0000941221icl:OtherCurrentLiabilitiesMembericl:RMBCurrencyRiskMember 2021-01-01 2021-12-31

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 20-F
(Mark One)
(Mark One)
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 
OR
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
 For the fiscal year ended December 31, 20182021
 
OR
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
OR
 
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
 
Date of event requiring this shell company report
 
 
For the transition period fromto.
 
Commission File Number: 001-13742
 
ISRAEL CHEMICALSICL GROUP LTD.
(Exact name of Registrant as specified in its charter)
 
N/A
(Translation of Registrant’s name into English)
 
Israel
(Jurisdiction of incorporation or organization)
 
Millennium Tower, 23 Aranha Street, P.O. Box 20245 Tel Aviv, 61202 Israel
(Address of principal executive offices)

Aya Landman
Lilach Geva Harel, Adv.
SVP,VP, Company Secretary & Global General Counsel
Compliance
Millennium Tower, 23 Aranha St.

Tel-Aviv 6120201 Israel

Tel: +972 (3) 6844440
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

 

Securities registered or to be registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Ordinary Shares, par value NIS 1.00 per share
ICL
The New York Stock Exchange

Securities registered or to be registered pursuant to Section 12(g) of the Act:
 
None
 
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 
None
 
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
 
The number of outstanding shares as of December 31, 20182021 was:
 
Title of Class
Number of Shares Outstanding
Ordinary shares
1,304,890,778
1,287,150,942
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
 
Yes              No
 
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 
Yes No
 
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
Yes No
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes                         No
 
Yes ☒No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer,” “accelerated filer, and large accelerated filer”“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):Act:
 
Large Accelerated Filer                Accelerated Filer                        Non-accelerated Filer  
Large Accelerated Filer     ☒
Accelerated Filer  ☐
Non-accelerated Filer  ☐
  Emerging Growth Company  ☐
 
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
 
U.S. GAAP
 
International Financial Reporting Standards as issued by the International Accounting Standards Board
 
           Other
 
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.
 
Item 17 Item 18
 
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
 
Yes No
 
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐No ☒


Annual Report

For the Period Ended December 31, 2021






ICL Group Ltd




 
TABLE OF CONTENTS
 
 PART IPage
   
  
  
  
1
1
1
3339
131165
131166
187199
220228
228237
233241
233241
247251
256260
   
 PART II 
   
256260
256260
257261
258262
258262
259263
259263
260263
260264
260264
262266
262266
262266
262
FS-1267


 


SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Annual Report contains statements that constitute “forward‑looking statements,” many of which can be identified by the use of forward‑looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate”, "strive", "forecast", "targets" and “potential,” among others. The Company is relying on the safe harbor provided in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in making such forward-looking statements.
 
Forward‑looking statements appear in a number ofseveral places in this Annual Report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward‑looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward‑looking statements due to various factors, including, but not limited to, those identified in “Item 3 - Key Information— D. Risk Factors” in this Annual Report. These risks and uncertainties include factors relating to:
 
LossChanges in exchange rates or prices compared to those we are currently experiencing; loss or impairment of business licenses or miningmineral extractions permits or concessions; volatility of supply and demand and the impact of competition; the difference between actual reserves and our reserve estimates; natural disasters; failure to raise"harvest" salt which could lead to accumulation of salt at the water level inbottom of the evaporation Pond 5 in the Dead Sea; construction of a new pumping station; disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; general market, political or economic conditions in the countries in which we operate; price increases or shortages with respect to our principal raw materials; delays in the completion of major projects by third party contractors and/or termination of engagements with contractors and/or governmental obligations; the inflow of significant amounts of water into the Dead Sea could adversely affect production at our plants; labor disputes, slowdowns and strikes involving our employees; pension and health insurance liabilities; the ongoing COVID-19 pandemic, which has impacted, and may continue to impact our sales, operating results and business operations by disrupting our ability to purchase raw materials, by negatively impacting the demand and pricing for some of our products, by disrupting our ability to sell and/or distribute products, impacting customers' ability to pay us for past or future purchases and/or temporarily closing our facilities or the facilities of our suppliers or customers and their contract manufacturers, or restricting our ability to travel to support our sites or our customers around the world; changes to governmental incentive programs or tax benefits, creation of new fiscal or tax related legislation; changes in our evaluations and estimates, which serve as a basis for the recognition and manner of measurement of assets and liabilities; higher tax liabilities; failure to integrate or realize expected benefits from mergers and acquisitions, organizational restructuring and joint ventures; currency rate fluctuations; rising interest rates; government examinations or investigations; disruption of our, or our service providers', information technology systems or breaches of our, or our service providers', data security; failure to retain and/or recruit key personnel; inability to realize expected benefits from our cost reduction program according to the expected timetable; inability to access capital markets on favorable terms; cyclicality of our businesses; changes in demand for our fertilizer products due to a decline in agricultural product prices, lack of available credit, weather conditions, government policies or other factors beyond our control; Imposingsales of antidumpingour magnesium products being affected by various factors that are not within our control; our ability to secure approvals and countervailing duties on imports of magnesiumpermits from the authorities in Israel to U.S.;continue our phosphate mining operations in Rotem Amfert; volatility or crises in the financial markets; uncertainties surrounding the withdrawal of the United Kingdom from the European Union; hazards inherent to mining and chemical manufacturing; the failure to ensure the safety of our workers and processes; cost of compliance with environmental regulatory legislative and licensing restrictions; hazards inherentlaws and regulations related to, chemical manufacturing;and physical impacts of climate change and greenhouse gas emissions; litigation, arbitration and regulatory proceedings; exposure to third party and product liability claims; Productproduct recalls or other liability claims as a result of food safety and food-borne illness concerns; insufficiency of insurance coverage; closing of transactions, mergers and acquisitions; war or acts of terror and/or political, economic and military instability in Israel and its region; filing of class actions and derivative actions against the Company, its executives and Board members; The Company is exposed to risks relating to its current and future activity in emerging markets; and other risk factors discussed under ”Item 3 - Key Information— D. Risk Factors".


 
Forward‑looking statements speak only as atof the date they are made, and we do not undertake any obligation to update them in light of new information or future developments or to release publicly any revisions to these statements in order to reflect later events or circumstances or to reflect the occurrence of unanticipated events.

INTRODUCTION

 
This Annual Report contains forward-looking statements that involve risksCAUTIONARY NOTE TO INVESTORS REGARDING MINERAL AND RESOURCES ESTIMATES
The U.S. Securities and uncertainties. Our actual results may differ significantly from future resultsExchange Commission (the “SEC”), adopted final rules in 2018 to amend and modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the U.S. Securities Act of 1933, as amended (“Securities Act”), or the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”). These amendments, which we refer to as the SEC Mining Modernization Rules, became effective February 25, 2019, with compliance required for the first fiscal year beginning on or after January 1, 2021. The SEC Mining Modernization Rules rescinded the historical property disclosure guidance for mining registrants included in SEC Industry Guide 7 and replaced them with the disclosure requirements in subpart 1300 of SEC Regulation S-K (“S-K 1300”). As a result of the adoption of the SEC Mining Modernization Rules, the SEC now recognizes estimates of “Measured Mineral Resources,” “Indicated Mineral Resources” and “Inferred Mineral Resources.” Accordingly, ICL presents new information with respect to its mining and operation plants in this Annual Report, including resource and reserve estimates, which differ materially from the reserve estimates presented historically by ICL.
A Mineral Resource is a reasonable estimate of mineralization, taking into account relevant factors, such as cut-off grade, likely mining dimensions, location or continuity that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.” The Mineral Resources presented in this Annual Report are not Mineral Reserves and do not reflect demonstrated economic viability. The estimates of Mineral Resources may be materially affected if mining, metallurgical, or infrastructure factors at the corresponding properties change from those set forthcurrently assumed by ICL.
Mineral Reserves are reported as the economically mineable portion of a Measured Mineral Resource and/or Indicated Mineral Resource, and take into consideration the mining, processing, metallurgical, economic, marketing, legal, environmental, infrastructure, social, and governmental factors (the “modifying factors”) that may be applicable to the deposit. Mineral Resources that are not Mineral Reserves do not meet the threshold for reserve modifying factors, such as estimated economic viability, that would allow for conversion to Mineral Reserves. There is no certainty that all or any part of a Mineral Resource will be converted into a Mineral Reserve. Estimates of Inferred Mineral Resources have significant geological uncertainty, and it should not be assumed that all or any part of an Inferred Mineral Resource will be converted to the Measured or Indicated categories.
Figures related to our mineral and resource estimates are rounded to reflect the relative accuracy of the estimates, and totals may not add correctly. In addition, the Mineral Resource and Reserve estimates are based on the factors related to the geological and grade models discussed in “Item 3 - Key Information—4 ‑ Information on the Company— D. Risk Factors”Property, Plant and ”Item 5 - OperatingEquipment,” and Financial Reviewthe criteria for reasonable prospects of eventual economic extraction as described therein. The Mineral Resource and Prospects.”Reserve estimates may be affected, positively or negatively, by additional exploration that expands the geological database and models of the properties described. The Mineral Resource and Reserve estimates could also be materially affected by any significant changes in the assumptions regarding forecast product prices, mining efficiency, process recoveries, or production costs. If the price assumptions decrease or the assumed production costs increase, then the cut-off grade would increase. The potential impacts on the Mineral Resource and Reserve estimates may be material and such estimates may need to be re-evaluated. The Mineral Resource and Reserve estimates are also based on certain critical assumptions, such as requisite mining permits continuing to be granted as-needed, tax rates remaining stable, and the absence of additional regulations on the corresponding properties. Except as described in “Item 4 ‑ Information on the Company— D. Property, Plant and Equipment” and the Technical Report Summary (defined below), Wardell Armstrong International Ltd (“Wardell”), our qualified persons, are not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimates.


INTRODUCTION
 
The financial information included in this Annual Report has been prepared in accordance with the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). None of the financial information in this Annual Report has been prepared in accordance with accounting principles generally accepted in the United States.
 
This Annual Report contains translations of certain NIScurrencies amounts into U.S.US dollars at specified rates solely for your convenience. Unless otherwise indicated, we have translated NIS amounts as atof December 31, 2018,2021, into U.S.US dollars at an exchange rate of NIS 3.748 to $1.00, and euro amounts into U.S. dollars at an exchange rate of €0.8733.110 to $1.00, the daily representative exchange rate reported by the Bank of Israel foras of December 31, 2018.2021. Euro amounts were translated into US dollars at an exchange rate of €0.884 to $1.00.
 
Market data and certain industry data used in this Annual Report were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information and industry publications, including publications, reports or releases of the International Monetary Fund (“IMF”), the U.S. Census Bureau, the Food and Agriculture Organization of the United Nations (“FAO”), the International Fertilizers Association (“IFA”), the United States Department of Agriculture (“USDA”), the United States Geological Survey, the CRU Group ("CRU"), and Fertecon, the Fertilizer Association of India (“FAI”) and the Brazilian National Fertilizer Association (“ANDA”). Industry publications generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information is not guaranteed. Similarly, internal reports and studies, estimates and market research, which we believe to be reliable and accurately extracted by us for use in this Annual Report, have not been independently verified. However, we believe such data is accurate. There is only a limited amount of independent data available about certain aspects of our industry, market, and competitive position. As a result, certainsome data and information about our market rankings in certain product areas are based on our good faith estimates, which are derived from our review of internal data and information, information that we obtain fromour customers, and other third-partythird-party sources. We believe these internal surveys and management estimates are reliable; however, no independent sources have verified such surveys and estimates.


 
In presenting and discussing our financial position, operating results and net income results, the management uses certain non-IFRS financial measures. These non-IFRS financial measures should not be viewed in isolation or as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures. A discussion of non-IFRS measures included in this Annual Report and a reconciliation of such measures to the most directly comparable IFRS measures are contained in this Annual Report under “Item 5 – Operating and Financial Review and Prospects— A. Operating Results”.
 
In this Annual Report, unless otherwise indicated or the context otherwise requires, all references to “ICL,” the “Group,” the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Israel ChemicalsICL Group Ltd., together with its consolidated subsidiaries. When we refer to our “parent company”Company” or to “Israel Corporation,Corp.,” we refer to our controlling shareholder, Israel CorporationLtd. Unless otherwise indicated or the context otherwise requires, references in this Annual Report to “NIS” are to the legal currency of Israel, “U.S.“US dollars”, “$” or “dollars” are to United States dollars, “euro” or “€” are to the Euro,euro, the legal currency of certain countries of the European Union, and “British pound” or “£” are to the legal currency of the United Kingdom. See “Item 4 - Information on the Company— A. History and Development of the Company”. We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business. Solely for convenience, trademarks and trade names referred to in this Annual Report may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent of the law, our rights or the rights of the applicable licensor to these trademarks and trade names. In this Annual Report, we also refer to product names, trademarks, and trade names that are the property of other companies. Each of the trademarks and trade names of other companies appearing in this Annual Report belongs to its owners. Our use or display of other companies’ product names, trademarks, or trade names is not intended to and does not imply a relationship with, or endorsement or sponsorship by us of, the product, trademark, or trade name owner, unless we otherwise indicate.
 



GLOSSARY OF SELECTED TERMS
 
The following is a glossary of selected terms used in this Annual Report.
 
BromineA chemical element used as a basis for a wide variety of uses and compounds, and mainly as a component in flame retardants or fire prevention substances. Unless otherwise stated, the term “bromine” refers to elemental bromine.
CDPCarbon Disclosure Project – A leading non-profit organization in the greenhouse gas emissions reporting field.
CFRCost and freight.Freight. In a CFR transaction, the prices of goods to the customer includes,include, in addition to FOB expenses, marine shipping costs and all other costs that arise after the goods leave the seller’s factory gates and up to the destination port.
CLPClassification, Labeling and Packaging of Substances and Mixtures– EU regulation.
CPIThe Consumer Price Index, as published by the Israeli Central Bureau of Statistics.
CRUIntelligence company that provides information on global mining, metal and fertilizers market.
ICL ADSICL América do Sul (formerly Compass Minerals América do Sul S.A.).
Dead Sea Bromine CompanyDead Sea Bromine Company Ltd., included in the Industrial Products segment.
MAPMonoammonium Phosphate, a fertilizer containing nitrate and phosphorus oxide.
GTSPGranular Triple Superphosphate, used as fertilizer, a source of high phosphorus.
GSSPGranular Single Superphosphate, used as a phosphate fertilizer.
Green HydrogenHydrogen produced by splitting water into hydrogen and oxygen using renewable electricity.
DAPDiammonium Phosphate - a fertilizer containing nitrate and phosphorus oxide.
EPAUS Environmental Protection Agency.
FAOThe Food and Agriculture Organization of the United Nations.
FOBFree on boardon-Board expenses are expenses for overland transportation, loading costs and other costs, up to and including the port of origin. In an FOB transaction, the seller pays the FOB expenses, and the buyer pays the other costs from the port of origin onwards.
F&CCPTCost Per Ton.
CIF
Cost, Insurance, and Freight. In CIF transaction, the price of goods includes, as well as FOB expenses, the expenses for insurance, shipping and any other costs that arise after the goods leave the factory gates and up to the destination port.
ICL Haifa (Fertilizers & Chemicals)Fertilizers and Chemicals Ltd., included in the Innovative Ag Solutions segment.
GHGGreenhouse Gases – air emissions contributing to climate change.
GranularFertilizer having granular particles.
ICL BoulbyA United Kingdom companysubsidiary included in the Potash segment.
ICL Iberia (Iberpotash)Iberpotash S.A., a Spanish companysubsidiary included in the Potash segment.
ICIsrael Corporation Ltd.
ICL Dead Sea (DSW)Indicated Mineral ResourceThat part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve.
Inferred Mineral ResourceThat part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve.
DSWDead Sea Works Ltd., included in the Potash segment.
ICL Magnesium (DSM)DSMDead Sea Magnesium Ltd., included in the Potash segment.
ICL Neot HovavSubsidiaries in the Neot Hovav area in the south of Israel, including facilities of Bromine Compounds Ltd. IncludedLtd included in the Industrial Products segment.
ICL Rotem IsraelRotem Amfert Negev Ltd., included in the Phosphate Solutions segment.
IFAThe International Fertilizers Industry Association, an international association of fertilizers manufacturers.
ILAIsrael Land AuthorityAuthority.



IMFInternational Monetary Fund.
KThe element potassium, one of the three main plant nutrients.
KNO3
Potassium Nitrate, a soluble fertilizer containing N&P used as a stand-alone product or as a key component of some water-soluble blends.
KOHPotassium hydroxide 50% liquid.
MGAMerchant grade phosphoric acid.
Measured Mineral ResourceThat part of a mineral resource for which quantity and grade or quality are estimated on the based on conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve.
Mineral ReserveAn estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
Mineral ResourceA concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
MoEPIsrael Ministry of Environmental Protection.
NThe element nitrogen, one of the three main plant nutrients.
NYSEThe New York Stock Exchange.
PThe element phosphorus, one of the three main plant nutrients, which is also used as a raw material in industry.
NPKComplex fertilizer comprised primarily of 3 primary nutrients (N,P,K).
NYSEThe New York Stock Exchange.
Phosphate
Phosphate rock that contains the element phosphorus. Its concentration is measured in units of P2O5.
PolyhaliteA mineral marketed by ICL under the brand name Polysulphate™, composed of potash, sulphur, calcium, and magnesium. Used in its natural form as a fully soluble and natural fertilizer, which is also used for organic agriculture and as a raw material for production of fertilizers.
Probable Mineral Reserve
The economically mineable part of an Indicated and, in some cases, a Measured Mineral Resource. Quantity, grade and/or quality of Probable Mineral Reserves are computed from information similar to that used for Proven Mineral Reserves, but the sites for survey, sampling and measurement are further apart or are otherwise less efficiently spaced. The degree of assurance, although lower than that for proven reserves,  is high enough to assume continuity between points of observation.
Proven Mineral ReserveThe economically mineable part of a Measured Mineral Resource. Proven Mineral Reserve quantities are computed from information received from explorations, channels, wells, and drilling; grade and/or quality are computed from the results of detailed sampling. The sites for inspection, sampling and measurement for proven reserves are spaced so closely to each other so that the geologic character is well defined so the size, shape, depth and mineral content of reserves can be reliably determined.
ChlorineA chemical, raw material in various productions process. A byproduct of Dead Sea Magnesium production.
SylviniteA byproduct from the production of Magnesium from the raw material – Carnallite. Transferred to DSW as an additional source for potash production.
PolymerA chemical compound containing a long chain of repeating units linked by a chemical bond and created by polymerization.
PotashPotassium chloride (KCl), used as a plant’s main source of potassium.
P2O5
Phosphorus pentoxide.
P2S5
Phosphorus pentasulfide.
TCFDTask Force on Climate-Related Financial Disclosures.
SASBSustainability Accounting Standards Board.
REACH
Registration, Evaluation,, Authorization and Restriction of Chemicals, a framework within the European Union.
Red MOPReservesNaturalThe part of a mineral deposit that could be economically and legally extracted or artificially reddish color MOP.produced at the time of the Mineral Reserve determination. Reserves are divided between “proven reserves” and “probable reserves”.
SaltUnless otherwise specified, sodium chloride (NaCl).
SSulphur – a chemical used for the production of sulfuric acid for sulfate and phosphate fertilizers, and other chemical processes.
Soluble NPKSoluble fertilizer containing the three basic elements for plant development (nitrogen, phosphorus and potash).

SOPPotassium of Sulfate or 0-0-50, used as low chloride potassium source.
StandardFertilizer having small particles.
TamiTami (IMI) Research and Development Institute Ltd., the central research institute of ICL.
TASE
Tel Aviv Stock Exchange, Ltd.
USDA
United States Department of Agriculture.
WPAWhite Phosphoric Acid, purified from MGA.
UreaA white granular or prillpill solid fertilizer containing 46% nitrogen.
YTH/YPCThe Chinese partner in the Company’s joint venture YPH in China.
4DClean green phosphoric acid, used as a raw material for purification processes.
PMParticular Matter






Item1 IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not Applicable.
 
Item2 OFFER STATISTICS AND EXPECTED TIMETABLE

Not Applicable.
 
Item 3 KEY INFORMATION


A. SELECTED FINANCIAL DATA

We have derived the consolidated statements of income data for the years ended December31, 2018, 2017, 2016, 20152021, 2020 and 20142019 and the consolidated statements of financial position as of December 31, 2018, 2017, 2016, 20152021, 2020 and 20142019 from our audited consolidated financial statements which have been prepared in accordance with IFRS, as issued by the IASB for the years ended, December 31, 2018, 2017, 2016, 20152021, 2020 and 2014.2019. You should read the consolidated financial data set forth below in conjunction with our consolidated audited financial statements and related notes and the information under “Item 5 - Operating and Financial Review and Prospects”, appearing elsewhere in this Annual Report. Our reporting currency is the U.S.US dollar. Our historical results are not necessarily indicative of our results to be expected in any future period.
 
ICL Group Limited 1
1



Selected financial data:
 
 For the Year Ended December 31,
 20182017201620152014
 US$ millions, except for the share data
 For the Year Ended December 31,
 202120202019
 US$ millions


Sales 5,556 5,418 5,363 5,405 6,111
Gross profit 1,854 1,672 1,660 1,803 2,196
Operating income (loss) 1,519 629 (3) 765 758
Income (loss) before income taxes 1,364 505 (117) 668 632
Net income (loss) attributable to the shareholders of the Company 1,240 364 (122) 509 464
Earnings (loss) per share (in dollars) :     
Basic earnings (loss) per share 0.97 0.29 (0.10) 0.40 0.37
Diluted earnings (loss) per share 0.97 0.29 (0.10) 0.40 0.37
Weighted average number of ordinary shares outstanding:     
Basic (in thousands) 1,277,209 1,276,072 1,273,295 1,271,624 1,270,426
Diluted (in thousands) 1,279,781 1,276,997 1,273,295 1,272,256 1,270,458
Dividends declared per common share (in dollars) 0.18 0.13 0.18 0.28 0.67
Sales
 6,955
 5,043
 5,271
Gross profit
 2,611
 1,490
 1,817
Operating income
 1,210
 202
 756
Income before taxes on income
 1,092
 49
 628
Net income attributable to the shareholders of the Company
 783
 11
 475
Earnings per share (in dollars):
   
Basic earnings per share
 0.61
 0.01
 0.37
Diluted earnings per share
 0.60
 0.01
 0.37
Weighted average number of ordinary shares outstanding:
   
Basic (in thousands)
 1,282,807
 1,280,026
 1,278,950
Diluted (in thousands)
 1,287,051
 1,280,273
 1,282,056
Dividends declared per share (in dollars)
 0.21
 0.09
 0.22


 For the Year Ended December 31,
 202120202019
 US$ millions

Statements of Financial Position Data:
   
Total assets
 11,080
 9,664
 9,173
Total liabilities
 6,344
 5,576
 5,112
Total equity
 4,736
 4,088
 4,061

 
 As at December 31,
 20182017201620152014
 US$ millions

ICL Group Limited 2
Statements of Financial Position Data:     
Total assets 8,776 8,714 8,552 9,077 8,348
Total liabilities 4,861 5,784 5,893 5,889 5,348
Total equity 3,915 2,930 2,659 3,188 3,000



Adjustments to reported operating and net income (non-GAAP financial measures)
We disclose in this Annual Report non-IFRS financial measures titled adjusted operating income and adjusted net income attributable to the Company’s shareholders. Our management uses these adjusted measures to facilitate operating performance comparisons from period to period. We calculate our adjusted operating income by adding certain items, as set forth in the reconciliation table below. Some of these items may recur. We calculate our adjusted net income attributable to the Company’s shareholders by adding certain items, as set forth in the reconciliation table below, excluding the total tax impact of such adjustments.
You should not view adjusted operating income or adjusted net income attributable to the Company’s shareholders as a substitute for operating income or net income attributable to the Company’s shareholders as determined in accordance with IFRS, and you should note that our definitions of adjusted operating income and adjusted net income attributable to the Company’s shareholders may differ from those used by other companies. Additionally, other companies may use other measures to evaluate their performance, which may reduce the usefulness of our non-IFRS financial measures as tools for comparison. However, we believe adjusted operating income and adjusted net income attributable to the Company’s shareholders provide useful information to both management and investors by excluding certain items that management believes are not indicative of our ongoing operations. Our management uses these non-IFRS measures to evaluate the Company's business strategies and management's performance. We believe that these non-IFRS measures provide useful information to investors because they improve the comparability of our financial results between periods and provide for greater transparency of key measures used to evaluate our performance.

ICL Group Limited 3

The table below reconciles total adjusted operating income and total adjusted net income attributable to the shareholders of the Company, to the comparable IFRS measures:
 For the Year Ended December 31,
 202120202019
 US$ millions

Operating income
1,210
202
756
Dispute and other settlement expenses (1)5-7
Divestment related items and transaction costs from acquisitions (2)(22)--
Impairment and disposal of assets, provision for closure and restoration costs (3)1229(3)
Provision for early retirement (4)
-
78
-
Total adjustments to operating income
(16)
307
4
Adjusted operating income
1,194
509
760
Net income attributable to the shareholders of the Company78311475
Total adjustments to operating income(16)3074
Total tax adjustments (5)
57
(60)
-
Total adjusted net income - shareholders of the Company
824
258
479


(1)For 2021, the amount reflects settlement costs related to the termination of partnership and arbitration proceedings between ICL Iberia and Nobian and reimbursement of arbitration costs related to the Ethiopian potash project, which was partially offset by a reversal of a VAT provision following a court ruling in Brazil.

(2)For 2021, the amount reflects a capital gain related to the sale of an asset located in the industrial area of Ashdod, Israel and to the divestment of the Zhapu site (China) from the Industrial Products segment, which was partially offset by an earnout adjustment relating to prior years' divestment, as well as transaction costs related to the acquisitions in Brazil.

(3)For 2021, the amount reflects a disposal of a pilot investment, which will not materialize in Spain and an increase in restoration costs, offset by a reversal of an impairment due to the strengthening of phosphate prices at Rotem Israel.
For 2020, the amount reflects an impairment and write-off of certain assets in Rotem Amfert Israel, following low phosphate prices and the discontinuation of the unprofitable production and sale of phosphate rock activity, which also led to an increase in the provision for asset retirement obligation (ARO) and in facility restoration costs. In addition, it reflects an impairment of assets and an increase in closure costs resulting from closure of the Sallent site (Vilafruns) in Spain.
For 2019, the amount reflects an agreement for the sale of assets, a partial reversal of impairment loss related to assets in Germany which was incurred in 2015 and an increase of the provision for the Sallent site closure costs as part of the restoration solution, together with an increase of the provision for the removal of prior periods waste in bromine production facilities in Israel.

(4)For 2020, the amount reflects an increase in the provision following the implementation of an efficiency plan, primarily through an early retirement plan, at Israeli production facilities (Rotem Israel, Bromine Compounds and Dead Sea Magnesium).

(5)For 2021, the amount reflects the tax impact of the adjustments made to the operational income and tax expenses related to the release of trapped earnings of the Company and certain Israeli subsidiaries. For 2020, reflects the tax impact of the adjustments made to operational income.
 
B. CAPITALIZATION AND INDEBTEDNESS

Not Applicable.
 
C. REASONS FOR THE OFFER AND USE OF PROCEEDS

Not Applicable.
 


2ICL Group Limited 4


D. RISK FACTORS


Summary of Risk Factors
Our business, liquidity, financial condition and results of operations could be materially and adversely affected, and even materially so, if any of the risks described below occur. As a result, the trading price of our securities could decline, and investors could lose all or part of their investment. This Annual Report also contains forward‑looking statements that involve risks and uncertainties, see “Special Note Regarding Forward‑Looking Statements.” Our actual results could differ materially and adversely from those anticipated, as a resultdue to of certain factors, including the risks facing the Company as described below and elsewhere in the Annual Report. This Annual Report contains forward‑looking statements that involve risks and uncertainties, see “Special Note Regarding Forward‑Looking Statements“. Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, those relating to:
 

Our ability to operate and/or expand our production and operating facilitiesworldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations.

As a leading global specialty minerals company, we are exposed to various legislative, regulatory and licensing restrictions in the areas of environmental protection and safety. Related compliance costs and liabilities may adversely affect the results of our operations.
Our mineral extraction operations are dependent on concessions, licenses and permits granted to us by the respective governments in the countries in which we operate.
Securing the future of the phosphate mining operations at Rotem Israel depends on obtaining several approvals and permits from the authorities in Israel.

Current and future laws and regulations regarding climate change and greenhouse gas (GHG) emissions, as well as the physical impacts of climate change, may affect our operations and businesses.
The continued spread of the COVID-19 pandemic has affected and may in the future materially and adversely affect our financial condition and results of operations.
Our operations and sales are exposed to volatility in supply and demand, mergers of key producers\customers\suppliers, expansion of production capacity and competition from some of the world’s largest chemical and mining companies.

Our operations could be adversely affected by price increases or shortages with respect to water, energy and our principal raw materials.
The accumulation of salt at the bottom of Pond 5, the central evaporation pond in our solar evaporation ponds system used to extract minerals from the Dead Sea in Israel, requires regular harvesting salt to maintain a fixed brine volume and thereby sustain the production capacity of extracted minerals and prevent potential damage to the foundations and structures of hotels and other buildings situated close to the edge of the pond.
The receding water level in the Northern Basin of the Dead Sea, may require capital and/or operational expenses to enable the continuation of the Company's operations in the Dead Sea.
ICL Group Limited 5


We are exposed to risks associated with our international sales and operations, which could adversely affect our sales to customers as well as our operations and assets in various countries. Some of these factors may also make it less attractive to distribute cash generated by our operations outside Israel to our shareholders, use cash generated by our operations in one country to fund our operations or repayments of our indebtedness in another country and support other corporate purposes or the distribution of dividends.
Changes in our evaluations and estimates, which serve as a basis for analyzing our contingent liabilities and for the recognition and measurement of assets and liabilities, including provisions for waste removal and the reclamation of mines, may adversely affect our business results and financial condition.
Our tax liabilities may be higher than expected.
Due to the nature of our operations, we are exposed to administrative and legal proceedings, both civil and criminal, including as a result of alleged environmental contamination caused by certain of our facilities.
Risks Related to Our Business
 
Our miningmineral extraction operations are dependent on concessions, licenses and permits granted to us by the respective governments in the countries wherein they are locatedin which we operate
 
Our mining business dependsmineral extraction businesses depend on concessions granted to us by the respective governments in the countries in which we operate. Loss of concessions, licenses and/or permits, as well as material changes to the conditions of these concessionsthereof, could materially and adversely affect our business, financial condition and results of operations.
 
We extract potash, phosphate, bromine, magnesium and certain other minerals in Israel, potash and salt in Spain, Polysulphate™Polysulphate®, salt, and certain other minerals in the United Kingdom and phosphate in China, pursuant to concessions and permits in those countries.
 
Israel
 
In Israel,Pursuant to the Israeli Dead Sea Concession Law, 1961 (hereinafter – the Concession Law), as amended in 1986, and the concession thatdeed attached as an addendum to the Concession Law, DSW was granted by the governmenta concession to utilize the resources of the Dead Sea (mainly potash, bromine and magnesium) endsto lease the land required for its plants in Sodom for a period ending on March 31, 2030. In consideration, we pay royalties2030, accompanied by a priority right to receive the Israeli government.concession after its expiration, should the Government decide to offer a new concession. There is no assurance that the Company will continue to hold the concession will be renewed atbeyond that time.period.
 
In 2015, the Minister of Finance appointed a team to determine the “governmental activities to be conducted towards the endaccordance with section 24 (a) of the concession period”. The public’s comments in this matter were submittedSupplement to the team. Based on the interim report and its recommendations published in May 2018, and following a public hearing, on January 21, 2019, the Israeli Ministry of Finance released the final report of the inter-ministry team headed by Mr. Yoel Naveh, former Chief Economist, which includes a series of guidelines and recommendations regarding the actions that the government should take towards the end of the concession period. As at the date of the report, since the report includes guiding principles and a recommendation to establish sub-teams to implement such principles, the Company is unable to assess, at this stage, the concrete implications, manner in which the recommendations would be implemented in practice and on which schedules. In addition, there is no certainty as to how the Government would interpret the Concession Law, and the manner in which this process and methodology would ultimately be implemented.
In addition, in 2015, the Minister of Finance appointed a team headed by the (former) Accountant General to evaluate the manner in which, according to the current concession, the replacement value of DSW’s tangible assets would be calculated assumingit is stated, among other things, that these assets would be returned to the government at the end of the concession period. The determination date ofperiod all the actual calculation is onlytangible assets at the concession area will be transferred to the government, in 2030. As far asexchange for their amortized replacement value – the Company is aware, this work has not yet been completed.
3

In December 2018, the Company received an opinion from an independent appraiser regarding the fair value of the property, plant andassets as if they are purchased as new at the remaining useful life of the fixed assets of the subsidiaries Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium in Israel (hereinafter – the Subsidiaries). The Opinion was prepared mainly for the Subsidiaries’ financial statements for 2016 and onward, which serve as a basis for the reports filed pursuant to the provisions of the Taxation of Natural Resources Law. There is no resulting change in the Company's consolidated financial statements.
The Property, Plant and Equipment value provided in the opinion is based on the Replacement Cost methodology which is one of the methods in international accounting standards (IFRS) for the measurement of fixed assets and is estimated at about $6 billion, as at December 31, 2015, and at December 31, 2016.
Though the assets assessed for tax purposes and the assets that may be valuated under the Concession Law are highly correlated, there is no complete identity between them. The Company believes that the applied Replacement Cost Methodology used in the opinion for estimating the fair value coincides with the methodology mentioned in the Concession Law for future valuation of the Property, Plant and Equipment upon terminationend of the concession period. Nevertheless, there could be other interpretations toperiod, less their technical depreciation based on their maintenance condition and the manner of implementationunique characteristics of the Concession Law’s provisions with respect to the valuation methodology, hence, the estimated value with respect to the Concession Law could materially differ from the value provided in the said opinion, even with respect to the same assets and dates. Dead Sea area.
There is no certainty as to the manner of interpretation of the provisions of the Concession Law in this context as willthat would be adopted in a legal proceeding, to the extent such proceeding wouldwere to occur. It is expected that the value of the Property, Plant and Equipment, at the end of the concession period, will change, even materially, as time passes and as a result of purchase and disposal of assets included in the future valuation.For further information, see Note 18 to our Audited Financial Statements.
 
ICL Group Limited 6
See “Item 4 - Information on the Company— D. Property, Plant and Equipment— Mineral Extraction and Mining Operations and “Concessions and Mining Rights.


Furthermore, weWe mine phosphate rock from phosphate deposits in the Negev desert in accordance with three concessionsa mining concession from the State of Israel, that arewhich is valid until the end of 2021.2024. For further information see Note 18 to our Audited Financial Statements. In consideration thereof, we are requiredaddition, Rotem Israel has two lease agreements in effect until 2024 and 2041 and an additional lease agreement of the Oron plant, which the Company has been working to pay royaltiesextend since 2017, by exercising the extension option provided in the agreement.
There is no certainty that these concessions and leases will be extended and/or renewed under the same terms or at all. Failure to renew said concessions and leases or different terms could materially and adversely affect our business, financial condition and results of operations. For further information see Note 18 to the Israeli government. Company's Audited Financial Statements.
Our existing phosphate mines in the Negev desert hold limited reserves of phosphate rock designated for phosphoric acid production. The Company is acting for renewal of said concessions, and is the only entity having the appropriate production facilities; however, there can be no certainty that these concessions will be renewed on the same terms or at all following their expiration in 2021, failure to extend the said concessions could materially and adversely affect our business, financial condition and results of operations.
The Company is working to promote thea plan for mining phosphates in Barir field, (whichwhich is located in the southern part of the South Zohar field)deposit in the Negev Desert. In 2015, the National Planning and Building Council (hereinafter – the National Council) approved the Policy Document regarding Mining and Quarrying of Industrial Minerals, which included a recommendation to permit phosphate miningDesert in the Barir field. In February 2017, the Committee for Principle Planning Matters, decided to continue advancement of the mining in the South Zohar field. Concurrently, and based on a decision of the National Council, instructions were prepared by the competent authorities with respect to the performance of an environmental survey of the Barir field for purposes of its further advancement. In April 2017, the National Council recommended to the government to approve National Outline Plan (hereinafter – NOP 14B), which includes South Zohar field, and determined that Barir field will be advanced as part of a detailed National Outline Plan, which was approved by the government’s Housing Cabinet in January 2018.
4

In January 2018, the Minister of Health filed an appeal of the said approval, requiring compliance with the Ministry of Health’s recommendation to conduct a survey regarding the health impact in each site included in NOP 14B. As part of a discussion regarding the appeal, which was held in the Housing Cabinet, it was decided, with the consent of the Ministries of Health, Finance and Energy, to remove the appeal and to approve the NOP 14B. In addition, it was decided to establish a team with representatives of the ministries of Treasury, Health, Transportation, Environmental Protection and Energy, which will present to the Housing Cabinet a report that includes health aspects for NOP 14B. In April 2018, the NOP 14B was formally published.
In July 2018, a petition was submitted to the Israeli Supreme Court of Justice by the municipality of Arad against the National Planning and Building Council, the Ministry of Health, the Ministry of Environmental Protection and Rotem, to revoke the approval of NOP 14B. In January 2019, residents of the Bedouin diaspora in the "Arad Valley" submitted a petition to the High Court of Justice (hereinafter – the Court) against the National Council, the Government of Israel and Rotem, in which the Court was requested to cancel the provisions of NOP 14B and the decision of the National Council from December 5, 2017, regarding to the advancement of a detailed plan for phosphate mining in the South Zohar field. In addition, the Court was requested to issue an interim injunction preventing the implementation of the NOP 14B instructions and the National Council's said decision until a final resolution. On January 22, 2019, the Supreme Court consolidated the hearing of the petition together with the other petition filed against NOP 14B and decided that at this stage there is no basis for granting the interim injunction. On February 5, 2019, the Company filed its response.
.There is no certainty regarding the timelines for the submission of the Plans, theplan, its approval, thereof, or of further developments with respect to the South Zohar. If miningBarir field site. Failure to obtain such approval is not received for South Zohar, there will beor a significant delay in receiving it, or in finding alternative sources of phosphates in Israel, will have a significant negative impact on the Group’sour future mining reserves in the medium and long term. Our business. As a result, our financial condition and results of operations maywill be adversely affected, even materially,materially. For further information, see “Item 3 - Key Information— D. Risk Factors— Securing the future of the phosphate mining operations at Rotem Israel depends on obtaining several approvals and permits from the authorities in case of failure to receive such approval and to find alternative sources of phosphates in Israel. For additional information on phosphate rock reserves, concessions and mining activities, see “itemIsrael”, “Item 4 - Information on the Company— D. Property, Plant and Equipment— Mineral Extraction and Mining Operations - Negev”, Concessions“Concessions and Mining RightsRights” and “Reserves”, and Note 18 to our Audited Financial Statements.
 
Spain
 
A subsidiary in Spain (hereinafter – ICL Iberia)Iberia was granted mining rights based on legislation of Spain’s Government from 1973 and the regulations accompanying this legislation. Further to the legislation, as stated, the Governmentgovernment of the Catalonia region published special mining regulations whereby ICL Iberia received individual licenses for each of the 126 different sites that are relevant to the current and possible future mining activities. Some of the licenses are valid up tountil 2037 and the restremainder are effective up tountil 2067. The concession for the "Reserva Catalana", an additional site whereinwhere mining hasdid not yet been commenced,commence, expired in 2012. The Company is acting in cooperation with the Spanish Government to obtain a renewal of the concession. According to the Spanish authorities, the concession period is valid until a final decision is made regarding the renewal. In consideration thereof, ICL pays royalties to the Spanish government.renewal. Maintaining the mining activity in Spain also requires municipal and environmental licenses. If such licenses are not renewed once expired, this would be expected to affect,likely have an impact, possibly in a substantial manner, on the mining activity atin certain sites in Spain and the Company’s financial results. For additionalfurther information, respecting issues relating to mining permits in Spain, see “Item 4 - Information on the Company— D. Property, Plant and Equipment— Mineral Extraction and Mining Operations” and “Concessions and Mining Rights” and “Reserves”, and Note 2018 to our Audited Financial Statements.
Statements.
 
5

United Kingdom
 
United Kingdom
The mining rightsmineral leases of aICL Boulby, ICL's subsidiary in the United Kingdom (hereinafter – ICL Boulby), are based on approximately 114 mining74 mineral leases and licenses for extracting various minerals, in addition to numerous easements and rights of way from private owners of land under which ICL Boulby operates, and miningmineral lease rights under the North Sea granted by the BritishThe Crown (Crown Estates), which includesEstates. The mineral lease rights with The Crown Estates, include provisions to explore and exploit theall targeted and known polyhalite mineral resources of the Polysulphate mineral. The said mining rightsinterest to ICL Boulby. Said leases cover a total area of about 374822 square kilometers. As atkilometers (onshore leases total around 32 square kilometers and offshore leases from the date of this report, allCrown Estates cover around 790 square kilometers). All the lease periods, licenses, easements and rights of way are effective, some until 2022 and others until 2038. The Company is acting to renew the rights necessary for the mining operation which expire in 2022, or, alternatively, to seek ownership of these rights. Regarding ICL Boulby's planning permit for mineral exploitation, which is valid until 2023, in December 2021, the North York Moors Park Authority Planning Committee approved ICL Boulby Mine’s application for the continuation of polyhalite and salt production for an additional 25 years, commencing 2023. Nevertheless, in the event such rights are not obtained, the mining activity in the UK may be substantially affected as well as the Company’s financial results. For further information, see “Item 4 - Information on the Company— D. Property, Plant and Equipment— Mineral Extraction and Mining Operations” and “Concessions and Mining Rights”, and Note 18 to our Audited Financial Statements.
ICL Group Limited 7


China
 
China
InYPH, ICL's subsidiary in China, the Company holds a joint venture (“YPH JV”)which is equally owned with Yunnan Phosphate Chemicals Group (“YPC”Corporation Ltd. ("YYTH"), a phosphate producer operating in China. YPH JV holds two phosphate mining licenses that were issued in July 2015, by the Division of Land and Resources of the Yunnan district in China. With reference toChina: (1) a mining license for the Haikou Mine (hereinafter – Haikou), which the Company operates and which is valid until January 2043, and (2) a mining license is valid up to January 2043, whereas regardingfor the Baitacun Mine, (hereinafter – Baitacun),which was renewed in 2021, and is valid until 2023. The Company intends to conduct a risk survey to assess the feasibility and profitably of mining the site. If Haikou's license is not renewed once expired, this would likely to have an impact, possibly in November 2018. Thea substantial manner, on our mining activities at Haikou are carried outactivity in accordance withChina and the above‑mentioned license. Regarding Baitacun, the Company is examining the option to renew the concession, subject to the phosphate reserves soil survey results and achieving the required understanding with the authorities. With respect to the mining rights, the Company pays royalties and a resource tax to the Chinese government. SeeCompany’s financial results. For further information, see “Item 4 - Information on the Company— D. Property, Plant and Equipment— ConcessionsMineral Extraction and Mining Rights”.
In addition,Operations” and “Concessions and Mining Rights" and “Reserves”, and Note 18 to our concession agreements and/or licenses include obligations relating to the expiration of the concession and/or licenses at some of the various activity sites, including reclamation and clearing of the sites (restoring the site to its former state)Audited Financial Statements. The scope of restoration required is uncertain, as is estimating what actions would need to be executed upon expiration of the concession and/or license period, and the costs involved in such actions.
 
Our ability to operate and/or expand our production and operating facilitiesworldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations
 
Existing permits are subject to challenges with respect to their validity, revocation, modification and non‑renewal, including as a result of environmental events or other unforeseeable occurrences. Any successful challenges with respect to the validity of our permits or the revocation, modification or non‑renewal of our permits could lead to significant costs and materially adversely affect our operations and financial condition. In addition, a failure to comply with the terms of our permits could result in payment of substantial fines and subject usthe Company and the Company’sits managers to criminal sanctions.
 
Furthermore, our production processes generate byproducts, some of which are saleable while others must be reused or disposed of as waste. Storage, transportation, reuse and waste disposal are generally regulated by governmental authorities in the jurisdictions in which we operate. Permits issued by governmental authorities are contingent on our compliance with relevant regulations in the jurisdictions in which we operate. If the validity of our permits or the revocation, modification or non-renewal of our permits occurs as a result of our noncompliance with regulations relating to storage, transportation, reuse and waste disposal, production may be interrupted or even ceased, which can lead to significant costs adversely affecting our operations and financial condition.
6
ICL Group Limited 8

It would be noted in this context that relating to the active gypsum Pond 5 in Rotem Amfert plants in Israel, and the process of obtaining a permit for its operation, in January 2018, an appeal was filed by Adam Teva V’Din - Israeli Association for Environmental Protection (hereinafter - ATD) to the District Planning and Building Appeals Committee of the Southern District (hereinafter – the Appeals Committee) against the Local Council and Rotem, in connection with the decision of the Local Committee from December 2017, to dismiss ATD’s objection to approval of the leniency and issuance of a building permit for Pond 5. In light of the Appeals Committee's dismissal of ATD's said claims, in May 2018 ATD filed an administrative petition against the Appeal Committee requesting the Court to order that: (1) the Appeals Committee's ruling is void, as well as any permit issued by virtue thereof; (2) the “relief” in implementation of the outline plan applying to the region, as provided in the Appeals Committee ruling, constitutes a breach of the provisions of the outline plan applying to the region; and (3) the Local Committee shall act to enforce the law and abstain from further planning procedures and permits until such enforcement actions are taken.
On October 11, 2018, the Court approved a settlement agreement between ATD and the Company, the main points of which are: withdrawing the abovementioned petition, in return for a re-deliberation of the Appeals Committee on its decision regarding the implementation of the relief for obtaining building permits for the operation of Pond 5 and future restoration of Ponds 1-4. On October 24, 2018, the Appeals Committee approved the issuing of the building permits for the operation of Pond 5, until the date of December 31, 2020. In November 2018, the building and use permits for Pond 5 were received. The Company is working with the relevant authorities to obtain all the required permits, for the continued operation of the gypsum ponds beyond 2020, and this is in accordance with the requirements set by law and/or instructions of the Planning and Building Committee.

Our operations and sales are exposed to volatility in the supply and demand, mergers of key producers\customers\suppliers, expansion of production capacity and competition from some of the world’s largest chemical and mining companies
 
In addition to seasonal and cyclical variations, the Company’s businesses are exposed to fluctuations caused, in part, by factors on the supply side, such as entry into the market of new manufacturers and products, mergers of key players (producers\suppliers), expansion of the production capacity of existing manufacturers, and changes on the demand side, such as mergers or collaborations between key customers. Our competitors include some of the world’s largest chemical and mining companies, some of which are state‑owned or government‑subsidized. The potential production capacity is currently greater than the global demand, which has affected price levels. In light ofDue to the fact that some of our products are commodities available from several sources, the primary competitive factor with respect to our products is the price. The prices of some of our products are influenced by the prices prevailing in the market, while the oversupply as compared to demand constitutes a negative factor in the field of commodity prices such as potash and phosphates, as do low prices in the agricultural sector. Additional competitive factors include product quality, customer service and technical assistance. If we are unable to compete effectively with these companies, our results of operations would almost certainly be significantly and adversely affected.
 
For example, our Polysulphate® business at the ICL Boulby mine in the UK, is exposed to new potential producers entering the market. Polysulphate® is the basis for many of the products in the Company's FertilizerpluS premium fertilizers business line. It should be noted, in this context, that a new potential producer, AngloAmerican Plc, holds a concession to develop a polyhalite mine with an undetermined capacity, located in the same area as our Boulby mine. According to its recent announcement, the engineering design, capital budget and project schedule are expected to be completed by the end of 2022 with an additional capital investment of approximately $700 million. If the development of the new mine materializes, ICL will cease to be the sole producer of Polysulphate® and may not be the market leader in terms of production throughput, which is inconsistent with the Company's strategy to obtain a leadership position in all its activities. We continuously monitor our competitive environment and will continue to seek ways to adhere with our strategy. If we are unable to compete effectively with new producers, our business, financial condition and results of operations could be materially and adversely affected.For further information, see “Item 4 – Information on the Company — B. Business Overview — Segment Information – Potash Segment”.
Moreover, some of our products are marketed through distributors, mainly as pertains to the activity of theour Phosphate Solutions segment and Specialty Fertilizers business.
7

Any replacement of, or modification into the composition of our distributors might adversely affect the Company’sour competitive ability and causeresult in a decrease in the scope of sales in certain markets, at least in the short term.
 
Overestimation of mineral and resource reserves could result in lower than expectedlower-than-expected sales and/or higher than expected costs and may have a material adverse effect on our business, financial condition and results of operations.operations
 
We base our estimates of mineral resources and resource reserves on engineering, economic and geological data that is compiled and analyzed by our engineers and geologists. However, resource and reserves estimates are by nature imprecise and rely to some extent on statistical inferences drawn from available drilling data, which may prove unreliable/inaccurate. There are numerous inherent uncertainties in estimating quantities and qualities of mineral deposits, resources and reserve deposits,reserves, as well the quality of the ore, and the costs of mining recoverable reserves and the economic feasibility thereof, including many factors beyond our control. Estimates of economically feasible commercial reserves necessarily rely on a number ofseveral factors and assumptions, all of which may vary considerably from the actual results, such as:
 
·Geological and mining conditions and/or effects of prior mining that may not be fully identified/assessed within the available data or that may differ from those based on our experience;
 
·
ICL Group Limited 9


Assumptions concerning future prices of products, operating costs, updates to the statistical model and geological parameters according to past experience and developing practices in this field, mining technology improvements, development costs and reclamation costs; and
 
·Assumptions concerning future effects of regulation, including the issuance of required permits and taxes imposed by governmental agencies.
 
If these factors and assumptions change, we may need to revise our mineral resource and resource reserves estimates.
 
Any revisions to our previous resource or reserve estimates or inaccuracies in our estimates related to our existing mineral resources and resource reserves could result in lower than expectedlower-than-expected sales and/or higher than expected costs and may have a material adverse effect on our business, financial condition and results of operations.
 
InFollowing the SEC final rule from October 2018 the SEC adopted a final rule that willto adopt new regulations to replace SEC Industry Guide 7 with new disclosure requirements that are more closely aligned with current industry and global regulatory practices and standards. We must comply with these new disclosure requirementsstandards, beginning with our fiscal year ended December 31, 2021, although early voluntary compliance is permitted. As at the date of this annual report, we have not adopted these new disclosure requirements and have not determined when we will electare reporting according to adopt them. When we implementSK-1300. In light of the new methodology in connection with adoption of theseaforesaid disclosure requirements, we will present resourceinformation regarding estimates of mineral reserves and reserveresources that, which differs from reserves estimates andpresented in the information presented may differ materially from the reserve estimates to those presented historically and in this Annual Report under the existing SEC rules.past.
 
In addition, we do not currently present reserves estimates in Spain (because we continue to evaluate our reserves there) and in the UK (because we don't believe that the polysulphate we are producing there is material).  In the absence of published reserves, we are unable to provide life of mine estimates that determine how long we are able to continue production, and the life of mine may be shorter than you expect.
For additionalfurther information, see “Item 4- Information on the Company— D. Property, Plant and Equipment— Reserves”.

8

 
The locations of some of our mines and facilities expose us to various natural disasters, including as a result of climate change
 
We are exposed to natural disasters, such as flooding and earthquakes which may cause material damage to our business. Inbusiness, and climate change has tended to cause certain types of natural disasters to become more severe or frequent. For example, in Israel, some of our plants are located onin the Jordan Rift Valley, or Syro-African Depression, a seismically active area. Furthermore, in recent years sinkholes and underground cavities have been discovered, in the area of the Dead Sea, which could cause harm to theour Company’s plants. In addition, an “undermining” process has begun in the northern part of the Arava stream, at the end of which there are located,, on both banks, are the evaporation ponds of the Company’s plants at the Dead Sea, this being a reaction to the recession of the Dead Sea water level.Sea. There is a risk that this phenomenon would jeopardize the stability of the Company’s dikesdykes and evaporation ponds. In the Sodom area, where many of the Company’s plants in Israel are located, there are occasional flash floods in the streambeds. While we have insurance coverage that coversfor these types of damage, subject to payment of deductibles, the insurance may not be sufficient to cover all of these damages.costs. In addition, we have underground mines in the United Kingdom and Spain and a mine in China. Water leakages into these mines or other natural disasters might causeresult in disruptions to our mining activities or even a loss of the mine. We do not have full property insurance with respect to all our property/assets.
ICL Group Limited 10

 
The accumulation of salt at the bottom of Pond 5, the central evaporation pond in our solar evaporation pondponds system used to extract minerals from the Dead Sea, requires the water levelregular harvesting of the pondsalt to be constantly raised in order to maintain a fixed brine volume and thereby sustain the production capacity of extracted minerals and prevent potential damage to the foundations and structures of hotels and other buildings situated close to the edge of the Pond
 
The minerals from the Dead Sea are extracted by way of solar evaporation, whereby salt precipitates onto the bed of one of the evaporation ponds at Sodom (Pond 5), in one of the sites of Dead Sea Works (hereinafter – DSW). The precipitated salt creates a layer on the Pond bed of approximately 20 million tonnes annually. Theproduction process of production of the raw material requires that a fixed brine volume is preserved in the Pond.Pond 5. Failure to maintain a constant volume of brine in Pond 5 could result in a reduction in production capacity. To this end, up to the solutionsend of 2021, the raising of the brines' level of the Pond is raised each year5 was according to the rate at which the poolpond floor rises.rises, while performing the salt harvest. Since the solutions' level maximum height (15.1 meters) was reached at the end of 2021, from 2022 onwards, the solutions' volume in Pond 5 will be preserved by way of harvesting the salt.
 
Failure to correspondingly raise the water level will cause a reduction in our production capacity. However, raisingRaising the water level of the pondPond 5 above a certain level may cause structural damage to the foundations of the hotel structuresbuildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructures oninfrastructure located along the western shoreline of Pond 5.the Pond.
 
We are currently working withUntil the Israeli government both with respectend of 2020, in order to ensure that Pond 5 water level does not exceed the maximum height (15.1 meters), the Government of Israel, through the Dead Sea Preservation Government Company Ltd., implemented a project for construction of the coastline defenses, andtogether with DSW (which financed 39.5% of the project's cost), as part of which the dike along the western beachfront of Pond 5, across from the hotels, was raised, together with a system for lowering subterranean water. The construction work with respect to the permanent solution,hotels' coastlines was completed and currently the Dead Sea Preservation Government Company Ltd. is carrying out elevation work in the intermediate area between the two hotel complexes. The "Permanent Solution", which consists of harvesting of the salt in suchshould provide a manner whereby raising the water level in Pond 5 would no longer be necessary after completion of the harvesting. The coastline defenses are supposed to provide protection pending the implementation of the permanent solution, which is supposed to provide protectiondefense at least until the end of the current concession period in 2030.
In 2015 and in 2016, the National Infrastructures Committee and the Israeli Government, respectively, approved National Infrastructures Plan 35A (hereinafter – the Plan), which includes the statutory infrastructure for establishment of the Salt Harvesting Project in Pond 5, and construction of the P-9 pumping station2030, was established in the northern basin of the Dead Sea. As at the date of the report, the building permits for the Salt Harvesting Project and the P-9 pumping station have been received and the construction work has commenced.
9

The Company will bear 80% andagreement with the Government will bear 20% of the cost of the Salt Harvesting Project, however the Government's share will not exceed NIS 1.4 billion.
In October 2017, DSWIsrael signed an agreement for the execution of the first stage of the Salt Harvesting Project, with a contracting company Holland Shallow Seas Dredging Ltd., which includes, among others, the construction of a special dredger that is designed to execute the salt harvesting. The dredger is expected to enter into service towards the end of 2019.in 2012.
 
There is no assuranceguarantee that the coastline defenses orsaid projects for maintaining the permanent solutionPond’s water level will be fully implementedat the cost we currently estimate or that the implementation will prevent damage to the surrounding infrastructure or to our operations at Pond 5. Failurein the Pond. Higher cost of the harvesting process or failure to provide solutions and/or any proof of damage caused as aforesaid, could materially and adversely affect our business, financial condition and results of operations.
 
For morefurther information about the coastline defenses and the permanent solution (the Salt Harvesting Project), see “Item 4 - Information on the Company—Company — D. Property, Plant and Equipment—Equipment Mineral Extraction and Mining Operations” and Concessions and Mining RightsNote 18 to our Audited Financial Statements.
 
Construction of a new pumping station is required due to the
ICL Group Limited 11

The receding water level in the northern basinNorthern Basin of the Dead Sea and the appearance of sinkholes may require capital and/or operational expenses in order to enable the continuation of the Company's operations in the Dead Sea
 
Due to the hydrological deficit, the water level of the Northern Basin of the Dead Sea is receding at the rate of over onemeter per year. As part of our production process in Israel, we pump water from the Northern Basin of the Dead Sea through a special pumping station and deliver it through a feeding channel to the salt and carnallite ponds. Due to the receding water levelevaporation ponds in the northern basin of the Dead Sea,Southern Basin. As the water line is receding from the current pumping station and construction of a new pumping station (hereinafter – the P‑9 Pumping Station) is therefore necessary. We expect that the P-9 pumping station will be able to pump water until the end of the current concession period. 
In 2017, DSW signed agreements with several execution and infrastructure companies for construction of the P-9 pumping station. The P-9 Pumping Station is expected to commence its operation during the year 2020.
Failure to construct the new pumping station as aforesaid or a significant delay in the planned timetables could have a material adverse effect on the Company’s business, its financial condition and results of operations.
In addition, as the water level of the northern basin of the Dead Sea recedes, we may be pressuredrequired to reduce our usage of minerals from the Dead Sea, which could have a material adverse effect on our business, financial condition and results of operations.
 
Our ability to pump water relies on an active pumping station at the water line of the Northern Basin of the Dead Sea. Due to the receding water level in this area, the water line is receding from the current pumping station area and construction of a new pumping station (hereinafter – the P‑9 Pumping Station) was required. The P-9 Pumping Station commenced its operation in early 2022. The Company expects that it will be able to continue pumping water in the coming years. Failure to operate the P-9 pumping station or to extend its life in future years could have a material adverse effect on the Company’s business, its financial condition and results of operations.
An additional risk related to the decline of the Dead Sea level is the erosion of Arava stream which flows along the international border between Israel and Jordan and into the Dead Sea. This erosion could endanger the stability of the eastern dykes in the future in the array of salt and carnallite ponds and any breach or damage to the salt and carnallite ponds could materially and adversely affect our business, financial condition and results of operations. We are endeavoring to analyze the matter and to find solutions to prevent or retard this occurrencein the long term. We are conducting ongoing monitoring and acting on site to protect the dykes. As part of these efforts, research was conducted, designed to gather information for the detailed planning of a project to prevent the continued erosion of the stream. The research phase was completed in 2020 and the detailed design is expected to commence in the first half of 2022. Prior to commencing the project, we must obtain permits from the authorities, due to its engineering complexity, proximity to the border, soil instability and environmental sensitivity of the entire area. Insofar as a decision was made to commence the project, we estimate that its completion is likely to take several years.
Furthermore, as a result of the decline of the Dead Sea's level, sinkholes and underground cavities have been discovered in the area of the Dead Sea. The appearance of sinkholes in the Dead Sea area is increasing over the years. Most of the sinkholes develop in the Northern Basin of the Sea, where there is little activity by ICL Dead Sea. However, in recent years there has been a steady development of sinkholes around of the feeding channel, through which water is pumped from the Northern Basin to the Southern Basin. DSW takes actions to monitor the development of these sinkholes and to fill them when they appear. The development of sinkholes in areas where we operate, together with a failure to detect and treat those sinkholes can cause significant damage and could materially and adversely affect our business, financial condition and results of operations.
ICL Group Limited 12

Any malfunction in the transportation systems we use to ship our products, and receive raw materials could have a material adverse effect on our business, financial condition and results of operations.operations
 
Part of our sales turnover is comprised of sales of bulk products characterized by large quantities. Most of this production quantity is shipped through dedicated facilities from two seaports in Israel, one seaport in Spain and another seaport in the United Kingdom. It is not possible to ship large quantities in bulk from other facilities in Israel. Any significant disruption with regard to the seaport facilities and/or the array of transportation from the seaports, including due to strikes by port workers,workers’ strike, regulatory restrictions and changes in the rights of use of seaport facilities, couldmay delay or prevent exports of our products to our customers, which could materially and adversely affect our business, financial condition and results of operations. In addition, any significant disruption, shortage, or unavailability in the array of transportation to the seaports and between various sites, primarily through trains and trucks, carrying our products and the raw materials we use in our business could result in customer dissatisfaction, loss of production or sales and higher transportation or equipment costs.
We rely heavily upon truck, rail, tug, barge and ocean freight transportation to obtain the raw materials we need, to distribute raw materials between our mines and facilities and to deliver our products to our customers. In addition, the cost of transportation is an important part of the final sale price of our products. Finding affordable and dependable transportation is important in obtaining our raw materials and to supply our customers. Higher costs for these transportation services or an interruption or slowdown due to factors including high demand, high fuel and energy prices, labor disputes, layoffs or other factors might materially and adversely affect the Company’s operations, its financial condition and results of operations.
 
10

In addition, the Company transports hazardous materials through the use ofusing specialized transport facilities, such as isotanks for the transportationconveyance of bromine. A malfunction in the transportation of hazardous materials, in one of our specialized transport facilities mightmay have an environmental impact and\or cause harm to the welfare of local residents, and, as a result, expose the Company to lawsuits and\or administrative proceedings or fines, and also causelead to a shutdown of such materials’ transportation systems for a certain period until the cause for such malfunction has beenis discovered and\or for purposes of preventative maintenance and improvement of the transportation array, and as a result may have material adverse effect on the Company’s operations, financial condition and results of operations.
 
We are exposed to risks associated with our international sales and operations which could adversely affect our sales to customers in various countries as well as our operations and assets in various countries. Some of these factors may also make it less attractive to distribute cash generated by our operations outside Israel to our shareholders, use cash generated by our operations in one country to fund our operations or repayments of our indebtedness in another country and support other corporate purposes or the distribution of dividends
 
As a multinational company, we sell in many countries where we do not produce. A considerable portion of our production is designated for export. As a result, we are subject to numerous risks and uncertainties relating to international sales and operations, including:
 
·Difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations, including the U.S. Foreign Corrupt Practices Act (the “FCPA”), the UK. Bribery Act of 2010 and Section 291A of the Israeli Penal Law;
 
·Unexpected changes in regulatory environments;
Unexpected changes in regulatory environments and increased government ownership and regulation in the countries in which we operate;
 
·Increased government ownership and regulation in the countries in which we operate;
ICL Group Limited 13



Political and economic instability, including civil unrest, inflation and adverse economic conditions resulting from governmental attempts to reduce inflation, such as imposition of higher interest rates and wage and price controls;
 
·PoliticalPublic health crises, such as pandemics and epidemics; and economic instability, including civil unrest, inflation and adverse economic conditions resulting from governmental attempts to reduce inflation, such as imposition of higher interest rates and wage and price controls; and
 

·
The imposition of tariffs, exchange controls, trade barriers or sanctions, new taxes or tax rates or other restrictions, including the current trade dispute between the US and China.China.
 
The occurrence of any of the above in the countries in which we operate or elsewhere could jeopardize or limit our ability to transact business there and could materially adversely affect our revenue and operating results and the value of our assets.
 
SomeThe continued spread of the aboveCOVID-19 pandemic has affected and may in the future materially and adversely affect our financial condition and results of operation
In March 2020, the World Health Organization declared COVID-19 a pandemic. Since then, the pandemic has continued to spread across the globe at varying infection rates and has introduced significant business and economic uncertainty and volatility to global markets. Accordingly, there has been, and may continue to be, a significant decline in global economic activity, in part, due to sporadic preventive measures taken by various governmental organizations around the world, such as travel bans and restrictions, quarantines, shelter-in-place orders and shutdowns.
The spread of the COVID-19 pandemic has led us to modify our business practices, including implementing policies, health and safety measures and procedures to protect our employees in all of our facilities and offices. We may need to take further actions for the benefit of our employees, customers, partners and suppliers, or as required by government authorities. There is no certainty that such measures will be sufficient to mitigate the risks might make it economically unattractiveposed by the pandemic. Furthermore, our ability to utilize cash generated byperform certain functions may be affected if we are required to take additional steps.
We expect COVID-19 to have a continues impact over the coming quarters, although the full future impact on global economy and our operations in one countrybusiness is uncertain and is difficult to fundassess or predict. The extent of the impact of the COVID-19 pandemic on our operationsoperational and financial performance will depend on future developments, including, but not limited to:

The duration, severity and spread of the pandemic and the actions required by government authorities or other health organizations to contain the disease or treat its impact, including the effectiveness of the vaccinations developed and already administered in most countries.
The duration and severity of the sustained global recession, and the uncertainty as to when global economy will fully recover.
The possibility of additional outbreaks of the virus, or repaymentsthe development of liabilities in another country, supportmore harmful and resistant variants of the virus, or any possible recurrence of other corporate purposessimilar types of pandemics, or any other widespread public health emergencies.
Significant disruption of global financial markets and needscredit markets, which may reduce our ability to access capital or distribute dividends.our customers’ ability to pay us for past or future purchases, which could negatively affect our liquidity.
The possibility of temporary closures of our facilities or the facilities of our suppliers, customers, their contract manufacturers, and the possibility of certain industries shutting down.
 
11ICL Group Limited 14


The ability to purchase raw materials in times of shortages resulting from supply chain disruptions, quarantines, lockdown orders and production shutdowns.
Lower demand and/or pricing for our products and a potential global economic recession could lead to reduced demand in our end markets, particularly bromine compounds. In addition, the significant decline in crude oil prices and the oil markets’ current ability to absorb excess supplies and rebalance inventory is likely to continue to result in decreased demand for our clear brine fluids.
The ability of our suppliers, contractors and third-party providers to meet their obligations to us at previously anticipated costs and timelines without significant disruption.
Our ability to continue to meet the manufacturing and supply arrangements with our customers at previously anticipated costs and timelines without significant disruption.
We continue to closely monitor the effects and implications of the pandemic. The ultimate impact of the COVID-19 pandemic, or a similar health epidemic, is highly uncertain and subject to change. To the extent that the COVID-19 pandemic negatively impacts our business, results of operations, liquidity or financial condition, it may also have the effect of increasing many of the other risks described in this “Risk Factors” section.
 
Our operations could be adversely affected by price increases or shortages with respect to water, energy and our principal raw materials as well as by increases in transportation costs
 
We use water, energy and various raw materials as inputs and we could be affected by higher costs or shortages inof these materials, as well as by changes in transportation prices.prices.
 
OurFor example, an increase in price or shortage of raw materials, inter alia: ammonia, sulphur, WPA and 4D (which we purchase from third parties) could adversely and materially affect our results of operations, financial position, and our business.
In addition, our phosphate facilities use large quantities of water purchased from Mekorot, Israel’s national water company, at prices set by the government. If these prices rise significantly, our costs will rise as well. In our plants in Sodom, we obtain water from an independent system that is not part of the national water system. A shortageLack of water at the water sources in proximityproximate to the plants or the imposition of additional costs/charges for water usage would force the Company to obtain water from sources located further away and/or at a higher cost.
 
Our plants consume large amounts of energy. Moreover, energy is a significant component of the shipping costs of a considerable share of our products. Significant price increases for energy, or energy shortages, would affect shipping costs, production costs and/or quantities.
The supply of electricity to our production processes and facilities at our magnesium plant require a continuous supply of electricity. While our magnesium plant has two power supply sources —in Israel is provided by our power station in Sodom and the national power grid. Our operations in Israel — there isare dependent on these two sources, so significant malfunctions at the power station and/or interruption of power supply from the national grid in Israel may lead to additional financial liabilities and potential shutdowns at our production facilities, which could negatively affect ICL's ability to supply its products to both external customers and other ICL's sites using them as raw materials and reduce revenue from decreased production capacity. In addition, our magnesium plant requires a riskcontinuous supply of damage toelectricity, so any interruption in the power supply from these two sources concurrently. Prolongedto the magnesium plant may cause significant damage to regular power supply may damage the plants and the environment.our magnesium production process.

In addition, during the third quarter of 2018, the Company’s new power plant in Sodom became operational. The new power plant is fueled by natural gas.
ICL Group Limited 15


The current supply of natural gas to our power plant and to our subsidiariesfacilities in Israel is dependent on a single suppliernarrow range of suppliers, who may prefer exporting over supplying to the domestic market and also on a single gas pipeline with limited transmission capacity. In 2017, the Company signed an agreement with Energean who holds a license to develop the Karish and Tanin gas reservoirs to supply up to 13 BCM of natural gas (NG) over a period of 15 years commencing with the commercial operation of Karish and Tanin. The NG from the reservoirs will be used for operating ICL’s factories and power stations in Israel. In January 2022, Energean announced that the gas supply is expected to be postponed until the third quarter of 2022. Considering the expected high demand during the summer of 2022, which may lead to potential shortages in NG, as well as the continued delays in Energean’s supply, the Company is taking measures to secure its supply of NG until its full gas supply is obtained from Energean. Failure to ensure sufficient supply of NG and/or to preserve the current price environment may lead to a material impact on the Company's business, financial position and results of operations. For further information, see Note 18 to our Audited Financial Statements.
 
While our plants are prepared for theto use of alternative energy sources (fuel oil and/or diesel fuel), failure to obtain NG in a timely manner or energy shortages stemming from high demand in local markets, export preference and the like, can result in an increase in our energy costs and/or energy shortages,in production losses, and could materiallyadversely and adverselymaterially affect our business, financial condition and results of operations.
Furthermore, an increase in price or shortage of raw materials, such as ammonia, sulphur, WPA and 4D (which we purchase from third parties) could adversely and materially affect our results of operations financial position, and our business.
 
We can provide no assurance that we will be able to passimpose on to our customers increased costs relatingwith respect to water, energy or otherand principal raw materials, such as sulphur, ammonia and white acid that are supplied by third parties.materials. Our inability to pass onimpose such cost increases could adversely affect our margins. In addition, shortages in our principal raw materials may disrupt our production capacity and adversely affect our business performance.
12

For further information, see “Item 4 ‑ Information on the Company— B. Business Overview— Segment Information”.
 
Completion of certain of the Company’s major projects may be dependent on third‑party contractors and/or governmental obligations. Furthermore, termination of engagements with contractors might entail additional costs
 
In the coming years, the Company planswe plan to complete several key projects, whose completion is very importantwhich are of great importance to the Company’s continued operation and ability to significantly improve its competitive position in somecertain markets. Thus, for example, we are advancing the salt harvest projectsignificant investments in Pond 5projects to increase our production capacity for our main product lines and in the Dead Sea, the construction of the new pumping station (P-9) in the Dead Sea, the construction of the white acid (WPA) facility in the YPH JV in China, the consolidation of potash mines in Spain including completion of the new mine access tunnel at Suria, and significant environmental investments.projects. The completion of key projects of the Company could also be dependent uponon third-party contractors. InFor example, a project in Spain for example, the project incurred several delays and budget expansions that were associated, among others, with thea third-party contractor. Situations wherein such contractors encounter financial or operational difficulties, or otherhave significant disagreements with the Company, could cause a significant delay in the planned timetables for completion of a project and\or material deviations from the project’sits budget and may even jeopardize its completion of the project altogether, andaltogether. This could adversely and even materially affect the Company’sour business, its financial condition and results of operations.
There is a risk that the outcome of this proceeding, or related proceeding, could amount to a significant monetary expense for us and it may have a material adverse effect on our business, our financial condition and results of operations.
 
The inflow of significant amountsquantities of water into the Dead Sea could adversely affect production at our plants
 
The inflow of significant amountsquantities of water into the Dead Sea could adversely affect production at our plants due to the inflow of significant amounts of water into the Dead Sea mightand may alter the composition of the Dead Sea water, in a manner that would lowerlowers the concentration of sodium chloride (NaCl) in the water, which couldmay adversely affect production at ICL plants.plants, our results of operations financial position, and our business. This risk may materialize, among other things, as a result of the construction of a canal connecting the Mediterranean Sea with the Dead Sea, the inflow of water from the Sea of Galilee (Kinneret) to the Dead Sea via the Jordan River, or the construction of a canal from the Red Sea to the Dead Sea.
An examination conducted by the World Bank, which is reviewing the construction of the canal connecting the Red Sea and the Dead Sea indicated that, a discharge of up to 400 million cubic meters into the Dead Sea will have no adverse environmental effects, as no layering effect will be caused, and the water will evaporate and/or mix with the water of the Dead Sea. For this reason it appears that inflow on such a scale will also create no significant damage to our plants, although the actual impacts may be different. However, if the Red Sea-Dead Sea Canal results in a lower concentration of sodium chloride in the water in the Dead Sea, it could adversely and materially affect production at our plants, our results of operations financial position, and our business..
 
13ICL Group Limited 16

 
We are exposed to the risk of labor disputes, slowdowns and strikes
 
From time to time, we experience labor disputes, slowdowns and strikes. A significant partportion of our employees are subject to collective labor agreements, mainly in Israel, China, Germany, United Kingdom, Spain, the Netherlands and the Netherlands.Brazil. Prolonged slowdowns or strikes at any of our plants could disrupt production and cause the non-delivery of products that had already been ordered, andordered. Also, ramp-up time is needed in order to return to full production capacity at the facilities. Furthermore, due to the mutual dependency between ICL plants, slowdowns or strikes in any ICL plantone of ICL's plants may affect the production capacity and/or production costs at other ICL plants. Labor disputes, slowdowns or strikes, as well as the renewal of collective labor agreements, may lead to significant costs and loss of profits, which could adversely, and even materially, affect our operating results and our ability to implement future operational changes for efficiency purposes. In the course of labor disputes, the workers union may impose certain sanctions which may include blocking or delaying the transfer of goods through the factory gates; such disputes may escalate into a strike.
 
Some of our employees have pension and health insurance arrangements that are our responsibility
 
Some of our employees have pension and health insurance arrangements that are our responsibility. Against some of these liabilities, we have monetary reserves that are invested in financial assets. Changes in life expectancy, changes in the capital marketmarkets or changes in other parameters by which undertakings to employees and retirees are calculated, as well as statutory amendments, could increase our net liabilityliabilities for these arrangements. For information about our employee benefits liabilities and composition of plan assets, see Note 1816 to our Audited Financial Statements.
 
The discontinuation, cancellation or expiration of government incentive programs or tax benefits; entry into force of new or amended legislation or regulations with respect to additional and/or increased fiscal liabilities to be imposed on us; or imposition of new taxes or changes to existing tax rates, could all adversely affect our business results
 
Any of the following may have a material adverse effect on our operating expenses, effective tax rate and overall business results:
 
·Some government incentive programs may be discontinued, expire or be cancelled;
 

·
Governments may initiate new legislation or amend existing legislation in order to impose additional and/or increased fiscal liabilities on our business, such as additional royalties or, natural resource taxes or required investments, as has occurred in Israel;
The applicable tax rates may increase;
 
·The applicable tax rates may increase;
We may no longer be able to meet the requirements for continuing to qualify for some incentive programs;
 
·We may no longer be able to meet the requirements for continuing to qualify for some programs;
Such incentive programs and tax benefits may be unavailable at their current levels;
 
·Such programs and tax benefits may be unavailable at their current levels;
Upon the expiration of a particular benefit, we may not be eligible to participate in a new program or qualify for a new tax benefit that would offset the loss of the expiring tax benefit.
 
·Upon the expiration of a particular benefit, we may not be eligible to participate in a new program or qualify for a new tax benefit that would offset the loss of the expiring tax benefit.
Changes in trade agreements between countries, such as in the trade agreements between the United States and China.
 
·Changes in trade agreements between countries, such as in the trade agreements between the United States and China.
Changes in international taxation laws, as may be adopted by several countries we operate in, or sell to, may result in additional taxes or high tax rates being imposed on our operations.
 
14ICL Group Limited 17


Changes in our evaluations and estimates, which serve as a basis for analyzing our contingent liabilities and for the recognition and manner of measurement of assets and liabilities, including provisions for thewaste removal of waste and the reclamation of mines, may adversely affect our business results and financial situationcondition
 
As part of the preparation and composition of our financial statements, we are required to exercise discretion, make use of evaluations and estimates and make assumptions that affect, among other things, the amounts of assets and liabilities, income and expenses. When formulating such estimates, the Company iswe are required to make assumptions concerning circumstances and events that involve uncertainty, even great uncertainty.uncertainty, such as, legal claims pending against ICL. We exercise our discretion based on our past experience, various facts, external factors and reasonable assumptions, according to the circumstances relevant to each estimate. It should be noted that actual results may differ, and even materially so, from such estimates and therefore. Therefore, this may adversely affect our financial results. For further information, see Note 2 to our Audited Financial Statements.
Regarding pending legal matters, we are required to estimate the probability of their outcome, which could be substantially different from their actual results due to the inherent complexity and the uncertainty of such proceedings. For example, in 2015, a request was filed for certification of a claim as a class action, in the Tel Aviv-Jaffa District Court, against eleven defendants, including a subsidiary, Fertilizers and Chemical Ltd., in respect of claims relating to air pollution in Haifa Bay and for the harm allegedly caused by it to residents of the Haifa Bay area. The amount of the claim is about NIS 13.4 billion (about $4.2 billion). In the Company’s estimation, based on the factual material provided to it and the relevant court decision, it is more likely than not that the plaintiffs’ contentions will be rejected.
In some of our various sites of operation, concession agreements and/or licenses include obligations relating to the expiration thereof, including reclamation and clearing of the sites (restoring the site to its former state). There is uncertainty regarding the actions that would be required upon expiration of the concession and/or license period and, accordingly, the costs involved in the execution of such actions, including the scope of restoration required. For example, with respect to the estimated costs of reclamation of our mining in Israel, we are required to make assessments considering numerous assumptions, including future additional restoration requirements and the impact thereof, in light of regulatory developments in this field in recent years. It is very difficult to assess the estimates for site restoration and clearing due to the complexity of soil restoration treatments, the scope and costs required for restoration, which are occasionally discovered only during actual execution of restoration works, the absence of a single, unified global standard determining environmental restoration requirements, and the absence of any significant precedents in this matter in Israel. An additional example is estimation of the projected costs for the closure and restoration of the Sallent site as part– the main portion of the estimated costs for closure and restoration solution,is attributed to restoration of the salt pile. The Company is taking action to utilizetreating the salt pile, by both utilizing the salt for production and sale asfor de-icing purposes, and by processing the material and removing it to the sea via a product in the De-icing business. In light of changes in market conditions, mainly in the future selling prices of the said product, the Company updated its provision.
collector. The provisionestimation is based on a long‑termlong-term forecast, covering a period of more than 50 years, along with observed estimates and, accordingly,therefore, the final amountactual costs that willmay be required to restore the Sallent site could change,may differ, even significantly,substantially, from the amount of the presentcurrent provision. In the Company’s estimation, the provision in its books reflects the best estimate of the expense required For further information, see Note 17 and 18 to settle this obligation.our Audited Financial Statements.
 
ICL Group Limited 18


Our tax liabilities may be higher than expected.expected
 
Our tax expenses and the resulting effective tax rate reflected in our consolidated financial statements may increase over time as a result of changes in corporate income tax rates andand/or other changes in tax laws in the various countries in which we operate. We are subject to taxes in many jurisdictions, including jurisdictions in which we have a limited presence, and discretion is required in the determination of the provisions for our tax liability. Considering recent trends in international tax law and OECD recommendations, significant changes to international tax laws and practices may be adopted by various jurisdictions. Such changes could result in us being subject to tax in jurisdictions in which we currently are not subject to tax (including jurisdictions in which we have limited or no operations other than performing sales activities). Similarly, we are subject to examination by the tax authorities in many different jurisdictions. As part of thesesuch tax examinations, the relevant tax authorities may disagree with the amount of taxable income reported deriving from our inter‑company agreements, and may also dispute our interpretation of the applicable tax legislation. For example, thelegislation relating, among other things, to inter‑company agreements.
The Law for Taxation of Profits from Natural Resources
The Law for Taxation of Profits from Natural Resources in Israel (hereinafter – the Law) is a new law that entered into effect with respect to the bromine, phosphate and magnesium minerals in 2016, and with regard to the potash mineral, in 2017.
As at the date of the report,reporting date, no regulations under the Law have yet been issued under the Lawenacted (except for regulations regarding to advancedadvances on account of tax payments, regulations published in July 2018), no circulars have been published and no court decisions have been rendered as to the implementation of this Law. The manner of applicationnew Law that was imposed, to the best of the Law, including preparation of theCompany's knowledge, only on one other company. The financial statements of Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium (hereinafter – the Subsidiaries), serve as a basis for eachthe mineral based financial reports (hereinafter – Surplus Profit Reports) required to be filed for tax calculation under the Law. Such calculation involves interpretations and assumptions as per a number ofon several significant matters, which require management’s judgment.
 
Based
The Company's position is that the Surplus Profit Levy should be calculated on the law's interpretation,Dead Sea Solution, which is the natural resource used by the Company, and not for each product produced from the Dead Sea Solution. Furthermore, based on the Company’s position is thatunderstanding of the law, the carrying amount of the property, plant and equipment, for the purpose of preparation of the Subsidiaries’ financial statements for 2016 and onward of the Subsidiaries, which serve as athe basis for the reports filed pursuant to the provisions of the Law,  can beSurplus Profit Reports, are presented on the basis of fair value revaluation,their replacement cost (as used assets), on the date the Law entersentered into effect. Presenting property, plant and equipment based on fair value revaluation is in accordance with one of the permitted methods in International Financial Reporting Standards (IFRS), which apply to the Company and its Subsidiaries and are accepted accounting principles in Israel. There is no resulting change in the Company's consolidated financial statements.
 
15

 
The tax authority'sTax Authority's position could be materially different, even in very significant amounts, mainly, as a result of the different interpretation regarding the implementation of the Law, including matters other thanwith respect to the measurementcarrying amount for natural resources tax purposes of the property, plant and equipment. If
Should the above‑mentioned tax position is rejected byITA, and subsequently the Israel tax authority, meaningapplicable District Court, in case of an appeal, decides that the measurement of the property, plant and equipment, for this purpose, should have beenbe in accordance with depreciated historical values,cost, and fully rejects the Company's arguments with respect to this issue, the result wouldcan be an increase in the company'sCompany's tax liabilities in an aggregate amount of about $100 million for the years 2016-2018.liabilities.
ICL Group Limited 19


CFC taxation
 
The Company estimates that it is more likely than not that its position will be accepted. As at the date of the report, the Company believes that the tax provision in its financial statements represents the best estimate of the tax payment expected to be incurred with reference to the Law.
Given the mineral's price environment, its effect on the profitability of the subsidiaries and after deduction of a 14% return on the balance of property, plant and equipment, as stated in the law, as at December 31, 2018, no natural resources tax liability was payable.
In December 2017, the U.S. tax reform was approved through legislation, and became effective on January 1, 2018. The Tax Act is comprehensive and complex and may lead to future interpretations regarding the manner of its implementation, which may impact the Company’s estimations and conclusions. For further details, see Note 17 to our Audited Financial Statements.
The company operates in many countries around the world. Under certain conditions, the tax lawlaws in certain countries considersprovide that income from passive activities (and in certain cases, active activities) from controlled foreign companiesControlled Foreign Companies ("CFC") asshall be considered taxable income even if not distributed. The conditions include, among other, the ratio between active and passive income and tax rates applied in the foreign countries.Although the Company is acting in accordance with the relevant tax legislation, there is a risk that the tax authorities will require additional tax payment,payments, to the extent that the Company's position regarding meeting the conditions of a Controlled Foreign Companies (CFC) will not be acceptedaccepted.
BEPS and Pillar and 2 proposed arrangements
 
The base erosionBase Erosion and profit shiftingProfit Shifting (“BEPS”) project and other initiatives like Pillars 1 and 2 undertaken by the Organization for Economic Cooperation and Development (“OECD”) may have adverse consequences to our tax liabilities. The BEPS project contemplatesThese initiatives contemplate changes to numerous international tax principles, as well as national tax incentives and theseenforce other arrangements like minimum effective tax liability. These changes, when adopted by individual countries, could adversely affect our provision for income taxes. Countries have only recently begun to translatebeen translating the BEPS recommendations into specific national tax laws, and itare expected to do so also with respect to Pillar 1 and 2, while in the EU, Pillar 2 is expected to be effective as early as of FY 2023. It remains difficult to predict the magnitude of the effect of such new rules on our financial results.
 
16

We have expanded our business throughby mergers and acquisitions, oras well as by organizational restructuring and various initiatives designed to increase production capacity and reduce costs of our existing operations. This could result in a diversion of resources and significant expenses, a disruption of our existing business operations and an adverse effect on our financial condition and results of operations
 
Negotiation processes with respect to potential acquisitions or joint ventures, as well as the integration of acquired or jointly developed businesses, require management to invest time and resources, in addition to significant financial investments, and we may not be able to realize or benefit from the potential involved in such opportunities. Future acquisitions could lead to substantial cash expenditures, dilution due to issuance of equity securities, the incurrence of debt and contingent liabilities, including liabilities for environmental damage caused by acquired businesses prior to or after the date we acquired them, a decrease in our profit margins, impairment of intangible assets and goodwill; and increased governmental oversight over the Company’s activity in certain areas. There is no guarantee that businesses that have been or will be acquired or joint ventures will be successfully integrated with our current productsbusinesses and operations, and we may not realize the anticipated benefits of such acquisitions or joint ventures and even incur losses as a result thereof.
Future acquisitions could lead to:
·Substantial cash expenditures;
·Dilution due to issuances of equity securities;
·The incurrence of debt and contingent liabilities, including liabilities for environmental damage caused by acquired businesses before we acquired them;
·A decrease in our profit margins;
·Impairment of intangible assets and goodwill; and
·Increased governmental oversight over the Company’s activity in certain areas.
If futurethereof, particularly if such acquisitions disrupt our operations our business may be materially and adversely affected..
 
Some of our partners or potential partners in these business initiatives are governments, governmental bodies or publicly owned companies. We may face certain risks in connection with our investments in the joint ventures and/or partnerships including, for example, if our partners' needs, desires or intents change, if the government changes or if the ownership structure of our partners changes.
 
In addition, we are employing a number ofseveral initiatives to improve our existing operations, including initiatives to increase production in Spain and Israel and reduce operating costs at our facilities. InFor example, at ICL Iberia, our subsidiary in Spain, we are consolidating allconsolidated our two existing mines and processing facilities into one complex which operates via a single site which includesramp instead of a mineshaft. The sites consolidation and a processing plant, which would reduce coststhe ramp project are expected to increase our production capacity to an expected annual running rate of approximately 1 million tons by the second half of 2022, while lowering cost per ton, and allow forto reach a level of up to about 1.3 million tons per year in the eliminationfuture, following completion of additional bottlenecks and further expansion. In ICL Boulby we have made a transition from thenecessary adjustments in surface production of potash to the production of Polysulphate™ and have expanded the mining area in order to provide more resources. In YPH JV in China we are expanding the JV’s activities in the field of specialty phosphate solution, among other things through the construction of a white acid (WPA) facility. These initiatives may involve very high costs and/or take longer than we anticipate and may not be realized and\or ultimately achieve their goals. facilities.
If theseour initiatives will not succeed, our financial situation and results of business and operations, as well as competitive position, could be materially and adversely affected.
 
ICL Group Limited 20
17

In addition, as part of our plan to create available sources for funding further investments, as well as decrease our current leverage level, we are considering, among other things, various opportunities for divesting of subsidiaries and/or assets having low synergies with our minerals chain and/or portfolio. Accordingly, in 2018 the Company completed the sale of its fire safety, oil additives and Rovita businesses. These divestments, at least in the short-term, cause a decrease in the scope of our business activities and there is no certainty that we will be able to decrease by an identical proportion the fixed costs required in order to manage our business activities, which would adversely the results of our ongoing operations. 
See “Item 4 - Information on the Company— B. Business Overview— Our Strategy”.

As a multinational company, our sales may be adversely affected by currency fluctuations and restrictions, as well as by credit risks
 
Our global activities expose us to the impact of currency exchange rate fluctuations. Our financial statements are prepared in U.S. dollars. Our sales are made in a variety of currencies, primarily in U.S. dollars and euros. As a result, we are currently subject to significant foreign currency risks that affect our financial results and may face greater risks as we enter new markets. We may also be exposed to credit risks in some of these markets. The imposition of price controls and restrictions on the conversion of foreign currencies could also have a material adverse effect on our financial results. Part of our operating costs are incurred in currencies other than U.S. dollars, particularly in euros, ILS,NIS, GBP, BRL and RMB. As a result, fluctuations in exchange rates between the currencies in which such costs are incurred and the U.S. dollar may have a material adverse effect on the results of our operations, the value of the balance sheet items measured in foreign currencies and our financial condition.
 
We use derivative financial instruments and "hedging" measures to manage some of our net exposure to currency exchange rate fluctuations in the major foreign currencies in which we operate. However, not all of our potential exposure is covered, and certain elements of the Company’s financial statements, such as operating profit, long-term employee liabilities (IAS 19), lease liabilities (IFRS 16) and equity, are not fully protected against foreign currency exposures. Therefore, our exposure to exchange rate fluctuations could have a material adverse effect on our financial results.
 
See “Item“Item 11 - Quantitative and Qualitative Disclosures about Market Risk—Risk — Exchange Rate Risk”.
 
Because some of the Company’s liabilities bear interest at variable rates, we are exposed to the risk of interest rate increases, including in connection with any developments with respect to the end of LIBOR rate calculations in 2021phase-out period
 
A portion of our liabilities bear interest at variable rates and therefore, we are exposed to the risk stemming from an increase in interest rates, which would increase our financing expenses and adversely affect our results. Such increase in interest rates may also occur as a result of a downgrade in our rating.
 
Further, a portion of ICL'sour loans bear variable interest rates based on the short‑termshort-term London interbank offered rate for deposits of US dollars (LIBOR) rate for a period of one to twelve months, plus a margin as defined in each loan agreement. Apart from our debt instruments, we also use LIBOR for our derivatives, such as currency swaps. LIBOR tends to fluctuate based on general interest rates, rates set by the Federal Reserve and other central banks, the supply of and demand for credit in the London interbank market and general economic conditions. OnIn July 27, 2017, the Financial Conduct Authority (“FCA”) (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021. It is unclear whether new methods of calculatingIn March 2021, the IBA released the LIBOR will be established suchcessation statement, pursuant to which the IBA publicly announced that it continuesintends to exist after 2021. The U.S. Federal Reserve, in conjunctioncease publication of euro, sterling, Swiss franc and Japanese yen and 1 week and 2-month USD LIBOR settings on December 31, 2021, and the remaining USD LIBOR settings on June 30, 2023. In addition, the FCA provided that starting January 1, 2022, new use of USD LIBOR is banned, subject to limited exceptions. In accordance with recommendations from the Alternative Reference Rates Committee, is considering replacing U.S. dollar LIBOR is currently being replaced with the Secured Overnight Financing Rate (“SOFR”), a newly creatednew index calculated with a broad setthat measures the cost of short-term repurchase agreementsborrowing cash overnight, backed by treasuryU.S. Treasury securities. ItGiven that SOFR is a secured rate backed by government securities, it is a rate that does not possibletake into account bank credit risk (as is the case with LIBOR). SOFR is therefore likely to predictbe lower than LIBOR and is less likely to correlate with the effectfunding costs of financial institutions. As a result, parties may seek to adjust the spreads relative to such reference rate in underlying contractual arrangements. These reforms may cause existing loan agreements using LIBOR to perform differently than in the past or to disappear entirely. The consequences of these changes, other reforms or the establishment of alternative reference ratesdevelopments with respect to LIBOR cannot be entirely predicted but may result in the US or elsewhere.level of interest payments on the portion of our indebtedness that bears interest at variable rates to be affected, which may adversely impact the amount of our interest payments under such debt. To the extent these interest rates increase, our interest expense will increase, in which event we may have difficulties making interest payments and funding our other fixed costs, and our available cash flow for general corporate requirements may be adversely affected. See “Item“Item 11 - Quantitative and Qualitative Disclosures about Market Risk—Risk — Interest Rate Risk”.

ICL Group Limited 21



In anticipation of LIBOR’s phase-out, we initiated preliminary discussions with our lenders to negotiate a replacement benchmark for LIBOR. There can be no assurance that we will be able to reach any agreement on a replacement benchmark, and there can be no assurance that any agreement we reach will result in effective interest rates at least as favorable to us as our current effective interest rates. The failure to reach an agreement on a replacement benchmark, or the failure to reach an agreement that results in an effective interest rate at least as favorable to us as our current effective interest rates, could result in a significant increase in our debt service obligations, which could adversely affect our financial condition and results of operations. In addition, the overall financing market may be disrupted as a result of the phase-out or replacement of LIBOR, which could have an adverse impact on our ability to refinance, reprice or amend our existing loans, or incur additional indebtedness on favorable terms or at all.
 
18

We are exposed to material fines, penalties and other sanctions and other adverse consequences arising out of FCPA investigations and related matters
 
We are required to comply with the U.S. Foreign Corrupt Practices Act (the "FCPA"), the UK Bribery Act and similar anti-corruption laws in other jurisdictions around the world, in the countries where we operate. We operate and sell in countries that may be considered to be ofas high risk in this regard. Compliance with these laws has been subject to increasing focus and activity by regulatory authorities, both in the United States and elsewhere, in recent years. Actions by our employees, as well as third party intermediaries acting on our behalf, in violation of such laws, whether carried out in the United States or elsewhere in connection with the conduct of our business, could expose us to significant liability for violations of the FCPA or other anti-corruption laws and accordingly may have a material adverse effect on our reputation and our business, financial condition and results of operations.

ICL Group Limited 22

 
Significant disruptions in our, or our service providers’, information technology systems or breaches of our, or our service providers’, information security systems could adversely affect our business
 
OurInformation technology (IT) systems, including our hardware, software and telecommunications networks, as well as data centers and other information technology systems of third parties are critical to the operation of our business and essential to our ability to successfully perform day-to-day operations. Our operations also depend on the timely maintenance, upgrade and replacement of such systems, as well as pre-emptive expenses to mitigate the risks of failures. An intrusion, interruption, destructionbreakdown or breakdowndestruction of our, or our service providers’, information technology systems and/or infrastructure by authorized or unauthorized persons could adversely affect our business and operations and in some cases even lead to environmental damage. In addition, a significant disruption to our, or our service providers’, computerized systems could cause harm of damage to the civilian population located in the vicinity of our production facilities. Moreover, we could experience business interruption, information or money theft and/or reputational damage as a result of cyber-attacks, which may compromise our, or our service providers’, systems, lead to data leakage and to disruption of sensitive production facilities and/or the security thereof, whether internally or at our third-party providers. Our, and some of our service providers’, systems have been, and are expected to continue to be, the target of malware and other cyber-attacks. In spite ofDespite our investment in measures to reduce these risks, we cannot guarantee that these measures will be successful in preventing compromise and/or disruption of our information technology systems and related data. In addition, asdata or that such systems and data held and operated by our service providers will be secure. We have a limited ability to control the operations and security of the information systems used on our behalf or provided to us by our service providers and may have limited recourse with such service providers in the event an issue arises. As we become more dependent on information technologies to conduct our operations, and as the number and sophistication of cyber-attacks increase, the risks associated with cyber security increase. These risks apply both to us, and to third parties on whose systems we rely for the conduct of our business. Cyber threats are persistent and constantly evolving.evolving and include, but are not limited to, installation of malicious software, ransomware, viruses, social engineering (including phishing attacks), denial of service or other attacks, employee theft or misuse, unauthorized access to data and other electronic security breaches. Threats may derive from human error, fraud or malice on the part of employees or third parties or may result from accidental technological failure. Such threats have increased in frequency, scope and potential impact in recent years, which increaseincreased the difficulty of detecting and successfully defending against them. As cyber threats continue to evolve, we may be required to incur additional expenses in order to enhance our protective measures or to remediate any information security vulnerability. Cyber-attacks and other intrusion, interruption, destructionbreakdown or breakdowndestruction of our information technology systems and/or infrastructure could also could require significant management attention and resources, expose us to legal liabilities, negatively impact our reputation among our customers, business partners and the public, and cause us to incur significant costs, any of which could have a material adverse effect on our business, financial condition and results of operations.
 
Our operations depend, among other things, on the timely maintenance, upgrade and replacement of networks, equipment, and information systems, as well as pre-emptive expenses to mitigate the risks of failures. We regularly evaluate the need to upgrade and/or replace our information systems to protect our information technology environment, to stay current on vendor supported products and to improve the efficiency and scope of our systems and information technology capabilities. The implementation of new systems and information technology could adversely impact our operations by requiring substantial capital expenditures, diverting management’s attention, and/or causing delays or difficulties in transitioning to new systems. In addition, our systems implementations may not result in productivity improvements at the levels anticipated. Systems implementation disruption and any other information technology disruption, if not anticipated and appropriately mitigated, could have an adverse and material effect on our business.
19

ICL Group Limited 23


 
Failure to retain and\or recruit personnel for key personnel,operational/professional positions, or to attract additional executive and managerial talent, could adversely affect our business
 
Given our increasing size,the complexity and the global reach of our businesses each of which could constitute a significant stand-alone company,and their global reach, we greatly rely upon our ability to recruit and retain highly qualified and skilled management and other employees.employees,including engineers, agronomists, scientists, technical equipment operators, programmers, data scientists, and other employees with special expertise. Much of our competitive advantage is based on the expertise, experience and know-how of our key management personnel. Any loss of service of key members of our organization, or any diminution in our ability to continue to attract high-quality employees may delay or prevent the achievement of major business objectives and may have a material adverse effect on our business, financial condition and results of operations.
 
We may not succeed in reducing our operating expenses within the framework of various efficiency programs implemented by the Company in its various sites
 
In order toTo cope with the challenging business environment prevailing in recent years and the increasing level of competition, we constantly review our total expenses and cost structure, and accordingly implement, from time to time, various efficiency programs designed to reduce costs. Such programs are subject to risks and uncertainties, and actual results may differ, even materially, differ from those planned or expected, and might adversely affect our operations, as well as our ability to realize other aspects of our strategy. For example, in ICL Iberia in Spain we are consolidating all our sites into a single mine with a single processing plant, which is expected to lead to decreased cost per tonne and create the possibility of removing other bottlenecks and further expansion. The plan involves significant capital investments, as well as manpower reduction. The plan is subject to risks and uncertainties, and actual results may materially differ from those planned or expected and could adversely affect our operations.   
 
In recent years, the Company’s leverage degree has changed significantly and we frequently engage in refinancing activities, and we therefore relyThe Company relies on access to the capital markets as it borrows money from various sources to fund its operations and it frequently engages in refinancing activities
 
The level at which the Company is leveraged could affect our ability to obtain additional financing for acquisitions, refinancing of existing debt, working capital or other purposes, could adversely affect our credit rating, and could make us more vulnerable to industry downturns and competitive pressures, as well as to interest rate and other refinancing risks. In addition, capital markets have been more volatile in recent years. Such volatility may adversely affect our ability to obtain financing on favorable terms at times in which we need to access the capital markets. Our ability to refinance existing debt and meet our debt service obligations will be dependent upon our future performance and access to capital markets, which will be subject to financial, business and other factors affecting our operations (including our long-term credit ratings), many of which are beyond our control. Our credit rating may be downgraded, among other things, due to our future performance, the degree to which we are leveraged and deterioration of the business environment.
20

 
The instruments relating to our debt contain covenants and, in some cases, require us to meet certain financial ratios. Any failureFailure to comply with thesefinancial covenants could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which may not be available to us on favorable terms or at all. Alternatively, any such default could require us to sell our assets or otherwise curtail operations in order to satisfy our obligations to our creditors.
 
In September 2021, the Company entered into a new sustainability linked loan (SLL) agreement, which includes sustainability performance targets. Any failure to comply with these targets may result in penalties and impede our efforts to raise funds, which may not be available to us on favorable terms or at all, especially as such loans become increasingly common.
ICL Group Limited 24


The Company is exposed to risks relating to its current and future activity in emerging markets
We operate in several emerging markets and may have future activities in additional emerging markets. Activity in these regions is exposed to the socioeconomic conditions, as well as to the laws and regulations governing the agricultural, food and industrial sectors in these countries. The additional risks entailed in operating in emerging markets include, but are not limited to, high inflation rates; extreme fluctuations in exchange rates, martial law, war or civil war; social unrest; organized crime; expropriations and nationalizations; rescindment of existing licenses, approvals, permits and contracts; frequent and significant changes in taxation policies; restrictions on the use and trade of foreign currency. Governments in certain jurisdictions often intervene in the country’s economy, and at times even introduce significant changes to policy and regulations. Changes in the policies governing the food, agricultural and industrial sectors or changes in political attitudes in the countries wherein we operate could adversely affect our operations or profitability. Our operations could be affected at various degrees by governmental regulations relating to production limitations, price controls, controls of export, currency transfer, product imports and supply, taxes and royalties, divesture of property, licenses, approval and permits, environmental issues, real estate claims by local residents, water use and workplace safety. Failure to comply with domestic laws, regulations and procedures may result in the loss, revocation or divesture of licenses, imposition of additional local oversight of activities or other interests. We are monitoring the developments and policies in emerging markets in which we operate, and regularly assess their effect on our operations; however, such developments cannot be accurately anticipated, which, insofar as they occur, could adversely and even materially affect our activity and/or profitability.
Risks Related to Our Industry
 
Sales of our fertilizer products are subject to the situationconditions in the agricultural industry
 
Most of our fertilizer products are sold to producers of agricultural produce. Fertilizer sales may be adversely affected as a result of a decline in agricultural produce prices or the availability of credit, or other events that cause farmers to plant less and consequently reduce their use of fertilizers. For example, periods of high demand, increasing profits and high-capacity utilization tend to lead to new investment in crops and increased production. This growth increases supply until the market is over‑saturated, leading to declining prices and declining capacity utilization until the cycle repeats. As a result, the prices and quantities of fertilizer products sold have been volatile. As potash and phosphate prices and quantities sold have a very significant influence on our business results, low prices and/or low quantities could cause our results of operations to fluctuate and, potentially, materially deteriorate.
 
The priceprices at which we sell our fertilizer products and our sales volumes could fall in the event of industry oversupply conditions, which could have a material adverse effect on our business, financial condition and results of operations. Alternatively, high prices may lead our customers to delay purchases in anticipation of lower prices in the future, thereby decreasing our sales volumes. These factors could materially and adversely affect our business, financial condition and results of operations.
 
In addition, government policies, and specifically, subsidy levels, may affect the amountnumber of agricultural crops and, as a result, sales of our fertilizer products. Generally, reductions in agricultural subsidiesto the farmer or increases in subsidies to local fertilizer manufacturers in countries where we sell our products have an adverse effect on our fertilizer business. In addition, the ongoing trade dispute between the United States and China may also affect the sales of some of the Company’s products through continued imposition of existing tariffs or increased tariffs or other trade barriers that may negatively affect our sales directly and\or indirectly by affecting our customers’ business and operations, which could materially and adversely affect our business, financial condition and results of operations.
 
Finally, the agricultural industry is strongly affected by local weather conditions. Conditions such as heavy storms, long periods of drought, floods, or extreme seasonal temperatures could affect the local crop’s quality and yield and cause a reduction in the use of fertilizers. Loss of sales in an agricultural season in a target country as a result of weather‑related events can cause a loss of sales for the wholeentire year.


21
ICL Group Limited 25


Sales of our Industrial Products and Phosphate Solutions segments’ products are affected by various factors that are not within our control, including developments in the end markets of industrialmaterials and food, legislative changes, recession or economic slowdown and changes in currency exchange rates
 
The sales of oil drilling products depend on the extent of operations in the oil drilling market, mainly in deep-sea drilling, which in turn is dependent on oil prices, and on the decisions of oil companies regarding rates of production and areas of production of oil and gas.
Sales of our Industrial Products and Phosphate Solutions segments’ products are also affected by global economic conditions in the markets in which we operate. For example, our sales may be affected by the slow economic recovery or any reversal thereof in Europe. In addition, we have significant manufacturing operations in Europe and a large portion of our European sales are in euros, while some of our competitors are manufacturers located outside Europe whose operational currency is the U.S. dollar. As a result, a strengthening of the euro exchange rate against the U.S. dollar increases the competitive advantage of these competitors.competitors.
 
The sales of oil drilling products depend on the extent of operations in the oil drilling market, mainly in deep-sea drilling, which in turn is dependent on oil prices, and on the decisions of oil companies regarding rates of production and areas of production of oil and gas.
The operation of the Phosphate Solutions segment in the food industry is affected by legal provisions and licensing regulations relating to health. This area is characterized by stringent regulatory requirements that are updated from time to time by enforcement agencies. Adjustments of our operations to the changes in regulation, including the technological complexity and feasibility of such adjustments, may adversely affect the sales of our products, incidental to any specific prohibitions and/or adjustments required in order to meet regulatory requirements.
 
In addition, the ongoing trade dispute between the United States and China may also affect the sales of some of our products through continued imposition of the existing tariffs or increased tariffs or other trade barriers that may negatively affect our sales directly and\or indirectly by affecting our customers’ business and operations, which could materially and adversely affect our business, financial condition and results of operations.
 
OurSales of our magnesium salesproducts are affected by various factors that are not within our control, including developments in the Unites Statesend markets of magnesium, legislative changes, recession or economic slowdown, changes in currency exchange rates, antidumping and countervailing duties
Sales of our magnesium products are under investigationaffected by global economic conditions in the International Trade Administration ofmarkets in which we operate. For example, our sales may be affected by any economic reversal in the U.S. Department of Commercealuminum sector, steel sector, and the U.S. International Trade Commissioncasting sector of parts made of magnesium alloys (mainly for uses in the vehicle industry).
 
In October 2018, a petition was filedaddition, environmental regulations, significant changes in the USD against the NIS exchange rate and trade barriers may negatively affect our sales directly and\or indirectly by affecting our customers’ business and operations, which could materially and adversely affect our business, financial condition and results of operations.
ICL Group Limited 26


The Company’s magnesium activities may be subject to the International Trade Administration of the U.S. Department of Commerce and the U.S. International Trade Commission by a US Magnesium company (hereinafter - US Magnesium), to impose antidumping and countervailing duties on imports of magnesium from Israel. US Magnesium claims that imports of magnesium producedare imposed in Israel by Dead Sea Magnesium Ltd. are being subsidized and sold at less than fair valueorder to protect the local producer in the U.S. market. The US Department of Commerce is expected to issue its preliminary determination with respect to subsidies on May 2, 2019.target markets. If these petitions proceed andsuch duties are successful, these petitions couldimposed, it may result in the imposition of tariffs on future imports of our magnesium sales in the United States. 
A decision by U.S. authorities to impose antidumping and countervailing duties on the Company’s magnesium activities in the U.S. and the Company'sdifficulties or inability to sell its magnesium on other markets could adversely and materially affect our magnesium business. products in these markets and thus negatively affect the Company's magnesium activities economic viability.
 

Securing the future of our phosphate mining operations at Rotem Israel depends on obtaining several approvals and permits from the authorities in Israel
Securing the future of our phosphate mining operations at Rotem Israel depends on obtaining several approvals and permits from the authorities in Israel, as follows:
Emissions permit under the Israeli Clean Air Act (hereinafter - the Law): In June 2021, the Company's emission permit was renewed by the Israeli Ministry of Environmental Protection (MoEP), until September 2023. The renewed permit reflects an updated outline of requirements. Postponement in the execution of a limited number of projects was granted within the framework of an administrative order under Section 45 of the Law, received in July 2021. Management still expects difficulties in meeting the execution schedules of a limited number of projects and accordingly continues to work with the MoEP to find a satisfactory solution regarding the timing of the investments, taking into account the impact of uncertainty surrounding Rotem Israel's activity, as far as the implementation of long-term projects is concerned.
Oron's lease agreement - The Company has been working to extend the lease agreement for Oron's plant area since 2017 by exercising the extension option provided in the agreement.
22
Phosphogypsum storage - In October 2021, a new Urban Building Plan was approved, the main objectives of which are to regulate areas for phosphogypsum storage reservoirs. According to the new Plan, the Company is required to obtain building permits involving permit fees. Due to the ambiguity of the guidelines regarding the fee's calculation, there is a difficulty in estimating the future required outflows.


Energy production – In order to ensure the continuity of energy production in Rotem Israel, and in accordance with the policy of the Ministry of Energy and the Ministry of Environmental Protection, the Company is working to accelerate the completion of a project to replace existing energy production infrastructure at Rotem, which utilizes oil shale, with a natural gas-based steam boiler, so it will be completed before the existing mined reserves of oil shale are utilized.

Finding economically feasible alternatives for continued mining of phosphate rock in Israel – According to the Company's assessment of economic phosphate reserves in the existing mining areas and the estimated useful life of Rotem's phosphate rock reserves, which are essential for its production, is limited to only a few years. The Company is working to obtain permits and approvals which will provide an economic alternative for future mining of phosphate rock in Israel.
The Company is continuing its discussions with the relevant authorities, in order that the required approvals, permits and future phosphate rock resources are granted. The Company estimates that it is more likely than not that the said approvals, permits and future phosphate rock resources will be granted within a timeframe that will not materially impact the Company's results. Nevertheless, there is no certainty as to the receipt of such approvals, permits and future phosphate rock resources and/or the date of their receipt. Failure to obtain these approvals, permits and future phosphate rock resources, or a significant delay in receiving them can lead to a material impact on the Company's business, financial position and results of operations.
ICL Group Limited 27


Our operations are subject to a crisis in the financial markets.markets
 
We areAs a multinational company, and ourICL's financial results are affected by global economic trends, changes in the terms of trade and financing and fluctuations of currency exchange rates. A crisis in the financial markets could causeresult in a reduction in the international sources of credit available for the purpose of financing business operations. The impact of such a crisis might be expressed in terms of availability of credit to us and our customers, as well as the price of credit. In addition, the volatility and uncertainty in the European Union affect our activities in this market.
 
The decision by British voters to exituncertainty surrounding the withdrawal of the United Kingdom from the European Union may materially and adversely affect our business.business
 
Currently, the UK is scheduled to leaveThe United Kingdom (UK) officially left the European Union effective March 29, 2019, buton January 31, 2020, while the relationshiptransitional period ended on December 31, 2020. In December 2020, the UK and the European Union agreed to a trade and cooperation agreement (the “Trade and Cooperation Agreement”). The Trade and Cooperation Agreement took provisional effect from January 1, 2021, and provided for, among other things, zero-rate tariffs and zero quotas on the movement of goods between the UK and the European Union following a UK departure has not been determined yet. As a result, the impact of Brexit is not yet known and depends on any agreements the UK and European Union may make to retain access to each other's markets, either during a transition period or more permanently. In the absence of a future trade deal, the UK’s trade with the European Union and the rest of the world would be subject to tariffs and duties set by the World Trade Organization. Additionally,Union. However, the movement of goods between the UK and the remaining member states of the European Union will beis subject to additional inspections and documentation checks, leading to possible delays at ports of entry and departure. TheseBeginning January 1, 2022, the UK implemented new full customs declarations controls that apply to all goods imported from the EU (except the Republic of Ireland) to the UK. Additional procedures relating to the imports of goods from the EU to the UK are scheduled to take effect in July, September and November of 2022. Such anticipated changes to the trading relationship between the U.KUK and the European Union would likelycould result in the increased cost of goods imported into and exported from the UK and may decrease the profitability of our UK and other operations. In 2018, 7% of our revenues were generated from our UK operations and 35% of our revenues were generated from our European operations.
 
In addition, Brexit could lead to legal uncertainlyThe uncertainty and potentially divergent nationalunpredictability concerning the UK’s future laws and regulations including with respect to data privacy. It is unclear what(including financial laws and regulations, tax and free trade legalagreements, immigration laws and employment implications the withdraw of the UKlaws) as well as its legal, political and economic relationships with Europe following its exit from the European Union would havemay continue to be a source of instability in international markets, create significant currency fluctuations or otherwise adversely affect trading agreements or similar cross-border cooperation arrangements (whether economic, tax, fiscal, legal, regulatory or otherwise) for the foreseeable future. The long-term effects of Brexit will depend on the implementation of the Trade and howCooperation Agreement and any future agreements (or lack thereof) between the withdrawal would affect us.UK and the European Union and in particular, any potential changes in arrangements for the UK to retain access to EU markets. Brexit could result in adverse economic effects across the UK and Europe. Adverse consequences such as reduced consumer spending, deterioration in economic conditions, volatility in exchange rates, and prohibitive laws and regulations could materially and adversely affect our business, financial situationcondition and results of operation.
 
ICL Group Limited 28


As a chemical industryleading global specialty minerals company, we are inherently, and by the nature of our activity,activities means that we are inherently exposed to hazards relating to materials, processes, production and mining.mining
 
Although we take precautions to enhance the safety of our operations and minimize the risk of disruptions, weWe are subject to hazards inherent in chemical manufacturing and the related storage and transportation of raw materials, products and waste. These hazards include explosions, fires, mechanical failures, remediation complications, chemical spills and discharges or releases of toxic or hazardous substances. These and other hazards are also inherent inDuring our mining operations, particularly underground mining.mining, additional hazards may occur, such as high levels of temperature requiring proper ventilation of the mine, high levels of dust which negatively affect the mining operation, flooding of the mine and others. These hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment, and environmental damage, personal injury and loss of life and may result in suspension of operationoperations and the imposition of civil or criminal penalties. For example, in connection with the 2017 event of the partial collapse of the dyke in Pond 3, which is used for accumulation of phosphogypsum water that is created as part of the production processes in Rotem plants in Israel, the Company is taking action to rectify environmental impacts caused to the Ashalim Stream and its surrounding area, to the extent required. The Company’s actions are being carried out in full coordination and close cooperation with the Israeli environmental authorities. The Company is committed to the matter of environmental protection, and for years has worked closely with the Israeli environmental protection authorities to maintain the Negev’s natural reserves in the area of its facilities. As at the date of this report, the event is being investigated by the Ministry of Environmental Protection and the Nature and Natural Parks Authority.
 
23

In addition, in October 2018, an application for certification of a class action was filed with the Beer Sheva Magistrate Court against Dead Sea Works Ltd. and Dead Sea Bromine Company Ltd., with respect to a bromine leak that occurred in June 2018, within the premises of Dead Sea Works. According to the plaintiff, the alleged air pollution caused an environmental hazard and a health risk to passersby and to those present in the vicinity of the plant, as well as in the settlements Neot Hakikar and Ein Tamar, and the blocking of Route 90. According to the statement of claim, the Court is requested to award compensation for the alleged damages, in the total amount of about NIS 1.5 million (about $0.4 million). In December 2018, the parties signed a settlement agreement at immaterial amounts to conclude the application proceeding for certification of a class action. The agreement is subject to the Court's approval.
Our manufacturing facilities contain sophisticated manufacturing equipment. In the event of a major disruption in the operations of any of this equipment, we may not be able to resume manufacturing operations for an extended period of time.period. The occurrence of material operating problems at our facilities including, but not limited to, the events described above, may have aan adverse and even material adverse effect on us, during and after the period of such operational difficulties, as we areand expose us to significant liabilities and costs, dependent on the continued operation of our production facilities. For example, a malfunction in the operation of the dredger as part of the salt harvesting activity in DSW, designed to maintain a fixed brine volume at Pond 5, could harm, and even materially so, the production capacity of extracted minerals, and thereby adversely and materially affect our operations.
For further information, see “Item 4 – Information on the Company — B. Business Overview —Regulatory and Environmental, Health and Safety Matters”.
Accidents occurring during our industrial and mining operations and failure to ensure the safety of workers and processes, could adversely affect our business
Various occupational hazards are inherent in our industrial and mining operations. Thus, our operations require that we take special precautionary measures to maintain a safe and healthy work environment. To ensure the safety of workers and others in the Company's facilities, we are subject to strict occupational health and safety standards, prescribed by local, national and international laws, regulations and standards. Additionally, we are exposed to operational risks associated with industrial or engineering activities, such as maintenance problems or equipment failures.
Failure to implement, or a deviation from our safety measures and standards, or failure to prevent or appropriately respond to a safety-related incident, or other operational risks may result in personnel injuries or fatalities, production shutdowns, disruption of operations and significant legal and financial liabilities. The occurrence of material safety incidents at our facilities could have a material adverse effect on us, and we may be exposed to substantial liabilities and costs under thesesuch circumstances.
 
For additionalfurther information, see “Item 4 - Information on the Company—Company — B. Business Overview— RegulatoryOverview —Regulatory and Environmental, Health and Safety Matters” and Note 20 to our Audited Financial Statements.Matters“.
ICL Group Limited 29

 
As an industrial chemicalsa leading global specialty minerals company, we are exposed to various legislative, regulatory and licensing restrictions in the areas of environmental protection and safety. Related compliance costs and liabilities may adversely affect the results of our operations
 
As a chemical industryleading global specialty minerals company, we are significantly affected by the legal provisions and licensing regime in the areas of environmental protection and safety. Recent years have been characterized by a substantial increase in the stringency and enforcement of legal provisions and regulatory requirements in these areas; the cost of adjustment to and compliance with such regulatory changes, including the technological complexity of such adjustment as well asand compliance with standardization requirements, have all shown a significant upward trend. For example, in Israel, emission permits are issued under the Israeli Clean Air Law. In order to comply with the emission permits received in connection with some of our operations in Israel, we are required to make significant capital investment over the next few years. Failure to comply with these requirements may have an adverse effect on our operations, business and results of operations.
 
Legislative and regulatory changes around the world may prohibit or restrict the use of our products, due to environmental protection, or health orand safety considerations. Standards adopted in the future may affect us and change our methods of operation. Furthermore, some of our licenses, including business licenses and mining licenses, are for fixed periods and must be renewed from time to time. Renewal of such permitslicenses is not certain and may be made contingent on additional conditions and significant costs. Difficulties in obtaining such licenses could have an adverse effect on our operations, business and results of operations. For example,further information, see "Securing the future of the phosphate mining operations at Rotem Israel depends on obtaining several approvals and permits from the authorities in orderIsrael” above, “Item 4 – Information on the Company — B. Business Overview —Regulatory and Environmental, Health and Safety Matters”, “B. Business Overview —Business Licenses and Other Permits” and Note 18 to comply withour Audited Financial Statements.
Current and future laws and regulations regarding climate change and greenhouse gas (GHG) emissions, as well as the physical impacts of climate change, may affect our operations and businesses
Over the past few years, climate change and GHG emissions have been of increasing concern worldwide. Current and future legislation and regulations governing climate change and GHG emissions are transition risks in the short term and beyond. Carbon taxes and cap-and-trade-emissions schemes are increasingly viewed in global jurisdictions as a way of pricing carbon – a key policy driver for GHG emissions reductions. These policies and regulatory levers will increasingly result in additional financial costs to the Company, which may lead to a material impact on the Company's business, financial position and results. Currently, this risk impacts two of ICL Europe's sites, ICL Iberia is affected as a participant in the EU-ETS Emissions Trading System and ICL Boulby become subject to the UK Emissions Trading Scheme as of January 1, 2021.
There is considerable uncertainty over the future cost of allowances and the manner in which they will be allocated. Revisions to the EU ETS published in 2021 also include proposals for the introduction of a Carbon Border Adjustment Mechanism (CBAM), designed to prevent carbon leakage from the EU. The UK Government is considering implementing a similar mechanism. Both of these financial instruments will increase the purchase price that our customers will need to pay for our products. In Israel, a new carbon tax is planned for implementation in 2023. China also initiated a national emission permits receivedtrading scheme in connection with2017. YPH in China, is one of the Company's largest production sites but currently, this trading scheme does not include the business sector relevant to this site. However, the existing range of business sectors is likely to expand in the future. There has not been an indication of upcoming carbon taxes/trading schemes in the US states where ICL operates, but this too could change in the future, as concerns regarding climate change increase. Consequently, it is expected that, in the short-term, ICL will need to purchase more carbon allowances at higher prices through these specific programs than we have done historically. At the same time, we also anticipate we will incur additional capital costs for energy and emissions reduction measures as carbon taxes increase the costs of supplied materials in the ICL value chain.

ICL Group Limited 30


In addition to legislative, regulatory, business and market impacts related to climate change, there may also be significant physical effects of climate change. These effects nay result in both ‘acute’, short term events and chronic, longer term impacts including changes in weather patterns, such as, water shortages or changes in water quality, changes to sea and temperature levels, increases in the intensity of storms, changes in availability of natural resources and damage to facilities or equipment some of which have been experienced at ICL facilities.
Physical risks have the potential to financially disrupt operations, upstream raw material supply and downstream distribution of our products to our customers. Climate change is expected to increase the frequency and likelihood of acute, extreme weather events such as floods. ICL’s Dead Sea facilities, for example, are located in an area that has already been impacted by severe floods in the past. Another example indicating the beginning of a chronic change is the low water levels in the Rhine River in Germany, a key transport route, which in 2018, experienced water levels too low for transport barges to operate, The ICL Ludwigshafen site, which is located on the banks of the Rhine river, may be affected as it uses freight boats to carry phosphate rock into the site and phosphate fertilizers produced at the site to customers. An increase of these occurrences may be attributable to climate change.
The potential impact of climate change and associated laws and regulations on the Company's operations in Israel, we are requiredand business, and those of our customers and suppliers, is uncertain. The cost of adjustment to make significant capital investment overand compliance with legislative and regulatory changes regarding climate change and GHG emissions, and adjustments to the next few years. See “Itemphysical impacts of climate change, could materially and adversely affect our business, financial condition and results of operation. Apart from implementing physical measures to deal with extreme weather conditions, ICL has acquired insurance to provide some degree of protection from some financial losses resulting from natural disasters.
For further information, see “Item 4 - Information on the Company— B. Business Overview—Regulatory and Environmental, Health and Safety Matters” and “D. Property, Plant and Equipment— Other Leases, Licenses and Permits”Matters”.
24

 
Due to the nature of our Company,operations, we are exposed to administrative and legal proceedings, both civil and criminal, including as a result of alleged environmental contamination caused by certain of our facilities
 
From time to time we are exposed to administrative and legal proceedings, both civil and criminal, including as a result of alleged environmental contamination caused by certain of our facilities. It should be noted in that regard, that the Company may be exposed to criminal proceedings, fines and significant impairment of the operation of our facilities as a result of failing to meet the requirements of our emissions permits including the provisions of the Israeli Clean Air Law, and particularly, regarding the scope of current and future requirements as prescribed by the Israeli Ministry of Environmental Protection respecting the implementation of the Law’sthis law’s provisions at the Company’s plants in Rotem Israel, as well as compliance with the timeframes for implementation of such requirements. In addition, from time to time examinations and investigations areof our facilities conducted by enforcement authorities.authorities may result in administrative and legal proceedings.
 
Furthermore, from time to time we are exposed to claims alleging physical or property damage which may cause us financial harm.
 
In addition, some
ICL Group Limited 31


Some of theour manufacturing or marketing activities (and sometimes transportation and storage as well) entail safety risks that we attempt to minimize but are not ableunable to eliminate. In various countries, including Israel and the United States, legislation exists that can impose liability on us irrespective of our actual intent or negligence. Other laws impose liability on defendants jointly and severally, and sometimes retroactively, and therefore can cause us to be liable for activities executed jointly with others and at times solely by others. We may also be found liable for claims related to land treatment where mining operations and other activities were conducted, even after such activities have ceased.
 
In addition, overOver the past several years, there has been an upward trend in the filing of claims together with a request for their certification as class and derivative actions. Due to the nature of such actions, these claims may be for very high amounts and the costs of defending against such actions may be substantial, even if the claims are without merit from the outset. In addition, our insurance policies include coverage limitations, are restricted to certain causes of action and may not cover claims relating to certain types of damages, such as intangible damages, etc.
 
For information respecting legal proceedings and actions, see Note 2018 to our Audited Financial Statements and “Item 8 - Financial Information— A. Consolidated Statements and Other Financial Information— Legal Proceedings”.
 
We are exposed to the risk of third‑party and product liability claims
 
We are also exposed to risk of liability related to damage caused to third parties by our operations or by our products. For example, we are subject to claims alleging liability for the impacts from the rising water level at one of our evaporation ponds at the Dead Sea. See Note 20 to our Audited Financial Statements. We have third‑party liability insurance for damages caused by our operations and for product liability. However, there is no certainty that this insurance will fully cover all damage for such liability. Moreover, sale of defective products by us might lead to a recall of products by us or by our customers who had used our products. In addition, the sale of defective products, as well as damage caused to third parties by our activities or our products may harm our public image and reputation and,, as a result, materially and adversely affect our business, financial situationcondition and results of operation.
25

 
Product recalls or other liability claims as a result of food safety and food-borne illness concerns could materially and adversely affect us.us
 
We develop and produce functional food ingredients and phosphate additives for the food industry. Selling ingredients and additives that will be used in products sold for human consumption involves inherent legal and other risks, including product contamination, spoilage, product tampering, allergens, or other adulteration. We could decide to, or be required to, recall products due to suspected or confirmed product contamination, adulteration, misbranding, tampering, or other deficiencies. Product recalls or market withdrawals could result in significant losses due to their costs, the destruction of product inventory, and lost sales due to the unavailability of the product for a period of time.
 
Because food safety issues could be experienced at the source or by food suppliers or distributors, food safety could, in part, be out of our control. Regardless of the source or cause, any report of food-borne illness or other food safety issues such as food tampering or contamination of products that contain our ingredients or additives could adversely impact our reputation, hindering our ability to renew contracts on favorable terms or to obtain new business, and have a negative impact on our sales. Even instances of food-borne illness, food tampering or contamination of products that do not contain our ingredients or additives could result in negative publicity and could negatively impact our sales.
 
ICL Group Limited 32

We may also suffer losses if our products or operations violate applicable laws or regulations, or if our products cause injury, illness, or death. A significant product liability or other legal judgment or a related regulatory enforcement action against us, or a significant product recall, may materially and adversely affect our reputation and profitability. Awards of damages, settlement amounts and fees and expenses resulting from such claims and the public relations implications of any such claims could have an adverse effect on our business. The availability and price of insurance to cover claims for damages are subject to market forces that we do not control, and such insurance may not cover all the costs of such claims and would not cover damage to our reputation. Moreover, even if a product liability or fraud claim is unsuccessful, has no merit, or is not pursued, the negative publicity surrounding assertions against our products or processes could materially and adversely affect our business, financial condition and results of operations.
 
Our insurance policies may not be sufficient to cover all actual losses that we may incur in the future
 
We maintain, among others, property, environmental, business interruption, casualty and malpractice insurance policies. However, we are not fully insured against all potential hazards and risks incidental to our business, including to damages which may be caused to us by the negligence of our employees. We are subject to various self‑retentions and deductibles under these insurance policies. As a result of market conditions, our loss experience and other factors, our premiums, self‑retentions and deductibles for insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. In addition, significantly increased costs could lead us to decide to reduce, or possibly eliminate, coverage. As a result, a disruption of the operations at one of our key facilities or a significant casualty could have a material adverse effect on our financial condition and results of operations. Furthermore, our insurance may not fully cover our expenses related to claims and lawsuits that may be filed against us, or expenses related to legislation that is being promoted and enacted with adverse effect on us. In addition, it is possible that there are risks that we did not identify and are thus not covered by the insurance policies acquired by the Company.
 
26

Risks Related to the Company’sOur Operations in Israel and/or to the Company being an Israeli companyCompany
 
Due to our location in Israel and/or being an Israeli company, our operations may be exposed to war or acts of terror. In addition, we are exposed to risks of terrorist acts, war and governmental instability in the regions outside Israel where we operate
 
War, acts of terror and\or governmental instability in the regions where we operate are likely to negatively impact us. This impact may manifest itself in production delays, distribution delays, loss of property, injury to employees, and increased insurance premiums. In addition, our plants may be targets for terrorist acts due to the chemicals they store. We do not have property insurance against war or acts of terror, other than compensation from the State of Israel pursuant to Israeli law, which covers only physical property damage, without accounting for reinstatement values.
 
It is noted that since the construction of our initial facilities in the 1950s, we have never experienced material business interruptions as a result of war or acts of terror, but we can provide no assurance that we will not be subject to any such interruptions in the future.
 
Our computer and communications networks, and production technologies constitute a basic platform for operational continuity and are also potential targets for acts of terror. Potential cyber threats can cause damage to systems and plants, data loss, software vulnerability and external and internal access to sensitive and confidential information. We have implemented a plan for safeguarding and backing up the information systems. The activities include:include separation of our information networks from the computerized process systems, physical protection of the computer rooms and terminals and training of employees. However, there is no assurance that the Company will successfully accomplish its goals.
 
ICL Group Limited 33



We conduct operations in Israel and therefore our business, financial condition and results of operations may be materially and adversely affected by political, economic and military instability in Israel and its region
 
Our headquarters, some of our operations, and some of our mining facilities are located in Israel and many of our key employees, directors and officers are residents of Israel. Accordingly, political, economic and security conditions in Israel and the surrounding region may directly affect our business. Since the establishment of Israel in 1948, a number of armed conflicts have taken placeoccurred between Israel and its Arab neighbors, Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon). Any hostilities involving Israel or the interruption or curtailment of trade within Israel or between Israel and its trading partners could materially and adversely affect our business, financial condition and results of operations and could also make it more difficult for us to raise capital. Recent political uprisings, social unrest and violence in various countries in the Middle East and North Africa, including Israel’s neighbors Egypt and Syria, are affecting the political stability of those countries. This instability may lead to deterioration of the political relationships that exist between Israel and these countries and has raised concerns regarding security in the region and the potential for armed conflict. In addition, Iran has threatened to attack Israel and is widely believed to be developing nuclear weapons.
27

 
In addition, the assessment is that Iran has a strong influence among parties hostile to Israel in areas that neighbor Israel, such as the Syrian government, Hamas in Gaza and Hezbollah in Lebanon. Any armed conflicts, terrorist activities or political instability in the region could materially and adversely affect our business, financial condition and results of operations. In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to comply with their undertakings under those agreements pursuant to force majeure provisions in such agreements. In addition, because we are an Israeli company, our sales may be subject to economic boycotts or other sanctions on our products.
 
Our operations may be disrupted as a result of the obligation of Israeli citizens to perform military reserve service
 
Many Israeli citizens are obligated to perform one month, and in some cases more, of annual military reserve service until the age of 45 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. Although periods of significant call‑ups of military reservists which occurred in the past in response to terrorist activities have had no significant impact on our operations, it is possible that military reserve duty call‑ups will occur in the future, which might disrupt our operations.
 
ICL Group Limited 34

It may be difficult to enforce a U.S. judgment against us and our directors and officers, in Israel or the United States, or to serve process on our directors and officers
 
We are incorporated under Israeli law. Many of our directors and executive officers reside outside the United States, and most of our assets are located outside the United States. Therefore, a judgment obtained in the United States against us or many of our directors and executive officers, including one based on the civil liability provisions of the U.S. federal securities laws, may not be collectible in the United States and may not be enforced by an Israeli court. It also may be difficult for an investor to effect service of process on these persons in the United States or to assert claims under the U.S. securities laws in original actions instituted in Israel.
 
The rightsRights and responsibilities as a shareholder are governed by Israeli law which may differ in some respects from the rights and responsibilities of shareholders of U.S. companies
 
We are incorporated under Israeli law. The rights and responsibilities of the holders of our ordinary shares are governed by our Articles of Association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S. corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith toward the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on matters such as amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and acquisitions and interested party transactions requiring shareholder approval. In addition, a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company. There is limited case law available to assist us in understanding the implications of these provisions that govern shareholders’ actions.
 
28

These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S. corporations.
 
In addition, in light of the Company’s listing for trading on a stock exchange in the United States, and also considering the fact that our parent company is subject only to the Israeli securities law, we are subject, in certain aspects, to both Israeli law and U.S. law, a fact which may cause us to face both reporting and legal conflicts.
 
In recent years we have seen a significant rise in the filing of class actions andin Israel against public companies, including derivative actions against the Company,company, its executives and Board members
 
In recent years we have seen a significant rise in the filing of class actions and derivative actions in Israel against companies, executives and Board members. While the vast majority of such claims are dismissed, companies like usICL are forced to increasingly invest resources, including monetary expenses and investment of management attention due to these claims. This state of affairs could adversely affect the willingness of our executives and Board members to make decisions which could have benefitted our business operations. Such legal actions could also be taken with respect to the validity or reasonableness of the decisions of our Board of Directors.
 
ICL Group Limited 35


Risks Related to Our Ordinary Shares
 
We have one key shareholder who is our controlling shareholder. This controlling shareholder may influence thedecision making of decisions with which other shareholders may disagree
 
As atof December 31, 2018,2021, the Israel Corporation Ltd. (“Israel Corp.”) holds the controlling interest in the Company.
 
The interests of Israel Corporation may differ from the interests of other shareholders. Israel Corporation exercises control over our operations and business strategy and has sufficient voting power to control many matters requiring approval by our shareholders, including:
 
·
The composition of our Board of Directors (other than external directors, as described under “Item 6 - Directors, Senior Management and Employees— C. Board Practices— External DirectorsThe composition of our Board of Directors (other than external directors, as described under “Item 6 - Directors, Senior Management and Employees— C. Board Practices— External Directors”);
 
·Mergers, acquisitions, divestitures or other business combinations;
 
·Future issuances of ordinary shares or other securities;
 

·
Amendments to our Articles of Association, excluding provisions of the Articles of Association that were determined by virtue of the Special State Share; and
 

·
Dividend distribution policy.policy.
 
In addition, this concentration of ownership may delay, prevent or deter a change in control, or deprive the investor of a possible premium for his ordinary shares as part of a sale of our Company. Moreover, as a result of the Company’s control structure, our shares may be subject to low tradability, which may hinder the sale and/or exercise of our shares. Furthermore, Israel Corp. may conduct material transactions in our shares, such as its existing margin loans that are secured by pledges of ICL shares, and/or in their organizational structure, that we will not be able to influence but that may have a material adverse effect on our share price.

29

 
The existence of a Special State Share gives the State of Israel veto power over transfers of certain assets and shares above certain thresholds, and may have an anti‑takeover effect
 
The State of Israel holds a Special State Share in our Company and in some of our Israeli subsidiaries. The Special State Share entitles the State of Israel, among other things, to restrict the transfer of certain assets and some acquisitions of shares by any person that would become a holder of specified amounts of our share capital. Because the Special State Share restricts the ability of a shareholder to gain control of our Company, the existence of the Special State Share may have an anti‑takeover effect and therefore depress the price of our ordinary shares. Furthermore, the existence of the Special State Share may prevent us from realizing and developing business opportunities that we may come across. To the best of the Company’s knowledge, during the second half of 2018, an inter-ministryinter-ministerial team has recently beenwas established, headed by the Ministry of Finance, tasked with arrangingwhose purpose is, among other things, to regulate the issue of authority and oversight relating to special state shares, interest decrees and reductionsupervision in respect of the Special State Share, as well as reduce the regulatory burden. In January 2019, the work of this team was put on hold until further notice due to the dissolution of the Knesset and lack of permanent Government. As at the date of thisthe report, the Company is unable to estimate whatthe implications of this process would have on the Company, if any, but it is possible that the introduction of an additional array of regulatory provisions, coupled with strict enforcement, may increase the uncertainty in the management of Companycompany operations relating to natural resources in Israel and may have a material adverse effect on our business, our financial condition and results of operations.operations.
 
ICL Group Limited 36


The market price of our ordinary shares is subject to fluctuation, which could result in substantial losses for our investors
 
The stock market in general and the market price of our ordinary shares, in particular, are subject to fluctuation, and changes in our share price may occur unrelated to our operating performance. The market price of our ordinary shares on the TASE or NYSE has fluctuated in the past, and we expect it will continue to do so. The market price of our ordinary shares is and will be subject to a number ofseveral factors, including:
 
·Expiration or termination of licenses and/or concessions;
 
·General stock market conditions;
 
·Decisions by governmental entities that affect us;
 
·Variations in our and our competitors’ results of operations;
 
·Changes in earnings estimates or recommendations by securities analysts; and
 
·General market conditions and other factors, including factors unrelated to our operating performance.
 
These factors and any corresponding price fluctuations may materially and adversely affect the market price of our ordinary shares and result in substantial losses for our investors.
 
If equity research analysts issue unfavorable commentary or cease publishing reports about our ordinary shares, the price of our ordinary shares could decline
 
The trading market for our ordinary shares relies in part on the research and reports that equity research analysts publish about us and our business. The price of our ordinary shares could decline if one or more securities analysts downgrade our ordinary shares or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.
 
30

YouShareholders may be diluted by the future issuance of additional ordinary shares, among other reasons, for purposes of carrying out future acquisitions, financing needs, and also as a result of our incentive and compensation plans
 
As at the date of this Annual Report, we have approximately 181173 million ILSNIS 1 par value (approximately $48$56 million) shares authorized but unissued. We may choose to raise substantial equity capital in the future in order: to acquire or invest in businesses, products or technologies and other strategic relationships and to finance unanticipated working capital requirements in order to respond to competitive pressures. The issuance of any additional ordinary shares in the future, or any securities that are exercisable for or convertible into our ordinary shares, will have a dilutive effect on our shareholders as a consequence of thea reduction in the percentage ownership.
 
Moreover, these securities may have rights, preferences or privileges senior to those of our existing shareholders.
For example, as at the date of the report, there are about 18.912 million outstanding options for our ordinary shares that were issued under our incentive and compensation plan. For additionalfurther information, see Note 21 to our Audited Financial Statements and Item 6 - Directors, Senior Management and Employees— E. Share Ownership”. Any ordinary shares that we issue, including under any option plans, would dilute the percentage ownership held by investors.Ownership.
ICL Group Limited 37

 
We may not be able to maintain our dividend payment
 
The Company's dividend distribution policy as determined by our Board of Directors on May 2016 with respect to 2016 and 2017, and again in March 2018 with respect to 2018 and 2019, is that the Company’s dividend distribution rate will be up to 50% of the annual adjusted net profit, compared with the prior dividend distribution policy of up to 70% of the net profit. Our Board of Directors will reexamine the dividend policy at the end of the said period. There is no certainty that our Board of Directors will make changes to the updated dividend policy. In addition, dividends will be paid as declared by the Board of Directors and may be discontinued at any time. All decisions regarding dividend distributions are made by the Board of Directors, which takes into accountconsiders various factors including our profits, investment plans, financial position and additional factors as it deems appropriate. Dividend payments are not guaranteed, and our Board of Directors may decide, in its exclusive discretion, at any time and for whatever reason, not to pay dividends, to reduce the rate of dividends paid, to pay a special dividend, to modify the dividend payout policy or to adopt a share buyback program.program.
 
Our ordinary shares are traded on different markets which may result in price variations
 
Our ordinary shares have been traded on the TASETel Aviv Stock Exchange (TASE) since 1992 and have been listed on the NYSENew York Stock Exchange (NYSE) since September 2014. Trading in our ordinary shares on these markets occurs in different currencies (U.S. dollars on the NYSE and ILSNIS on the TASE) and takes placeoccurs at different times (resulting from different time zones, different trading days and different public holidays in the United States and Israel). The trading prices of our ordinary shares on these two markets may differ due to these and other factors. Any decrease in the price of our ordinary shares on one of these markets could cause a decrease in the trading price of our ordinary shares on the other market.

31

 
As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of applicable SEC and NYSE requirements, which may result in less protection than is afforded to investors under rules applicable to domestic issuers
 
As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of those otherwise required by the NYSE for domestic issuers. For instance, we have elected to follow home country practices in Israel with respect to, among other things, composition and function of the Audit and Finance Committee and other committees of our Board of Directors and certain general corporate governance matters. In addition, in certain instances we will follow our home country law, instead of NYSE rules applicable to domestic issuers, which require that we obtain shareholder approval for certain dilutive events, such as an issuance that will result in a change of control of our Company, certain transactions other than a public offering involving issuances of a 20% or more interest in our Company and certain acquisitions of the stock or assets of another company. Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S. company listed on the NYSE may provide less protection than is afforded to investors under the NYSE rules applicable to domestic issuers.
 
In addition, as a foreign private issuer, we are exempt from the rules and regulations under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), related to the furnishing and content of proxy statements and the requirements of Regulation FD (Fair Disclosure), and our directors, officers and principal shareholders are exempt from the reporting and short‑swing profit recovery provisions of Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as domestic companies whose securities are registered under the Exchange Act.
 
The Company has a history of quarterly fluctuations in the results of its operations due to the seasonal nature of some of its products and its dependence on the commodities markets. We expect these fluctuations to continue. Fluctuations in the results of our operationsRevenues below seasonal norms may disappoint investors and result in a decline in our share price
 
We have experienced, and expect to continue to experience, fluctuations in our quarterly results of operations.operations due to the mix of products we sell and the different countries in which we operate. Our sales have historically and less significantly so over the last three years, been stronger in the second and third quarters of each year. This is due toIn the mixpast year, the COVID epidemic flattened seasonality and we are witnessing changes in seasonal patterns which are reflected in high off-season demand as a result of products we sell in those quarters, as well asgovernments’ food security strategies and the mix of sales in different countries.like, which increases uncertainty regarding future seasonality fluctuations. If, for any reason, our revenues in the second and third quarters are below seasonal norms, we may not be able to recover these sales in subsequent quartersperiods and our annual results of operations may not meet expectations. If this occurs, the market price of our ordinary shares could decline.
 
ICL Group Limited 38

32


Item4 – INFORMATIONINFORMAION ON THE COMPANY

A. HISTORY AND DEVELOPMENT OF THE COMPANY
 
Our legal name is Israel ChemicalsICL Group Ltd. and our commercial name is ICL. We are a public company and operate today as a limited liability company under the laws of Israel. Our registered headquarters is located at Millennium Tower, 23 Aranha Street, P.O. Box 20245, Tel Aviv 61202, Israel. The telephone number at our registered office is +972‑3‑684‑4400. Our website address is www.icl‑group.com. The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Annual Report.
 
The Company is subject to certain of the informational filing requirements of the Exchange Act.Since the Company is a “foreign private issuer”, it is exempt from the rules and regulations underthe Exchange Act prescribing the furnishing and content of proxy statements, and the officers,directors and principal shareholders of the Company are exempt from the reporting and“short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respectto their purchase and sale of Ordinary Shares. In addition, the Company is not required to filereports and financial statements with the SEC as frequently or as promptly as U.S. publiccompanies whose securities are registered under the Exchange Act. However, the Company isrequired to file with the SEC an Annual Report on Form 20-F containing financial statementsaudited by an independent registered public accounting firm. The SEC also maintains a website athttp://www.sec.gov that contains reports and other information that the Company files with orfurnishes electronically to the SEC.
ICL was established in Israel in 1968 as a government-owned and -operated company in Israel and operates today as a limited liability company under the laws of Israel. In 1975, the shares of certain companies (including, among others, ICL Dead Sea, the consolidated companies ICL Rotem, the bromine companiesDead Sea Bromine, Bromine Compounds and Tami) were transferred to ICL. In 1992, following a decision of the Israeli government to privatize ICL, the State of Israel published its tender prospectus, 20% of the Company's shares were sold to the public and its shares were registered for trading on the Tel‑Aviv Stock Exchange.Exchange (TASE). Prior to our public share issuance, a Special State Share in our Companycompany and our main Israeli subsidiaries was issued to the State of Israel (for additionalfurther details regarding the terms of the Special State Share, see “Item 10 - Additional Information— B. Memorandum, Articles of Association and Special StateShare”). In 1995, the State of Israel sold its controlling interest in the Company (representing approximately 24.9% of our shares) to Israel Corporation Ltd., a publicpublicly traded Companycompany on the TASE (ILCO), which was controlled at that time by the Eisenberg family. A majority of the ordinary shares, held by the stateState of Israel, were sold during the following years. In 1999, the Ofer Group acquired the Eisenberg family’s shares in Israel Corporation. In 2000, the State of Israel ceased to be a stakeholder in terms of holding any of our ordinary shares, but it retained theits Special State Share. In 1999, the Ofer Group acquired the Eisenberg family’s shares in Israel Corporation.Share In September 2014, we listed our shares on the New York Stock Exchange, and they are currently traded in Tel Aviv and in New York.
 
As of December 31, 2018,2021, Israel Corporation Ltd. holds approximately 45%44.76% of our outstanding ordinary shares and approximately 45.87%45.62% of the shareholders' voting rights.
ICL Group Limited 39

 
The following is a list of significant acquisitions divestitures and joint venturesdivestitures over the last several years:
 
In January 2021, we completed the acquisition of Agro Fertiláqua Participações S.A., one of Brazil's leading specialty plant nutrition companies, and in July 2021, we acquired the South American Plant Nutrition business of Compass Minerals América do Sul S.A. (hereinafter - ADS).
In July 2021, we completed the sale of Jiaxing ICL Chemical Co. Ltd (ICL Zhapu), which was part of our Industrial Products segment to China Sanjiang Fine Chemicals Company Limited.
In May 2020, we completed the sale of Hagesüd Interspice Gewürzwerke GmbH, including related real-estate assets, to Solina Corporate SAS.

·
In March 2018, the CompanyFebruary 2020, we completed the sale transactionacquisition of the fire safety and oil additives businesses, for a total consideration of $1,010 million, of which $953 million is in cash and $57 million isGrowers Holdings, Inc., an innovator in the formfield of a long-term loan to a subsidiary of the buyer.process and data-driven farming. For further information see "Item 5 – Operating and Financial Review and Prospects – C. Research and Development, Patents and Licenses, etc. – Research and Development".
In March 2018, we completed the sale of our fire safety and oil additives businesses, for $1,010 million.
 
·In 2017, the Company completed the sale of its holdings in IDE Technologies Ltd., constituting 50% of IDE’s share capital.
·In 2016, ICL completed the sale of Clearon (chlorine-based biocide activities in USA).

33

·
In 2015, ICL, together with YPC, completed the formation of YPH JV. YPH JV’s activities include operation of a phosphate rock mine and other phosphate operations. In January 2016, ICL completed the investment in 15% of the issued and outstanding share capital on a fully diluted basis of YTH (Chinese traded company which holds YPH JV together with ICL).
·In 2015, ICL completed the divestiture of the following non‑core business activities: the alumina, paper and water industry (APW), the thermoplastic products for the footwear industry (Renoflex), the hygiene products for the food industry (Anti‑Germ) and the pharmaceutical and gypsum businesses (PCG).
For information about our principal capital expenditures and divestitures during the last three fiscal years, see “Item 5 - Operating and Financial Review and Prospects— B. Liquidity and Capital Resources—Principal Capital Expenditures and Divestitures”Expenditures”.
 
B. BUSINESS OVERVIEW
 
Company Overview
 
ICL Group Ltd. is a leading global specialty minerals company. The Company creates impactful solutions for humanity’s sustainability challenges in global food, agriculture and chemicals company operatingindustrial markets. The Company leverages its unique bromine, potash and phosphate mineral value chains in a unique, integrated business model. ICL extracts raw materials from well-positioned mineral assetsresources, its professional employees, and utilizes technologyits strong focus on R&D and industrial know-howtechnological innovation, to add value for customers in key agricultural and industrial markets worldwide. ICL focuses on strengthening leadership positions in all ofdrive growth across its core value chains. It also expects to strengthen and diversify its offerings of innovative agro solutions by leveraging its existing capabilities and agronomic know-how, as well as the Israeli technological ecosystem. In August 2018, we commenced working under an aligned organizational structure according to which the Company'send markets. The Company’s operations are divided intoorganized under four segments: Industrial Products (Bromine), Potash, Phosphate Solutions and Innovative Ag Solutions. Comparative data has been restated to reflect the change in the structure of the reportable segments, as stated above.
 
Our principal assets include:
 
·Access to one of the world’s richest, longest‑life and lowest‑cost sources of potash and bromine (the Dead Sea).
 
·
Two potash mines and processing facilities in Spain. The Company is in the process of restructuring the operations in Spain from two sites into one site.
A potash mine and processing facilities in Spain.
 
·
Bromine compounds processing facilities located in Israel, the Netherlands and China.
Bromine compounds processing facilities in Israel, the Netherlands and China.
 

·
A unique integrated phosphate value chain that extends from phosphate rock mines in Israel and in China to our value‑added downstream products produced in facilities located in Israel, Europe, the United States, Brazil and China. Our specialty phosphates serve the food industry by providing texture and stability solutions to the meat, meat alternatives, poultry, sea food, dairy and bakery markets and many, as well as numerous other industrial markets, such as metal treatment, water treatment, oral care, carbonated drinks, asphalt modification, paints and coatings and more.
 
34ICL Group Limited 40



Polysulphate® resources in the United Kingdom.
 

·
Polysulphate resources in the United Kingdom.
·Production of tailor-made, highly-effectiveCustomized, highly effective specialty fertilizers offering boththat provide improved value to the grower and precise, as well as essential nutrition which is essential for plant development, optimization of crop yields and reduced environmental impacts.impact.
A focused and highly experienced team of technical experts that develop production processes, new applications, formulations and products for our agricultural and industrial markets.
 
·A focused and highly experienced group of technical experts developing production processes, new applications, formulations and products for our agricultural and industrial markets.
A strong crop nutrition sales and marketing infrastructure that optimizes distribution channels of commodity, specialty and semi-specialty fertilizers by leveraging its commercial excellence, global operational efficiency, region-specific knowledge, agronomic and R&D capabilities, logistical assets and customer relationships.
 
·An extensive global logistics and distribution network with operations in over 30 countries.
Research & Development and Innovation:  We benefit from our proximity to Israel’s global-leading high-tech and agri-tech eco-system, as well as our vast agronomy and chemistry knowledge that we have accumulated over decades. Our extensive global R&D infrastructure includes 26 R&D and Innovation centers around the world that employ 300 highly experienced personnel who have obtained 770 patents in 220 patent families. ICL's R&D unit supports the development of new, innovative products, applications and formulations for each of our operating segments through internal research, employee ideation and collaborative research with third parties.
 
An extensive global logistics and distribution network with operations in over 30 countries.
In
The acquisitions of Fertiláqua and ADS have helped position ICL as the leading specialty plant nutrition company in Brazil.
For the year ended December 31, 2018,2021, we generated total sales of $5,556$6,955 million, operating income of $1,519$1,210 million, adjusted operating income of $753$1,194 million, net income attributable to the shareholders of the companyCompany of $1,240$783 million and adjusted net income attributable to the shareholders of the companyCompany of $477$824 million. See "Item 5 – Operating and Financial Review and Prospects – A.A. Operating Results – Adjustments to reported operating and net income (Non-GAAP financial measures)"Results of Operations".
 
Sales of by the Industrial Products segment amountedtotaled to $1,296 $1,617million and the operating incomeprofit attributable to the segment amountedtotaled to $350 $435million, sales ofby the Potash segment amountedtotaled to $1,623 $1,931million and the operating incomeprofit attributable to the segment amountedtotaled to $393 $399million, sales ofby the Phosphate Solutions segment amountedtotaled to $2,099 $2,432million and the operating incomeprofit attributable to the segment amountedtotaled to $208 $307million, and sales of the Innovative Ag Solutions segment amountedtotaled to $741 $1,245million and the operating incomeprofit attributable to the segment amountedtotaled to $57 $121million.
 
For a breakdown of sales and a geographic market by segments, for each of the last three fiscal years, see “Item 5 - Operating and Financial Review and Prospects— A. Operating Results”Results– Segment Information”.
ICL Group Limited 41


Markets and Industries
General
 
Our Industries
The majority of our businesses compete in the global fertilizer and specialty chemicals industries.
Fertilizers
Fertilizers serve an important role in global agriculture by providing vital nutrients that help increase both the yield and the quality of crops. Nitrogen, phosphorus and potassium (N, P and K) constitute the three major nutrients required for plant growth. ICL sells phosphorus‑based and potassium‑based products. There are no artificial substitutes for potassium and phosphorous. Although these nutrients are naturally found in soil, they are depleted over time by farming, which could lead to declining crop yields and land productivity. To replenish these nutrients, farmers must apply fertilizers.
Each of these three nutrients plays a different role in plant development. Potassium and phosphorus are vital for physiological processes of the plant, including strengthening cereal stalks, stimulating root development, leaf and fruit health, and accelerating the growth rate of crops. Without these nutrients, crops cannot achieve their growth potential. Potassium also enhances a plant’s ability to withstand drought and cold, improves the efficient use of nitrogen and other nutrients necessary for plant development, and improves the durability of agricultural produce in storage and transportation, thereby prolonging the shelf life of produce.
35

In the short term, demand for fertilizersintegrated business model is volatile and seasonal, and is affected by factors such as weather in the world’s key agricultural growing regions, fluctuations in planting main crops, agricultural input costs, agricultural product prices and developments in biotechnology. Some of these factors are influenced by subsidies and lines of credit granted to farmers or to producers of agriculture inputs in various countries, and by environmental regulations. In addition, currency exchange rates, legislation and international trade policies have an impact on the supply, demand and level of consumption of fertilizers worldwide. In spite of the volatility that may be caused in the short term as a result of these factors, we believe that the policy of most countries is to ensure an orderly and high‑quality supply of food to the population and to this end, to encourage agricultural production. Therefore, we expect the long‑term growth trend of the fertilizers market to be maintained. Due to the existing entry barriers and the excess of supply over demand, in the long term we expect a reduction in the entry of new players into the market and the expansion of production capacity, until a new breakeven point between the supply and the demand is reached.
Potash helps regulate a plant’s physiological functions and improves plant resilience, providing crops with protection from drought, disease, parasites and cold weather. Unlike phosphate and nitrogen, potash does not require additional chemical conversion to be used as a nutrient fertilizer. Potash is mined either from underground mines or, less frequently, from solutions found in nature, such as the Company’s operations in the Dead Sea. According to estimates of the United States Geological Survey, nine countries account for approximately 94% of the world’s potash natural reserves and according to the Fertecon Potash Outlook December 2018 report, worldwide sales of potash in 2018 were higher than in 2017 due to increased demand, mainly in China and Brazil.
The entry barriers facing new competitors into the potash market are significant, and include a long period of time and an investment of billions of dollars of capital per operation. For example, economically recoverable potash deposits are scarce, typically deep in the earth and geographically concentrated. Nonetheless, several fertilizer companies are in the process of commissioning new potash mines.
Phosphate is essential for the development of the plant’s root, and is required for photosynthesis, seed germination and efficient usage of water. The main raw materials for phosphate fertilizers are phosphate rock and sulphuric acid, as well as ammonia. The principal phosphate fertilizer producing regions have plentiful reserves of high quality phosphate rock that can be mined at a low cost. In 2018, the vast majority of the world’s phosphate rock production was in China, Morocco, the United States and Russia. In the phosphate market, the need for access to competitive sources of multiple raw material feedstocks (phosphate rock, sulphuric acid and ammonia), combined with the complexity of developing an economically feasible downstream value chain, constitute a significant entry barrier with respect to new competitors.
The specialty fertilizers market is growing faster than the markets for conventional fertilizers. Specialty fertilizers are generally used for specialty crops (such as greenhouses and horticulture) but are also expanding into usage for larger specialty field crops. Farmers use fertilizers that are customized to meet the needs of specific crops, soil types and climates, to maximize yield and quality. The specialty fertilizers allow more precise application of the critical foundations for development of the plant (phosphorus acid, potassium and nitrogen) and micro‑nutrients. In addition to reduction of the environmental impacts, the specialty fertilizers contribute to a more efficient and effective fertilization of different types of agriculture products (fruits, vegetables, etc.). Increase in the demand for food is expected to give rise to an increase in the use of specialty fertilizers. These fertilizers include, among others, “enhanced efficiency fertilizers” which include controlled release fertilizers (CRF), which allow for precision in the release of nutrients over time, and delayed/slow release fertilizers (SRF), which allow for a very slow release of nutrients (nitrogen and potassium only), liquid fertilizers integrated in irrigation systems and in herbicides and fully water soluble fertilizers, which are most commonly used for fertilization by means of drip irrigation systems and foliar spraying.
36

FertilizerpluS is ICL's premium fertilizers line, based mainly on polyhalite (marketed by the Company as Polysulphate™) and other products. FertilizerpluS products, which include different compounds of phosphorus, sulphur, potassium, magnesium and calcium, are tailored for various types of soil and wide range of crops, intended to enhance crops, improve yields and increase fertilizer efficiency. FertilizerpluS includes, among others, the following products:
·Polysulphate™ – polyhalite is a mineral that is exclusively mined by ICL through the Potash segment in an underground mine in the UK and is marketed under the brand name Polysulphate™. Polysulphate™ is used in its natural form as a fully soluble and natural fertilizer, which is also used for organic agriculture and as a raw material for production of fertilizers. Polysulphate™ is composed of sulphur (SO3 48%), potash (K2O 14%), calcium (CaO 17%) and magnesium (MgO 6%), which are essential components for improvement of crops and agricultural products.
·PotashpluS – a compressed mixture of Polysulphate™ and potash. The product includes potassium, sulphur, calcium and magnesium.
·PKPlus – a unique combination of phosphate, potash and Polysulphate™.
·NovaPhos – ensures an effective supply of slow-release phosphorus, calcium, magnesium and micronutrients for crops, specifically tailored for use in acidic soil.
·NPS – a nitrogen-phosphate fertilizer compounded with sulphur, which provides exceptional effectiveness for the enhancement of a wide range of crops through the combination of these three nutrients in one product.
·PK+Micronutrients – a tailor-made fertilizer, with precise micronutrient composition for the specific type of crop.
PKPlus, NovaPhos, NPS and PK+Micronutrients are marketed by the Phosphate Solutions segment.

37

Specialty Chemicals Industries
Specialty phosphates - ICL’s specialty phosphates products are based on ICL's backward integrated value chain, which uses phosphate rock and fertilizer-grade phosphoric acid (“green phosphoric acid”), for the production of specialty phosphates products with higher added value, such as pure phosphoric acid and salts for various applications. These products provide ICL with additional value on top of commodity phosphates. One of the major applications for specialty phosphates provides solutions based on specialty phosphate salts and acids for the diversified industrial end markets, such as oral care, cleaning products, paints and coatings, water treatment, asphalt modification, construction and metal treatment. Another major application is for the food industry, as functional food ingredients and phosphate additives, which provide texture and stability solutions for the processed meat, poultry, seafood, dairy, beverage and baked goods markets. Demand for specialty phosphates is driven by global economic and population growth and improved living standards, which promote the adoption of more sophisticated food products as well as improved industrial products and production technologies.
Bromine is a member of the halogen family and known for its diverse uses in many industries. Based on a study conducted in 2014 at Vanderbilt University, among 92 naturally occurring chemical elements, bromine falls within a class of 28 chemical elements that are essential for human life. Bromine is used in the production of a range of bromine compounds.
The largest commercial use of bromine is in the area of bromine‑based flame retardants, which, based on ICL’s internal estimations, accounts for approximately 40% of the demand for bromine. In order to meet fire-safety requirements, flame retardants are used as inputs in manufacturing processes and end products, such as, plastic enclosures for consumer electronics, printed circuit boards, insulation materials for construction, furniture, automobiles, and textiles. Additional commercial uses of bromine are in the following industries: rubber production, oil and gas drilling, water purification, intermediate materials for production of medicines and pesticides, and others. ICL and its competitors focus on R&D to introduce new products and uses for bromine on an ongoing basis.
Bromine is found naturally in seawater, underground brine deposits and other water reservoirs, such as the Dead Sea. The concentration of bromine varies depending upon its source. The method for extracting bromine depends on the nature of its source and its concentration. The lower the concentration of bromine in the brines, the more difficult and expensive it is to extract. The Dead Sea is the world’s premier source of bromine, with concentration levels significantly higher than in regular seawater, and it accounts for about half of the global supply (together with the production on the Jordanian side of the Dead Sea). The Dead Sea operation is the most competitive supply source of bromine as it has the highest concentration, and as a result, the least amount of water must be extracted and evaporated to produce bromine, which minimizes the energy costs.
The bromine industry is highly concentrated, with three companies accounting for the majority of the worldwide capacity in 2018 (ICL, Albemarle and Lanxess). Lack of access to a low-cost source of supply, such as the Dead Sea, constitutes a significant barrier to entry for aspiring competitors, as well as the requirement for a logistical supply system and specialized transport containers (isotanks). The Company estimates that the majority of the global elemental bromine production is consumed internally by the bromine manufacturers, since there is a very small market for elemental bromine. Development of complex production facilities for downstream products is required in order to increase the global use of elemental bromine.
Magnesium is considered to be the lightest structural metal. One of the main characteristics of magnesium is a higher strength‑to‑weight ratio compared with other metals – mainly steel and aluminum. The magnesium market is characterized by concentration of production, where about 85% of the production is in China.There are a small number of western producers, including US Magnesium in the United States, ICL Magnesium in Israel and RIMA in Brazil.
38

Markets
ICL is builtstructured around three mainmineral value chains – bromine, potash and phosphate. These minerals – potash, phosphate and bromine, which are the main raw materials for most of the value-added downstream products along the integrated value chains that we have developed throughout the years. ICL isin our Company’s portfolio. Our operations are organized inunder four reporting segments: Industrial Products (bromine), Potash, Phosphate Solutions and Innovative Ag Solutions (IAS). Three of the fourThe first three segments represent a specific value chain: Thechain, and we are a leader in each of these segments – either in terms of market share or cost competitiveness.
Our Industrial Products segment includes mainlyprimarily operates the bromine value chain, (elementalwhich includes elemental bromine and bromine compounds for various industrial applications) as well asapplications. This segment also operates several complementary businesses, mainly phosphorous based compounds (mostlyphosphorous-based flame retardants)retardants and additional Dead Sea minerals for the pharma,pharmaceutical, food, oil &and gas, and de-icing industries.
The Potash segment is based onoperates our potash value chain and includes mainlyprimarily potash fertilizers, as well as polysulphate-based fertilizers for the agriculture market.Polysulphate®-based fertilizers. The segmentsmagnesium business, a byproduct of potash production, is also includes the magnesium activity. reported under this segment.
The Phosphate Solutions segment is mostlyprimarily based on ICL'sour phosphate value chain. It includes specialty phosphate salts and acids for various food and industrial applications, as well as commodity phosphates, which are used mostlymainly as fertilizers. In each of the segments ICL benefits from leadership position, whether it is in market share or in cost competitiveness.
The fourth segment, IAS, currently includes theour specialty fertilizers business. We are focused on expanding and strengthening our Innovative Ag Solutions offerings, by maximizing its existing capabilities and agronomic expertise. Our stated strategy calls for expansion and global diversification through opportunistic M&A and, accordingly in 2021, we completed the acquisitions of Fertiláqua, a Brazilian specialty crop nutrition company, and the South American Plant Nutrition business but also functionsfrom Compass Minerals (now known as ICL's innovative arm, focusing on R&DICL America do Sul or ADS). Both acquisitions have helped position ICL as the leading specialty plant nutrition company in Brazil and digital innovation. ICL aims to achieve leadership position in specialty fertilizers through portfolio enhancement and geographic expansion, potentially including bolt-on M&A.
balance segment seasonality.
 

ICL Group Limited 42
39



Industrial and Food Markets
 
ICL’sOur Industrial Products segment and ICL's specialty phosphates business serve various industrial markets, benefitting from its integrated phosphate and bromine value chains.food markets.
 
Industrial Products
Bromine, a member of the halogen family, is found naturally in seawater, underground brine deposits and other water reservoirs, such as the Dead Sea. Bromine concentration and extraction methods vary depending upon the source.  The lower the concentration of bromine in the brines, the more difficult and expensive it is to extract. The Dead Sea, which spans Israel and Jordan, is the world’s premier source of bromine and accounts for approximately half of global supply. The Dead Sea is also the most competitive source of bromine, as it has the highest concentration, which means the least amount of water must be extracted and evaporated to produce bromine, resulting in lower energy costs.
 
ICL's bromine solutions are embeddedfound in numerous products makingand make consumer goods safer and industrial production more efficient and sustainable. The largest commercial use of bromine is in flame retardants, which are used by the electronics and components, automotive, building and construction, and furniture and textiles end-markets. Bromine and its derivatives are also used in various other industrial applications, including rubber production, oil and gas drilling, water purification, and in the pharmaceutical and food industries.
ICL Group Limited 43

Demand for the products manufactured by ICLour Industrial Products which mainly include solutions based on bromine and phosphorus,segment is driven by population growth, increasedimproved standards of living, highergreater environmental and safety awareness, and an increased focus on cost effective production. These trends drive demand for more environmentally friendly and safer industrial products, as well as efficient and reliable service suppliers. ICL’s products serve a diverse number of industries, such as, construction, electronics, automotive, energy (including renewable energy), water and pharma & nutraceutical.production. Increased regulation and environmental awareness also drive demand for flame retardants including polymeric and reactive bromine and phosphorus-based flame retardants, bromine‑based biocides for water treatment, bromine, magnesiawhich are considered more environmentally friendly. Despite strong demand patterns in 2021 – driven by the post COVID-19 industrial impact, tight supply and potassium chloride‑based intermediates for the pharmaceutical industry and oil additive solutions.related supply chain challenges - ICL estimates thatlong-term bromine demand is relatively stable and expects market growth isto be primarily linked to global population growth. On the above-mentioned market drivers.
The supply side has tightened, as Chinese supply is in a downward trendproducers have significantly decreased their bromine production over the past few years, due to resource depletion, and increased environmental-related regulatory pressure, in China.and the reduced availability of land for bromine production. This togethershift, combined with a shortage of economically viable bromine resources globally, resulthas resulted in aprice increases related to tight supply‑demand balancesupply and price increases.demand.
 
Specialty Phosphates
 
ICL’sOur specialty phosphates business is basedpart of our Phosphate Solutions segment and is focused on ICL's backwarddeveloping products for the food and industrial end-markets. These products are centered around the Company's vertical integration into phosphate rock and fertilizer gradefertilizer-grade phosphoric acid, also known as green phosphoric acid, which is cleanedundergoes a chemical process to reachbecome purified phosphoric acid, (alsoalso referred to as food grade or technical grade acid)white phosphoric acid (WPA). ICL marketsAs part of its value-add proposition, we produce and market purified acids and also produces phosphate salts, based on it.in addition to commodity phosphates.
In the food industry, phosphate salts are used as functional food ingredients and provide texture and stability solutions for the processed meat, poultry, seafood, dairy, beverage, and bakery industries. On the industrial side, ICL's phosphoric acidsspecialty phosphates are found in water and salts serve many industries such asmetal treatment supplies, cleaning and construction materials, cola beverages, water treatment, cleaning materials,oral care, paints and coatings, metal treatment, oral care, construction and more. Phosphate salts used as food additives serve the dairy, bakery, meat, poultry and seafood industries.more.
 
In March 2018,As part of its food specialties business, ICL developed its proprietary ROVITARIS® alternative protein technology for the Company completedmeat alternatives market.  By using ROVITARIS®, food manufacturers can create plant-based meat alternatives, which are virtually indistinguishable from their traditional meat counterparts and are allergen free. On December 2, 2021, ICL announced it opened a new 10,000-square-foot alternative-protein production facility in St. Louis, Missouri. At full capacity, the sale transactionnew facility will produce more than 15 million pounds of the fire safetyplant-based meat substitute for use by food companies, food-service distributors, restaurants and oil additives businesses, for a total consideration of $1,010 million, of which $953 million is in cash and $57 million is in the form of a long-term loan to a subsidiary of the buyer.grocery chains.
 
According to ICL'sour estimates, the Company hasICL holds a leading position in specialty phosphates in Europe, North America and Latin America. According to CRU's estimates from September 2018,America, with approximately 24% market share in total. Additionally, demand for purified phosphoric acid is expected to grow by- a CAGR of 1.5% between 2018 to 2023 while supply is expected to grow by less than 0.5%. According to CRU, demandkey raw material for water soluble fertilizers of which purified phosphoric acid- is a major raw material, has been growing sharply,expected to continue to increase, driven by rapid growth in fruit &and vegetable consumption and changing agricultural production systems. PhosphateSimilarly, phosphate salts used in processed meats, cheeses and bakingbaked goods have seen strongincreased consumption growth in developing countries. At the same time, there are several capacity expansions on the horizon, these are likely to be almost entirely offset by expected closures of TPA (thermal phosphoric acid) plants in China.

 
ICL Group Limited 44
40


Consumer demand for different food products has changed dramatically over the lastpast several decades, driven by increasedhigher income per capita, demographic shifts and lifestyle changes. Longer working hours, changing family structures, increased awareness of nutrition and health issues, and access to a broader variety of food products, resulthave resulted in growing demand for more sophisticated, protein-enriched, unprocessed (“clean label”)(clean label) and non-allergenic (“free from”)(free from) food products with longer shelf lives along with improved flavor, texture and appearance. An increasingly longer supply chain and consumer awareness of food waste also drives the demand for longer shelf‑life and food stability. These trends act asdrive long‑term drivers of demand for food additives, such as phosphate derivatives and phosphate and protein containing formulationsformulations.
For 2022, we expect to increase our food-grade WPA production at our YPH in China, in order to serve local food and hygiene products forindustrial applications markets. We also expect to increase our battery grade MAPsales to the processed meat, bakery, dairy and beverages industries.rapidly growing lithium iron phosphate (LFP) battery market in China.
 
Agriculture Markets
 
ICL'sFertilizers
Our potash and phosphate commodity fertilizers, FertilizerpluS and specialty fertilizers businesses serve agriculture markets worldwide.
Fertilizers serve an important role in global agriculture by providing vital nutrients to increase both the crop yield and quality. Nitrogen, phosphorus and potassium (N, P and K) constitute the three major nutrients required for plant growth, and there are no artificial substitutes for potassium and phosphorous. Although these nutrients are naturally found in soil, they are depleted over time by farming, which can lead to declining crop yields and land productivity. To replenish these nutrients, farmers must apply fertilizers.
Each of these three nutrients plays a different role in plant development and helps crops achieve their growth potential. Potassium and phosphorus are vital for the plant’s physiological processes, including strengthening cereal stalks, stimulating root development, promoting leaf and fruit health, and accelerating the growth rate of crops. Potassium also enhances a plant’s ability to withstand drought and cold, improves the efficient use of nitrogen and other nutrients necessary for plant development, and improves the durability of agricultural products in storage and transportation, thereby prolonging shelf life.
Short term demand for fertilizers is volatile and seasonal and affected by factors, such as the weather in the world’s key agricultural growing regions, fluctuations in planting main crops, agricultural input costs, agricultural product prices and developments in biotechnology. Some of these factors are influenced by various countries’ government subsidies and environmental regulations or by the lines of credit granted to farmers or to producers of agriculture inputs. In addition, currency exchange rates, legislation and international trade policies have an impact on the supply, demand and level of consumption of fertilizers worldwide. Nevertheless, the common perception, reinforced by the 2020 outbreak of COVID -19, is that the policy of most countries is to ensure an orderly and high-quality supply of food for their population and, to this end, they encourage local agricultural production. To achieve this goal, most countries classified the fertilizer industry as essential, excluding it from Covid-19 restrictions and lockdowns. Therefore, we expect the long-term growth trend in the fertilizers market will be maintained.
Global fertilizer demand is also driven mainly by the supply/demand balance in respect offor grains and other agriculture products markets, which impacts their prices. Supply of agriculture products is influenced by weather, planted areas and input usage, while demand is primarily influenced by population growth and dietary changes in the developing world:
 
ICL Group Limited 45


Population and Income Growth per Capita. Historically, growth in global fertilizer consumption globally has been closely correlated withto the growth inof the world’s population, which is expected to increase by over 2.0grow from 7.8 billion andin 2021 to reach 9.89.7 billion by 2050, according to the FAO (FoodFood and Agriculture Organization of the UN)UN (FAO). Currently, developed countries use fertilizers more intensively than developing countries and, therefore, produce crops at much higher yields. Economic growth in emerging markets supports food demand and, thusas a result, fertilizer use. In addition, growth in income per capita in developing markets resultsis resulting in a shift to more protein‑rich diets through higher meat consumption - which requires larger quantities of grain for their growth thus leading to an increased demand for seeds used in animal feed. According to estimates published by the IMF (InternationalInternational Monetary Fund)Fund (IMF), GDP per capita in emerging markets and developing economies (current prices) is expected to grow by 3.3%7.2% and 6.5%6.4% in 20192022 and 2020, respectively.2023, respectively.
 
Declining Arable Land per Capita.  As the world’s population grows, mainly in cities, farmland per capita decreases and more food production is requiredneeded from each acre of farmland. This, in turn,farmland, which requires increased yield per planted area. According toBased on data provided by the FAO, the amount of arable land per capita is expected to decrease from 0.220.21 hectares per person to 0.170.18 hectares per person between 20142022 and 2050. Effectively, newNew arable land is available only in limited quantities and is concentrated mainly in Brazil. Therefore, the only viable path to increaseincreased crop production is through a yield increase in existing farms in developing countries,regions – mainly in China, India, Russia, Africa and Central America,America.  This can be achieved by optimizing the use of fertilizers (especially- especially improving the balance in the use of potash, which is underutilized versus the use of nitrogen fertilizers),fertilizers - together with improved water availability and better seeds. According to the FAO, world crop production will doubleincrease by 23.7% between 20072021 and 2050. 77%2050, with most of the growth is expected to be attributed to increase in yields.yields.
 

41

Grain Stock‑to‑Use Ratio. As illustrated by the chart below, starting from the year 2000 and until the 2012/3 agriculture season, pressure on food demand and unfavorable weather in the main growing areas resulted in low levels of the grain stock‑to‑use ratio (a metric index of the level of carryover stock). Since then, several years of favorable weather led to a trend of increasing yields, resulting in an increase in the grain stock-to-use ratio. An increase in the grain stock-to-use ratio generally indicates that grain prices may decline (due to higher grain supply) and vice versa.
Stocks are an important market variable, represent inventories at a point in time, and reflect the balance between supply and demand. The stock-to-use ratio also indicates the level of carryover stock for any given commodity, as a percentage of the total demand or use. High stock-to-use ratios indicate more supply is available, generally leading to lower prices.  Conversely, low stock-to-use ratios indicate a tight supply situation and higher prices.
This ratio can also be used to indicate whether current and projected stock levels are critical or plentiful. By comparing the current year's stock-to-use ratio with years when carryover stocks were below normal – as well as years when carryover stocks were above normal – will help provide an estimate as to the direction of the price trend, as well as the probable extent of price changes.
During 2018,2021, average prices of corn, soybean and wheat prices increased by 8.4%60.4%, 45.2%, and 19.3%41.1%, respectively, while soybeanthe average price of rice declined by 2%. These increases occurred due to the lingering impact of COVID-19 and ricethe related global concerns regarding food security, especially in China. Good agricultural fundamentals supported the increase in grain prices, decreased by 4.8% and 9.9%, respectively.mainly in Brazil, where farmers faced high barter ratios. The WASDE report, published by the USDA in February 2019January of 2022, further supports the above and showed a decrease in the expected ratio of the global grain inventories of grains to annual consumption, to 29.2% at28.4% for the end of the 2018/192021/22 agriculture year, compared to 31.3% at29.2% for the 2017/182020/21 agriculture year, and 30.6% in30.5% for the 2016/172019/20 agriculture year. The decrease in the global stock-to-use ratio is mainly a result of a decrease in the ratio for wheat and corn compared to the previous agricultural year due to a decrease in wheat production in Australia which is facing a drought and in Argentina due to a smaller crop on the background of an increased consumption and due to higher consumption of corn..

ICL Group Limited 46




Specialty Agriculture
 
Specialty Agriculturefertilizer markets are estimated to be growing at a rateCAGR of 5-15% a year,5% to 7% from 2020 to 2025, depending on the market segment (IFA, 2017)(Luclntel, 2021), which is faster than the conventional fertilizer market. The decrease in arable land per capita due Farmers use specialty fertilizers to population growthmeet the needs of specific crops, soil types and climates, to achieve more efficient and effective fertilization and to maximize yield and quality. Specialty fertilizers allow for more precise application of the increasing pursuit of an improved quality of lifecritical foundations for plant development and are leading to a higher consumption ofgenerally used for specialty crops (such as fruits and vegetables, which are consideredgreenhouses and horticulture), and in recent years, usage has also expanded to larger specialty crops, and supportfield crops. The global increase in the use of more sophisticated fertilizers that will enable higher yields. Increased environmental awarenessdemand for food is also contributingexpected to drive a related increase in the use of specialty fertilizers. These fertilizers (since they resultinclude enhanced efficiency fertilizers, such as controlled release fertilizers (CRF), which allow for precision in higher nutrient efficiency)the release of nutrients over time, and delayed or slow-release fertilizers (SRF), which allow for a very slow release of nutrients (nitrogen and potassium only).  Other enhanced efficiency fertilizers include liquid fertilizers, integrated in irrigation systems and in herbicides, and fully water-soluble fertilizers, which are most commonly used for fertilization by means of drip irrigation systems and foliar spraying.
 

ICL Group Limited 47
42


 
The expected market growth of specialty fertilizers is supported by the following global trends:
 
The need for an increase in yield and crop quality
 
Enhanced Efficient Fertilizers,efficiency fertilizers, which include controlled release fertilizers (CRF),CRFs, increase the quality and yield of crops through a more efficient crop uptake of the nutrients. Many specialty-fertilizersspecialty-fertilizer field trials in specific growing regions have already demonstrated the benefits of using new fertilizer technologies. The Enhanced Efficiency Fertilizerstechnologies and, as a result, the enhanced efficiency fertilizers category is rapidly growing globally.globally.
 
Regulatory pressure and environmental trends
 
Environmental regulations can impose restrictions on the level of nutrient usage. This results in a movement towards more efficient nutrient solutions, such as Controlled Release Fertilizers (CRFs)CRFs, water-soluble fertilizers or Water Soluble Fertilizers.biostimulants.
 
China’s Zero Growth Fertilizers 2020 is oneAs an example of such a regulation. In order to achieve the goal of a zero increase in fertilizer consumption by 2020,restrictions, under its ‘Zero Growth Fertilizers 2020’ plan, China is promotingpromoted new fertilization technologies, including Controlled Release Fertilizers and fertigation; raising customized fertilizer application; promoting newthe use of controlled release fertilizers and new technologies; promoting organic fertilizer application and strengthening of high-standard ploughing (Agronews, 2015). CRFs are representative of new fertilizers, so hastening their adoption will play a pivotal role in reducing the consumption volume of chemical fertilizers and improving their utilization rates (CCM, Data & Business Intelligence, 2016).fertigation, among other initiatives. Another regulatory example is the EU Nitrate Directive, which sets a limit toon the amount of nitrates that may be found in the water.water supply. Specialty Fertilizers,fertilizers, such as CRFs, can optimize the availability of nitrogen to the crop. (EU Nitrate Directive, European Commission, 2014). In recent years, there has beencrop, thereby reducing nitrate levels. The EU also announced a growing trend among commercial companies,new fertilizer regulation, which is expected to come into force in July 2022, aimed at developing a more circular economy and at facilitating the development of innovative solutions, such as supermarket chains and other retailers,biostimulants, while also improving the global safety of setting their own internal rules relatedfertilizers. The EU also announced a ‘Farm to growers’ practices. For instance, some supermarket chains are demonstrating their commitment to reduce environmental impacts by setting specific rules regardingFork’ strategy with several ambitious targets, including a reduction in fertilizer usage by their fruits and vegetables suppliers. Other voluntary organizations, suchnutrient loss while simultaneously maintaining existing soil fertility, as “GAP - Good Agriculture Practice”, publish guidelines and issue certificates to farmers who comply with their regulations. Many food processing companies and retailers adopt these guidelineswell as a standard their suppliers should comply with.target calling for 25% of the EU’s agricultural land to be organically farmed by 2030.
 
New Grower Practices
 
Grower practices can have a substantial impact on the growth of the Specialty Fertilizersspecialty fertilizers market. Fertigation usage is growing, since applying fertilizers via fertigation systems is much more efficient when using specialty fertilizers, thus increasing the demand for soluble fertilizers such as Water Soluble NPKs.
The ongoingfertilizers. Ongoing improvements in agricultural technology have resulted in a significantan increase in the usage of drip irrigation (more than 10% per year) and an increase in demand for liquid and water soluble fertilizers.water-soluble fertilizers.
 
All of the above factors are expected to contribute to a higheran increase in long-term demand for specialty fertilizer solutions.solutions.
 
ICL Group Limited 48

43

Our
 Competitive Strengths
 
ICL attributes itsWe attribute our business strength to the following competitive advantages:
 

·
Unique portfolio of mineral assets. ICL benefits from access to one of the world’s richest, longest‑life and lowest‑cost resources of potash and bromine. ICL’s access to these resources is based on an exclusive concession from the State of Israel for extraction of minerals from the Dead Sea. ICL also holds licenses to mine potash and salts from underground mines in Spain, with vast resources. ICL is the only global producer of polyhalite, a mineral used as fertilizer and consisting potassium, Sulphur, calcium and magnesium. In addition, ICL has access to phosphate rock in the Negev Desert based on mining licenses from the State of Israel and it holds a license for mining phosphates in China. assets.Access to these assets provides ICLus with a consistent, reliable supply of raw materials, allowingallows for large scale-production, and supporting ICL’ssupports our integrated value chain of specialty value added products.
Israel
 
Dead Sea: We benefit from access to the Dead Sea in Israel:  ICL’s- one of the world’s most abundant, enduring and cost-efficient sources of potash and brominebromine. The Company’s access to these resources is based on an exclusive concession from the State of Israel for extraction of minerals from the Dead Sea. ICL’s production facilities at the Dead Sea enjoy lower production costs compared to underground potash mining potashoperations or bromine extracted from underground deposits or extracting bromine from less concentrated sources. This is attributed to theresources with lower mineral concentration. The Dead Sea has high mineral concentration and virtually unlimited supply, of minerals in the Dead Sea and to theICL’s unique solar evaporation production process which is less energy intensive. Furthermore, the Dead Sea’s hot and dry climate allows ICL to store outdoors very large amounts of potash (exceeding annual production)outdoors at a low cost. This advantage enables ICL to operate its potash facilities at full production capacity, despite periodic fluctuations in demand, and to react faster in periods of higher demand. In addition, ICL benefits from lower transportation and logistics costs compared to its competitors and has a faster time to market, due to the geographic proximity of its facilities in Israel to seaports and dueIsrael’s location to Israel’s geographic positioning vis‑à‑vis its main geographical markets (especially- especially the fast‑rapidly‑growing markets of India, China and Brazil).Brazil. While ICL benefits from these advantages, it incurs other infrastructure‑related costs in connection with harvesting salt from Pond 5 at its Dead Sea complex, which is its central evaporation pond, to avoid the need to continue to raise the water level in the pond. In addition, while the supply in the Dead Sea is virtually unlimited, ICL’s access to this supply of potash and bromine pursuant to the concession is subject to the need to construct a new pumping station (P-9). Moreover, the Law for Taxation of Profits from Natural Resources in Israel which entered into effect on January 1, 2016, will impact the Company's net profit if the mineral's price environment will increase to a level that its effect5. For further information, see “Item 4 - Information on the profitability of the subsidiaries resulted to a natural resources tax liabilities. See “Item 3 - Key Information—Company— D. Risk Factors— Risks Related to Our Business”Property, Plant and Equipment— Mineral Extraction and Mining Operations”.
 
United Kingdom and Spain mineral assets:  In addition to its operations in Israel, ICL mines potash in Spain and Polysulphate in the United Kingdom (potash production in the United Kingdom halted completely in mid-2018). The geographical proximity to Europe, the primary market of these assets, provides ICL with logistical advantages reflected in lower transportation costs, faster time-to‑market and higher net-back prices. In Spain, ICL is progressing with its project to consolidate the two existing mines and processing facilities into one complex which operates a ramp instead of a shaft, thus aiming to increase the mine’s capacity and contributing to lower costs. The project also consists of expanding the above-mentioned processing facility’s capacity, logistics adjustments and improvements and construction of a new terminal in the Port of Barcelona. In the UK, the Company is ramping up the production of Polysulphate,a unique mineral containing four nutrients (potassium, sulphur, calcium and magnesium) which can be used as a natural fertilizer and provides a very cost effective solution, as its production does not require chemical processing.
44

Integrated phosphate value chain: ICL’sNegev Desert: Our access to phosphate rock in the Negev Desert and in China is the foundation for the Company's sizeable downstream fully backwardand vertically integrated specialty phosphate business. ICL minesWe mine and processesprocess phosphate rock from three open‑pit mines in the Negev Desert under mining licenses from the State of Israel and fromIsrael.
China
We also operate an open-pitopen pit mine in Haikou, (China),China, using conventional methods, under a phosphate mining license that was issued in July 2015 by the Division of Land and Resources of the Yunnan district in China. About 90%
The majority of theour phosphate rock producedproduction in China (and Israel) is used internally to manufacture phosphate fertilizers and fertilizer-grade and pure phosphoric acid, with the balance being sold to third parties. ICL’sOur phosphate assets are the base for itsof our vast and diversified specialty phosphates product portfolio and are used in industrial applications, as well as food additives and specialty fertilizers, addingfertilizers.  These offerings provide additional value to the commodity businessICL while reducing ICL’sour exposure to the volatility in the commodity markets. See “Item 3 - Key Information— D. Risk Factors— Our miningmineral extraction operations are dependent on concessions, licenses and permits granted to us by the respective governments in the countries wherein they are located”in which we operate”.
 
ICL Group Limited 49


United Kingdom
We are currently the only global producer of polyhalite, a unique and organic resource used as fertilizer and naturally consisting of potassium, sulfur, calcium and magnesium, which ICL markets under the name Polysulphate.  Unlike blended or compound fertilizer, Polysulphate is available in its natural state and is mined, crushed, screened and bagged, with no additional chemical separation or other industrial processes.  It is also soluble, easily absorbed and a cost-effective answer to crop nutrition, and has the lowest carbon footprint available globally.
Spain
We hold licenses to mine potash and salts from underground mines with vast resources in Spain. In the first half of 2021, we completed a project to consolidate two existing mines and processing facilities into one complex, which operates via a ramp instead of a shaft.  This change has increased the mine’s capacity and is expected to contribute to lower costs. The project also expanded the complex’s processing capacity, along with other improvements, including the construction of a new terminal in the Port of Barcelona, which was completed in early 2020.

·
Diversification into higher value‑added specialty products leveraging ICL’sleverages our integrated business model. ICL’sThe Company’s integrated production processes are based on a synergistic value chain thatwhich allows itus to both efficiently convert raw materials into value‑added downstream products and to utilize the by‑products. For example, in phosphates, ICL utilizes itswe utilize backward integration to produce specialty phosphates used infor the food industry and for industrial applications. These businesses benefit from higher growth rates, higher margins and lower volatility compared to commodity phosphates. In addition, as a by‑product of the potash production at the Dead Sea, ICL generateswe generate brines with the highest bromine concentration globally. ICL’sOur bromine‑based products serve various industries such as the electronics, construction, oil and gas and automotive industries.industries.
 

·
Leading positions in markets with high barriers to entry barriers.. ICL obtainshas leadership positions in many of the key markets in which it operates. It is the clear leader in the bromine market, with 40% of market capacity, and aboutor approximately one third of global production, andas well as most of the excess capacity in the market. In the potash market, our Dead Sea operations have a leading competitive position and, according to CRU, the Dead Sea operations has a leadingis among the most competitive positions.potash suppliers to China, India and Brazil. ICL also has the largest market share in specialty phosphates, in the combined markets of North America, Europe and Latin America and is the sole producer of polysulphate.Polysulphate®. ICL has leadership positions in additional product lines, such as phosphorous-based flame retardants, PK fertilizers in Europe, and soluble phosphate‑based fertilizers.fertilizers.
 
Most of ICL’sour businesses rely on natural resources, thatwhich are scarce and concentrated in the hands of a few market participants. ICL’s exclusive concessions, intellectual property (unique– including unique knowledge, technologies and patents for various products and applications),applications – and our world‑wide marketing and distribution network, andcombined with high industry start‑up costs for new market entrants, add further significant barriers to entry.entry.
 
45


·
Strategically located production and logistics assets.  ICL benefits We benefit from the proximity of itsour facilities, both in Israel and Europe, to developed economies (Western Europe) and emerging markets (such as China, India and Brazil). For example, inIn Israel, ICL shipswe ship from two seaports: Thethe Port of Ashdod (with access to Europe and South America) and the Port of Eilat (with access to Asia, Africa and Oceania). As a result of their geographical positions, accessAccess to these two ports provides ICLus with two distinctivedistinct advantages versus itsour competitors: (1) it has lower plant gate‑to‑‑to‑port, ocean freight, and transportation costs from our ports to our target markets, which lower itsour overall cost structure; and (2) it has faster time to markets, due to itsour proximity to end‑markets, allowing itwhich allows us to opportunistically fill short lead‑time orders strengthening itsand strengthen our position with itsour customers. In addition, ICL is the sole producer with the ability to transport potash and phosphates from the same port (which it does in Israel). ICL’s sales are balanced between emerging markets (approximately 39% of 2018 sales) and developed economies (approximately 61% of 2018 sales).
 

ICL Group Limited 50



·
Available
Strong cash flows from operating activitiesgeneration andclosely monitored capital allocation approach. ContinuousA continuous focus on cash flow generation and the optimization of the capital expenditures (CAPEX) and working capital as well as the implementation of efficiency measures enabled the Companyus to generate operating cash flow of $620$1,065 million in 2018. These cash flows were used in accordance with the Company’s strict approach in connection with allotment2021, an increase of equity, whereby the Company examines, on an ongoing basis, the work plan and its investments.32% compared to 2020. ICL's capital allocation approach balances between driving its long‑term value creation through investments in its growth, with its commitment to providing a solid dividend yield, while aiming to maintain an investment grade rating (BBB-of at least BBB- by S&P and Fitch). On March 6, 2018,Fitch. In February 2020, the Company’s Board of Directors revisited theresolved to extend our dividend distribution policy and decided that for 2018 and 2019 calendar years the Company’s dividend payment rate will continue to beof a payout ratio of up to 50% of theannual adjusted net income.income, until further notice. In 2018,respect to 2021 adjusted net income, the Company declared and paid total dividends in the amount of $244$411 million, in respect of the fourth quarter of 2017 as well as the first, second and third quarters of 2018. Dividend payments in 2018 reflectsreflecting a dividend yield rate of 3.8%approximately 4.57% (based on the average share price for the year). See “Item 8 - Financial Information— A. Consolidated Statements and Other Financial Information— Dividend policy”.
 

·
Professional expertise and culture of collaboration and determination. ICL’sOur operations are managed by an international management team with extensive industry experience. ICL develops leaders with strong experience in their fields in order to drive change and innovation within the Company. ICL focuses on nurturing and empowering talent through a global platform of qualification, collaboration and communication, that reinforces innovation.in order to drive change and innovation within the Company.
 

46

Our Strategy
 
ICL’s integrated business modelOur strategy is based on itsto strengthen or achieve a leadership position in each of our segments - either in terms of market share or cost competitiveness – and to grow our businesses while creating shareholder value. We do this by leveraging our unique assets and strategic locations; by maximizing our knowledge of agronomy, chemistry and customer requirements; and through our access to Israel’s leading innovation and technology ecosystem. We have identified several growth engines, including:
Agriculture – We intend to build global leadership by developing and expanding our portfolio of essential minerals that support its specialty downstream activitiesand advanced crop nutrition products, digital solutions and integrated services, enabling farmers to increase yields and provide for the ever-growing nutritional needs of the world. Our growth in agriculture is driven by innovation, investment in increasing capacity and M&A, and it is supported by the increasing demand for organic fertilizers, micronutrients and bio stimulants, focusing on growing markets.
FoodwithWe expect to capitalize on the alternative protein market potential, by focusing on food technologies and innovation, and by increasing capacity for food grade solutions. Growth will be achieved both organically and through M&A.
Industrial – We intend to strengthen our global leadership in the bromine market by capitalizing on new market opportunities and by continuing to focus on crop nutritionlonger-term bromine compounds contracts. In addition, growth will be supported through expanded R&D and industrial markets. business development activities for new and sustainable bromine applications.
Our Company’s integrated business model creates significant operational synergies, which are derive from the combination of our attractive assets and broad value‑added solutions. Over the years, we have developed a balanced portfolio that supportsto support long‑term stability and growth.
 
In 2018
ICL launched its “Business CultureGroup Limited 51

To drive internal commercial synergies, optimize the distribution of Leadership” strategy, focused on enhancing market leadership across its three core mineral value chains of bromine, potashour commodity, specialty and phosphate, as well as realizingsemi-specialty fertilizers, and in order to better realize the growth potential of Innovative Ag Solutions. Toour crop nutrition business, we consolidated our crop nutrition sales and marketing infrastructure in 2020, This has created a unified commercial-facing platform for agriculture end-markets. This new operating model, which is managed on a regional basis, serves to enable us to achieve commercial excellence, increase the efficiency of our global operations and better align the organization with this strategy, ICL Realigned the company into four business divisions: Industrial Products (bromine), Potash, Phosphate Solutionsleverage region-specific knowledge, agronomic and Innovative Ag Solutions.R&D capabilities, logistical assets, and customer relationships.
 
Industrial Products
 
ICL’s global leadership in the bromine industry is driven by itsour focus on delivering value to itsour customers rather than increasing volume. ICL isWe are able to generate more value by leveraging itsour unique assets and know-how and by fosteringknow-how. The Company also employs targeted innovation, throughfor the development of new applications, such as new bromine and phosphorus-based flame retardants, magnesia and salt products, as well as other solutions. ICL continues to leverage its unique logistical advantages and unparalleled experience related to the safety and environmental aspects of its bromine business. Following strategic long-term contracts signed during 2019, the segment has built new compound facilities to increase its production capacity, mainly for TBBA. The new TBBA facility has been running in full capacity since the beginning of 2021.
 
Potash
 
ICL leverages its well-positioned and unique potash assets, as well as itsour logistical advantages, to be among the three most competitive suppliers in itsour key target markets, including Brazil, Europe, India, South-East Asia and China. ICL’sOur cost competitiveness is driven by itsthe Company’s lower logistics costs due to itsour facilities’ proximity to both ports and customers, as well as bycustomers. The Company also strives to continuous optimization of its potash production processes and capacity potential at ICL Dead Sea and ICL Iberia reducing(through the consolidation of sites and the completion of the ramp connecting the Cabanassas mine with the Suria plant), to reduce costs and efficientlyincrease efficiency utilizing its capacity potential. At ICL Boulby,, the Company has shifted towardsfocuses on ramping‑up the production of Polysulphate becomingand developing the market for this unique fertilizer as the world's first and sole supplier of this new and unique fertilizer.supplier. ICL also continues to enhance its competitive production of Magnesium andstrives to optimize synergies of producing magnesium with its potash and bromine operations at the Dead Sea.
 
Phosphate Solutions
 
ICL is a global leader in providing phosphate basedphosphate-based solutions to the Industrial, Foodindustrial, food and Agriculture end markets. ICL’sagriculture end-markets. Our strategy is to continue to outgrowgrow in these markets by increasingly focusingincreasing our focus on specialty phosphate solutions, and further promoting commercial excellence and value-based product positioning, while enhancing customer relationships. Leveraging on itsrelationships, and leveraging our backward integration tointo the phosphate resources of ICL Rotem in Israel and YPH in China, ICL willand our extensive know-how and innovation capabilities. We continue optimizing itsto optimize our production capabilities to support the growth and margin expansion of itsour specialty phosphate products and solutions. During 2021, we entered the fast-growing Electric Vehicles (EV) market segment through the sale of phosphate-based raw materials for the production of lithium iron phosphate LFP batteries in China and we expect to grow this business in the coming years by increasing production capacity, adding global R&D collaborations and by developing additional innovative solutions. On December 2, 2021, ICL opened a new 10,000-square-foot alternative-protein production facility in St. Louis, Missouri. At full capacity, the new facility will produce more than 15 million pounds of plant-based meat substitute for use by food companies, food-service distributors, restaurants and grocery chains.
 

ICL Group Limited 52
47

 
Innovative Ag Solutions
 
ICL is strivingstrives to create global leadership for Innovative Ag solutions by enhancing its global positions in its core markets of Specialty Agriculture, Ornamental Horticulture, Turfspecialty agriculture, ornamental horticulture, turf and Landscaping,landscaping, by targeting high growth markets such as Latin America, India and China. By leveraging itsWe leverage our unique R&D capabilities as well as seekingand seek M&A opportunities, ICL is workingas we work to expand itsour broad product portfolio of Controlled Release Fertilizersspecialty plant nutrition products, including controlled release fertilizers (CRF), Water Soluble Fertilizerswater soluble fertilizers (WSF), Liquid Fertilizers, Slow Release Fertilizersliquid fertilizers, slow-release fertilizers (SRF), straights (MAP/MKP/PeKacid), organic fertilizers, micronutrients, biostimulants, soil conditioners, adjuvants, seed treatment and Straights (MAP/MKP/Pekacid),growing media, to further boostdrive additional growth. ICL isWe are also developing a service portfolio focused on creating global and regional Agro-professionalagri-professional based solutions, by leveraging digital innovation.
 
As part of the Company's strategy to grow its specialty plant nutrition business organically and through M&A, in 2021, we completed the acquisitions of Fertiláqua, a Brazilian specialty plant nutrition company, and the South American Plant Nutrition business from Compass Minerals (ADS). Both acquisitions helped position ICL as the leading specialty plant nutrition company in Brazil.
Culture
 
ICL fosters a “Business’Business Culture of Leadership”Leadership‘, which focuses on business leadership, by creating a leading and sustainable work environment, with a strong commitment to all stakeholders. Culture at ICL, means placing safety as the company’sCompany’s top priority and making every effort and investment to achieve toptop-tier safety results. Culture at ICL, also means operating with a clear commitment to the environment, even beyond regulatory compliance. ICL strivesWe strive to be an “employerEmployer of choice”Choice by strengthening the company’sCompany’s value proposition to employees and by promoting ICL’s core values. ICLWe also fostersfoster an innovation-driven culture that, which leverages itsour technology and know-how, to better serve itsour customers and increase their loyalty. To ensure we live up to our values, culture at ICL also means accountability, transparency and top-tier corporate governance.
 
Innovation
As part of our strategic focus to enhance customer value through innovation, we are developing a service portfolio focused on creating global and regional agri-professional based solutions, by leveraging digital innovation.
In 2021, we established Agmatix, an agro-informatics start-up that creates data-driven solutions for ag professionals worldwide. Agmatix has developed a cutting-edge platform that uses agronomy data science and advanced AI technology to convert agronomic data into actionable insights at the field level. Agmatix aims to compensate the challenge of data standardization in order to dramatically increase crop yield, and quality, and to promote sustainable agriculture.
In July 2021, we launched ‘ICL Planet Startup Hub’, a foodTech and agriTech accelerator, aimed at offering ICL’s knowledge, experience, market access, and resources to startups operating within and adjacent to ICL’s core areas of expertise. ICL Planet Startup Hub’s first investment was a $1 million series A investment in Protera, an AI-driven start-up designing and developing new proteins and providing for a wide range of plant-based sustainable solutions to the alternative protein market.
ICL Group Limited 53


As part of our effort to expand our global Food Specialties portfolio and to focus the development of healthier and more sustainable food products, the Company launched a new alternative-protein fiber production facility in St. Louis in December 2021. The facility will produce plant-based protein fibers to be used in the production of meat substitute products sold by food companies, food-service distributors, restaurants and grocery chains
During 2021, we also expanded our specialty products offerings by producing a mono ammonium phosphate battery grade MAP solution for the production of LFP batteries, destined for electric vehicles and other energy storage uses. The Company also collaborates with research and academic institutes to advance LFP technology. 
In February 2020, ICL acquired Growers Holdings, Inc. ('Growers'), an innovator in the field of process and data-driven farming, to help further enhance our digital service offerings and accelerate our global development roadmap. The Growers platform collects and structures manual and machine-generated farm data, instantly creating agile and return-focused plans for planting, fertilization and purchasing decisions. 
Our strong commitment to foster an innovation-driven culture is also reflected by the establishment of an internal innovation accelerator, designed "Business Innovation for Growth" (BIG), aimed to optimally leverage the experience, knowledge and ingenuity of our approximately 12,000 employees worldwide. This integrated ideation platform also provides a structured evaluation process, professional support and resources for developing the ideas raised by employees and enables them to create a meaningful business impact. Since the program’s launch in January 2020, ICL employees submitted more than 3,000 ideas across various areas of ICL’s businesses, including new applications and products, production optimization and debottlenecking, implementation of Industry 4.0 technologies, introduction of new business models, service improvement and enhancement, supply chain optimization, digitalization of manual business processes, adoption of more sustainable production and operational process, sustainable products development and waste to product projects and much more. Out of the ideas submitted to date, more than 930 have become fully funded projects, of which nearly 600 were completed by the end of 2021. These projects have made an outstanding contribution to ICL's current and future profits, as well as to many other aspects of the Company’s business, including commercial and service excellence, operational excellence, suitability, safety, employee satisfaction and other qualitative aspects.
Capital Structure
 
ICL’sOur growth initiatives will be supported by our strong financial position. ICL has taken several steps to solidify itsWe are focused on maintaining our solid capital structure and generategenerating funds for future growth, by reducing debtpreserving our financial leverage at investment grade levels and improving the maturity profile optimizingof our debt portfolio. The Company also works to optimize capital expenditures and working capital implementingand to implement cost reductions and divesting low‑synergy assets.efficiencies.
 
ICL Group Limited 54
As part of this strategy, in March 2018, the Company completed the sale transaction of the Fire Safety and Oil Additives businesses, for a total consideration of $1,010 million, of which $953 million is in cash and $57 million is in the form of a long-term loan to a subsidiary of the buyer.
48

Segment Information

Segment Information
We are
ICL is a leading multinational companyCompany that operates mainly in the areas of fertilizers and specialty chemicals,minerals, through four segments – Industrial Products, Potash, Phosphate Solutions and Innovative Ag Solutions.
 

Industrial Products Segment
 
TheOur Industrial Products segment produces bromine out of a solution that is a by‑productas part of the potash production process in Sodom, Israel, as well as bromine‑based compounds. Industrial Products uses most of the bromine it produces for self‑production of bromine compounds at its production sites in Israel, the Netherlands and China. In addition, the Industrial Products segment produces several grades of potash, salt, magnesium chloride and magnesia products. Industrial Products is also engaged in the production and marketing of phosphorous-based flame retardantsproducts. In addition, the segment produces several magnesia, calcium carbonate and additional phosphorus‑basedsalt products.
 
In 2018,2021, the total sales of the Industrial Products segment totaled $1,296$1,617 million constituting approximately 23% of ICL’s total sales (including sales to other segments), an increase of 9%29% compared to 2017 Sales.2020. Sales by the Industrial Products segment constitute approximately 23% of ICL’s total sales, a decrease of 2% compared to 2020. The segmentsegment's operating profitincome totaled $350$435 million, constituting 35%an increase of the total44% compared to 2020. The Industrial Products segment's operating profit attributableincome constituted approximately 36% of ICL’s adjusted operating income, a decrease of 23% compared to the segments.2020. For additionalfurther information see "Item 3 – Key Information – A. Selected Financial Data – Adjusted to reported operating and net income (non-GAAP financial measures)" and “Item 5 - Operating and Financial Review and Prospects— A. Operating Results— Results of Operations”.
 
ICL Group Limited 55

Products
 
Industrial Products focuses on three main sub-business lines:
 
Flame retardants – bromine,Bromine, phosphorus and magnesium-based flame retardants are used in electronics, building and construction, automotive, textile and furnishing applications. Flame retardants are added to plastics, textiles and other combustible materials to inhibitprevent or delayinhibit fire or flames and to prevent the spread of fire.
 
49

Industrial solutionselementalElemental bromine, has a range of uses in the chemical industry, while bromine compounds and phosphorousphosphorus compounds are used in a number of industries worldwide, such as: rubber, pharmaceuticals, electricity, agro and polyester (in production of plastic fabrics and bottles). Clear brine fluids are used for balancing pressure in the oil and gas drilling industry. In addition, this sub-business line includes bromine‑Bromine‑based biocides are used for treating industrial water.
 
Specialty mineralsspecialtySpecialty minerals include magnesia, calcium carbonate and salt products. The main applications of magnesia products are fooddietary supplements and pharma, oil and fuel additives, catalysts and many other small applications. The calcium carbonate main applications are dietary supplements and pharma. The salts include sodium chloride, magnesium chloride and KCl which are mainly used for the food industry, deicing (MgCl2)(MgCl2) and various industrial applications. Due to the uniqueness and high quality/purity of our products, most of our sales are to niche markets.
 
The following table sets forth the principal products of the Industrial Products segment,, as well as their primary applications and end‑markets:
 
Sub-business lineProductPrimary ApplicationsPrimary End‑Markets
Flame retardantsBromine-, Phosphorus-phosphorus and magnesium Basedmagnesium-Based Flame Retardants
Additives used in plastic,Plastic, building materials and textile production
 
Electronics, automotive, building and construction, furniture and textiles
Industrial solutionsElemental BromineChemical reagent
Tire manufacturing, pharmaceuticals and agro
Phosphorus-Based Industrial CompoundsPhosphorus-based industrial compounds
Fire resistant fluids in turbines & power generation hydraulic systems and phosphorous-basedphosphorus-based inorganic intermediates
Power plants and agro
Organic Bromine CompoundsInsecticides, solvents for chemical synthesis and chemical intermediates
Pharmaceuticals and agro
Clear BrinesOil and gas drillings
Oil and gas
MerquelMercury emission control
Emission control in coal‑fired power plants
Bromine‑Based Biocides
Water treatment and disinfection
 
Swimming pools, coolingCooling towers, paper plants and oil and gas drillings
Specialty mineralsMagnesia ProductsPharma and food,Supplementals, transformer steel, catalysts, fuel and oil additives.
Food additives,Supplementals, multivitamins, transformer steel, automotive rubber and plastic, health care
Calcium Carbonate
Supplementals and pharmaSupplementals and pharma
Solid MgCl2,MgCl2, KClDeicing, food, oil drilling, pharmaDeicing, sodium replacement, KCl for drugs. multivitamins, oil drilling companies, small industrial niche markets


ICL Group Limited 56


Industrial Products also develops innovative products and new applications for existing products. The newNew products introduced in recent years include, among others, FR122P flame retardant (a polymeric bromine‑based flame retardant used in insulation material in the construction industry), TexFRon® 4002 (a polymeric flame retardant product for textiles),bromine compounds for energy storage (a wide range of products useused in bromine-based flow batteries), VeriQuel™VeriQuel®R100 (a phosphorus-based reactive flame retardant for rigid polyisocyanurate and polyurethane spray foam), our innovative Bromoquel (replacing ammonia and PolyQuel®other chemicals as more flexible and effective treatment in case of bromine leakage), VeriQuel® F series (phosphorus-based active flame retardants for flexible polyurethane), CareMag® D (a new natural raw material for deodorants), PolyQuel® P100 (polymeric phosphorousphosphorus‑based flame retardant for high end epoxy printed circuit boards). and Phosphorus Acid of 80% concentration, which enables customers to improve productivity and yield.
 
50Production

FR-122P Flame Retardant:Our Industrial Products has successfully introduced FR-122P as a sustainable polymeric flame retardant alternative to HBCD (hexabromocyclododecane) in the EU and Americas for expanded (EPS) and extruded (XPS) polystyrene foams used as insulation materials in the construction industry. Industrial Products is now focused on providing the same value chain support for the upcoming ban of HBCD in China expected in December 2021. For additional information, see “Item 4 - Information on the Company— B. Business Overview— Regulatory and Environmental, Health and Safety Matters - Limitations on the use of flame retardants and other products”.
TexFRon® flame retardant products for textiles:  In 2015, ICL began selling TexFRon® 4002, a polymeric flame retardant product for textiles developed as part of the R&D activities of the Industrial Products segment. TexFRon® 4002, which is designed to provide high‑level fire retardant solutions for textile and adhesive products, is an effective substitute for DECA, which the Company discontinued the production and marketing thereof, following a regulation prohibiting its use, which is expected to take effect in Europe in 2019. In December 2014, the TexFRon® 4002 polymeric product was recognized by Oekotex, a European standard for textile products. This product is the first bromine-based flame retardant that has received such recognition.
Energy storage: Bromine-based flow batteries are highly effective for storing large amounts of energy and offer important advantages compared to alternatives. ICL provides a high‑purity, tailor-made electrolyte solution together with a recycling process to assure that this technology is fully sustainable (in its post-use phase as well). Bromine-based flow batteries can be produced at lower cost, last longer and have greater capacity. ICL’s energy storage products were developed in order to address the developing needs deriving from the increased use of renewable energy. ICL supports technology developers with its world class experts and advanced laboratories, and its bromine-based energy storage technology provides environmental benefits.
VeriQuel™ R100 - Reactive flame retardant alternative to a legacy additive flame retardant (TCPP) in rigid polyurethane insulation applications.  VeriQuel™ R100 provides a timely drop-in replacement for TCPP due to the increased regulatory pressure against TCPP for its reported ubiquity in living environments. The strength of VeriQuel™ R100 is that it is reactive and thus helps avoid leaching or migration from the polymer into living environments as is reported with TCPP.  
PolyQuel® P100 - ICL has recently launched a new proprietary flame retardant PolyQuel® P100 targeting the high end printed circuit board market. PolyQuel® P100 offers a high performance solution for printed circuit boards. Being an active ester curing agent, this polymeric, non-halogen flame retardant provides higher flame-retardant efficiency, and lower dielectric values than other commercial phosphorus-based flame retardants. With this unique performance PolyQuel® P100 can be a high end solution for the telecommunication, server and transportation growing markets. This product was developed independently by ICL and is manufactured solely by ICL.
51


Production
The Industrial Products segment's major manufacturing facilities are located in Israel (production of bromine, bromine compounds, magnesia and salts products), the Netherlands (bromine compounds), Germany (phosphorus compounds), France (magnesia and calcium carbonate basedcarbonate-based products), the United States (phosphorus compounds) and China (bromine compounds).
 
ICL Group Limited 57


The Industrial Products segment's principal manufacturing plants and marketing companies are set forth in the map below:


In 2018,2021, ICL produced approximately 175182 thousand tonnestons of elemental bromine out of potential annual maximum production capacity of approximately 280 thousand tonnes.tons. Approximately 75%74% of the elemental bromine produced is used internally for the production of bromine compounds.
 
In January 2018, a Central Control Room (CCR) was launchedFollowing the signing of several strategic long-term agreements in Neot Hovav site. The CCR aligns2019, we increased capacity of several major bromine compounds, including production at our new TBBA plant at our Neot Hovav site within Israel.Further capacity increases are ongoing in various implementation stages. Moreover, we are increasing our Bromine Isotanks fleet to meet growing market needs.
During 2021, the industry's best practicesIndustrial Products segment ceased operations at two of its production sites in China. In July 2021, we completed the sale of Jiaxing ICL Chemical Co. Ltd. (ICL Zhapu) and in October 2021, we shut down our LYG plant following a way that supports information flow and allows remote control overrequest by the entire site. The new approach is based on centralized operational management which brings opportunities for innovation, economic of scale, benefits of safety, emergency response and management.Chinese authorities to either relocate the plant or shut it down. Authorities asked to conduct additional land survey. Once it complete, the compensation will be finalized.
 
ICL Group Limited 58

Competition
 
ICL Industrial Products is the world's largest manufacturer of elemental bromine. Based on internal estimates, in 2021 ICL and its two main competitors, Albemarle and Lanxess, accounted for the majority of the worldwide production of bromine in 2018.bromine. Chinese and Indian production accounted for most of the remainder of the global production from various different sources, including, from brine produced from wells, seawater and desalinization plants. InChinese supply is decreasing mainly due to continued depletion of brine wells, along with stricter enforcement in recent years by the Chinese authorities have been gearing-up their enforcement of regulations regardingrelated to safety and ecology in the local brominechemical industry. During 2017-2018, the MEP (Ministry of Environmental Protection) performed inspections in the province of Shandong (main Bromine production area in China). As a result of the inspections, producers are required to execute large investments in order to meet the ecological requirements. Due to these regulations,trends, favorable conditions werehave developed in the Chinese bromine and bromine compounds market.
 
52

Lanxess and Albemarle produce bromine primarily from underground brine sources in the United States. Albemarle also has a joint venture with a Jordanian company for the production ofto produce bromine and bromine compounds which is located on the Jordanian side of the Dead Sea, sharing the same source of raw materials with ICL. Lanxess purchases bromine and some other bromine compounds from theour Industrial Products segment under a long‑term contract.
 
The main barrier to entry into the bromine and bromine compound market is access to an economically viable source of bromine havingin a sufficiently high concentration. In addition, the bromine business requires a complex logistics, system based onincluding special containers (isotanks)(Isotanks) for transporting the transportation of bromine. The need for thethese logistics system ispresents a barrier toof entry ofto competitors into the global bromine trade.
 
The Dead Sea operations offer the world’s highest bromine concentration. As a result, the segment's relatively low production cost of elemental bromine gives it a competitive advantage. An additional competitive advantage derives from ICL’s isotanks fleet, which is the largest in the world. In addition, the segment has a widespread worldwide marketing, sales and supply chain network and a range of high‑quality products, combined with a technical support system that works closely with customers, providing a good competitive position in its target markets. In China, for example, the segment's network includes three production facilities, a sales network and technical support. In the Netherlands, the segment has a bromine compound production facility, which gives it a competitive advantage over materials imported into Europe. The phosphorous‑based flame retardant and functional fluids production plants in the United States and Europe are situated in close proximity to the Industrial Products’ principal customers.
In the phosphorous‑phosphorus‑based flame retardants market, competition is mainly from Chinese manufacturers operating in thetheir local market and in markets outside China, mainly Europe and the United States. The Chinese manufacturers have access to a source of high‑quality, low‑cost phosphorus, which improves their capacityability to compete in this market. However, several limitations of the Chinese authorities affect the production and the competitive position of Chinese phosphorus-based flame retardants producers.
 
There are many competitorsThe segment benefits from the following competitive advantages:
The Dead Sea operations offer the world’s highest bromine concentration, while our bromine compounds facility at Neot Hovav, Israel, is the largest worldwide. As a result, the segment's relatively low production cost of elemental bromine gives it a competitive advantage. An additional competitive advantage, deriving from ICL’s complex logistics system, which includes the largest Isotanks fleet in the biocides market for water treatment. The major barrier to entry intoworld. In addition, the market is related to the processsegment operates worldwide marketing, sales and supply chain network, a range of obtaining approval from the regulatory authorities to supply the biocide. During 2015, a new regulation (BPR Art. 95) entered into effect in Europe permitting only holders of the biocide approvals to sell. This acted to remove Chinese producers from supplying directly to the market. ICL is a registered and approved biocide producer.
In the magnesia field, as well as in fields of the solid MgCl2, packed KCl and salts, there are many competitors that have a cost advantage compared to us, which forces us to look for niche markets where our uniqueness and our high high‑quality products are important.   and a technical support system that works closely with our customers, providing a good competitive position in its target markets.
 
53ICL Group Limited 59

 
Raw Materials and Suppliers
 
The principal raw materials used by theour Industrial Products segment for manufacturethe manufacturing of theits end products are bromine, chlorine, phosphorus and magnesia. The production process also uses significant amounts of water and energy. The Companysegment produces a significant portion of its raw materials through theoperations to extract Dead Sea minerals extraction operations.minerals. For further information on the extraction operations, see “Item 4 - Information on the Company— D. Property, Plant and Equipment— Mineral Extraction and Mining Operations”.
 
Bromine is produced from the end brines (salt solutions) that are a by‑product of the process of production of potash from carnallite.potash. The brine is pumped into ICL Industrial Products’ plant in Sodom, where bromine is produced in an oxidation process using chlorine.chlorine and steam.
 
Chlorine is produced by electrolysis of sodium chloride and as a by‑product of the metal magnesium production process of Dead Sea Magnesium Ltd. (“Dead Sea Magnesium”). The electrolysis facility and the magnesium plant are located next to the bromine production facility in Sodom. The sodium chloride used in the electrolysis process is also a by‑product of the potash production in Sodom.

Industrial Products’Products uses elemental bromine to manufacture bromine compounds at its facilities in Israel, the Netherlands and China. The restremainder of the bromine is sold to third parties. Most bromine compounds are manufactured by a chemical process involving bromine together with a range of other raw materials, of which the largest areis Bisphenol A, which is used to manufacture the bromine‑bromine-based flame retardant TBBA. Furthermore, the Industrial Products segment purchases many other raw materials that are required for production ofto produce its various products.products.

The following is a graphic representation of the production process.

 
ICL Group Limited 60

Elemental phosphorus (P4) is produced in a roasting process from ores, originating mainly in Central Asia (Kazakhstan), the United States and China. The Industrial Products segment uses elemental phosphorus to produce phosphorus compounds at its factories (mainly phosphorous-basedphosphorous based flame retardants). The basic phosphorus compound, POCl3, is manufactured in a chemical process that combines phosphorus, chlorine and oxygen. The reaction of this compound with a variety of other raw materials (such as propylene oxide)Propylene Oxide) creates the commercial phosphorus compounds.

54

Following is a graphic representation of the production process:
 

Industrial Products uses magnesium chloride brine to manufacture magnesia products at its Mishor Rotem facilities in Israel and MgCl2MgCl2 flakes and pellets at its facilities in Sodom Israel. In addition, Thethe Industrial Products segment uses KCl from theour Potash segment to manufacture pure and industrial grades of KCl.KCl in Sodom.
Following is a graphic representation of the production process:
 


Industrial Products maintains raw‑material inventories in quantities that take into account the projected level of production based on consumption, supply dates, distance from the supplier and other operational and logisticallogistic considerations.
 
As part of our strategy to increase its energy consumption from renewable energy sources, the Company has signed several contracts for the installation of PV panels at its production sites, which will gradually occur from 2022 onward.
55
ICL Group Limited 61



Sales, Marketing and Distribution
 
Industrial Products’ principal markets are the United States, westernWestern Europe, China, Japan, and Taiwan. Industrial Products sells its products primarily through a network of marketing companies, while a smaller partportion of sales is conducted through agents and distributors throughout the world. Commissions are paid to agents as isin accordance with the sector's customary practice. Approximately half of our sales in the sector. MostIndustrial Products segment are conducted via long‑term agreements with an initial term of one year or more. Nevertheless, the sales are not executed under long‑term contracts or orders, but ratherIndustrial Products segment also sells its products via current orders, close to the date of supply. Nevertheless, the Industrial Products segment has several longer-term contracts (a year or more) and working to achieve additional long-term agreements.
 
Industrial Products’ policy is to maintain adequate inventory levels, which varies from product to product, in order to ensure orderly supply to customers in light of the customers’ distance from the production centers and their demand for inventory availability while optimizing the inventory storage costs. Therefore, portionsa portion of finished product inventories are held in storage facilities in the destination countries.
 
Industrial Products extends credit terms to its customers according to its credit policy. Sales are generally covered by trade credit risk insurance or by letters of credit from banks with high credit ratings.
 
Seasonality
 
Industrial Products’ operations are not characterized by seasonal fluctuations. However, sales of some of its products do fluctuate between the various seasons. Agricultural products are characterized by relatively high sales in the second and third quarters. Biocides for swimming pools are characterized by relatively lower sales in the fourth quarter. MgCl2 for de‑icing sales are characterized by relatively higher sales in the first and fourth quarters. The aggregate impact of these diverse seasonal differences on the Industrial Products segment is not significant.
 
Natural Resources Tax in Israel
 
The Law for Taxation of Profits from Natural Resources entered into effectin Israel became effective on January 1, 2016.2016, with respect to our Bromine operation. For additionalfurther information, see Note 1715 to our Audited Financial Statements.
 
ICL Group Limited 62
56


Potash Segment
 
TheOur Potash segment usesSegment produces and sells mainly potash, salt, Polysulphate®, magnesium and excess electricity. Potash is produced in Israel and Spain, using an evaporation process to extract potash from the Dead Sea in Israel and uses conventional mining to produce potash and salt from an underground mine in Spain. The segment markets its potash fertilizers globally and also carries on certain other operations not solely related to the potash activities. At the end of the second quarter of 2018, the Company ceased the production of potash in theour ICL Boulby mine in the UK, the Company produces Polysulphate®, which is composed of sulphur, potash, calcium and shifted to sole production of Polysulphate™. The Polysulphate™ is produced in an underground mine at ICL Boulby in the UK, and is the basis for a significant part of the Company'smagnesium. Our FertilizerpluS product line.line is based mainly on Polysulphate®. The segment also includes a magnesium activities underproducts line which it produces markets and sells pure magnesium and magnesium alloys, and also produces related by-products, includingas well as chlorine and sylvinite. In addition, the Potash segment sells salt that is produced in its potash and Polysulphate® underground mines in Spain and the UK. Our Company operates a power plant in Sodom which supplies electricity to ICL companies in Israel (electricity surplus is sold to external customers) and steam to all the facilities at the Sodom site.
 
In 2018,2021, the total sales of the Potash segment were $1,623totaled to $1,931 million constituting 29% of ICL's total sales (including sales to other segments), whilean increase of 43% compared to 2020. Total sales of the Potash segment constituted approximately 28% of ICL's total sales, an increase of 1% compared to 2020. The segment's operating income totaled $399 million, an increase of the segment totaled $393 million, constituting 39% of the233% compared to 2020. The segment's total operating income attributableconstituted approximately 33% of ICL’s adjusted operating income, an increase of 10% compared to the segments.2020. For additionalfurther information, see "Item 3 – Key Information – A. Selected Financial Data – Adjusted to reported operating and net income (non-GAAP financial measures)" and “Item 5 - Operating and Financial Review and Prospects— A. Operating Results— Results of Operations”.
 
Potash
 
Products
 
Potash is the common name for potassium chloride, which is the most common source of potassium for plants and one of the three essential nutrients for plant development, whichdevelopment. Potash assists in protection of plants from diseasesdisease and damaging agents, helps them to adapt to different weather conditions, regulates theplant water level in the plant,levels, strengthens the plant stems and strengthens the plant's ability to absorb nourishing substances. ICL sellsWe sell potash for direct application as a fertilizer and to compound fertilizer manufacturers.
 
Production
Potash is produced from the Dead Sea and from an underground minesmine in Spain. The potash production process in Israel is based on extracting carnallite. The carnallite, which is a compound of potassium chloride (KCl) and magnesium chloride mixed with table salt,sodium chloride (NaCl), precipitates in some of the largest solar evaporation ponds in the world, which contain brines drawn from the Dead Sea. The carnallite is transferred to the plants where a chemical and physical process breaks down the carnallite crystal into potash using two distinct parallel technologies, cold crystallization and hot leach. Potash production in Spain is carried outconducted in an underground minesmine extracting sylvinite, a mixture of potash (KCl) and salt (NaCl) with varying potash concentrations. The potash is separated from the salt by a flotation process in the production plants situated near the mines.
57

Productionmine.
 
The principal production facilities of the Potash business include its plants in Israel and Spain.
 
ICL Group Limited 63

The manufacturing plants, distribution centers and marketing companies of the Potashpotash business are set forth in the map below:
 

*The facilities in ICL Boulby were used for potash, in addition to Polysulphate, until the end of the second quarter of 2018. For more information, see "United Kingdom" below.

In 2018, the2021, our Potash business produced approximately 4.94.5 million tonnestons of potash and reached an annual production record level of approximately 3.8 million tonnes in Israel which derived mainly from efficiency activity in planning, maintenance and operational excellence.
Thepotash. Our potential annual production capacity of potash, isafter completion of the expansion of our Spanish mine will be about 5 million tonnes.tons. The potential production capacity of our various plants is based on the hourly output of the plants, multiplied by potential hours of operation per year. This calculation assumes continuous production over the year, 24 hours a day, with the exception ofother than a few days for annual planned maintenance and renovations. Actual production is usually lower than the potential production capacity due to unexpected breakdowns,unplanned downtime, special maintenance operations, non‑availability of raw materials, market conditions, and market conditions.unexpected events.
 
TheProduction-related developments throughout the Potash business is focusing on improving the efficiency of its operations and streamlining its cost structurebusiness:
Israel
Following ICL Dead Sea's record potash production in order to improve its competitive position in the market and to develop new, specialized products based on the main raw materials of2020, the segment by utilizingsuccessfully maintained a similar production level and produced 3,900K tons, while breaking the existingannual production facilities and sales and logistics array. Under this framework, the following actions were taken:record of granular potash with production of 1,858K tons.
 
58ICL Group Limited 64

 
IsraelSpain
 
During the third quarter of 2018, the new power plantUp to June 2020, ICL Iberia, our subsidiary in Sodom, Israel became operational. The power plant is expected to reduce energy costsSpain, operated two potash production centers in Suria and support production of ICL's plants in Israel. The power plant produces steam that satisfies the Sodom site consumption and sells surplus electricity to other ICL companies and external customers. In 2018, the power plant contributed to ICL an operating income of about $10 million. For additional information, see Note 20 to our Audited Financial Statements.
Spain
In 2011, ICL’s Board of Directors approved the restructuring of ICL Iberia’s operations from two sites to one site, asSallent. As part of an efficiency plan, while maintaining the current levelin June 2020, ICL Iberia consolidated its activities into one site by means of production. According to this plan, production atexpanding the Suria production site in Spain, which includes a mine and a plant, will be expanded gradually, whereasdiscontinuing the mining and production activitiesactivity at Sallent. In addition, in 2021, we successfully completed the second site (Sallent) will be discontinued.
As partexcavation of the above-mentioned plan, the Company is building an access tunnel toramp connecting the Cabanasses mine (Suria), expandingwith the Suria plant, including the installation of operational equipment and infrastructure.
The consolidation of the facilities and the ramp project are expected to increase our production capacity to an expected annual running rate of approximately 1 million tons by the second half of 2022, while lowering cost per ton, and compactionto reach a level of potash, and constructed a plant forup to about 1.3 million tons per year in the future, following completion of additional necessary adjustments in surface production of vacuum salt. The Company estimates that implementation of these actions will reduce expenses and contribute to streamlining, which will reduce potash production costs and contribute to alignment of the production activities with the environmental standards.facilities.
 
At the end of 2016, the compaction and flotation plants were operated. Towards the third quarter of 2018 the commissioning of the vacuum salt plant was completed and the plant became operational. Construction of the new access tunnel to the mine, which is designed to significantly reduce production costs and improve production capacity at the Suria site in Spain, is progressing and the completion is expected to take place at the end of 2019, the operation is expected to begin in the first quarter of 2020. 
Salt - In order to help implement these expansion plans in Spain, in 2015, AkzoNobel (AkzoNobel Industrial Chemicals) and ICL Iberia and AkzoNobel Industrial Chemicals B.V. (currently known as Nobian Industrial Chemicals B.V., or Nobian) signed ana partnership agreement for production and marketing of high qualityto market high-quality vacuum salt and pure potash. High purity vacuum salt is used in a variety of applications in various industries, such as the:the chemicals industry (for instance in electrochemical companies), the leather and textile industries, the food and feed industries, and for water treatment applications. Following disputes between the Company and Nobian, in October 2021, an agreement was signed to terminate the partnership, under which the Company will pay a net amount of approximately $17 million for Nobian's holding in Sal Vesta (51%), Nobian’s share in a joint venture (SOPAA) and for the net settlement of all additional disputes between the parties.
 
AllCollector - As part of the potash production and pure potash marketing was plannedprocess, salt is produced as a by-product which is treated using a collector that transports it from ICL Iberia's sites to be performed by ICL and the vacuum salt marketing was planned to be performed by AkzoNobel by way of an off-take agreement for acquisitionsea. In view of the partnership’s products.
Pursuant to the agreement mentioned above, subject to certain conditions, ICL agreed to finance and construct two manufacturing facilities on its mining site in Suria in Spain. Each vacuum facility planned to have a production capacity of 750 thousand tonnes of vacuum salt per year. The commissioningobsolescence of the firstcurrent facility, was completed towardslocated between the third quarterICL site and Abrera (located around 50 km from our site and 40 km from Barcelona), the Generaltat de Catalunya will construct a new collector which will secure the future operations of 2018.

59

The agreement provides a specific deadline (July 1, 2018) by which certain condition precedent had to be fulfilled. Since such condition precedent was not met byour production sites, will enable an increase in capacity and improve our treatment of the agreed deadline,existing salt. In April 2021, the Company formally informed AkzoNobel that,signed an agreement with the agreement had to be deemed automatically terminated once that deadline passed.Catalan Water Agency for the construction and operation of the Collector. The Company will continue to supply salt to AkzoNobel during the next two years pursuant to the supply agreements, which remain in force. Following correspondence between AkzoNobel and the Company, in which AkzoNobel challenged the automatic terminationmain highlights of the agreement on August 2018, AkzoNobel commenced arbitration proceedings according to the agreement between the parties. The Company filed its response on October 2018. On January 2019, three arbitrators were appointed to follow the proceeding.
In September 2018, a definitive Urban Master Plan (PDU) was approved, constituting the next stage in the Suria site expansion. The PDU allows,include, among other things, the way in which the project will be managed, the financing aspects of the project, the definition of project costs and the determination of the operational maintenance mechanism, including usage costs. Based on the said agreement and the Spanish Water law, it was determined that ICL Iberia's share will be up to expand90% of the industrial areaproject's cost (approximately $110 million), to new facilities in Suria needed for increasingbe paid throughout the capacity.
construction and operation period. The production of potash in Spainconstruction period is expected to extend over four years and the operation period is expected to be about 1 million tonnes per year and to reach a level of up to about 1.3 million tonnes per year after completion of the necessary adjustments. In order to support the expected operational expansion in Spain, the Company is in the process of setting up a new designated facility in the Barcelona port that will replace the current facility and is making preparations for transition to use thereof. The new facility is expected to be constructed and operative towards the end of 2019.25 years.
 
ICL Group Limited 65
In 2015, Generalitat Catalunya launched a new project to renovate and duplicate the existing brine collector from Abrera up to Suria and Sallent. The new trench will allow to increase the capacity and improve the existing salt treatment of ICL. The Company is negotiating with the authorities regards the new collector from the production site, in order to secure the future operation.

United Kingdom
Further to the Company’s decision to accelerate the transition from extraction and production of potash to production of Polysulphate™ in the ICL Boulby mine in the UK, at the end of the second quarter of 2018 the Company ceased the production of potash and shifted to sole production of Polysulphate. The workforce reduction as a result of the transition to production of Polysulphate was about 180 positions. Further to the losses recorded in 2017, ICL Boulby recorded notable losses during 2018 and is expected to continue to record losses throughout the transition process from potash to Polysulphate. For additional information, see “Item 4 - Information on the Company— D. Property, Plant and Equipment— Mineral Extraction and Mining Operations” and “Reserves”.

Competition
 
The potash market is characterized by a relatively small number of manufacturers, some of whichwhom export jointly. See“SeeItem 3 - Key Information— D. Risk Factors— Our operations and sales are exposed to volatility in the supply and demand, mergers of key producers\customers\suppliers, expansion of production capacity and competition from some of the world’s largest chemical and mining companies”. The ability to compete in the potash market is dependent mainly on production costs and logistic capabilities. Moreover, there are high entry barriers for new players due to the significant investment and length of time required to establish potash operations. In addition, this industry requires appropriate concessions and proximity of production facilities to the mines.

60

During 2018, the new (Greenfield) mines experienced slower than expected ramp-up, partly due to operational challenges. According to market observers, K+S experiences some difficulties with the granulation stage production process in its Bethune mine in Saskatchewan (Canada), which started producing potash in June 2017, led it to deliver standard MOP to the Far East including China. In addition, K+S, closed its Sigmundshall site in Germany (capacity of 0.75 million tonnes per year in 2017). EuroChem, has cut its forecast for 2018 output from its new mines in Russia, Usolskiy (expected nameplate capacity of 3.7 million tonnes per year in 2024) and Volgakaliy (expected nameplate capacity of 4.6 million tonnes per year in 2024) to a total of about 0.3 million tonnes. Turkmenhimiya's new potash mine (Garlyk) in Turkmenistan, which was inaugurated in March 2017 (nameplate capacity of 1.4 million tonnes per year), is believed to be inoperable. Slavkaliy's Nezhinsky potash project in Belarus (expected nameplate capacity of 2 million tonnes per year) ramp-up is expected to be delayed from 2020 to 2022. Belaruskali's Petrikov project (expected nameplate capacity of 1.5 million tonnes per year in 2022) ramp-up is expected in 2020. 
Mosaic commissioned the new production skip at its Esterhazy K3 mine in Saskatchewan (Canada) in December 2018. This Brownfield project is expected to reach its full operational capacity (7.35 million tonnes per year) by 2024. In Russia, there were reports of flooding at Uralkali's Solikamsk 2 mine, although it seems like there was not a significant impact on the Uralkali's production as it continued its production from the adjacent Solikamsk 1 mine. Lao Kaiyuan is expected to expand the nameplate capacity of its Khammouans site in Laos from 0.5 to 1.5 million tonnes per year until 2021. It should be mentioned that nameplate capacities are in accordance with Informa (Fertecon) Potash Outlook Report - December 2018. Other information is in accordance with CRU Fertilizer Week.  
TheICL’s current significant competitors of ICL in the international trade of the potash market are Nutrien (Canada), Uralkali (Russia), Mosaic (USA), Belaruskali (Belarus), Uralkali (Russia), K+S (Germany), QSL (China), APC (Jordan), EuroChem (Russia) and SQM (Chile).
 
61



The Company believes its potashWe believe our Potash business benefits from the following competitive advantages:
 
·The relatively low average cost of potash production at the Dead Sea, by using the sun as a solar energy source in the evaporation process.
 
·Logistical advantages due to its geographical location, access to nearby ports in Israel and Europe and relative proximity to itsLogistical advantages due to our geographical location, access to nearby ports in Israel and Europe and relative proximity to our customers, which are reflected in particularly competitive marine and overland shipping costs and delivery times.
 
·Climate advantages due to the hot and dry climate of the Dead Sea that enable the Company to store, at very low cost, a large quantity of potash in an open area thereby allowing itClimate advantages due to the hot and dry climate of the Dead Sea that enable us to store, at very low cost, a large quantity of potash in an open area thereby allowing us to constantly produce at Sodom at full capacity, independent of fluctuations in global potash demand.
 
·A professional agronomic sales team that focuses on individually‑tailored agronomic consulting to customers based on an analysis of the different growing conditions of each particular customer.
Our mine in Spain is one of the last mines in Western Europe, creating logistics advantages in supplying customers in Europe.
 
·A leading R&D set‑up in the area of potash production.
ICL Group Limited 66

·Synergies between the various production plants in Sodom site.
 
Raw Materials and Suppliers
 
The Potash segment produces potash in Israel and Spain. Potash does not require additional chemical conversion to be used as a plant‑nutrient fertilizer. Nevertheless, it can also serve as a raw material in the production of certain specialty fertilizers.
 
The other primary utilities used by ICL in orderus to support theour potash production are natural gas, electricity, industrial water and neutralization materials.
 
Sales, Marketing and Distribution
 
The primary markets of the Potash business are Brazil, China, India, Europe China, Brazil and India. TheUSA. Our Potash businesssegment sells its fertilizersfertilizer products primarily via a network of its ownICL sales offices, as well as salesand through agents throughoutaround the world.
 
Most of the potashour Potash sales are not made by means of contracts or long‑term orders but, rather, through current orders proximate to the supply date (except for annual agreements with customers in India and China, see below)China). Accordingly, theour Potash segment does not have a significant orders' backlog.
The pricesbacklog of potash are determined in negotiations between the manufacturers and the customers and are affected mainly by the relationship between the market demand and the available supply at that date as well as the size of the customer and period of the agreement. Prices for relatively long‑term contracts are not necessarily similar to the “SPOT” prices (current/casual sale transactions).orders.
 
In the Indian and Chinese markets, it is customary to carry on concentratedconduct protracted negotiations regarding the potash contracts, – part of which withpartly through commercial entities related to the governments of those countries. In other markets, potash is usually imported by a larger number of customers. In these markets, we have trade relations with most of the major customers.
 

62

Potash prices are determined through negotiations between manufacturers and customers and are affected, mainly, by the relationship between market demand, available supply and the outstanding inventories among suppliers and customers, as well as the identity of the customer and the timing of the transaction. Prices for relatively long‑term contracts are not necessarily identical to the “spot” prices (current sale transactions).
 
In AugustApril 2021, ICL signed a contract with Indian Potash Limited (IPL), India’s largest importer of potash, to supply an aggregate 600,000 metric tons of potash, with mutual options for an additional 50,000 metric tons, to be supplied through December 2021. The agreed selling price in the contract is $280 per ton CIFFO Indian ports, $50 per ton above the previous contract. The contract is part of a five-year supply agreement signed in December 2018 between ICL and IPL. In November 2021, ICL reached an agreement with IPL to increase the selling price of 150 thousand tons of potash to be delivered to India in 2021 to $445 per ton CIFFO Indian ports.

On February 22, 2022, as part of the five-year supply agreements signed in December 2018, ICL signed a potash supply contract with its Indian customers, inIPL for the total amountsupply of 775 thousand tonnes (including optional quantities), for delivery between September 2018 and June 2019.an aggregate 600,000 metric tons of potash through December 2022. The contractagreed selling price is $290$590 per tonne CFR (an increase of $50 per tonne compared with the 2017 contract price).ton CIFFO Indian ports.
 
In September 2018,February 2022, ICL signed aframework agreements for supply of potash supply contract with its Chinese customers infor the total amount of 905 thousand tonnes (not including additional optional quantities), for delivery up to June 2019. The contract price is $290 per tonne CFR (an increase of $60 per tonne compared with the 2017 contract price)next three years (2022-2024).
In November 2018, ICL has signed framework agreements with its customers in China for 2019-2021, to supply 3 million tonnes of potash, with additional options for 750 thousand tonnes. Prices for the quantities to be supplied are subjectaccording to the framework agreements shall be established in line with the prevailing market prices in China at the relevant date of supply.
In December 2018, As part of these agreements, ICL has signed for the first time a five-year potash supply agreement with Indian Potash Limited ("IPL"), India's largest importer of potash. According to the agreement, ICL is expectedcontracts to supply IPLan aggregate amount of 700,000 metric tons of potash, with 600 thousand tonnes per year in 2019 and 2020, increasing to 650 thousand tonnes per year in 2021-2023 (including optional quantities). Prices will be determined in accordance with the prevailing market prices in India at the relevant date of supply.
In other markets, potash is usually imported by a larger number of customers, and the potash price is determined between the suppliers and the customersmutual options for shorter periods (quarterly, monthly or even for individual shipments). In these markets, the Company has trade relations with most of the major customers.
The Potash business transports potash from Israel to customers overseas by ships (mainly in bulk) that it leases in the market and loads using designated facilities in the ports of Ashdod on the Mediterranean Sea and Eilat on the Red Sea. The Potash business also has designated facilities for bulk loading at ports in Barcelona (Spain) and Teesside (UK). In Israel, short mine-to-port distances and shorter shipping routes to emerging markets grants the Potash business a significant and a unique advantage over its main competitors. In order to support the expected operational expansion in Spain, the Company is in the process of setting up a new designated facility in the Barcelona port that will replace the current facility and is making preparations for transition to use thereof. The new facility is expectedadditional 250,000 metric tons, to be constructed and operative towardssupplied by the end of 2019.2022. The agreed selling price in the contracts is $590 per ton.

For further information about trends affecting the segment, see Item 5 – "Operating and Financial Review and Prospects, Trends Affecting Potash Segment " to our 20F report.
 
TheOur Potash segment grants credit terms to its clients according to customary practices in their locations. The segments’ssegment's credit sales are generally covered by trade credit risk insurance or by letters of credit from banks with high credit ratings.
 
ICL involvedGroup Limited 67


The Potash business transports potash from Israel and Spain as follows:
From Israel to overseas customers by ships (mainly in number of activities dealing with the need for increasing food quality, as well as for increased efficiencybulk), which are leased in the agriculture sector, to respond tomarket and loaded using designated facilities at the world’s growing population, decreasing agricultural landport of Ashdod on the Mediterranean Sea and the urgent need for greater environmental stewardship:port of Eilat on the Red Sea.
 
From Spain to local customers by trucks and overseas by ships, using designated facilities for bulk loading at the new port of Barcelona (Spain). In Israel, short mine-to-port distances and shorter shipping routes to emerging markets gives our Potash for Life (India) - In 2018,business a significant and unique advantage over our main competitors. For information regarding the Company continuednew designated facility at the “Potash for Life” project in India, in light of its position in this marketBarcelona port, see“Item 4 – Information on the Company— D. Property, Plant and the relatively low use of potassium fertilization in this country. About 1,000 demonstration plots were conducted in farmers' fields in ten states and more than 42 districts. Other educative activities, like farmers' field days, potash campaigns and crop seminars were also conducted.
63

Feed the Future (Tanzania) - In May 2017, the United States Agency for international development (USAID) sent out a call for proposal of funding under the Feed the Future Tanzania Mboga na Matunda (Fruit and Vegetables) program. Over 70 agricultural companies applied, ICL was one of the few companies that won the co-funding award. Through the USAID funded project, ICL seeks to strengthen the fertilizer input supply system by providing high quality and innovative products through demonstrations and training on balanced fertilization. It will also create awareness of ICL's fertilizers products and the adoption of sustainable fertilization practices.
Research Center for Fertilizers & Plant Nutrition – Global Knowledge - In 2015, ICL established a Center for Fertilization and Plant Nutrition (CFPN)Equipment— Logistics". The CFPN is a global center for research and knowledge in the field of fertilizers and plant nutrition in conjunction with Israel’s Agricultural Research Organization (ARO). Research is conducted by ARO scientists in partnership with colleagues from other research institutions. The CFPN offers scholarships and research grants to graduate and Ph.D. students in Israel and from abroad. CFPN trains and works with foreign students from Asia and East Africa. Training courses and workshops are conducted for Israeli farmers and agronomists from the world.
International Potash Institute (IPI) - ICL is part of IPI, a non-governmental and non-profit organization whose mission is to develop and promote balanced fertilization for the production of higher yields and more nutritious food, together with ensuring sustainability of production through conservation of soil fertility for future generations. IPI conducted in 2018 dozens of field experiments and research projects worldwide. In addition, several farmers' days and workshops were conducted in Asia, Africa, Europe and Latin America.
 
Seasonality
 
The seasonal nature of the demand for theour Potash business’sbusiness’ products gives rise generally to quarterlyis usually characterized by higher sales fluctuations, as sales levels in the second and third quarters are generally higher thanquarters. The prolonged impact of the COVID-19 pandemic has changed this seasonal sales inpattern, as governments around the first and fourth quarters. In recent years, due to various influences on the timing of sales, primarily price fluctuations and the effects of negotiationsworld, especially in China, have adopted “Food Security” policies, which have supported high levels of crops’ demand and Indiaprices. The strong, global demand for grains has resulted in a continuous decline in grains stock-to-use ratio which, in turn, supports higher fertilizer demand and changes in the timing of fertilizer imports to Brazil, the effects of seasonality explained above have been reduced as compared to earlier periods. In the years 2016 to 2018, the delay in signing of the contracts with the Chinese and Indian customers caused a situation wherein the total sales in the second half of the year were higher than in the first half of the year.price levels, including potash.
 
Natural Resources Tax
 
The Law for Taxation of Profits from Natural Resources in Israel entered into effect on January 1, 2016, except2017, with respect to our Potash operations at ICL Dead Sea (potash operation) regarding which the effective date was January 1, 2017. Sea.For additionalfurther information, see Note 1715 to our Audited Financial Statements.
 
Additional products
 
The Potash segment produces and sells additional products, including Polysulphate™Polysulphate®, PotashpluS®, magnesium-based products, dehydrated carnallite, chlorine, salt produced in underground mines in the UK and Spain, vacuum salt produced in Spain, electricity surplus produced in Israel and others.

64

 
FertilizerpluS
 
FertilizerpluS is ICL's premium fertilizers line, based mainly on polyhalite (marketed by the Company as Polysulphate™Polysulphate®) and other products. FertilizerpluS products, which include different compounds of phosphorus, sulphur, potassium, magnesium and calcium, are tailored for various types of soil and a wide range of crops and are intended to enhance crops, improvecrop value by improving yields and increaseincreasing fertilizer efficiency.uptake. We produce our FertilizerpluS products through both our Potash and the Phosphate Solutions segments. See below a list of products that are included in the FertilizerpluS line.
 
Polyhaliteis a mineral that is exclusively mined by ICL through theour Potash segment in a an underground mine (ICL Boulby), located in North Yorkshire in the UK, and is marketed under the brand name Polysulphate™Polysulphate®. Polysulphate™Polysulphate® is used in its natural form as a fully soluble and natural fertilizer, which is also used for organic agriculture, and as a raw material for the production of fertilizers. Polysulphate™Polysulphate® is composed of sulphur (SO348%), potash (K2O 14%), calcium (CaO 17%) and magnesium (MgO 6%), which are essential components for the improvement of crops and agricultural products. Polysulphate™Polysulphate® is the basis for many of theour Company's FertilizerpluS products.
 
ICL Group Limited 68

The Company sees the Polysulphate™ asconsiders Polysulphate® a unique product for ICL, and is synergistic with the Company’sour other raw materials for purposesthe purpose of development ofdeveloping downstream products. In order toTo develop downstream products, we are expanding the Company is acting to expand the Polysulphate™Polysulphate® market by means of, among other things, development of a wide variety of innovative Polysulphate™Polysulphate®-based products.
In addition, in order2021, ICL's total sales of FertilizerpluS products amounted to develop the Polysulphate™ market for both existing and new uses,$168.2 million (including sales of the Potash segment has set up a teamand the Phosphate Solutions Segments), constituting 2.4% of agronomists that are performing dozens of tests on various crops in different countries. The favorable results of these tests are the basis for expansion of the sales to new customers and markets.our total sales.
 
The Company believesWe believe that theour FertilizerpluS product line benefits from the following competitive advantages:

·ICL is the sole producer of Polysulphate™ worldwide.
Currently, we are the sole producer of Polysulphate® worldwide. Regarding an additional potential future producer of Polysulphate®, see “Item 3 – Key Information – D. Risk Factors – Our operations and sales are exposed to volatility in supply and demand, mergers of key producers\customers\suppliers, expansion of production capacity and competition from some of the world’s largest chemical and mining companies".
 
·ICL Boulby's infrastructure supporting Polysulphate production (previously used for potash production) is already in place, including mine, shaft and transportation logistics.
Our ability to increase production at a relatively low capital expenditure.
 
·The ability to increase production at a relatively low capital expenditure.
Polysulphate® and Polysulphate®-based fertilizers, customized to meet the needs of different crops and soil types, maximize yield and allow more precise and efficient applications.
 
·The Polysulphate™ and Polysulphate™-based fertilizers, which include different compounds of phosphorus, sulphur, magnesium and calcium, are tailored for various types of soil and a wide range of crops, achieved high performance in enhancing crops, improving yields and increasing fertilizer efficiency.
·Polysulphate™Polysulphate® contributes to and follows the main market trends in the fields of increased nutrient-use efficiency, low carbon footprint and organic fertilizers.
·The FertilizerpluS product line is part of ICL’s strong market position in fertilizers.
·
The FertilizerpluS product line has an inherent potential for the development of new products and applications.

65

 
Following are several examples of Polysulphate™Polysulphate®-based products and additional products that are included in the FertilizerpluS line:
 
·PotashpluS – a compressed mixture of Polysulphate™ and potash. The product includes potassium, sulphur, calcium and magnesium and is marketed by the Potash segment. In the third quarter of 2018, the segment finalized the industrialization process for the production of PotashpluS and in 2019 plans to increase significantly the production and the sales quantities of the product.
PotashpluS – a compressed mixture of Polysulphate® and potash. The product includes potassium, sulphur, calcium and magnesium. ICL continued the growth trend of PotashpluS throughout 2021 and plans to continue this trend in 2022.
 
·PKpluS – a unique combination of phosphate, potash and Polysulphate™. In 2018, the Company, through the Phosphate Solutions segment, sold the product in commercial quantities and in 2019 plans to increase the production and the sales quantities of the product.
PKpluS – a unique combination of phosphate, potash and Polysulphate ®. In 2021, the Company, through our Phosphate Solutions Segment, increased PKpluS sales and plans to continue this trend in 2022.
 
AtNPKpluS – a unique combination of Nitrogen, phosphate, potash and Polysulphate®. This product includes all 6 macro nutrients in one granule
Polysulphate premium – granulated uniform, robust spheres of natural, multi-nutrient Polysulphate fertilizer with smooth surface protects from abrasion, humidity or damage & gives consistent flow rate
NovaPhos – ensures an effective supply of slow-release phosphorus, calcium, magnesium and micronutrients for crops, specifically tailored for use in acidic soil.
NPS – a nitrogen-phosphate fertilizer compounded with sulphur, which provides exceptional effectiveness for the endenhancement of a wide range of crops through the second quartercombination of 2018,these three nutrients in one product.
PK+Micronutrients – a tailor-made fertilizer, with precise micronutrient composition for the Company ceased the productionspecific type of potash in crop.
ICL Boulby mine in the UK and shifted to sole production of Polysulphate™ and salt.Group Limited 69

 
In 2018, the Company2021, we produced approximately 350789 thousand tonnestons of Polysulphate.Polysulphate®. The production of PolysulphatePolysulphate® in the UK is in the ramp-up stages and is expected to reach full production capacity towards the end of 2020.2023. The current annual potential production capacity of Polysulphate™Polysulphate® is above 1 million tonnes.tons. The potential production capacity is based on the hourly output of the plants, multiplied by potential hours of operation per year. This calculation assumes continuous production over the year, 24 hours a day, with the exception ofother than a few days for planned maintenance and renovations. Actual production is usually lower than the potential production capacity due to unexpected breakdowns, special maintenance operations, non‑availability of raw materials and market conditions.
 
As of the date of this report, ICL's Boulby mine is the sole producer of Polysulphate worldwide. However, in North Yorkshire in the UK, where ICL's Polysulphate operations are located, there is an additional concession owned by another potential producer, which, according to its formal publications, plans to develop a polyhalite mine with a production capacity of up to 10 million tonnes, subject to its ability to raise several billions of dollars for the mine development. If successful in raising the funds and build the mine and operations, ICL will cease to be the sole producer of Polysulphate, and will not be the market leader, which is inconsistent with the Company's strategy to obtain leadership positions in all its activities. ICL is constantly monitoring the competitive environment and will continue to seek ways to adhere with its strategy.  
Magnesium
 
The Potash segment includes magnesium activities,production, operated by Dead Sea Magnesium Ltd., which is the second largest magnesium producer inoutside China and the western world after the US magnesium producer “US Magnesium LLC”.USA. The magnesium business produces, marketsproducing, marketing and sellsselling pure magnesium and magnesium alloys, and also producesas well as dry carnallite and related by‑products, including chlorine and sylvinite.carnallite.
 
Magnesium is considered to beas the lightest structural metal. One of the main characteristics of magnesium is a higher strength-to‑strength-to weight ratio compared with other metals – mainly steel and aluminum. The main uses of magnesium are in the following industrial sectors: the aluminum sector, steel sector, and the casting sector of parts made of magnesium alloys (mainly for uses in the vehicleautomotive industry).
 
66

Production of the magnesium is based on the carnallite gathered from the Dead Sea and acquired from ICL Dead Sea. During the electrolysis process, the magnesium chloride present in the carnallite is separated into magnesium metal magnesium and chlorine gas.
 
In 2018, the Potash segment produced approximately 21 thousand tonnes of magnesium.
The current annual potential production capacity of the magnesium facilities is 33 thousand tonnes of metal magnesium. The actual quantity of the magnesium produced depends on the demand for chlorine (used in the production of bromine) and, therefore, it is possible that the actual production will be lower than the production capacity. Additional factorsFactors that can reduce the actual production are unexpected breakdowns, special maintenance operations, non‑availabilitynon-availability of raw materials and market conditions. The potential production capacity of our various plants is based on the hourly output of the plants, multiplied by potential hours of operation per year. This calculation assumes continuous production over the year, 24 hours a day.
 
About 85% of the production in the magnesium market is in China. There are a small number of western producers, including in the United States, Brazil and Russia. In the United States and Brazil, import of magnesium and magnesium alloys from China is subject to anti-dumping duties that are imposed in order to protect the local producer in these countries.
ICL Group Limited 70
In October 2018, a petition was filed to the International Trade Administration of the US Department of Commerce and the US International Trade Commission by a US magnesium competitor (hereinafter - US Magnesium), to impose antidumping and countervailing duties on imports of magnesium from Israel. US Magnesium claims that imports of magnesium produced in Israel by Dead Sea Magnesium Ltd. are being subsidized and sold at less than fair value in the US market. The US Department of Commerce is expected to issue its preliminary determination with respect to subsidies on May 2, 2019. As at the date of the report, considering the early stage of the proceedings, there is a difficulty in estimating the chances the petition will be accepted or whether tariffs will be imposed in the future. Market reaction has seen impact through increased prices coupled with future supply concerns by consumers. For additional information, see “Item 3 - Key Information— D. Risk Factors— Risks Related to Our Business— Our magnesium sales in the Unites States are under investigation by the International Trade Administration of the U.S. Department of Commerce and the U.S. International Trade Commission.”
The Company believes that the magnesium business benefits from the following competitive advantages: the level of the magnesium cleanliness and quality that permits its use in sensitive and unique industries, the Company's developed magnesium alloys and intellectual property that allows the production of advanced magnesium applications and the utilization of by-product produced during the magnesium production for other activities in ICL (e.g. chlorine, etc.).
The global magnesium markets can be divided in two in terms of prices: regulated markets (based on prices of the local producers in US and Brazil) and ROW markets (Rest of the World - based on Chinese magnesium prices). Chinese magnesium prices have increased during 2018 mainly due to tightness of environmental regulations imposed in China. However, they are still significantly lower than the prices in the regulated markets. Most of DSM's sales are designated for the regulated markets and specific niche markets. The price levels in the regulated markets has slightly increased during 2018, despite this increase, their relatively low level resulted in DSM's negative results over the last few years as well as in 2018.
67



PhosphateSolutions Segment
 
Phosphate Solutions Segment
The strategy of the Phosphate Solutions segment is to be a leading provider of value added specialty solutions based on phosphate for the industrial, food and agriculture markets. The segment’s goal is to outgrow the market by enhancing its customer relationships and at the same time optimizing its upstream capabilities directed towards specialties products. The segment operates in two main streams: Phosphate Specialties and Phosphate Commodities. The diversification into higher value-added specialty products leverages ICL's integrated business model and provides it with additional margins on top of the commodity margin.
The Phosphate Solutions segment (hereinafter – the Segment) is based on a phosphate value chain which uses phosphate commodity products, such as phosphate rock and fertilizer-grade phosphoric acid (“green phosphoric acid”), to produce specialty products with higher added value. The segment also produces and markets phosphate-based fertilizers.
Phosphate rock The strategy of the segment is mined and processed from open pit mines, threeto be a leading provider of which are located in the Negev Desert in Israel while the fourth is located in Yunnan province in China. Sulphuric acid, green phosphoric acid and phosphate fertilizers are produced in facilities in Israel, China and Europe.
The Phosphate Solutions segment purifies some of its green phosphoric acid and manufactures thermal phosphoric acid to providevalue-added specialty solutions based on specialty phosphate salts and acids for diversified industrial end markets, such as oral care, cleaning products, paints and coatings, water treatment, asphalt modification, construction and metal treatment. The specialty phosphate salts and acids are mainly produced in the Company’s facilities in US, Brazil, Germany and China. The segment is also a leader in developing and producing functional food ingredients and phosphate additives, which provide texture and stability solutions for the processed meat, poultry, seafood, dairy, beverageindustrial, food and baked goodsagriculture markets. In addition, the segment supplies pure phosphoric acid to ICL’s specialty fertilizers business and produces milk and whey proteins for the food ingredients industry.
Phosphate Solutions: Backward Integrated Value Chain


68

In 2018,2021, the total sales of the Phosphate Solutions segment were $2,099totaled $2,432 million constituting 38% of ICL's total sales (including sales to other segments), whilean increase of 25% compared to 2020. Total sales of the operating income of Phosphate Solutions totaled $208 million, constituting 21%segment constituted approximately 35% of the operating income attributableICL's total sales, a decrease of 4% compared to the segments.
In 2018, total2020. Total sales of Phosphate Specialties, in 2021, were $1,197$1,341 million, (constituting 57% of the Phosphate Solutions segment’s sales), reflecting an increase of $71 million or 6%18% compared to 2017.2020. Total sales of Phosphate Commodities, in 2021, were $1,091 million, reflecting an increase of 34% compared to 2020. Segment operating income totaled to $307 million, an increase of 365% compared to 2020. Total segment operating income constituted approximately 26% of ICL’s adjusted operating income, an increase of 13% compared to 2020. The operating income of Phosphate Specialties, in 20182021, totaled $171$155 million, reflecting an increase of $45 million or 36%32% compared to 2017.
In 2018, total sales of Phosphate Commodities, were $1,069 million (constituting 51% of the Phosphate Solutions segment’s sales and including sales to Phosphate Specialties), reflecting an increase of $17 million or 2% compared to 2017.2020. The operating income of Phosphate Commodities in 20182021, totaled $37$152 million, reflecting an increase of $14$203 million or 61% comparedhigher than the $51 million operating loss in 2020. For further information, see "Item 3 – Key Information – A. Selected Financial Data – Adjusted to 2017. For additional information, seereported operating and net income (non-GAAP financial measures)" and “Item 5 - Operating and Financial Review and Prospects— A. Operating Results— Results of Operations”.
 
Products
 
The Phosphate Solutions segment produces a variety of products based on its backward integrated value chain.
 
Phosphate rock contains phosphorus, one of the three essential nutrients for plant development, which directly contributes to a wide range of physiological processes in a plant, including production of sugars (including starch), photosynthesis and energy transfer. Phosphorus strengthens plant stems, stimulates root development, promotes flower formation and accelerates crop development. Phosphate rock can be utilized for the production ofto produce phosphoric acid and can be sold as a raw material to other fertilizer producers. OurICL's phosphate rock is mined and processed from open pit mines and undergoes a beneficiation process, after which high‑grade multi‑purpose phosphate products are received.created.

ICL Group Limited 71
 


Green phosphoric acid (fertilizer-grade phosphoric acid) is produced by using beneficiated rock and sulphuric acid (produced by the segment by using sulphur acquired from third parties). Most of the green phosphoric acid is used to produce phosphate-based fertilizers and pure phosphoric acid, and in some cases, is sold to external costumers.
 
Phosphate fertilizers are produced by using green phosphoric acid or sulphuric acid, depending on the fertilizer type. The segment manufactures various types of fertilizers (TSP, SSP,(PK products, GSSP, GTSP and others) for different uses.
 
The segment manufactures purepurified phosphoric acid in Israel by purifying green phosphoric acid and also manufactures technical-grade purified phosphoric acid and green phosphoric acid in China, pure phosphoric acid in Brazil, and food grade and industrial phosphate salts in Israel, Germany, Brazil, the US and Mexico. Pure Purified phosphoric acid and green phosphoric acid are used to manufacture downstream products with high added value, such as, phosphate salts and acids for a wide range of food and industrial applications. In addition, the segment supplies pure phosphoric acid to ICL’s specialty fertilizers business.
Phosphate salts and acids are used in various industrial end markets, such as oral care, cleaning products, paints and coatings, water treatment, asphalt modification, construction, metal treatment and a variety of other industries.
69

more. The segment's products for the food industry include functional food ingredients and phosphate additives, which provide texture and stability solutions for the processed meat, meat alternatives, poultry, seafood, dairy, beverage and baked goods markets. goods.
In addition, the segment supplies purified phosphoric acid to our Innovative Ag Solutions segment (IAS) and also produces milk proteins and whey proteins for the food ingredients industry and offers spices and spice blends for the processed meat and poultry industries..
 
Some
The segment owns, develops and commercializes proprietary technologies that supports the production of ICL's products forallergen-free plant-based structured protein systems, called ROVITARIS®, targeting the chemicalfast-growth plant-based meat alternative market. Recently, the segment entered into several strategic contracts with suppliers and production partners in order to further expand and diversify the food industries areROVITARIS® product portfolio to further meet consumer demand and strengthen ICL’s footprint in the meat alternative market. In December 2021, we opened a plant protein fiber production unit at our Carondelet, Missouri facility.
Moreover, our Phosphate Solutions segment, together with the Potash and IAS segments, produces and markets FertilizerpluS products. FertilizerpluS is our premium fertilizers line, based mainly on its intellectual propertypolyhalite (marketed by the Company as Polysulphate®) and have well-known brand names in their relevant markets.other products. For further information, see “Item 4 - Information on the Company— B. Business Overview— Potash Segment”.
 
Production
 
The Phosphate Solutions segment has a developed production setup fromthat includes phosphate rock mining, along with production and purchase of different grades of phosphoric acid, and up to production of commodities and specialties products inand commodities at different facilities around the world.
 
Phosphate rock is mined and processed from open pit mines three of which arethat located in the Negev Desert in Israel while the fourth is situatedand in Yunnan province in China. The Phosphate Solutions segmentproduces sulphuric acid, green phosphoric acid and phosphate fertilizers at its facilities in Israel and in China. The segment also operates facilities for the production ofto produce phosphate fertilizers in the Netherlands and Germany, as well as animal‑feed additives facilities in Turkey. The segment's specialty products are manufactured inat its facilities in Germany, the United States, Israel, Brazil, China, UK, Argentina Australia and Mexico.Australia. These facilities enable the segment to produce customer-specific solutions meetingthat meet the requirementrequirements of the different markets. Additionally, the segment produces milk and whey proteins for the food ingredients industry inat its facility in Austria.Austria.
 
ICL Group Limited 72
70


The Phosphate Solutions segment's principal manufacturing plants, distribution centers and marketing companies are set forth in the map below:


The currentCurrent annual potential production capacity is as follows: approximately 74.4 million tonnestons of phosphate rock, approximately 2.7 million tonnestons of phosphate fertilizers, approximately 1.3 million tonnestons of green phosphoric acid, approximately 345415 thousand tonnestons of purified phosphoric acid (as Phosphorus Pentoxide),and approximately 385 thousand tonnestons of phosphate salts. The potential production capacity of the various plants is based on the hourly output of the plants multiplied by the potential hours of operation per year. This calculation assumes continuous production over the year, 24 hours per day, with the exception ofother than a few days for planned maintenance and renovations. Actual production is usually lower than potential production capacity, due to unexpected breakdowns, special maintenance operations, availability of raw materials, market conditions, and market conditions.unplanned downtime.
 
71ICL Group Limited 73

 
In 2018,2021, The Phosphate Solutions segment produced approximately: 5,006approximately 4,625 thousand tonnestons of enriched phosphate rock, 1,1951,204 thousand tonnestons of green phosphoric acid, 2,304 2,298thousand tonnestons of phosphate fertilizers, 289326 thousand tonnestons of purepurified phosphoric acid (as Phosphorus Pentoxide), 269288 thousand tonnestons of phosphate salts 71and 73 thousand tonnestons of food multi-blends.
 
Production-related developments throughout the segment:
Israel
Rotem Israel presented strong results in 2021 mainly due to improvement in the commodities market and higher prices and the contribution of a 2020 efficiency plan, which was implemented to address global market volatility and continuing economic and business uncertainty.
In the second halfaddition, in Rotem Israel, production records were achieved in certain product lines, such as, Fertilizers (1,082,100 tons) and Specialty Fertilizers, (71,700 tons), including 61,200 tons of 2018, green phosphoric acid production at ICL Rotem was unfavorably impacted by technical operation challenges. During the third quarterMKP and 10,500 tons of 2018, activities at ICL Rotem's Zin plant stopped for 2 months in order to adjust phosphate rock production volumes to the business environment. In November 2018, the Company signed an agreement with the worker's council which regulates the transition to a five-day workweek at ICL Rotem's Zin plant.Pekasead.
China
 
YPH, the joint venture in China,an equally owned company controlled by ICL, improves the competitiveness and flexibility of ICL’s phosphate activities, as a result of access to phosphate rock with extensive reserves. The joint manufacturing platform includes activities over the entire value chain. The performance of YPH JV significantly improved and shiftedcontinued to profitability during 2018, mainly due to reductionimprove in costs, increased production and sales and an increase in phosphate products prices.2021.
 
In December 2019, ICL launched its new food-grade phosphoric acid plant at YPH. The plancommenced its operation in 2021 and will add up to 70 thousand tons of food grade acid production capacity, once fully ramped-up. The plant produces qualified commercial food-grade acid quantities. The new plant is expected to strengthen our phosphate specialties operations and enable additional diversification into higher value-added products.
Americas
In 2020, the Company carried out further production optimizations following the continued reallocation of production from Mexico to San Jose dos Campos (Brazil) and Carondelet (US), which was initiated in 2019. Further, in December 2021, ICL opened its alternative-protein facility in St. Louis, US, which will produce a plant-based meat substitute for use by food companies, food-service distributors, restaurants and grocery chains.
Europe
Both of our fertilizer facilities in Europe, ICL Germany Ludwigshafen and ICL The Netherlands, successfully increased the utilization of Polysulphate® within a new range of PK products, which are part of the FertilizerpluS product line. For further information, see “Item 4 - Information on the Company— B. Business Overview— Potash Segment”.
In addition, during the third quarter of 2021, a fire event occurred at ICL Germany Ludwigshafen, ended without injuries. However, all production activities were stopped. Rehabilitation activities have begun, and the production is expected to be renewed by the end of first quarter of 2022.
ICL Group Limited 74


Competition
 
The competitive characteristics of the segment vary according to the type of products it manufactures and the markets in which they are sold.
 
The commodity phosphates market is extremely competitive, and the competitors include multi‑national companies and government‑owned companies. Many producers operate in this market and the main competitive factor is price. The ability to compete in the market is dependent, mainly, on raw material costs, production costs and logistics. For this reason,these reasons, companies located in proximity to sources of raw materials, ports, and customers, benefit from competitive advantages. A key factor in the area of raw materials (in addition to phosphate rock) is the accessibility to and the price of the sulphur and ammonia, which are required to manufacture the main phosphate fertilizers. Additional factors that affect competition to a certain extent include product quality, range of products, service, and the capability to develop new products that provide unique solutions.
 
Phosphate rock mines and phosphate fertilizers production facilities are located in many countries, including Morocco, which possesses the world’s largest phosphate rock reserves, China, Russia,Saudi Arabia, Algeria, Brazil, South Africa, Jordan, Egypt, Australia, the United States, Brazil, Saudi Arabia,Russia, Peru, Tunisia, Mexico, Lebanon, Syria, Togo, Senegal, Israel and others. A major part of the mined phosphate rock is used by their manufacturers, including ICL, mainly for production of downstream phosphate fertilizers (vertically integrated companies), including Triple Superphosphate (TSP).
The main phosphate fertilizers producers, who compete with ICL arein the global TSP market, include Office Chérifien des Phosphates (OCP Group, from Morocco), Ma’aden (Saudi Arabia)Mosaic (US), Mosaic (United States and Saudi Arabia via JV with Ma'aden), Jordan Phosphate Mines Co. (Jordan), Nutrien (Canada), GroupGroupe Chimique TunisienneTunisien (GCT, from Tunisia), the Roullier Group (Europe)Grupo Fertinal (Mexico), Agropolychim, (Bulgaria), Lebanon Chemical Company, Polyserve (Egypt) and other various Russian and Chinese producers.
 
72

The planned production expansion during 2018 of world's major phosphates' fertilizers producers was slower than expected: although first exports of phosphate fertilizers were executed in July 2017 from Ma'aden, Sabic and Mosaic owned project of Wa'ad Al Shamal (Saudi Arabia), its ramp–up rate during 2018 was lower than planned. Moreover, during 2018 Mosaic had shut down its Plant City (US) operations which had a capacity of about 1.2 million tonnes P2O5, due to its partnership in the Wa'ad Al Shamal project. Following that, Mosaic idled all its South Pasture mine operations in Hardee County, Florida, during September 2018. OCP (Morocco) had commissioned its fourth granular phosphate hub at Jorf Lasfar (JPH-4) during the first half of 2018, bringing its overall granular phosphates capacity to around 12 million tonnes per year. However, according to CRU Fertilizer Week, OCP adjusted its planned development strategy at this site in November 2018, and it now plans to reach 15 million tonnes per year granular phosphate capacity by the end of 2020, rather than the end of 2019. The increase includes the addition of three new granulation units of 1 million tonnes per year capacity each and are expected to have flexibility to produce SSP and TSP. OCP is also set to start up a new sulphuric acid unit in the first quarter of 2019 with a further two sulphuric acid plants, also planned to start by mid‑2020. In addition, Nutrien (Canada) closed in December 2018 its 0.2 million tonnes per year phosphoric acid production plant in Geismar (US). This shutdown, together with the conversion of Nutrien's Redwater (Canada) MAP unit to ammonium sulfate production, have led for its being fully self-sufficient in phosphate rock.
China is a significant player in the commodity phosphate market. Its industry is fully integrated based on its local phosphate rock reserves, and it is a net exporter of phosphate rock, although it may import phosphate rock due to both economic as well as to quality considerations. China is a major phosphate fertilizer exporter. DAP export during 2018 was 7.49 million tonnes, an increase of 17% year on year, mainly due to an increase of 51% in exports to India to 3.04 million tonnes. MAP export during 2018 was 2.49 million tonnes, a decrease of 8.2% year on year, mainly as a result of a decrease of 19% in exports to Brazil to 815 thousand tonnes, while exports to India increased by 20% to 154 thousand tonnes, according to China's General Administration of Customs. These figures were supported by higher than expected prices as a consequence of high import demand, mainly in India as the result of on Indian rupee depreciation against the US dollar, the Indian domestic fertilizers subsidy policy and in light of the above described slower than expected phosphates production expansion.
Our Phosphate Solutions segment has a global leading position in the field of purepurified phosphoric acid market, based on its in-house technology and its downstream products, as well as in the field of food grade phosphatefood-grade phosphates and dairy proteins area.
markets. The segment's competitors are large and mid-sized international companies, serving the chemical and food industries, which carry onconduct manufacturing and marketing activities in various countries, as well as local companies servingthat serve local markets.
ICL's competitive advantage in specialty phosphates field derives from product features, quality, service and the ability to meet the customers’ needs.
 
The primary competitors of the segment, in the chemical and food fields, are Chemische Fabrik Budenheim KG, Innophos Inc., Prayon S.A, Nutrien, Adithya Birla, Haifa Chemicals Ltd., FOSFA and various Chinese producers.
 
Significant competitors exist in the dairy protein field, including Bayrische Milchindustrie, Arla, Fonterra, Milei, LactoprotAlpavit and Sachsenmilch.AVH. Competitiveness is primarily determined by product quality, access to raw materials, supply chainschain capabilities and technologictechnical know‑how.
 
73


The Phosphate Solutions segment benefits from the following competitive advantages:
 

·
An integrated value chain that uses the phosphate rock mined in Israel (ICL Rotem)(at Rotem Israel), as well as in China (YPH) for the production of itsto produce green phosphoric acid, which serves mainly as a raw material for the production of the segment's products and for the production of ICL's specialty fertilizers business products.our Innovative Ag Solutions products.
Logistical advantages due to the segment's geographical location and diversification, proximity to ports in Israel and Europe and relative proximity to its customers.
 
·Logistical advantages due to its geographical location, close proximity to ports in Israel and Europe and relative proximity to its customers. In addition, ICL is a unique global fertilizer producer that is able to combine potash and phosphate fertilizers in the same shipment, which enables it
ICL Group Limited 75


Our Company is a global fertilizer producer that can combine potash and phosphate fertilizers in the same shipment, which enables us to service smaller customers, particularly in Brazil and the United States.
 
·A professional agronomic sales team that focuses on individually‑tailored agronomic consulting to customers based on analysis of their specific combination of agricultural products and growing conditions.
The segment enjoys a competitive advantage in specialty phosphates deriving from product features, quality, service, technical application support, a global manufacturing footprint and a very broad product line.
 

·Phosphate Solutions segment is the only fully integrated global producer of downstream phosphate-based products and its geographical diversification
YPH provides a competitive advantage in logistics, as a supplier to global food companies.
·As a result of the acquisition of YPH, the JV in China, ICL has an integrative phosphate platform in China, with better access to the Chinese market. In addition, Phosphate Solutionsthe segment enjoys a competitive cost advantage with respect toin its phosphate activities, due to access to low‑cost phosphate rock with long‑term reserves as well as low‑cost green phosphoric acid..
 
Raw Materials and Suppliers
 
The Phosphate Solutions segment produces most of the raw materials it uses for the production ofto produce its commodities and specialties products.
 
The segment produces phosphate rock as the primary raw material for its backward integrated value chain, commencing from mining of phosphate rock, in Israel and China, through production of green phosphoric acid and up to the production of phosphate-based fertilizers, purepurified phosphoric acid and specialty phosphate.phosphates.
 
The primary raw materials acquired from external sources are, mainly, sulphur, ammonia, different grades of purepurified phosphoric acid, soda ash, caustic soda and caustic soda.potassium hydroxide.
 
Sulphur prices increased during most of 2018 but started to moderate from November 2018. AverageFor further information regarding sulphur prices in 2018 (bulk crushed lumpduring 2021, see “Item 5 - Operating and gran CFR price China) were $154 per tonne, compared to $122 per tonne in 2017Financial Review and compared to $126 currently (according to CRU - Fertilizer Week Historical Prices, February 7, 2019)Prospects— A. Operating Results— Trends Affecting Phosphate Solutions segment”. Market observers are forecasting that the downward trend will continue during the first half of 2019, mainly due to the weakening of the phosphates market.    
During the fourth quarter of 2017, towards the expected termination of the long-term contract for the supply of pure phosphoric acid with the supplier Nutrien at the end of 2018, the Company signed a new contract with Nutrien which guarantees regular supply of this raw material through December 31, 2025. The terms of the new contract will result in a modest margin reduction; however, ICL expects that most of the margin reduction will be recovered via market pricing actions and/or cost reductions in other areas.
74

 
For the dairy protein business, especially in the organic and goat segments, securing organichigh quality raw materials (whole milk, skimmed milk and whey) is a key element of the operations. In orderA balance between short- and long-term agreements secures supply, while maintaining adaptability to secure the supply, there are long term agreements in place with all major suppliers, which are valid for the next 1–3 years.changing market conditions.
 
The Phosphate Solutions segment maintains inventories of sulphur, phosphate rock, green phosphoric acid, purified phosphoric acid and other raw materials in quantities that take into accountconsider the projected level of production based on consumption characteristics, supply times,timeline, distance from suppliers and other logistical considerations.
 
Sales, Marketing and Distribution
 
The Phosphate Solutions segment sells and markets its products worldwide. The primary markets of phosphate commodities products are Europe, China, Brazil, India, the United States and Turkey.Israel. Phosphate specialties products are primarily marketed to industrial, food and commercial customers in Europe, North America, Asia, South America and Asia.Australia. The marketing network is based, mainly, on an extensive internala marketing and sales organization and, to a lesser extent, on external distributors and sales agents.
 
The Phosphate Solutions segment extends credit terms to its customers, according to the customary practice in their locations. The segment's sales are generally covered by trade credit risk insurance or by letters of credit from banks with high credit ratings.
 
Most of the segment's sales do not take placeoccur according to long‑term orders or contracts but are regularly ordered close to the time of supply. Accordingly,Therefore, there is no significant orders' backlog.
 
ICL Group Limited 76



The Phosphate Solutions segment shipstransports its products from Israel to customers overseas by ships (mainly in bulk) that it leases in the global marine transportation market, which are loaded by using designated facilities in the ports of Ashdod on the Mediterranean Sea and Eilat on the Red Sea. The segment also has special port facilities for bulk loading in Amsterdam (the Netherlands) and Ludwigshafen (Germany). YPH JV sells most of its products in China and is preparing to provide a logistical solution tofor marine shipping outside China, when it will be required.
 
The prices of phosphate-based fertilizers are determined in negotiations between the manufacturers and the customers and are affected mainly by the relationship between the market demand and the available supply, at that date as well as the sizeidentity of the customer and the period of the agreement. Prices for relatively long‑term contracts are not necessarily similar to spotthe same as “spot” prices (current/casual sales transactions).
 
Most sales of the phosphate specialties products are made under agreements with terms of one or two years, or through “spot” orders placed close to the date of supply. In addition, forFor these products, framework agreements exist with specific customers exist, through which the customercustomers may purchase up to anthe maximum agreed maximum quantities of products during the term, on the basis of which the customer issues purchase orders from time to time.term.
 
For purposes of effective marketing and sellingsale of many of itsthe segment's products, effectively, especially food products, Technical Salestechnical sales and Applicationsapplications, personnel work closely with customers in order to tailor the products to the customers’their needs.
 
75


The strategy regardingsegment maintains adequate inventories of phosphate specialties products is to maintain adequate inventories to ensure orderly supply to customers, in light ofconsidering the customers’ distance from the manufacturing locations and their demand for inventory availability, in conjunction with optimization of inventory storage costs. Therefore, portions of thesome finished product inventories are heldstored in storage facilities in the destination countries.countries.
 
Seasonality
 
The seasonal nature of demand for phosphate commodities products is usually characterized by higher sales in the second and third quarters than sales in the first and fourth quarters. In recent years, due to various influences on the timing of sales, primarily price fluctuations, the effects of seasonality have been reduced as compared to earlierpast periods.
 
The target markets of phosphate specialties products are not characterized by significant seasonality. However, the fourth quarter of the year is relatively weak due to the holiday season and customers’ destocking towards the end of the year.
 
Natural Resources Tax
 
The Law for Taxation of Profits from Natural Resources whichin Israel entered into effect on January 1, 2016. 2016, which respect to Phosphate operations at Rotem Israel.For additionalfurther information, see Note 1715 to our Audited Financial Statements.
 
ICL Group Limited 77

Innovative Ag Solutions Segment
 
TheOur Innovative Ag Solutions segment was established on the foundations of ICL’s specialty fertilizers business. The segment aims to achieve global leadership in specialty fertilization markets by enhancing its global positions in its core markets of specialty agriculture, ornamental horticulture, turf and landscaping, targeting high-growth markets such as Latin America,Brazil, India and China, by leveraging its unique R&D capabilities, vast agronomic experience, global footprint, backward integration to potash and phosphate and chemistry know-how, as well as seeking M&A opportunities. ICLintegrating and generating synergies from acquired businesses. Our Company is continuously working to expand itsour broad product portfolio of specialty plant nutrition, plant stimulation and plant health solutions, which consists of enhanced efficiency and controlled release fertilizers (CRF), water soluble fertilizers (WSF), liquid fertilizers slow release fertilizers (SRF) and straights (MKP/MAP/Pekacid)PeKacid), soil and foliar micronutrients, secondary nutrients, bio-stimulants, soil conditioners, seed treatment products, and adjuvants.
 
The Innovative Ag Solutions segment develops, manufactures, markets and sells fertilizers that are based primarily on nitrogen, potash (potassium chloride) and phosphate. It produces water soluble specialty fertilizers in Belgium, Israel and the US,Spain, liquid fertilizers in Israel, Spain and Brazil, straight soluble fertilizers in China and Israel, and Spain, and controlled‑controlled release fertilizers in the Netherlands, Brazil and the United States.States, as well as secondary nutrients, biostimulants, soil conditioners, seed treatment product, and adjuvants in Brazil. ICL's specialty fertilizers business markets its products worldwide, mainly in Europe, Asia, North America, Brazil and Israel.
The segment will also function as ICL’s innovative arm, which will seek to focus on R&D, as well as implementing digital innovation.Israel.
 
In 2018,2021, the sales of the Innovative Ag Solutions segment totaled $741$1,245 million constituting approximately 13% of ICL's total sales (including sales to other segments), an increase of 7%70% compared to 2017 sales.2020. The segment operating profit totaled $57 million, constituting 6%sales of the Innovative Ag Solutions segment constituted approximately 18% of ICL's total sales, an increase of 3% compared to 2020. The segment's operating profit attributableincome totaled $121 million, an increase of 203% compared to the segments.2020. The Innovative Ag Solutions segment’s operating income constituted approximately 10% of ICL’s adjusted operating income, an increase of 2% million compared to 2020. For additionalfurther information, see "Item 3 – Key Information – A. Selected Financial Data – Adjusted to reported operating and net income (non-GAAP financial measures)" and “Item 5 - Operating and Financial Review and Prospects— A. Operating Results— Results of Operations”.
 
76

Specialty fertilizers offer improved value to the grower compared to the use of regularother fertilizers as they are more efficient, maximize yield and quality and require lower labor costs. The following pyramid presents the different fertilizer product lines – the high‑value products are usually accompanied by a higher price per tonne.ton. ICL's Innovative Ag Solutions segment (IAS) produces most of the high value products, except for potassium nitrate and calcium nitrate.
 



 
The
ICL Group Limited 78

Our Specialty Fertilizers business operates in 2 main markets:
 
Specialty Agriculture
 
This market includes high-value agricultural crops, such as fruits and vegetables. Enhanced efficiency fertilizers are used and applied mainly into these crops. The use of specialty fertilizers in row crops, such as sugar cane, corn and wheat can also be beneficial – subject to climate and soil conditions. TheOne of the main marketmarkets for ICL is related to the drip irrigation/fertigation market. This market, which is growing as the use of drip irrigation systems is growingincreases across the globe.globe, mainly in emerging markets, such as China and India. The use of enhanced efficiency fertilizers, such as controlled release fertilizers, is growing due to their environmental and economic advantages, although such growth is still dependent on the price levels of crops and raw-material prices (e.g., urea, potassium and phosphorous)phosphorus).In Brazil, the adoption rate for micronutrients, bio-stimulants and soil conditioner is growing in a wide range of crops due to demand to increase productivity, improve and balance plant nutrition and reduce abiotic stress.
 
Turf & Ornamental (T&O)
 
Ornamental Horticulture
 
The Ornamental Horticulture market consists of growers of outdoor ornamental plants (nurseries) and pot and bedding plants (greenhouses). The growers require high quality fertilization programs to grow plants at the quality level required by the garden centers, DIY (Do‑It‑Yourself) outlets and retail chains. The IAS segment has a large, specialized sales force advisingthat advises growers on the optimal nutrition of the plants. ICLIt also has a specialized distributor network in the Ornamental Horticulture market, and itsmarket. The segment’s main product lines for this market are specialty fertilizers such as CRFs (controlled release fertilizers) and WSFs (water soluble fertilizers) with well-known brand names such as Osmocote, Peters & Universol. In specific markets, such as North America and the UK, a range of unique plant protection products is also included in the proposals for growing healthy plants. In the UK, ICL iswe are a leading companygrowing media supplier providing a totalcomplete solution for the ornamental growers as it produces and markets unique, high-quality peat and growing media products under the brand name Levington Advance.
77

.
 
Turf & Landscape
 
The professional turf market includes the following user groups: golf coursescourse green keepers, sport field grounds men,groundsmen, landscapers, contractors & lawn service providers.
 
These groups demand high-quality inputs to secure strong, high-quality turf. The usersThey also require an integrated approach for keeping theto keep turf strong and maintaining its health, without creating an environment that is conducive to the development of disease. There is an environmental need to limit the inputs and, therefore,which requires an integrated approach of unique, high-quality products is needed.products. The most important inputs are (specialty) fertilizers (controlled release-controlled release and slow-release fertilizers),fertilizers, grass seeds and plant protection products. ICLSome of these products’ well-known brands are Sierrablen, Sierraform and ProTurf. Recently, the segment launched a new brand of organic Fertilizers named Gronamic. The segment offers all three product lines in an integrated program. ICLprogram, and has a dedicated and experienced team of unique professional grass experts, along with a distribution network serving its key markets, mainly in Europe and Asia.
InnovationAsia.
 
ICL Group Limited 79
The IAS segment will function as ICL’s innovative arm, promoting innovation, developing new products and services as well as digital platforms and technological solutions for farmers and agronomists. The segment will drive collaborations with innovative technologies and its goal is to introduce and integrate new digital solutions for the agricultural world by utilizing, among other things, external knowledge and platforms.

The ICL specialty fertilizers business has grown substantially through both organic growth and M&A. Over the past few years, the business has proven its ability to successfully integrate businesses into its existing platforms (R&D, sales & marketing, distribution channels), such as:
·
Everris, a company that manufactures and sells high‑quality controlled‑release, slow‑release and soluble fertilizers,
·
Fuentes Fertilizantes, a leading company in Spain that manufactures and distributes liquid and soluble fertilizers, NPK compounds and conventional fertilizers,
·
ICL Belgium, a manufacturer of soluble NPK fertilizer components,
·
AmegA, which develops advanced solutions for water conservation.
·
YPH in China also manufactures specialty fertilizers, contributing to the business line’s growth in Asia.

 
Products
 
Specialty fertilizers are highly effective fertilizers that allow more precise feeding of plants for their major nutrients needs (nitrogen, phosphorous and potassium) as well as secondary nutrients and micronutrients. These fertilizers allow efficient fertilizing through special applications among others, through drip irrigation systems and foliar spraying, and help growers obtain higher yields and quality. These fertilizers include, among others, controlled release fertilizers (CRF), slow-release fertilizers (SRF), soluble fertilizers and liquid fertilizers as follows:
 
78


·
Controlled‑release fertilizers (CRF) allow accurate release of nutrients over time. CRF’sCRFs have a special coating that allows prolonged release of nutrients over several weeks and up to 18 months - compared to regular fertilizers that dissolve in the soil and are immediately available.available but therefore leach partially in the soil. ICL Innovative Ag Solutions has leading global brand-name products such as,including Osmocote, Agroblen, Agrocote, Polyblen and Agrocote. Osmocote is the most used controlled‑release fertilizers by ornamental growers worldwide. The brand is known to deliver high quality ornamental plants due to its consistent release of nutrients and unique patterned and programmed release technologies. ICL continues to invest in new technologies as well as field trials to test and confirm the high reliability of the release. During the past few years, ICL developed several new technologies such as the “Dual Coating Technology” (which optimizes the release to ornamental plants) and the “E-Max Release Technology” (a new coating technology with improved release characteristics, mainly for urea). Furthermore, ICL is also selling slow‑release fertilizers (SRF) which, due to their low solubility and hydrolysis, release nutrients slowly (generally up to a period of 2 months). Main market for this is in the Turf and Amenity market.Producote.
Osmocote is the most used controlled‑release fertilizer by ornamental growers worldwide. The brand is known to deliver high quality ornamental plants due to its consistent release of nutrients and unique patterned and programmed release technologies. We continue to invest in new technologies, as well as field trials to test and confirm the high reliability of our products. During the past few years, the Company developed several new technologies, such as “Dual Coating Technology” (which optimizes the release to ornamental plants) and “E-Max Release Technology” (a new coating technology with improved release characteristics, mainly for urea). Our latest innovation is Osmocote 5 with OTEA-system and NutriMatch technolgy. This 5th generation of CRF for ornamental growers delivers a unique, accurate and optimized release of nutrients and micronutrients. In addition, we also sell slow‑release fertilizers (SRF) which, due to their low solubility and hydrolysis, release nutrients slowly (generally up to a period of two months). Main markets for these fertilizers are in the Turf and Amenity markets.
 

·
Soluble fertilizers, which are fully water‑soluble, and fully‑soluble NPK compound fertilizers, are commonly used for fertilization through drip irrigation systems to optimize fertilizer efficiency in the root zone and to maximize yields. These fully soluble fertilizers are also used sometimes used for foliar applications. ICL'sOur well-known brands for fertigation are Peters, Universol, Agrolution, NovaNPK and Novacid. ICL develops specific formulations for different applications and circumstances. In South America, products such as Profol, Kellus, Tonus, Translok, Forcy, Nutritio, Vegetação and Dimi Tônico are used as high technology products for farmers to improve plant nutrition and physiology through foliar fertilization. There are specific formulations for specific crops, greenhouses and/or open fields, as well as for different water types.types.
 

·ICL is
We also sellingsell ‘Straight fertilizers’ which are crystalline, free‑flowing and high purity phosphorus soluble fertilizers such as MKP, MAP and PeKacid. Key brands include NovaPeak & NovaMAP. PeKacid is the only solid highly acidifying, water-soluble fertigation product that contains both phosphorus and potassium. The product is ideal for specific water conditions where an acidifying effect is required, as well as for keeping the dripping lines clean.
Liquid fertilizers are used for intensive agriculture and are integrated in irrigation systems (mainly drip systems). Our product line includes mostly tailor‑made formulations designed for specific soil & water/climate conditions and crop needs.
 
·Liquid fertilizers are used for intensive agriculture and are integrated in irrigation systems (mainly drip systems). The product line includes mostly tailor‑made formulations designed for specific soil & water/climate conditions and crop needs.
ICL Group Limited 80

 

·
Peat, a growing medium for various crops, where generally controlled‑release fertilizers and plant‑protection products are added too.mixed in. Specific formulations of growing media are designed for specific plant needs, such as greenhouse bedding plants and outdoor nurseries. A well-known ICL brand is the “Levington” brand. Inclusion of growing media products in the portfolio in the UK allows ICL to offer an effective total solution to beddingits customers.  We intend to use more circular products and pot planthave extended our growing media offerings with Fibagro Advance, a unique and superior peat alternative manufactured in the UK. This innovative and advanced woodfibre product is being used as a key component in professional growing media mixes and provides professional growers and nurseries.with a sustainable growing solution.
Water conservation and soil conditioning products are new product lines developed by the segment. Water conservation products are used in professional turf to keep water in the root-zone. Key brands are H2Flo and H2Pro. In 2021, the H2Gro brand grew strongly in the ornamental horticulture market. These products significantly reduce irrigation requirements. This new technology is also used in agriculture to allow better water availability around the root-zone of the crops.
 

·Water conservation and soil conditioning products is a new product line developed by ICL's IAS segment. Water conservation products
Seed treatment technologies are used in professional turf to keep water indeliver plant nutrients and bio-stimulants, with a focus on improved root development, early plant development and nitrogen fixation. Several products and brands serve the root-zone. A key brand is H2Pro. These products significantly reduce irrigation requirements. This new technology is also used in agriculture to allow better water availability around the root-zoneneeds of the crops.different crops such as ProSelect and Landscaper Pro.
Bio-stimulants technologies such as Triplus, Improver, Concorde, Vegetação and Dimi Tônicoare, are being successfully used by farmers to increase their productivity and alleviate abiotic stress, such as drought, salinity and others.
 

Adjuvants are essential to enhance foliar nutrition, herbicides and crop protection spray. We offer the South American market adjuvant technologies including Helper, Tensor Max and AD+ as well as various formulations that address the primary challenges facing farmers, such as drift and run off.

79


Soil conditioner has a set of amino and organic acids which contribute to the soil biological balance and help increase the index of beneficial microorganisms and, thus enlarge the capacity to revitalize the macro environment in a sustainable way. Recent research has indicated substantial potential for the product to maintain soil carbon stocks. The segment's brands, Mol Top and Longevus, contain a mix of carefully developed components that increase plant production potential.
 
Production
 
ICL Innovative Ag Solutions’ principal production facilities include its plants in Israel (special compound fertilizers, liquid fertilizers and soluble NPK fertilizers), Spain (liquid fertilizers, and soluble NPK fertilizers), the United Kingdom (products for water conservation and peat incorporated in growing media), China (compound specialty fertilizers and soluble fertilizers), the Netherlands (controlled‑release fertilizers and fertilizer blends), Belgium (soluble NPK fertilizers) and, the United StatesUS (controlled‑release fertilizers) and Brazil (liquid fertilizers, water-soluble fertilizers, controlled-release fertilizers, improved efficiency phosphorus fertilizers, secondary nutrients fertilizers and micronutrients fertilizers).
ICL Group Limited 81

ICL Innovative Ag Solutions’ main manufacturing plants and marketing companies are set forthindicated in the map below:


 
ICL Innovative Ag Solutions’ annual potential production capacity is approximately 300360 thousand tonnestons of soluble fertilizers, 450480 thousand tonnestons of liquid fertilizers, 110200 thousand tonnestons of controlled‑controlled release fertilizers, and 400 thousand M3m3 of peat.growing media and 200 thousand tons of micronutrients. The potential production capacity of our various plants is based on the hourly output of the plants, multiplied by potential hours of operation per year. This calculation assumes continuous production over the year, 24 hours a day, with the exception ofother than a few days for planned maintenance and renovations. Actual production is usually lower than potential production capacity, due to unexpected breakdowns,unplanned downtime, special maintenance operations, lack of availability of raw materials, market conditions and seasonality in demand.
 
ICL Group Limited 82

Competition
 
The Specialty Fertilizers’global specialty fertilizer market size is estimated at approximately $13$15 billion per year, accounting for about 4% of the total fertilizers market.market. According to the Company's estimation, the specialty fertilizer market is growing at an average rate of about 6%5%-7% per year.
 
The Specialty Fertilizersspecialty fertilizers market is diversified, with a few global companies and many small to medium-size reginal and local producers. The market operates mainly on a local basis and most producers sell their products in nearby territories rather than globally. ICL’s specialty fertilizers business may beWe are considered one of the largest global players in the specialty fertilizers market, with production plants in Israel, Netherlands, Belgium, Spain, the UK, Brazil, the USA and China.
 
80

The Capex needed forrequired to develop new production capacities for existing specialty fertilizer companies is not considered highsignificant compared to the commodity fertilizers market. Nevertheless,fertilizer operations. However, barriers of entry for new players include, among others, extensive know-how in order for a new player to enter this market with different product groups, extensive knowledge is needed – both of chemical production and of agronomical know-how, as well asagronomy, large, professional selling and marketing teams, and customer support capabilities. ICL focuses and relies on a worldwide experienced R&D team, allowing it to stay significantly ahead of the competition in many of the specialty-fertilizers product lines, especially in the controlled-release, water soluble and liquid fertilizers markets. ICL provides high-level professional support to customers by means of experienced and professional marketing and agronomist teams with strong customer relationships that have been developed over decades of service, and through the offer of an extensive product portfolio.
 
Besides
In addition to ICL, other companies globally active in the specialty fertilizers market are:companies with a global presence include: SQM, Yara, Haifa Chemicals and Compo.Compo Expert. Other companies, such as Simplot, Nutrien and Koch (USA), Produquimica (Brazil)Kingenta and KingentaMoith (China) and JCAM (Japan), are considered regional players.
 
ICL specialty fertilizersInnovative Ag Solutions business benefits from the following competitive advantages:
 
·A strong, efficient and integrated supply chain with in-house access to high quality raw materials, such asA strong, efficient and integrated supply chain with in-house access to high quality raw materials, mostly phosphate and potash, which is based on an extensive product portfolio and multi-location production.
 

·
Unique R&D and product development activities,capabilities, creating a strong platform for future growth in controlled-release fertilizers, fertigation, foliar soluble fertilizers, enhanced nutrients, bio-stimulantswater efficiency and innovative, next generation products.
Added value production process technology – custom-made formulations that meet our customers’ unique needs.
 
·Added value production process technology – custom-made formulations to meet our customers’ unique needs.
A highly skilled global agronomic sales team that provides professional advice and consultation which fosters loyalty by distributors.
 
·Highly skilled global agronomic sales team providing professional advice and consultation and Distributor loyalty.
Full product portfolio (one-stop shop).
 
·Full product portfolio (one-stop shop).
ICL’s well-known and leading brands.
 

·ICL’s well-known
Direct working relationships with farmers (B2C) especially in Brazil, providing service at the field level and leading brands.  accelerates the innovation cycle.
 
Raw Materials and Suppliers
 
The primary raw materials acquired from external sources are mainly KNO3,KNO3, SOP, ammonia, NPK granules, Urea, KOH, coating materials, micronutrients and coating materials.
On March 1, 2017, the District Court in Haifa (Israel) decided that the ammonia tank operated by Haifa Chemicals must be emptied no later than April 1, 2017, and that ships transporting ammonia are forbidden to enter Israel’s seaports. Ammonia is a raw material used for various purposes by ICL’s Innovative Ag Solutions, and is also sold to external customers as an end product and/or as ammonia derivatives. During 2017, the Company started to import ammonia in tanks and other nitric raw materials as alternative for ammonia imports in vessels until better alternatives will be approved by the Israeli Authorities. Where needed, ICL Innovative Ag Solutions is examining the production alternatives of the business-line in order to ensure continuous supply to the end customers. The total impact on the Company’s business results is not material. During 2018, the Company used isotanks to import ammonia for the production of all the required products and ammonia derivatives. During the year, imported ammonia costs decreased, mainly by optimizing supplier portfolio.
81

biostimulants ingredients.
 
ICLIn addition, our specialty fertilizersfertilizer business benefits from its backward integration to raw materials produced by the Company, such as KCl, MGA, GTSP and Polyhalite.
In 2021, there was a significant increase in raw material prices and unstable supply due to global supply chain challenges. We mitigated these challenges and have taken the appropriate measures to secure timely supply to customers.
The segment endeavors to hold inventories of the above raw materials in quantities that take into account theconsideration projected levellevels of production, based on consumption characteristics,levels, supply dates,timelines, distance from suppliers and other logistical considerations.considerations.
 
ICL Group Limited 83



Sales, Marketing and Distribution
 
The primary markets of the Specialty Fertilizers business line are the USA and Europe, particularly Spain, Israel, the US, India and Israel, Asia,China, the UK, Australia and Brazil. The Specialty Fertilizers business line sells its fertilizer products primarily via a network of its own sales offices as well as sales agents throughoutthrough distributers around the world.
 
In general, the business model relies on brand-name, premium specialty products which are marketed by a strong agronomist sales network at the end‑end user level, while sales are invoiced through distributor-partners whichthat distribute the products exclusively or semi-exclusively.products. The technical sales force emphasizes the agronomic advantages of the specialty products to the end users (farmers, growers of containerized plants, golf courses, etc.) and provides advice to and training of distributor sales representatives. ICL Innovative Ag. Solution also has specialized field forces for the Agriculture, Ornamental Horticulture and Turf & Landscape markets that are supported by specialized marketing teams.
 
Most of the specialty fertilizers business sales are not made by means of contracts or long‑termlong-term orders, but rather through current orders made close to the supply date. Accordingly, there is no significant orders’ backlog.backlog of orders.
 
Prices are determined via negotiations between ICLthe Company and its customers and are affected mainly by the relationship between market demand and the business line’s production cost,costs, as well as by the sizeidentity of the customer and terms of the agreement.
 
ICL Innovative Ag Solutions grants credit terms to its customers according to customary practices in their respective locations. ICL Innovative Ag Solutions credit sales are generally covered by trade credit risk insurance or by letters of credit from banks with high credit ratings.
 
Seasonality
 
The stronger sales season for Specialty Fertilizers is the first half of the year. The use and application of thespecialty fertilizers is related to the main growing seasons of the specialty crops around the globe.world. The main factors impacting seasonality are geographical location, type of crop, product and market. While the majority of our specialty fertilizer business serves markets in the northern hemisphere, where most of the demand for the segment's products are concentrated in the first half of the year, recent acquisitions of specialty fertilizer assets in Brazil, where demand is mostly concentrated in the second half of the year, somewhat balances the seasonality that characterized the segment's business.
 
As an example, some specialty products, such as soluble fertilizers in the Ornamental Horticulture market are sold and applied throughout the entire year with limited seasonality, whereas controlled release fertilizers are sold during the potting season of container nursery stock and pot‑pot plants (before spring time)springtime).
 

ICL Group Limited 84
82

 
Corporate Responsibility, SustainabilityAdditional Activities
Our business activities include, among other things, our innovation arm which promotes innovation, development of new products and services, as well as digital platforms and technological solutions for farmers and agronomists. This category includes Growers and Agmatix, innovative start-ups that are developing agricultural data processing and analysis capabilities for the future of agriculture.
For further information please see "Item 5 – Operating and Financial Review and Prospects – C. Research and Development, Patents and Licenses, etc. – Research and Development".
Community Involvement and Donations
 
The Company applies an overall policy of corporate responsibility
We are involved and sustainability that seeks to integrate social, economic and environmental considerations into all of our business activities. This policy includes responsible management and continues improvementinvested in all sustainability fields: reducing environmental impacts; health and safety; product stewardship throughout the entire product life cycle; responsible use of natural and land resources; advanced mine reclamation; fair employment; business ethics; community contribution; transparency and additional fields. For additional details on our practices and performance in all sustainability fields, see “ICL Corporate Responsibility Report 2017” in our current report on Form 6-K (File no. 001-13742) furnished to the SEC on December 31, 2018. In addition, the Corporate Responsibility web-report (which constitutes the aforementioned report), is available on ICL's website. Neither this current report on Form 6-K nor our website is incorporated by reference into this Annual Report.
ICL has a policy of involvement and investment in the society and the community, which wasthe result of a policy formulated and approved by itsour Board of Directors in 2001 and was revised in 2014. Each activity and donation is executed in accordance with the policy and isof our community activities or donations are reviewed by the relevant authorized parties according to the type and amount of the donation.
 
ICL focuses its cooperation with the community and its involvement
We focus our efforts on the communities in which our employees live and outside of Israel from which its employees come and within which it operates. ICL's main activities are inwhere we operate, mostly Negev communities in Israel's southern region, namely:Israel, such as Dimona, Yerucham, Beer Sheva, and the Bedouin settlements in the South. ICL focuses itsregion. The focus of our activities is mainly on supporting daily life sustenance areasin these communities (e.g., the society, economy, and environment), education and excellence of students in the science areasciences (with an emphasis on chemistry), strengthening of the local communitiesthem through performance of various social projects for the benefit of theaimed at benefiting local residents, and support of supporting underprivileged populations and those having special needs.needs populations.
"Thinking Doing": 2021 Activity Summary
 
“Thinking Doing” is ICL's flagship social program in Israel that operates in seven municipalities: Dimona, Yerucham, Beer Sheva, Ramat Negev Regional Council, Kuseife and Tamar Regional Council.
The program boosts community activity by developing entrepreneurship and local leadership among residents, local social organizations, and municipal staff. In addition, the program fosters social entrepreneurship and collaboration to create community resilience in southern Israel's communities by developing and establishing sustainable anchor institutions.
As a significant business organization in southern Israel, ICL is committed to contributing to community resilience and the quality of life of communities in the Negev region, and to playing an active role in leading change. "Thinking Doing" offers long-term guidance and support to community activists in organizational, social and economic areas. The program provides opportunities for local residents to take charge of their lives, engage in social innovation and develop a sense of responsibility for the region in which they live.
During 2021, due to the continued spread of COVID-19 and ongoing uncertainty regarding its implications for the future, we established circumstance-based community insights, while adapting activities and introducing flexibility vis-à-vis the residents' ability to meet and assemble. Dealing with COVID-19 created numerous insights regarding the meaning and importance of community, and in many municipalities it accelerated a perceptual change in the concept of community and enabled deeper involvement in ICL’s program – with the goal of promoting and establishing a stronger sense of community among residents and municipality staffs.
ICL Group Limited 85

"Thinking Doing" enjoys the support and personal involvement of all mayors and council chairpersons. Municipality staff are committed to activities and provide continuous guidance and support. The mayors and council chairpersons participate in developing the community vision, the unique municipal model, and the municipal steering committees, through participation in entrepreneur-community meetings, and they enjoy close familiarity and involvement in the program’s activities.
The Moshe Novomieski Potash Company Heritage Site Visitor Center in the Dead Sea, Israel
The Moshe Novomieski Potash Company Heritage and Visitor Center opened to the public in 2021. The Center is located at the old workers’ compound in Sodom and focuses on three main topics: the unique geological conditions that led to the formation of the Dead Sea; the history of the founding of the Eretz-Israeli Potash Company in pre-state Israel; and ICL’s current activities. The Center was established and is operated in collaboration with the Council for Preservation of Heritage Sites in Israel, the Jerusalem and Heritage Ministry, the Ministry of Education, and others, and it constitutes a significant milestone in the history of industry in the Land of Israel.
Our “Password for Every Student” program in Israel, is an initiative that provides basic and comprehensive solutions for the education system, from the user, through the classroom, school, and education system, creating a digital user community for the residents of the region. ICL’s support of this program provides 15,000 students in the Negev region with digital accessibility. In 2021, we began development of a unique program for ICL and “Password for Every Student’, which manifests the Company’s vision. The chairman of this project is Mr. Ehud Angel who serves as chairman for no consideration. Mr. Angel indirectly holds XT Holdings Inc., which is a stakeholder in Millennium Investment Elad Ltd., which is the controlling shareholder of Israel Corp., ICL’s parent company.
ICL’s charitable contributionsmonetary donations in 2018 totaled2021 amounted to approximately $5 million.$8 million (including the amount invested in the Visitor Center). In addition, during 2021, ICL contributed, at the Company's expense, about 12,755 hours of volunteer work of its employees. This amount does not include the numerous volunteer12,680 hours of the employees, partly at the employer’s expense.volunteer work after working hours, which was encouraged, organized, and logistically facilitated by ICL.
 
Regulatory and
ICL Group Limited 86


Environmental, Health and Safety Matters
Introduction
ICL is committed to developing and implementing a comprehensive Environmental, Social and Governance (ESG) strategy for our business, including integrating responsible and sustainable considerations in the conduct of our business activities, including in the manufacture and sale of our products.
We continuously aim to create a balance between economic, social and environmental needs. Our vision includes reducing our greenhouse gas emissions; increasing our use of renewable energy; reducing our water consumption and promoting circular economy activities; supporting communities; and promoting personal environmental responsibility, as well as volunteering of our employees.
Our goals and targets call for increasing our energy efficiency and use of renewable energy, reducing our carbon footprint, water consumption and raw materials, and minimizing our air emissions and wastewater output. We aim to increase our re-use of materials and to recycle hazardous and non-hazardous wastes. We intend to continue to identify and promote circular economy opportunities and implement life-cycle analysis processes, as well as to integrate ecological considerations in our mining reclamation processes. We are committed to the global efforts to mitigate climate change and have pledged to reach a net-zero target by 2050. One of our main goals is to deliver sustainable products and industrial solutions that are safe when used responsibly and to provide our customers with product data and training on safe product handling. Another target is to achieve and maintain leading positions in ESG rankings and indices, as well as increase our transparency and open dialogue with ICL’s stakeholders.
Our Company also acts proactively to prevent environmental incidents through comprehensive risk management, knowledge sharing and effective maintenance, and by developing, implementing and maintaining appropriate management systems. We consider safety and health performance as core values and make every effort to achieve top tier safety results. We are working to increase the number of our suppliers who have conducted sustainability assessments via the Together for Sustainability (TfS) initiative and emphasize the personal environmental responsibility of our employees. We are committed to acting ethically and treating our stakeholders fairly. We are also proactive in our efforts to create a diverse and inclusive workforce (for more details, see “Promoting Diversity, Inclusion & Belonging (DIB)”). In addition, we aim to maintain transparent communications with regulatory authorities and to engage with the communities in which we reside. Our company contributes to initiatives in those communities and is committed to fostering social values with our various stakeholders.
ICL’s CEO and President, Mr. Raviv Zoller, was appointed as a member of the board of the International Fertilizer Association (IFA). Mr. Zoller is the new representative of the West Asia region and was elected as Chairman of IFA’s Sustainability Committee. With our support, members of the IFA organization will be joining the TfS initiative.
In addition, 2021 marked the first year in which we have voluntarily disclosed information according to the Climate-related Financial Disclosures (TCFD) framework. As this is the first year of implementation of our reporting in accordance with TCFD, we intend to continue to advance our relevant knowledge and develop this disclosure in future years. For more details, see “Climate Change and Greenhouse Gas Emissions - TCFD” below.
For further details regarding our ESG practices and performance, see “ICL Corporate Responsibility Report 2020” in our current Report on Form 6-K (File no. 001-13742) furnished to the SEC on August 2, 2021. In addition, our Corporate Responsibility web-report, is publicly available on our website at www.icl-group.com. Neither the 6-K report nor our website are incorporated by reference into this Annual Report, and the reference to our website is intended to be an inactive textual reference. The information found on, or accessible through, our website is not intended to be a part of this Annual Report.
ICL Group Limited 87



Sustainability
Sustainable Solutions
We focus on developing sustainable solutions that increase the positive global impact of ICL’s business through its existing and new products. The sustainable solutions that we offer are interlinked with the challenges that humanity is facing, such as providing food security. Our Research Development and Innovation department (RD&I) uses the UN Sustainable Development Goals (SDGs) as guiding principles in its RD&I activities.
 
As an essential player in the global food supply chain, our main goal is to contribute globally to the effort to achieve Zero Hunger (SDG 2). As the global population continues to rise, farmers worldwide are confronted by the constant need to increase yields, while facing land erosion, effects of climate change and other environmental challenges. They must also adapt to evolving regulations. The fertilizer industry helps to overcome agricultural challenges by facilitating increased crop yields on existing agricultural land and preventing excess conversion of natural habitats into agricultural land. To improve food security, our Company offers a broad variety of solutions to farmers, including supporting them with fertilizers and AgTech solutions. Our products enable growers to enhance their yields and improve their crop quality, while increasing their nutrient use efficiency (so that more fertilizer is taken up by crops), and reducing farmers’ water consumption. Water conservation products are used in professional turf to keep water in the root-zone. Key brands are H2Flo and H2Pro. These products significantly reduce irrigation requirements. This new technology is also used in agriculture to allow better water availability around the root-zone of the crops. Our IAS segment also helps farmers protect the environment by minimizing their losses of nutrients through leaching and volatilization, and by enabling them to reach data-based decisions through precision agriculture. We also offer farmers a Plant Nutrition Carbon Footprint Optimizer that allows them to compare nutrition plans and consider the tradeoffs between yields and environmental impact. The system calculates their Carbon Footprint & GHG emissions based on different parameters, such as field characteristics (soil type, organic matter, pH); environmental conditions; agronomic practices; crop type; fertilizer type; applications timing, and residue management. In addition, we market alternative proteins (plant-based substitutes) and various products, such as the JOHA® emulsifying salts, that enable longer shelf life for food products and reduce food waste.
Due to the growing impact of climate change on the agricultural supply chain, we are increasing our efforts to reduce our GHG emissions (Climate Action SDG 13). In addition, we sell products that contribute to resource efficiency, such as water conservation. We also sell products and services that support energy storage, a necessary step in advancing the use of renewable energy in the global economy. Strong demand for Electric Vehicles (EV) and energy storage is a potentially significant source of growth for our phosphate-based and bromine-based specialty products.
ICL Group Limited 88

Our efforts to improve ICL’s impact on the environment are being facilitated by innovation and commercial excellence activities (SDG 9). We are increasingly more operationally efficient, integrating renewable energy into our fuel mix and implementing ‘circular economy’ activities, both within our organization and in collaboration with our partners.

            
Circular Economy
‘Circular Economy’ and an ‘Integrated Production Value Chain’ are guiding principles that drive our activities. According to the Circular Economy approach, the industrial production process should shift from a linear process, in which resources and capital pass through the production chain and eventually become waste, to a closed process where by-products and waste can serve as inputs in new production processes.
 
We are also deploying innovation to create new products from what was previously regarded as by-products or waste, as well as working to optimize our production processes. Examples of new products include:

MagiK, a fertilization product developed from a by-product stream created as part of our magnesium's production process.
Fibagro Advance, a peat alternative growing media that uses waste, from the timber industry, and a thermo-mechanical process, to create a unique matrix that improves moisture and nutrient retention. It also has a lower carbon footprint, compared with peat and other peat alternatives.

Our Phosphate Solution segment is integrating new technologies to use secondary source phosphate as an alternative to virgin raw materials. There are immediate uses in our production facilities in Europe and we are developing future sources for our fertilizer products, including a technology roadmap for recycling and recovery of phosphorus and nitrogen from secondary sources.
In ICL Dead Sea, some salt was used in the rehabilitation of an abandoned site and the construction of an observatory for use by the public.
PSLoop - ICL is one of the co-founders of the PolyStyrene Loop (PSL) recycling project, together with the complete PS value chain, which introduces a miningrecycling scheme for PolyStyrene (PS) foams containing the flame retardant HBCD (Hexabromocyclododecane). The PolyStyrene Loop facility in the Netherlands will recycle EPS insulation and chemical company.will turn EPS foam demolition waste into new high-quality raw material. Impurities, such as cement or other construction residues, as well as the legacy flame retardant HBCD, will be safely removed, the valuable bromine it contains recovered and re -used in the new polymeric flame-retardant FR-112P.
ICL Group Limited 89

Phosphogypsum for building roads - As part of YPH circular economy efforts, the Company develops a variety of different uses for Phosphogypsum - our only by-product that has not yet been fully utilized. In addition to the existing solutions, that were already developed and implemented, the company has developed a new solution for integrating phosphogypsum into road paving. A full-scale pilot is expected to be carried out in China in 2022.
Our Ambition Creates Excellence (ACE) program has expanded to include development of a standardized approach for Circular Economy that will systematically review ICL’s waste streams, by-products, and other outputs from our operations, to identify opportunities to develop new and useful products and to optimize our operations.
ICL’s sustainability performance: Non-financial KPI’s & Sustainability Linked Loan
In September 2021, our Company entered into a €250 million sustainability-linked loan ("SLL") agreement. The loan is an innovative step forward in our ongoing sustainability efforts and includes three sustainability performance targets. These targets were designed to align with our sustainability strategy and goals, and each will be assessed at specific times during the term of the loan by third-party certification.
As part of this effort, we are targeting reductions in Scope 1 and Scope 2 COe emissions resulting from our global operations. We are also planning to expand our participation in Together for Sustainability (TfS), a global initiative dedicated to developing and implementing a global supplier engagement program that assesses and improves sustainability sourcing practices. In addition, we continue to focus on inclusion, equality and expanded representation of women among our senior management.
For further information regarding the SLL, see “Item 5- Liquidity and Capital Resources- Debentures”.
ICL Group Limited 90


Health and Safety
As a leading global specialty minerals company, we are subject to various strict environmental, health and safety requirements under international, national and local laws, regulations and permits in each jurisdiction in which we operate. In order to sell our products and to operate our activities and processes, including mineral extraction, production, distribution, marketing and use of products, we must comply with relevant environmental, health and safety requirements. Those include, among others, requirements related to climate change, energy efficiency, air quality, liquid and solid waste discharge, land reclamation, hazardous substances, product requirements and others. Furthermore, we are required to hold certain environmental permits and licenses, such as air emission permits, waste discharge permits and others that aim to protect the health and safety of people and the environment. To continue our operations, we must comply with the requirements and conditions of these permits and licenses and to remedy any discrepancies in the event we deviate from such requirements and conditions.
Beyond existing environmental, health and safety requirements, which have tended to evolve over time and become more stringent, we may be subject to new environmental, health and safety requirements, which may be challenging and present uncertainties regarding our ability to comply with them. This may impact the capital and operating costs of our Company. Complying with such requirements may require the adjustment of the Company's facilities, production processes and operations. In addition, these potential new requirements may oblige us to obtain new permits and licenses for our continued operations. As a result, we strive to monitor the development of any environmental, health and safety requirements and evaluate them with respect to their potential impact on our operations.
As a leading specialty minerals company, we manufacture products that are part of everyday life. Some of itsour products, are defined as hazardous substances andif not managed properly, are potentially harmful to the environment and to the health and safety of the public if not managed properly. This applies also to effluents, air emissions and waste that are generated during production of some of the products. These substances can cause pollution that necessitates remediation, clean up or other responsive actions. In addition, some of ICL’s products may be hazardous to those who are exposed to them during their production, transportation, storage or use. The Company operates in accordance with environmental, health and safety regulation.
The Company routinely invests in capital projects in the areas of environmental protection, health and safety, and also incurs current costs in connection with these matters. In 2018, ICL spent approximately $121 million on environmental matters, of which approximately $47 million were capital projects in property, plant and equipment and approximately $74 million were current expenses. ICL is continuing to invest in order to reduce its impact on the environment. In order to comply with the Israeli Clean Air Law and the emission permits, over the next few years the Company will make significant capital investments in the areas of environmental protection. For more information, see "Air Monitoring and Treatment Rotem” below. The Company estimates that in 2019, it will spend approximately $171 million on environmental protection matters, of which approximately $101 million will be capital projects in property, plant and equipment while approximately $70 million on current expenses.
83

Industrial production in general, and the chemicals industry in particular, requires taking special precautionary measures to maintain a safe and healthy work environment. Some of ICL’s products, raw materials and production processes represent a potentially high risk to anyone who deviates from the required professional safety standards or from the mandatory means of safety. ICL invests considerable efforts to ensure that it complies with the requirements of the authorities and acts in accordance with their instructions.
To ensure the safety of workers and others in its plants, ICL seeks to comply with strict occupational safety and health standards prescribed by local and international laws and standards. ICL invests extensive resources in training and mentoring,This applies as well as other safety measures, in order to continually improve occupational safety and health and prevent accidents. ICL is continuing to enhance its procedures and measures and aims to become a leader in safety and environmental performance.
Regulations addressing environmentaleffluents, air emissions and other issues, which may have an impact on ICL’s activities:
The Company makes an ongoing and consistent assessment‘waste’ streams that are generated during the production of the riskssome of its new products prior to entering them into commerce. In addition,our products. These substances can cause contamination that necessitates remediation, clean up or other responsive actions. Our existing products undergo an evaluation process at every stage induring the various stages of their production process and supply chain. ICL investschain, and we assess the risks of our new products prior to their launch. We also invest resources to develop sufficient information and data with respect to itsour products, in order to create a full characterization of their safety features with reference to human health hazards and environmental threats. We strive to take action to increase their positive impact and to reduce any negative impacts.
To prevent potential occupational hazards that may occur during our operations, and to ensure a safe and healthy work environment, we seek to comply with strict occupational safety and health standards prescribed by local, national and international laws and standards. The health of our employees is checked regularly, and all mandatory and locally agreed safety equipment is provided to our employees. We regularly monitor environmental and hygiene issues in occupational work areas, as required by regulations and company procedures. In addition, we invest extensive resources in training and mentoring, as well as in other safety measures, in order to improve occupational safety and health and prevent accidents and illnesses.
 
ICL Group Limited 91


We have implemented a new operations management system that provides the framework and structure to drive operational excellence, safety and reliability across our organization (OEMS-EHS - Operational Excellence Management System - Environmental Health & Safety). We have also adopted the Human and Organizational Performance (HOP) methodology, which focuses on early detection and prevention. The methodology aims to develop organizational transparency, as well as educate and create defense mechanisms for employee safety. Moreover, the HOP approach creates dialogue and knowledge sharing in our organization between managers and employees.
We are a learning organization and aim to implement a mindset of learning from failure and success across the organization. Analysis of accidents and “near misses” is encouraged and conducted at all ICL sites. Management meetings often include a case analysis of a recent safety incident, including conclusions and corrective actions taken. We also initiate cross-organizational learning processes on a regular basis to encourage peer learning.
In recent years, we have implemented advanced technologies to manage safety events and proactive safety processes globally. We deployed specialty software at all our sites and created a mobile safety application that is used globally for safety events management, hazard recognition and various proactive on-line activities. These processes include lesson-learning, shared learning, intake of innovative ideas arising from the field and an addition of controls and defenses. Both employees and managers undergo routine safety training. We have also implemented internal mechanisms to map, track and manage environmental incidents. Our ‘emergency event management’ methodology, supported by a mobile application with a unique module that was developed specifically for ICL, is practiced regularly within the Company, as well as by specified teams of first responders and other regulatory officials. This enables us to respond quickly to emergency events, as well as to conduct crisis management. We continue to enhance our procedures and measures with the goal of becoming best in class in safety and environmental performance.
Our risk management process is a structured, continuous process, consisting of both periodic and ongoing activities. We have established formal and uniform Enterprise Risk Management (ERM) policies and procedures and conducted a comprehensive risk mapping process throughout our organizational units. We are incorporating a Process Safety Management (PSM) methodology. Our Risk Management focuses on process safety at all sites throughout our Company. To accomplish this, we continue to develop and implement policies and standards guided by the CCPS framework, which include the EU Seveso Directive, OSHA PSM Regulation and UK HSE Control of Major Accidents. Recently, Israel’s Ministry of Environmental Protection adopted the Seveso risk assessment methodology and is expected to require it at our relevant facilities in Israel.
We continuously invest in capital projects towards environmental protection, health and safety and in their proactive management. In 2021, we invested approximately $122 million on environmental related projects, out of which $52 million were in our property, plant and equipment, and $70 in on‑going environmental protection. Over the next few years, we intend to invest significant capital to further reduce our air emissions, treat hazardous materials and reduce our overall negative environmental impact. These include investments required to comply with the Israeli Clean Air Law, European environmental regulation, and other regional environmental regulation. We estimate that in 2022 we will spend approximately $197 million on environment related purposes. For further information, see “Item 3 - Key Information— D. Risk Factors— Securing the future of the phosphate mining operations at Rotem Israel depends on obtaining several approvals and permits from the authorities in Israel” and "D. Risk Factors— As a leading global specialty minerals company the nature of our activities means that we are inherently exposed to hazards relating to materials, processes, production and mining" “, and "D. Risk Factors— Accidents occurring during our industrial and mining operations and failure to ensure the safety of workers and processes, could adversely affect our business”.
ICL Group Limited 92

For further details on regulatory, environmental, health and safety matters, see our “ICL Corporate Responsibility Report 2021” (web-report) on our website at www.icl-group.com. The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Annual Report.
Climate Change and Greenhouse Gas Emissions
The impact of climate change is being recognized throughout our value chain, from farmers exposed to extreme weather events, to higher energy prices in our own plants. We are accelerating our response and actions, due to the accelerating pace of climate change. Climate change is an increasing concern not only to governments and non-governmental organizations, but also to our stakeholders, including our investors, customers, employees and the general public.
We are witnessing an increasing level of new and tightened global regulation of greenhouse gases (“GHGs”). Ultimately, these regulations could impact our operations by requiring us to change our production processes or by increasing our raw-material, energy, production and transportation costs. This will also entail disclosure efforts and costs. For additional information regarding our climate change-related risk management and GHG emissions, see “Item 3 - Key Information— D. Risk Factors— Current and future laws and regulations regarding climate change and greenhouse gas (GHG) emissions, as well as the physical impacts of climate change, may affect our operations and businesses”.
As part of our vision, we have established a decarbonization roadmap to achieve a goal of net zero GHG emissions by 2050. Our medium-term target is to reduce 30% of our Scope 1 and 2 GHG emissions by 2030, (vs. our 2018 baseline). We support the global effort initiated by the Paris Agreement to reduce GHG emissions at a pace that limits global warming to no more than 2.
ICL Group Limited 93

Task Force on Climate-related Financial Disclosures (TCFD)
Introduction
ICL is a leading global specialty minerals company. We acknowledge that the minerals and chemicals sector is a major energy user and emitter of greenhouse gasses with an imperative to transition to net zero. Moreover, the sector can be an important enabler of the low carbon transition through development of innovative products and services. We are committed to identifying, managing and harnessing the risks and opportunities that climate change and the low-carbon transition may bring. One of our expressions of this commitment is our support of the Task Force on Climate-related Financial Disclosures (TCFD).
This report contains our first TCFD disclosures, and it is formatted to align with the structure described in the October 2021 document ‘Task Force on Climate-related Financial Disclosures: Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures’ with the four overarching TCFD recommendations addressed in sections on Governance, Strategy, Risk Management, and Metrics and Targets. We recognize that this is the beginning of a new level of disclosure for our company, and we look forward to enhancing our understanding and management of climate-related risks, and reporting of such through our TCFD disclosures in the coming years.
Governance
ICL’s Board of Directors is responsible for setting ICL’s overall strategic direction, including climate-related matters. The Board acknowledges that climate change is a material governance and strategy issue. Therefore, it has appointed the Safety, Environment, Climate, Diversity, Inclusion and Public Affairs Committee to assists it with fulfilling responsibilities relating to the oversight of climate-related issues, such as climate‑change risk assessment and mitigation plans, installation of renewable energy facilities, site decarbonization plans, implementation of circular economy, achieving water saving targets and the like. For further information, see “Item 6 –Directors, Senior Management and Employs— C. Board Practices—Our Board Committees”.
The Executive Vice President of Operations (EVPO), who is also the Chief Risk Officer (CRO), is accountable for implementing ICL’s climate-related risk assessment policy, and reports to ICL’s Board of Directors on a quarterly basis (through the Safety, Environment, Climate, Diversity, Inclusion and Public Affairs Committee). The financial transition-related risk, which is also managed within the climate-change risk assessment is directed by ICL’s Chief Financial Officer (CFO), who reports to the Audit and Accounting Committee in full coordination with the EVPO.
ICL's Global Sustainability team is responsible for coordinating all ICL’s climate-change-related assessments and reports in accordance with global risk management (GRM).
ICL has also recently appointed two separate management-level committees supported by the global sustainability team and risk management team, for managing both physical and transition climate‑related matters. The purpose of these committees is to identify the potential climate-related risks and opportunities and assess their impact on ICL’s operational and logistics sites, as well as the financial transition climate-related matters, and to determine mitigating actions to minimize ICL’s exposure to these risks. Specific sites and segments at ICL are engaged, as needed. The committees report once every two months to the steering committee, headed by ICL’s Global EVPO and CFO, who then report to the Global Executive Management Committee and Board of Directors.
ICL Group Limited 94


Strategy
ICL’s Board of Directors and senior management are working to enhance the company climate strategy in order to align with the aims of the “Paris Agreement”, to keep global warming to well below 2.
We are taking a systematic approach to reduce our GHG emissions across our global operations. ESG KPIs and targets, including climate related targets, have been embedded in executive measures for success and financial performance-based benefits for key executives.
Informing Current Strategy and Initiatives
Climate risk and opportunities factors are incorporated into our business strategy and operations in order to improve our short, medium, and long-term financial resilience. In alignment with TCFD definitions, physical risks and opportunities are those that occur due to the physical manifestation of climate change – as chronic long term climate changes or as acute episodic weather events. Transition risks and opportunities are those related to the transition to a low carbon economy, including legal and/or regulatory risks such as carbon pricing, market supply and demand, reputation, and technology that support the transition to a low carbon economy.
ICL’s industrial operations continue to innovate, establishing best practices for industry, working to eliminate process inefficiencies and optimizing operations to mitigate greenhouse gas emissions. We have established a dedicated team to implement energy efficiency projects across our plants, throughout the world, as part of our Ambition Creates Excellence (ACE) program. In recognition of the change in emphasis from improving energy efficiency to reducing emissions of GHGs, in 2021 this team refocused its efforts on delivering lower carbon solutions globally, and is working to implement GHG reduction measures, as part of our decarbonization road map. Measures include transitioning to lower carbon fuels for both on-site power generation and process heating; increasing energy efficiency by phasing out inefficient production technologies; streamlining production facilities, and improved efficiency of heat and steam consumption. The team is responsible for increasing the renewable energy component in ICL’s fuel mix.
In parallel, our Global Procurement Organization (GPO) takes part in the effort to purchase and install renewable electricity. This is particularly successful in Europe, where above 70% of the electricity consumed in 2021 was purchased with Renewable Energy Guarantees of Origin. It is also engaging in extensive training to raise awareness among ICL’s suppliers regarding sustainability, transparency and carbon emissions reduction, as part of the TfS initiative.
We are using ICL’s innovation building infrastructure to promote our GHG reductions capacity. ICL’s Research, Development and Innovation (RD&I) organization is establishing both short-term and long-term goals for GHG emissions reduction technologies. Research, redesign and implementation of low carbon solutions are currently being introduced in effort to mitigate process-based and product-based emissions and to meet future needs. In the short term, our RD&I organization will use its existing infrastructure to challenge both internal and external partners to introduce solutions. For longer-term solutions, we will also tap into both ICL’s own RD&I as well as the market at large, through our Open Innovation platforms.
Recent examples include the development of products, such as advanced fertilizers that increase nutrient use efficiency and reduce water consumption, and the production of plant-based proteins as alternatives to meat-based options.
ICL Group Limited 95


Our global finance teams are integrating non-financial KPIs, such as GHG emissions and other ESG KPIs into our financial reporting. This includes creating the necessary data infrastructure (data quality and data management) and the management infrastructure to enable and support proper decision-making processes. This also includes an increase in the transparency of our ESG performance with rigor financial methodologies and metrics. Benefiting from the proper infrastructure, we have been able to take advantage of financial opportunities, such as the Sustainability Linked Loan (SLL) that we secured during 2021.
We support the objective of the TCFD initiative in identifying and responding to the financial implications for our business of both climate-related risks and opportunities. Our newly formed climate-related physical risk and transition teams comprise senior members of the finance and risks teams and will be tasked with making our actions transparent through disclosures that meet the needs of the financial sector and other stakeholders. Building on our existing sustainability programs, we will take action to identify and manage both the potential costs and benefits of climate-related issues to our business; ensuring integration into our risk management and strategic planning processes, resulting in a more resilient strategy.
Risk and Opportunities
Identified Climate Change Risks and Opportunities
Over the past several years, climate change and GHG emissions have been of increasing concern worldwide. Current and potential future laws and regulations governing climate change and GHG emissions present transition risks in the short term and beyond. Carbon taxes and cap-and-trade-emissions schemes are increasingly viewed in global jurisdictions as a way of pricing carbon – a key policy driver for GHG emissions reductions. These policies and regulatory levers may result in additional, potentially financially material, costs to the Company.
Currently, one of ICL Europe's sites, ICL Iberia, is covered by the EU-ETS Emissions Trading System, and, in the UK, ICL Boulby (from January 1, 2021) is subject to the UK Emissions Trading Scheme. There is considerable uncertainty over the future cost of allowances and how allowances might be allocated. Revisions to the EU ETS published in 2021 also include proposals for the introduction of a Carbon Border Adjustment Mechanism (CBAM), designed to prevent carbon leakage from the EU, while in Israel, a new carbon tax is planned to be implemented in the near future. Consequently, it may be expected that, in the short-term, ICL may need to purchase carbon allowances through the specific programs and/or incur additional capital costs for energy and emissions reduction measures. Similarly, carbon taxes could increase the costs of supplied materials and suppliers in the ICL value chain.
In addition, physical impacts including water shortages or changes in water quality, changing sea and temperature levels, increases in storm intensities, as well as changes in the availability of natural resources, could result in damage to facilities or equipment. Physical risks have the potential to financially disrupt operations, upstream raw material supply and downstream distribution. Climate change is expected to increase the frequency and likelihood of extreme weather events, such as floods. For example, ICL’s Dead Sea facilities, are located in an area that has been impacted by floods in the past. Physical risk can also occur when transport barges cannot operate on key transport routes, such as occurred when the water level of the Rhine River dropped. These physical effects may be attributed to climate change.
ICL Group Limited 96

For further information, see “Item 3 - Key Information— D. Risk Factors—Current and future laws and regulations regarding climate change and greenhouse gas (GHG) emissions, as well as the physical impacts of climate change, may affect our operations and businesses”.
Transition-related opportunities for our specialty businesses are illustrative of current and future opportunities created by ICL’s strategy relating to climate change. As part of our strategy to focus on our speciality products, and with typical R&D timelines ranging from 5-15 years, we successfully responded to some of the transitional risks through our product portfolio. One example is our new meat protein substitutes, which were driven by consumer demand (market transition) to reduce the ecological (carbon and water) footprint by consuming less meat. Our substitutes are versatile and can replace animal protein. Another example is ICL’s Fibagro Advance, our peat alternative growing media that uses waste from the timber industry and a thermo-mechanical process to create a unique matrix that improves moisture and nutrient retention with a lower carbon footprint compared to peat and other peat alternatives.
In addition, tracking consumer preferences toward low carbon footprint products (Market Demand Opportunities), we have developed a multi-nutrient fertilizer based on naturally occurring Polysulphate®. Polysulphate® requires no chemical processing, creates no waste products and has less potential to add to global warming than other comparable products. With its low carbon footprint, Polysulphate® is a fertilizer that could help farmers reach their industry or national carbon targets.
We are also researching new upcycling opportunities (Legislation and Regulation - R&D into Product Circularity). For example, the EU’s Circular Economy Action Plan 2020 promotes initiatives around the circular economy and encourages the use and re-use of resources for as long as possible. Expanded Polystyrene (EPS) foam is used in packaging and in insulation of buildings. Insulation EPS contains brominated flame retardants (with high global warming potential) that, due to their restricted use as a Persistent Organic Pollutant in numerous jurisdictions, prohibits their recycling. The ‘Polystyrene Loop’ initiative is driven by 70 members of the polystyrene value chain (producers to converters). ICL is a leading member of the initiative and has developed a technically verifiable method to safely remove brominated flame retardant from high quality construction EPS to enable the EPS to be recycled. This initiative was supported by funding from the EU (Funding for LIFE) to encourage product circularity.
In recognition of the importance of research and development (R&D) for our sector (we have been granted 770 patents in various countries), we also describe our strategic research, development and innovation activity as it relates to climate change in the R&D section below.
Informing Future Strategy
The ICL TCFD program is designed to complement and augment ICL’s existing climate strategy and associated risk management. ICL has applied forward-looking scenario analysis to identify physical and transition climate-related risks and opportunities that could have a material financial impact on the business over short (0-3 years), medium (3-10 years) and long (10+ years) term time horizons.
During 2021, ICL, initiated a high-level climate change scenario analysis to better understand the potential timing and materiality of climate-related risks and opportunities across ICL’s key geographies and business segments. The assessment was completed using relevance weightings and climate data to show the trends by key indicators for specific climate scenarios, considering future timeframes
ICL Group Limited 97

The following timeframes and scenarios were used in the assessment:

Physical risks: 2030 and 2050, using the Intergovernmental Panel on Climate Change (IPCC) Representative Concentration Pathway (RCP) 4.5 (low carbon scenario) and 8.5 (high carbon scenario);


Transition risks and opportunities: 2025, 2030, 2040 and 2050, using the two scenarios ‘Stated Policies Scenario (STEPS)’ and ‘Sustainable Development Scenario (SDS)’ developed by the International Energy Agency (IEA). Additional scenario data was obtained from equivalent scenarios to STEPS/SDS. The IEA scenarios use carbon prices as an input into their modelling For example, STEPS take into consideration existing or announced carbon pricing schemes and in SDS it is assumed that pricing is established in all advanced economies.
The outputs from this process resulted in a set of potential financially material physical risks (Table 1 below) and transition risks and opportunities (Table 2 below).
Physical Risks:
Climate-related physical- risks may be expected to occur under all scenarios but may be more material under the high carbon scenario - IPPC RCP 8.5. Table 1 identifies the headline potentially material physical risks that may affect regions in which we operate, including extreme heat, storms and high winds in the long term (by 2050, under RCP 8.5).
Table 1: Physical risks by region under Baseline and Projected RCP 8.5
LocationShort-term 0 to 3 years (2022 to 2025)Medium-term 3 to 13 years (2025 to 2035)Long-term 13+ years (2035 to 2050)
IsraelExtreme Heat, storm & windExtreme heat, storms and wind, water stress.Extreme heat, storms and wind, water stress
ChinaWatercourse & rainfall flooding, storms & wind, water stressExtreme heat, watercourse & rainfall floodingExtreme heat, watercourse & rainfall flooding
Europe Watercourse flooding, storm & windExtreme heat, watercourse & coastal & rainfall flooding, storms & wind, water stressExtreme heat, watercourse & coastal flooding, storms & wind, water stress, wildfires
USAWatercourse flooding, extreme heat, storms, & windExtreme heat, watercourse flooding, storms & wind, water stressExtreme heat, WC flooding, storms & wind, water stress


* The table above is based on an analysis of ICL’s main sites. The new acquisitions in Brazil that occurred during 2021 have yet to be analyzed as part of the 2021 process.
Mitigation measures currently adopted by ICL at various sites include, but are not limited to, flood management plans, specific insurance policies (e.g., for high winds), emergency response plans, and improved ventilation measures.
These potential physical risks will be further evaluated by ICL as it further develops its TCFD program in the coming years. However, it is noted that the physical risks in Table 1 do not yet consider those that may arise in the value chain, and which might affect future demand for products or on the availability of supplies.
ICL Group Limited 98


Transition Risks and Opportunities:
Transition risks will be experienced as economies transition towards a low carbon / net zero world. In 2021, an initial assessment was performed for the first time at ICL. Under the plausible scenario modelling completed to date, initial potential transition risks and opportunities in the short-medium- and long-term have been identified and are presented in Table 2.
Table 2: Examples of potentially material climate-related transition risks and opportunities for ICL, including planned or existing responses
Risk / Opportunity descriptionKey ICL SegmentsRisk / opportunityPlanned or existing responses
Regulation and Policy particularly in the medium term: Additional costs associated with increasingly stringent climate policy mechanisms, such as carbon pricing, emissions trading and carbon taxes including carbon border mechanism advancements.AllRisk
Measures to reduce industrial CO2e intensity, such as internal carbon pricing, fuel switching, electrification, production process optimization and energy efficiency
Regulatory and Policy, Market Demand and Reputational, particularly in the medium term: Increasing requirements to invest in renewable electricity generation, storage and purchasing, due to external policies and internal targets.
Investment in site's operational improvements, such as energy efficiencies and optimization of production processes.
All, particularly Potash and Phosphate Solutions
Risk
Measures to transition away from unabated natural gas use, such as fuel switching, electrification, process optimization and energy efficiency
Market demand in the medium and long term - Decrease consumer demand for some of ICL’s productsAll, mainly IP and Phosphate SolutionsRisk
Reviewing potential risks.
RD&I is working to find alternatives and new opportunities
Regulatory and Policy particularly in the medium term:
Increased shipping transportation costs as a result of measures (investments/regulatory instruments) implemented to increase efficiency of the global shipping fleet
AllRisk
Explore using low-carbon shipping methods and suppliers in the global supply chain
Market Demand in the short to medium term:
Increased consumer demand for ICL’s low-carbon products driving up revenue
AllOpportunity
Investment into R&D for low-carbon fertilizers, as well as meat and dairy substitutes
Increase in target revenue for low-carbon products – aligning with the trend for product circularity and life cycle regulation
Creating procedures to collect, analyse and manage GHG data from all operations


ICL Group Limited 99


Risk / Opportunity descriptionKey ICL SegmentsRisk / opportunityPlanned or existing responses
Regulation and Policy driving Market Demand and Technology Innovation in the short to longer term:
Increase in renewable energy generation leading to a reduction in emissions and operating costs
Dependent on geography, all particularly Potash and Phosphate SolutionsOpportunity
Energy efficiency
Increase in renewable energy generation or procurement
Regulation and Policy driving Market Demand in the short to medium term:
Increased electrification of industrial processes leading to a reduction in emissions and operating costs
All, particularly PotashOpportunity
Electrifying fossil fuel-based industrial processes

ICL acknowledges that the application of a scenario analysis to climate-related risk is a relatively new and rapidly evolving area. As part of our TCFD program, we will continue to enhance our analysis capabilities to reflect developments in modelling, policy, emissions pathways and wider stakeholder expectations. The outputs from further scenario analysis work, including carbon price trajectories, will be used to enhance ICL’s existing business planning processes and inform strategy. They will also be used as an engagement tool to improve understanding of climate related risks and opportunities within the Company. In this way, ICL will seek to integrate climate-related issues into its regular financial processes.
Risk Management
ICL has established formal and uniform enterprise risk management (ERM) policies and procedures that follow the COSO1 risk management methodology. These policies and procedures have improved management processes for identifying, assessing and mitigating ICL’s top-rated risks. ERM activities utilize an integrated business framework to embed risk management into the Company’s business culture. Identified Individual risks, for example, related to extreme weather at individual locations, are prioritised with associated mitigation plans, often involving significant capital spend, to ensure long-term future resilience. This integration is designed to increase the performance of the different ICL business units, to support corporate efforts, to minimize exposure to and potential concentration of risks, including those related to climate-change, and to enable strategic achievements. ICL’s continuing review of the climate-related elements within its ERM, including those related to TCFD, will guide ICL’s future responses to, and risk management of, climate change impacts. This will include support for the senior management committees charged with managing both physical and transition-related climate risk.

1 COSO Committee of Sponsoring Organizations of the Treadway Committee
ICL Group Limited 100


Metrics and Targets
Metrics 
The GHG emissions reported below include all direct (“Scope 1”) and indirect energy-related (“Scope 2”) emissions of the primary known greenhouse gasses, including: CO2, CH4, N2O and HFCs/HCFCs and SF6. During previous years reported, there was no consumption or emissions of PFCs or NF3. Direct emissions include emissions from stationary and mobile fuel combustion, refrigerants, non-energy related process emissions and emissions from onsite wastewater treatment facilities. Indirect energy‑related emissions include the calculated emissions resulting from consumption of purchased electricity, steam, heating and cooling.
The table below presents ICL’s greenhouse gas emissions for the years 2021 and 2018 (the baseline year). ICL followed the GHG Protocol and ISO 14064 standard methodologies. An independent assurance process was performed by an external expert, which included verification and validation in accorded with ISO 14064-3 standard for greenhouse gas statements.
Scope 1 & 2 GHG emissions
  Year 2021 (1)Year 2018 (2)VS 2018
Scope 1
CO2e tons (thousands)
2,1582,220(2.8%)
Scope 2
CO2e tons (thousands)
380720(47.2%)
Total scope 1+2 GHG emission
CO2e tons (thousands)
2,5382,940(13.67%)

 

(1)Emissions from facilities acquired during 2021 are not included in the current greenhouse gas measurements.

(2)2018 is the baseline year for ICL’s decarbonization roadmap.
ICL expects to further refine its Scope 3 emissions data collection procedures over time and to include data on Scope 3 emissions in future Disclosures.
ICL’s 2021 Scope 1 & 2 emissions are 13.67% lower than the 2018 emissions, on course to meet the 2030 target successfully. 
A reduction in emissions was achieved over the period 2018 to 2021 through the commissioning of the Sodom CHP (Combined Heat and Power) plant, which now supplies almost all electricity consumed by ICL’s sites in Israel. The electricity generated is of much lower carbon intensity compared to the less efficient oil-fired power plant it replaced, and the majority of the heat generated in combination with power generation is used in the Sodom production facilities, displacing natural gas previously used solely for process heating.
Further reductions mostly resulted from a decrease in Scope 2 emissions due to ICL’s decision to purchase renewable electricity for the majority of ICL sites in Europe.
ICL Group Limited 101

R&D
ICL continues to invest in research and development activities to meet many of the challenges posed by climate change, and to date has lodged over 770 patents, some of which are a response to climate change. Examples of the R&D that ICL is currently engaged in include:
The development of “next generation fertilization” to promote nutrient use efficiency, biodegradable coatings, nutrient sensing, growth enhancers, nitrogen fixation and soil health.
Food technology developments in the areas of food texture improvement, stabilization, salt reduction, shelf-life extension and the development of alternative, plant-based proteins, including meat substitutes.
Studies and development in the areas of E-mobility and sustainability, focusing on energy storage solutions, hydrogen carriers for fuel cells, urban mining and lithium battery recycling.
The development of novel materials, including flame retardants, paints & coatings additives and biocides.
Circular economy initiatives, including developments of waste-to-product solutions, waste recycling and efficiency improvement.
ICL’s Industry 4.0 program, which develops IOT concepts in manufacturing, safety and environment, machine learning and artificial intelligence for manufacturing optimization and product development.
ICL’s Digital Agriculture program, which aims to leverage ICL’s digital platforms and data-driven solutions to create an agro-professional community, enabling sharing of information and knowledge between growers and agro-professionals, retailers, academia, and food producers to extract the most value from agriculture.
Targets 
ICL has established a decarbonization roadmap to achieve net zero GHG emissions by 2050. The near-term milestone is to reduce Scope 1 and 2 GHG emissions by 30% by 2030, when compared to a 2018 baseline. ICL supports the global effort initiated by the Paris Agreement to reduce GHG emissions at a pace that limits global warming to no more than 2℃.
ICL has already implemented several measures included in its decarbonization roadmap, including:
Commissioning of a high efficiency gas-fired combined heat and power (CHP) plant at ICL’s Sodom facility to supply ICL’s facilities in Israel, replacing older, oil-fired power generation systems.
Beginning the transition to the procurement of renewably generated electricity, across all ICL sites, starting with the procurement of renewable electricity for ICL sites in Europe.
Other measures in the Decarbonization Roadmap for future implementation include:
Phasing out oil shale-firing for power generation at ICL Rotem (Israel), in favour of a more efficient gas-fired power generation plant with much lower GHG emissions.
Improved measurement of GHG emissions, including digital dashboards for more accurate and up-to-date reporting of emission at site and product levels.
Eliminating or reducing process GHG emissions.
ICL Group Limited 102



Converting ICL’s production plants in Israel to the use of natural gas in place of higher carbon intensity energy sources such as fuel oils.
Increasing energy efficiency through the phasing out of inefficient production technologies, streamlining its production facilities, increasing the efficiency of its consumption of heat and steam, recovering heat where possible.
Reducing the use of electricity for lighting and air conditioning through the implementation of more efficient technologies.

Targeting 50% of electricity to be sourced from renewable energy, mainly at sites in Europe and North America. Renewable electricity supplies and market mechanisms such as power purchase agreements are not yet available in other parts of the world, but ICL will seek to increase its share of renewable electricity as it becomes available.
 
Planning for installation of solar photovoltaic (solar PV) electricity generation systems in all available and appropriate areas within the operational boundaries of ICL sites in Israel, Spain, Germany and other countries.
Use of carbon pricing consideration in product development and investment decision-making, in order to raise internal awareness, promote better life-cycle costing decisions, and better prepare our business for future emissions trading schemes.
Energy
We are engaged in efforts improve our energy metrics by increasing our use of clean and renewable energy, utilizing more efficient electricity production units (natural gas-based cogeneration) and implementing a multi-year energy efficiency program.
Renewable Energy
Our Company has created a cross-organizational team which includes representatives of our Global Procurement Organization (GPO) and Operational Excellence unit. They are responsible for increasing the renewable energy component in ICL’s fuel mix.
We have already invested in transitioning to renewable energy (externally-supplied electricity) for the majority of the electricity consumed by our European sites. These market-based emission reductions have made a significant impact on our emissions generated in Europe. This approach will be rolled out in North America during 2022, although the market for power purchase agreements and other similar renewable electricity supply contract mechanisms is not yet as developed as in Europe. In other regions where we operate, there are currently no mechanisms to directly procure renewable energy.
In addition, we conducted several feasibility studies across Europe and Israel during 2021 to identify which of our site assets are suitable for Photo-Voltaic (PV) installations. Several statutory challenges are delaying the implementation of PV in Israel. Certain projects have overcome the hurdles and been approved, and construction is expected to commence in early 2022. During 2022, our North American operations will be similarly assessed, and our other main sites globally (predominantly in Brazil and China) will be assessed in 2023.
Long-term, we are looking at projects that are compatible with our net zero (by 2050) goal. As we expect these types of projects to include major infrastructure challenges, we are initiating them now. One of the major projects that we are currently launching is a PV plant combined with Green Hydrogen production at our Sodom site (green hydrogen is defined as hydrogen produced by splitting water into hydrogen and oxygen using renewable electricity).
ICL Group Limited 103

Natural Gas
In 2010, we made a strategic transition to increase our use of natural gas (NG) instead of heavy fossil fuels (fuel oil, kerosene, diesel and shale oil) to power our largest production plants in Israel. The transition is nearly complete, with more than 95% of ICL Israel’s main energy-consuming sites converted to NG. This transition has also significantly reduced our emission of air pollutants (such as NOx and PM) in the areas surrounding our sites.
The remaining step in this transition is to transition away from the combustion of shale oil at our Rotem Israel site. In 2021, we ceased extracting shale oil minerals and commenced the construction of a new NG-fired turbine installation. We expect this new facility to commence operations in 2022, significantly reducing our emissions of GHG (and other pollutants) at the Rotem Israel site.
For more information regarding natural gas agreements, see Note 18 to our Audited Financial Statements and "Item 3 – Key Information - D. Risk Factors - Our operations could be adversely affected by price increases or shortages with respect to water, energy and our principal raw materials".
The European Energy Efficiency Directive (EED)
In July 2021, the European Commission published a proposal to recast the EU Directive on Energy Efficiency, aimed at further stimulating efforts to promote energy efficiency and achieve energy savings in the fight against climate change. This initiative forms part of the EU’s package of measures aimed at reducing net greenhouse gas emissions by at least 55% by 2030, with an ultimate objective of becoming climate neutral by 2050. Currently, the EED requires an 0.8% per year energy efficiency improvement through the end of 2023, but the proposal seeks to almost double this figure to 1.5% as of 2024 until 2030. The proposal requires each Member State (MS) to determine their own national contribution (based on a formula of objective criteria and benchmarks), which reflects national circumstances. We fully expect that each MS will develop its own response to these proposed changes to the EED, and the Company will develop plans and strategies to comply with these requirements for all our European operations going forward.
Air Quality
Reducing air emissions is a central goal of our environmental strategy. We are taking steps to reduce air emissions by implementing emission prevention solutions and switching to cleaner fuels. Our sites regularly monitor their emissions of pollutants to better manage our operations.
Israel
In Israel, air emissions from major industrial operations are regulated by the Clean Air Law (hereinafter - the Law) which aims to improve air quality, prevent, and reduce air pollution by implementing both prohibitions and obligations, and protect the health and quality of life of human beings and the environment. The Law addresses emission sources (including all our production plants in Israel) and is intended to serve as a platform for implementing the regulatory principles currently in place in the European Union (EU), specifically the principles of the IED (The Industrial Emissions Directive) that was adopted by the EU.
ICL Group Limited 104


Our plants in Israel that fall under the definition of Emission Source Subject to Licensing Requirements, have received air emission permits. In the event of deviations from the emission permits’ conditions, we could be subject to administrative enforcement measures, as well as to criminal liability. In addition, certain restrictions on our operations and significant capital investments may be imposed on our Company. In order to comply with the emissions permits granted under the Law, we have made significant investments, and will continue to do so as necessary. As a result, some of ICL’s air emissions have decreased considerably.

DSW and DSM will implement major dust reduction projects over the next few years. Our other production sites in Israel will also increase their efforts to reduce particle emissions.

In June 2021, Rotem Israel's emission permit was renewed by the Israeli Ministry of Environmental Protection (MoEP), which is valid until September 2023. The renewed permit reflects an updated outline of requirements. Postponement in the execution of a limited number of projects was granted within the framework of an administrative order under Section 45 of the Law.
By the end of 2021, Rotem Israel had completed 77 of 194 specific tasks required by the permit. Rotem Israel is striving to implement the requirements of the permit through a multi-year plan that includes several significant emissions reduction projects. Management still expects difficulties in meeting the execution schedules of a limited number of projects and accordingly continues to work with the MoEP to find a satisfactory solution regarding the timing of the investments, taking into account the impact of uncertainty surrounding Rotem Israel's activity, as far as the implementation of long-term projects is concerned. For more information, see Note 18 to our Audited Financial Statements.
Europe
In Europe, emissions are regulated under the EU IED – Industrial Emission Directive, as well as regional and local regulations. Preventive measures and Best Available Technology (BAT) are applied. These regulations are translated to national legislation. Emission limit values for relevant substances are included as part of the authority's approval. Rules guarantee protection of air, soil and water. In addition, in Europe relevant emissions control is conducted by authority inspection through independent technical supervisory associations and by self-inspection. Relevant plants in the EU are subject to the European SEVESO directive, which requires regular safety inspections and prepare reports.
Americas
Air emissions in the Americas are managed through operating permits issued by the relevant agency responsible for each individual site. In the US, air permits are issued under the authority of the US Environmental Protection Agency’s (EPA) Clean Air Act. In Brazil, air emissions are managed under the site’s operation license issued by the relevant state environmental agency.
China
Air emissions in China are regulated in accordance with the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution and the Regulations on the Management of Pollutant Discharge Permits.

SBCL – Bromine leakage occurred during January 2022. According to the guidance of local authorities, production onsite was halted. Corrective actions were taken. Production activity is expected to resume by mid – March, following the approval by authorities.
ICL Group Limited 105


Water
We regard potable water as a high-value natural resource. Several of our major production sites are located in water-stressed regions. Water conservation is therefore an inherent part of our business culture. Our production facilities maintain various water conservation projects, including using brackish water and recycling treated wastewater. We track the consumption of water at our facilities worldwide and promote the implementation of water efficiency projects.
We expect potable water to become scarcer in the future across the globe. As water scarcity becomes a pressing issue due to climate change and other factors, we expect greater and stricter regulation of water consumption and wastewater quality. We also anticipate that we will need to invest additional resources to enhance our water efficiency and wastewater quality at several of our plants.
Several of our major production facilities are located in Israel. The country, though located in a water-stressed region, manages its water resources efficiently. Desalination plants and Reverse Osmosis (RO) plants are major contributors to the country’s potable water resources, thereby reducing potable water scarcity in the country. In addition, industrial facilities, such as our facilities in Sodom, are allowed to use non-potable water where possible.
Further information about water related issues in Israel, see Notes 17 and 18 to our Audited Financial Statements.
Wastewater, By-products, Waste & Hazardous Waste
We track and manage our waste streams and take various steps to reduce waste. We identify and seek to maximize potential reuse and recycling of relevant waste streams and are proactive in searching for ‘circular economy’ opportunities. For further information, see the “Circular Economy” section above. During production processes at our facilities, industrial liquid and solid wastes are produced. Storage, transportation, reuse and disposal of waste are generally regulated by governmental authorities in the countries in which we operate. Wastewater quality and quantities must comply with local regulations and with permits at relevant sites. We strive to implement zero discharge policies where applicable. Various production sites have adapted their treatment systems to the standards applicable to them. We track and manage our waste streams and take various steps to reduce waste or identify and maximize potential reuse and recycling of relevant waste. Most of the waste is either directly treated by us or treated by external certified vendors.
Although we strive to reduce the likelihood of wastewater leakages or solid waste and hazardous materials unexpected releases, we may not always succeed to prevent such incidents, which may occur, among other things, due to various factors that are not within our control. In the event of difficulties in the reuse or disposal of waste generated in our facilities, interruptions or production stoppage may occur and significant costs may be imposed. If we cannot properly mitigate and reduce the exposure, our operations may be adversely and materially affected.
For further information, see “Item 3 - Key Information— D. Risk Factors— As a leading global specialty minerals company the nature of our activities means that we are inherently exposed to hazards relating to materials, processes, production and mining" and “Item 3 - Key Information— D. Risk Factors— Our ability to operate and/or expand our production and operating facilities worldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations”.
ICL Group Limited 106

Israel
Liquid and solid waste and other emissions are regulated by multiple regulations. Our plants in Israel implement waste monitoring and management measures. Each plant is required to inform the authorities on the amount of waste and treatment method for every waste stream under Israel’s PRTR (Pollutant Release and Transfer Register) regulation. Wastewater regulations, including effluent limits, are regulated by the MoEP and partly by local authorities.
Pursuant to the conditions set by the MoEP in their Toxins Permits, our plants in Israel have conducted historical land contamination surveys and submitted them to the MoEP.
 
ICL Dead Sea (DSW) - Salt by-product is transferred to a large open-air depot, in proximity to DSW’s site. The open-air depot's dimensions (height and area) are limited by statutory requirements. DSW is examining alternatives for salt storage/treatment.
Rotem Israel – The site is implementing a master plan for wastewater treatment, with the principal goal of reducing effluent quantities, by converting some effluents into products, wastewater recycling, reducing water consumption, treatment/neutralization of wastewater and restoration of wastewater ponds. The plan currently includes additional wastewater streams created by air emission purification processes, as required by the Israeli Clean Air Law.
As part of its treatment of liquid and solid waste, the site treats gypsum waste by ponds and storage. In September 2021, the authorities approved a gypsum storage comprehensive plan that would allow the Company to store gypsum for the next 30 years. In addition, the plan allows the use of “Pond 5”, which has been operating since 2018, until the end of its operational life, expected in 2024. The Company began planning the remediation of gypsum Ponds 1 to 3 that were used by Rotem Israel in the past. In accordance with current regulatory requirements, future expansion of the storage piles will need to be positioned on new protective infrastructure. Another requirement is the establishment of restoration methodologies for these large storage piles. Rotem Israel is planning to comply with these requirements and is striving to find alternative uses for the gypsum with external industry partners. For further information, see Note 18 to our Audited Financial Statements.
The Rotem site has also completed the implementation of a multiyear master plan to prevent ground pollution by fuels or oils.

Neot Hovav - Pursuant to the requirements of the MoEP, in the coming years our Neot Hovav site will be required to treat existing hazardous waste (historical). This waste is stored in a designated defined area on the site's premises, in coordination with the MoEP. Some of the currently produced waste is also stored in this area. Treatment of this waste is partly conducted through a combustion facility (Bromine Recovery Unit), which recovers hydro-bromine acid. Additional waste quantities are sent to external designated treatment facilities. Once the area is cleared, the Company will be required to conduct soil surveys.  For further information, see Note 17 to our Audited Financial Statements.
ICL Periclase - The site is working to reduce historic Magnesia waste, stored in a designated waste area, and to reuse it for the benefit of a circular economy. ICL Periclase is implementing a project that uses magnesia powder, a non-hazardous material, to fill sinkholes in the Dead Sea region. The project is expected to be completed by January 2023.
 
ICL Haifa (F&C) – Treated wastewater of the site's facilities flows into the Kishon River, according to a permit issued by the MoEP. To comply with the standards covering treatment of the wastewater, the site, in coordination with the MoEP, is conducting a project to channel the treated wastewater underground. This project is in advanced stages.
ICL Group Limited 107


Following laboratory tests that were performed at the site, the MoEP raised a concern regarding local underground water pollution. Therefore, the ICL Haifa site was given two alternatives - sealing the existing runoff pond, or building a new pond. After a thorough examination of the two alternatives, the site decided to build a new pond to reduce the risk to which the plant is exposed.

The production process of phosphoric acid produced in the 1990’s at a facility which has since been shut down, has created a by-product in the form of a gypsum pile which is stored at the site. The site is working in coordination with the MoEP and taking the necessary actions according to regulatory requirements, including the Toxins Permit issued to the site.
Europe
Liquid and solid waste and emissions are regulated under the European IED – Industrial Emission Directive. The Company implements waste monitoring and other management measures. It is  obligated to inform the authorities of the results. Wastewater regulations, including effluent limits, are regulated by states and partly by communities. We are subject to provisions regarding the avoidance of pollution and conditions for assessing compliance with emission limit values.
Wastewater is partly pre-treated and sent to municipalities and third parties for final treatment before discharge, or at levels that can be discharged to surface waters without treatment. Production processes, in general, do not generate significant volumes of direct solid waste. In event that solid waste must be disposed, we strive to perform in accordance with relevant European requirements.
ICL Boulby - All wastewater leaving our site in the UK is permitted according to the UK’s Environment Agency. The site's wastewater consists of extracted sea water, mine brines, gathered surface rainwater and water treated at the on-site sewage plant. Multiple parameter limits are imposed on the site by the wastewater permit, and no compliance breaches have occurred since the site’s transition to producing Polysulphate®, and, in fact, wastewater amounts have been reduced considerably.
 
ICL Iberia - A multi-year program is underway to restore large salt piles, while paying close attention to the issue of wastewater drainage and sludge treatment. In April 2021, the Company signed an agreement with the ACA, Catalan Water Agency, for the construction and operation of a new collector. The new collector is infrastructure required for the removal of brine water that will be used for restoration, as well as for production. For further information regarding the restoration plan and the agreement for the construction and operation of the collector in Spain, see Notes 17 and 18 to our Audited Financial Statements.
ICL Iberia has also successfully passed the audit for the certification of UNE 22470 and 22480 standards, which accredited ICL Iberia as a sustainable mining company. ICL Iberia is also engaged in a program regarding non-mining waste management to valorize and reduce its waste, in accordance with local and European waste management.
ICL Group Limited 108

Americas
Liquid and solid wastes at our Americas sites are managed in accordance with country and state-specific regulatory requirements. In the US, solid and hazardous wastes are regulated by the Environmental Protection Agency’s (EPA) Resource Conservation and Recovery Act. In Brazil, waste is managed under the site’s operation license issued by the relevant state environmental agency.
ICL follows a qualification process for waste vendors who assist us in ensuring that waste is properly profiled, treatment standards are followed, and disposal processes meet regulatory requirements. Wastewater is managed through site industrial discharge permits that are managed through federal, state or local agencies. Wastewater treatment is mainly focused on chemical treatment. Wastewater treatment systems are maintained on a regular basis.
ICL US Gallipolis Ferry - The site operates under a National Pollutant Discharge Elimination System (NPDES) Permit which regulates water discharge from point sources and is renewed every 5 years. The site operates a large Wastewater Treatment Plant (WWTP). Discharge limitations, set by the West Virginia Department of Environmental Protection (WVDEP), are becoming stricter, placing a challenge on the treatment capabilities for some parameters being treated within the current WWTP. Therefore, in 2021 the site installed new technology for its wastewater treatment processes. The site has been very active in pursuing recycling initiatives, which helped achieve a landfill to recycling ratio of 50%. Additionally, the facility entered into a Voluntary Remediation Agreement (VRA) with the former owner of the facility, and the WVDEP. The active remediation has been completed and is being reviewed by the WVDEP for approval.  Currently, there is ongoing periodic groundwater sampling, analysis, monitoring, and reporting to the WVDEP, per the VRA.
China
According to the Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution and the National Catalogue of Hazardous Waste, solid waste is collected, stored and transferred. General industrial solid waste is entrusted for comprehensive utilization by qualified organizations, and hazardous waste is entrusted for treatment by organizations with a Hazardous Waste Business License issued by the Department of Ecological Environment of Yunnan Province.

YPH- All wastewater at YPH, after physical or chemical treatment, is reused in the production system with zero discharge.
LYG - During 2021, ICL ceased operations at its LYG plant following a request by the Chinese authorities to either relocate the plant or cease its operation. As part of the closure process, soil surveys were conducted. Once concluded, ICL is expected to receive compensation due to the closure.
ICL Group Limited 109

Ecological Impact
We manage our mineral extraction sites according to local regulations and depend on concessions that are granted to us. Our broad and varied operations cover the entire lifecycle of our products, from the initial production of raw materials through manufacture of the final product. This is becoming more challenging as the population grows in proximity to our sites. To try to minimize any unexpected disturbances by our facilities to their surrounding communities, we have increased our efforts to take precautions and safety measures in our activities, especially those which involve hazardous materials.
We aim to minimize the ecological impact of both our mining and production activities, beginning at the initial stage of planning, through the implementation of recommendations and finally by monitoring and minimizing their impact. We continuously implement relevant operational methodologies and necessary technologies to prevent unexpected ecological impact. In the event of an ecological impact, we strive to mitigate and remediate the impact, in accordance with best practices and regulatory requirements, including by coordination with the relevant local authorities. For further information, see “Item 3 - Key Information— D. Risk Factors— As a leading global specialty minerals company the nature of our activities means that we are inherently exposed to hazards relating to materials, processes, production and mining".
It should be noted that our Sodom production facility is located in the Jordan Rift Valley, or Syro-African Depression, a seismically active area. For further information, see “Item 3 - Key Information— D. Risk Factors— The locations of some of our mines and facilities expose us to various natural disasters, including as a result of climate change".


ICL DSW – Due to the negative water balance, the water level in the northern basin of the Dead Sea is decreasing. The receding water levels over the years has required ICL to reposition its pumping station northwards, in order to enable continued operations in the Dead Sea region, which also enables the existence of tourism infrastructure. The P-9 pumping station and feeder canal crossing the Tze’elim stream were constructed in order to maintain operational continuity. The Tze’elim stream alluvial fan is one of the largest and most developed of all the surviving fans in the area, and therefore it is important to preserve it and to protect the biodiversity existing in this habitat. ICL reached an agreement with environmental authorities and organizations, according to which, seven culverts were constructed above the excavated canalto allow flood waters to flow through the original flow channel, without damaging the feeder canal,while maintaining the braided channel fan pattern. In addition, the culverts serve as an ecological corridor, by providing passageways for animals. ICL periodically reviews field data and makes adjustments in accordance with the findings. For further information, see “Item 4 – Information on the company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations- Dead Sea”.

ICL Iberia - ICL Iberia’s past activities have resulted in the salinization of some water wells in the Suria and Sallent sites. Compensation to the relevant owners is under discussion. For more information, seenote 17 to our Audited Financial Statements.
 
Rotem Israel - In 2017, Rotem experienced an environmental accident in which approximately 100,000 cubic meters of acidic phosphogypsum liquid were released into the surrounding environment, as a result of a breach in its Number 3 detainment pond. The liquid entered the nearby Ashalim Creek (Nahal Ashalim), which flows through an area designated as a nature reserve. To the best of our knowledge, as of the reporting date, criminal investigation of the event is still underway. We took intensive actions to restore the creek, to its state prior to the accident, in full cooperation with the relevant authorities.
ICL Group Limited 110



Following the incident, the Israel Nature and Parks Authority (INPA) closed the nature reserve to the public. We conducted a risk assessment process of the creek, together with leading experts. The assessment was meant to assure that the creek’s hiking trails can be reopened and do not pose risks to hikers' health. The assessment was completed in late 2019 and the results were presented to the authorities. All risk levels were found to be acceptable, and in June 2020, the Ashalim Creek was reopened for hikers. For further information, see Note 18 to our Audited Financial Statements.
Rotem Israel is in a process to remediate its gypsum ponds, based on a remediation plan that was established following the ‘Florida Standard’ and approved in 2020. The remediation work, which commenced in September 2020, was stalled due to discussions with the MoEP regarding the approval of landscape restoration. Discussions are still on going, but Rotem Israel expects to resume remediation process during 2022. In addition, Rotem Israel is designing a remediation action plan for its acidic wastewater ponds.
In 2020, an application for a class action was filed against the Company, according to which, discharge, leakage and seepage of wastewater from Rotem's Zin site, allegedly caused various environmental hazards to the Zin stream, which resulted in damages. For future information, see Note 18 to our Audited Financial Statements.
Part of the environmental challenges Rotem Israel is facing and handling, including certain environmental class actions against the Company, pertaining to environmental damages originating in the period that the Company was owned by the Israeli government, prior to its privatization.
ICL R&D Beer Sheva - A soil survey was conducted. The initial results of the survey point to small amounts of contamination. ICL will act in accordance with the survey's findings, and related MoEP guidelines.
lCL Periclase - In 2021, brine, a non-hazardous substance, leaked from a ruptured pipeline in a nature reserve. No significant damage was recorded, and we are in the process of remediating the area. We committed to testing and replacing the necessary pipeline components, in order to prevent future occurrences.
ICL Group Limited 111


Biodiversity
Biodiversity, also called biological diversity, is the variety of life found in a place on Earth. A common measure of this variety, called species richness, is the count of species in an area. We recognize the need to consider environmental factors when using land and managing our operations, particularly in ecologically sensitive areas, including areas with unique cultural value. We are committed to ongoing consideration of the impact of our activities on biodiversity in our decision making.
Examples regarding our management of biodiversity at some of our mining sites includes the following:
ICL DSW - Sodom Saltmarsh Lake. The Ashalim reservoir, located south of the ICL’s Dead Sea site, is a wet habitat, situated within a typical arid habitat. It is abundant with rich biological diversity. ICL Dead Sea, whose excavations in the region created this wet habitat, takes extra measures to preserve it and invests in making this unique habitat accessible to the public. In the past, the Sodom salt flats area was a resting stop and habitat for migratory birds. Today, due to changes in the land’s use – to agriculture, residential and industrial purposes, almost no salt flats remain. These flats have unique characteristics with high salinity in the soil and unique species that have adapted to these extreme conditions. The salt flats in Israel are a rare habitat and have been shrinking over time. The Sodom Saltmarsh Lake, initially created as a result of ICL Dead Sea’s excavation activities, has become a salt flat substitute. The lake was created from a rise in groundwater in the excavated area. Over the past few years, the lake has had relatively good water quality year-round. We also started monitoring the lake, using sensors, to continuously measure its water quality. Vegetation was planted in a stable water environment. The lake is now used as a resting spot for migrating birds and as a nesting site for a wide range of species.

ICL Boulby - Adjacent to ICL Boubly’s mining facilities, and within its operational area, are non-developed turfs where important habitats and species flourish. Most notable are the woodlands at Mines Wood and Ridge Lane Wood, near Dalehouse. These are some of the most wildlife-rich woodlands in the Northeast England / Yorkshire areas. The woodlands are home to invertebrates, birds and mammals. For over a decade ICL Boulby has worked with the Industry Nature Conservation Association (INCA) to monitor and manage the wildlife that exists in proximity to the mine. Key to this process is a Site Biodiversity Action Plan (Site BAP), operated by ICL Boulby within its operational area. The site BAP is designed to conserve the key habitats and species which live at the site, and is assisted by INCA annually.For further information see: “Item 4 – Information on the Company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations” and Note 18(c) to our Audited Financial Statements.
ICL Group Limited 112

Hazardous Substances
Some of the substances used at our facilities across the world (such as raw materials, etc.) are considered as hazardous substances. These substances require governmental approvals and registration. Relevant safety measures and procedures for storage and handling are implemented and maintained. Measures are taken to reduce the likelihood and the potential severity of incidents in case of an exposure to hazardous materials. This includes risk assessment, training, personal protective equipment (PPEs) and other relevant mitigation measures for employees and contractors. In addition, suppliers, transporters and vendors are qualified for proper handling of these materials.
Israel
As part of our operations in Israel, we produce, store, transport and use materials that are defined as hazardous materials according to the Israeli Hazardous Substances Law, 1993. Handling such substances requires a special permit for hazardous material from the MoEP ("Toxins Permit") that is renewed annually. All our Israeli companies have a Toxins Permit, as required by law, and they operate according to the special conditions defined in these permits. Leakage or loss of control of these materials could result in an environmental incident and cause damage to people and/or to the environment. We take measures to prevent such occurrences, and, at the same time, we prepare for such occurrences by means of emergency teams training and appropriate equipment for dealing with these types of events.
Europe
Some of the substances used in our European facilities (such as raw materials) are considered hazardous substances. Required approvals and registrations for these substances are secured and maintained. Relevant safety measures and procedures for storage and handling are also implemented and maintained. In addition to these measures, we only use qualified suppliers and transport companies, while qualification and training of employees is conducted on a regular basis. All requirements based on the GHS (Globally Harmonized System of Classification, Labelling and Packaging of Chemicals) are acquired and maintained.
Americas
Hazardous substances are utilized at ICL’s facilities in the Americas as raw materials and can also be found as finished products. Where required, registrations for the storage, handling and transportation of these materials are secured and maintained. Measures are taken to reduce the likelihood of releases of hazardous materials by way of supplier and transporter qualification, as well as training of employees, contractors and vendors on the proper handling of these materials.
China
Hazardous substances are utilized at our facilities in China as raw materials and can also be found as finished products. Where required, registrations for the storage, handling and transportation of these materials are secured and maintained. Measures are taken to reduce the likelihood of releases of hazardous materials by way of supplier and transporter qualification, training of employees, contractors and vendors on the proper handling of these materials.
ICL Group Limited 113


Limitation Regulation and Registration of our Products
As a global specialty minerals company, we are subject to multiple rules and regulations in terms of product safety. We ensure that the substances we produce, and sell, are handled in accordance with all such rules and regulations throughout their life cycle. These rules and regulations, among other things, impose limitations on the use of specific substances and products, require us to register and label some of our products and more. We continuously monitor these rules and regulations and take the necessary operational measures to ensure that we remain in material compliance with them.
New European Fertilizer Product Regulation
 
One of the future regulatory changes that may impact our products is the new European Fertilizing Product Regulation (FPR, formerly known as NFR), which was published in in 2019, with an effective date of July 2022. FPR covers a broad scope of materials, including all types of fertilizers, liming materials, biostimulants, growing media, soil improvers, inhibitors and other blends of these materials. The new future European Fertilizers Regulation, which is still in progress, will requireregulation requires fertilizer producers to monitor new contaminating elements in fertilizer products and for this purpose, additional analytical and monitoring methods will be incorporated to comply.products. In addition, pursuant to the new Law,FPR, fertilizer producers will have to demonstrate the ability to track their products to ensure thetheir quality thereof in the production and supply chain.
In Europe the legislative process for the New Fertilizer Regulation ("NFR") is still in progress. The negotiatorslabelling of the EU Parliament, Council and EU commission have made a compromise text which was approved by the Coreper (Committee of the Permanent Representatives of the Governments of the Member States to the European Union). Further approvals are needed (e.g. from the Parliament) before it is finalized. Fertilizers Europe (the branch organization of major fertilizer manufacturers in Europe), of which ICL is a member, expects that the NFR could be implemented from September 2019.
The NFR has a broad scope from all types of fertilizers, liming materials, biostimulants, growing media, soil improvers, inhibitors and blends of these materials. The impact to ICL will be considerable. Not only the labelling of products will need to change, and the wayconformity assessment methodologies will need to assess conformity, but alsobe updated. Moreover, new tolerances andtolerance levels offor fertilizer contaminants are included in the NFR. EspeciallyFPR. One focus area is the level of cadmium forin phosphate containing fertilizers was a point of long discussions. The current version is requiring a maximum cadmium level of 60 mg/kg P2O5 which was the level supported by the majority of the European fertilizer industry. Alsofertilizers. In addition, FPR includes very challenging biodegradation requirements for the polymer coatings on controlled release fertilizers very challenging biodegradationfertilizers. These requirements are included in the NFR. If the criteria are not met in 7 years, it will notneed to be possible to sell controlled release fertilizers using today's coatings as EC fertilizers. In addition, proposal requestedestablished by the EU commission to ECHA will likely influence the polymer coatingICL until July 2026, for continued sale of controlled release fertilizers. This proposed restrictionWe are actively undertaking steps to adjust to these new regulations for all relevant products.
New Chinese Polysulphate standard
A new industry standard for Polysulphate (as a fertilizer) was recently published in January 2019 by ECHAChina. We are examining how this new standard may affect the supply of Polysulphate to the Chinese market and will be open for public consultation.
the options to meet its requirements.
 
84ICL Group Limited 114

Limitations, regulation and registration on the use of products under the Industrial Products segment
Various countries are assessing possible limitations on the use of specific chemicals. Below are details regarding the main proceedings known to the Company as of the date of this Annual Report.
·
Tetrabromobisphenol A (TBBPA) flame retardant, is under review as part of the Chemicals Regulation in Europe (REACH). The results of the review are expected in 2021. During 2018, TBBPA was nominated for review under the European directive on the restriction of the use of certain hazardous substances in electrical and electronic equipment (RoHS). The assessment is expected to be completed by the end of 2019. In October 2018, the California Office of Environmental Health and Hazard Assessment (OEHHA) added TBBPA to the Proposition 65 list, this process does not have a significant impact on the Industrial Products segment.
·
Hypobromous Acid (HOBr): The Netherlands has filed a Registry of Intent (ROI) to the European Chemicals Agency (ECHA), with a proposed classification of HOBr as a reproductive toxin category 1B under the Classification, Labelling & Packaging (CLP) EU Regulation. HOBr is the active biocide formed from a few products of the Industrial Products segment. If this proposal will be accepted and becomes officially binding, it may have significant implications on the bromine-based biocidal products in the EU.
·Ammonium Bromide: Sweden has filed a dossier supporting proposed classification as reproductive toxin category 1B under the Classification, Labelling & Packaging (CLP) EU Regulation. If this proposal will be accepted and becomes officially binding, it may have significant implications on the bromides use in the EU (biocides and as chemicals).
·Biocides: in a number of countries, a biocidal substance and any product containing it must be registered prior to import or sale in those countries. Sale is limited to those commercial uses for which registration has been granted in a given country. The registration is generally for a limited time and needs to be renewed in order to continue selling. In the EU, biocides are regulated by the Biocides Products Regulation (BPR) under the EU Chemicals Agency (ECHA). All of the Industrial Products segment's biocide registration submissions under the BPR are currently in the stage of evaluation by the relevant Member State performing the review.
On November 29, 2017, the European Commission published its delegated regulation, setting out the criteria for identifying endocrine disrupting chemicals (EDCs) under the EU Biocides Products Regulation (BPR) in the EU Official Journal, and it entered in to force on June 7, 2018. BPR is the first regime to apply the ED criteria, however, it will become applicable across sectors of EU law, such as REACH, cosmetics, and food contact materials. It is to be expected that some of ICL's biocides and other chemicals might be identified as ED, and as a result might be affected by various regulatory restrictions.
Biocides have also specific regulatory requirements, depending on the specific use, in many other countries. ICL has registered all its biocides under the USA FIFRA (Federal Insecticide, Fungicide and Rodenticide Act) and in all relevant states in the US and maintains full compliance under this law. ICL also registers its biocides as needed in all target markets as required by the local regulations.
·
Additional specific products of the Industrial Products segment are in the process of evaluation under the Chemical Regulation in the EU (REACH), For some products, there are draft or final decisions by ECHA to perform more studies, a process that will take a few years until the evaluation is completed.

85

Chemicals Regulation and RegistrationNatural Gas
 
Europe
REACH
A regulation setting upIn 2010, we made a framework for registration, evaluation, authorizationstrategic transition to increase our use of natural gas (NG) instead of heavy fossil fuels (fuel oil, kerosene, diesel and restriction (REACH)shale oil) to power our largest production plants in Israel. The transition is nearly complete, with more than 95% of chemicalsICL Israel’s main energy-consuming sites converted to NG. This transition has also significantly reduced our emission of air pollutants (such as NOx and PM) in the European Union became effective as of June 1, 2007. The regulation applies to both chemicals already on the market, as well as to new chemicals. The regulation is being implemented gradually, between 2008 and 2018, under the authority of the ECHA (European Chemicals Agency). The regulation covers chemicals not regulated under other specific regulations in the EU (e.g. pesticides, biocides, food, pharma, etc.).
Pursuant to this legislation, manufacturers and importers of chemicals in the European Union are required to register each chemical above one ton per year. For each chemical a Lead Registrant is assigned, who produces a joint dossier with data on the chemical. Other registrants are co-registrants, who are required to produce a short dossier with company‑specific information and share the cost of the joint dossier. The amount and content of the information submitted in the dossier depends on the volume of production and/or sales in the EU, and the nature of the product in terms of its effect on health and the environment. Some of the products will undergo a thorough chemical evaluation by the ECHA and by a Member State based on the information that has been submitted. As part of the process, ECHA regularly publishes and updates a list of substances defined as “Substances of Very High Concern” (SVHC). The process defines, later on, substances which are candidates for authorization. Such authorization will only be granted on the basis of quantified evidence relating to management of the product with regard to health and environmental aspects, a lack of appropriate alternatives, and a socio‑economic evaluation. An authorization will be granted to a substance defined as SVHC for a specific use(s) and for a limited period of time. It is expected that for such substances, alternatives will be developed and introduced to the EU market.
Apart from higher production and raw material costs following implementation of REACH, under the lawareas surrounding our subsidiaries incur costs in the field of registration, control and implementation of product stewardship programs with customers. Another possible risk caused by the REACH legislation is removal of certain substances from the European Union markets or prohibition of certain uses of a substance in the EU. However, there will be opportunities to introduce newly developed substances as alternatives to substances in products that will be restricted or removed from use in the European Union markets.
All ICL segments are implementing REACH and are registering their chemicals as required by law. ICL has submitted applications for registrations for all the chemicals relevant for its businesses in EU (production and sale) within the timetables set in the law. ICL has also volunteered to lead and prepare a large number of joint dossiers for the entire industry (as a Lead Registrant).
86

As at the date of this Annual Report, there are several substances which are under evaluation by the Authorities, some of which have been listed as Substances of Very High Concern (SVHCs). For more details, see “Item 4 - Information on the Company— B. Business Overview—Regulatory and Environmental, Health and Safety Matters — Limitations on the Use of Flame Retardants and Other Products”.
CLP Regulation
Another important regulation in the EU is the CLP regulation (Classification, Labeling and Packaging of substances and mixtures), that entered into effect in the European Union in December 2010. Under this regulation the European Chemicals Agency (ECHA) is reviewing classifications of substances and mixtures. An outcome of a severe classification may have an impact on a specific product's market in the EU and even lead to additional implications outside of Europe.
USAsites.
 
The Toxic Substances Control Actremaining step in this transition is to transition away from the combustion of 1976 (TSCA), addressesshale oil at our Rotem Israel site. In 2021, we ceased extracting shale oil minerals and commenced the production, importation, use,construction of a new NG-fired turbine installation. We expect this new facility to commence operations in 2022, significantly reducing our emissions of GHG (and other pollutants) at the Rotem Israel site.
For more information regarding natural gas agreements, see Note 18 to our Audited Financial Statements and disposal of specific chemicals"Item 3 – Key Information - D. Risk Factors - Our operations could be adversely affected by price increases or shortages with respect to water, energy and our principal raw materials".
The European Energy Efficiency Directive (EED)
In July 2021, the European Commission published a proposal to recast the EU Directive on Energy Efficiency, aimed at further stimulating efforts to promote energy efficiency and achieve energy savings in the USA. The TSCA is administered by the US Environmental Protection Agency (EPA) that regulates the introduction of new and existing chemicals.
During 2016, the TSCA was reformed and some new requirements were implemented. Onefight against climate change. This initiative forms part of the significantEU’s package of measures aimed at reducing net greenhouse gas emissions by at least 55% by 2030, with an ultimate objective of becoming climate neutral by 2050. Currently, the EED requires an 0.8% per year energy efficiency improvement through the end of 2023, but the proposal seeks to almost double this figure to 1.5% as of 2024 until 2030. The proposal requires each Member State (MS) to determine their own national contribution (based on a formula of objective criteria and benchmarks), which reflects national circumstances. We fully expect that each MS will develop its own response to these proposed changes is the inventory reset rule, which required all manufacturers and importers to the USAEED, and the Company will develop plans and strategies to submit a report of all non-exempt substances imported or manufactured for commercial use during the years 2006-2016. This report is in order to ascertain the substances which will be classified as "Active" or "Inactive" in the TSCA inventory. ICL completed the submission prior to the deadline of February 2018.
Asia
K-REACH
On March 20, 2018, Korea’s Ministry of Environment (MoE) announced amendments to Act on Registration and Evaluation etc. of Chemicals (known as K-REACH), which has entered into force on January 1, 2019 and is similar to the EU REACH.
K-REACH includes registrationcomply with these requirements for all substances manufactured or imported into Korea above defined thresholds, at defined timelines, similarly to EU REACH. Basically, registration timelines for K-REACH are volume based, starting December 31, 2021, and ending December 31, 2030 (registration grace period for existing substances above 1 ton).  Some substances or uses (e.g. R&D substances, export only, polymer of low concern) are exempt from registration. However, a confirmation on exemption must be applied for.
Strict penalties are to be imposed on the manufacture, import, or sale of hazardous chemicals without registration.
ICL is getting prepared by collecting information towards the incoming pre-registration step, which is the first stage of K-REACH regulation, that starts on January 2019 and ends on June 2019. Completion of this step will allow continuation of ICL sales to Korea, to be subsequently followed by full registration processes.

87

our European operations going forward.
 
Air Quality
 
Climate Change and Greenhouse Gas Issues
Climate changeReducing air emissions is a central goal of increasing concern our environmental strategy. We are taking steps to governments, non‑governmental organizations, and the general public. Increasing regulation of greenhouse gases (“GHGs”) could impact ICL’s operations by requiring changes to its production processes or increasing raw‑material, energy, production and transportation costs. ICL is striving to become a leader in reduction of emissions, in general, and GHG emissions, in particular. The Company has therefore set a target of reducing 30% of the base year 2008reduce air emissions by 2020.
ICL’s reduction efforts include a strategic conversion of its main plantsimplementing emission prevention solutions and switching to the use of natural gas, utilization of new technologies to reduce production emissions, and comprehensive energy efficiency initiatives. The combined result of these efforts has resulted in a 23% reduction in the GHGcleaner fuels. Our sites regularly monitor their emissions of ICL between 2008 and 2017. This reduction constitutes 77% ofpollutants to better manage our planned reduction target by 2020. It should be noted that excluding ICL’s acquisition of YPH JV, the Company has already surpassed it’s 30% reduction target.
The total ICL global GHG emissions for 2017 are 3,225,551 tonnes CO2e (Scope 1‑ 1,908,948 tonnes CO2e, Scope 2- 1,138,502 tonnes CO2e, Scope 3- 178,101 tonnes CO2e). The 2018 emissions will be finalized after the publication of this annual report. The Company currently expects a decrease in total emissions in 2018, with the full operation of the new Sodom power plant, supplying less-carbon intense electricity to ICL's sites in Israel.
In addition, ICL promotes the development of new products that contribute to reduction of GHG emissions and up to now has analyzed the carbon footprint of over 60 of its products.
ICL annually reports its emissions data and its efforts in the climate change field to the CDP (Carbon Disclosure Project), a non-profit leading organization in the greenhouse gas (GHG) emissions reporting field. For its 2018 report, ICL has received a general CDP ranking of "B", which is tied for second place among global fertilizer companies. Also in 2018, for the CDP's new second sub-score, the Supplier Engagement Rating (SER), ICL has received the maximum score of "A". Only 120 of 5000  (2.5%) reporting companies achieved this score. ICL is the only fertilizer company and the only Israeli company, to make this "A" list.
This achievement reflects the enhancement of ICL's sustainable procurement practices in recent years. In October 2018, ICL has also joined the TFS (Together For Sustainability) initiative, a global supplier sustainability initiative which will enable our global procurement organization to enhance its engagement with the supply chain and increase ICL's confidence in the good practices of its suppliers.
88

operations.
 
Israel
 
The IsraeliIn Israel, air emissions from major industrial operations are regulated by the Clean Air Law – Air Emission Permit
(hereinafter - the Law) which aims to improve air quality, prevent, and reduce air pollution by implementing both prohibitions and obligations, and protect the health and quality of life of human beings and the environment. The Clean Air Law addresses inter alia, fixedemission sources (including the Company’s plants)all our production plants in Israel) and is intended to serve as a platform for implementing the IPPC directiveregulatory principles currently in place in the European Union (EU), specifically the principles of the IED (The Industrial Emissions Directive) that was adopted by the European Union in 1996.EU.
ICL Group Limited 104


 
As of the date of this Annual Report, all ICL’sOur plants in Israel that fall under the definition of Emission Source Subject to Licensing Requirements, have received air emission permits. The airIn the event of deviations from the emission permits include provisions regarding the application of the Best Available Technologies (BAT),permits’ conditions, we could be subject to administrative enforcement measures, as well as provisions with respect to monitoring, controlcriminal liability. In addition, certain restrictions on our operations and reporting to the Ministry of Environmental Protection. The Company is taking steps to implement a plan to address the requirements of the air emission permits in coordination with the Ministry of Environmental Protection.
Examinations made by the Ministry of Environmental Protection in ICL Magnesium’s plant indicated that there are alleged discrepancies between the values measured in a number of stacks compared with the requirements provided in the emission permit. The plant was summoned to a hearing and clarification of the matter. As at the date of the report, it is not clear whether the findings relating to the plant are reliable and the matter was addressed with the Ministry’s personnel during the hearing. Notwithstanding the said uncertainty, in order to ensure compliance with the required values, the plant has initiated three projects for dealing with emissions. All were completed by December 31, 2018. Furthermore, ICL Magnesium initiated the installation of additional system to reduce the level of emissions in the plant's main stack, the completion of which is expected in the coming years.
In 2016, ICL Rotem received a new emission permit, as part of the Clean Air Law, requiring compliance with more strict conditions than the ones in the previous permit. In order to meet the requirements set in the new emission permit, ICL Rotem began implementing a multi-year plan for several projects. During 2017 and 2018, ICL Rotem was summoned to an administrative hearings in the Ministry of Environmental Protection, in connection with alleged violations of its emission permit. At the publication date of this report, no additional enforcement steps had been taken by the Ministry. Nevertheless, ICL Rotem is taking action to address the above mentioned deviations as part of the multi-year plan, including the implementation of the provisions of the Clean Air Law, in accordance with disscussions with the Ministry of Environmental Protection regarding the implementation of the law.
Over the next few years, the Company will make significant capital investments inmay be imposed on our Company. In order to comply with the emissionemissions permits received.granted under the Law, we have made significant investments, and will continue to do so as necessary. As a result, some of ICL’s air emissions have decreased considerably.
 

DSW and DSM will implement major dust reduction projects over the next few years. Our other production sites in Israel will also increase their efforts to reduce particle emissions.
Air Quality – Monitoring and Treatment
During
In June 2021, Rotem Israel's emission permit was renewed by the Company’s production processes, pollutants are emitted,Israeli Ministry of Environmental Protection (MoEP), which could be harmful to people or tois valid until September 2023. The renewed permit reflects an updated outline of requirements. Postponement in the environment if they were to be emitted intoexecution of a limited number of projects was granted within the environment in concentrations or amounts exceeding the permitted levels. The materials emitted are mainly inorganic compounds and particles and a minorityframework of volatile organic compounds. The Company regularly and continuously measures the emission of these pollutants inan administrative order to monitor and locate uncontrolled emissions, in accordance with the provisionsunder Section 45 of the law and the conditions set forth in the business licenses and emission permits. The Company is advancing execution of projects to reduce emissions into the atmosphere in accordance with the terms of the emission permits.Law.
 
89

Rotem - In September 2016, plants at MishorBy the end of 2021, Rotem received an emission permit pursuant toIsrael had completed 77 of 194 specific tasks required by the Israeli Clean Air Law. The Companypermit. Rotem Israel is striving to implement the requirements of the permit. During 2017,permit through a multi-year plan that includes several significant emissions reduction projects. Management still expects difficulties in meeting the Company filed an appeal for changing 46 permit tasks. The Ministryexecution schedules of Environmental Protection (MOE) agreeda limited number of projects and accordingly continues to change 43 of them andwork with the MoEP to find a final permit was received in July 2018.
Until December 2018,satisfactory solution regarding the Company has completed 50timing of the 180 specific tasks required byinvestments, taking into account the Clean Air permit. In the second halfimpact of 2018 the Company conducted two risk assessments by external experts regarding the ability to execute all of the Clean Air tasks on time. The risk assessments focused on the safety and technical issues of implementing the large number of tasks according to the timetable. The risk assessments show thatuncertainty surrounding Rotem cannot implement the Clean Air requirements safely and with reasonable quality in the permit defined time line. After the risk assessments were completed the Company started a new negotiation, now ongoing, with the MOE in order to rescheduleIsrael's activity, as far as the implementation period.of long-term projects is concerned. For more information, see Note 18 to our Audited Financial Statements.
 
During 2018, the sulphuric acid plant replaced and upgraded a catalyst system in order to reduce specific emissions by more than 30%.
In Rotem, there are on-fence monitoring systems that report on-line parameters to the environmental authorities. The monitoring systems are in the final stage of receiving ISO 17025 permit.
Fertilizers & Chemicals (F&C) - ICL’s Haifa factory in Israel was converted to natural gas during 2018. This is conducted as part of ICL’s shift to environmentally-friendly energy sources throughout its facilities.
DSW - In the area of the Sodom Industrial Zone, Dead Sea Works operates three air quality monitoring stations, pursuant to the Clean Air Law. The data, which is measured on a continuous basis, is automatically sent to the Internet site of the National Monitoring Center of the Ministry of Environmental Protection, which is accessible to the general public. The main production facilities of Dead Sea Works in Sodom have been fully converted to natural gas and are connected to the gas transport network.
During the third quarter of 2018, the new power plant in Sodom became operational. The power plant is expected to reduce energy costs and is more environmental friendly.
DSM - The production facilities of the Dead Sea Magnesium plant produce mainly inorganic emissions. Some of the exhaust stacks are monitored in accordance with the directives in the emission permits issued to the Company. In the Dead Sea Magnesium plant, detectors were installed that send on‑line computerized warnings to the environmental authorities.
Neot Hovav - the Industrial Products segment operates advanced monitoring and detection methods to identify malfunctions in its plants’, such that before a malfunction occurs the facility's manufacturing activities are halted, and thus steps are taken to minimize uncontrolled emissions according to the laws and the conditions set out in its business license, its poisons permit, and its emissions permit. In addition, integrated pollution prevention and control (IPPC) methodologies are also applied, which provide guidance regarding all of the techniques for preventing and monitoring emissions into the environment. The main actions taken by the Industrial Products segment in the area of air quality are: investments were made in the production facilities in order to improve recycling and recovery of solvents and other organic materials emitted into the air via activated charcoal systems, in order to achieve reduction of the amount of these materials emitted into the air; investments were made in catalytic oxidizing technologies that reduce volatile organic compound emissions and comply with advanced values in accordance with the BAT (Best Available Technique); investments were made in the installation and upgrading of absorption systems in the inorganic systems; investments were made in the installation and upgrading of filters to prevent emissions of particles from the solids’ handling systems; sealing of diffused emissions in the loading and unloading areas was made; ongoing work is being executed for the LDAR (Leak Detection and Repair) program – control and treatment of fugitive emissions with the assistance of a European company.
During 2018, Periclase installed an air emissions treatment facility for the Magnesia manufacturing process.
90

Europe
AirEmission
 
In Europe, emissions are regulated under the EU IED – Industrial Emission Directive.Directive, as well as regional and local regulations. Preventive measures and Best Available TechnologiesTechnology (BAT) are applied. These regulations are translated to national legislation. Emission limit values for relevant substances are included as part of our authority approvals. There are rules guaranteeingthe authority's approval. Rules guarantee protection of air, soil and water. In addition, in Europe relevant emissions control is conducted by authority inspection through independent technical supervisory associations and by self-inspection. ICLRelevant plants falling underin the EU are subject to the European SEVESO directive, conductwhich requires regular safety inspections and prepare reports.
Relevant potential sources for emissions are registered and controlled also by the authorities on a regular basis. If required, on-line-monitoring systems are installed. In addition, investments were made in the installation and upgrading of filter, separation and absorption systems in order to keep the air emission limits.
ICL Boulby’s air emissions are permitted under the Environmental Permitting Regulations (England and Wales) 2010 (as amended), and regulated by the Local Authority and the Environment Agency. As required within these permits, the emission sources are monitored both periodically and continuously, and results are reported as required by the regulators.
European Plan for Trade in GHG Emissions
The European Union, as a party that signed the Kyoto Protocol (the framework treaty of the United Nations for dealing with climate changes), has agreed on a mandatory target for reducing the emissions of greenhouse gases. The main tool for achieving the reduction targets is the EU Emissions Trading Scheme (“ETS”), which was launched on January 1, 2005. In the first and second phases of the ETS, the European countries agreed that every industrial company that emits GHGs above the agreed minimum threshold is required to report its emissions and to limit them to the gradually decreasing periodic quota. In addition, companies were allowed to realize a monetary gain or benefit by trading and selling unused emission permits (or ‘carbon allowances’). The third phase of the ETS commenced on January 1, 2013 and will run up to December 31, 2020. This phase includes a further decrease in the free allocation of carbon allowances to all industrial companies. Some of ICL's largest sites in Europe are participants in the ETS, and therefore receive annual carbon allowances ("EUA's") and are then obligated to emit up to the annual allowances and/or purchase extra EUA's. Unused allocated EUA's can be sold. In 2018, ICL sold some surplus EUA's from its UK Boulby site. ICL is closely monitoring the developments and emission allocation policies of the ETS and is taking them into account when establishing/purchasing new sites in Europe and when considering potential significant expansions of existing sites.
91

 
Americas
 
Air emissions in the Americas are managed through operating permits issued by the relevant agency responsible for each individual site. In the United States,US, air permits are issued under the authority of the US EPA’sEnvironmental Protection Agency’s (EPA) Clean Air Act. In Mexico, air emissions are managed through the site’s single environmental license or the LAU issued by SEMARNAT. In Brazil, air emissions are managed under the site’s operation license issued by the Sao Paulo Staterelevant state environmental agency – CETESB.
Air pollution control equipment is employed throughout the region to ensure that ICL’s facilities comply with the emission parameters established by the regulators. Continued maintenance of pollution control equipment and improvement of control efficiencies is the focus.agency.
 
China
 
The phosphate plantAir emissions in China are regulated in accordance with the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution and the Regulations on the Management of Pollutant Discharge Permits.

SBCL – Bromine leakage occurred during January 2022. According to the guidance of local authorities, production onsite was halted. Corrective actions were taken. Production activity is expected to resume by mid – March, following the approval by authorities.
ICL Group Limited 105


Water
We regard potable water as a high-value natural resource. Several of our major production sites are located in water-stressed regions. Water conservation is tested once every six monthstherefore an inherent part of our business culture. Our production facilities maintain various water conservation projects, including using brackish water and recycling treated wastewater. We track the consumption of water at our facilities worldwide and promote the implementation of water efficiency projects.
We expect potable water to become scarcer in the future across the globe. As water scarcity becomes a pressing issue due to climate change and other factors, we expect greater and stricter regulation of water consumption and wastewater quality. We also anticipate that we will need to invest additional resources to enhance our water efficiency and wastewater quality at several of our plants.
Several of our major production facilities are located in Israel. The country, though located in a water-stressed region, manages its water resources efficiently. Desalination plants and Reverse Osmosis (RO) plants are major contributors to the country’s potable water resources, thereby reducing potable water scarcity in the country. In addition, industrial facilities, such as our facilities in Sodom, are allowed to use non-potable water where possible.
Further information about water related issues in Israel, see Notes 17 and 18 to our Audited Financial Statements.
Wastewater, By-products, Waste & Hazardous Waste
We track and manage our waste streams and take various steps to reduce waste. We identify and seek to maximize potential reuse and recycling of relevant waste streams and are proactive in searching for ‘circular economy’ opportunities. For further information, see the “Circular Economy” section above. During production processes at our facilities, industrial liquid and solid wastes are produced. Storage, transportation, reuse and disposal of waste are generally regulated by governmental authorities in the Center for Environmental Protection regarding gas emissions. In the phosphate plant, the Company has adapted its facilities by means of installation of systems monitoring gas emissionscountries in order towhich we operate. Wastewater quality and quantities must comply with local regulations and regulatory schemes. Thewith permits at relevant sites. We strive to implement zero discharge policies where applicable. Various production sites have adapted their treatment systems to the standards applicable to them. We track and manage our waste streams and take various steps to reduce waste or identify and maximize potential reuse and recycling of relevant waste. Most of the waste is either directly treated by us or treated by external certified vendors.
Although we strive to reduce the likelihood of wastewater leakages or solid waste and hazardous materials unexpected releases, we may not always succeed to prevent such incidents, which may occur, among other things, due to various factors that are not within our control. In the event of difficulties in the reuse or disposal of waste generated in our facilities, interruptions or production stoppage may occur and significant costs may be imposed. If we cannot properly mitigate and reduce the exposure, our operations may be adversely and materially affected.
For further information, see “Item 3 - Key Information— D. Risk Factors— As a leading global specialty minerals company the nature of our activities means that we are inherently exposed to hazards relating to materials, processes, production and mining" and “Item 3 - Key Information— D. Risk Factors— Our ability to operate and/or expand our production and operating facilities worldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations”.
ICL Group Limited 106

Israel
Liquid and solid waste and other emissions are regulated by multiple regulations. Our plants in Israel implement waste monitoring and management measures. Each plant is required to inform the authorities on the amount of waste and treatment method for every waste stream under Israel’s PRTR (Pollutant Release and Transfer Register) regulation. Wastewater regulations, including effluent limits, are regulated by the MoEP and partly by local authorities.
Pursuant to the conditions set by the MoEP in their Toxins Permits, our plants in Israel have conducted historical land contamination surveys and submitted them to the MoEP.
 
ICL Dead Sea (DSW) - Salt by-product is transferred to a large open-air depot, in proximity to DSW’s site. The open-air depot's dimensions (height and area) are limited by statutory requirements. DSW is examining alternatives for salt storage/treatment.
Rotem Israel – The site is implementing a master plan for wastewater treatment, with the principal goal of reducing effluent quantities, by converting some effluents into products, wastewater recycling, reducing water consumption, treatment/neutralization of wastewater and restoration of wastewater ponds. The plan currently includes additional wastewater streams created by air emission purification processes, as required by the Israeli Clean Air Law.
As part of its treatment of liquid and solid waste, the site treats gypsum waste by ponds and storage. In September 2021, the authorities approved a gypsum storage comprehensive plan that would allow the Company to store gypsum for the next 30 years. In addition, the plan allows the use of “Pond 5”, which has been operating since 2018, until the end of its operational life, expected in 2024. The Company began planning the remediation of gypsum Ponds 1 to 3 that were used by Rotem Israel in the past. In accordance with current regulatory requirements, future expansion of the storage piles will need to be positioned on new protective infrastructure. Another requirement is the establishment of restoration methodologies for these large storage piles. Rotem Israel is planning to comply with these requirements and is striving to find alternative uses for the gypsum with external industry partners. For further information, see Note 18 to our Audited Financial Statements.
The Rotem site has also completed the implementation of a multiyear master plan to prevent ground pollution by fuels or oils.

Neot Hovav - Pursuant to the requirements of the MoEP, in the coming years our Neot Hovav site will be required to treat existing hazardous waste (historical). This waste is stored in a designated defined area on the site's premises, in coordination with the MoEP. Some of the currently produced waste is also stored in this area. Treatment of this waste is partly conducted through a combustion facility (Bromine Recovery Unit), which recovers hydro-bromine acid. Additional waste quantities are sent to external designated treatment facilities. Once the area is cleared, the Company will be required to conduct soil surveys.  For further information, see Note 17 to our Audited Financial Statements.
ICL Periclase - The site is working to reduce historic Magnesia waste, stored in a designated waste area, and to reuse it for the benefit of a circular economy. ICL Periclase is implementing a project that uses magnesia powder, a non-hazardous material, to fill sinkholes in the Dead Sea region. The project is expected to be completed by January 2023.
 
ICL Haifa (F&C) – Treated wastewater of the site's facilities flows into the Kishon River, according to a permit issued by the MoEP. To comply with the standards covering treatment of the wastewater, the site, in coordination with the MoEP, is conducting a project to channel the treated wastewater underground. This project is in advanced stages.
ICL Group Limited 107


Following laboratory tests that were performed at the site, the MoEP raised a concern regarding local underground water pollution. Therefore, the ICL Haifa site was given two alternatives - sealing the existing runoff pond, or building a new pond. After a thorough examination of the two alternatives, the site decided to build a new pond to reduce the risk to which the plant is exposed.

The production process of phosphoric acid produced in the 1990’s at a facility which has since been shut down, has created a by-product in the form of a gypsum pile which is stored at the site. The site is working in coordination with the MoEP and taking the necessary actions according to regulatory requirements, including the Toxins Permit issued to the site.
Europe
Liquid and solid waste and emissions are regulated under the European IED – Industrial Emission Directive. The Company implements waste monitoring and other management measures. It is  obligated to inform the authorities of the results. Wastewater regulations, including effluent limits, are regulated by states and partly by communities. We are subject to provisions regarding the avoidance of pollution and conditions for assessing compliance with allemission limit values.
Wastewater is partly pre-treated and sent to municipalities and third parties for final treatment before discharge, or at levels that can be discharged to surface waters without treatment. Production processes, in general, do not generate significant volumes of direct solid waste. In event that solid waste must be disposed, we strive to perform in accordance with relevant European requirements.
ICL Boulby - All wastewater leaving our site in the lawsUK is permitted according to the UK’s Environment Agency. The site's wastewater consists of extracted sea water, mine brines, gathered surface rainwater and regulations.water treated at the on-site sewage plant. Multiple parameter limits are imposed on the site by the wastewater permit, and no compliance breaches have occurred since the site’s transition to producing Polysulphate®, and, in fact, wastewater amounts have been reduced considerably.
 
ICL Iberia - A multi-year program is underway to restore large salt piles, while paying close attention to the issue of wastewater drainage and sludge treatment. In April 2021, the Company signed an agreement with the ACA, Catalan Water Agency, for the construction and operation of a new collector. The new collector is infrastructure required for the removal of brine water that will be used for restoration, as well as for production. For further information regarding the restoration plan and the agreement for the construction and operation of the collector in Spain, see Notes 17 and 18 to our Audited Financial Statements.
ICL Iberia has also successfully passed the audit for the certification of UNE 22470 and 22480 standards, which accredited ICL Iberia as a sustainable mining company. ICL Iberia is also engaged in a program regarding non-mining waste management to valorize and reduce its waste, in accordance with local and European waste management.
ICL Group Limited 108

Americas
Liquid and solid wastes at our Americas sites are managed in accordance with country and state-specific regulatory requirements. In the US, solid and hazardous wastes are regulated by the Environmental Protection Agency’s (EPA) Resource Conservation and Recovery Act. In Brazil, waste is managed under the site’s operation license issued by the relevant state environmental agency.
ICL follows a qualification process for waste vendors who assist us in ensuring that waste is properly profiled, treatment standards are followed, and disposal processes meet regulatory requirements. Wastewater is managed through site industrial discharge permits that are managed through federal, state or local agencies. Wastewater treatment is mainly focused on chemical treatment. Wastewater treatment systems are maintained on a regular basis.
ICL US Gallipolis Ferry - The site operates under a National Pollutant Discharge Elimination System (NPDES) Permit which regulates water discharge from point sources and is renewed every 5 years. The site operates a large Wastewater Treatment Plant (WWTP). Discharge limitations, set by the West Virginia Department of Environmental Protection (WVDEP), are becoming stricter, placing a challenge on the treatment capabilities for some parameters being treated within the current WWTP. Therefore, in 2021 the site installed new technology for its wastewater treatment processes. The site has been very active in pursuing recycling initiatives, which helped achieve a landfill to recycling ratio of 50%. Additionally, the facility entered into a Voluntary Remediation Agreement (VRA) with the former owner of the facility, and the WVDEP. The active remediation has been completed and is being reviewed by the WVDEP for approval.  Currently, there is ongoing periodic groundwater sampling, analysis, monitoring, and reporting to the WVDEP, per the VRA.
China
According to the Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution and the National Catalogue of Hazardous Waste, solid waste is collected, stored and transferred. General industrial solid waste is entrusted for comprehensive utilization by qualified organizations, and hazardous waste is entrusted for treatment by organizations with a Hazardous Waste Business License issued by the Department of Ecological Environment of Yunnan Province.

YPH- All wastewater at YPH, after physical or chemical treatment, is reused in the production system with zero discharge.
LYG - During 2021, ICL ceased operations at its LYG plant following a request by the Chinese authorities to either relocate the plant or cease its operation. As part of the closure process, soil surveys were conducted. Once concluded, ICL is expected to receive compensation due to the closure.
ICL Group Limited 109

Ecological Impact
We manage our mineral extraction sites according to local regulations and depend on concessions that are granted to us. Our broad and varied operations cover the entire lifecycle of our products, from the initial production of raw materials through manufacture of the final product. This is becoming more challenging as the population grows in proximity to our sites. To try to minimize any unexpected disturbances by our facilities to their surrounding communities, we have increased our efforts to take precautions and safety measures in our activities, especially those which involve hazardous materials.
We aim to minimize the ecological impact of both our mining and production activities, beginning at the initial stage of planning, through the implementation of recommendations and finally by monitoring and minimizing their impact. We continuously implement relevant operational methodologies and necessary technologies to prevent unexpected ecological impact. In the event of an ecological impact, we strive to mitigate and remediate the impact, in accordance with best practices and regulatory requirements, including by coordination with the relevant local authorities. For further information, see “Item 3 - Key Information— D. Risk Factors— As a leading global specialty minerals company the nature of our activities means that we are inherently exposed to hazards relating to materials, processes, production and mining".
It should be noted that our Sodom production facility is located in the Jordan Rift Valley, or Syro-African Depression, a seismically active area. For further information, see “Item 3 - Key Information— D. Risk Factors— The locations of some of our mines and facilities expose us to various natural disasters, including as a result of climate change".


ICL DSW – Due to the negative water balance, the water level in the northern basin of the Dead Sea is decreasing. The receding water levels over the years has required ICL to reposition its pumping station northwards, in order to enable continued operations in the Dead Sea region, which also enables the existence of tourism infrastructure. The P-9 pumping station and feeder canal crossing the Tze’elim stream were constructed in order to maintain operational continuity. The Tze’elim stream alluvial fan is one of the largest and most developed of all the surviving fans in the area, and therefore it is important to preserve it and to protect the biodiversity existing in this habitat. ICL reached an agreement with environmental authorities and organizations, according to which, seven culverts were constructed above the excavated canalto allow flood waters to flow through the original flow channel, without damaging the feeder canal,while maintaining the braided channel fan pattern. In addition, the culverts serve as an ecological corridor, by providing passageways for animals. ICL periodically reviews field data and makes adjustments in accordance with the findings. For further information, see “Item 4 – Information on the company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations- Dead Sea”.

ICL Iberia - ICL Iberia’s past activities have resulted in the salinization of some water wells in the Suria and Sallent sites. Compensation to the relevant owners is under discussion. For more information, seenote 17 to our Audited Financial Statements.
 
Rotem Israel - In 2017, Rotem experienced an environmental accident in which approximately 100,000 cubic meters of acidic phosphogypsum liquid were released into the ammonia complex,surrounding environment, as a result of a breach in its Number 3 detainment pond. The liquid entered the nearby Ashalim Creek (Nahal Ashalim), which was located nearflows through an area designated as a nature reserve. To the residential area proximatebest of our knowledge, as of the reporting date, criminal investigation of the event is still underway. We took intensive actions to restore the creek, to its state prior to the plant, was movedaccident, in full cooperation with the relevant authorities.
ICL Group Limited 110



Following the incident, the Israel Nature and Parks Authority (INPA) closed the nature reserve to the plant’s premises.
public. We conducted a risk assessment process of the creek, together with leading experts. The assessment was meant to assure that the creek’s hiking trails can be reopened and do not pose risks to hikers' health. The assessment was completed in late 2019 and the results were presented to the authorities. All risk levels were found to be acceptable, and in June 2020, the Ashalim Creek was reopened for hikers. For further information, see Note 18 to our Audited Financial Statements.
 
Energy
Rotem Israel is in a process to remediate its gypsum ponds, based on a remediation plan that was established following the ‘Florida Standard’ and approved in 2020. The remediation work, which commenced in September 2020, was stalled due to discussions with the MoEP regarding the approval of landscape restoration. Discussions are still on going, but Rotem Israel expects to resume remediation process during 2022. In addition, Rotem Israel is designing a remediation action plan for its acidic wastewater ponds.
In 2020, an application for a class action was filed against the Company, according to which, discharge, leakage and seepage of wastewater from Rotem's Zin site, allegedly caused various environmental hazards to the Zin stream, which resulted in damages. For future information, see Note 18 to our Audited Financial Statements.
 
Part of the environmental challenges Rotem Israel is facing and handling, including certain environmental class actions against the Company, pertaining to environmental damages originating in the period that the Company was owned by the Israeli government, prior to its privatization.
ICL R&D Beer Sheva - A soil survey was conducted. The European Energy Efficiency Directive (EED)initial results of the survey point to small amounts of contamination. ICL will act in accordance with the survey's findings, and related MoEP guidelines.
 
The latest Energy Efficiency Directive of the European Union came into effect on December 4, 2012. The requirementslCL Periclase - In 2021, brine, a non-hazardous substance, leaked from a ruptured pipeline in a nature reserve. No significant damage was recorded, and we are in the Energy Efficiency Directive must be implemented by companies operating inprocess of remediating the European Union. The Energy Efficiency Directive provides a joint frameworkarea. We committed to advance energy efficiency intesting and replacing the European Unionnecessary pipeline components, in order to achieveprevent future occurrences.
ICL Group Limited 111


Biodiversity
Biodiversity, also called biological diversity, is the European Union’s energy goals by 2020. These goals includevariety of life found in a place on Earth. A common measure of this variety, called species richness, is the reductioncount of GHG emissions by 20% comparedspecies in an area. We recognize the need to consider environmental factors when using land and managing our operations, particularly in ecologically sensitive areas, including areas with unique cultural value. We are committed to ongoing consideration of the levelsimpact of our activities on biodiversity in 1990, an increaseour decision making.
Examples regarding our management of biodiversity at some of our mining sites includes the following:
ICL DSW - Sodom Saltmarsh Lake. The Ashalim reservoir, located south of the ICL’s Dead Sea site, is a wet habitat, situated within a typical arid habitat. It is abundant with rich biological diversity. ICL Dead Sea, whose excavations in the rateregion created this wet habitat, takes extra measures to preserve it and invests in making this unique habitat accessible to the public. In the past, the Sodom salt flats area was a resting stop and habitat for migratory birds. Today, due to changes in the land’s use – to agriculture, residential and industrial purposes, almost no salt flats remain. These flats have unique characteristics with high salinity in the soil and unique species that have adapted to these extreme conditions. The salt flats in Israel are a rare habitat and have been shrinking over time. The Sodom Saltmarsh Lake, initially created as a result of consumptionICL Dead Sea’s excavation activities, has become a salt flat substitute. The lake was created from a rise in groundwater in the excavated area. Over the past few years, the lake has had relatively good water quality year-round. We also started monitoring the lake, using sensors, to continuously measure its water quality. Vegetation was planted in a stable water environment. The lake is now used as a resting spot for migrating birds and as a nesting site for a wide range of renewable energy sources to 20%species.

ICL Boulby - Adjacent to ICL Boubly’s mining facilities, and within its operational area, are non-developed turfs where important habitats and species flourish. Most notable are the woodlands at Mines Wood and Ridge Lane Wood, near Dalehouse. These are some of the most wildlife-rich woodlands in the Northeast England / Yorkshire areas. The woodlands are home to invertebrates, birds and mammals. For over a decade ICL Boulby has worked with the Industry Nature Conservation Association (INCA) to monitor and manage the wildlife that exists in proximity to the mine. Key to this process is a Site Biodiversity Action Plan (Site BAP), operated by ICL Boulby within its operational area. The site BAP is designed to conserve the key habitats and species which live at the site, and is assisted by INCA annually.For further information see: “Item 4 – Information on the Company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations” and Note 18(c) to our Audited Financial Statements.
ICL Group Limited 112

Hazardous Substances
Some of the total energy consumptionsubstances used at our facilities across the world (such as raw materials, etc.) are considered as hazardous substances. These substances require governmental approvals and registration. Relevant safety measures and procedures for storage and handling are implemented and maintained. Measures are taken to reduce the likelihood and the potential severity of incidents in case of an improvementexposure to hazardous materials. This includes risk assessment, training, personal protective equipment (PPEs) and other relevant mitigation measures for employees and contractors. In addition, suppliers, transporters and vendors are qualified for proper handling of these materials.
Israel
As part of our operations in energy efficiency by 20%. Accordingly, all countriesIsrael, we produce, store, transport and use materials that are membersdefined as hazardous materials according to the Israeli Hazardous Substances Law, 1993. Handling such substances requires a special permit for hazardous material from the MoEP ("Toxins Permit") that is renewed annually. All our Israeli companies have a Toxins Permit, as required by law, and they operate according to the special conditions defined in these permits. Leakage or loss of control of these materials could result in an environmental incident and cause damage to people and/or to the environment. We take measures to prevent such occurrences, and, at the same time, we prepare for such occurrences by means of emergency teams training and appropriate equipment for dealing with these types of events.
Europe
Some of the substances used in our European Unionfacilities (such as raw materials) are considered hazardous substances. Required approvals and registrations for these substances are secured and maintained. Relevant safety measures and procedures for storage and handling are also implemented and maintained. In addition to these measures, we only use qualified suppliers and transport companies, while qualification and training of employees is conducted on a regular basis. All requirements based on the GHS (Globally Harmonized System of Classification, Labelling and Packaging of Chemicals) are acquired and maintained.
Americas
Hazardous substances are utilized at ICL’s facilities in the Americas as raw materials and can also be found as finished products. Where required, registrations for the storage, handling and transportation of these materials are secured and maintained. Measures are taken to increasereduce the efficiencylikelihood of releases of hazardous materials by way of supplier and transporter qualification, as well as training of employees, contractors and vendors on the proper handling of these materials.
China
Hazardous substances are utilized at our facilities in China as raw materials and can also be found as finished products. Where required, registrations for the storage, handling and transportation of these materials are secured and maintained. Measures are taken to reduce the likelihood of releases of hazardous materials by way of supplier and transporter qualification, training of employees, contractors and vendors on the proper handling of these materials.
ICL Group Limited 113


Limitation Regulation and Registration of our Products
As a global specialty minerals company, we are subject to multiple rules and regulations in terms of product safety. We ensure that the substances we produce, and sell, are handled in accordance with all such rules and regulations throughout their energy consumptionlife cycle. These rules and regulations, among other things, impose limitations on the use of specific substances and products, require us to register and label some of our products and more. We continuously monitor these rules and regulations and take the necessary operational measures to ensure that we remain in all stagesmaterial compliance with them.
New European Fertilizer Product Regulation
One of the energy chain — conversion, transportationfuture regulatory changes that may impact our products is the new European Fertilizing Product Regulation (FPR, formerly known as NFR), which was published in in 2019, with an effective date of July 2022. FPR covers a broad scope of materials, including all types of fertilizers, liming materials, biostimulants, growing media, soil improvers, inhibitors and final use.other blends of these materials. The new regulation requires fertilizer producers to monitor new contaminating elements in fertilizer products. In addition, pursuant to FPR, fertilizer producers will have to demonstrate the ability to track their products to ensure their quality in the production and supply chain. The labelling of fertilizer products will need to change, and conformity assessment methodologies will need to be updated. Moreover, new tolerance levels for fertilizer contaminants are included in the FPR. One focus area is the level of cadmium in phosphate containing fertilizers. In addition, FPR includes very challenging biodegradation requirements for polymer coatings on controlled release fertilizers. These requirements need to be established by ICL is developing and adopting strategies and procedures atuntil July 2026, for continued sale of controlled release fertilizers. We are actively undertaking steps to adjust to these new regulations for all of its European plants to comply with the local interpretations of the Directive.relevant products.
 
New Chinese Polysulphate standard
A new industry standard for Polysulphate (as a fertilizer) was recently published in China. We are examining how this new standard may affect the supply of Polysulphate to the Chinese market and the options to meet its requirements.
ICL Group Limited 114


Natural Gas
 
In 2012 the Company signed agreements for supply of natural gas2010, we made a strategic transition to the Group’s manufacturing facilities in Israel with the “Tamar” reservoir. On December 5, 2017, ICL signed an agreement with Energean Israel Ltd. for the supply of up to 13 BCM of natural gas over a period of 15 years, amounting to approximately $1.9 billion. On November 2018, all conditions precedent to the agreement with Energean have been met. The signing of this agreement marked an important milestone for securing a consistent supply of gas to the Company’s facilities in Israel at a competitive price in relation to current gas supply agreements. 
92

In February 2018, the Company entered into two supply agreements with the “Tamar" and “Leviathan” reservoirs to secure the gas supply needs of the Company until the end of 2025 or until the entry of the “Karish” and “Tanin” reservoirs into service (Energean) ‑ whichever occurs first.
The increasedincrease our use of natural gas (NG) instead of heavy fossil fuels (fuel oil, kerosene, diesel and shale oil) to power our largest production plants in ICL’s facilitiesIsrael. The transition is nearly complete, with more than 95% of ICL Israel’s main energy-consuming sites converted to NG. This transition has also significantly reduced emissionsour emission of air pollutants (such as NOx and PM) in the areaareas surrounding our facilities, improved the quality of the output, reduced maintenance expenses and has led to a significant monetary savings due to the transition from the use of more expensive fuels.sites.
 
The remaining step in this transition is to transition away from the combustion of shale oil at our Rotem Israel site. In 2021, we ceased extracting shale oil minerals and commenced the construction of a new NG-fired turbine installation. We expect this new facility to commence operations in 2022, significantly reducing our emissions of GHG (and other pollutants) at the Rotem Israel site.
For more information regarding natural gas agreements, see Note 18 to our Audited Financial Statements and "Item 3 – Key Information - D. Risk Factors - Our operations could be adversely affected by price increases or shortages with respect to water, energy and our principal raw materials".
The European Energy Efficiency Directive (EED)
In July 2021, the European Commission published a proposal to recast the EU Directive on Energy Efficiency, aimed at further stimulating efforts to promote energy efficiency and achieve energy savings in the fight against climate change. This initiative forms part of the EU’s package of measures aimed at reducing net greenhouse gas emissions by at least 55% by 2030, with an ultimate objective of becoming climate neutral by 2050. Currently, the EED requires an 0.8% per year energy efficiency improvement through the end of 2023, but the proposal seeks to almost double this figure to 1.5% as of 2024 until 2030. The proposal requires each Member State (MS) to determine their own national contribution (based on a formula of objective criteria and benchmarks), which reflects national circumstances. We fully expect that each MS will develop its own response to these proposed changes to the EED, and the Company will develop plans and strategies to comply with these requirements for all our European operations going forward.
Air Quality
Reducing air emissions is a central goal of our environmental strategy. We are taking steps to reduce air emissions by implementing emission prevention solutions and switching to cleaner fuels. Our sites regularly monitor their emissions of pollutants to better manage our operations.
Israel
In Israel, air emissions from major industrial operations are regulated by the Clean Air Law (hereinafter - the Law) which aims to improve air quality, prevent, and reduce air pollution by implementing both prohibitions and obligations, and protect the health and quality of life of human beings and the environment. The Law addresses emission sources (including all our production plants in Israel) and is intended to serve as a platform for implementing the regulatory principles currently in place in the European Union (EU), specifically the principles of the IED (The Industrial Emissions Directive) that was adopted by the EU.
ICL Group Limited 104


Our plants in Israel that fall under the definition of Emission Source Subject to Licensing Requirements, have received air emission permits. In the event of deviations from the emission permits’ conditions, we could be subject to administrative enforcement measures, as well as to criminal liability. In addition, certain restrictions on our operations and significant capital investments may be imposed on our Company. In order to comply with the emissions permits granted under the Law, we have made significant investments, and will continue to do so as necessary. As a result, some of ICL’s air emissions have decreased considerably.

DSW and DSM will implement major dust reduction projects over the next few years. Our other production sites in Israel will also increase their efforts to reduce particle emissions.

In June 2021, Rotem Israel's emission permit was renewed by the Israeli Ministry of Environmental Protection (MoEP), which is valid until September 2023. The renewed permit reflects an updated outline of requirements. Postponement in the execution of a limited number of projects was granted within the framework of an administrative order under Section 45 of the Law.
By the end of 2021, Rotem Israel had completed 77 of 194 specific tasks required by the permit. Rotem Israel is striving to implement the requirements of the permit through a multi-year plan that includes several significant emissions reduction projects. Management still expects difficulties in meeting the execution schedules of a limited number of projects and accordingly continues to work with the MoEP to find a satisfactory solution regarding the timing of the investments, taking into account the impact of uncertainty surrounding Rotem Israel's activity, as far as the implementation of long-term projects is concerned. For more information, see “Item 5 - Operating andNote 18 to our Audited Financial Review and Prospects— A. Operating Results— Principal Factors Affecting our Results of Operations and Financial Condition”.Statements.
Europe
 
Liquid, Solid WasteIn Europe, emissions are regulated under the EU IED – Industrial Emission Directive, as well as regional and Land Contaminationlocal regulations. Preventive measures and Best Available Technology (BAT) are applied. These regulations are translated to national legislation. Emission limit values for relevant substances are included as part of the authority's approval. Rules guarantee protection of air, soil and water. In addition, in Europe relevant emissions control is conducted by authority inspection through independent technical supervisory associations and by self-inspection. Relevant plants in the EU are subject to the European SEVESO directive, which requires regular safety inspections and prepare reports.
 
Americas
Air emissions in the Americas are managed through operating permits issued by the relevant agency responsible for each individual site. In the US, air permits are issued under the authority of the US Environmental Protection Agency’s (EPA) Clean Air Act. In Brazil, air emissions are managed under the site’s operation license issued by the relevant state environmental agency.
China
Air emissions in China are regulated in accordance with the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution and the Regulations on the Management of Pollutant Discharge Permits.

SBCL – Bromine leakage occurred during January 2022. According to the guidance of local authorities, production onsite was halted. Corrective actions were taken. Production activity is expected to resume by mid – March, following the approval by authorities.
ICL Group Limited 105


Water
We regard potable water as a high-value natural resource. Several of our major production sites are located in water-stressed regions. Water conservation is therefore an inherent part of our business culture. Our production facilities maintain various water conservation projects, including using brackish water and recycling treated wastewater. We track the consumption of water at our facilities worldwide and promote the implementation of water efficiency projects.
We expect potable water to become scarcer in the future across the globe. As water scarcity becomes a pressing issue due to climate change and other factors, we expect greater and stricter regulation of water consumption and wastewater quality. We also anticipate that we will need to invest additional resources to enhance our water efficiency and wastewater quality at several of our plants.
Several of our major production facilities are located in Israel. The country, though located in a water-stressed region, manages its water resources efficiently. Desalination plants and Reverse Osmosis (RO) plants are major contributors to the country’s potable water resources, thereby reducing potable water scarcity in the country. In addition, industrial facilities, such as our facilities in Sodom, are allowed to use non-potable water where possible.
Further information about water related issues in Israel, see Notes 17 and 18 to our Audited Financial Statements.
Wastewater, By-products, Waste & Hazardous Waste
We track and manage our waste streams and take various steps to reduce waste. We identify and seek to maximize potential reuse and recycling of relevant waste streams and are proactive in searching for ‘circular economy’ opportunities. For further information, see the “Circular Economy” section above. During the production processes at ICL’sour facilities, industrial liquid and solid waste and wastewaterwastes are produced. AccordingStorage, transportation, reuse and disposal of waste are generally regulated by governmental authorities in the countries in which we operate. Wastewater quality and quantities must comply with local regulations and with permits at relevant sites. We strive to theimplement zero discharge permit, wastewater is channeled into water sources or evaporation ponds. The variouspolicies where applicable. Various production sites have adapted their treatment systems to the standards applicable to them. We track and manage our waste streams and take various steps to reduce waste or identify and maximize potential reuse and recycling of relevant waste. Most of the waste is either directly treated by us or treated by external certified vendors.
 
Although we strive to reduce the likelihood of wastewater leakages or solid waste and hazardous materials unexpected releases, we may not always succeed to prevent such incidents, which may occur, among other things, due to various factors that are not within our control. In the event of difficulties in the reuse or disposal of waste generated in our facilities, interruptions or production stoppage may occur and significant costs may be imposed. If we cannot properly mitigate and reduce the exposure, our operations may be adversely and materially affected.
For further information, see “Item 3 - Key Information— D. Risk Factors— As a leading global specialty minerals company the nature of our activities means that we are inherently exposed to hazards relating to materials, processes, production and mining" and “Item 3 - Key Information— D. Risk Factors— Our ability to operate and/or expand our production and operating facilities worldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations”.
ICL Group Limited 106

Israel
 
Liquid and solid waste and other emissions are regulated by multiple regulations. Our plants in Israel implement waste monitoring and management measures. Each plant is required to inform the authorities on the amount of waste and treatment method for every waste stream under Israel’s PRTR (Pollutant Release and Transfer Register) regulation. Wastewater regulations, including effluent limits, are regulated by the MoEP and partly by local authorities.
Pursuant to the conditions set by the MoEP in their Toxins Permits, our plants in Israel have conducted historical land contamination surveys and submitted them to the MoEP.
 
ICL Dead Sea (DSW) - Salt by-product is transferred to a large open-air depot, in proximity to DSW’s site. The open-air depot's dimensions (height and area) are limited by statutory requirements. DSW is examining alternatives for salt storage/treatment.
Rotem IsraelAt the RotemThe site is implementing a master plan for treating waste is being implementedwastewater treatment, with the principal goal to reduce theof reducing effluent quantities, turning part of theby converting some effluents into products, wastewater recycling, the wastewater, reducing the water consumption, treatmenttreatment/neutralization of wastewater and neutralization and restoration of the wastewater ponds, including theponds. The plan currently includes additional wastewater causedstreams created by the air emmision purificatio processemission purification processes, as required by the Israeli Clean Air Law.
 
As part of theits treatment of liquid and solid waste, treatment, Rotemthe site is treating thetreats gypsum waste by ponds and storage. In JuneSeptember 2021, the authorities approved a gypsum storage comprehensive plan that would allow the Company to store gypsum for the next 30 years. In addition, the plan allows the use of “Pond 5”, which has been operating since 2018, until the new Pond 5 started to operate.end of its operational life, expected in 2024. The Company started reclamationbegan planning forthe remediation of gypsum pondsPonds 1 through 4to 3 that were used by Rotem Israel in the past. In October 2018,accordance with current regulatory requirements, future expansion of the Court approved a settlement agreement between ATD (Adam Teva V’Din - Israeli Associationstorage piles will need to be positioned on new protective infrastructure. Another requirement is the establishment of restoration methodologies for Environmental Protection)these large storage piles. Rotem Israel is planning to comply with these requirements and is striving to find alternative uses for the Company. Based on the agreement, Rotem will submit a plan for building a future gypsum pond on the west side of road 258. In addition, to the authorities' request, Rotem will submit an alternative location. The final location will be determined based on a full environmental survey, that will be held in the first half of 2019.with external industry partners. For additionalfurther information, see Note 2018 to our Audited Financial Statements.
 
The CompanyRotem site has conducted several pilots for wastewater recoveryalso completed the implementation of a multiyear master plan to prevent ground pollution by fuels or oils.

Neot Hovav - Pursuant to the requirements of the MoEP, in the coming years our Neot Hovav site will be required to treat existing hazardous waste (historical). This waste is stored in a designated defined area on the site's premises, in coordination with the MoEP. Some of the currently produced waste is also stored in this area. Treatment of this waste is partly conducted through a combustion facility (Bromine Recovery Unit), which recovers hydro-bromine acid. Additional waste quantities are sent to external designated treatment facilities. Once the area is cleared, the Company will be required to conduct soil surveys.  For further information, see Note 17 to our Audited Financial Statements.
ICL Periclase - The site is working to reduce historic Magnesia waste, stored in a designated waste area, and to reuse it for the plants of WPA, MGA and fertilizers.
In 2017, as a resultbenefit of a partial collapse ofcircular economy. ICL Periclase is implementing a dyke in Pond 3project that uses magnesia powder, a non-hazardous material, to fill sinkholes in the plants of Rotem Amfert Israel, a leak occurred into Ashalim stream. Rotem Amfert Israel takes intensive actionDead Sea region. The project is expected to restore the stream, in full cooperation with the relevant authorities. For additional information, see Note 20 to our Audited Financial Statements.be completed by January 2023.
 
Fertilizers & Chemicals (F&C) – In
ICL Haifa facility, several biological pilots and other pilots were conducted(F&C) – Treated wastewater of the site's facilities flows into the Kishon River, according to find possible solutions for compliancea permit issued by the MoEP. To comply with the standards covering treatment of the facility’s wastewater, flowing into the Kishon River, as directed bysite, in coordination with the Inbar Committee. After careful considerations, the solution that was chosen and approved by the authoritiesMoEP, is to drill to the underground water zone in orderconducting a project to channel the treated wastewater into the underground water. The investment expected to be carried out during 2019.underground. This project is in advanced stages.

93

 
Neot Hovav
ICL Group Limited 107


Following laboratory tests that were performed at the site, the MoEP raised a concern regarding local underground water pollution. Therefore, the ICL Haifa site was given two alternatives - Atsealing the Bromine Compounds plantexisting runoff pond, or building a sanitary facility for independent treatmentnew pond. After a thorough examination of the sanitary effluentstwo alternatives, the site decided to build a new pond to reduce the risk to which the plant is operated. exposed.

The treated wastewater is sent as an input feed intoproduction process of phosphoric acid produced in the cooling towers. In addition,1990’s at a facility was constructed for treating industrial wastewater, which includeshas since been shut down, has created a transmission system, physicochemical unit, MBR (Membrane Bio Reactor) unit and evaporation ponds. The system was built according to a US standard, which includes leakage monitoring and air monitoring. In 2013, construction of the evaporation ponds was completed, and all the plant’s wastewater is presently being pumped into these evaporation ponds.
Pursuant to the requirements of the Ministry of Environmental Protection,by-product in the coming years ICL is required to treat the existing hazardous waste (historical),form of a gypsum pile which is stored on a specialat the site. The site on the facility's premises (Area 14)is working in coordination with the Ministry of Environmental Protection, as well asMoEP and taking the ongoing waste that is produced innecessary actions according to regulatory requirements, including the facility's present manufacturing processes. The treatment is partly through a combustion facility, which recovers hydro-bromine acid, while part ofToxins Permit issued to the waste will be sent to an outside source for treatment. The total provision for waste treatment amounts to about $56 million.
Industrial Products operates a special authorized laboratory for monitoring and analyzing wastewater quality.
ICL established a thickening and filtration facility to treat waste at the Periclase plant in Mishor Rotem. site.
 
Europe
 
Liquid and solid waste and emissions are regulated under the European IED – Industrial Emission Directive. The Company implements waste monitoring and other management measures, andmeasures. It is  obligated to inform the authorities of the results. Wastewater regulations, including effluent limits, are regulated by states and partly by communities. ICL hasWe are subject to provisions regarding the avoidance of pollution and conditions for assessing compliance with the emission limit values.
 
Wastewater is partly pretreatedpre-treated and sent to municipalities and third parties for final treatment before discharging. The productiondischarge, or at levels that can be discharged to surface waters without treatment. Production processes, in general, aredo not generatinggenerate significant volumes of direct solid waste. In caseevent that solid waste needs tomust be disposed, of, the required documentation and approvals under thewe strive to perform in accordance with relevant European regulations are fulfilled.requirements.
 
Due to phosphate pollutionICL Boulby - All wastewater leaving our site in the subsoil of the Ladenburg site, the phosphate concentrationUK is monitored at several wells and reported regularlypermitted according to the authorities.UK’s Environment Agency. The site's wastewater consists of extracted sea water, mine brines, gathered surface rainwater and water treated at the on-site sewage plant. Multiple parameter limits are imposed on the site by the wastewater permit, and no compliance breaches have occurred since the site’s transition to producing Polysulphate®, and, in fact, wastewater amounts have been reduced considerably.
 
In Spain, a multi‑year
ICL Iberia - A multi-year program is underway to restore large salt piles, while paying close attention to the issue of wastewater drainage and sludge treatment. In 2015, in accordanceApril 2021, the Company signed an agreement with the provisionsACA, Catalan Water Agency, for the construction and operation of a new collector. The new collector is infrastructure required for the removal of brine water that will be used for restoration, as well as for production. For further information regarding the restoration plan and the agreement for the construction and operation of the Spanish Waste Management regulation, ICL Iberia submitted to the Government of Catalonia a mining site restoration plan for the two production sites Suriacollector in Spain, see Notes 17 and Sallent, which includes a plan for handling the salt piles and dismantling of facilities. The restoration plan for the Suria site is scheduled to run up to 2094, whereas for the Sallent site up to 2070. In June 2018, the new restoration plan was approved. For additional information, see Note 2018 to our Audited Financial Statements.
ICL Iberia has also successfully passed the audit for the certification of UNE 22470 and 22480 standards, which accredited ICL Iberia as a sustainable mining company. ICL Iberia is also engaged in a program regarding non-mining waste management to valorize and reduce its waste, in accordance with local and European waste management.
 
94
ICL Group Limited 108

 
Americas
 
The liquidLiquid and solid wastes in theat our Americas sites are managed underin accordance with country and state specificstate-specific regulatory requirements. In the USA,US, solid and hazardous wastes are regulated underby the US EPA’sEnvironmental Protection Agency’s (EPA) Resource Conservation and Recovery Act. In Mexico, waste is managed through the site’s single environmental license or the LAU issued by SEMARNAT. In Brazil, waste is managed under the site’s operation license issued by the Sao Paulo Staterelevant state environmental agency – CETESB.agency.
 
ICL follows a qualification process for waste vendors which assistswho assist us in ensuring that waste is properly profiled, treatment standards are followed, and disposal processes meet regulatory requirements. Wastewater is managed through site industrial discharge permits that are managed through federal, state or local agencies. Waste waterWastewater treatment is mainly focused on chemical treatment. The wastewaterWastewater treatment systems are maintained on a regular basis.
 
ICL US Gallipolis Ferry - The site operates under a National Pollutant Discharge Elimination System (NPDES) Permit which regulates water discharge from point sources and is renewed every 5 years. The site operates a large Wastewater Treatment Plant (WWTP). Discharge limitations, set by the West Virginia Department of Environmental Protection (WVDEP), are becoming stricter, placing a challenge on the treatment capabilities for some parameters being treated within the current WWTP. Therefore, in 2021 the site installed new technology for its wastewater treatment processes. The site has been very active in pursuing recycling initiatives, which helped achieve a landfill to recycling ratio of 50%. Additionally, the facility entered into a Voluntary Remediation Agreement (VRA) with the former owner of the facility, and the WVDEP. The active remediation has been completed and is being reviewed by the WVDEP for approval.  Currently, there is ongoing periodic groundwater sampling, analysis, monitoring, and reporting to the WVDEP, per the VRA.
China
 
The phosphateAccording to the Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution and the National Catalogue of Hazardous Waste, solid waste is collected, stored and transferred. General industrial solid waste is entrusted for comprehensive utilization by qualified organizations, and hazardous waste is entrusted for treatment by organizations with a Hazardous Waste Business License issued by the Department of Ecological Environment of Yunnan Province.

YPH- All wastewater at YPH, after physical or chemical treatment, is reused in the production system with zero discharge.
LYG - During 2021, ICL ceased operations at its LYG plant following a request by the Chinese authorities to either relocate the plant or cease its operation. As part of the closure process, soil surveys were conducted. Once concluded, ICL is expected to receive compensation due to the closure.
ICL Group Limited 109

Ecological Impact
We manage our mineral extraction sites according to local regulations and depend on concessions that are granted to us. Our broad and varied operations cover the entire lifecycle of our products, from the initial production of raw materials through manufacture of the final product. This is becoming more challenging as the population grows in Chinaproximity to our sites. To try to minimize any unexpected disturbances by our facilities to their surrounding communities, we have increased our efforts to take precautions and safety measures in our activities, especially those which involve hazardous materials.
We aim to minimize the ecological impact of both our mining and production activities, beginning at the initial stage of planning, through the implementation of recommendations and finally by monitoring and minimizing their impact. We continuously implement relevant operational methodologies and necessary technologies to prevent unexpected ecological impact. In the event of an ecological impact, we strive to mitigate and remediate the impact, in accordance with best practices and regulatory requirements, including by coordination with the relevant local authorities. For further information, see “Item 3 - Key Information— D. Risk Factors— As a leading global specialty minerals company the nature of our activities means that we are inherently exposed to hazards relating to materials, processes, production and mining".
It should be noted that our Sodom production facility is located in the Jordan Rift Valley, or Syro-African Depression, a ruralseismically active area. For further information, see “Item 3 - Key Information— D. Risk Factors— The Company’slocations of some of our mines and facilities expose us to various natural disasters, including as a result of climate change".


ICL DSW – Due to the negative water balance, the water level in the northern basin of the Dead Sea is decreasing. The receding water levels over the years has required ICL to reposition its pumping station northwards, in order to enable continued operations in the Dead Sea region, which also enables the existence of tourism infrastructure. The P-9 pumping station and feeder canal crossing the Tze’elim stream were constructed in order to maintain operational continuity. The Tze’elim stream alluvial fan is one of the largest and most developed of all the surviving fans in the area, and therefore it is important to preserve it and to protect the biodiversity existing in this habitat. ICL reached an agreement with environmental authorities and organizations, according to which, seven culverts were constructed above the excavated canalto allow flood waters to flow through the original flow channel, without damaging the feeder canal,while maintaining the braided channel fan pattern. In addition, the culverts serve as an ecological corridor, by providing passageways for animals. ICL periodically reviews field data and makes adjustments in accordance with the findings. For further information, see “Item 4 – Information on the company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations- Dead Sea”.

ICL Iberia - ICL Iberia’s past activities have resulted in the salinization of some water wells in the Suria and Sallent sites. Compensation to the relevant owners is under discussion. For more information, seenote 17 to our Audited Financial Statements.
 
Rotem Israel - In 2017, Rotem experienced an environmental accident in Chinawhich approximately 100,000 cubic meters of acidic phosphogypsum liquid were released into the surrounding environment, as a result of a breach in its Number 3 detainment pond. The liquid entered the nearby Ashalim Creek (Nahal Ashalim), which flows through an area designated as a nature reserve. To the best of our knowledge, as of the reporting date, criminal investigation of the event is still underway. We took intensive actions to restore the creek, to its state prior to the accident, in full cooperation with the relevant authorities.
ICL Group Limited 110



Following the incident, the Israel Nature and Parks Authority (INPA) closed the nature reserve to the public. We conducted a risk assessment process of the creek, together with leading experts. The assessment was meant to assure that the creek’s hiking trails can be reopened and do not pose risks to hikers' health. The assessment was completed in late 2019 and the results were presented to the authorities. All risk levels were found to be acceptable, and in June 2020, the Ashalim Creek was reopened for hikers. For further information, see Note 18 to our Audited Financial Statements.
Rotem Israel is in a process to remediate its gypsum ponds, based on a remediation plan that was established following the ‘Florida Standard’ and approved in 2020. The remediation work, which commenced in September 2020, was stalled due to discussions with the MoEP regarding the approval of landscape restoration. Discussions are tested once every six monthsstill on going, but Rotem Israel expects to resume remediation process during 2022. In addition, Rotem Israel is designing a remediation action plan for its acidic wastewater ponds.
In 2020, an application for a class action was filed against the Company, according to which, discharge, leakage and seepage of wastewater from Rotem's Zin site, allegedly caused various environmental hazards to the Zin stream, which resulted in damages. For future information, see Note 18 to our Audited Financial Statements.
Part of the environmental challenges Rotem Israel is facing and handling, including certain environmental class actions against the Company, pertaining to environmental damages originating in the period that the Company was owned by the Center for Environmental Protection regarding gathering of solid waste and hazardous waste. In orderIsraeli government, prior to comply with the local regulations, the Company has adapted its plant by means of installation of systems for removal of wastewater and diversion thereof from clean water sources, including transferring phosphogypsum water (which is created as a by-productprivatization.
ICL R&D Beer Sheva - A soil survey was conducted. The initial results of the production processes) into designated ponds for further treatment. The plant has received a license for unloading contaminating materials and strict environmental licenses and it is in compliance with all the laws and regulations. Furthermore, annual land examinations are conductedsurvey point to small amounts of contamination. ICL will act in accordance with the regulatory requirements.survey's findings, and related MoEP guidelines.
 
Land contaminationlCL Periclase - In 2021, brine, a non-hazardous substance, leaked from a ruptured pipeline in a nature reserve. No significant damage was recorded, and we are in the process of remediating the area. We committed to testing and replacing the necessary pipeline components, in order to prevent future occurrences.
 
All
ICL Group Limited 111


Biodiversity
Biodiversity, also called biological diversity, is the variety of life found in a place on Earth. A common measure of this variety, called species richness, is the count of species in an area. We recognize the need to consider environmental factors when using land and managing our operations, particularly in ecologically sensitive areas, including areas with unique cultural value. We are committed to ongoing consideration of the Company's plantsimpact of our activities on biodiversity in Israel have conducted historical land surveys, based on a demand received as partour decision making.
Examples regarding our management of biodiversity at some of our mining sites includes the following:
ICL DSW - Sodom Saltmarsh Lake. The Ashalim reservoir, located south of the conditions for receipt ofICL’s Dead Sea site, is a business license regarding an integrated arrangement, submitted them to the Ministry of Environmental Protection and are awaiting the Ministry's instructions.
At the Sodom site, historical crude oil contamination has been found near the operational salt reservoir.wet habitat, situated within a typical arid habitat. It is abundant with rich biological diversity. ICL Dead Sea, submitted a planwhose excavations in the region created this wet habitat, takes extra measures to preserve it and invests in making this unique habitat accessible to the Ministrypublic. In the past, the Sodom salt flats area was a resting stop and habitat for migratory birds. Today, due to changes in the land’s use – to agriculture, residential and industrial purposes, almost no salt flats remain. These flats have unique characteristics with high salinity in the soil and unique species that have adapted to these extreme conditions. The salt flats in Israel are a rare habitat and have been shrinking over time. The Sodom Saltmarsh Lake, initially created as a result of Environmental Protection for treatment at the site and is awaiting the Ministry's instructions.
In addition, a groundwater study in ICL Dead Sea’s old power stations’ contaminated fuel tank farm showed noexcavation activities, has become a salt flat substitute. The lake was created from a rise in groundwater contamination; however, soil rehabilitation is expected in the future. Atexcavated area. Over the old gas station, boreholes were drilledpast few years, the lake has had relatively good water quality year-round. We also started monitoring the lake, using sensors, to continuously measure its water quality. Vegetation was planted in a stable water environment. The lake is now used as a resting spot for migrating birds and diesel fuel is being pumped from the contaminated groundwater.as a nesting site for a wide range of species.
 
Furthermore, the implementation of a multi‑year master plan to prevent ground pollution by fuels or oils at our Rotem sites was completed.

ICL Boulby - Adjacent to ICL Boubly’s mining facilities, and within its operational area, are non-developed turfs where important habitats and species flourish. Most notable are the woodlands at Mines Wood and Ridge Lane Wood, near Dalehouse. These are some of the most wildlife-rich woodlands in the Northeast England / Yorkshire areas. The woodlands are home to invertebrates, birds and mammals. For over a decade ICL Boulby has worked with the Industry Nature Conservation Association (INCA) to monitor and manage the wildlife that exists in proximity to the mine. Key to this process is a Site Biodiversity Action Plan (Site BAP), operated by ICL Boulby within its operational area. The site BAP is designed to conserve the key habitats and species which live at the site, and is assisted by INCA annually.For further information see: “Item 4 – Information on the Company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations” and Note 18(c) to our Audited Financial Statements.
 
95ICL Group Limited 112


 
Hazardous Substances
Some of the substances used at our facilities across the world (such as raw materials, etc.) are considered as hazardous substances. These substances require governmental approvals and registration. Relevant safety measures and procedures for storage and handling are implemented and maintained. Measures are taken to reduce the likelihood and the potential severity of incidents in case of an exposure to hazardous materials. This includes risk assessment, training, personal protective equipment (PPEs) and other relevant mitigation measures for employees and contractors. In addition, suppliers, transporters and vendors are qualified for proper handling of these materials.
 
Israel
 
As part of ICL’sour operations it produces, stores, transports,in Israel, we produce, store, transport and usesuse materials that are defined as hazardous materials according to the Israeli Hazardous Substances Law, 1993. Handling such substances requires a special permit for hazardous material from the MoEP ("poisons permit"Toxins Permit") that is renewed annually. All ICLour Israeli companies have poisons permitsa Toxins Permit, as required by law, and they operate according to the special conditions defined in these permits. Leakage or loss of control of these materials could causeresult in an environmental incident and cause damage to people and/or to the environment. ICL takesWe take measures to prevent such occurrences, and, at the same time, it prepareswe prepare for such occurrences by means of emergency teams training and appropriate equipment for dealing with these types of events.
 
Europe
 
Some of the substances used in ICL’sour European facilities in Europe (such as raw materials, etc.)materials) are considered to be hazardous substances. Required approvals and registrations for these substances are acquiredsecured and maintained. Relevant safety measures and procedures for storage and handling are also implemented and maintained. In addition to these measures, we only use qualified suppliers and transport companies, are used, andwhile qualification and training of employees areis conducted on a regular basis. All requirements based on the GHS (Globally Harmonized System of Classification, Labelling and Packaging of Chemicals) are acquired and maintained.
 
Americas
 
Hazardous substances are utilized at ICL’s facilities in the Americas as raw materials and can also be found as finished products. Where required, registrations for the storage, handling and transportation of these materials are acquiredsecured and maintained. Measures are taken to reduce the likelihood of releases of hazardous materials by way of supplier and transporter qualification, as well as training of employees, contractors and vendors on the proper handling of these materials.
China
Hazardous substances are utilized at our facilities in China as raw materials and can also be found as finished products. Where required, registrations for the storage, handling and transportation of these materials are secured and maintained. Measures are taken to reduce the likelihood of releases of hazardous materials by way of supplier and transporter qualification, training of employees, contractors and vendors on the proper handling of these materials.
 
ICL Group Limited 113
96



Limitation Regulation and Registration of our Products
 
C. ORGANIZATIONAL STRUCTURE
As a global specialty minerals company, we are subject to multiple rules and regulations in terms of product safety. We ensure that the substances we produce, and sell, are handled in accordance with all such rules and regulations throughout their life cycle. These rules and regulations, among other things, impose limitations on the use of specific substances and products, require us to register and label some of our products and more. We continuously monitor these rules and regulations and take the necessary operational measures to ensure that we remain in material compliance with them.
* New European Fertilizer Product Regulation
One of the future regulatory changes that may impact our products is the new European Fertilizing Product Regulation (FPR, formerly known as NFR), which was published in in 2019, with an effective date of July 2022. FPR covers a broad scope of materials, including all types of fertilizers, liming materials, biostimulants, growing media, soil improvers, inhibitors and other blends of these materials. The new regulation requires fertilizer producers to monitor new contaminating elements in fertilizer products. In addition, pursuant to FPR, fertilizer producers will have to demonstrate the ability to track their products to ensure their quality in the production and supply chain. The labelling of fertilizer products will need to change, and conformity assessment methodologies will need to be updated. Moreover, new tolerance levels for fertilizer contaminants are included in the FPR. One focus area is the level of cadmium in phosphate containing fertilizers. In addition, FPR includes very challenging biodegradation requirements for polymer coatings on controlled release fertilizers. These requirements need to be established by ICL until July 2026, for continued sale of controlled release fertilizers. We are actively undertaking steps to adjust to these new regulations for all relevant products.
New Chinese Polysulphate standard
A new industry standard for Polysulphate (as a fertilizer) was recently published in China. We are examining how this new standard may affect the supply of Polysulphate to the Chinese market and the options to meet its requirements.
ICL Group Limited 114


Chemicals Regulation and Registration
Europe and UK
The EU has established one of the most comprehensive chemical regulatory frameworks in the world known as REACH, a regulation setting up a framework for registration, evaluation, authorization and restriction of chemicals in the EU. Chemicals imported or manufactured in the UK are regulated by a new UK chemical legislation similar to EU REACH.
All ICL segments are implementing REACH, and are registering their chemicals as required by law. We have submitted applications for registrations of all chemicals relevant to our businesses in the EU (production and sale). As of the date of this Annual Report, a few substances are under evaluation by the authorities (ECHA and the member state). In addition, there are substances listed as Substances of Very High Concern (SVHC), which may result in various regulatory restrictions.
The following are examples of EU limitations on the use of specific chemicals used as flame retardants, biocides and other uses:
The European Ecodesign E-Display regulation, published by the European Commission in December 2019, bans the use of halogenated flame retardants in electronic display enclosures. The regulation has been in force as of March 2021. This is the first-time chemicals have been regulated under this regulation and was justified as a means to improve plastics recycling.
We believe the regulation conflicts with other EU regulatory processes, such as RoHS and REACH, and does not take into consideration current practices of EU plastics recycling. In addition, there are several available technologies for the recycling of plastics with halogenated flame retardants, while alternative flame retardants (not halogenated) present difficulties for plastics recycling. One plant recycling halogenated flame retardants is already in operation (PSLoop). BSEF (the International Bromine Council) has filed a lawsuit against the European Commission, petitioning the EU court to remove the ban. The ruling is expected during 2022.
Tetrabromobisphenol A (TBBPA or TBBA) flame retardant is under review as part of REACH. The results of the review are expected during 2022. TBBA is also being reviewed under the European Directive on the Restriction of the Use of Certain Hazardous Substances in electrical and electronic equipment (RoHS). The draft assessment was published in December 2019 and includes a proposal to restrict TBBA for its additive uses in plastics for EE&E (Electric and Electronic Equipment). BSEF commented on the proposed regulation, expressing concern regarding the scientific basis to justify any restrictions. The European Commission will review and make its final decision, likely in fourth quarter 2022. TBBA is mostly used as a reactive flame retardant and not as an additive.
Additionally, in November 2020, a proposal by Norway to classify TBBA as a carcinogen category 1B was made public and open for a consultation period until the end of January 2021. The proposal was reviewed in September 2021 by the Risk Assessment Committee (RAC) of ECHA, which provided an opinion that the classification is warranted. This change is likely to increase pressure to stop the use of TBBA as an additive flame retardant and increase workplace controls for all European manufacturers. A final decision by the Commission is expected during 2022.
ICL Group Limited 115

Ammonium Bromide: Sweden has filed a dossier supporting proposed classification as reproductive toxin category 1B under the Classification, Labelling & Packaging (CLP) EU Regulation. In October 2020, the risk assessment committee (RAC) of ECHA provided an opinion that the classification is warranted.  The final Commission decision on the classification is expected by Q2 2022. A decision on the further use of ammonium bromide as a biocide will be taken by the BPC (Biocidal Products Committee), probably during 2022, pending provision of additional data to be requested by Sweden.
Additional specific products of the Industrial Products segment are in the process of evaluation under REACH. For some products, there are draft or final decisions by ECHA to perform additional studies, a process that will take a few years until evaluations are completed. Other products are in the process of evaluation under the Biocides Products Regulation (BPR).
EU Chemicals Strategy for Sustainability
In addition to REACH and the various chemical-specific limitations described above, the European Commission has introduced a new Chemicals Strategy for Sustainability (CSS).
CSS was launched in October 2020 to provide a new long-term strategy for chemicals related policy, in line with the aims of the EU Green Deal. The CSS strives for a toxic-free environment, in which chemicals are manufactured and used in a way that maximizes their societal contribution, but avoids causing harm to the environment or the population, now and in the future. The strategy contains around 80 action points, which may have a significant impact on existing or future legislative frameworks such as CLP (Classification, Packaging and Labelling Regulation) and REACH.
We are carefully monitoring developments related to CSS, in order to be prepared for upcoming regulatory requirements which may affect many of our products.
US
The Toxic Substances Control Act of 1976 (TSCA), which was reformed in 2016, addresses the production, importation, use, and disposal of specific chemicals in the US. The TSCA is administered by the US Environmental Protection Agency (EPA), which regulates the introduction of new and existing chemicals. Under TSCA, certain substances are prioritized by EPA for its risk assessment. EPA publishes projected timelines for prioritized substances and the risk evaluation process. Some ICL products, such as TBBA, are under the TSCA evaluation. We are closely monitoring these publications, which might entail regulatory decisions on restrictions.
The state of New York has passed a bill banning halogenated flame retardants in electronic display casings. The new law impacts display and stands greater than 15 inches. It also places reporting requirements on manufacturers and retailers on the flame retardants they use in these devices. The law is expected to become effective in 2025. We believe the law conflicts with the federal TSCA's Law and the American Chemical Council is evaluating legal action.
Asia
In addition to REACH requirements in the EU, other countries, including South Korea, Turkey and EAEU (Eurasian Economic Union), have adopted, or are in the process of adopting, restrictive regulations similar to REACH, which may affect our ability to manufacture and sell certain products in these countries in the future.
In January 2019, amendments to South Korea's version of REACH (known as K-REACH) came into force. We completed, on time, the notification process under K-REACH, which is a prerequisite for the full registration (pre-registration phase), allowing us to continue selling in South Korea during the transition period, prior to the registration. ICL is working in accordance with the plan established for the registration of its products, which is in line with the deadlines defined by regulation.
ICL Group Limited 116


In June 2017, Turkey published its version of REACH, called the KKDIK Regulation. According to the KKDIK Regulation, chemicals, in excess of one ton per year, that are imported and/or manufactured in Turkey, need to be reported by December 31, 2020, followed by subsequent full registrations by December 31, 2023. The Company’s Turkish representative notified the Turkish authorities regarding its relevant substances in a timely manner.
Eurasia REACH requires companies that manufacture or import substances and mixtures into EAEU (Eurasian Economic Union) countries (Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan), in any amounts, to register these substances and mixtures. Although the requirement to notify of any such substances is on a voluntary basis, it is important for us to participate in this process, in order to ensure that our relevant substances will be listed in the EAEU inventory. We are participating in the inventory build-up process, and have submitted relevant substances for inclusion by the Russian authorities.
Israel
Following Israel's acceptance to the OECD in 2010, Israel's MoEP published a draft law to establish a national inventory of industrial chemicals and established processes for risk assessment and management of chemicals in Israel. The MoEP proposed that the law will enter into force on March 1, 2023, but it will give manufacturers and importers until September 1, 2024, to register chemicals. ICL is actively involved, via the Israel Manufacturers Association, in providing inputs regarding the proposed law. Once this new regulation enters into force, it is expected that it will have an impact on ICL, importers and manufacturers in Israel, including higher costs and complex administrative processes.
For more details on regulations and limitations of our products, see “Item 4 - Information on the Company— B. Business Overview—Regulatory and Environmental, Health and Safety Matters — Limitations on the Use of Specific Chemicals Used as Flame Retardants, Biocides and Other Uses".
Business Licenses and other permits
In the ordinary course of our Company’s business activities, we hold business licenses, permits and governmental approvals, including such related to environmental, health and safety, that are issued by various regulatory agencies to operate our facilities. We may be required to obtain or renew such licenses, permits and governmental approvals in the future, in order to continue our current or future operations throughout the world. ICL strives to comply with the terms and conditions set out in its business licenses and permits, as applicable, and in the event of any non-compliance, ICL acts to amend in full coordination with the relevant agencies. We do not believe that any individual plant facility that is subject to a business license or permit is material to our operation as a whole.
ICL Group Limited 117


In 2020, our ICL Terneuzen site submitted an application to renew its environmental permit. The application is expected to be addressed by the relevant local authorities in the first quarter of 2022. Our current permit is valid until the new permit is obtained. Local environmental authorities have updated the SVHC list, and for the materials listed there will be a need for adaptations. IPT continues to work together with the Dutch environmental authorities to close any relevant gaps, as identified in a gap analysis conducted in 2021. Please see “Item 3 - Key Information— D. Risk Factors - Our ability to operate and/or expand our production and operating facilities worldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations.”
Cybersecurity
Our Global IT team handles the operational cybersecurity policies and measures regarding the Group’s global infrastructures, in collaboration with the plants' engineering and control units.
ICL’s cyber security strategy resides on three fundamental pillars: (a) plants and operational security, (b) critical assets & data protection, and (c) fraud prevention. For each pillar, there is a program that seeks to reduce the risks identified. All these programs are periodically reviewed by internal governance structures to assess their effective impact on the Group’s risks. For the purpose of critical plants protection, we continuously cooperate with the National Cyber Directorate - the National CERT, the Ministry of Energy and the Ministry of Environmental Protection in Israel.
As cyberattacks evolve and become more sophisticated, the Group has had to strengthen its prevention and monitorization efforts. As part of such efforts, ICL routinely reviews, reinforces and tests its security processes and procedures through simulation exercises in the areas of physical security and cyber security. The outcome of such exercises is an important part of a feedback process designed to improve the Group’s cybersecurity strategies.
As part of our ongoing efforts to strengthen our cyber defenses, we conducted a comprehensive Cyber Maturity survey in 2019 in cooperation with a leading international consulting firm, which was revalidated in 2020, and will be revalidated again in 2022, alongside intrusion drills and instructional videos designed to raise employee awareness. In addition, the Company retained the services of an SOC cyber center operating 24 hours a day, as well as cyber intelligence services. We also conducted a risk assessment of our sensitive IT systems in cooperation with several leading Israeli and international companies in the field of cyber defense. The Group also tests its continuity plans in order to improve disaster recovery in instances where an incident or vulnerability threatens the continuity of one or several critical processes, services or platforms.
Other lines of action also include the adequate training of ICL's management members in the area of security and incident management. Periodically ICL carries out simulation exercises in order to raise the level of awareness and preparedness of certain key personnel. We maintain cybersecurity and fraud insurance policies. These insurance policies are subject to certain loss limits, deductions and exclusions and we can provide no assurance that all losses related to a cybersecurity or fraud incident will be covered under our policies. For further information, see “Item 3 - Key Information— D. Risk Factors— Significant disruptions in our, or our service providers’, information technology systems or breaches of our, or our service providers’, information security systems could adversely affect our business”.
ICL Group Limited 118

Water Wells Production Permits
The water supply to DSW is executed via approximately 40 drillings, most of which are located within the concession area. Seven drillings - the Ein Ofarim drillings - are located outside the concession area, and DSW is therefore required to sign, from time to time, lease contracts for limited periods with the Israel Land Authority (ILA).
The contracts renewal process is lengthy and DSW has been working for several years to renew the contracts. As of today, five contacts have been renewed until 2026, two contracts that expired in 2016, are still in the process of being renewed.
In addition, the drillings require a drilling license issued by the Water Authority, and at the beginning of every year the Water Authority issues the Company with a water production license that defines the production capacity of each drilling.
In 2017, the Israeli Water Law was amended, according to which saline water of the kind produced for Dead Sea plants by the Company's own water drilling is charged with water fees. The Company objected to the charges relating to water drilling within the concession area, which constitutes about 65% of the total charge, based on various arguments, most notably the provisions of the Concession Law. In October 2021, the Water Authority informed the Company that water fees will not be charged for water production within the concession area.
In addition, in March 2021, a decision was made by the Water Authority, whereby despite the Company's objection, its definition should be changed to "Consumer-Producer", as defined in the Water Law, starting with the production license for 2021. The main implication of this change is an increase in the water fees of about $3 million per year for water from drillings outside the concession area. The Company filed an appeal with the water court against the said decision and the parties presented their arguments in a preliminary hearing. A hearing procedure is being held, in the framework of which an additional deliberation was scheduled for April 2022.
ICL Group Limited 119


   C. ORGANIZATIONAL STRUCTURE


A list of our main subsidiaries, including name and country of incorporation or residence is provided in an exhibit to our Form 20-F filed with the U.S. Securities Exchange Commission, which can be found at www.sec.gov.
 

ICL Group Limited 120
97


  
D. PROPERTY, PLANT AND EQUIPMENT


The Company operates production facilities in its worldwide locations, including the following:
 
·
Israel: under the Israeli Dead Sea Concession Law, 1961, as amended in 1986 (the “Concession Law”), we have lease rights until 2030 for the salt and carnallite ponds, pumping facilities and productions plants at Sodom. We have other production facilities in Israel, situated on land with a long‑term lease, including the plants at Mishor Rotem, the Oron and Zin sites of Phosphate Solutions segment (Oron is under an extension process), production facilities at Naot Hovav of Industrial Products segment (leased until 2024-2048), as well as production, storage and transportation facilities together with chemicals and research laboratories at Kiryat Ata that belong to Innovative Ag Solutions segment (leased until 2046-
Israel: under the Israeli Dead Sea Concession Law, 1961, as amended in 1986 (the “Concession Law”), we have lease rights until March 31, 2030, for salt and carnallite ponds, pumping facilities and productions plants at Sodom. We have other production facilities in Israel, situated on land with a long term lease, including the Oron and Zin plants at Mishor Rotem of the Phosphate Solutions segment (the lease agreement for Oron plant has been under an extension process since 2017), production facilities at Naot Hovav of Industrial Products segment (leased until 2024-2048), as well as production, storage and transportation facilities together with chemicals and research laboratories at Kiryat Ata that belong to the Innovative Ag Solutions segment (leased until 2046 2049). We also use warehouses and loading and unloading sites at the Ashdod (leased until 2030) and Eilat ports (negotiations are underway to extend the agreement). We also use warehouse, loading and unloading sites at Ashdod and Eilat ports (leased until 2030).
 
·Europe:
 
Germany: the productionProduction plants of the Phosphate Solutions segment are located at Ludwigshafen, Ladenburg and Hemmingen (Hagesüd).Ladenburg. The production plants of the Industrial Products segment are located at Bitterfeld. All the plants, in addition to Ludwigshafen, are owned by the Company.Company.
 
The Netherlands: the productionProduction plants of the Industrial Products segment at Terneuzen are owned by the Company. A facility of the Phosphate Solutions segment in Amsterdam is held under a lease until 2034 (or under certain conditions up to 2044)2040 and a production facility in the southern Netherlands is located on land that is partly owned by the Company and partly held under a long‑term lease.
 
Spain: the concessionsConcessions at the potash and salt mines are held under the concession agreements described below. The potashPotash and salt production plants, and the warehouses as well as theand loading and unloading facilities of the Potash segment at Catalonia are owned by the Company. The Innovative Ag Solutions segment also owns a liquid fertilizer and soluble fertilizer production plant in Totana, owns another plant for mixing solid fertilizers in CartagenaLos Patohos and has a concession in Cartagena port until 2024.
 
The United Kingdom: the rightsUK: Rights to the polyhalite and salt mines are held under the concession agreements described below. The polyhalitePolyhalite and salt production plants and the warehouses of the Potash segment in Cleveland are owned by the Company. The warehouses and bulk loading and unloading facilities at the port are leased until March 2034. TwoThe company owns three peat moors of the Innovative Ag Solutions segment are owned by the Company and one is leased. In addition, Innovative Ag Solutions segment owns a plant for producing growing media in the north of the United Kingdom and anotherScotland. The Innovative Ag Solutions segment also owns a plant in Daventry for producing water conservation and liquid plant nutrition products.products along with a fertilizer blending site in Rugby.
 
Belgium: The Innovative Ag Solutions segment owns a production facility in Grobbendonk for producing water soluble fertilizers.
 
Austria: theA dairy protein production plant of the Phosphate Solutions segment at Hartberg (Prolactal) is owned by the Company.Company.
ICL Group Limited 121


 
98

North and South America:
 
·North and South America:
United States: the productionUS: Production plants of the Industrial Products segment in West Virginia are mainly owned by the Company. The production plants of the Phosphate Solutions segment in Lawrence, Kansas and St. Louis, Missouri are owned by the Company. The production plants of the Innovative Ag Solutions segment in South Carolina are operated under leases ending in 2025.
 
Mexico: the production plant of Phosphate Solutions segment at Nuevo León is owned by ICL.
Brazil: the productionProduction plants of the Phosphate Solutions segment at Sao Jose dos Campos and Cajati are leased by the Company.
 
·Asia:
Production plants of the Innovative Ag Solutions segment at Suzano I and Suzano II (liquid fertilizers, water-soluble fertilizers, animal nutrition, micronutrients fertilizers), at Uberlandia (improved efficiency phosphorus fertilizers), at Jacarei I (secondary nutrients fertilizers), at Maua (micronutrients fertilizers), at Cruz Alta (liquid fertilizers) and at Cidade Ocidental (liquid fertilizers) are owned by the Company. The production plant at Jacarei II (controlled-release fertilizers) is leased by the Company.
 
Asia:
China – phosphatePhosphate rock mining rights inat the Haikou Mine are derived from mining licenses that are described below. The scrubbing plantplants of YPH are owned by the Company, some of them located on land that is owned by the Company, andwhile others are situated on leased land.
 

99

    Principal Properties
 
The following table sets forth certain additional information regarding ICL’s principal properties as atof December 31, 2018.2021:
 
Property TypeLocationSize (square feet)ProductsOwned/Leased


PlantMishor Rotem, Israel27,094,510Phosphate Solutions productsOwned on leased land
PlantMishor Rotem, Israel10,763,910Industrial Products productsOwned on leased land
PlantNeot Hovav, Israel9,601,591Industrial Products products Owned on leased land
PlantZin, Israel8,484,123Phosphate Solutions productsOwned on leased land
PlantKiryat Ata, Israel6,888,903Innovative Ag Solutions productsLeased
PlantOron, Israel4,413,348 (not including phosphate reserve)Phosphate Solutions productsOwned on leased land
PlantSodom, Israel13,099,679 (not including ponds and Magnesium factory)Potash productsOwned on leased land
Plant4,088,800Magnesium products (Potash segment)Owned on leased land
Plant2,326,060Industrial Products productsOwned on leased land
Conveyor belt1,970,333Transportation facility for PotashOwned on leased land
Pumping station920,314Pumping station for Potash segmentOwned on leased land
Plant667,362Industrial Products productsOwned on leased land
Power plant645,856
Power and steam production  for Potash segment
Owned on leased land




ICL Group Limited 122




Warehouse and loading facilityAshdod, Israel664,133Warehouse for Potash and Phosphate Solutions productsLeasedOwned on leased land
OfficeHeadquartersBeer Sheva, Israel495,883191,598Industrial ProductsCompany headquartersOwned
and leased
PlantMishor Rotem, Israel430,355Phosphate Solutions productsOwned on leased land
100

Warehouse and loading facilityEilat, Israel152,557Warehouse for Potash and Phosphate Solutions productsLeased
Owned on leased land
HeadquartersTel Aviv, Israel25,31821,797Company headquartersLeased
PlantCatalonia, Spain48,491,416Mines, manufacturing facilities and warehouses for PotashOwned
Port/warehouseCatalonia, Spain866,407Potash and salt productsOwned on leased land
PlantTotana, Spain2,210,261Innovative Ag Solutions productsOwned
PlantCartagena, Spain209,853Innovative Ag Solutions products Owned
Warehouse and loading facilityCartagena, Spain184,342Storage for Innovative Ag Solutions productsLeased
PlantJiaxing, China828,017Industrial Products productsOwned on leased land
PlantShan Dong,Shandong, China692,045Industrial Products productsOwned on leased land
PlantKunming, Yunnan, China458,394Production Plant of Phosphate SolutionsOwned on leased land
PlantLian Yungang, China358,793Industrial Products productsOwned on leased land
HeadquartersShanghai, China8,224Company headquartersLeased
PlantKunming, Yunnan, China290,4201,161,593Phosphate Solutions productsOwned on leased land
PlantKunming, Yunnan, China8,345,037Phosphate Solutions productsLeased land  
Pumping stationKunming, Yunnan, China2,23136,931A pumping station for Phosphate SolutionsOwned on leasedLeased land
 
Peat MoorNutberry and Douglas Water, United Kingdom17,760,451Peat mine -Innovative Ag SolutionsOwned
PlantCleveland, United Kingdom13,239,609Polysulphate products (Potash segment)Owned
Warehouse and loading facilityCleveland, United Kingdom2,357,296Polysulphate products (Potash segment)Owned on leased land


ICL Group Limited 123


Peat MoorCreca, United Kingdom4,305,564Peat mine - Innovative Ag SolutionsLeased
Owned
PlantNutberry, United Kingdom322,917Innovative Ag Solutions productsOwned
PlantDaventry, United Kingdom81,539Innovative Ag solutions productsOwned and leased
PlantTerneuzen, the Netherlands1,206,527Industrial Products productsOwned
Plant & warehouseLawford Heath, Rugby45,000Innovative Ag solutions productsLeased
PlantHeerlen, the Netherlands481,802Innovative Ag solutions productsOwned and leased
PlantAmsterdam, the Netherlands349,827Phosphate Solutions products and logistics centerOwned on leased land
European HeadquartersAmsterdam, the Netherlands59,055European Company headquartersLeased
PlantGallipolis Ferry, West Virginia, United States1,742,400Industrial Products productsOwned
PlantLawrence, Kansas, United States179,689Phosphate Solutions productsOwned
PlantCarondelet, Missouri, United States172,361Phosphate Solutions productsOwned
PlantNorth Charleston, South Carolina, United States100,000Innovative Ag solutions productsLeased
101

PlantSummerville, South Carolina, United States40,000Innovative Ag solutions productsLeased
US headquartersSt. Louis, Missouri, United States45,595US Company headquartersLeased
PlantLudwigshafen, Germany6,996,5412,534,319Phosphate Solutions products and InfrastructureOwned
Leased
PlantLadenburg, Germany1,569,764Phosphate Solutions productsOwned
PlantBitterfeld, Germany514,031Industrial Products productsOwned
PlantHemmingen, Germany175,042Phosphate Solutions productsOwned
PlantCajati, Brazil413,959Phosphate Solutions productsOwned
PlantSao Jose dos Campos, BrazilPhosphate plant: 137,573 Blending plant: 80,729Phosphate Solutions productsOwned on (free of charge) leased land
PlantBrazil Cidade Ocidental8,275Innovative Ag solutions productsOwned
PlantBrazil Cruz Alta7,499Innovative Ag solutions productsOwned
PlantBrazil Jacarei I879,248Innovative Ag solutions productsOwned
PlantBrazil Jacarei II967,987Innovative Ag solutions productsLeased
PlantBrazil Maua968,751Innovative Ag solutions productsOwned
PlantBrazil Suzano I3,349,186Innovative Ag solutions productsOwned
PlantBrazil Suzano II637,001Innovative Ag solutions productsOwned
PlantBrazil Uberlandia263,716Innovative Ag solutions productsOwned
PlantBelgium128,693Innovative Ag solutions productsOwned
PlantCalais, France546,290Industrial Products productsOwned
PlantNuevo Leon, Mexico152,408Phosphate Solutions  productsOwned
PlantBandırma, Turkey375,187Phosphate Solutions productsOwned
PlantHartberg, Austria692,937Phosphate Solutions productsOwned
PlantHeatherton, Australia64,583Phosphate Solutions productsLeased

ICL Group Limited 124
102

Other Leases, Licenses and Permits
Well Production Permits
The water supply to ICL Dead Sea is executed via approximately 40 drillings, most of which are located within the concession area. Seven drillings - the Ein Ofarim drillings - are located outside the concession area, and ICL Dead Sea is therefore required to sign, from time to time, lease contracts for limited periods with the Israel Land Authority (ILA).
Renewal of the contracts is a lengthy process and ICL Dead Sea has been working for several years to renew the contracts, which expired in 2016.
In addition, every new drilling requires a drilling license issued by the Water Authority, and at the beginning of every year the Water Authority issues ICL Dead Sea with a water production license that defines the production capacity of each drilling. There is no guarantee that the Water Authority will issue ICL Dead Sea a water production license or that the Water Authority will amend the production license if ICL Dead Sea will exceed the production capacity for such drilling.
During 2017, a revision was made to the Water Law whereby monetary charges will be imposed on private water producers in respect of water drawn from the wells, subject to the quality of the water and other factors. The meaning of the legislative revision for ICL Dead Sea is imposition of costs for the wells, from which ICL Dead Sea has drawn water up to now with no additional charge beyond its actual costs of drawing the water. The Company is examining application of the revision on ICL Dead Sea, in light of the Concession Law that applies to the Company and relevant for the wells located in the concession area. If the revision to the Law does apply to wells located in the concession area, in the Company’s estimation, the monetary impact on the Company is not expected to be material. 
Business Licenses and Other Permits
In November 2013 a reform in the Business Licensing Law, 1968 came into effect, providing, among other things, that business licenses in Israel will no longer be perpetual, but rather each business license will be valid for a term of between one and fifteen years, depending on the type of activity covered by the license. In addition, licensable activities in accordance with the Business License Ordinance (Licensable Businesses), 2013, will be subject to unified specifications to be issued by the authorities as specified in the Ordinance, including the Ministry of Environmental Protection.
Up to now, we have been issued valid business licenses for our sites in Israel in perpetuity, in accordance with the law. Under the abovementioned reform, all of our business licenses will expire and require renewal three years after the applicable “Unified Specifications” are published, and after receiving a notification from the Licensing Authority, except those issued to power stations and fertilizer storage facilities that currently hold a permanent business license, and which will remain in perpetuity.
In addition, our sites in Israel have valid toxic substance permits under the Israeli Hazardous Materials Law, 1993. These permits were issued by the Ministry of Environmental Protection for a period of one year. Renewal of these permits is performed on an ongoing basis. The toxic substances permit issued to Bromine Compounds sets forth additional conditions, including requirements of risk management and seismic surveys in accordance with the Ministry’s guidelines.
Industrial Products plant in Neot Hovav discharges industrial wastewater into the evaporation ponds in accordance with the requirements of the plant’s business licenses.
103


Periclase plant in Mishor Rotem has a valid permit for discharging brine into the Dead Sea (valid up to 2021).
ICL Haifa has a valid permit for discharging industrial wastewater into the Kishon River. At the end of November 2018, ICL Haifa received a permission to drill to the underground water in order to channel the treated wastewater into the underground water, a solution which is accepted by the authorities.
ICL Dead Sea has a valid permit for discharging industrial wastewater into the Dead Sea (valid up to 2020), under the Israeli Prevention of Sea Pollution from Land‑Based Sources Law, 1988.
Commencing from December 2017, discharging of wastewater from the magnesium plant into the Dead Sea was discontinued and, thus, the permit for discharging of wastewater into the Sea, which had been issued by the Ministry of Environmental Protection, became superfluous.
The Ministry of Environmental Protection is expected to add further conditions regarding discharge of wastewater, as part of the terms of the business license. At this stage, it is not possible to estimate what the additional conditions will be or the impact thereof.
The companies also hold emissions permits under the Israeli Clean Air Law, 2008 (the “Clean Air Law”).
As part of the production process in Rotem Amfert Israel, the Company builds and operates ponds that accumulate phosphogypsum water created in the production processes. For additional information relating the ponds’ permits for construction and operation, see Note 20 to our Audited Financial Statements, “Item 3 - Key Information— D. Risk Factors”.
ICL operates in accordance with conditions set out in the licenses and permits. If there is any discrepancy in respect of the requirements of these conditions, the Company takes action to remedy the discrepancy in coordination with the Ministry of Environmental Protection.
Mineral Extraction and Mining Operations
 
Certain information that follows relating to our mineral extraction and mining operations is derived from, and in some instances is an extract from, the report titled “Technical Report Summary and Resource Estimate” with an effective date of December 31, 2021 (the “Technical Report Summary”) and prepared for us by our qualified person, Wardell Armstrong International Ltd (“Wardell”). Wardell has approved and verified the scientific and technical information in the Technical Report Summary and reproduced in this Annual Report. Portions of the following information are based upon assumptions, qualifications and procedures that are not fully described herein. See “Cautionary Note to Investors Regarding Mineral and Resource Estimates.” Reference should be made to the full text of the Technical Report Summary, which is included as an exhibit to this Annual Report.
Overview
ICL extracts minerals and conducts mining at ICL Boulby (United Kingdom), ICL Iberia (Cabanasses and Vilafruns in Spain), ICL Rotem (including Oron and Zin) and ICL Dead Sea (Israel), and YPH (China).
Figure 1:  Location of the ICL Operations

ICL Group Limited 125


ICL’s mining activities are dependent on concessions, authorizations and permits granted by the governments of the countries in which the mines are located.
 
ICL Rotem has been mining phosphates in the Negev in Israel for more than sixty years. The mining is conducted in accordance with phosphate mining concessions, which are granted from time to time by the Minister of Energy under the Mines Ordinance, by the Supervisor of Mines in his Office, as well as the mining authorizations issued by the Israel Lands Authority. The concessions relate to quarries (phosphate rock), whereas the authorizations cover use of land as active mining areas.
ICL Dead Sea (DSW) comprises 37 evaporation ponds producing potash and salt, among other chemical products, located on the south-west shore of the Dead Sea’s southern basin in Israel. DSW is in the production stage and is leased by ICL. Dead Sea Works Ltd., a wholly owned subsidiary, operates the DSW concession covering 652 sqkm, which is in place through 2030.
 
ICL Iberia holds mining rights for two underground potash mines, Cabanasses and Vilafruns, located in Spain. ICL owns the land on which the Spanish surface facilities are located and the Spanish government owns the underground mining rights. Cabanasses is in the production stage, while Vilafruns was put on care and maintenance in June 2020. ICL Iberia, a wholly owned subsidiary, operates Cabanasses, which comprise 126 licenses for the extraction of rocksalt and potash covering 693 sqkm.
ICL Boulby is an underground polyhalite mine in the production stage located in the United Kingdom, of which ICL owns the freehold of approximately 198 hectares of the mineral field, with the remainder held on a leasehold basis. Cleveland Potash Limited, a wholly owned subsidiary, operates ICL Boulby, which comprises 74 mining leases which cover a total area of 822sqkm, primarily offshore.
 
YPH is a joint venture between ICL and Yunnan Phosphate Corporation (YPC), controlled by ICL, that owns and operates the open-pit Haikou Phosphate Mine and Processing Facility in the Xishan district of China, of which ICL has a 50% interest. YPH holds two phosphate mining licenses, including the mining license for the Haikou Mine covering 9.6sqkm, which is in the production stage and the Company operates.
In consideration of the concessions, ICL pays royaltiesand taxes to the governments of Israel, China, UK and Spain. Below are the royalties amounts paid in 2018, 2017with respect to 2021, 2020 and 2016: 2019:
 
 IsraelTotal in IsraelOut of IsraelTotal
Year Ended December 31,$ millionsNIS millions$ millions

201871*621334137
201764*681324136
201658-58967

202175242378
202075 257378
2019*82295385


*In 2018 and 2017,2019 the Company paid an additional amounts of $62$20 million and $68 million, respectively in respect ofregarding royalties in Israel relating to prior periods. For additional information regarding royalties paid for prior periods, see Note 20 to our Audited Financial Statements.
 
104

ICL Group Limited 126
Following is a description of the material properties from which ICL extracts minerals and conducts mining. For additional information regarding the total cost of the Company’s property, plant and equipment and its intangible assets (including concession and mining rights) see Note 11 and Note 12, respectively, to our Audited Financial Statements.
The Dead Sea
The concentration of the minerals extracted from the Dead Sea (including potash and bromide), constituting the raw materials for production, is on the rise due to the hydrological deficit the Dead Sea has been experiencing during the past 40 years.
ICL’s extraction of minerals from the Dead Sea begins with an evaporation process facilitated by the hot and dry desert climate of the Dead Sea region, which is the lowest point on the earth’s surface. Due to the hydrological deficit, the sea is declining at the rate of 1.1 meters per year and is now about 430 meters below sea level. As a result of the said decline, the Dead Sea is divided into two parts: the natural Northern Basin and the Southern Basin, on the basis of which dams were installed and artificial evaporation ponds were constructed.
The production process begins with the flowing of water from the Northern Basin into the evaporation ponds (a distance of about 12 kilometers). The Company’s pumping station P‑88 has a pumping capacity of 100,000 cubic meters per hour. In 2018, ICL flowed approximately 420 million cubic meters of water from the Northern Basin into the evaporation ponds, of this quantity, approximately 260 million cubic meters of brine were rechanneled into the Northern Basin of the Dead Sea at the end of the process. In 2018, the Company produced from the Dead Sea approximately 3.8 million metric tonnes of potash, approximately 175 thousand metric tonnes of bromine, 21 thousand metric tonnes of metal magnesium, 187 thousand metric tonnes of salt and 132 thousand metric tonnes of solid magnesium chloride. The Company built a new pumping station (hereinafter – the P‑9 Pumping Station) from the Northern Basin to the evaporation ponds, this being in light of retirement of pumping station P‑88 from service due to the receding water level. The Company made an additional investment and extended the life of the present pumping station (P‑88) so that it will be able to function up to 2021. In 2017, the Board of Directors approved the investment in construction of the P‑9 Pumping Station. In 2017 and 2018, DSW signed agreements with several execution and infrastructure companies, in a total amount of $160 million (out of the total project cost of about $250 million), for construction of the P-9 Pumping Station. The P-9 Pumping Station is expected to commence its operation during the year 2020.
In 2015, an appeal was filed in the Israeli Court for Water Matters by Adam Teva V’Din - Israeli Association for Environmental Protection (ATD) wherein the Court was requested to order the Government Water and Sewage Authority to issue a production license to DSW pursuant to the Water Law with respect to the transfer of water from the North Basin of the Dead Sea to the evaporation ponds in the Sea’s South Basin in order to regulate and supervise, within the framework of the production license, transfer of the water, as stated, in connection with certain aspects, including limitation of the quantities transferred. In August 2016, the Government Water and Sewage Authority issued directives to DSW (not in the framework of the production license), after hearing the latter’s position, which included limitations on the quantities of water transferred, as well as mechanisms for reporting of pumping volume. As at the reporting date, summaries have been filed by all the parties and the case is waiting for the Court's judgement. In the Company’s estimation, the legal proceedings in this matter will end without material influence on its operations. For additional information, see Note 20 to our Audited Financial Statements.
105

 
The evaporation ponds extend over an areaaggregate production data for the properties is summarized in Table 1.
Table 1:  Production Data for the Properties
 Production Data for ICL Boulby
 202120202019

Polyhalite – Hoisted, kt784711636
Total Polyhalite Production, kt789
709
632

 
Potash Production at Suria Plant
 202120202019

Ore hoisted from Cabanasses mine 2,534 1,874 1,831
Ore hoisted from Vilafruns mine- 484 836
Total Processed (Kt)
2,534
2,358
2,667
Head Grade, % KCl26.4%24.2%23.8%
KCl Produced (Kt)
599
503
569
Product Grade, % KCl95.5%95.5%95.5%

 
Potash Production at Sallent Plant
 202120202019

Ore hoisted from Vilafruns mine  277 1,183
Total Processed (Kt)-277
1,183
Head Grade, % KCl-22.4%22.5%
KCl Produced (Kt)-54
234
Product Grade, % KCl-  95.5% 95.5%

 Total Mine Production of raw ore at Negev (Rotem, Oron and Zin)
 202120202019

Tons (Mt)567
P2O5 % (Before / After Beneficiation)
26% / 32%26% / 32%26% / 32%

ICL Group Limited 127


 
Product Produced after processing at Negev Operations (Rotem, Oron and Zin) (Kt)
 202120202019

Phosphate Rock2,4313,0902,807
Green Phosphate Rock531544567
Fertilizers1,0829201,033
White Phosphoric Acid168171134
Speciality Fertilizers727066

 DSW Production (kt)
 202120202019

Potash
3,900
3,9603,334
Compacting plant
1,858
1,707
1,218
Bromine182171
181
Cast Mg181822

 Total Mine Production of raw ore at YPH
 202120202019

Millions of tons produced2.662.402.15
Grade (% P2O5 before/after beneficiation)
21% / 28%21% / 29%21% / 29%

 
Product Produced after processing at YPH (Kt)
 202120202019

Phosphate Rock *
2,1942,0441,946
Green Phosphoric Acid673632637
Fertilizers612584516
White Phosphoric Acid837164
Speciality Fertilizers765546

*including Enriched & Grinding Rock
ICL Group Limited 128

Table 2:  Estimate Mineral Resources as of approximately 150 square kilometersDecember 31, 2021(1)
Measured Mineral ResourcesIndicated Mineral ResourcesMeasured + Indicated Mineral ResourcesInferred Mineral Resources
Amount
(Mt)
Grades/
qualities
Amount
(Mt)
Grades/
qualities
Amount
(Mt)
Grades/
qualities
Amount
(Mt)
Grades/
qualities

Commodity: K2O
        
United Kingdom--24.013.7%24.013.7%17.313.5%
Boulby
-
-
24.0
13.7%
24.0
13.7%
17.3
13.5%
Total
-
-
24.0
13.7%
24.0
13.7%
17.3
13.5%
Commodity: KCl        
Spain96.526.4%60.824.7%157.325.7%361.229.1%
Cabanasses83.925.7%51.423.3%
135.3
24.8%330.529.1%
Vilafruns12.631.0%9.432.1%22.031.5%30.728.9%
Israel225.020.0%1,500.020.0%1,725.020.0%445.020.0%
Mine/Property DSW
225.0
20.0%
1,500.0
20.0%
1,725.0
20.0%
445.0
20.0%
Total
321.5
21.9%
1,560.8
20.2%
1,882.3
20.5%
806.2
24.1%
Commodity: P2O5
        
Israel247.727.5%10.026.0%257.727.5%--
Rotem247.727.5%10.026.0%257.727.5%--
China3.022.3%2.324.0%5.323.0%0.220.0%
YPH
3.0
22.3%
2.3
24.0%
5.3
23.0%
0.2
20.0%
Total
250.7
27.4%
12.3
25.6%
263.0
27.4%
0.2
20.0%


Mineral Resources are reported in-situ and are divided into two sub‑systems – an arrayexclusive of pondsMineral Reserves. Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape and continuity of the occurrence and on the available sampling results. All figures in the above table have been rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. Mineral Resources are classified in accordance with the guidelines of the Australasian Code for sinking salt (mineral waste fromReporting of Exploration Results, Mineral Resources and Ore Reserves JORC Code (2012) for ICL Boulby, Cabanasses and Vilafruns, and the production process),Pan European Reserves and a seriesResources Reporting Committee (PERC) Standard for Reporting of pondsExploration Results for sinking carnallite (the target mineral constituting a raw material for production of potash).Rotem Israel, DSW and YPH.

ICL Group Limited 129

 
The salt pond knownTable 3:  Estimated Mineral Reserves as Pond 5 is the largest pond in the series of ponds, having an area of approximately 80 square kilometers. Pond 5 was built during the 1960s by construction of a large dam, where in the center of the dyke surrounding it a partition (separation clay core) was installed for sealing and prevention of potential leakage of solutions. This dam demarks the Southern basin of the Dead Sea on the Israeli side and allowed the continued existence of the Southern Basin due to the system of pumping stations and flowing channels that are operated as part of the industrial operational system of the evaporation ponds. In order to continue and operate Pond 5, the dyke was raised several times during the last 50 years. In 2013December 31, 2021
Proven ReservesProbable ReservesTotal Reserves
Amount (Mt)Grades/
qualities
Amount (Mt)Grades/
qualities
Amount (Mt)Grades/
qualities

Commodity: K2O
      
United Kingdom--8.013.8%8.013.8%
ICL Boulby--8.013.8%8.013.8%
Total--8.013.8%8.013.8%
Commodity: KCl:      
Spain29.025.5%61.626.8%90.626.3%
Cabanasses29.025.5%61.626.8%90.626.3%
Vilafruns------
Israel172.020.0%--172.020.0
DSW172.020.0%--172.020.0
Total201.020.8%61.626.8%262.622.2%
Commodity: P2O5
      
Israel60.225.4%--60.225.4%
Rotem Israel60.225.4%--60.225.4%
China57.721.8%--57.721.8%
YPH57.721.8%--57.721.8%
Total117.923.6%--117.923.6%



(1)
The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimate, and numbers may not sum due to rounding.
Internal Controls
Quality assurance at Rotem Israel, ICL Boulby, ICL Dead Sea, completedICL Iberia (Cabanasses and Vilafruns), and YPH in China, involve the cut off project that aimeduse of standard practice procedures for sample collection and includes oversight by experienced technical staff during data collection, management, and interpretation. Certain quality control measures for sample analysis include in-stream sample submittal of standard reference material, blank material, and field duplicate sampling. For data verification, staff members observed drill hole locations and orientations, inspected drill cores, and compared to minimizelogs and analytical results, observed core intake, visited outcrops and discussed with on-site geologists, including reviewing working maps and cross-sections. In addition, ongoing reconciliation is conducted between resource estimates and production data. Notwithstanding the seepage fromabove, inherent risks in quality control include potential mislabeling of samples, sample contamination, among others, but the Northern pond. As partCompany maintains a close and diligent monitoring program of all quality control measures for the project sheet piles were inserted up to the depthcollection of 33 meters to the ground along the lengthboth exploration and production data with results deemed suitable for use in subsequent estimation of 18.6 km. The evaporation processes give rise to concentration of the brinesMineral Resources and the sinking of the salt to the floor of the pond. The remaining brines are rich in potash, magnesium and bromide. These brines are pumped into the systems of other ponds, and as a result of the continued evaporation, the "carnallite" precipitates. Carnallite is the raw material used for production of potash, metal magnesium and chlorine. The carnallite is harvested by floating barges and is sent as slurry to our production plants. The brine from the edge of the carnallite ponds is used as a raw material in the production of bromine and magnesium chloride.Mineral Reserves.
ICL Group Limited 130


ICL Boulby
Overview
 
About 20 million tonnes of sea salt precipitates every year and creates a layer of approximately 20 centimeters on the floor of Pond 5. Precipitation of the salt causes a reductionICL’s mining operations in the volume of the solutions in the pond. As the production process requires maintaining a fixed volume of solutions (brines) in the pond, the level of the solutions in the pondUnited Kingdom are conducted by its wholly owned subsidiary, Cleveland Potash Limited (ICL Boulby Mine). ICL Boulby is raised each year according to the rate at which the pool floor rises.
The Ein Boqeq and Hamei Zohar hotels, the settlement of Neve Zohar and other facilities and infrastructures are located on the western beach of the Pond. Raising the water level of the Pond above a certain level is likely to cause structural damage to the foundations and the hotel buildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructures located along the western shoreline of the Pond. This situation requires establishment of defenses for the facilities and infrastructures of the hotels located on the shores of the Pond.
The project for construction of the coastline defenses with respect to the hotels and infrastructuresan underground polyhalite mine on the coastline of northeast England, approximately 340 kilometers north of London and approximately 34 kilometers to the Pond has been underway for several years. As part of such defenses, from time to time, the dyke along the western beachfrontsoutheast of the Pond, across from the hotels, is raised, together with, in many places, a system for lowering subterranean water. As at the datetown of the report, the construction work with respect to the hotels coastline is complete, and the related dykes have been raised to accommodate the maximal brine level (15.1 meters). The current brine level is 14.6 meters. Nevertheless, there is additional ongoing work on raising the roads level along pond 5.
There is an agreement between DSW and the Government of Israel that the Company will bear 39.5% of the costs of financing the coastline defenses and the Government will finance the balance thereof. In July 2012, an agreement was signed with the Government of Israel, regarding "Execution and Funding of the Dead Sea Protection Project and Increase of the Royalties Paid to the State" (hereinafter – the Salt Harvesting Project). The purpose of the Salt Harvesting Project is to provide a permanent solution for raising the water level in the Pond and stabilizing of the water therein at a fixed level by harvesting of the salt from this pond and transferring it to the Northern Basin of the Dead Sea.
106

The highlights of the agreement are set forth below:
A.     The planning and execution of the Salt Harvesting Project will be performed by DSW.
B.    The Salt Harvesting Project as well as the project for the new pumping station that is to be constructed (hereinafter – the P-9 Pumping Station), constitute an Israeli national infrastructure project that will be promoted by the Israeli Committee for National Infrastructures.
C.    Starting from January 1, 2017, the water level in the pond will not rise above 15.1 meters in DSW’s network (about 390 meters below sea level). DSW will be required to pay compensation in respect of any damages caused, if at all, as a result of a rise of the water level beyond the level determined. In the case of a material deviation from the timetables for the execution of the Salt Harvesting Project as a result of a requirement for changes by the planning institutions, as a result of which the Plan is not approved on time, or due to a decision of a judicial tribunal that caused a delay of at least one year in provision of effect to the Salt Harvesting Project by the planning institutions, without the Company having violated its obligations, the Company will be permitted to request raising of the water level above that stated above.
D.    Increase in the rate of the royalties from 5% to 10% of sales, for quantities of chloride potash DSW sells in excess of 1.5 million tonnes annually. This increase applies to sales starting January 1, 2012. In July 2012, as part of the agreement, the Government committed that at this time it sees no need to make additional changes to its specific fiscal policy regarding mining from the quarries at the Dead Sea, including the commercial utilization thereof and, accordingly, at this time, it will not initiate and will even object to, as applicable, proposed laws regarding this matter. The Company’s consent to the increase of the rate of the royalties is contingent on implementation of the Government of Israel’s decision.
The agreement further provides that if legislation is enacted that changes the specific fiscal policy in connection with profits or royalties deriving from mining of quarries from the Dead Sea, the Company’s consent to the increase of royalties' rate on the surplus quantities referred to above will not apply, after the enactment of the legislation, to the period in which such additional tax is collected as stated in the said legislation. In January 2016, the Law for Taxation of Profits from Natural Resources, which includes the Sheshinski Committee’s recommendations that address royalties and taxation of excess profits from Dead Sea minerals (hereinafter – the Law), entered into effect. Accordingly, the rate of the royalties' provision was update to 5%.
The Company will bear 80% and the Government will bear 20% of the cost of the Salt Harvesting Project, however the Government's share will not exceed NIS 1.4 billion.
107

Middlesbrough.
 
In 2015The mine site and in 2016, the National Infrastructures Committeeshafts are approximately centered at a latitude and longitude of 54°33'05.4"N and 0°49'32.5"W. The ICL Boulby mine site has a long history of production dating back to 1969 and the Israeli Government, respectively, approved National Infrastructures Plan 35A (hereinafter – the Plan), which includes the statutory infrastructure for establishment of the Salt Harvesting Project in Pond 5, and construction of the P-9 pumping station in the northern basin of the Dead Sea. As at the date of the report, the building permits for the Salt Harvesting Project and the P-9 pumping station have been received and the construction work has commenced. The P-9 pumping station is expected to commence its operations during 2020. For further information see item A above relating commitments.
In April 2017, after receiving all the permits for execution of the Salt Harvestingmine owns a private rail line spur that connects it with the Government of Israel, ICL’s Board of Directors approveddeep-water port facilities at Teesport in Middlesbrough. ICL Boulby’s mining operations are mainly conducted under the North Sea at a budgetdepth of about $280 million to further proceed with1,000 meters below the execution of the Salt Harvesting in the Dead Sea. This budget will be executed over the next 12 years and constitutes ICL’s share (80%) in the cost of performing this part. In October 2017, DSW signed an agreement, the cost of which for ICL is $280 million, for the execution of the first stage of the Salt Harvesting Project, with a contracting company Holland Shallow Seas Dredging Ltd., which includes, among others, the construction of a special dredger that is designed to execute the salt harvesting.surface. The dredger is expected to enter into service towards the end of 2019. By then, the engineering and operational preparations and the extensive infrastructure works that have been underway during the past few years are planned to be completed and the salt harvesting operations are expectedcurrently conducted as far as 8 kilometers offshore subject to begin.
The receding level ofmining leases and mineral extraction licenses described below, while the Dead Sea is not to be confused with the rise of the water level in Pond 5 discussed above, and the two seemingly contradictory phenomenamined mineral processing operations are occurring simultaneously, as Pond 5 is located in the Southern Basin on a different plane than the main body of the sea lying to its north, necessitating a special pumping station to constantly feed the pond with water. See “Item 3 - Key Information— D. Risk Factors— Construction of a new pumping station is required due to the receding water level in the northern basin of the Dead Sea”. While the water level of Pond 5 is rising due to the accumulation of salt on its floor and the continuous pumping of water from the Northern Basin of the Dead Sea, the water level of the Northern Basin is receding. As a result of the decline of the Dead Sea level, sinkholes appear. The appearance of sinkholes in the Dead Sea area is increasing over the years. Most of the sinkholes develop in the Northern Basin of the Sea, where there is little operation by ICL Dead Sea. However, the development of sinkholes in areas where ICL Dead Sea facilities exist can cause significant damage. In recent years there has been a steady development of sinkholes in the area of the feeding channel, through which water is pumped from the Northern Basin to the Southern Basin. ICL Dead Sea takes actions to monitor the development of these sinkholes and to fill them when they appear.
Additional risk factor is the erosion of Nahal Arava, which flows along the international border between Israel and Jordan. This erosion could endanger the stability of the eastern dykes in the future in the array of salt and carnallite ponds. The Company is endeavoring to analyze the matter and to find solutions for preventing or retarding this occurrence in the long term. The Company is carrying on ongoing monitoring and taking actionmainly being done on the site in order to protect the dykes. In addition, ICL Potash intends to execute a preliminary project, in order to examine possible solutions and alternatives
108

In 2012, the Company started the construction of a new cogeneration power station (EPC) in Sodom, Israel (hereinafter – the Station). The Station has a production capacity of about 330 tonnes of steam per hour and about 230 MW, which supply electricity and steam requirements for the production plants at the Sodom site and for third party customers. In August 2018, the process of certification approval was completed, and the Power Station started operating in full. The Company intends to operate the Station concurrently with the existing power station, which will continue operatingsurface on a partial basis in a "hot back‑up" format, for production of electricity and steam. The total power produced at both stations can reach up to 245 MW. The Plant is producing as designed and exporting surplus electricity sold to third parties via the National Grid. Regarding to the construction agreement of the Station, in light of the continued violationsland owned by the executing contractor (the Spanish Company - Abengoa), in September 2017, the Company notified of the cancellation of the agreement. Due to financial disputes between the Company and Abengoa, in November 2018, the Company announced the initiation of an arbitration proceeding, in accordance with the provisions of the agreement.
In the Company's estimate, the damages caused by Abengoa amounted to about euro 77 million (about $ 84 million). On January 30, 2019, Abengoa submitted its response, denying ICL's claims, and claiming a payment of euro 15 million ($17 million) for the contract's termination, which was, allegedly, done unlawfully and for convenience. As at the date of the report, considering the early stages of the proceedings, there is a difficulty in estimating the chances of the outcome.
Transport from the Company's plant in the Dead Sea is by means of a conveyor belt from the plant to the railway in the direction of the Ashdod port and from Highway 90 in the direction of the Eilat port.
The Negev Desert
ICL currently operates large surface phosphate mining sites at Oron, Rotem and Zin, which are located in the southern part of the State of Israel in the Negev region. The Israeli Minister of Energy under the Israeli Mines Ordinance, through the Supervisor of Mines in his Office (“the Supervisor”), has decided to extend the area of the Rotem field concession (valid until the end of the 2021) so that it covers the Hatrurim field. The area of the Rotem concession has been so extended, and the matter has been transferred to the Israel Land Authority (“ILA”) to deal with the extension of the area of the mining permit for the Rotem field, in line with the extension of the concession area.
The Company is working to promote the plan for mining phosphates in Barir field (which is located in the southern part of South Zohar field) in the Negev Desert. In 2015, the National Planning and Building Council (hereinafter – the National Council) approved the Policy Document regarding Mining and Quarrying of Industrial Minerals, which included a recommendation to permit phosphate mining in the Barir field. In February 2017, the Committee for Principle Planning Matters, decided to continue advancement of the mining in the South Zohar field. Concurrently, and based on a decision of the National Council, instructions were prepared by the competent authorities with respect to the performance of an environmental survey of the Barir field for purposes of its further advancement. In April 2017, the National Council recommended to the government to approve National Outline Plan (hereinafter – NOP 14B), which includes South Zohar field, and determined that Barir field will be advanced as part of a detailed National Outline Plan, which was approved by the government’s Housing Cabinet in January 2018.
109

In January 2018, the Minister of Health filed an appeal of the said approval, requiring compliance with the Ministry of Health’s recommendation to conduct a survey regarding the health impact in each site included in NOP 14B. As part of a discussion regarding the appeal, which was held in the Housing Cabinet, it was decided, with the consent of the Ministries of Health, Finance and Energy, to remove the appeal and to approve the NOP 14B. In addition, it was decided to establish a team with representatives of the ministries of Treasury, Health, Transportation, Environmental Protection and Energy, which will present to the Housing Cabinet a report that includes health aspects for NOP 14B. In April 2018, the NOP 14B was formally published.
In July 2018, a petition was submitted to the Israeli Supreme Court of Justice by the municipality of Arad against the National Planning and Building Council, the Ministry of Health, the Ministry of Environmental Protection and Rotem, to revoke the approval of NOP 14B. In January 2019, residents of the Bedouin diaspora in the "Arad Valley" submitted a petition to the High Court of Justice (hereinafter – the Court) against the National Council, the Government of Israel and Rotem, in which the Court was requested to cancel the provisions of NOP 14B and the decision of the National Council from December 5, 2017, regarding to the advancement of a detailed plan for phosphate mining in the South Zohar field. In addition, the Court was requested to issue an interim injunction preventing the implementation of the NOP 14B instructions and the National Council's said decision until a final resolution. On January 22, 2019, the Supreme Court consolidated the hearing of the petition together with the other petition filed against NOP 14B and decided that at this stage there is no basis for granting the interim injunction. On February 5, 2019, the Company filed its response.
For a description of certain risks relating to receipt of a license for mining in the Barir Field, see “Item 3 - Key Information— D. Risk Factors”.
Each of the said fields in Israel has a similar layered structure and geological composition, with the phosphate preserved as relatively thin layers along the margins and within the axes of two northeast to southwest trending asymmetrical synclines (basins or trough‑shaped folds). Oron and Rotem lie within a single syncline located northwest of the Zin syncline. The three deposits have been proved over extensive distances in terms of length (Rotem 10 kilometers, Oron 16 kilometers and Zin 22 kilometers) and width (4 kilometers each). The Campanian (Upper Cretaceous period) phosphate rock deposits of Israel are part of the Mediterranean phosphate belt extending from Turkey, through Jordan and Israel, and westward through Egypt, Tunisia and Morocco. The Company began operations at Oron in the 1950s and at Rotem and Zin in the 1970s. These sites are accessible by road and rail. ICL has long‑term leases covering all the land on which its Israeli facilities are located, and it operates under mining concessions and licenses granted to it by the Israeli Minister of Energy and by the ILA. Regarding Oron, its long-term lease is under a renewal process.ICL. See “Item 4 - Information on the Company— D. Property, Plant and Equipment— Concessions and Mining Rights”.
Figure 2: Location of the ICL Boulby Mine (United Kingdom)


ICL Group Limited 131


 
In November 2016,Mining Concessions and Lease Agreements
ICL Boulby owns the District Board forfreehold of most of the Southern District approved a detailed site plan for mining phosphatemineral field in and around the mine head, extending to approximately 198 hectares. These freehold minerals are in the Zin‑Oron area. This plan,process of being registered at the Land Registry. The remainder of the mineral fields are held on a leasehold basis.
The entities involved in renewing or obtaining new leases are ICL Boulby, local solicitors and individual landowners who own the mineral rights, as described above. The conditions that must be met in order to retain the leases are payment of bi-annual fees to the landowners and a royalty payment for minerals extracted from the property to The Crown Estates.
The mineral leases of ICL Boulby, are based on approximately 74 mineral leases and licenses for extracting various minerals, in addition to numerous easements and rights of way from private owners of land under which covers anICL Boulby operates, and mineral lease rights under the North Sea granted by The Crown Estates. The mineral lease rights with The Crown Estates, include provisions to explore and exploit all targeted and known polyhalite mineral resources of interest to ICL Boulby. Said leases cover a total area of about 350822 square kilometers will(onshore leases total around 32 square kilometers and offshore leases from the Crown Estates cover around 790 square kilometers). All the lease periods, licenses, easements and rights of way are effective, some until 2022 and others until 2038. The Company is acting to renew the rights necessary for the mining operation which expire in 2022, or, alternatively, to seek ownership of these rights.
Regarding ICL Boulby's planning permit for mineral exploitation, which is valid until 2023, in December 2021, the continued miningNorth York Moors Park Authority Planning Committee approved ICL Boulby Mine’s application for the continuation of phosphate locatedpolyhalite and salt production for an additional 25 years, commencing 2023 (until 2048).
Historically, the renewal of leases has not been problematic, and the Company is confident in the Zin valleyrenewal of all land and in the Oron valleymineral leases as required and will receive all government approvals and permits necessary for a period of 25 years or up to exhaustion of the raw material – whichever occurs first, with the possibility for extension (under the authority of the District Planning Board).exploiting all targeted mineral resources.
 
110

ICL Boulby has a preferential right to renew some of its leases as it has the Planning Permission to extract minerals. There is no competitive bidding process. The method of miningentities involved in renewing or obtaining new leases are ICL Boulby, local solicitors and individual landowners who own the Negev is by the conventional open pit method, using drilling and blasting, hydraulic excavators and rigid dump trucks or dozers with rippers for overburden removal and front-end loaders and trucks for mining phosphate. Each mine site has varying numbers and thicknesses of over‑burden, inter‑burden and phosphate rock layers, so that the size of the mining equipment is conformed to the mining sites and the operating requirements. In all of the mines, stripping of the waste material and mining of the phosphate are performed by entirely conventional methods.
Phosphate rock from the Rotem mine is transported by truck to a nearby beneficiation plant at Mishor Rotem. In addition, on this site, we also operate two sulphuric acid plants, three  green phosphoric acid plants, white phosphoric acid plant, three superphosphate plants, two granular fertilizer plants, MKP plant and oil shale burning plant for production of electricity and steam. We also have beneficiation plants at both Oron and Zin. The product of the process is a high‑grade, multi‑purpose phosphate product, most of which is used to produce phosphoric acid and fertilizers. The rest of this material is sold to other phosphoric acid and fertilizer producers.
The plant at Mishor Rotem is powered primarily by electricity generated by the Company at its sulphuric acid plants and by oil shale that the Company mines in Mishor Rotem. Any surplus power is sold to Israel Electric Company. All the power utilized by the Oron and Zin beneficiation plants is purchased from the grid.
The following table sets forth the amount of our total mine production of raw ore in the Company’s mines in the Negev (and the relevant grade) supplied to our beneficiation plants, for the three years ended December 31, 2018, 2017 and 2016:
 Year Ended December 31,
 201820172016
Millions of metric tonnes produced
 8 7 9
Grade (% P2O5 before/after beneficiation)
26/3226/3226/32

The following table sets forth the approximate amounts of product produced after processing by our operations in the Negev Desert, for the three years ended December 31, 2018, 2017 and 2016:
 Year Ended December 31,
 201820172016
 
thousands of
metric tonnes
thousands of
metric tonnes
thousands of
metric tonnes
Phosphate Rock 3,550 3,332 3,947
Green Phosphoric Acid 560 575 602
Fertilizers 988 957 890
White Phosphoric Acid 162 148 161
MKP 70 68 47


111

Spain
The Company's potash mining operations in Spain are carried out by ICL Iberia (IBP) (a wholly‑owned subsidiary of the Company) through Trafico de Mercancias (a wholly‑owned subsidiary of ICL Iberia). As at the date of this Annual Report, there are three underground potash mines that make up ICL Iberia’s complex: Suria, Cabanasses and Vilafruns. Currently, the Company operates two mines, the Cabanasses mine, which is located in the town of Suria, approximately 12 kilometers north of the district capital of Manresa in the Cardener river valley, and the Vilafruns mine, which is located in the town of Sallent, approximately 13 kilometers east of Suria in the Llobregat river valley. The third mine in Suria is inactive.
Potash was first discovered in 1912 at Suria and commercial development was started in 1920. ICL purchased its three Spanish mines in 1998. Potash of late Eocene age occurs in the northeast corner of the Ebro Evaporite Basin which lies along the southern flank of the Pyrenees. Sylvinite and carnallite are found towards the top of the Cardona Halite at depths which vary considerablymineral rights, as a result of deformations associated with the Pyrenean fold and thrust belt.
The Cabanasses and Vilafruns mines are both in the province of Barcelona and are located approximately 530 to 1000 meters below ground. Each mine has two access points and the mining is by a modified room and pillar method. All the mine sites are served by roads/railways and are near major highways.
Extraction of potash from underground mines in Spain is carried out by mining sylvinite (a mixture of potash and salt found in varying potash concentrations). The potash is separated from the salt in production plants near the mines. described above.
 
The Company ownsbelieves that it will obtain the renewal of all government's leases and operates two processing plants – onelicenses that are necessary for the reserves in Suria and one in Sallent. The processing at these plants includes crushing, grinding, desliming, froth flotation, drying and compacting. In addition, in Suria plant there is a process for crystallization of vacuum salt and pure potash. All the power utilized by our Spanish mining operations is purchased from third‑party electric companies.
ICL owns all the land on which the Spanish surface facilities are located. The Spanish government owns all the underground mining rights and has granted ICL concessions to conduct mining operations under the land. See “Item 4 - Information on the Company— D. Property, Plant and Equipment— Concessions and Mining Rights”.United Kingdom.
 
In 2011, ICL’s Board of Directors approved the restructuring of ICL Iberia’s operations from two sites to one site. According to this plan, production at the Suria site (Cabanasses mine) will be expanded gradually, whereas the mining and production activities at the Sallent site (Vilafruns mine) will be discontinued. Sallent site is expected to be closed at the end of 2020.
Group Limited 132
The production of potash in Spain is expected to be about 1 million tonnes per year and to reach a level of up to about 1.3 million tonnes per year after completion of the necessary adjustments.
112

 
The following table sets forth, the quantities and gradesUnited Kingdom Concession - Everris
A UK subsidiary which is a part of the potash ore extracted from theInnovative Ag Solutions segment (hereinafter – Everris Limited), has peat mines and processed in the plants in Spain,UK (Creca, Nutberry and Douglas Water). Peat is used as a component to produce professional growing media. All sites are owned by Everris Limited. The current extraction permits are granted by the local authorities and are renewed after examining the renewal applications. The extraction permits for Nutberry and Douglas Water were granted until the three years ended December 31, 2018, 2017end of 2024 and 2016:until 2037 for Creca.
Operations
 
 Year Ended December 31,
 201820172016

Sallent   
Ore processed (in millions of metric tonnes) 2 2 2
Grade (% KCl)23%23%23%
Suria   
Ore processed (in millions of metric tonnes) 2 2 2
Grade (% KCl)25%24%26%
Total   
Ore processed (in millions of metric tonnes) 4 4 4

United Kingdom
ICL’s mining operations in the United Kingdom are conducted by its wholly owned subsidiary, ICL Boulby. ICL’s mine and processing plant are located approximately 340 kilometers north of London and approximately 40 kilometers east of Middlesbrough, England in the North York Moors National Park. The mine was originally designed, developed and operated by Imperial Chemical Industries and Charter Consolidated and the first potash was extracted in 1973. ICL purchased the mine, including mining leases and mineral extraction licenses, in 2002 from the then‑owner, Anglo American Corporation.
ICL’s mining operations in the United Kingdom are conducted both under land and under the North Sea. Mining operations are conducted at depths up to much as 1,300 meters below ground onshore and 1,000 meters below the surface of the North Sea. The operations under the North Sea are currently conducted as far as 17.5 kilometers offshore. Although ICL owns the land on which the minehead and the related surface operations are conducted, substantially all the United Kingdom subsurface operations are conducted either under land that it does not own or under the North Sea, which it also does not own. ICL has the right to conduct our mining operations pursuant to the mining leases and mineral extraction licenses described below. See “Item 4 - Information on the Company— D. Property, Plant and Equipment— Concessions and Mining Rights”.
ICL’s United KingdomBoulby’s mining operations are situated close to the western limits of polyhalite, potash and salt deposition in the Zechstein Basin extending inland in the United Kingdom and below the North Sea into Germany. The polyhalite seam is of the Permian Evaporite Series and is overlainover lain by some 800 meters to 1,300 meters of younger sedimentary rocks. The polyhalite seam averages 4 meters in mineable thickness but varies from zero to more than 11 meters in thickness. The access into the polyhalite bed was builtestablished in 2010 from one of its main salt roadways. As described below, Polysulphate™ production at ICL has increased in recent years and is now the focus of mining activities at ICL Boulby as it transitioned away from potash production due to fully depleted reserves.
113

 
The ICL Boulby mine is accessed by two vertical shafts. One shaft hoists Polysulphate™Polysulphate® and salt and the other provides man-riding and service access. Mining is by continuous mining with shuttle cars and by a modified room and pillar method. The mine has been designated as a “gassy” mine, containing methane gas. Supply of the electricity to the mining operations in the ICL Boulby mine is mainly through electricity purchased on the open market from the localnational electricity company. There is also a power plant on the site that converts gas into electricity and supplements the electricity supply required for execution of the mining operations.during peak demand periods.
 
A new
The processing plant for Polysulphate™ was established in 2016.  This plantPolysulphate® uses simple crushing and screening processes to produce standard and granular products in approximately 50:50 ratio. Research is currently underway regarding methods to further enhance thesethe standard products through compaction, granulation, blending and micronutrient addition which, in combination, is anticipated to deliver high value new fertilizer products into the market. In addition, the former potash processinga compaction plant in the second quarter of 2018 was modified and sections of the drying and compacting circuit were adjusted for the production ofis producing PotashpluS, a compacted blend of Potash Standard (SMOP) and Poly Standard.
 
The following table sets forth, the quantities and grades of the potash ore extracted from the Boulby mine and the insoluble clay minerals, for the three years ended December 31, 2018, 2017 and 2016:
 Year Ended December 31,
 2018*20172016
Potash Ore (millions of metric tonnes) 1 1 2
Grade (% KCl) 35% 36% 36%
Grade (% insoluble) 9% 11% 11%

*Potash was extracted until the end of the second quarter of 2018.
The Company ceased the production of potash at its ICL Boulby mine at the end of the second quarter of 2018, due to fully depleted reserves and shifted to sole production of Polysulphate™.
The following table sets forth, the quantities of the polyhalite ore extracted from the mine in the United Kingdom, for the three years ended December 31, 2018, 2017 and 2016:
 Year Ended December 31,
 201820172016
Polyhalite Ore (millions of metric tonnes)0.40.50.2

Beginning in 2016, the Company accelerated the transition from extracting and producing potash to producing Polysulphate™ at its ICL Boulby mine. ICL is acting to expand the Polysulphate™ market by means of, among other things, development of a wide range of innovative Polysulphate™-based products. In 2018,2021, ICL produced about 350789 thousand tonnestons of Polysulphate™Polysulphate® and sold about 827 thousand tons, for the total amount of about $76 million (including sales of Polysulphate® downstream products).
 
114Production


China
YPH JV, a joint venture with Yunnan Phosphate Chemicals Group Corporation Ltd. (“YTH”), operates an open-pit mining site named Haikou (the "Haikou mine") that is located alongside the Haikou Town, in the Xishan district, proximate to the city of Kunming. YPH JV holds a concession for the Haikou mine that expires in 2043 and an additional concession for mining phosphates ended at November 2018 in the mine of Baitacun (the "Baitacun mine"), which is located several kilometers from the Haikou mine, wherein the mining activities have not yet commenced. As at the date of the report, the Company is examining the option to renew Baitacun's concession, subject to the phosphate reserves soil survey results, as well as achieving the required understanding with the authorities.
The access to Haikou mine is by means of a network of roads, as well as an accessible rail network that links to the state rail lines. In light of the current operations at the Haikou mine, the production capacity of YPH JV is approximately 2.5 million tonnes per year.
The Haikou mine has been in operation since 1966 and the concession area is spread over 9.6 square kilometers.
The Haikou mine is divided into four areas. The phosphate sources in areas 1 and 2 have been almost fully depleted. The mining in area 3 began in 2015 and the mining activities in area 4 started at the end of 2017.
The phosphate deposits at both mines are part of an extensive marine sedimentary basin in which the phosphate is situated in two layers – an upper layer and a lower layer. The thickness of the upper layer varies from 2.5 to 11 meters and is about 7.6 meters on average, whereas the thickness of the lower layer varies from 2 to 9 meters and is about 6.1 meters on average. The mining is executed based on layers and quality thereof. Each layer has 3 quality categories: Grade I (highest grade) > 30% P2O5, Grade II- 24-30% P2O5 and Grade III- 15-24% P2O5. Structurally, the Haikou mine is moderately complex, which requires precision mining that is accomplished through use of relatively small mining tools. The phosphate is covered by hard rock layers that require blasting, except for the upper ground level, which is removed and used for reclamation of the mined areas. The phosphate layers are also partially hard and require blasting.
The phosphate is low organic type, and as such it is suitable for phosphoric acid production.
The mining in the Haikou Mine is via open mining using conventional methods by means of drilling and blasting, hydraulic excavators, mining trucks and tractors for mining phosphates.
In the first stage: mining of the upper ground level is being stripped, and stored or spread out over mined areas for purposes of reclamation. In the second stage: drilling, blasting and stripping of the upper overburden level is executed. In the third stage: mining of the phosphate is performed by drilling and blasting of every layer separately (between which an interburden layer exists having a thickness of 11 meters, which is also drilled, blasted and stripped) and the phosphate is then loaded on truck and being transported to the beneficiation plants.
Based on the patches appearance of the medium and high-grade phosphate, the mining is performed through use of small mining tools, trucks with a capacity of 40 tonnes and excavators having a bucket capacity of 3 to 6 cubic meters.
115

Close to the Haikou mine, there are two beneficiation plants: flotation and scrubbing. These facilities are accessible by roads, and the scrubbing plant is accessible by roads and train. The output of these facilities is designated for the production plants of acids and fertilizers, located several kilometers from the Haikou mine, which include four sulphuric acid factories, three green phosphoric acid factories, one factory for manufacture of technical grade white phosphoric acid and six fertilizer factories. These factories are powered by electricity generated from the sulphuric acid production process as well as from the national power network. These facilities have been continuously developed and maintained for the last 40 years and are in a good condition. The access to the production site is also by road and train.
The following table sets forth the amount of our total mine production of raw orepolyhalite at the Company’s mines in the Haikou mine (and the relevant grade)ICL Boulby supplied to our beneficiation plants, for the three years ended December 31, 2018, 20172021, 2020 and 2016:2019:
202120202019

Polyhalite – Hoisted, kt784711636
Total Polyhalite Production, kt
789
709632


ICL Group Limited 133


Property Value
 
 Year Ended December 31,
 201820172016 
Millions of metric tonnes produced 2.15 1.95 2.20
Grade (% P2O5 before/after beneficiation)
20.7/28.9821.3/29.620.4/29.2

The following table sets forth the approximate amountsAs of product produced after processing by our operations in Haikou mine, for the three years ended December 31, 2018, 2017 and 2016:
 Year Ended December 31,
 201820172016
 thousands of metric tonnesthousands of metric tonnesthousands of metric tonnes
Phosphate Rock 1,725 1,545 1,798
Green Phosphoric Acid 635 572 617
Fertilizers 621 335 790
White Phosphoric Acid (TG) 65 61 37


116

Concessions and Mining Rights
Israel
ICL Dead Sea Ltd. Concession
Pursuant to2021, the Israeli Dead Sea Concession Law, 1961 (hereinafter – the Concession Law), as amended in 1986, and the concession deed attached as an addendum to the Concession Law, DSW was granted a concession to utilize the resources of the Dead Sea and to lease the land required for its plants in Sodom for a period that is expected to end on March 31, 2030, accompanied by a priority right to receive the concession after its expiration, should the Government wish to offer a new concession to a third party.
In 2015, the Minister of Finance appointed a team to determine the “governmental activities to be conducted towards the end of the concession period”. The public’s comments in this matter were submitted to the team. Based on the interim report and its recommendations published in May 2018, and following a public hearing, on January 21, 2019, the Israeli Ministry of Finance released the final report of the inter-ministry team headed by Mr. Yoel Naveh, former Chief Economist, which includes a series of guidelines and recommendations regarding the actions that the government should take towards the end of the concession period. As at the date of the report, since the report includes guiding principles and a recommendation to establish sub-teams to implement such principles, the Company is unable to assess, at this stage, the concrete implications, manner in which the recommendations would be implemented in practice and on which schedules. In addition, there is no certainty as to how the Government would interpret the Concession Law and the manner in which this process and methodology would ultimately be implemented.
The Financial Statements were prepared under the assumption that DSW will continue to operate the relevant assets for at least their remaining useful lives. In addition, the Financial Statements were prepared under the assumption that it is more likely than not that ICL will not sell DSW.
In addition, in 2015, the Minister of Finance appointed a team headed by the (former) Accountant General to evaluate the manner in which, according to the current concession, the replacement value of DSW’s tangible assets would be calculated assuming that these assets would be returned to the government at the end of the concession period. The determination date of the actual calculation is only in 2030. As far as the Company is aware, this work has not yet been completed.
In December 2018, the Company received an opinion from an independent appraiser regarding the fairoverall book value of the property, plant and equipment of ICL Boulby amounted to about $194 million.
Mineral Resource Estimate
In ICL Boulby’s mine, the subsidiaries Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium in Israel (hereinafter – the Subsidiaries). The Opinion was prepared mainlyCompany believe there are sizable resources for the Subsidiaries’ financial statementspurpose of continued production of Polysulphate®, the sale of which in commercial quantities began in 2012. The estimation utilizes assay results from underground exploration drill holes and face sampling with grade control drilling used to aid the geological modelling of the polyhalite seam. The data is considered adequate for 2016use in Mineral Resource estimation; however, classification of Mineral Resources has made consideration for the paucity of quality assurance/quality control (QA/QC) procedures for the existing data set. Work is currently ongoing to modernize sampling methods and onward,implement robust QA/QC procedures. The geological model was used to code and composite the drill hole data based on their stratigraphic position within the seam. Two regional domains were identified: a higher polyhalite grade western region and a lower grade, higher halite eastern region with further sub domains established based on population analysis and grade distribution. The boundary between domains were generally treated as soft boundaries.
Grade estimation was carried out using Ordinary Kriging for the main seam domain (2 – 8 meters above base of seam) in the higher-grade western region, with all other domains estimated using Inverse Distance Weighted (Squared). Estimated grades were validated by visual, statistical, and graphical means on a global and local basis prior to tabulation of the Mineral Resource Estimates. The limited readily available reconciliation data indicates that the resource model performs well overall when compared to plant production data, however, further work is recommended to consistently record and make available grade and tonnage information for all stages of the mining, processing, and shipping of materials.
Mineral Resources were categorized primarily on the search volume used to generate the estimate with additional consideration of drill hole spacing, geological and grade continuity, data density and orientation.
ICL Group Limited 134


K2O is an equivalent value calculated from the estimated K based on atomic mass and ratio of K in the compound K2O. The factor used is K2O = K x 1.2046.
Mineral Resources are a 7 meters thick horizon optimized for grade (% K) whilst ensuring mining operations are matched to achievable gradients for excavation.
Mineral Resources are reported using a cut-off grade of 10.7% K, or 12.9% K2O Equivalent, which servereflects the current ability to blend, homogenize and upgrade material as part of mine sequencing and processing.
Polyhalite, Halite and Anhydrite are theoretical values calculated from the elemental analysis under the assumption that all elemental K is contained within Polyhalite
We use long hole drilling to provide information for classification of Indicated Resources, however current spacing is insufficient to identify localised variations in polyhalite grade and seam position that would impact on short-scale production increments and cannot be used as a basis for the reports filed pursuant to the provisions of the Taxation of Natural Resources Law. The Property, Plant and Equipment value provided in the opinion is based on the Replacement Cost methodology and is estimated at about $6 billion, as at December 31, 2015, and at December 31, 2016.a Measured Resource classification.
 
Though the assets assessed for tax purposes and the assets that may be valuated under the Concession Law are highly correlated, there is no complete identity between them. The Company believes that the applied Replacement Cost Methodology used in the opinion for estimating the fair value coincides with the methodology mentioned in the Concession Law for future valuation
ICL Boulby – Summary of the Property, Plant and Equipment upon termination of the concession period. Nevertheless, there could be other interpretations to the manner of implementation of the Concession Law’s provisions with respect to the valuation methodology, hence, the estimated value with respect to the Concession Law could materially differ from the value provided in the said opinion, even with respect to the same assets and dates. It is expected that the value of the Property, Plant and Equipment,Polyhalite Mineral Resources at the end of the concession period, will changefiscal year ended December 31, 2021, based on $120 FOB per ton.
Resources
Amount
(Mt)
Grades/qualities
(K2O)
Cut-off grades
(K2O)
Metallurgical
recovery
(K2O)

Measured mineral resources--
12.9% Equivalent
 
100%
 
Indicated mineral resources24.013.7%
Measured + Indicated mineral resources24.013.7%
Inferred mineral resources17.313.5%



(1)Mineral Resources are reported exclusive of any Ore Reserve.

(2)All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(3)Mineral Resources are reported in accordance with the guidelines of the JORC (2012) Codefor Mineral Resources and Ore Reserves.
As of December 31, 2021, ICL Boulby had 41.3 Mt of mineral resources which is inclusive of the reserves total. We are reporting Mineral Resources at ICL Boulby in accordance with the guidelines of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves JORC Code (2012) the first time in 2021. The mineral resources estimate for ICL Boulby is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.2 of the Technical Report Summary filed as an exhibit to this Annual Report.
The current base case for the life of mine at Boulby, and geological delineation, continues to nominally be 2030. Further work based on the current Mineral Resource of 24.0Mt is expected to expand the life of mine beyond 2030.
Mineral Reserve Estimate
The Probable Mineral Reserve has been derived from Indicated Mineral Resources included within the life of mine plan. The life of mine plan contains in addition to the 10.4Mt Indicated resource, 3.6Mt of Inferred Mineral Resource which is equivalent to 26% of the life of mine. The current scheduling of the Mineral Reserve is contingent on the simultaneous extraction of a portion of these Inferred Resources on an annual basis. Current and future drilling programs are focused on the upgrade of these Inferred Resources.


ICL Group Limited 135

ICL Boulby – Summary of Polyhalite (K2O)Mineral Reserves at the end of the fiscal year ended December 31, 2021, based on $120 per ton.
Amount
(Mt)
Grades/qualities
(K2O)
Cut-off grades
(K2O)
Metallurgical
recovery
(K2O)

Proven mineral reserves--12.9%
100%
Probable mineral reserves8.013.8%
Total mineral reserves8.013.8%



(1)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(2)The mineral reserve estimate for the ICL Boulby is classified in accordance with the JORC (2012) Code for Mineral Resources and Ore Reserves.
As of December 31, 2021, ICL Boulby had 8.0 Mt of polyhalite mineral reserves. We are reporting Polyhalite Mineral Reserves at ICL Boulby for the first time passesin 2021. The mineral reserves estimate for ICL Boulby may be impacted by additional exploration that could alter the geological database and model of mineralization. Material assumptions regarding the technical parameter analysis, forecasted product prices, production costs, permitting decisions, or other factors may positively or negatively affect the reserves estimates. For further discussion of the material assumptions relied upon, please refer Section 12.2 of the Technical Report Summary filed as an exhibit to this Annual Report.
Logistics
The ICL Boulby mine in the United Kingdom is connected by a network of roads running over 11 kilometers southward from the mine entrance, as well as a network of underground roads extending 17.5 kilometers from the mine entrance in the direction of the North Sea. Approximately 80 kilometers of underground tunnels are still open to support present production. The mine has easy access to the national road and train transportation routes. The mine receives good quality drinking water and a stable supply of electricity.
Pursuant to agreements with the North Yorkshire National Parks Authority, the total transport movements by means of the network of roads to and from site to site are limited to a maximum of 150 thousand tons per year and a maximum of 66 trucks per day (no road movements are allowed on Sundays or public holidays). This limitation is not expected to interfere with the future production of ICL Boulby in light of its commitment to maintain the rail link to Teesdock. ICL Boulby's roads and trains are in full compliance with all the requirements.
The rail load‑out products are transported on an ICL Boulby‑owned rail line which extends approximately eight kilometers from the mine entrance to a junction with the national rail network, and from there the products continue to Teesport, Middlesbrough, via the Network Rail Company, the owner and operator of the main rail line.
Eight trains per day transport Polysulphate®,PotashpluS and rock‑saltto the Teesdock. Most of the Polysulphate®output is used as a component of agricultural fertilizers, where volumes are exported by sea from the Teesdock seaport to customers overseas and in the UK.
Rock‑salt is taken by train to Teesdock and transported by ship or trucks to local UK authorities for de‑icing roads.
ICL Boulby leases and operates three principal storage and loading facilities: the Teesdock facility, which is located on the Tees River, and two additional storage facilities that are connected to the main rail line – Cobra and Ayrton Works in Middlesbrough.
ICL Group Limited 136


ICL Iberia
Overview
The Company's potash mining operations in Spain are carried out by ICL Iberia (a wholly owned subsidiary of the Company) and the marine transportation performed through Trafico de Mercancias (a wholly owned subsidiary of ICL Iberia). ICL Iberia holds mining rights for two underground potash mines, Cabanasses and Vilafruns. As part of the Company's strategic decision to concentrate its production at the Suria site (Cabanasses mine), in June 2020, ICL Iberia accelerated the process of consolidating its sites and accordingly, the potash production at the Sallent site was discontinued. The Vialfruns mine has been maintained on care and maintenance basis since June 2020. As a result, the Company operates only at the Cabanasses mine, which is located in the town of Suria, approximately 12 kilometers north of the district capital of Manresa in the Cardener river valley. The Cabanasses mine is approximately centered on the geographic coordinates: latitude 41°50’27”N and longitude 01°45’07”E. The Vilafruns mine is approximately centered on the geographic coordinates: latitude 41°50’25”N and longitude 01°52’39”E and UTM (WGS84).
Potash extraction is conducted by mining sylvinite, a mixture of potash and salt found in varying concentrations, the potash is then separated from the salt at production plants located near the mines. The Cabanasses mine is located in the province of Barcelona and is approximately 730 to 1000 meters below ground. The mine has three access points (including the ramp) and the mining is by a modified room and pillar method. The mine site is served by roads/railways and is near major highways.
Figure 3: Location of Cabanasses and Vilafruns Mines (Spain)

ICL Group Limited 137

Potash in Suria was first discovered in 1912 and its commercial development began in 1920. ICL purchased its three Spanish mines in 1998. Potash of late Eocene age occurs in the northeast corner of the Ebro Evaporite Basin which lies along the southern flank of the Pyrenees. Sylvinite and Carnallite are found towards the top of the Cardona Halite at varying depths as a result of purchasedeformations associated with the Pyrenean fold and disposalthrust belt.
Mining Concessions and Lease Agreements
ICL Iberia conducts its mining activities in Spain pursuant to concessions granted to it by the Spanish government. ICL Iberia was granted mining rights based on legislation of assets includedSpain’s Government from 1973 and the regulations accompanying this legislation. Further to the legislation, the government of the Catalonia region published special mining regulations whereby ICL Iberia received individual licenses for each of the 126 different sites that are relevant to current and possible future mining activities. Some of the licenses are valid until 2037 and the remainder are effective until 2067. The concession for the "Reserva Catalana", an additional site where mining did not commence, expired in 2012. The Company is acting in cooperation with the Spanish Government to obtain a renewal of the concession. According to the Spanish authorities, the concession period is valid until a final decision is made regarding the renewal.
A total of 126 licenses for the extraction of rocksalt and potash, awarded to Iberpotash, S.A., cover the Cabansses and Vilafruns operations covering an area of 42,489 hectares (425sqkm) in the future valuation.
117

province of Barcelona and 26,809 hectares (268sqkm) in the province of Lerida. As part of a renewal process, the Company is required to prepare and present a basic technical report describing the intended use of the mines. As required by law, the concessions are required to be renewed prior to their expiration date. If a concession expires, a bidding process will be initiated. ICL Iberia applies in advance for the renewal of mining concessions and until now, had no difficulties in renewing them.
 
In consideration ofICL owns all the concession, DSW pays royaltieslands on which the Spanish surface facilities are located. The Spanish government owns all the underground mining rights and has granted ICL concessions to conduct mining operations under the Government of Israel, calculated at the rate of 5% of the value of the products at the factory gate, less certain expenses. According to the Salt Harvesting Agreement signed in July 2012 (hereinafter – the SLA), in case the annual quantity of chloride potash sold is in excess of 1.5 million tonnes, the royalties rate would be 10%. In addition, the SLA states that if legislation is enacted that changes the specific fiscal policy in connection with profits or royalties deriving from the mining of quarries from the Dead Sea, the Company’s consent to the increase of the royalties' rateland. See “Item 4 - Information on the surplus quantities referred to above will not apply, after the enactment of the legislation, to the period in which such additional tax is collected as stated in the said legislation.
In January 2016, the Law for Taxation of Profits from Natural Resources, including implementation of the Sheshinski Committee’s recommendations, which address royaltiesCompany— D. Property, Plant and taxation of excess profits from Dead Sea minerals (hereinafter – the Law), entered into effect. Accordingly, the rate of the royalties' provision was updated to 5%. The Company's position, pursuant to the SLAEquipment— Concessions and its arguments in the royalties' arbitration, is that increasing royalties at a rate exceeding 5% requires the Company's consent, which expired with the enactment of the Law. The State holds a different position regarding the royalties' rate in 2016. Nevertheless, in the Company's estimation, in the event this matter would be challenged in arbitration, it is more likely than not that its claims regarding the royalties' rate increase, following the enactment of the Law in 2016, will be accepted.
DSW granted a sub‑concession to Dead Sea Bromine Ltd. (hereinafter –the Bromine Company) to produce bromineMining Rights” and its compounds from the Dead Sea, the expiration date of which is concurrent with the DSW's concession. The royalties in respect of the products manufactured by the Bromine Company are received by DSW from the Bromine Company, and DSW then pays them over to the State.
There is an arrangement relating to payment of royalties by Dead Sea Magnesium (hereinafter – DSM) for the production of metal magnesium by virtue of a specific arrangement with the State provided in the Government’s decision dated September 5, 1993. Pursuant to this arrangement, royalties are paid by DSM on the basis of carnallite used for production of magnesium. The arrangement with DSM provides that during 2006 the State may demand a reconsideration in connection with the amount of the royalties and the method of their calculation for 2007 and thereafter. The State’s demand for reconsideration, as stated, was initially received at the end of 2010, and the matter is presently in an arbitration proceeding, as described below.
In 2007, a letter was received from the former Accountant General of the Israeli Ministry of Finance, claiming an underpayment of royalties amounting to hundreds of millions of shekels. Pursuant to the concession, disputes between the parties, including royalties, are to be decided by an arbitration panel of three arbitrators, comprising of two arbitrators appointed by each party, who in turn jointly appoint a third arbitrator. For additional details regarding the arbitration proceeding – see Note 2018 to our Audited Financial Statements.
 
Operations
Extraction of potash from underground mines in Spain is carried out by mining sylvinite (a mixture of potash and salt found in varying potash concentrations). The potash is separated from the salt at the Suria production plant.
The mineral processing includes crushing, grinding, desliming, froth flotation, drying and compacting. In 2018, 2017addition, there is a process for crystallization of vacuum salt and 2016, DSW paid current royaltiespure potash. The power utilized by our Spanish mining operations is purchased from third party electric companies.
According to the Governmentconsolidation plan, the annual production capacity of Israelpotash in Spain is expected to be about 1 million tons by the second half of 2022 and to reach a level of up to about 1.3 million tons in the amountsfuture, following completion of $66 million, $60 million, and $53 million, respectively. In addition,additional necessary adjustments in 2018, the Company paid ansurface production facilities.
ICL Group Limited 138


Production
The following table sets forth the amount of $62our total mine production of potash at the Suria plant in ICL Iberia, for the three years ended December 31, 2021, 2020 and 2019:
 Potash Production at Suria Plant
 202120202019

Ore hoisted from Cabanasses mine2,534
1,874
1,831
Ore hoisted from Vilafruns mine-
484
836
Total Processed (Kt)
2,534
2,3582,667
Head Grade, % KCI26.4%24.2%23.8%
KCI Produced (Kt)
599
503569
Product Grade, % KCI95.5%95.5%95.5%


(1)Potash at Vilafruns was extracted until the end of the second quarter of 2020.

Property Values
As of December 31, 2021, the overall book value of the property, plant and equipment of Cabanasses amounted to about $688 million.

ICL Group Limited 139


The following table sets forth the amount of our total mine production of potash at the Sallent plant in respectICL Iberia, for the three years ended December 31, 2021, 2020 and 2019:
 Potash Production at Sallent Plant
 202120202019

Ore hoisted from Vilafruns mine- 2771,183
Total Processed (Kt)
-2771,183
Head Grade, % KCI-22.4%22.5%
KCI Produced (Kt)-54
234
Product Grade, % KCI- 95.5% 95.5%


(1)
Potash at Vilafruns was extracted until the end of the second quarter of 2020.
Property Values
As of royalties relatingDecember 31, 2021, the overall book value of the property, plant and equipment of Vilafruns amounted to prior periods.about $4.2 million.
Mineral Resource Estimate
The Mineral Resources Estimate of the Cabanasses and Vilafruns deposits have been classified in accordance with the guidelines of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves, The JORC Code” edition 2012. The life-of-mine at Cabanasses is based on current drilling approximately 19 years.
Mineral Resource classification was set in the block model by ICL Iberia, using wireframe perimeters to outline the extent of mineralisation. The Mineral Resource classification methodology considers the confidence in the drillhole data, the geological interpretation, geological continuity, data spacing and orientation, spatial grade continuity and confidence in the Mineral Resource estimation process. Areas identified as being below a cut-off grade of 10% KCl and areas of low seam thicknesses are also considered by ICL Iberia as non-recoverable
The Mineral Resource estimate is used to classify Measured Mineral Resources based on a drill spacing of 50m and Indicated Mineral Resources based on a drill spacing of 100m. The remaining peripheral areas, located within the mineralized zone, are considered suitable for classification of Inferred Mineral Resources.
In calculating the cut-off grade and reserves, an average of the previous three years’ market prices and operating costs is used as part of the calculations to ensure economic feasibility. The three year average market price used to calculate our reserves for potash per ton of product in Spain is $291 FOB per ton as of December 31, 2021.
 
In addition, ICL Dead Sea payscalculating the Israel Land Authority lease rentals in respectreserves, an average of the leasesprevious three years’ currency conversion rates is used as defined in the concession certificate. The amountpart of the payment andcalculations to ensure economic feasibility. The three-year average currency conversation rate used to calculate the related update mechanismreserves is provided in the agreement signed with the Israel Land Authority (formerly the Israel Land Administration) in 1975. The amount is updated from time to time.€0.85 per dollar as of December 31, 2021.
 
118ICL Group Limited 140

 
Rotem Concession.
Cabanasses – Summary of Potash Resources at the end of the fiscal year ended December 31, 2021, based on $291 FOB per ton.
Resources
Amount
(Mt)
Grades/qualities
(KCl)
Cut-off grades
(KCl)
Metallurgical
recovery
(KCl)

Measured mineral resources83.925.7% 10%  
 85.5%  
Indicated mineral resources51.423.3%
Measured + Indicated mineral resources135.324.8%
Inferred mineral resources330.529.1%



(1)Mineral Resources are reported exclusive of any Ore Reserve.

(2)All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(3)Mineral Resources for Cabanasses have been estimated in accordance with the guidelines of the JORC Code (2012).
As of December 31, 2021, Cabanasses had 465.8 Mt of potash mineral resources. We are reporting Mineral Resources at Cabanasses in accordance with the guidelines of JORC for the first time in 2021. The mineral resources estimate for Cabanasses is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.3 of the Technical Report Summary filed as an exhibit to this Annual Report.
Vilafruns – Summary of Potash Resources at the end of the fiscal year ended December 31, 2021, based on $291 FOB per ton.
Resources
Amount
(Mt)
Grades/qualities
(KCl)
Cut-off grades
(KCl)
Metallurgical
recovery
(KCl)

Measured mineral resources12.631.0% 10% 85.5%
Indicated mineral resources9.432.1%
Measured + Indicated mineral resources22.031.5%
Inferred mineral resources30.728.9%



(1)Mineral Resources are reported exclusive of any Ore Reserve.

(2)All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(3)Mineral Resources for Vilafruns have been estimated in accordance with the guidelines of the JORC Code (2012).
As of December 31, 2021, Vilafruns had 52.7 Mt of potash mineral resources. We are reporting Mineral Resources at Vilafruns in accordance with the guidelines of JORC for the first time in 2021. The mineral resources estimates for Vilafruns is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.3 of the Technical Report Summary filed as an exhibit to this Annual Report.
 
ICL Group Limited 141

Mineral Reserve Estimate
The parameters used in determining the cut-off grade considered the geology (continuity, structure), mining method, mining dilution, plant utilization, technical feasibility, operating costs and historical and current product prices. The calculation involves a computerized geological block model using both, the drilling data from the underground drilling campaign and from the exploratory surface drilling, with underground drilling work carried out on a regular basis, around 60,000 meters drilled in 2020; while the surface drilling was done in different times in the last decades. The KCI grade is interpolated using inverse distance method (ID2). Zones that are potentially mineable are defined, considered the thickness, the grade, and the structure of the ore seams; a minimum factor grade (%KCl) multiplied by the thickness (meters) of 80 is considered to define these mineable blocks. Modifying factors are based on historic data for “Dilution”, “mining recovery” and “cut-off grade” of 19% KCl etc. are applied. All this data is provided to the Mine Planning Dept. to spatially define the mine planning of access tunnels to all mineable blocks and then mining fleet activity scheduling to plan the life-of-mine.
The cut‑off grade calculations are made by the economists of ICL Iberia's finance department. The calculation considers the long-run forecast of selling prices, costs and expected ore production Long-Range-Plan. A conservative approach in the selling prices was chosen.
The proven and probable reserves above the cut-off grade were obtained considering the mining method, mining recovery, mining dilution, selective mining, geological conditions and in plant recovery, based on ICL Iberia’s historical data. The mining recovery and dilution factors, which are required in the conversion of resources to reserves consider the mining method and the geological conditions in the mine; and consist of historical yield data based on 20 years of operations at the mines. The mining recovery ranges from approximately 25% to 60% by ICL Iberia’s “room and pillar” modified layout. The reserve quantity (in tons) and grade are quoted as those that are expected to be delivered to the treatment plant and are subject to metallurgical recovery factors. Metallurgical recovery factors consist of historical yield data and are based on the previous ten years. A processing plant recovery of 86.5% (similar to the recovery achieved in the Súria treatment plant, in the last 5 years) was chosen. The proven reserves have been determined by information from the underground drillings, using distances of 80 to 150 meter intervals between sample points, while probable reserves have been explored by surface vertical boreholes at sample intervals of up to 1,300 meters. The final product is well over 95.5% KCl to avoid quality losses.
The Suria processing plant has a current capacity to produce approximately 800 thousand tons per annum of potash, but it is expected to reach a capacity of 1 million tons by the second quarter of 2022.
ICL Group Limited 142

Cabanasses – Summary of Potash Reserves at the end of the fiscal year ended December 31, 2021, based on $291 FOB per ton.
Amount
(Mt)
Grades/qualities
(KCl)
Cut-off grades
(KCl)
Metallurgical recovery
(KCl) 

Proven mineral reserves29.025.5%19%
85.5%
Probable mineral reserves61.626.8%
Total mineral reserves90.626.3%



(1)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(2)Mineral Reserves for Cabansses are classified in accordance with the guidelines of the JORC Code (2012).
As of December 31, 2021, Cabanasses had 90.6Mt at 26.3% KCl of potash Ore reserves compared to 88.0Mt at 27.0% KCl as of December 31, 2020, an increase of 0.4%. This increase was due to a decrease in cut-off grade (19% KCl in 2021 compared to 20% KCl in 2020) and was partially offset by production.
There are no Mineral Reserves for Vilafruns as of December 31, 2021.
Logistics
ICL Iberia transports by conveyor belt the excavated ore from the Cabanasses mine to the production plant. The final products potash and salt are transported from the plant to its customers by trucks and trains to the local market, and via railway to Barcelona port to the overseas markets.
A designated railway line is used for the transport of potash from the mines to the Barcelona port. Most of ICL Iberia's shipments are made via a terminal it owns at the port of Barcelona (Trafico de Mercancias – Tramer). ICL Iberia owns and maintains approximately 1.5 kilometers of standard gauge railway at Suria plant that connect to the regional rail network. Until now, up to three trains leave on a daily basis with a total payload capacity of 800 tons, spread out over about 21 freight cars. During 2019, ICL Iberia signed, a new freight rail transport agreement with FGC (Ferrocarrils Generalitat de Catalunya), which is expected to increase the capacity of the rail transport. In 2022, it is expected to increase to 24 freight cars, 1,000 tons and up to seven daily trains. The rail route for potash transport from Suria to the terminal in the port of Barcelona includes a rail route of about 80 kilometers. The production site (Suria) has one rail load out system for the rail to port transport systems. The train traction engine and part of the bulk freight car rolling stock is operated by the owner and operator FGC (Ferrocarrils de la Generalitat de Catalunya).
ICL Iberia owns and operates its own port facilities, which consist of bulk potash and salt storage facilities, comprised of freight car and rail truck conveyor unloading facilities and product storage warehouses.
As part of the plan for increasing ICL Iberia's production capacity, an upgrade is being made to the logistical infrastructure at the Suria Site and in the Cabanasses mine (entrance ramp into the mine, commissioned in 2021), the factories and the Company's berth in the Barcelona port, in such a manner that will permit production, transport and export of about 2.3 million tons of potash and salt per year.
The new facilities at the port of Barcelona are managed by ICL Iberia’s subsidiary Tramer and comprise an area of 866,407 square feet divided into three zones.
ICL Group Limited 143

Rotem Amfert Israel (ICL Rotem)
Overview
Rotem Amfert Negev Limited (“ICL Rotem/Rotem Israel”), a limited liability company and wholly owned subsidiary of ICL, retains three phosphate open pit mines (Rotem, Oron, and Zin) in the Negev desert region of southern Israel, each with its own beneficiation plant. Commencing 2021, ICL Rotem operates only two of its phosphate open pit mines (Rotem and Oron), in light of the discontinuation of the mining activity at Zin in 2020. While the mining activity at Zin was discontinued, the mine restoration at the site continues. The Rotem operation is located approximately 17 kilometers to the south of the town of Arad and east of the town of Dimona (Figure 4), at approximately latitude 31°04’00”N and longitude 35°11’50”E. The Oron and Zin operations lie to the southeast of the town of Yeruham. Oron is approximately centered on the geographic coordinates: latitude 30°54’00”N and longitude 35°00’59”E. Zin operation is approximately centered on the geographic coordinates: latitude 30°50’35”N and longitude 35°05’22”E. The head office of ICL Rotem is in the town of Be’er Sheva. These sites are accessible by road and rail.
Figure 4: Location of the Rotem, Oron, Zin, and DSW Properties (Israel)



Israel has a well-established and high-quality road network making travel and access within the country, and to the ICL properties, straightforward and efficient. Rotem is 150 kilometers by road from Ashdod, a Mediterranean port, via Route 258 and Highways 25 and 40. The Zin mine is located at the end of the current rail network in the Negev desert. It is linked via an internal private haul road to the Oron mine which is 10 kilometers from Zin. All three ICL Rotem production areas are connected by rail to the port of Ashdod on the Mediterranean and by road to Eilat on the Red Sea. Exports are mainly handled via Ashdod, where ICL has its own dedicated facilities, though exports to the Far East, Australia and India can be handled via Eilat.
Mining Concessions and Lease Agreements
Rotem Israel has been mining phosphates in the Negev in Israel for more than sixty years. The mining is conducted in accordance with the phosphate mining concessions, which are granted from time to time by the Minister of National Infrastructures, Energy and Water under the Mines Ordinance, by the Supervisor of Mines in his Office, as well as the mining authorizations issued by the Israel Lands Authority. The concessions relate to quarries (phosphate rock), whereas the authorizations cover use of land as active mining areas.
 

ICL Group Limited 144


Rotem Israel had two mining concessions: (1) Rotem Field (including the Hatrurim Field) and (2) Zafir Field (Oron Zin) which were valid until the end of 2021.
The Zafir joint concession included the Oron concession, which was first granted in 1952. The1952, and the Zin concession, which was first granted in 1970, as part of the Oron concession and the joint concession was subsequently renamed Zafir.concession. The Zafir concession (consisting of both the Oron and Zin sites) was renewed every 3 years, and in 1995 it was granted for 10 years and thereafter, in 2002, it was granted up to 2021. The Rotem concession was first granted in 1970 and, similar to the Zafir concession, it was granted in 1995 for 10 years and inyears. In 2002 it was granted up to 2021. In 2011, the Supervisor of Mines expanded the area of the Rotem concessionconcession's area, by joining the Hatrurim site to the area of this concession, and theconcession. The matter was transferred to the Israel Lands Authority for handling ofin order to treat the expansion of the permissible mining area to the Rotem field, in accordance with expansion of the concession area.

The concessions relate
In December 2021, the Ministry of Energy granted Rotem Israel an extension to the quarry (phosphate rock) whereas the other authorizations relate to use of land as active mine sites.
ICL Rotem has the following twoa unified concession (which includes all Rotem's mining concessions, which cover a total area of approximately 224 square kilometers:
1.   Rotem Field (including the Hatrurim Field) – valid up tofields) for an additional three years, until the end of 2021;2024.
 
2.   Zafir Field (Oron‑Zin) – valid up to
Rotem Israel has two lease agreements in effect until 2024 and 2041 and an additional lease agreement of the end of 2021;
As atOron plant, which the date of this report, the company isCompany has been working to extend since 2017, by exercising the said concessions withextension option provided in the relevant authorities.agreement.
 
119

Mining Royalties
 
As part of the terms of the concessions in respect of mining of the phosphate, Rotem Israel is required to pay the State of Israel royalties based on a calculation as stipulated in the Israeli Mines Ordinance.
In January 2016, a legislative amendment entered into effect covering implementationaccordance with the Mines Ordinance, the royalty rate for production of the recommendations of the Sheshinski Committee that changed the formula for the calculation of the royalties, by increasing the rates from 2% tophosphates is 5% of the value of the quarried material and leftmaterial.
Under the Supervisor the possibility of collecting royalties at a higher rate if he decided to grant a mining right in a competitive process wherein oneterms of the selection indicesconcessions and in order to continue to hold the concession rights, Rotem Israel is the royalty rate.
In 2018, 2017 and 2016, Rotem paid royaltiesrequired to comply with additional reporting requirements, in addition to the Statepayment of Israel in the amounts of $5 million, $4 million, and $5 million, respectively.royalties.
 
Planning and Building
 
The mining and quarrying activities require a zoning approval of the site based on a plan in accordance with the Israeli Planning and Building Law, 1965. These plans are updated, as needed, from time to time. As atof the reporting date, of this report, there are various requests at different stages of deliberations pending before the planning authorities.
 
In November 2016, the District Board for the Southern District approved a detailed site plan for mining phosphatephosphates in the Zin‑Zin Oron area. This plan, which covers an area of about 350 square kilometers, will permit the continued mining of phosphate located in the Zin valley and in the Oron valley for a period of 25 years or up tountil the exhaustion of the raw material – whichever occurs first, with the possibility for extension (under the authority of the District Planning Board).
 
TheIn addition, the Company is working to promote the plan for mining phosphates in Barir field, (which is located in the southern part of the South Zohar field)deposit in the Negev Desert. In 2015, the National Planning and Building Council (hereinafter – the National Council) approved the Policy Document regarding Mining and Quarrying of Industrial Minerals, which included a recommendation to permit phosphate mining in the Barir field. In February 2017, the Committee for Principle Planning Matters, decided to continue advancement of the mining in the South Zohar field. Concurrently, and based on a decision of the National Council, instructions were prepared by the competent authorities with respect to the performance of an environmental survey of the Barir field for purposes of its further advancement. In April 2017, the National Council recommended to the government to approve National Outline Plan (hereinafter – NOP 14B), which includes South Zohar field, and determined that Barir field will be advanced as part of a detailed National Outline Plan, which was approved by the government’s Housing Cabinet in January 2018.
 
In January 2018, the Minister
For further information regarding Rotem Israel's royalties, tax, planning and building proceedings, leases and other matters, and for description of Health filed an appeal of the said approval, requiring compliance with the Ministry of Health’s recommendationcertain risks relating to conduct a survey regarding the health impact in each site included in NOP 14B. As part of a discussion regarding the appeal, which was held in the Housing Cabinet, it was decided, with the consent of the Ministries of Health, FinanceRotem Israel's concession, see Note 18 to our Audited Financial Statements and Energy, to remove the appeal and to approve the NOP 14B. In addition, it was decided to establish a team with representatives of the ministries of Treasury, Health, Transportation, Environmental Protection and Energy, which will present to the Housing Cabinet a report that includes health aspects for NOP 14B. In April 2018, the NOP 14B was formally published.“Item 3 - Key Information— D. Risk Factors”, respectively.
 

120
ICL Group Limited 145

 
In July 2018,Operations
ICL currently operates large surface phosphate mining sites at Oron and Rotem, which are located at the southern part of Israel in the Negev region. The mining activity at Zin was discontinued in mid-2020, while the mine restoration at the site continues.
Each of the said fields in Israel has a petition was submittedsimilar layered structure and geological composition, with the phosphate preserved as relatively thin layers along the margins and within the axes of two northeast to southwest trending asymmetrical synclines (basins or trough shaped folds). Oron and Rotem lie within a single syncline located northwest of the Zin syncline. The three deposits have been proved over extensive distances in terms of length (Rotem 10 kilometers, Oron 16 kilometers and Zin 22 kilometers) and width (4 kilometers each). The Campanian (Upper Cretaceous period) phosphate rock deposits of Israel are part of the Mediterranean phosphate belt extending from Turkey, through Jordan and Israel, and westward through Egypt, Tunisia and Morocco. The Company began operations at Oron in the 1950s and at Rotem and Zin in the 1970s. These sites are accessible by road and rail. See “Item 4 - Information on the Company— D. Property, Plant and Equipment— Concessions and Mining Rights”.
The method of mining in the Negev is by the conventional open pit method, using drilling and blasting, hydraulic excavators and rigid dump trucks or dozers with rippers for overburden removal and front-end loaders and trucks for mining phosphate. Each mine site has varying numbers and thicknesses of over burden, inter burden and phosphate rock layers, so that the size of the mining equipment is conformed to the Israeli Supreme Courtmining sites and the operating requirements. In all the mines, stripping of Justicethe waste material and mining of the phosphate are performed by entirely conventional methods. The Company is committed to continuing the restoration work, as it has been so far, in all its mines.
Phosphate rock from the Rotem mine is transported by truck to a nearby beneficiation plant at Mishor Rotem. In addition, on this site, ICL operate two sulphuric acid plants, three green phosphoric acid plants, a white phosphoric acid plant, three superphosphate plants, two granular fertilizer plants, MKP plant and an oil shale burning plant for production of electricity and steam. ICL also has beneficiation plant at Oron. The product of the process is a high grade, multi purpose phosphate product, and from 2021, most of the production is used to produce phosphoric acid and fertilizers.
The plant at Mishor Rotem is powered primarily from electricity generated by the municipalityCompany at its sulphuric acid plants and oil shale that the Company mines at Mishor Rotem. In order to ensure the continuity of Arad againstenergy production in Rotem Israel, and in accordance with the National Planning and Building Council,policy of the Ministry of Health,Energy and the Ministry of Environmental Protection, and Rotem,the Company is working to revokeaccelerate the approval of NOP 14B. In January 2019, residents of the Bedouin diaspora in the "Arad Valley" submitted a petition to the High Court of Justice (hereinafter – the Court) against the National Council, the Government of Israel and Rotem, in which the Court was requested to cancel the provisions of NOP 14B and the decision of the National Council from December 5, 2017, regarding to the advancementcompletion of a detailed plan for phosphate miningproject to replace existing energy production infrastructure at Rotem, which utilizes oil shale, with a natural gas-based steam boiler, so it will be completed before the existing mined reserves of oil shale are utilized. All the power utilized by the Oron beneficiation plant is purchased from the national grid in the South Zohar field. In addition, the Court was requested to issue an interim injunction preventing the implementation of the NOP 14B instructions and the National Council's said decision until a final resolution. On January 22, 2019, the Supreme Court consolidated the hearing of the petition together with the other petition filed against NOP 14B and decided that at this stage there is no basis for granting the interim injunction. On February 5, 2019, the Company filed its response.Israel.
 
Under the termsFor further information and description of the concessions and in ordercertain risks relating to continue to hold the concession rights, ICL Rotem is required to comply with additional reporting requirements, in addition to the payment of royalties.
Spain
A subsidiary in Spain (hereinafter – ICL Iberia) was grantedour mining rights based on legislation of Spain’s Government from 1973 and the regulations accompanying this legislation. Further to the legislation, as stated, the Government of the Catalonia region published special mining regulations whereby ICL Iberia received individual licenses for each of the 126 different sites that are relevant to the current and possible future mining activities. Some of the licenses are valid up to 2037 and the rest are effective up to 2067. The concession for the "Reserva Catalana", an additional site wherein mining has not yet been commenced, expired in 2012. The Company is acting in cooperation with the Spanish Government to obtain a renewal of the concession. According to the Spanish authorities, the concession period is valid until a final decision is made regarding the renewal.
The concessions cover a total area of 42,489 hectares in the province of Barcelona and 26,809 hectares in the province of Lerida. As part of a renewal process, the Company must prepare and present a basic technical report describing the intended use of the mines. As required by law, the concessions must be renewed prior to the expiration date. If a concession expires, a bidding process will be initiated. ICL Iberia (IBP) applies in advance for the renewal of mining concessions and until now, had no difficulties in renewing them.

121

United Kingdom
United Kingdom Mining Concession – ICL Boulby
The mining rights of a subsidiary in the United Kingdom (hereinafter – ICL Boulby), are based on approximately 114 mining leases and licenses for extracting various minerals, in addition to numerous easements and rights of way from private owners of land under which ICL Boulby operates, and mining rights under the North Sea granted by the British Crown (Crown Estates), which includes provisions to explore and exploit the resources of the Polysulphate mineral. The said mining rights cover a total area of about 374 square kilometers. Asoperation at the date of this report, all the lease periods, licenses, easementsNegev Desert, see Note 18 to our Audited Financial Statements and rights of way are effective until 2038. In 2018 and 2017, the mining royalties amounted to $1.3 million and $2 million, respectively.
Historically, the renewal of leases has not been problematic, and the Company is confident in the renewal of all land leases as required and will receive all government approvals and permits necessary for exploiting all targeted mineral resources.
The current planning permit, relevant to mineral exploitation, processing and land usage, is valid up to 2023. Accordingly, a new permission must be issued by the North York Moors National Park Authority no later than 2020. ICL Boulby is taking action to extend the planning permit by twenty‑five years.
ICL Boulby has a preferential right to renew some of its leases as it has the Planning Permission to extract minerals. In addition, in the past, when leases expired, there has been no interest from other companies and there is no competitive bidding process.
The entities involved in renewing or obtaining new leases are ICL Boulby, local solicitors and individual landowners who own the mineral rights, as described above. The particular conditions that must be met in order to retain the leases are payment of annual fees and a royalty payment for minerals extracted from the property to the landowner.
United Kingdom Concession“Item 3 - EverrisKey Information— D. Risk Factors”, respectively.
 
A UK subsidiary from
ICL Innovative Ag Solutions segment (hereinafter – Everris UK), has peat mines in the UK (Creca, Nutberry and Douglas Water). Peat is used as a raw material for production of detached beds for soil improvement and use as soil substitutes in growing media. The Nutberry and Douglas Water mining sites are owned by Everris UK, while the Creca mine is held under a long‑term lease. The mining permits are granted by the local authorities and are renewed after examination of the local authorities. The mining permits were granted up to the end of 2024.Group Limited 146
China
YPH JV holds two phosphate mining licenses that were issued in July 2015, by the Division of Land and Resources of the Yunnan district in China. With reference to the Haikou Mine (hereinafter – Haikou), the mining license is valid up to January 2043, whereas regarding the Baitacun Mine (hereinafter – Baitacun), the mining license expired in November 2018. The mining activities at Haikou are carried out in accordance with the above‑mentioned license. Regarding Baitacun, the Company is examining the option to renew the concession, subject to the phosphate reserves soil survey results and achieving the required understanding with the authorities.
122

Natural Resources Royalties
With respect to the mining rights, in accordance with the "Natural Resources Tax Law", YPH JV will pay royalties of 8% on the selling price based on the market price of the rock prior to its processing. In 2018 and 2017, YPH JV paid royalties in the amount of $3 million and $2 million, respectively.
Grant of Mining Rights to Lindu
In 2016, YPC issued a statement whereby in 2010 YPC entered into agreements with the local authority of Jinning County, Yunnan Province and Jinning Lindu Mining Development and Construction Co. Ltd. (hereinafter - Lindu Company), according to which Lindu Company is permitted to mine up to two million tonnes of phosphate rock from a certain area measuring 0.414 square kilometers within the area of the Haikou mine (hereinafter – the Daqing Area) and to sell such phosphate rock to any third party in its own discretion.

Prior to the establishment of YPH JV, YPC proposed to the local authority of Jinning County and Lindu Company to swap the rights granted to Lindu Company in the Daqing Area with another area that is not a part of the Haikou mine, where Lindu Company would mine. In March 2016, in a meeting held between YPC, ICL and other relevant parties, YPC stated that it could not exchange its other mines to replace the Daqing Area since Lindu Company’s benefit is connected to the Daqing Area. Under the above‑mentioned statement, YPC has undertaken that YPH JV’s mining right in the Haikou mine will not be adversely affected by the above-mentioned arrangements. It was decided that YPH should conduct further communications with YPC and Lindu Company, for the purpose of protecting its legal rights and to urge the parties to reach a fair, just, and reasonable solution to this issue, as soon as possible. In light of the above, ICL didn’t include this area as part of YPH reserves.
Reserves
The Company believes it has a broad and high‑quality mineral reserves base due to its strategically‑located mines and facilities. “Reserves” are defined by SEC Industry Guide 7 as that part of a mineral deposit that could be economically and legally extracted or produced at the time of the reserves determination. Industry Guide 7 divides reserves between “proven (measured) reserves” and “probable (indicated) reserves,” which are defined as follows:
·
Proven (measured) reserves. Reserves for which (1) quantity is computed from information received from explorations, channels, wells and drillings; grade and/or quality are computed from the results of detailed sampling and (2) the sites for inspection, sampling and measurement are spaced so closely to each other so that the geologic character is well defined so the size, shape, depth and mineral content of reserves can be reliably determined.
·Probable (indicated) reserves. Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for survey, sampling, and measurement are further apart or are otherwise less efficiently spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.
123

ICL categorizes its reserves in accordance with these SEC Industry Guide 7 definitions, as stated above. The quantity, nature of the mineral reserves and estimate of the reserves at each of the Company’s properties are estimated by its internal geologists and mining engineers.
In October 2018, the SEC adopted a final rule that will replace SEC Industry Guide 7 with new disclosure requirements that are more closely aligned with current industry and global regulatory practices and standards. We must comply with these new disclosure requirements beginning with our fiscal year ended December 31, 2021, although early voluntary compliance is permitted. As at the date of this report, we have not adopted these new disclosure requirements and have not determined when we will elect to adopt them. When we implement the new methodology in connection with adoption of these disclosure requirements, we will present resource and reserve estimates, and the information presented may differ materially from the reserve estimates to those presented historically and in this Annual Report under the existing SEC rules.
IsraelProduction
 
The following table sets forth information regarding our estimatesthe amount of our total mine production of raw ore at the Company’s mines in the Negev (and the relevant grade) supplied to our beneficiation plants, for the three years ended December 31, 2021, 2020 and 2019:
 Year Ended December 31,
 202120202019

Millions of tons produced
 5 6 7
Grade (% P2O5 before/after beneficiation)
26% / 32%26% / 32%26% / 32%

The following table sets forth the approximate amounts of product produced after processing by our operations in the Negev Desert, for the three years ended December 31, 2021, 2020 and 2019:
 Year Ended December 31,
 202120202019
 thousands of tonsthousands of tonsthousands of tons

Phosphate Rock 2,431 3,090 2,807
Green Phosphoric Acid 531 544 567
Fertilizers 1,082 920 1,033
White Phosphoric Acid 168 171 134
Specialty Fertilizers 72 70 66


Property Values
As of December 31, 2021, the overall book value of the property, plant and equipment of ICL Rotem, amounted to about $746 million.
Mineral Resource Estimate
The reported P2O5 grade is intended for the phosphate rock product, after physical beneficiation (usually dis-aggregation, sieving and sizing), designed to replicate actual plant performance. The reported grade and tonnages, organic matter and chlorine contents are designated for the in-situ material.
At Rotem and Zin, future resources are located in the deeper, more steeply dipping, or remote parts of the deposits. They have higher average stripping ratios and ore haulage distances than do those at the older, smaller, and more compact mining operation at Oron. In general, production is progressively toward deeper pits.
The three-year average FOB Ashdod market prices used to calculate our resources and reserves in Israelthe Negev as of December 31, 2018:2021 are as follows: $686 per ton P2O5 for green phosphoric acid, $1,374 per ton for WPA, $1,283 per ton for MKP, and $153 per ton for GSSP.
 
In estimating the Resources and Reserves, an average of the previous three years’ currency exchange rates is used to ensure economic feasibility. The three-year average currency conversation rates used to calculate our resources and reserves in the Negev as of December 31, 2021 are as follows NIS 3.41 per $1.00, $1.15 per €1.00 and $1.31 per £1.00.
ICL Group Limited 147


Rotem, Zin, and Oron – Summary of Phosphate Mineral Resources at the end of the fiscal year ended December 31, 2021, based on FOB Ashdod market prices: $686 per ton P2O5 for green phosphoric acid, $1,374 per ton for WPA, $1,283 per ton for MKP, and $153 per ton for GSSP.
 CategoryWhite PhosphateLow
Organic Phosphate
High Organic &
Bituminous
Phosphate
Bituminous PhosphateRecoverable ReservesAverage Grade
(millions of metric tonnes)
Average
Grade
(%P2O5)
Cut-off
Grades
(P2O5)
Metallurgical Recovery
(P2O5)

(millions of tons)


RotemMeasured  156.727.5%25%  54%  
Indicated  10.026.0%
M + Ind  166.727.5%
Inferred  --
ZinMeasured 3.018.027.5%23%  
56%  
Indicated ---
M + Ind 3.018.027.5%
Inferred -.-
OronMeasured  70.027.5%20%  

59%  
Indicated  --
M + Ind  70.027.5%
Inferred  --
TotalMeasured 3.0
244.7
27.5%  
Indicated -10.026.0%  
M + Ind 3.0254.727.5%  
Inferred --- 




(1)Mineral Resources are reported exclusive of any Ore Reserve.

(2)All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(3)Mineral Resources for Rotem, Zin, and Oron are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results.
RotemProven- 10-- 1026%
ZinProven- 16 15 3 3425%
OronProven 14 4-- 1823%
Total (Proven) (1)  14 30 15 3 62 
As of December 31, 2021, ICL Rotem had 257.7 Mt of phosphate resources. We are reporting Mineral Resources at ICL Rotem in accordance with the guidelines of PERC for the first time in 2021. The mineral resources estimate for ICL Rotem is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.4 of the Technical Report Summary filed as an exhibit to this Annual Report.

Mineral Reserve Estimate
 
(1)          Amounts may not add up due to rounding.
The Company continues to check the adaptation of various potential types of phosphate rock (bituminous and brown phosphates) for the production of phosphoric acid and its downstream products as part of an effort to utilize and increase existing phosphate reserves. In 2019, the Company will further analyze these types of phosphate including R&D, pilots, plant testing activities and its economic feasibility. If this analysis is able to establish economic feasibility, we would expect to add a portion of this phosphate rock resources to our resource and reserve bases.
In determining these reserves,Reserves, a cut‑off grade of 20% to 25% P2O5 was applied, depending on the processing characteristics of the phosphate rock and the existing processes.mineral processing method. The cut‑off grade differs for each mine in accordance with the beneficiation process and enrichment capacity: a cut‑off grade of 20% P2O5 and lower was applied at Oron, aafter it has been proven that the required quality can be reached. A cut‑off grade of 23% P2O5 was applied at Zin, and a cut‑off grade of 25% P2O5 was applied at Rotem. The cut‑off grade for Oron is lower because ICL Rotem has the appropriate beneficiation process for phosphate rock with limestone, which characterizes the white phosphate and, therefore, the beneficiation process, through the flotation process, is extremely efficient. The cut‑off grade for the Rotem mine is higher because the beneficiation process there has a limited grinding and flotation system, and only medium to high grade phosphate can be fed (which is appropriate for the existing reservesReserves at Rotem). The cut‑off grade for Zin is slightly higher than that of Oron because of the presence of marl and clay that reduces the efficiency of the enrichment process.
ICL Group Limited 148


For purposes of determining the cut‑off grade, utilization and quantities parameters account was taken of the geology factors (continuity, structure), mining method, mining dilution, plant utilization, technical feasibility, operating costs, and historical and current product prices. The parameters employed in the calculation are as follows: on‑site tonnestons (multiplying area by layer thickness and phosphate density); recoverable tonnes (tonnestons (tons of mineral which can be mined, taking into account mining dilution); mineable tonnestons (recoverable tonnestons from which the tonnestons produced are deducted); stripping ratio (the quantity of waste removed per tonneton of phosphate rock mined); planned dilution; cost per tonneton for mining (typically related to transport distance to beneficiation plant); cost per tonneton including reclamation; and unplanned dilution (5%(7%-15% unplanned dilution is taken into account based on the data from the mining inoperation and the data from the problematic areas). ICL Rotem’sRotem Israel’s yearly mining plan is not determined by the minimum cut‑off grade, and fluctuations in commodity prices rarely affect its cut‑off grade.
 
124

The cut‑off grade calculations come from historical yield data and ICL Rotem’s historical experience with mining, and are adequately calculated and modelled by its geologists, operation engineers and economists. The calculation takes the ore grade in‑situ, converts it into extracted ore with ICL Rotem mining method, and estimates the plant yield depending on the grade. Economic modelling then gives the cut‑off figures currently used by ICL Rotem.
 
The proven reserves above the cut‑off grade were obtained from the calculated on‑site resources taking into accountconsidering the mining method, the rate of mining dilution, and in‑plant recovery, based on ICL Rotem’s historical data. In order to convert the resources into reserves, account is taken, separately, of the mining dilution rate, mining method and the geological conditions, including historical yield data, and are based on the previous five years’ experience.operational data. The mining dilution rate in the Company's mines in Israel’s southern region is 2.5% and takes into account the continuity of the layers and the geological structure. The quantity and grade of the calculated reserves are those that are expected to be transferred to the processing plant and are subject to recovery indices in the utilization plant. The updated utilization in the plant varies between the sites as it consists of historical yield data, which is currently 45% for Oron, 46% for Rotem, and 40-46% for Zin. Zin. These differences in metallurgical recovery rates are due to rock properties and differences in the beneficiation process at the different mines. Proven reserves have been explored by borehole intersections typically at 5070 to 70150 meters intervals. Each of the three plants at the mines has been developed over the past few decades for the optimum upgrading of the phosphate rock to concentrate ore containing typically 31% to 32% P2O5. The conversion ratio for most of the phosphate layers is 1.8 tonnestons for every 1 cubic meter, where a conversion ratio of 2.0 tonnestons per cubic meter is used for hard, calcareous beds. These factors are used on the basis of long experience and are considered to be reasonable.
 
The Company continues to check the adaptation of various potential types of phosphate rock for the production of phosphoric acid and its downstream products as part of an effort to utilize and increase existing phosphate reserves. In 2021, the Company will further analyze additional types of phosphate including: R&D, pilots, plant testing activities and other economic feasibility assessments.
In calculating the cut‑off grade and reserves, an average of the previous three years’ market prices and operating costs wasare used as part of the calculations to ensure economic feasibility.
 
The three‑year average market prices used to calculate our reservesIn 2019, additional areas in Rotem mine have been defined as low organic content, as well as reassessment of the overburden ratio in some areas in the Negevmine. In addition, at Oron mine more precise mining was utilized. Potential area in Tamar field (part of Rotem mine) is being examined for suitable mining method that could result in future additions to the Company reserves.
ICL Group Limited 149


Rotem mine: The life of the mine at Rotem is approximately 4 years based on reserves of nominally 8.6 million tons of low organic/low magnesium phosphate (given the current annual mining volume). The low‑organic, low-magnesium phosphates are suitable for phosphoric acid production. The annual average production (mining) rate for the low-organic/low-magnesium phosphate at Rotem is 2 million tons per year.

Oron mine: The life of the mine at Oron is approximately 3 years based on a reserve of 8.5 million tons and an average production of 2.8 million tons per year of white phosphate (given the current annual mining volume).

Zin mine: In order to actively address global market volatility, the continuing trend of economic and business uncertainty and to mitigate the implications of the COVID-19 spread and its impact on the Segment's results, several efficiency initiatives and measures have been initiated, which include, among other things, the discontinuation of the production and sale of the phosphate rock activity at Zin plant in 2020.
Currently, we are generating sufficient rock production from other mines and as such, we are not providing a life of mine estimate for Zin. Nevertheless, Zin reserve can be used as part of the future raw materials for MGA production at ICL Rotem and for other downstream products.
Rotem, Zin, and Oron – Summary of Phosphate Mineral Reserves at the end of the fiscal year ended December 31, 2018 are as follows: $6512021, based on FOB Ashdod market prices: $686 per tonneton P2O5 for green phosphoric acid, $1,286$1,374 per tonneton for WPA, $1,186$1,283 per tonneton for MKP, $290 per tonne for GTSP,and $153 per tonneton for GSSP, and $79 per tonne for phosphate rock.
125

In calculating the reserves, an average of the previous three years’ currency exchange rates were used to ensure economic feasibility. The three-year average currency conversation rates used to calculate our reserves in the south as at December 31, 2018 are as follows NIS 3.68 per $1.00, $1.14 per €1.00 and $1.33 per £1.00. 
The life of the mine at Rotem is approximately 5 years based on reserves of 10 million metric tonnes of low organic/low magnesium phosphate (given the current annual mining volume). The low-organic, low-magnesium phosphates are suitable for phosphoric acid production. The annual production (mining) rate for the low-organic/low-magnesium phosphate at Rotem is 1.9 million metric tonnes per year. 
The life of the mine at Oron is approximately 4.5 years based on a reserve of 14 million metric tonnes and an average production of 3 million metric tonnes per year of white phosphate (given the current annual mining volume).
The life of the mine at Zin is approximately 11 years based on reserves of 34 million metric tonnes and a production of 3.1 million metric tonnes per year as follows (given the current annual mining volume): 
·Low-organic phosphate—1.7 million metric tonnes per year
·High-organic phosphate—1.1 million metric tonnes per year
·Bituminous phosphate—0.3 million metric tonnes per year
The Company believes that it has all the government approvals and permits necessary for its reserves in Israel.
Spain
We are currently in the process of preparing our potash reserves calculation for our Spanish mining operations, in part due to the new pending SEC regulations effective in 2021. As of the date of this report, we have not completed this work and, accordingly, current reserve estimates for our mining operations at our Cabanasses and Vilafruns mining operations in Spain as of December 31, 2018 were not available and are not presented herein. See “Item 3 - Key Information— D. Risk Factors— Overestimation of mineral and resource reserves could result in lower than expected sales and/or higher than expected costs and may have a material adverse effect on our business, financial condition and results of operations".GSSP.
 
The Suria plant utilizes ore mined from Cabanasses and Vilafruns and has a current capacity to produce approximately 850 thousand tonnes per annum of potash. The Sallent plant utilizes ore mined from Vilafruns and has a current capacity to produce approximately 500 thousand tonnes per annum of product.
The Company believes that it has all government approvals and permits necessary for the reserves in Spain.
United Kingdom
At the end of the second quarter of 2018, the Company ceased the production of potash in ICL Boulby mine in the UK, due to fully depleted potash reserves and shifted to sole production Polysulphate™. As a result, we are no longer presenting reserve information for potash at ICL Boulby mine in accordance with the SEC Guide 7 rules.
In the Company’s mine in the United Kingdom, we believe there are sizable resources for the purpose of continued production of Polysulphate™ (a mineral used in its natural form as a fully soluble and natural fertilizer, also used for organic agriculture and as a raw material for production of fertilizers), the sale of which in commercial quantities began in 2012. Beginning in 2016, the Company has been in the process of transitioning from potash extraction and production to Polysulphate™ at its ICL Boulby mine. In 2018, ICL produced about 350 thousand tonnes of Polysulphate™ and sold about 330 thousand tonnes, for the total amount of about $40 million. The Company is tracking this initiative and will obtain and provide reserve information in accordance with the SEC Guide 7 rules when this product becomes significant for the Company’s top line sales. As at the date of this Annual Report, our Polysulphate™ production at the ICL Boulby mine has generated about $40 million in sales and currently is not considered material to the Company’s operations or financial results. Accordingly, the Company has not presented reserve information for Polysulphate™ at ICL Boulby.
126

The Company believes that it will obtain renewal of all the government leases and licenses necessary for the reserves in the United Kingdom.
China
Haikou mine has 55 million tonnes (after deduction of 5%: losses 3% and dilution 2%) of proven reserves of phosphate rock which located in 4 separated blocks (blocks 1-4). The annual production capacity is around 2.5 million tonnes (in 2018 2.15 million tonnes were mined). The proven reserves are sufficient for almost 22 years at such rate. Another 4.4 million tonnes of phosphate is placed in several piles around the mine and this reserve will be fed to the flotation plant in the next few years.
The following table sets forth our estimated phosphate reserves in Haikou Mine as of December 31, 2018:
 CategoryWhite PhosphateLow Organic PhosphateAverage Grade
(millions of metric tonnes)High Organic & Bituminous Phosphate
Total
(Mt)
Average
Grade
(% P2O5)
Cut-off
Grades
(P
2O5)
Metallurgical Recovery
(P2O5)
(millions of tons)



Block 1Proven 3 21%
Block 2Proven 5 21%
Block 3Proven 30 22%
Block 4Proven 17 22%
Total (Proven)  55 
RotemProven 8.610.018.626.7% 25.0% 54%
Probable ----
 
ZinProven 12.417.730.125.5% 23.0% 56%
Probable ----
 
OronProven8.53.0 11.523.1%20.0% 59%
Probable--   
 
TotalProven8.524.027.760.225.4%  
Probable------ 



(1)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.
The average quality of the phosphate is around 21.4% P2O5, and is divided into 3 grades: Grade I (highest grade) > 30% P2O5, Grade II- 24-30% P2O5 and Grade III- 15-24% P2O5. Around 20% of the phosphate has >27% P2O5 and is usually beneficiated in the scrubbing facility or in the flotation plant or in the grinding facility.

(2)Mineral Resources for Rotem, Zin, and Oron are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results.
 
In determining these
As of December 31, 2021, ICL Rotem had 60.2 Mt of phosphate reserves a cut-off grade of 15% P2O5 was applied in accordance with the flotation abilitycompared to produce usable concentrate rock (28.5% P2O5) which is the average quality required for the production of phosphoric acid in the Yunnan region. In practice, the Haikou mine is able to process and use all the phosphate that exists in the deposit. The phosphate layers’ borders are physically well defined, also has very low P2O5 content (usually around 5%), and the mining process does not leave any unmined phosphate behind.
The three-year average market prices used to calculate our reserves in the Haikou mine53 Mt as of December 31, 2018 are2020, an increase of 13.6%. This increase was primarily due to the addition of Tamar field (Low Organic) to the reserves and Bituminous Phosphate at Rotem, as follows: $394 per tonne for green phosphoric acid (MGA), $693 per tonne for white phosphoric acid (WPA), $906 per tonne for MKP, $223 per tonne for GTSP. a result of a change in Reserve determination methods. Assumptions regarding the technical parameter analysis, forecasted product prices, production costs, permitting decisions, or other factors may positively or negatively affect the reserves estimates.
127

 
In calculating the reserves, an average of the previous three years’ currency exchange rates were used to ensure economic feasibility. The three-year average currency conversation rates used to calculate our reserves as at December 31, 2018 are as follows NIS 3.68 per $1.00, $1.33 per £1.00 and 6.67 RMB per $1.00. 
ICL Group Limited 150
The life of the mine at Haikou is approximately 22 years based on reserves of 55 million tonnes (given the annual production (mining) capacity of around 2.5 million tonnes); this phosphate is suitable for phosphoric acid production.

The Company believes that we have all the government approvals and permits necessary for our reserves in China.

Logistics
Israel
Part of the output of ICL’s Dead Sea facilities is transported by a conveyor belt that was built over 18.1 kilometers to the railhead located at Tzefa in Mishor Rotem, and from there the output is transported to the Ashdod port. In addition, the Company also transports the output produced at the Dead Sea by truck, mainly to the Eilat port. Metal magnesium is transported by means of containers that are loaded on trucks from the Company's site in Sodom to the railhead at the Tzefa site. Thereafter, the Company transports the containers to the Haifa / Ashdod ports by means of train.
 
Most of ICL’s products, whether in solid or liquid state, are transported in bulk from Rotem Oron and ZinOron by road and rail to either the Ashdod port or by road to the Eilat port. From Eilat, ICL’s products are transported by ship to markets in the Far East, and from Ashdod, they are transported by ship to Europe and South America.
 
Within the Rotem site, there is a rail loading facility that typically loads up to 30 wagons for each delivery. Approximately 1.81.4 million tonnestons of products per year are transported by rail from the Rotem site to Ashdod. About 150Ashdod port, about 230 thousand tonnes of productstons by road to Ashdod and about 80 thousand tons are transported by road from Rotem to the port of Eilat.
 
ICL Tovala is responsible for transporting phosphate rock from the Oron and Zin processing facilities in road‑road going rigid trucks and trailers. Each trailer has a payload of 40 tonnes. Approximately 100 thousand tonnes are transported from Zin to Rotem for further processing, andtons. In 2021, about 1.11.3 million tonnes aretons of phosphate rock were transported from the Oron mine by truck for additional processing.processing and about 70 thousand tons of phosphate rock were transported from Zin, which ceased operations in 2020 and the transfer of the remaining inventory ended in early 2021, to Rotem for further processing.
 
From Ashdod port, approximately 650 thousand tonnestons of sulphur are transported to Rotem each year. Sulphur arrives at the port of Ashdod from overseas, where it is loaded into road‑going trucks and transported to the Company’s sulphur dispatch 5 kilometers away. At the depot, it is loaded into rail cars and then transported to Rotem.
The port of Ashdod is located on the Mediterranean coast, approximately 40 kilometers south of Tel Aviv and approximately 120 kilometers northwest of the Rotem site and the Tzefa site.


ICL Group Limited 151


Dead Sea Works
Overview
Figure 4:  Location of the DSW, Rotem, Oron and Zin Properties (Israel)


ICL Dead Sea (DSW) is located on the south- west shore of the Dead Sea’s southern basin (Figure 4). It is one of the world’s largest producer and supplier of potash products, in addition to a range of chemical products. The main product produced at the plant is muriate of potash (MOP) for use as agricultural fertilizer. The DSW comprises 37 ‘ponds’ covering an area of 146.7sqkm and its associated processing facilities. The DSW processing facilities are approximately centered on the geographic coordinates: latitude 31°02’18”N and longitude 35°22’15”E. Water from the northern Dead Sea basin is pumped into evaporation ponds which cause the salt (carnallite) to precipitate out of solution and to sink and deposit on the bottom of the ponds. A dredge harvests the carnallite and pumps this solution to the processing facilities located at the southern end of the site.
The DSW are located alongside Highway 90 which runs broadly north – south from the port of Eliat in the south, northwards alongside the Dead Sea and onwards through Tiberias on the Sea of Galilee in the north of the country. Products from the DSW are transferred to either the port of Ashdod (Mediterranean) or port of Eilat (Red Sea). For Ashdod, an 18 kilometers conveyor transfers potash product from the DSW to a terminal at Tsafa and then onwards by train or road truck. For transport to Eilat, road trucks are used for the entire journey.
Mining Concessions and Lease Agreements
Pursuant to the Israeli Dead Sea Concession Law, 1961 (hereinafter – the Concession Law), as amended in 1986, and the concession deed attached as an addendum to the Concession Law, DSW was granted a concession to utilize the resources of the Dead Sea and to lease the land required for its plants in Sodom for a period ending on March 31, 2030, accompanied by a priority right to receive the concession after its expiration, should the Government decide to offer a new concession.
The concession covers a total area of 652 sqkm, including the evaporation ponds that cover an area of 146.7 sqkm.
In accordance with section 24 (a) of the Supplement to the Concession Law, it is stated, among other things, that at the end of the concession period all the tangible assets at the concession area will be transferred to the government, in exchange for their amortized replacement value – the value of the assets as if they are purchased as new at the end of the concession period, less their technical depreciation based on their maintenance condition and the unique characteristics of the Dead Sea area. Pursuant to section 24 (b) of the Supplement to the Concession Law, it is stated that capital investments made 10 years before the concession ends (i.e., April 2020) to the end of the concession period require a prior consent of the Government, unless they can be fully deducted for tax purposes before the end of the concession period. However, the Government's consent to any fundamental investment that may be necessary for the proper operation of the plant, will not be unreasonably delayed or suspended. In 2020, a work procedure was signed between the Company and the Israeli Government for the purpose of implementing section 24(b).
ICL Group Limited 152



The procedure determines, among other things, the manner of examining new investments and the consent process. In addition, the procedure determines the Company's commitment to invest in fixed assets, including for preservation and infrastructure, and for ongoing maintenance of the facilities in the concession area (for the period beginning in 2026) and the Company's commitment to continue production of potassium chloride and elemental bromine (for the period commencing 2028), all subject to the conditions specified in the procedure. Such commitments do not change the way the Company currently operates.
In consideration of the concession, DSW pays royalties and lease rentals to the Government of Israel and is subject to the Law for Taxation of Profits from Natural Resources, on top of the regular income tax.
For further information regarding ICL Dead Sea royalties, tax and other matters, see Notes 15 and 18 to our Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors— Our minerals extraction operations are dependent on concessions, licenses and permits granted to us by the respective governments in the countries wherein they are located”.
Operations
The concentration of the minerals extracted from the Dead Sea (including potash and bromide), constituting the raw materials for production, is on the rise due to the hydrological deficit experienced by the Dead Sea over the past 40 years.
ICL’s extraction of minerals from the Dead Sea begins with an evaporation process facilitated by the hot and dry desert climate of the Dead Sea region, which is the lowest point on the earth’s surface. Due to the hydrological deficit, the sea is declining at the rate of over 1 meter per year and is now about 436 meters below sea level. As a result, the Dead Sea is divided into two parts: the natural Northern Basin and the Southern Basin, on the basis of which dams were installed and artificial evaporation ponds were constructed.
The production process begins with the pumping of brine from the Northern Basin into the evaporation ponds in the Southern Basin (a distance of about 12 kilometers) via the Company’s pumping stations. In 2021, ICL pumped approximately 443 million cubic meters of water from the Northern Basin into the evaporation ponds, of which, approximately 282 million cubic meters of brine were rechanneled at the end of the process to the Northern Basin. In 2021, the Company produced from the Dead Sea approximately 3.9 million tons of potash, 187 thousand tons of bromine, 18.2 thousand tons of metal magnesium, 111 thousand tons of salt and 131 thousand tons of solid magnesium chloride.
Due to the constant decline in water level (annual average of 1.1 meters which has been recorded in recent years), we are required to relocate the P-88 pumping station, after 21 years of service drawing water from the Northern Basin. During 2021, all the pumping units were assembled, the works on raising the settling basin to allow for extensive ground settlement was completed and the new P-9 pumping station started operating in early 2022.
ICL Group Limited 153


Nevertheless, the Company expects no impact on its operations due to the current sea water level, which will allow the continued operation of our existing P-88 pumping station until the second half of 2022.
The evaporation ponds extend over an area of approximately 150 square kilometers and are divided into two sub systems – an array of ponds for precipitating salt (mineral waste from the production process), and a series of ponds for precipitating carnallite (the target mineral constituting a raw material for production of potash).
The salt pond known as Pond 5 is the largest pond in the series of ponds, having an area of approximately 80 square kilometers. Pond 5 was built during the 1960s by construction of a large dam, where in the center of the dyke surrounding it a partition (separation clay core) was installed for sealing and prevention of potential leakage of solutions. This dam demarks the Southern Basin of the Dead Sea on the Israeli side and allowed the continued existence of the Southern Basin due to the system of pumping stations and flowing channels that are operated as part of the industrial operational system of the evaporation ponds. In order to continue and operate Pond 5, the dyke was raised several times during the last 50 years. In 2013, DSW completed the cut off project that aimed to minimize the seepage from the northern pond. As part of the project, sheet piles were inserted up to the depth of 33 meters to the ground along the length of 18.6 kilometers. The evaporation processes give rise to concentration of the brines and the sinking of the salt to the floor of the pond. The remaining brines are rich in potash, magnesium and bromide. These brines are pumped into the systems of other ponds, and as a result of the continued evaporation, the "carnallite" precipitates. Carnallite is the raw material used for production of potash, metal magnesium and chlorine. The carnallite is harvested by floating barges and is sent, as slurry, to our production plants. The brine from the end of the carnallite ponds is used as a raw material in the production of bromine and magnesium chloride.
The rise of the water level of Pond 5 -
The minerals from the Dead Sea are extracted by way of solar evaporation, whereby salt precipitates onto the bed of Pond 5, located in one of the sites of DSW. The precipitated salt creates a layer on Pond 5 bed with a volume of approximately 16 million cubic meters per year. The production process of the raw material requires that a fixed brine volume is preserved in Pond 5. Failure to maintain a constant volume of brine in Pond 5 could result in a reduction in production capacity. To this end, up to the end of 2021, the raising of the brines' level of Pond 5 was according to the rate at which the pond floor rises, while performing the salt harvest. Since the solutions' level maximum height (15.1 meters) was reached at the end of 2021, from 2022 onwards, the solutions' volume in Pond 5 will be preserved by way of harvesting the salt ("the Permanent Solution" and/or "the Salt Harvesting Project" as described below).
Raising the water level of Pond 5 above a certain level may cause structural damage to the foundations of hotel buildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructure located along the western shoreline of the Pond. Until the end of 2020, in order to ensure that Pond 5 water level does not exceed the maximum height (15.1 meters), the Government of Israel, through the Dead Sea Preservation Government Company Ltd., implemented a project for construction of coastline defenses, together with DSW (which financed 39.5% of the project's cost), as part of which the dike along the western beachfront of Pond 5, across from the hotels, was raised, together with a system for lowering subterranean water. The construction work with respect to the hotels' coastlines was completed and currently the Dead Sea Preservation Government Company Ltd. is carrying out elevation work in the intermediate area between the two hotel complexes.


ICL Group Limited 154


The "Permanent Solution", which should provide a defense at least until the end of the current concession period in 2030, was established in the agreement with the Government of Israel signed in 2012. The purpose of the agreement was, among others, to provide a permanent solution for raising the water level in Pond 5 and stabilizing the water therein at a fixed level by harvesting salt from this pond and transferring it to the Northern Basin of the Dead Sea. According to the agreement, the planning and execution of the Permanent Solution will be through the Salt Harvesting Project which will be performed by DSW. In addition, the agreement stipulates that from January 1, 2017, the water level in the pond will not rise above 15.1 meters. Nevertheless, in the event of a material deviation from the project's timetables, without the Company having violated its obligations, the Company will be permitted to request raising of the water level above 15.1 meters.
The Company bears 80% and the State of Israel bears 20% of the cost of the Salt Harvesting Project. However, the State's share will not exceed NIS 1.4 billion.
A salt dredger, which is part of the implementation of the Salt Harvesting Project, commenced operations in the fourth quarter of 2020. In 2021, the dredger has been operated successfully, dredging according to plan 6 million cubic meters of salt, which allowed DSW to set the level at its maximum height at the end of 2021. The P-9 pumping station operation commenced in early 2022.
For further information, see Note 18 to our Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors— The accumulation of salt at the bottom of the salt Pond 5, the central evaporation pond in our solar evaporation pond system used to extract minerals from the Dead Sea, requires the water level of the pond to be constantly raised in order to maintain the production capacity of extracted minerals”.
The receding level of the Dead Sea - not to be confused with the rising water level in Pond 5 discussed above. These two seemingly contradictory phenomena are occurring simultaneously, as Pond 5 is located in the Southern Basin on a different plane than the main body of the sea lying to its north, necessitating a special pumping station to constantly feed the pond with water. While the brine level of Pond 5 is rising due to the accumulation of salt on its floor and the continuous pumping of brine from the Northern Basin of the Dead Sea, the water level of the Northern Basin is receding, due to the reduction of the flow from the Jordan river to the Northern basin and due to the water pumping the ICL and Arab Potash Company (APC) are using for their production processes. As a result of the decline of the Dead Sea level, sinkholes appear and their appearance in the Dead Sea area has increased over the years. Most sinkholes develop in the northern Basin of the Sea, where the pumping station and the feeding canal of DSW are located. In order to protect these operational infrastructures, DSW monitors the area and fills sinkholes when they appear.
Additional effect of the decline of the Dead Sea level is the erosion of Arava stream, which flows along the international border between Israel and Jordan. This erosion could endanger the stability of the eastern dykes in the future in the array of salt and carnallite ponds. The Company is endeavoring to analyze the matter and to find solutions for preventing or retarding this occurrence in the long term. The Company is carrying on ongoing monitoring and acting on site in order to protect the dykes. As part of these efforts, research was conducted, designed to gather information for the detailed planning of a project to prevent the continued erosion of the stream. The research phase was completed in 2020 and the detailed design is expected to commence in early 2022. Prior to commencing the project, obtaining permits from the authorities is required, due to its engineering complexity, proximity to the border, soil instability and environmental sensitivity of the entire area. Insofar as it is decided to commence with the project, the Company estimates that its completion is likely to take several years.
ICL Group Limited 155


For further information, see “Item 3 - Key Information— D. Risk Factors— The receding water level in the Northern Basin of the Dead Sea, may require capital and/or operational expenses in order to enable the continuation of the Company's operations in the Dead Sea”.
Since 2018, the Company has also been operating a new cogeneration power station in Sodom, Israel. The new power station supplies electricity and steam required to support the production of ICL's plants at the Sodom site and sells its surplus electricity to other ICL companies and external customers via the national grid in Israel. The new power station has a capacity of about 330 tons of steam per hour and about 230 MWh. The Company is operating the new power station concurrently with the former power station, which will continue to operate on a limited basis as "hot back‑up". Due to its full natural gas operation, high efficiency and advanced pollution reduction technologies, the new plant also allows for significant reductions in direct air emissions including greenhouse gas emissions.
Production
The following table sets forth the amount of our total mine production at the Company’s mines in DSW supplied to our beneficiation plants, for the three years ended December 31, 2021, 2020 and 2019:
 
Production (Kt)
 202120202019

Potash
3,900
3,9603,334
Compacting plant
1,858
1,7071,218
Bromine
182
171
181
Cast Mg1818
22


Property Value
As of December 31, 2021, the overall book value of the property, plant and equipment of ICL Dead Sea, as presented in its financial statements (which are based on replacement cost accounting), amounted to about $6 billion. For further information, see Note 15E to our Audited Financial Statements.
Mineral Resource Estimate
The DSW is not a typical mining operation with a finite Mineral Resource, explored by drilling, that is estimated and classified. It is also not a typical solution mining operation that would require an assessment of porosity and fluid flow. However, even though the source of brine is renewed to a certain extent by inflow to the northern Dead Sea basin, the resource cannot be considered either fully renewable or infinite, given that there are certain engineering, licensing and environmental constraints. The Mineral Resource estimate is therefore based on the following steps:

1.Determination of pumping rate of brines from northern Dead Sea area to lagoons.

2.Determination of expected recovery of product as based upon:
 

a.Ability to determine composition and consistency of supply

b.Ability to predict consistency of evaporation and mineral precipitation

c.Ability to predict consistency of split into various products
ICL Group Limited 156


3.Determination of Mineral Resource classification is based upon:

a.Any variation in supply composition

b.Any variation in return flow of brines to the northern Dead Sea basin to assess efficiency and consistency of process

c.Variation in precipitation of mineral amounts

d.Accuracy of sonar measurements in determining reconciliation

4.Consideration of the length of extraction license held by ICL

5.Assessment of potential changes to any of the above factors during the remaining length of license.
Mineral Resources must have reasonable expectations of eventual economic extraction. Therefore, in assessing Mineral Resources for DSW we also consider the length of the license allowing abstraction of waters from the northern Dead Sea basin to DSW.
It is also important to consider future outside impact on what is a dynamic system. The primary factor that could impact on the source brines is the continuing drop in the sea level of the northern Dead Sea area and its potential effect on the chemistry of the Dead Sea waters. Water deficit, as a result of reduced inflow, has the result of changing chemistry of the remaining brine. The concentration of KCl has increased over time (at a rate of +0.05% over 20 years) and the concentration of NaCl has decreased because of halite deposition in the northern Dead Sea basin. This reduction in water level with associated changes in water chemistry are predicted to continue. The increased KCl content of the Dead Sea brine is predicted to cause an increase of DSW's potash production at a rate of an additional 11.5kt per year from 2020, with an increased potash production of approximately an additional 230kt over current rates by 2040.
DSW - Summary of Potash Mineral Resources at the end of the fiscal year ended December 31, 2021, based on $255 FOB per ton.
ClassificationProduct
Amount
(Mt)
Grades/qualities
(KCl)
Cut-off Grades
(KCl)
Metallurgical
Recovery
(KCl)

MeasuredKCl22520% n/a  
 100%  
IndicatedKCl1,50020%
InferredKCl44520%
TotalKCl2,17020%



(1)Potential brine volume is based upon the estimated pumping rate from Northern Dead Sea multiplied by potential extraction period until the year 2133.

(2)Mineral Resources are reported exclusive of any Ore Reserve.


(3)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(4)Mineral Resources for the DSW are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results.
As of December 31, 2021, DSW had 2,170 Mt of potash resources. We are reporting Mineral Resources at DSW in accordance with the guidelines of PERC for the first time in 2021. The mineral resources estimate for DSW is based on factors related to predictive models following assumed water inflow to the Dead Sea as well as the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.5 of the Technical Report Summary filed as an exhibit to this Annual Report.
ICL Group Limited 157

Mineral Reserve Estimate
The Mineral Reserves Estimate of the Dead Sea deposits have been classified in accordance with the definitions presented in Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results.
DSW – Summary of Potash Reserves at the end of the fiscal year ended December 31, 2021, based on $255 FOB per ton.
Amount (Mt)
Grades/qualities
(KCl)
Cut-off grades
(KCl)
Metallurgical
recovery
(KCl)

Proven mineral reserves17220%n/a100% 
Probable mineral reserves--
Total mineral reserves17220%



(1)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(2)Mineral Reserves for the DSW are classified in accordance with the guidelines of the PERC Code (2021).
As of December 31, 2021, DSW had 172 Mt of potash reserves. We are reporting Potash Mineral Reserves at DSW for the first time in 2021. The mineral reserves estimate for DSW may be impacted by material assumptions regarding forecasted product prices, production costs, permitting decisions (most notably the 2030 expiration of the concession, which is assumed to occur for purposes of calculating the reserves; an extension would increase reserves), or other relevant factors that may positively or negatively affect the reserve estimate. For further discussion of the material assumptions relied upon, please refer to Section 12.5 of the Technical Report Summary filed as an exhibit to this Annual Report.
The current life of the mine at DSW is nominally 9 years (to 2030) based on the reserve of 172 Mt (carnallite) and the current annual mining production volume shown above. “Mining” is set at 100% with 0% planned dilution.
Logistics
The potash produced at ICL’s Dead Sea facilities is transported by means of a conveyor belt that was built over 18 kilometers to the railhead located at Tzefa in Mishor Rotem, and from there the output is transported to the Ashdod port by train or by truck, mainly to the Eilat port. Metal magnesium is transported by means of containers that are loaded on trucks from the Company's site in Sodom to the railhead at the Tzefa site. Thereafter, the Company transports the containers to the Haifa/Ashdod ports by means of train.
The port of Eilat is located in the far south of Israel on the Red Sea coast. It is approximately 180 kilometers due south of Rotem and about 200 kilometers from Sodom and is accessible by road. Shipments exiting the Eilat port are to the Far East, whereas sales to Europe and the U.S.USA exit from the Ashdod port. Sales of fertilizers and potash from Rotem and the Dead Sea are not shipped from the Haifa port since it has no infrastructure for loading bulk products and the cost of overland transport is more expensive than transport to Ashdod.Ashdod.
ICL Group Limited 158

YPH China
 

128

Overview
 
SpainYPH, ICL's subsidiary in China, which is equally owned with Yunnan Phosphate Chemicals Group Corporation Ltd. ("YYTH"), holds two phosphate mining licenses that were issued in July 2015, by the Division of Land and Resources of the Yunnan district in China: (1) a mining license for the Haikou Mine (hereinafter – Haikou) which the Company operates and which is valid until January 2043, and (2) a mining license for the Baitacun Mine, which was renewed in 2021, and is valid until 2023. The Company intends to conduct a risk survey to assess the feasibility and profitably of mining the site.
 
ICL Iberia (IBP) transports the minerals it mines from the Company's minesWith respect to the production plants as well as potash and salt frommining rights, in accordance with China "Natural Resources Tax Law", YPH pays royalties of 8% on the factories andselling price based on the minesmarket price of the rock prior to its customers and the port. Ore is taken by 25-tonne road haulage trucks from Cabanasses to Suria plant and a conveyor belt from Vilafruns mine to Sallent plant. After the processing is completed, various quantities of potash and different types of salt are produced. The final product is transferred directly to the customer by truck, or train/truck through the port..
 
A designated railway lineIn 2016, a subsidiary of YYTH (hereinafter – YPC) issued a statement whereby in 2010 it entered into agreements with the local authority of Jinning County, Yunnan Province and Jinning Lindu Mining Development and Construction Co. Ltd. (hereinafter - Lindu Company), according to which Lindu Company is used for the transport of potash from the minespermitted to the Barcelona port. Most of the shipments of ICL Iberia (IBP) are made through a terminal it owns at the port of Barcelona (Trafico de Mercancias – Tramer).
A truck fleet with towing equipment having 25‑27 tonnes capacity each is used to transport the salt from the mine. Up to 120 trucks of salt per day are dispatched from the mine to the port.
ICL Iberia (IBP) owns and maintains approximately 1.5 kilometers and 3 kilometers of standard gauge railway at Suria and Sallent plants, respectively, that connect to the regional rail network. Until now, up to three trains leave on a daily basis having a total payload capacity of 800 tonnes, spread out over about 21 freight cars. In the coming years, it is expected to increase to 24 freight cars, 1,000 tonnes and up to seven daily trains. The rail route for potash transport from Suria and Sallent to the terminal in the port of Barcelona comprises an about 80 kilometer rail route (from Suria and Sallent to Manresa to the port of Barcelona). ICL Iberia (IBP) owns and operates its own port facilities, which consist of bulk potash and salt storage facilities, comprised of freight‑car and rail‑truck conveyor unloading facilities and product storage warehouses.
Each of the production sites, Suria (the Cabanasses mine) and Sallent (the Vilafruns mine), have one rail load out system each for the rail to port transport systems. The train traction engine and part of the bulk freight car rolling stock is operated by the owner and operator FGC (Ferrocarrils de la Generalitat de Catalunya). From time to time, Tarragona port is also used for storage and loading when Barcelona port is unavailable.
As part of the plan for increasing ICL Iberia's (IBP) production capacity, an upgrade is being made of the logistical infrastructure at the Suria Site and in Cabanasses mine (entrance ramps into the mine), the factories and the Company's berth in the Barcelona port, in such a manner that will permit production, transport and export of about 2.3two million tonnes of potashphosphate rock from a certain area measuring 0.414 square kilometers within the area of the Haikou mine (hereinafter – the Daqing Area) and salt per year.to sell such phosphate rock to any third party in its own discretion.
YPC has undertaken that YPH’s mining right in the Haikou mine will not be adversely affected by the above-mentioned arrangements. It was decided that YPH should conduct further communications with YPC and Lindu Company, for the purpose of protecting its legal rights and to urge the parties to reach a fair, just, and reasonable solution to this issue, as soon as possible. Considering the above, ICL did not include this area as part of YPH's reserves.
For further information regarding our concessions in China including royalties, mining licenses, rights and other matters, and for description of certain risks relating to our operations in China, see Note 18 to our Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors”, respectively.
 
The facilitiesaccess to Haikou mine is by means of the port of Barcelona are managed by ICL Iberia’s subsidiary Tramer and comprise an area of 13 thousand square meters divided into three zones. In order to support the expected operational expansion, the Company is in the process of setting up a new designed facility in the Barcelona port that will replace the current facility, and is making preparations for transition to use thereof. The new facility is expected to be constructed and operative towards the end of 2019 and has 56 thousand square meters and two storages. The new facilities allow to increase the train freight transport of salt and potash up to 2.3 million tonnes.
129

United Kingdom
The Boulby mine in the United Kingdom is connected by a network of roads, running over 11 kilometers southward from the mine entrance, as well as an accessible rail network that links to the state rail lines. The average production capacity at Haikou in 2021 increased due to several projects, including the flotation expansion project, and is approximately 2.7 million tons per year.
ICL Group Limited 159


Figure 5: Location of Haikou Mine (China)

Mining Concessions and Lease Agreements
YPH holds two phosphate mining licenses that were issued in July 2015, by the Division of Land and Resources of the Yunnan district in China: (1) a networkmining license for the Haikou Mine (hereinafter – Haikou), which the Company operates and which is valid until January 2043, and (2) a mining license for the Baitacun Mine, which was renewed in 2021, and is valid until 2023. The Company intends to conduct a risk survey to assess the feasibility and profitably of underground roads extending 17.5mining the site.
Haikou is an open-pit mining site located alongside the Haikou Town, in the Xishan district, proximate to the city of Kunming. The Baitacun is located several kilometers from the Haikou mine, entrance inwherein the direction of the North Sea. Circa 80 kilometers of underground tunnels are still open to support present production. The mine has easy access to the national road and train transportation routes. The mine receives good quality drinking water and a stable supply of electricity.
Pursuant to agreements with the North Yorkshire National Parks Authority, the total transport movements by means of the network of roads from site to site are limited to a maximum of 150 thousand tonnes per year and a maximum of 66 road wagons per day (no road movements are allowed on Sundays or bank holidays). This limitation ismining activities have not expected to interfere with the future production of ICL Boulby in light of its commitment to maintain the rail link to Teesdock. ICL Boulby's roads and trains are in full compliance with all the requirements.
The rail load‑out products are transported on an ICL Boulby‑owned rail line which extends approximately eight kilometers from the mine entrance to a junction with the national rail network, and from there the products continue to Teesport, Middlesbrough, via the Network Rail Company, the owner and operator of the main rail line.
Eight trains per day transport Polysulphate™ and rock‑salt to the Teesdock. Most of the Polysulphate™ output is used as a component of agricultural fertilizers, where most of the quantity is exported by sea from the Teesdock seaport to customers overseas.
Rock‑salt is taken by train to Teesdock, and transported by ship to English and Scottish east coast ports for sale to local authorities for de‑icing roads.
ICL Boulby leases and operates three principal storage and loading facilities: the Teesdock facility, which is located on the Tees River, and two additional storage facilities that are connected to the iron rail – Cobra and Ayrton Works in Middlesbrough.
Chinayet commenced.
 
The Haikou mine has been in operation since 1966 and the concession area is spread over 9.6 square kilometers. The Haikou mine is divided into four areas. The phosphate sources in areas 1 and 2 have almost been fully depleted. The mining in area 3 began in 2015 and the mining activities in area 4 began at the end of 2017.
For further information regarding our concessions in China including royalties, mining licenses, rights and other matters, and for description of certain risks relating to our operations in China, see Note 18 to our Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors”, respectively.
Operations
The phosphate deposits at both mines are part of an extensive marine sedimentary basin in which the phosphate is situated in two layers – an upper layer and a lower layer. The thickness of the upper layer varies from 2.5 to 11 meters and is about 7.6 meters on average, whereas the thickness of the lower layer varies from 2 to 9 meters and is about 6.1 meters on average. The mining is executed based on layers and quality thereof. Each layer has 3 quality categories: Grade I (highest grade) > 30% P2O5, Grade II- 24%-30% P2O5 and Grade III- 15%-24% P2O5. Structurally, the Haikou mine is moderately complex, which requires precision mining that is accomplished through use of relatively small mining tools. The phosphate is covered by hard rock layers that require blasting, except for the upper ground level, which is removed and used for reclamation of the mined areas. The phosphate layers are also partially hard and require blasting.
ICL Group Limited 160


The mining in the Haikou Mine is via open mining using conventional methods by means of drilling and blasting, hydraulic excavators, mining trucks and tractors for mining phosphates.
In the first stage, mining of the upper ground level is being stripped and stored or spread out over mined areas for purposes of reclamation. In the second stage, drilling, blasting and stripping of the upper overburden level is executed. In the third stage, mining of the phosphate is performed by drilling and blasting of every layer separately (between which an interburden layer exists having a thickness of 11 meters, which is also drilled, blasted and stripped) and the phosphate is then loaded on truck and being transported to the beneficiation plants.
Based on the patches' appearance of the medium and high-grade phosphate, the mining is performed through use of small mining tools, trucks with a capacity of 40 tons and excavators having a bucket capacity of 3 to 6 cubic meters.
The phosphate is low organic type, and as such it is suitable for phosphoric acid production. Close to the Haikou mine, there are two beneficiation plants: flotation and scrubbing. These facilities are accessible by roads, and the scrubbing plant is accessible by roads and train. The output of these facilities is designated for the production plants of acids and fertilizers, located several kilometers from the Haikou mine, which include four sulphuric acid factories, three green phosphoric acid factories, one factory for manufacture of technical grade white phosphoric acid, one factory for manufacture of food grade white phosphoric acid and an additional six fertilizer factories. These factories are powered by electricity generated from the sulphuric acid production process as well as from the national power network. These facilities have been continuously developed and maintained for the last 40 years and are in a good condition. The access to the production site is also by road and train.
Production
The following table sets forth the amount of our total mine production of raw ore at the Haikoumine (and the relevant grade) supplied to our beneficiation plants, for the three years ended December 31, 2021, 2020 and 2019:

 Year Ended December 31,
 202120202019

Millions of tons produced 2.66 2.40 2.15
Grade (% P2O5 before/after beneficiation)
21% / 28%21% / 29%21% / 29%


(1)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

The following table sets forth the approximate amounts of product produced after processing by our operations at the Haikou mine, for the three years ended December 31, 2021, 2020 and 2019:
 Year Ended December 31,
 202120202019
 thousands of tonsthousands of tonsthousands of tons

Phosphate Rock * 2,194 2,044 1,946
Green Phosphoric Acid 673 632 637
Fertilizers 612 584 516
White Phosphoric Acid 83 71 64
Specialty Fertilizers 76 55 46


*including Enriched & Grinding Rock
ICL Group Limited 161

Property Value
As of December 31, 2021, the overall book value of the property, plant and equipment of Haikou amounted to about $307 million.
Mineral Resource Estimate
The Mineral Resource is reported as in-situ and exclusive of the Mineral Reserve tons and grade. Mineral Resource categorization of Measured, Indicated, and Inferred Mineral Resources, presented in Table 1, is in accordance with the definitions presented in Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results and in S-K 1300.
YPH JVHaikou – Summary of Phosphate Mineral Resources at the end of the fiscal year ended December 31, 2021, based on three-year average market prices used to calculate our reserves at the Haikou mine as of December 31, 2021 are as follows: $406 per ton for green phosphoric acid (MGA), $931 per ton for white phosphoric acid (WPA), $1,024 per ton for MKP, $211 per ton for GTSP, $328 per ton for NPS, $268 per ton for MAP 55% and $652 per ton for MAP 73%.
MeasuredIndicatedInferredMeasured + Indicated
Cut-off Grades
(P2O5)
Metallurgica
 Recovery
(P2O5)
Mining AreaMt
(P2O5)
Mt
(P2O5)
Mt
(P2O5)
Mt
(P2O5)

Block 1 and 20.623.0%0.0222.4%--0.723.0%15%  89.3%   
Block 31.622.0%224.1%--3.823.2%
Block 40.722.4%0.223.1%0.220.0%0.922.5%
Total322.3%2.324.0%0.220.0%5.323.0%



(1)Mineral Resources are reported on a dry in-situ basis and are exclusive of Mineral Reserves.

(2)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(3)Mineral Resources are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results.

(4)
The reported Mineral Resource estimate was constrained by limiting polygons for the purpose of establishing reasonable prospects of economic extraction based on potential mining, metallurgical and processing grade parameters identified by mining, metallurgical and processing studies performed to date on the project. A minimum cut-off grade of 15% P2O5 has been applied for reporting purposes.
As of December 31, 2021, Haikou had 5.3 Mt of phosphate resource. We are reporting Mineral Resources at Haikou in accordance with the guidelines of PERC for the first time in 2021 The mineral resources estimate for Haikou is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.6 of the Technical Report Summary filed as an exhibit to this Annual Report.
ICL Group Limited 162


Mineral Reserve Estimate
Haikou mine has 57.7 million tons (after deduction of 5%: losses 3% and dilution 2%) of proven reserves of phosphate rock which located in 4 separated blocks (blocks 1-4). The annual average production capacity is around 2.9 million tons (in 2021 2.66 million tons were mined). The proven reserves are sufficient for almost 21 years at such rate. Another 4 million tons of phosphate is placed in several piles around the mine and this reserve will be fed to the flotation plant in the next few years.
The average quality of the phosphate is around 21.8% P2O5 and is divided into 3 grades: Grade I (highest grade) > 30% P2O5, Grade II- 24-30% P2O5 and Grade III- 15-24% P2O5. Around 20% of the phosphate has >27% P2O5 and is usually beneficiated in the scrubbing facility, in the flotation plant, or in the grinding facility.
In determining these reserves, a cut-off grade of 15% P2O5 was applied in accordance with the flotation ability to produce usable concentrate rock (28.5% P2O5), which is the average quality required to produce phosphoric acid in the Yunnan region. In practice, the Haikou mine is able to process and use all the phosphate that exists in the deposit. The phosphate layers’ borders are physically well defined, also has very low P2O5 content (usually around 5%), and the mining process does not leave any unmined phosphate below the cut-off grade behind.
The reported Mineral Reserve estimate was constrained by Pit designs and includes diluting materials and allowances for losses. All Proven Reserves were derived from the Measured Mineral Resource classification, and all Probable Reserves were derived from the Indicated Mineral Resource classification only. The results of the Mineral Reserve estimate are supported by the outcomes of an economic analysis completed in support of the operational business plan. The QP is satisfied that the stated Mineral Reserves classification of the deposit appropriately reflects the outcome of the technical and economic studies.
The three-year average market prices used to calculate our reserves at the Haikou mine as of December 31, 2021 are as follows: $406 per ton for green phosphoric acid (MGA), $931 per ton for white phosphoric acid (WPA), $1,024 per ton for MKP, $211 per ton for GTSP, $328 per ton for NPS, $268 per ton for MAP 55% and $652 per ton for MAP 73%.
In calculating the reserves, an average of the previous three years’ currency exchange rates is used to ensure economic feasibility. The three-year average currency conversation rates used to calculate our reserves as of December 31, 2021 are as follows: 6.75 RMB per $1.00.
The life of the mine at Haikou is approximately 23years, based on reserves of approximately 57.7million tons (given the annual average production (mining) capacity of around 2.5million tons); The phosphate from Haikou mine is suitable for phosphoric acid production.
Based on the Company's knowledge, we have all government's approvals and permits that are necessary for our reserves in China.
ICL Group Limited 163

The following table sets forth our estimated phosphate reserves at the Haikou Mine as of December 31, 2021:
YPH Haikou – Summary of Phosphate Mineral Reserves at the end of the fiscal year ended December 31, 2021, based on three-year average market prices used to calculate our reserves at the Haikou mine as of December 31, 2021 are as follows: $406 per ton for green phosphoric acid (MGA), $931 per ton for white phosphoric acid (WPA), $1,024 per ton for MKP, $211 per ton for GTSP, $328 per ton for NPS, $268 per ton for MAP 55% and $652 per ton for MAP 73%.
Category
Low Organic Phosphate
(Mt)
Average
Grade
(P2O5)
Cut-off Grade
(P2O5)
Metallurgical Recovery
(P2O5)

Block 1 + 2Proven6.921.8%15%89.3%
Probable
Block 3Proven39.021.9%
Probable
Block 4Proven11.921.3%
Probable
TotalProven57.721.8%
Probable



(1)
All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding.

(2)Mineral Reserves reported on a dry basis delivered to the processing plant primary crusher.
As of December 31, 2021, Haikou had 57.7Mt at 21.8% of phosphate reserves compared to 51Mt at 21.9% as of December 31, 2020, an increase of 13% contained phosphate. This increase was primarily driven by a change in methodology used to calculate reserves and was partially offset by production. Assumptions regarding the technical parameter analysis, forecasted product prices, production costs, permitting decisions, or other factors may positively or negatively affect the reserves estimates.
Logistics
YPH holds the Haikou mine, several factories for production of various types of fertilizers located close to the Haikou mine and two plants for production of downstream products – one located close to the Haikou mine and the fertilizers factory and the other situated proximatein proximity to the Kunming airport.
 
Most of the transport of thetransported raw materials from the Haikou mine to the acid factories is executed via pipeline (slurry), whereas a small part of the raw rock is transported by trucks.
 
Most of the outputoutputs are sold to the local market isin North China and are transported from the fertilizersfertilizers' factory directly to the customers, in North China by train as well as throughor marine shipment, mainly from two exit ports (Beihai(QinZhou port and Fangchengang). These ports are also used for import of sulphur, in the amount of 600 thousand tonnes per year. A, while a small part of the output sold is transported to customers in the Yunnan region. Fangcheng port and Zhanjiang port are also used for importing sulphur, in the amount of 600 thousand tons per year subject to YPH’s demand and option through existing sources.
 

ICL Group Limited 164
130

 

Item4A – UNRESOLVED STAFF COMMENTS

Not Applicable.
 
ICL Group Limited 165

Item5 – OPERATING AND FINANCIAL REVIEW AND PROSPECTS


A. OPERATING RESULTS

Principal Factors Affecting Our Results of Operations and Financial Condition
 
We areAs a multinational company theour financial results of which are affected by changes in the demand for basic agricultural products, global economic trends, changes in terms of trade and financing, and fluctuations in currency exchange rates. In the executionAs part of our business strategy implementation, we take steps to adapt our marketing and production policies to evolving global market conditions, improve cash flows, diversify sources of finance, strengthen our financial position and to optimize efficiency and minimize costs.
 
The following table sets forth the total Government Takes (GT) the Company had paid to the State of Israel in 2021, 2020 and 2019:
Year Ended December 31,$ millionsNIS millions

20215071,636
20203461,192
20194251,514

The GT include, among others, royalties, leases, dividend withholding tax, payroll taxes and social security and payments relating to taxes, including advances regarding the Surplus Profit Levy.

In 20182021 and 2017, approximately 49%2020, about 4% and 53%5%, respectively, of our total sales revenue wasderived from sales in Israel. In 2021 and 2020, about 49% and 48%, respectively, of our total sales derived from production activities taking place outside Israel and approximately 7% and 8%, respectively, of the cost of sales of products produced outside Israel was attributable to raw materials supplied from Israel. There is nonot a single customer on which we are materially dependent, or a single customer that accounted for more than 10% of the Company’s total sales revenue in 2018.2021.
Trends affecting our operating expenses
 
Energy expenses accounted for approximately 6% and 7% of our total operating costs in 20182021 and 2017, increased year over year by2020, respectively, a year-over-year increase of approximately 2%10%. Electricity expenses in 20182021 and 20172020 amounted to $163$147 million and $190$113 million, respectively, comprising 47%42% and 56%36%, respectively, of theour total energy expenses. Natural gas expenses in 20182021 and 20172020 amounted to $123$131 million and $87$139 million, respectively, comprising 35%38% and 25%44%, respectively, of theour total energy expenses. Oil and oil products expenses in 20182021 and 20172020 amounted to $17 million and $15 million, and $16 million, respectively, comprising 4% andeach accounting for 5%, respectively, of theour total energy expenses.
 
ICL is one of the largest natural gas consumers in Israel and is taking measureshas taken a strategic decision to increase the use of natural gas to power its largest production plants in itsIsrael. This transition of ICL’s facilities in order tohas significantly reducereduced emissions of air pollutants in the areaareas surrounding itsICL facilities, improveimproved the quality of the output, reducereduced maintenance expenses, and leadhas led to a significant monetary savings due to the transitiontransiting away from the use of more expensive fuels. For further information, including details of the specific natural gas purchasing agreements undertaken by the Company, see Note 18 to our Audited Financial Statements and “Item 4 - Information on the Company— B. Business Overview—Regulatory and Environmental, Health and Safety Matters — Energy”.
 
ICL Group Limited 166
(1)In February 2018, the Company entered into two supply agreements with Tamar and “Leviathan” reservoir (hereinafter – the Agreements), to secure its gas supply needs until the end of 2025 or until the entry of the “Karish” and “Tanin” reservoirs into service, whichever occurs first. The gas price in the Agreements is in accordance with the gas price formulas stipulated under the government’s gas outline. The Company anticipates that the scope of the annual gas consumption will be about 0.75 BCM.
131

The Company is entitled to terminate the Agreements in order to start the new agreement with Energean Israel Ltd. (hereinafter – “Energean”), which was signed in December 2017. According to the new agreement, Energean will supply up to 13 BCM of natural gas over a period of 15 years, amounting to about $1.9 billion. Energean holds licenses for development of the Karish and Tanin gas reservoirs, which are located in Israel’s territorial waters. Supply of the natural gas is expected to commence, at the earliest, in the first half of 2021, depending on completion of the development and commencement of production of natural gas from the reservoirs, and will be used for running ICL’s factories and power stations in Israel. In November 2018, following the completion of Energean's Financial Closing, all precedent conditions for the closing of the agreement have been met. In November 2018, all conditions precedent to the agreement with Energean have been met. Signing of the above-mentioned agreement marked an important milestone for securing a consistent supply of gas to the Company’s facilities in Israel, at a competitive price in relation to current gas supply agreements.
Marine transportation expenses in 20182021 and 2017 were2020 amounted to approximately 7%$369 million and $213 million, respectively, comprising 6% and 5%, respectively, of our total operating costs, respectively, and amountedcosts. The increase is primarily attributed to approximately $355 million and $306 million, respectively. Thean increase in marine transportation expenses is primarily attributed to the increase in marine transportation prices compared to last year, as the monthly average marine transportation price index (Baltic Dry Index – “BDI”) for 2018 was 17% higher than the monthly average index for 2017.prices.
 
Our financial statements are presented in U.S.US dollars. Most of our sales are in U.S.US dollars, even though a portion of our sales is in other currencies, mainly euros. Part of our operating expenses in Israel are denominated in NIS and, consequently, devaluation of the average NIS exchange rate against the U.S.US dollar has a positive impact on our profitability, while appreciation has the opposite effect. Devaluation of the average exchange rate of the euro against the U.S.US dollar has a negative impact on our profitability, while appreciation has the opposite impact. On the other hand, devaluation of the euro against the U.S.US dollar improves the competitive ability of our subsidiaries whose functional currency is the euro, compared with competitors whose functional currency is the U.S. dollar. In 2018,2021, the Company's operational results were positivelynegatively impacted mainly by the upward revaluation of the dollar, mainlyshekel against the shekel.dollar during the year, partly offset by the upward revaluation of the euro against the dollar and the devaluation of the Brazilian real against the dollar. For further information, see "Results“Item 5 – Operating and Financial Review and Prospects— A. Operating Results— Results of Operation" chapter below.Operations”.
 
We hedge part of our exposure to the risks described above, which include exposure to sales and operating expenses that are not denominated in our functional currency, mainlycurrency. The main exposure drives from operating expenses denominated in NIS and other currencies that are not the functional currency of our subsidiaries, and exposure to marine transportation prices and energy prices. Since all these hedging transactions are treated as economic (non‑accounting) hedges, they are not reflected in our operating costs, but instead are recorded as finance income or expenses in our statements of income. Our management determinedetermines the extent of our hedging activities based on their estimation of our sales and operating expenses, as well as their expectations of the developments in the markets in which we operate. See “Item 11 - Quantitative and Qualitative Disclosures about Market Risk— Risk Management”.
Trends Affecting our segments
 
132

From March 2020, when the World Health Organization declared the COVID-19 a pandemic, and recommended containment and mitigation measures worldwide, the pandemic has continued to create business and economic uncertainty and volatility in global markets. Many countries around the world are experiencing further outbreaks of the pandemic and governments are once again imposing various restrictions. In parallel, there is a recovery trend in the volume of economic activity around the world that has led on the one hand, to significant demand for certain products and services, and on the other hand, disruptions to worldwide supply chain routes and some raw materials.
 
We continue to take measures to ensure the health and safety of our employees in all of our facilities and offices, as well as those of our suppliers, our business partners, and the communities in which we operate, to maintain the level of operations throughout our various facilities around the world, and to minimize the pandemic’s potential impact on our business.
We have modified some of our work practices to enable our employees to accomplish critical tasks in new ways, leveraging innovation and prioritizing resources. We have implemented communication technologies to maintain work routines, enabling our employees to engage with each other, as well as with our business partners, through digital platforms and other remote access tools.
In 2021, manufacturing continued at our sites around the world without interruption. We have not experienced material delays in production or distribution. The Company continues to respond to the evolving business environment, adjusting to rapidly changing conditions, taking appropriate measures to further enhance operational efficiency and profitability.
However, it remains difficult to assess the future impacts of the pandemic on our operations in light of the uncertainty of its duration, the extent of its intensity, its effects on global supply chains and global markets, the extent of its impact on the markets in which we operate, especially on emerging markets and the impact of additional countermeasures that may be taken by governments and central banks.
ICL Group Limited 167


Trends Affecting Industrial Products segmentSegment
 
The operations of ICL's Industrial Products segment are largely affected by the level of activity in the electronics, construction, automotive, oil drilling, furniture, pharmaceutical, agro, textile and water treatment markets.
In 2018,2021, about 40%45% of the worldwide use of bromine was for flame retardants, about 30% was for intermediates and industrial uses, the rest20% was for clear brine fluids and the remainder was used for intermediates, industrial uses, water treatment and other uses.
 
In 2018,2021, ICL sold approximately 240264 thousand tonnestons of Brominebromine compounds 90(25% higher compared to 2020), 87 thousand tonnestons of Phosphorousphosphorus compounds 40(9% higher compared to 2020), 43 thousand tonnestons of Magnesiamagnesia and Calciumcalcium products (2% higher compared to 2020) and 350331 thousand tonnestons of Dead Sea Salts.Salts (3% higher compared to 2020).
 
During 2021, the Industrial Products segment experienced significant recovery in most markets, achieving all-time records of annual sales and operating income, driven by strong demand for the segment's products. This can be attributed to several factors including the record high bromine price in China, which derived from the government's restrictions on energy consumption, as well as safety and environmental audits that effected local bromine production, increased demand for bromine based flame retardants supported by the segment's production capacity expansions, the continued recovery in oil prices leading to renewal of drilling activities and the strong demand for phosphorus based flame retardants which benefitted from environmental restrictions on Chinese producers as well.
Below are the trends of the business lineline’s main activities -
 
Flame retardants: 2021 was characterized by high demand across all applications, mainly driven by strong demand in most end markets such as printed circuit boards, electronics, automotive and textile which is correlated with recovery of the worldwide economic activity beginning end of 2020 and during 2021.
Demand for ICL's phosphorus-based flame retardants was high during 2021 as Chinese regulatory authorities required the shutdown and relocation of several local production facilities located in dense population areas. Furthermore, Chinese authorities imposed energetic restrictions on large energy consumers, including phosphorus producers, resulting in Chinese phosphorus supply disruptions. In addition, demand was high in the construction and automotive industries.
The trend of pressure exerted by “green” organizations in the area of environmental protection to reduce the use of bromine-based flame retardants is continuing.continues. On the other hand, development and commercialization of new sustainable polymeric or reactive bromine-based flame retardantsretardants. along with new fire safety regulations in developing countries and as part of new growing global trends, are serving to increase the use of these products.

In 2018, the demand for flame retardants used in the automotive, enclosures and TV industries as well as the telecommunication market has increased. Another growth engine is the Internet of Things trend. In addition, 2018
ICL Group Limited 168


Elemental bromine:  2021 was characterized by continuationhigher elemental bromine sale quantities and record high selling prices, driven by high demand from one side and natural depletion of stricter environmental pressurebromine resources in China, which hadChinese bromine supply disruptions following governmental restrictions on local production and strong demand for brominated flame retardants on the other side. Commencing November 2021, a very significant impact on availabilityrelative softening of chemicals in the market andbromine demand was evident.
Clear brine fluids: 7-year record high oil prices led to an increaserecovery and renewal of drilling activities in prices. Pricesseveral global regions and higher year-over-year demand. The Industrial Products segment enjoyed the advantage of bromine-based flame retardants were also supported by an increase in elemental bromine prices in China.
Demand for phosphorous‑based flame retardants was stable and competitive pressure coming from China still exists. However, Chinese regulatory authorities continue to enforce stricter emissions standards during 2018, and marginal suppliers exited production when emissions standards could not be met. As a result, demand for some of ICL's products was higher during 2018 and prices increased. Chinese competitors resumed more of normal operations in the fourth quarter of 2018.
Elemental bromine: In 2018, continuing the trend from recent years, elemental bromine prices in China continued to increase, supported mainly by environmentally related regulation enforcement and resource depletion. Prices in the United States, Europe and India increased as well.
Clear brine fluids: The demand for clear brine fluids for the oil and gas drilling market was back to its previous level as the price of the Oil and Gas went up. There was relatively high level of activitystorage capability in the Gulf of Mexico, as well as in South America and Israel.allowing it to respond immediately to emerging needs.
Biocides: The globalDuring 2021, ICL supplied clear brine fluids to the United Arab Emirates, directly from Israel for the first time.  ICL is expected to supply was affectedan initial $6 million of materials by the environmental constraints on production set in China. As a result, demand for someend of ICL’s products was higherthis year, and the Company intends to increase its clear brine fluid sales to the Emirates during 2018 and prices increased.2022
 
Inorganic bromides: AsBiocides: The Company recorded a minor sales increase of April 2016, the new regulations for mercury emission controlindustrial Brominated Biocides supported by high bromine demand. Sales of Fuzzicide which is exposed to competition in the US are fully effective, meaning that all coal power plants are required to comply with the emission reduction rules. Nevertheless, lowpulp and paper application, slightly decreased.
Inorganic bromides: Demand returned for Mercury emissions control, supported by high natural gas prices and retirements of old coalwhich caused many power plants which doubled in 2018 compared to 2017, negatively impacted demand. switch back to coal as the primary energy source.
In addition, there was a moderate increase inincreased demand for additional bromine‑based products as a result of improvingHBr for the Purified Terephthalic Acid (PTA) market, mainly in China, following growth in the GDP.
Higher BOIs sales were due to high demand in the agrochemicals markets.agro & pharma markets, together with low supply from China.
Phosphorus-based industrial compounds: Slightly higher sales are attributed to recovery of the aviation sector after the 2020 COVID-19 pandemic peak, as well as to higher demand of power plants fluids following maintenance shutdowns that were postponed from 2020 to 2021, which was necessary to cope with the increase of private consumption during the pandemic in 2020. New power plants fluids business opportunities in China are an additional factor contributing to the increase in sales.
Magnesia and Calcium Products: Most magnesia and Calcium product lines were sold out, due to strong demand from the dietary supplements and pharmaceutical end-markets, and as selling prices continued to increase.
 
133

Solid MgCl2: An above-average snow season in the western US, followed by relatively strong pre-season sales, contributed to record high sales of solid MgCl2 during 2021, despite constraints prevailing in the marine transportation sector in the last year.
 
Phosphorous-based industrial compounds: overall stable demand correlated to GDP growth. In developing countries, demand growth is more significant due to higher rates of establishment of new power stations.
Organic bromine compounds: Overall stable demand correlated to GDP growth and driven by an improvement in the demand for agrochemical inputs.  In addition, due to the environmentally related regulation pressure in China, the demand for ICL's products increased during 2018.
Magnesia Products: The demand for magnesia products showed a slight increase due to increased global demand for healthy food and mineral supplements. On top of that there is also high demand for pure Magnesium for industrial use such as fuel additive and glass application.
Solid MgCl2, Pure and packed KCl: 2018 was characterized by "average" winter in the eastern parts of USA which increasedKCl: We experienced higher sales of deicing MgCl2 compared to last year. There was a slight growth in the demand for technical grade KCl forfollowing recovery of the oil drilling market, higher demand in the feed market and higher sales of new product launched this yearsharp price increases correlated with potash price increases in the fertilizers market.The demand for animal feed with GMP+ certification. For the pure KCl we witness strong competition with new companies that established new plants and the worldwide capacity increased significantly which increased the competition in this market.remained relatively stable.
ICL Group Limited 169


Trends Affecting Potash Segment
 
PotashDuring 2021 Wheat, Corn, Rice, and Soybean increased by 40.9%, 35.4% 16.3% and 8.9% respectively. These price increases occurred due to the continued spread of COVID-19 pandemic, including its different mutations, leading countries to continue with their increased concerns regarding food security for their people, especially in China. Good agricultural fundamentals supported this, mainly in Brazil expressed as high barter ratios.
In addition, the WASDE report, published by the USDA in February 2022, further supported the above, while showing a decrease in the expected ratio of the global inventories of grains to annual consumption to 28.4% for the 2021/22 agriculture year, compared to 29.2% for the 2020/21 agriculture year, and 30.5% for the 2019/20 agriculture year.
Global potash market - average prices and imports:
Average prices20212020VS  2020

Granular potash – Brazil
CFR spot
($ per tonne)
534238124.4%
Granular potash – Northwest Europe
CIF spot/contract
(€ per tonne)
36124448.0%
Standard potash – Southeast Asia
CFR spot
($ per tonne)
38924558.8%
Potash imports    
To Brazilmillion tons12.611.014.5%
To Chinamillion tons7.68.7(12.6)%
To Indiamillion tons2.54.1(39.0)%


Sources: CRU (Fertilizer Week Historical Price: January 2022), FAI, Brazil and Chinese customs data.
It should be noted that in June 2021 Canpotex member, Mosaic, announced an estimated decrease in production of 1Mt from July 2021 to March 2022, due to a halt in operations of its K1 and K2 mines, as a result of increased throughout 2018flooding, and the re-operation of its Colonsay site to offset this loss, which was later announced to be earlier than expected. Another Canpotex member, Nutrien, reported that it would increase accordingly its production from the fourth quarter of 2021.
In addition, the Australian BHP mining company announced in August 2021 that it intends to fund the continuation of its Jansen project (in Saskatchewan, Canada), thereby expressing confidence in the medium to long-term potash market, given that this projected ramp-up is forecasted in 2027.
Global potash prices have been strongly supported by recordtight supply and by the ongoing political condition in Belarus, which began in August 2021, following an incident in which a commercial airliner was forced down, leading to uncertainty regarding continued supply from Belaruskali by BPC, its trade arm.
For reference, in 2020, Belaruskali was responsible for about 21% of potash demand of 66.8 million tonnes, growth of 0.3% compared to 2017exported globally (according to CRU, August 20182021). In January 2021, BPC announced the sale of 800 thousand tons of potash to India at a price of $247 per ton (CFR), $17 above the price concluded in its previous contract, while in February 2021, BPC announced that it reached an agreement with its customers in China for potash supply at the same price, which reflected an increase of $27 per ton over the previous contract price. As a result, several large potash producers responded with dissatisfaction noting that this price does not reflect conditions in the global potash market. In April 2021, BPC revised its contract price in India to $280 per ton (CFR), following which ICL and FerteconAPC supply contracts were concluded at the same price.
ICL Group Limited 170


In June 2021,the EU imposed sanctions on Belarus following the aforementioned incident from May 2021, in which a commercial airliner was forced down by Belarus, limiting the potash grades that can be traded, although it remains the EU’s main export. In August 2021, the UK joined the EU sanctions in light of the accumulation of immigrants at Belarus-EU borders. That same date, Canada and the USA also imposed sanctions on Belarus, however, in December 2018)2021, the implementation of the American sanctions, which included a ban of trade that limited access to the US dollar-based financial system, thus having an unstated extra-territorial effect, was postponed from December 2021 to April 2022 maintaining favorable prices despite the seasonal nature of that period. Prices further increased following the submission of a draft law, in mid-December 2021, by Lithuania’s transport ministry for the immediate termination of any business activities with Belarus but stabilized toward the end of December.
Another factor that contributed to the satisfactory price environment was the increased uncertainty in USA potash supplies in September 2021, as a result of Hurricane Ida’s damage to the Mississippi river system and good spring weather forecasts. The global uncertainty in potash supply increased in November, due to storm damage to railways in Canadian British Columbia, specifically those leading to the port in Vancouver.
Magnesium Trends
During the second half of 2021, the magnesium global market experienced a severe shortage of supply due to an energy shortage and as a result of environmental and safety audits carried out in several provinces in China, pushing up market prices. Demand in the aluminum market (in which magnesium is used as a strengthening element) was strong following the global economy recovery, after the negative impact of COVID-19 in 2020. The demand from the automotive sector was impacted by the global shortage in semiconductor chips.
Trends Affecting Phosphate Solutions segment
Phosphate specialties sales amounted to $1,341 million in 2021 approximately 18% higher than 2020 based on record sales along the entire phosphates value chain.
Sales of phosphate commodities amounted to $1,135 million in 2021, approximately 34% higher than 2020, mostly due to significantly higher market prices, which was partly offset by lower sales volumes. A significant year-over-year increase in average selling prices of phosphate fertilizers, partly offset by higher raw materials costs and lower sales volumes, led to an operating income of $152 million in 2021, compared to operating loss of $51 million in 2020.
Global phosphate specialties were not significantly disrupted during the full year of 2021, despite the logistical and operational restrictions imposed in certain countries due to the ongoing spread of the COVID-19 pandemic. ICL’s robust and diversified customer portfolio and the wide geographic reach of its phosphate specialties businesses - coupled with strong demand for salts and acids - prevented a material impact from the pandemic on the segment's business performance. On the contrary, as a result of the continued pressure on the supply chain, raw materials, and production costs, prices and demand for phosphate supply and our product solutions increased significantly year-over-year.
ICL Group Limited 171


Food grade phosphates sales were notably higher year-over-year with a continued focus on integrated solutions and next generation product development.
Sales of Industrial salts increased year-over-year, with higher demand in all regions and most industries, supported by continued recovery from COVID-19 related weakness in 2020.
Purified phosphoric acid (WPA) revenues increased year-over-year with higher sales volumes and prices in all regions. In addition, Company’s YPH joint venture in China has been experiencing growing demand for its specialty mono ammonium phosphate (MAP) solutions for production of lithium iron phosphate (LFP) batteries, destined for electric vehicles and other energy storage offerings. ICL continues to explore ways to expand its presence in this evolving market in Asia, North America and Europe, through capacity expansions and business development.
Dairy proteins sales decreased year-over-year, due to reduced demand from key customers for organic products, which was partially offset by conventional milk and goat ingredients. ICL continues to focus on expanding its global leadership position in the organic cow and goat ingredients market for high-end applications.
In the fourth quarter of 2021, ICL opened its alternative-protein facility in St. Louis, US, which will produce a plant-based meat substitute for use by food companies, food-service distributors, restaurants and grocery chains. The significant investment represents an expansion of ICL’s global Food Specialties portfolio and the company’s focus on developing healthier and more sustainable food products.
Phosphate commodity fertilizers prices surged during 2021 following crop prices surge, due to worldwide governments’ food security concern policy adoption continuation, especially by the Chinese one, on the light of COVID-19 pandemic continuing spread. This was boosted by restricted supply by China and Russia, following July 22 China’s State Administration for Market Regulation (SAMR) guidance of local manufacturers to take care for a minimal domestic stock, followedby its September 27 order to halt exports till June 2022, while in October 2021, the Chinese customs started enforcing this order in ports. In Russia, the authorities-imposed on November 3, 2021, quotas regarding Nitrogen containing fertilizers exports valid from December 1 to May 31, 2022, due to a surge in global Natural gas prices.
In the US, this was boosted, mainly with regard to MAP, following US International Trade Commission (ITC) decision from March 11, 2021, to ratify the Department of Commerce (DoC) decision from February 9, 2021, to accept Mosaic’s June 26, 2020, petition to impose countervailing duties on imports of phosphate fertilizers from Morocco and Russia, while setting rates of 19.97%, 9.19% and 47.05% on phosphate fertilizers imports from OCP, PhosAgro and EuroChem, respectively, for at least 5 years. Hurricane Ida damages, in the period between late August and early September, to the Mississippi River system, as well as low availabilityto Mosaic’s production plants, boosted this even further, leading last company to announce an estimated production cut of potash300,000 tons, although in November 2021,  the company announced the reoperation of its Louisianan’s site.
In Brazil, MAP prices surged during year’s beginning, but lowered its pace towards year’s end due to among other things, slower than expected ramp-upaffordability destruction and the high imports from China, Morocco, and Russia.
In India, domestic depleting DAP stocks on the light of new capacity. Prices remained firm intocontinuing global DAP prices surge led the off-season periodlocal government to change twice its original decision not to increase DAP’s Nutrient Based Subsidy (NBS) for the 2021/22 agricultural year of 2018 year-end10,213 INR/t, first to 24,213 INR/t on May 10 and early 2019, which may be considered asthen to 32,991 INR/t on October 12.
ICL Group Limited 172



OCP (Morocco) concluded October 29 its fourth quarter phosphoric acid supply contracts to India at a price of $1,330 per ton (CFR 100% P2O5), an increase of $170 per ton compared to the previous quarter. This was the seventh consecutive price increase indicated in these quarterly contracts since the first quarter of 2020, with an accumulated increase of $740/ton, reflecting the continuing positive indication going forward. Accordingglobal sentiment in the phosphate commodity fertilizers market. OCP hasn’t concluded yet its phosphoric acid supply contracts to India for 2022 first quarter.
Global phosphate commodities market - average prices:
Average prices$ per ton20212020VS  2020

DAPCFR India Spot61833187%
TSPCFR Brazil Spot562251124%
SSPCFR Brazil inland 18-20% P2O5 Spot29717768%
SulphurBulk FOB Adnoc monthly contract18160202%


Source: CRU (Fertilizer Week Historical Prices, January 2019) the average spot price of granular potash imported to Brazil during 2018 was $320 per tonne (CFR), up by approximately 22% compared to 2017.The average spot price of standard potash exported from Vancouver during 2018 was $241 per tonne (FOB), up by approximately11% compared to 2017.
The Grain price index, which peaked during the second quarter of 2018, decreased during the third quarter mainly due to the trade dispute between the US and China and remained stable during the fourth quarter of 2018. On an annual basis, corn and wheat prices ended the year higher compared to 2017, year-end while soybean and rice prices decreased. According to the USDA's WASDE report (World Agricultural Supply and Demand Estimates) from February 2019, the grains stock-to-use ratio for the 2018/2019 agricultural year is expected to decrease to 29.2%, compared with 31.3% at the end of the 2017/2018 agricultural year and compared with 30.6% in the 2016/2017 agricultural year. This trend of lower stock‑to‑use ratio may be supportive for fertilizer demand.
The FAO (Food and Agriculture Organization of the UN) published in December its updated forecast for the global cereal production in 2018 to 2,595 million tonnes, which is 62.5 million tonnes (2.4%) below last year’s record high.
According to official Chinese customs statistics via China Fertilizer, potash imports to China in 2018 reached 7.49 million tonnes, a 1% decrease compared to last year.
134

According to the FAI (Fertilizer Association of India), potash imports during 2018 amounted to 4.37 million tonnes, a 1% increase over the imports during 2017.
According to ANDA (Brazilian National Fertilizer Association), potash imports to Brazil during 2018 were over 10.0 million tonnes, surpassing last year's record by 9%2021).
 
During 2018, the new (Greenfield) mines experienced slower than expected ramp-up, partly due to operational challenges. According to market observers K+S experiences some difficulties with the granulation stage production process in its Bethune mine in Saskatchewan (Canada), which started producing potash in June 2017, led it to deliver standard MOP to the Far East including China. In addition, K+S, closed its Sigmundshall site in Germany (capacity of 0.75 million tonnes per year in 2017). EuroChem, has cut its forecast for 2018 output from its new mines in Russia, Usolskiy (expected nameplate capacity of 3.7 million tonnes per year in 2024) and Volgakaliy (expected nameplate capacity of 4.6 million tonnes per year in 2024) to a total of about 0.3 million tonnes. Turkmenhimiya's new potash mine (Garlyk) in Turkmenistan, which was inaugurated in March 2017 (nameplate capacity of 1.4 million tonnes per year), is believed to be inoperable. Slavkaliy's Nezhinsky potash project in Belarus (expected nameplate capacity of 2 million tonnes per year) ramp-up is expected to be delayed from 2020 to 2022. Belaruskali's Petrikov project (expected nameplate capacity of 1.5 million tonnes per year in 2022) ramp-up is expected in 2020. 
Mosaic commissioned the new production skip at its Esterhazy K3 mine in Saskatchewan (Canada) in December 2018. This Brownfield project is expected to reach its full operational capacity (7.35 million tonnes per year) by 2024. In Russia, there were reports of flooding at Uralkali's Solikamsk 2 mine, although it seems like there was not a significant impact on the Uralkali's production as it continued its production from the adjacent Solikamsk 1 mine. Lao Kaiyuan is expected to expand the nameplate capacity of its Khammouans site in Laos from 0.5 to 1.5 million tonnes per year until 2021. It should be mentioned that nameplate capacities are in accordance with Informa (Fertecon) Potash Outlook Report - December 2018. Other information is in accordance with CRU Fertilizer Week.  
Global demand for magnesium remains constrained in China, Brazil and Europe. This was partly offset by trade actions by US that have pushed up prices in the steel, aluminum and automotive sectors, which in turn has caused a resumption of domestic production, and consequent demand for raw materials, including magnesium.
Part of the Company's strategy is to grow the FertilizerpluS platform, mainly by utilizing Polysulphate as a base for a product portfolio which includes PotashpluS, PKpluS and other products. PotashpluS commercial launch took place in the fourth quarter of 2018. In addition, NPS fertilizer was launched in the YPH JV in China and the product is marketed in China and other markets. The favorable quality of ICL’s NPS compared to other NPS products contributes to solid demand. Sales of FertilizerpluS in 2018 totaled $114 million. Towards the end of 2018, ICL has signed a new agreement of Polysulphate and its derivatives with its customers in China for 2019 in a total quantity of 89 thousand tonnes.

135

Trends Affecting Phosphate Solutions Segment
The phosphate fertilizers market was firm during the first three quarters of 2018 and weakened during the fourth quarter, as prices softened in light of the agricultural season ending at the major phosphate fertilizers importing countries, mainly in India (DAP) and in Brazil (MAP). Prices continued to moderate in the beginning of 2019 and market observers are forecasting that this trend will continue during the first half of 2019, followed by a stabilization in the second half of the year. Demand for phosphate rock and green phosphoric acid continued to be firm during the fourth quarter of 2018. 
Average prices (according to CRU - Fertilizer Week Historical Prices, January 2019):
$ per tonne 1-12/20181-12/2017% vs 2017
DAP (Bulk CFR India Spot)42336317%
TSP (Granular Bulk FOB Morocco Spot)33827722%
MAP (Granular Bulk CFR Brazil Spot)43836919%
Phosphate Rock (68-72% BPL) (FOB Morocco Contract)91901%

Sulphur prices increased during most of 2018 but started to moderate from November 2018. Average sulphur prices in 2018 (Bulk crushed lump and gran CFR price China) were $154 per tonne, compared to $122 per tonne in 2017 and compared to $126 currently (according to CRU - Fertilizer Week Historical Prices, February 7, 2019). Market observers are forecasting that the downward trend will continue during the first half of 2019, mainly due to the weakening of the phosphates market.    
According to IFA's (International Fertilizer Association) Short-Term Fertilizer Outlook 2018–2019, global phosphate fertilizers demand in 2017/2018 increased by 2% compared with 2016/2017. The ramp-up of Wa'ad Al Shamal (Saudi Arabia) project of Ma'aden, Sabic and Mosaic is slower than expected. Furthermore, Mosaic has shut down its Plant City phosphate facility (US). In addition, OCP's (Morocco) maintenance work as well as Chinese export reduction in the fourth quarter of 2018 have contributed to the above.          
According to IHS Markit data, Brazil imported 9 million tonnes of granular phosphate during 2018, a 0.9% increase compared to 2017. This is due to increases in SSP, TSP and NPK, which were offset by lower MAP, DAP and NP/NPS imports.
The Moroccan producer, OCP, secured 2019 first-quarter phosphoric acid contracts with its Indian partners at $750 per tonne P2O5 CFR, a decrease of $18 per tonne compared to the fourth-quarter of 2018.
According to the FAI (Fertilizer Association of India), DAP imports during 2018 increased by 49.7% to 5.99 million tonnes compared to 2017. On the other hand, domestic DAP production, decreased by 26.7% respectively to 3.55 million tonnes, mainly due to the increase in phosphoric acid contract price, but also due to the Indian rupee recovery against the US dollar during the fourth quarter of 2018, which together with a DAP domestic subsidy policy, have formed an economic preference for DAP import to India over its local production.
136

ICL's Phosphate Specialties business benefited from strong performance despite increasing global competitive pressure in certain regions. The business was successful in executing value oriented pricing approach in all regions. The pricing strategy over-compensated increased costs of major raw materials.
The business benefited from increased demand for acids from existing customers as well as new customers that used to import previously from Asia, especially in Europe.
Sales volumes of phosphate-based food additives in Europe decreased due to increased competition and the transition to a new distributor in Russia.
The salts business was impacted by higher transportation expenses caused by the low water level of Rhine River in Q4 2018, but this has normalized during December.
In North America, industrial salts and acids benefited from favorable market conditions with increased prices and improved volumes while food salts experienced volume losses in the lower value-added product lines.
In South America the phosphate salts and acids performance was stable through 2018, however market conditions were negatively impacted at the end of the year by increased low priced Chinese imports. These volume losses could be offset with the pricing strategy.
Continued growth of the P2O5 business in China was driven by increased local market share of the YPH JV as well as diversification of the acid customer base. The groundbreaking ceremony for the new food grade white phosphoric acid plant in the YPH JV took place in August, as part of the Company's strategy to increase specialty products production and sales. The 70 thousands tonnes P2O5 capacity plant is expected to be completed during the fourth quarter of 2019. 
The Paints and Coatings business experienced strong performance during the year benefiting from continuing R&D efforts.
The vegetarian and flexitarian consumer behavior still shows an increasing demand for healthier food, which led, in response, to new developments in food salts and additives product portfolio. Phosphate Specialties business has further developed its ROVITARIS® line for meat replacements and is continuously working on strategic partnerships to extend the market activities.
The Dairy protein business experienced improved demand of a key account in the Chinese market and benefited from the ongoing customer base diversification and continuous focus on developing organic dairy solutions for the infant food industry. In July 2018, ICL divested and transferred the assets and business of Rovita GmbH which produces a commodity milk protein. In 2018 the business reported sales of $16 million and operating loss of approximately $3 million compared to $32 million in sales and $4 million in operating loss in 2017.
137


Trends affecting Innovative Ag Solutions segment
 
Innovative Ag Solutions segment is active in two main markets: agriculture and turf & ornamental markets. The specialty fertilizers business is characterized by higher efficiency resulting in higher prices and lower quantities compared to the traditional commodity fertilizers.
 
Traditional Commoditycommodity producers continue to stepexpand into the specialty fertilizers markets, offering specialized, higher value and higher price products. Consolidation is another global trend, characterized by mergers of large fertilizer suppliers as well as acquisition of small specialty fertilizer players by the large input players.
 
Specialty Agriculture marketsmarkets:
 
The specialty agriculture markets include all open field crops (rice, maize, potatoes etc.), orchards and greenhouses.
 
ICL's offeringsOur offering for the specialty agriculture sector includeincludes three main product groups: (1) Soluble fertilizers, which includes water-soluble straights (such as MKP, MAP and Pekacid)PeKacid), and water‑soluble NPK;NPK (WSNPK); (2) controlled release fertilizers (CRF), and;; (3) liquids NPKs.liquid NPKs; 4) Seed treatment; (5) Biostimulants; (6) Adjuvants; (7) Soil conditioner.
 
Specialty agriculture markets are constantly growing, driven by global population growth, lack of arable land and regulation.regulations. New regulations, both local and national, requiresrequire limiting the amountamounts of fertilizers applied, thus increasing the usage of efficient fertilizers application. An example forfertilizer applications. Examples of such regulation can be found in limitingChina’s limitation of nitrogen use and the nitrogen usage in China, and controlling thecontrol of nitrogen leaching in someseveral countries in Europe. Growth in demand growth is significant in China, India and Brazil, while in Europe growth is more moderate. This growth was inhibitedmoderate.
During 2021, sales volumes of specialty agriculture products increased, supported by economic crisesCOVID-19-related strong demand, as well as the appreciation of the euro against the US dollar. Selling prices were higher compared to 2020 in Turkey, but this market is gradually recovering since early 2019.most product lines, driven by strong demand, supply chain constraints and higher raw materials prices.
 
Sales volumes of straight fertilizers improved during the year, supported by increased production capacity and disruptions in Chinese supply.
ICL Group Limited 173


The competitive landscape in the soluble fertilizer marketsmarket continues to develop, with commodityevolve, as some commodity-oriented players such as Eurochem,are strengthening their positionpositions in the specialty fertilizer markets with a full range offer of water solublewater-soluble MAP, water soluble NPK and NOP. There has been a substantial increase in capacity of WSNPK blending in China, encouraged by a government policy to improve fertilizer application efficiency and reduce total fertilizer consumption.  WSNPK is seen as more efficient than traditional commodity fertilizers. In parallel, compound NPK producers are searching for a new growth engine, which is also fueling the growth of WSNPK capacity.
 
The CRF markets are under pressuregrowing across the globe, including in China – which showshas experienced the highest growth alongsideas well as increased production capacity (mainly from Kingenta)Kingenta and Moith), as well as in the US, although the main capacity increase can be found in the lower quality CRF type (e.g. by Pursell in Alabama). Trials show the economic and environmental benefits of using CRF, but a much wider adoption of CRF by growers is hindered by its price premium over traditional fertilizers.
 
As part of the Company's strategy to grow its crop nutrition businesses organically and through M&A, in January 2021, ICL completed the acquisition of Fertiláqua, one of Brazil's leading specialty plant nutrition companies. ICL expects to leverage Fertiláqua's strong market presence and distribution capabilities to increase the sales of its organic fertilizers, controlled-released fertilizers and other specialty plant nutrition products to the Brazilian market, one of the world's fastest growing agriculture markets. Fertiláqua also expands ICL's specialty crop nutrition product portfolio with complete plant life-cycle solutions for plant nutrition & stimulation, soil revitalization, seed treatment and plant health utilized across all key Brazilian crops, including soybeans, corn, sugarcane, cotton, coffee, fruits and vegetables.
In July 2021, the Company successfully completed the acquisition of the South American plant nutrition business of ADS. ADS offers a broad range of solutions for plant nutrition and stimulation, soil treatment, seed treatment and plant health, covering all key Brazilian crops and as such, significantly expands ICL’s product portfolio and profitability, while providing further seasonal balance between the Northern and Southern hemispheres.
The strategic acquisition of these two specialty fertilizer businesses positions ICL as the leading specialty plant nutrition company in Brazil, one of the world’s fastest growing agriculture markets.
Turf and Ornamental Horticulture
 
Turf and Landscape
 
The segment’s Turf and Landscape market isbusiness serves the market for professional turf (i.e. golf & sport fields) and the landscape & lawn service market.markets.
During 2021, the professional turf market demand experienced strong growth for all product categories, supported by the golf sector due to higher usage rate of golf courses, leading to more maintenance and new applications.
 
The landscape market continued to grow in Europe. As many consumers stayed at home due to COVID-19 lockdowns and restrictions looking for specialty fertilizersprofessional support from landscapers to maintain or renew their gardens. Furthermore, in key countries in Europe, in 2018 was mainly impacted by the late Spring andhousing market expanded increasing the severe drought during the Summer of 2018. This limited the number of applications of granular fertilizers during the season in golf and sport fields. However, the drought drove demandneeds for liquids & wetting agents. Usually after a drought demand for seeds increase due to the need to renovate the turf.
138

The Landscape market is growing fast in Europe due to the fact that more consumers use professional landscapers.
Prices of raw materials and end products remained relatively flat during 2018.new gardens.
 
There is a slow but noticeable trend of consolidation in the distribution chainchannels in the Turf & Landscape market.
ICL Group Limited 174

 
Ornamental Horticulture
 
The Ornamental Horticulture market includes container nursery growers, pot-plants and bedding plants. Global demand has moderately recovered due to the improvement in global economy contributing to the housing and landscape market.plants (greenhouses).
 
The drought in Europe improved demand for plants as consumers and public gardens are renewing their plants who suffered fromTowards the high temperatures.
In the US the market for specialty fertilizers inend of 2020, the ornamental horticulture business experienced a recovery following the first half of the 2020 COVID-19 lockdown. This led to growers experiencing a robust sales season of green goods throughout the wholesale market, remained competitive. In 2018 capacitygarden centers and retail markets, thereby increasing the number of ornamental plants growers, driving strong increase in demand for specialty inputs, such as controlled release fertilizers. Throughout 2021, the exponential growth slowed due to steep increases in the cost of raw materials, which increased specialty fertilizers' prices, impacting demand in the fourth quarter of 2021. The ornamental sector experienced availability and supply challenges, as well as number of suppliers for controlled releasea large increase in input costs such as growing media, plastic pots and specialty fertilizers, increased.which negatively impacted the profitability in the sector.
 
Expected Expenses for Equity and Cash Compensation Plans
 
Based on the existing grants under the amended 2014 Equity Compensation Plan, the expected expensetotal expenses for the periods ended December 31, 2019,2022, December 31, 20202023, and December 31, 2021 is2024, are approximately $6.3$16 million, $2.1$8 million, and $0.3$3 million, respectively.
For a description of the 2014 Equity Compensation Plan and additionalfurther information about the grants made under the 2014 Equity Compensation Plan, see Note 21 to our Audited Financial Statements.

139

Adjustments to reported operating and net income (Non-GAAP financial measures)
We disclose in this Annual Report non-IFRS financial measures titled adjusted operating income and adjusted net income attributable to the Company’s shareholders. Our management uses adjusted operating income and adjusted net income attributable to the Company’s shareholders to facilitate operating performance comparisons from period to period.  We calculate our adjusted operating income by adjusting our operating income to add certain items, as set forth in the reconciliation table below. Certain of these items may recur. We calculate our adjusted net income attributable to the Company’s shareholders by adjusting our net income attributable to the Company’s shareholders to add certain items, as set forth in the reconciliation table below, excluding the total tax impact of such adjustments and adjustments attributable to the non-controlling interests.
You should not view adjusted operating income or adjusted net income attributable to the Company’s shareholders as a substitute for operating income or net income attributable to the Company’s shareholders determined in accordance with IFRS, and you should note that our definitions of adjusted operating income and adjusted net income attributable to the Company’s shareholders may differ from those used by other companies. However, we believe adjusted operating income and adjusted net income attributable to the Company’s shareholders provide useful information to both management and investors by excluding certain expenses that management believes are not indicative of our ongoing operations. Our management uses these non-IFRS measures to evaluate the Company's business strategies and management's performance. We believe that these non-IFRS measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate our performance.
The table below reconciles total adjusted operating income and total adjusted net income attributable to the shareholders of the Company, to the comparable IFRS measures:

140

 For the Year Ended December 31,
 20182017201620152014
 US$ millions

Operating income (loss)1,519629(3)765758
Impact of employee strike (1)---24817
Capital (gain) loss (2)(841)(54)1(215)(36)
Impairment of assets (3)19324899071
Provision for early retirement and dismissal of employees (4)7203948-
Provision for legal claims (5)3125538149
Provision for historical waste removal and site closure costs (6)18-5120-
Other----1
Total adjustments to operating income (loss)(766)23585229202
Adjusted operating income753652582994960
Net income (loss) attributable to the shareholders of the Company1,240364(122)509464
Total adjustments to operating income (loss)(766)23585229202
Adjustments to finance expenses (7)10-38-31
Total tax impact of the above operating income & finance expenses adjustments(7)(4)(81)(58)(64)
Tax assessment and deferred tax adjustments (8)-6361962
Adjustments attributable to the non-controlling interests--(5)--
Total adjusted net income - shareholders of the Company477389451699695

This table includes various adjustments that were presented in separate lines in prior years. The adjustments are the same as in prior years and only the tabular presentation has changed.
(1)  Loss due to the strike that occurred in the Company’s facilities in Israel – in 2014 in ICL Rotem and in 2015 in DSW and ICL Neot Hovav.
(2) Capital loss (gain) from sale of low synergy businesses, transaction expenses relating to sale and acquisition of businesses and gain from consolidation and deconsolidation of businesses. In 2014, income from consolidation of previous equity method investee (increase in the rate of holdings from an investment accounted for using the equity method of accounting), in respect of a company in Brazil. In 2015, capital gain deriving mainly from the sale of low synergy business activities and from consolidation of previous equity method investee (Allana Afar). In 2017, capital gain from IDE divestiture, capital gain from the deconsolidation of Allana Afar in Ethiopia and additional consideration received regarding earn-out of 2015 divestitures. In 2018, capital gain from the sale of the Fire Safety and Oil Additives (P2S5) businesses. See also – Note 10 to our Audited Financial Statements.
141

(3)  Impairment in value and write down of assets. In 2014, with respect to a write down of assets of a subsidiary in the United States in view of the decline in the selling prices of the Company's products as a result of its competitors' strategy to increase their market share, and in view of the cancellation of the anti-dumping tax on Japanese chlorine-based biocide manufacturers in the fourth quarter of 2014, and impairment in the value of the activities classified as “held for sale” pursuant to IFRS 5 in Europe. In 2015, with respect to impairment in value of the activities classified as “held for sale” pursuant to IFRS 5 in Europe and in the United States and impairment in the value of assets of the Bromine facilities in Israel in view of the decision of the Company’s management regarding the continued use of various facilities on the Company's sites. In 2016, with respect to the write down of assets (including closure cost) relating to the global ERP project (Harmonization Project), write down of assets relating to discontinuance of the activities of Allana Afar in Ethiopia (including closure cost), and impairment in the value of assets of a subsidiary in the United Kingdom. In 2017, relating to impairment of an intangible asset in Spain, write-down of an investment in Namibia and impairment of assets in China and the Netherlands. In 2018, write-off of Rovita’s assets following its divestment and write-off of an intangible asset regarding a specific ICL R&D project related to ICL’s phosphate-based products. See also – Note 1319 to our Audited Financial Statements.
(4) Provision
In addition, based on long-term incentive framework (hereinafter – Cash LTI Plan), the expected total expenses for early retirementthe next 3 years are about $40 million. The expenses are subject to achievement of certain financial targets over the 3 years and dismissal of employees in accordance with the Company’s comprehensive global efficiency plan in its production facilities throughout the group. In 2015, with respect to the Bromine’s facilities in Israel and the Company’s facilities in the United Kingdom. In 2016, with respect to the Bromine’s facilities in Israel, the Company’s facilities in the United Kingdomand the facilities of the joint venture in China (reflected also in the non-controlling interests’ adjustment below). In 2017, provisions relating to ICL Rotem’s facilities in Israel, and to subsidiaries in North America (Everris NA Inc.) and Europe (Everris International B.V and BK Giulini GmbH). In2018, provision relating to the Company’s facility in the United Kingdom (ICL Boulby). See also – Note 18 to our Audited Financial Statements.
(5) Provision for legal claims. In 2014, provision in connection with prior periods in respect of royalties’ arbitration in Israel. In 2015, stemming mainly from provision in connection with prior periods in respect of costs of management services of the electricity system in DSW and ICL Rotem, pursuant to the Israeli Public Utilities Authority Electricity's resolution from 2015, to impose certain electricity system management services charges also on private electricity producers as opposed to only on private consumers, retroactively from June 2013, a provision in connection with prior periods in respect of royalties’ arbitration in Israel  and the settlement agreement that ended the Class Action broughtcan be affected by the farmerschange in Israel regarding potash prices. In 2016, stemming mainly from a provision in connection with prior periods in respect of royalties’ arbitration in Israel, the arbitration award ending the commercial price dispute with Haifa Chemicals and reversal of the provision for retroactive electricity charges in connection with prior periods. In 2017, a provision following the judgement relating to a dispute with the National Company for Roads in Israel regarding damage caused to bridges by DSW, a provision following a decision of the European Commission concerning past grants received by a subsidiary in Spain, a provision relating to claims for damages related to the contamination of the water in certain wells at the Suria site in Spain, a provision in connection with prior periods in respect of royalties’ arbitration in Israel, reversal of the provision for retroactive electricity charges in connection with prior periods, and settlement of the dispute with Great Lakes(a subsidiary of Chemtura Corporation). In 2018, an increase of a provision in connection with prior periods in respect of royalties’ arbitration in Israel, partly offset by a VAT refund related to prior periods in Brazil (2002-2015). See also –share price. For further information see Note 20 to our Audited Financial Statements.
142

(6) Provision for removal of waste in respect of prior periods and site closure costs. In 2015, in respect of removal of historical waste stemming from bromine production at the facilities in Israel in light of the government’s requirement to accelerate the waste removal schedule leading to additional cost of implementing a different technology. In 2016, provision for closure costs in the Sallent site in Spain related to the purification and removal of historical waste from the potash activities as a result of decisions made by the Spanish authorities in connection with the plan for treating the salt pile in the Sallent site leading to plan changes mainly related to the water pumping process involved in the salt treatment, and an increase of the provision in 2018 for the Sallent site closure costs as part of the restoration solution.
(7)  Interest and linkage expenses, mainly in connection with the royalties’ arbitration and tax assessments in Israel and Belgium relating to prior periods. In 2014, in connection with the royalties’ arbitration relating to prior periods. In 2016, in connection with the royalties’ arbitration relating to prior periods, and relating to a tax assessment in Israel relating to prior periods. In 2017, provision in light of a decision of the European Commission above and income following the resolution of the Appeals Court for Tax matters in Belgium. In 2018, increase of provision related to the royalties’ arbitration in Israel. See also – Note 17 and Note 2016.I to our Audited Financial Statements.
(8) In 2014, relating to a provision for taxes as a result of a change in Spain's Supreme Court judgment relating to prior periods. In 2015, relating to deferred taxes adjustment of prior periods in the magnesium. In 2016, relating to tax assessment in Israel and Belgium relating to prior periods. In 2017, tax provision as a result of an internal transaction in preparation of low synergy business divestitures (it should be noted that the capital gain from the divestment of the Fire Safety and Oil Additives (P2S5) businesses was adjusted in 2018) and tax income relating to the resolution of the Appeals Court for Tax matters in Belgium. See also – Note 10 and Note 17 to our Audited Financial Statements.
ICL Group Limited 175

143


Results of Operations
 
The following discussion is based onIn our consolidated financial statements and should be read together with our consolidated financial statements.
We have presented below, a discussionyear‑to-year comparisons, we present the primary drivers of the period-to-period changeschange in the Company’s results of operations, and the primary drivers of these changes. These discussions areoperations. This discussion is based, in part, on management’s best estimates of the main trends' impact on its businesses. We have also based the following discussion on our financial statements, and as such, you should read such discussion together with them.
We have elected to omit discussion on the earliest of the main trendsthree years covered by the consolidated financial statements presented. Refer to Item 5 - Operating and Financial Review and Prospects located in its businesses. 
Year Endedour Form 20-F for the fiscal year ended December 31, 2019, filed on March 5, 2020, for reference to discussion of the fiscal year ended December 31, 2018, Compared to Year Ended December 31, 2017the earliest of the three fiscal years presented.
 
Set forth below are our results of operations for the years ended December 31, 20182021 and 2017.2020.

 For the Years Ended December 31,
%
Increase
(Decrease)
 20212020
 $ millions$ millions 
 For the Years Ended December 31,
%
Increase
(Decrease)
 20182017
 $ millions$ millions 

Sales 5,556 5,4183% 6,955 5,04338%
Cost of sales 3,702 3,746(1)%
 4,344
 3,553
22%
  
Gross profit 1,854 1,67211% 2,611 1,49075%
  
Selling, transport and marketing expenses 798 7467% 1,067 76639%
General and administrative expenses 257 261(2)% 276 23219%
Research and development expenses 55 55- 64 5419%
Other expenses 84 90(7)% 57 256(78)%
Other income (859) (109)688%
 (63)
 (20)
215%
  
Operating income 1,519 629141% 1,210 202499%
  
Finance expenses, net 158 12427%
 122
 158
(23)%
  
Share in earnings of equity-accounted investees 3-
 4
 5
(20)%
  
Income before income taxes 1,364 505170%
  
Provision for income taxes 129 158(18)%
  
Income before taxes on income 1,092 492129%
Taxes on income
 260
 25
940%
Net income 1,235 347256%
 832
 24
3367%
  
Net income attributable to the shareholders of the Company 1,240 364241% 783 117018%
  
Earnings per share attributable to the shareholders of the Company:   
  
Basic earnings per share (in dollars) 0.97 0.29235% 0.61 0.016000%
  
Diluted earnings per share (in dollars) 0.97 0.29235% 0.60 0.015900%



144ICL Group Limited 176

 
Results of operations for the year 20182021


SalesExpensesOperating income
$ millions
YTD 2017 figures 5,418 (4,789) 629 
Total adjustments YTD 2017 *- 23 23 
Adjusted YTD 2017 figures 5,418 (4,766) 652 
Divested businesses 2017 (343) 221 (122) 
Adjusted YTD 2017 figures (excluding divested businesses) 5,075 (4,545) 530 
Quantity (87) 77 (10) 
Price 419- 419 
Exchange rate 99 (93) 6 
Raw materials- (88) (88) 
Energy- (2) (2) 
Transportation- (41) (41) 
Operating and other expenses- (64) (64) 
Adjusted YTD 2018 figures (excluding divested businesses) 5,506 (4,756) 750 
Divested businesses 2018 50 (47) 3 
Adjusted YTD 2018 figures 5,556 (4,803) 753 
Total adjustments YTD 2018 *- 766 766 
YTD 2018 figures 5,556 (4,037) 1,519 

* See "Adjustments to reported operating and net income (Non-GAAP)" above.
-
Sales –  the Company sales increased by $138 million compared to 2017. The increase derives mainly from an increase in the selling prices of potash (a $42 increase in the average realized price per tonne compared to the corresponding period last year), phosphate fertilizers, phosphate-based acids and food additives (as part of the value-focused strategy), specialty agriculture products and a positive price impact throughout most of Industrial Products segment’s business lines (see 'Price' above), as well as a positive exchange rate contribution, mainly due to the average upward revaluation of the euro against the dollar (see ‘Exchange rate’ above) and an increase in the quantities sold of dairy proteins, bromine- and phosphorous-based flame retardants and specialty agriculture products (part of the change in the ‘Quantity’ line above).
The increase was partly offset by the divestiture of the Fire Safety and Oil Additives businesses (see 'Divested businesses' rows above) and a decrease in the quantities sold of potash, phosphate fertilizers and phosphate-based acids and food additives (see ‘Quantity’ above).
-
Cost of sales – the cost of sales decreased by $44 million compared to 2017. The decrease derives mainly from the divestiture of the Fire Safety, Oil Additives and Rovita businesses (see 'Divested businesses' rows above) together with a decline in the quantities sold of potash, phosphate fertilizers and phosphate-based acids and food additives (see ‘Quantity’ above).
145

The decrease was partly offset by an increase in raw materials prices, mainly Sulphur, which increased costs of main raw materials throughout the phosphate value chain, raw materials used for bromine- and phosphorous-based flame retardants and various raw materials used for products of Innovative Ag Solutions segment (see ‘Raw materials’ above) together with the average upward revaluation of the euro against the dollar, which increased production costs (see ‘Exchange rate’ above) and an increase in the quantities sold of dairy proteins, bromine- and phosphorous-based flame retardants and specialty agriculture products (see ‘Quantity’ above).
-
Selling and marketing – selling and marketing expenses increased by $52 million compared to 2017. The increase derives mainly from an increase in marine transportation prices and exchange rate fluctuations (see ‘Transportation’ and ‘Exchange rate’ above).
-
General and administrative – general and administrative expenses decreased by $4 million compared to 2017. The company successfully maintained low level of general and administrative expenses following the efficiency measures that took place in 2017.
-
Other income, net - other income, net, increased by $756 million compared to 2017. The increase derives mainly from capital gain recorded from the sale transaction of the Fire Safety and Oil Additives businesses, partly offset by capital gains recorded in the previous year related to divestiture of businesses, mainly IDE (see ‘Adjustments to reported operating and net income – Non-GAAP financial measures’ above).
Below is a geographical breakdown of our sales by customer location:

 Year Ended December 31,
 20182017
 $ millions$ millions
Europe 1,970 1,918
Asia 1,488 1,342
North America 978 1,175
South America 712 666
Rest of the world 408 317
Total 5,556 5,418


Europe – the increase derives mainly from an increase in the quantities sold and selling prices of potash and bromine-based flame retardants, quantities sold of specialty agriculture products, selling prices of phosphorous-based flame retardants, together with the positive impact of the average upward revaluation of the euro against the dollar. The increase was partly offset mainly as a result of divested businesses together with a decline in the green phosphoric acid quantities sold.
Asia – the increase derives mainly from an increase in quantities sold of dairy proteins and specialty agriculture products, together with an increase in the selling prices of potash, phosphate fertilizers and bromine‑based flame retardants and industrial solutions. The increase was partly offset by a decline in green phosphoric acid quantities sold.
North America – the decrease derives mainly from divestiture of the Fire Safety and Oil Additives (P2S5) businesses and a decrease in the quantities sold of potash. The decrease was partly offset by an increase in the selling prices and quantities sold of phosphate fertilizers, quantities sold of clear brine fluids and phosphorous-based flame retardants and selling prices of potash.

146

South America – the increase derives mainly from an increase in the selling prices of potash, partly offset by a decrease in potash quantities sold.
Rest of the world – the increase derives mainly from an increase in the quantities sold of dairy proteins products, clear brine fluids and electricity surplus to third parties from ICL's new power plant in Sodom. 
Financing expenses, net
The net financing expenses in 2018 amounted to $158 million, compared with $124 million last year – an increase of $34 million. The change derives mainly from an increase in respect of the change in exchange rate differences and hedging transaction results, in the amount of $36 million.
An additional increase of $10 million derives from interest on past royalties recognized in 2018 as a result of a decision in the arbitration between the State and the Company (for further information see note 20 to our Audited Financial Statements).
This increase was partly offset by a decline in the interest expenses, in the amount of $11 million, mainly due to the significant reduction of net financial liabilities, by using the proceeds received from the sale of the Fire Safety and Oil Additives (P2S5) businesses.
Furthermore, in 2018 and 2017, the Company paid fees regarding early repayment of long term loans of about $12 million and $13 million, respectively.
Tax expenses
The tax expenses in 2018 amounted to $129 million, reflecting an effective tax rate of about 9%, which is significantly lower than the Company’s usual tax rate, mainly due to exempt income as a result of the divestment of the businesses at the end of the first quarter of 2018, devaluation of the shekel against the dollar during the year and a decrease in tax provisions in Israel.
147

Segment Information
Segment revenues, expenses and results include inter-segment transfers, which are priced mainly based on transaction prices in the ordinary course of business – this being based on reports that are regularly reviewed by the chief operating decision maker. These transfers are eliminated as part of consolidation of the financial statements.
The segment profit is measured based on the operating income, without certain expenses that are not allocated to the operating segments including general and administrative expenses, as it is included in reports that are regularly reviewed by the chief operating decision maker.
Results of operations for the year 2018 – Industrial products segment
 20182017
 $ millions$ millions
Total Sales 1,296 1,193
   Sales to external customers 1,281 1,179
   Sales to internal customers 15 14
Segment profit 350 303
Depreciation and Amortization 63 61
Capital expenditures 50 49

Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20182017
 $ millions$ millions
Europe 473 456
Asia 399 351
North America 347 327
South America 21 18
Rest of the world 41 27
Total 1,281 1,179


148

SalesExpensesOperating income
$ millions
YTD 2017 figures 1,193 (890) 303 
Quantity 22 (19) 3 
Price 70- 70 
Exchange rate 11 (11)- 
Raw materials- (13) (13) 
Energy- (2) (2) 
Transportation- 1 1 
Operating and other expenses- (12) (12) 
YTD 2018 figures 1,296 (946) 350 


-
Quantity – the positive impact on the segment’s profit derives mainly from an increase in the quantities sold of bromine-based flame retardants, phosphorous‑based flame retardants and industrial solutions and magnesia products, partly offset by a decrease in the quantities sold of bromine-based industrial solutions.
-
Price – the positive impact on the segment’s profit derives mainly from an increase in the selling prices of bromine-based industrial solutions and flame retardants, phosphorous-based flame retardants and magnesia products.
-
Exchange rate – the average upward revaluation of the euro against the dollar which increased the Company's revenue was fully offset by the average upward revaluation of the euro and the shekel against the dollar which increased production costs.
-
Raw materials –the negative impact on the segment’s profit derives mainly from an increase in the prices of raw materials used for bromine- and phosphorous-based flame retardants.
-
Operating and other expenses – the negative impact on the segment's profit derives mainly from inventory write-off and higher labor costs.

149

Results of operations for the year 2018 - Potash segment
 20182017
 $ millions$ millions
Total sales 1,623 1,383
   Potash sales to external customers 1,280 1,119
   Potash sales to internal customers 79 71
   Other and eliminations* 264 193
Gross profit 696 539
Segment profit 393 282
Depreciation and Amortization 141 128
Capital expenditures 356 270
Average realized price (in $)** 278 236

* Mainly includes Polysulphate produced in UK, salt produced in underground mines in UK and Spain, magnesium-based products and sales of electricity produced in Israel.
** Potash average realized price (dollar per tonne) is calculated by dividing total potash revenue by total sales’ quantities. The difference between FOB price and average realized price is mainly marine transportation costs.
Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20182017
 $ millions$ millions
Asia 518 432
South America 406 347
Europe 396 327
North America 107 116
Rest of the world 54 36
Total 1,481 1,258



150

SalesExpensesOperating income
$ millions
YTD 2017 figures 1,383 (1,101) 282 
Quantity 21 (25) (4)
Price 197- 197
Exchange rate 22 (27) (5) 
Energy- (3) (3) 
Transportation- (32) (32) 
Operating and other expenses- (42) (42) 
YTD 2018 figures 1,623 (1,230) 393 


-
Quantity – the moderate negative impact on the segment’s profit derives mainly from a product and site mix, due to increased sales of lower margin products, including electricity surplus from the new power plant in Sodom and Polysulphate.
-
Price – the positive impact on the segment’s profit derives from the increase in potash selling prices.
-
Exchange rate – the negative impact on the segment’s profit derives mainly from the average upward revaluation of the euro against the dollar.
-
Transportation – the negative impact on the segment’s profit derives mainly from an increase in marine transportation prices.
-
Operating and other expenses – the negative impact on the segment’s profit derives mainly from a capital gain due to sale of an office building in Israel which was recorded last year, an increase in royalties, as a result of higher revenue, higher depreciation expenses, expenses recorded in connection with DSW's collective labor agreement and higher operational costs, mainly as a result of annual production record level of potash in Israel.

151

Potash – Production and Sales

Thousands of Tonnes20182017
Production 4,880 4,773
Total sales (including internal sales) 4,895 5,039
Closing inventory 385 400


-     Production – in 2018, production of potash was 107 thousand tonnes higher than in 2017, due to increased production (about 230 thousand tonnes) in ICL Dead Sea and ICL Iberia, despite the stoppage of the potash operation in ICL Boulby at the end of the second quarter of 2018, as part of the transition to the Polysulphate production. The increased production in ICL Dead Sea derived mainly from efficiency activity in planning, maintenance and operational excellence, which led to an annual production record level in ICL Dead Sea. The increased production in ICL Iberia derived mainly from an efficiency plan implemented at the beginning of 2018 and from higher ore grade in the mining area in the beginning of 2018.
-     Sales –  the quantity of potash sold in 2018, was 144 thousand tonnes lower than in 2017, mainly due to a decrease in potash sales to North and South America.
Results of operations for the year 2018 – Phosphate Solutions segment
 20182017
 $ millions$ millions
Total Sales 2,099 2,037
   Sales to external customers 2,001 1,938
   Sales to internal customers 98 99
Segment profit 208 149
Depreciation and Amortization 172 172
Capital expenditures 180 154

Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20182017
 $ millions$ millions
Europe 696 730
Asia 465 457
North America 405 368
South America 264 274
Rest of the world 171 109
Total 2,001 1,938

152

SalesExpensesOperating income
$ millions
YTD 2017 figures 2,037 (1,888) 149 
Divested businesses 2017 (32) 36 4 
YTD 2017 figures (excluding divested businesses) 2,005 (1,852) 153 
Quantity (108) 98 (10) 
Price 142- 142
Exchange rate 44 (33) 11 
Raw materials- (62) (62) 
Energy- 1 1
Transportation- (10) (10) 
Operating and other expenses- (14) (14) 
YTD 2018 figures (excluding divested businesses) 2,083 (1,872) 211 
Divested businesses 2018 16 (19) (3) 
YTD 2018 figures 2,099 (1,891) 208 


-
Divested businesses – sale of the assets and business of Rovita at the beginning of the third quarter of 2018.
-
Quantity – the negative impact on the segment’s profit derives mainly from a decrease in phosphate-based acids and food additives, together with phosphate fertilizers quantities sold, which was partly offset by an increase in dairy proteins quantities sold.
-
Price – the segment benefited from a positive price impact throughout most of the phosphate chain. The increase derives mainly from selling prices of phosphate fertilizers, together with phosphate-based acids, food additives and salts (mainly as part of value-focused strategy).
-
Exchange rate – the positive impact on the segment’s profit derives mainly from the average upward revaluation of the euro against the dollar increasing revenues. This increase was partly offset by the average upward revaluation of the euro and the Chinese yuan against the dollar increasing production costs.
-
Raw materials – the negative impact on the segment’s profit derives mainly from higher sulphur prices which increased the costs of the main raw materials throughout the phosphate value chain.
-
Transportation – the negative impact on the segment’s profit derives mainly from an increase in marine transportation prices.
-
Operating and other expenses – the negative impact on the segment’s profit derives mainly from an insurance income in Israel which was recorded last year and inventory write-off, partly offset by lower operational costs as a result of implementation of efficiency measures and an environment-related provision which was recorded last year.

153

Phosphate Solutions: Backward Integrated Value Chain
Thousands of tonnes20182017
Phosphate rock  
Production 5,006 4,877
Green phosphoric acid  
Used for production of phosphate commodities 552 451
Used for production of phosphate specialties 305 281
Other 17 28
Phosphate fertilizers  
Production 2,304 2,094
Sales* 2,269 2,291
Pure phosphoric acid  
Production 289 275


* To external customers.
-     Production of phosphate rock – in 2018, production of phosphate rock was higher by 129 thousand tonnes than in 2017, mainly due to shutdown at ICL Rotem Zin plant during the second half of 2017 as a result of adjusting production volumes to the business environment.
-     Green phosphoric acid – in 2018, green phosphoric acid used for production of phosphate commodities was higher by 101 thousand tonnes than in 2017, mainly due to increased production of phosphate fertilizers in YPH joint venture. Green phosphoric acid used for production of phosphate specialties in 2018, was higher by 24 thousand tonnes than in 2017, mainly due to the segment's strategy for increasing production of phosphate-based specialty products.
-     Production of phosphate fertilizers – in 2018, production of phosphate fertilizers was higher by 210 thousand tonnes than in 2017, mainly due to increased production of phosphate fertilizers in YPH joint venture.
-     Sales of phosphate fertilizers – the quantity of phosphate fertilizers sold in 2018 was 22 thousand tonnes lower than in 2017, as an increase in the sales of the YPH JV was more than offset by lower demand towards the end of 2018.
-     Production of pure phosphoric acid – in 2018, production of pure phosphoric acid was higher by 14 thousand tonnes than in 2017, mainly due to reduced production at ICL Rotem in 2017 that was unfavorably affected by a shortage of 4D acid, as well as due to higher demand in China.
154

Results of operations for the year 2018 – Innovative Ag Solutions segment
 20182017
 $ millions$ millions
Total Sales 741 692
   Sales to external customers 719 671
   Sales to internal customers 22 21
Segment profit 57 56
Depreciation and Amortization 19 19
Capital expenditures 15 12

Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20182017
 $ millions$ millions
Europe 359 324
Asia 105 99
North America 97 87
South America 21 22
Rest of the world 137 139
Total 719 671


155

SalesExpensesOperating income
$ millions
YTD 2017 figures 692 (636) 56 
Quantity 17 (13) 4
Price 13- 13
Exchange rate 19 (17) 2 
Raw materials- (14) (14) 
Energy--- 
Transportation--- 
Operating and other expenses- (4) (4) 
YTD 2018 figures 741 (684) 57 


-
Quantity – the positive impact on the segment's profit derives mainly from specialty agriculture products, largely from liquid NPK, straight fertilizers and water-soluble NPK.
-
Price – the positive impact on the segment's profit derives mainly from an increase in the selling prices of straight fertilizers.
-
Exchange rate – the positive impact on the segment's profit derived mainly from the average upward revaluation of the euro against the dollar which increased revenue more than it contributed to the increase in production costs.
-
Raw materials – the negative impact on the segment's profit derives mainly from an increase in most of the segment's raw materials, mainly ammonia and caustic soda.

156

Year Ended December 31, 2017 Compared to Year Ended December 31, 2016
Set forth below are our results of operations for the years ended December 31, 2017 and 2016.
 For the Years Ended December 31,
%
Increase
(Decrease)
 20172016
 $ millions$ millionssales
Sales 5,418 5,3631%
Cost of sales 3,746 3,7031%
    
Gross profit 1,672 1,6601%
    
Selling, transport and marketing expenses 746 7223%
General and administrative expenses 261 321(19)%
Research and development expenses 55 73(25)%
Other expenses 90 618(85)%
Other income (109) (71)54%
    
Operating income (loss) 629 (3)-
    
Finance expenses, net 124 132(6)%
    
Share in earnings of equity-accounted investees- 18-
Income (loss) before income taxes 505 (117)-
    
Provision for income taxes 158 55187%
Net income (loss) 347 (172)-
Net income (loss) attributable to the shareholders of the Company 364 (122)-
    
Earnings (losses) per share attributable to the shareholders of the Company:   
    
Basic earnings (losses) per share (in dollars) 0.29 (0.10)-
    
Diluted earnings (losses) per share (in dollars) 0.29 (0.10)-

157

Results of operations for the year 2017
SalesExpensesOperating income
$ millions
YTD 2016 figures 5,363 (5,366) (3) 
Total adjustments YTD 2016*- 585 585 
Adjusted YTD 2016 figures 5,363 (4,781) 582 
Quantity 52 (1) 51 
Price (6)- (6) 
Exchange rate 9 (56) (47) 
Raw materials- 25 25 
Energy- (21) (21) 
Transportation- (12) (12) 
Operating and other expenses- 80 80 
Adjusted YTD 2017 figures 5,418 (4,766) 652 
Total adjustments YTD 2017*- (23) (23) 
YTD 2017 figures 5,418 (4,789) 629 

* See "Adjustments to reported operating and net income (Non-GAAP)" above.
-
Sales – the company sales increased by $55 million compared to 2016. The quantity‑related increase derives mainly from an increase in the quantities sold of fire safety products (which were divested at the end of the first quarter of 2018), phosphate acids, bromine-based industrial solutions (mainly clear brine fluids), bromine‑based flame retardants and specialty agriculture products. The increase was partly offset by a decline in the quantities sold of phosphate rock, phosphate fertilizers and dairy proteins.
The price-related decrease derives mainly from a decline in the selling prices of phosphate fertilizers, phosphate acids, and specialty agriculture products. This decrease was partly offset by an increase in potash, phosphorous-based flame retardants and bromine-based industrial solutions selling prices.
The exchange rate increase derives mainly from the upward revaluation of the euro against the dollar.
-
Cost of sales – the cost of sales increased by $43 million compared to 2016. The increase derives mainly from the upward revaluation of the shekel against the dollar increasing production costs (see ‘Exchange rate’ above), higher energy prices in Israel, higher electricity costs in Europe (see ‘Energy’ above), inventory write-offs in ICL Potash, mainly in Europe and an increase in royalties paid due to higher revenues (see ‘Other’ above). The increase was partly offset by a decline in raw materials prices, mainly commodity fertilizer prices used in the specialty fertilizers business and sulphur prices used mainly in the phosphate value chain (see ‘Raw materials’ above).
-
Selling and marketing – selling and marketing expenses increased by $24 million compared to 2016. The increase derives mainly from an increase in marine transportation prices and exchange rate fluctuations, partly offset by a decrease in quantities sold of products of the Phosphate commodities business (see ‘Transportation’ and ‘Exchange rate’ above).
158

-
General and administrative – general and administrative expenses decreased by $60 million compared to 2016. The decrease derives mainly from cost-saving measures and a reduction of professional services throughout the Company (see ‘Operating and other expenses’ above).
-
Other expenses, net - other expenses, net, decreased by $566 million compared to 2016. The decrease derives mainly from capital gains recorded this year related to divestiture of businesses (mainly IDE), together with non-operational expenses in the corresponding period last year, mainly from impairment of assets related to the Harmonization Project and to discontinuance of the activities of Allana Affar in Ethiopia (see ‘Adjustments to reported operating and net income – Non-GAAP financial measures’ above).
Below is a geographical breakdown of our sales according to customer location:
 Year Ended December 31,
 20172016
 $ millions$ millions
Europe 1,918 1,863
Asia 1,342 1,275
North America 1,175 1,141
South America 666 588
Rest of the world 317 496
Total 5,418 5,363

Europe the increase derives mainly from an increase in the quantities sold of dairy protein products, phosphate fertilizers, clear brine fluids and specialty agriculture products. The increase was partly offset by a decrease in the quantities sold of potash and phosphate rock.
Asia – the increase derives mainly from an increase in the quantities sold of phosphoric acid, potash, bromine-based flame retardants, bromine-based industrial solutions, acids, specialty agriculture products and dairy protein products. This increase was partly offset by a decrease in the quantities sold of phosphate fertilizers and phosphate rock.
North America – the increase derives mainly from an increase in the quantities sold and selling prices of potash together with an increase in fire-safety and P2S5 product quantities sold. This increase was partly offset by a decrease in the quantities sold of the Innovative Ag Solutions segment products and food phosphates and multi‑ingredient blends.
South America – the increase derives mainly from an increase in potash selling prices and quantities sold.
Rest of the world – the decrease derives mainly from a decrease in the quantities of dairy protein products sold and a decline in potash sales to an Israeli customer (Haifa Chemicals) facing operational difficulties due to new local regulation. The decrease was partly offset by an increase in the quantities sold of specialty agriculture products.
159

Financing expenses, net
The net financing expenses in the year ended December 31, 2017 amounted to $124 million, compared with $132 million last year – a decrease of $8 million. The decrease derives mainly from interest expenses recorded last year in the amount of $38 million in connection with interest on past royalties following an arbitration decision between the government of Israel and the Company, as well as interest on a tax assessment agreement signed with the Israel Tax Authority relating to prior periods and an increase in 2017 of income of about $10 million in respect of hedging transactions, net of exchange rate differences. On the other hand, in 2017 we recognized finance expenses as a result of revaluation of liabilities for employee benefits (in shekel terms) of about $20 million, fees paid with respect to early repayment of a long-term loan of about $13 million and interest expenses, mainly from an increase of the average interest rate on the Company’s debt of about $7 million.
Tax expenses
The tax expenses in 2017 amounted to $158 million reflecting an effective tax rate of about 31%. In 2016 and 2015 tax expenses were $55 million and $162 million reflecting about (47%) and about 24% effective tax rate, respectively. The increase in the effective tax rate in 2017 compared with prior years is mainly due to reduction of the tax benefits under the Israeli Encouragement Law as well as the mix of profits generated in various jurisdictions.
Tax expenses in 2017 were impacted by tax expenses following an internal transaction in preparation of divestitures of low synergy businesses together with an upward revaluation of the shekel against dollar that increased the tax expenses in the Israeli subsidiaries, and was offset by tax income as a result of the resolution given by the Appeals Court in Belgium with respect to an appeal filed by the Company regarding allowance of deduction of certain expenses and tax income due to an adjustment to the deferred taxes following the tax reform in the US.
In 2016, the effective tax rate was impacted mainly by the loss from discontinuance of the global ERP project (Harmonization Project) and by the capital loss from discontinuance of the activities of Allana Afar in Ethiopia.
160

Results of operations for the year 2017 – for Industrial Products segment
 20172016
 $ millions$ millions
Total Sales 1,193 1,120
   Sales to external customers 1,179 1,111
   Sales to internal customers 14 9
Segment profit 303 286
Depreciation and Amortization 61 52
Capital expenditures 49 38

Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20172016
 $ millions$ millions
Europe 456 424
Asia 351 301
North America 327 330
South America 18 24
Rest of the world 27 32
Total 1,179 1,111



161

SalesExpensesOperating income
$ millions
YTD 2016 figures 1,120 (834) 286 
Quantity 57 (21) 36 
Price 12- 12 
Exchange rate 4 (16) (12) 
Raw materials  (1) (1) 
Energy  (2) (2) 
Transportation  (1) (1) 
Operating and other expenses  (15) (15)   
YTD 2017 figures 1,193 (890) 303 

-
Quantity – the positive impact on the segment's profit derives mainly from an increase in the quantities sold of bromine-based flame retardants and bromine-based industrial solutions (mainly clear brine fluids).
-
Price – the positive impact on the sales and on the segment's profit derives mainly from an increase in the selling prices of phosphorous-based flame retardants and bromine-based industrial solutions.
-
Exchange rate – the negative impact on the segment's profit derives mainly from the upward revaluation of the shekel against the dollar increasing production costs, partly offset by the upward revaluation of the euro against the dollar increasing revenues.
-
Operating and other expenses - the negative impact on the segment's profit derives mainly from an increase in the royalties as a result of the increase in sales and from expenses recorded in relation with an extension of work agreement.
162
Results of operations for the year 2017 – Potash segment
 20172016
 $ millions$ millions
Total sales 1,383 1,338
   Potash sales to external customers 1,119 1,085
   Potash sales to internal customers 71 80
   Other and eliminations* 193 173
Gross profit 539 499
Segment profit 282 282
Depreciation and Amortization 128 127
Capital expenditures 270 311
Average realized price (in $)** 236 226

* Mainly includes Polysulphate produced in UK, salt produced in underground mines in UK and Spain, magnesium-based products and sales of electricity produced in Israel.
** Potash average realized price (dollar per tonne) is calculated by dividing total potash revenue by total sales’ quantities. The difference between FOB price and average realized price is mainly marine transportation costs.
Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20172016
 $ millions$ millions
Asia 432 395
South America 347 267
Europe 327 354
North America 116 93
Rest of the world 36 104
Total 1,258 1,213



163

SalesExpensesOperating income
$ millions
YTD 2016 figures 1,338 (1,056) 282 
Quantity 1 9 10 
Price 41- 41 
Exchange rate 3 (14) (11) 
Energy  (11) (11) 
Transportation  (28) (28) 
Operating and other expenses  (1) (1) 
YTD 2017 figures 1,383 (1,101) 282 

-       Quantity - the positive impact on the segment's profit derives mainly from lower sales of potash manufactured at sites having lower profitability rates.
-       Price – the positive impact on the sales and on the segment's profit derives from an increase in potash selling prices (a $10 increase in the average realized price per tonne compared to last year).
-       Exchange rate – the negative impact on the segment’s profit derives mainly from the upward revaluation of the shekel and the euro against the dollar increasing production costs. This decrease was partly offset by the upward revaluation of the euro against the dollar increasing revenues.
-       Energy –  the negative impact on the segment’s profit derives mainly from higher energy prices in Israel and higher electricity charges in Europe.
-       Transportation – the negative impact on the segment’s profit derives mainly from an increase in marine transportation prices.
-
Operating and other expenses - the negative impact on the segment’s profit derives mainly from an increase in inventory write-offs (mainly in Europe) and an increase in royalties and sales commissions. This negative impact was partly offset by expenses recorded last year in connection with DSW's collective labor agreement and a capital gain due to sale of an office building in Israel.
164

Potash – Production and Sales
Thousands of Tonnes20172016
Production 4,773 5,279
Total sales (including internal sales) 5,039 5,165
Closing inventory 400 666


-     Production – production of potash in 2017, was 506 thousand tonnes lower than in 2016, mainly due to decreased production at ICL Boulby as a result of the transition from extracting and producing potash to producing Polysulphate™. The lower production in the first quarter of 2017, caused by an operational breakdown in the mine tailings channel, was renewed during the second quarter of 2017 and the overall production level was recovered during the course of the year. In addition, decreased production was recorded in Spain as a result of lower ore grade in the current mining area and in ICL Dead Sea as a result of maintenance operations at the plant in Sodom.
-     Sales –  the quantity of potash sold in 2017, was 126 thousand tonnes lower than in 2016, mainly due to a decrease in sales to Israel and Europe, which was partially offset by an increase in sales to South America and Asia.
Results of operations for the year 2017 – Phosphate Solutions segment
 20172016
 $ millions$ millions
Total Sales 2,037 2,186
   Sales to external customers 1,938 2,082
   Sales to internal customers 99 104
Segment profit 149 224
Depreciation and Amortization 172 203
Capital expenditures 154 237

Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20172016
 $ millions$ millions
Europe 730 697
Asia 457 501
North America 368 379
South America 274 276
Rest of the world 109 229
Total 1,938 2,082


165

 SalesExpensesOperating income 
 $ millions 

YTD 2016 figures 2,186 (1,962) 224 
Quantity (109) 73 (36)
Price (46)- (46) 
Exchange rate 6 (33) (27) 
Raw materials  15 15 
Energy  (8) (8) 
Transportation  16 16
Operating and other expenses  11 11 
YTD 2017 figures 2,037 (1,888) 149 
YTD 2020 figures 5,043 (4,841) 202 
Total adjustments YTD 2020*
-
 307
 307
 
Adjusted YTD 2020 figures 5,043 (4,534) 509 
New Brazilian Businesses' contribution 341 (290) 51
Quantity 353 (243) 110 
Price 1,081- 1,081 
Exchange rates 137 (191) (54) 
Raw materials- (246) (246) 
Energy- (27) (27) 
Transportation- (154) (154) 
Operating and other expenses
-
 (76)
 (76)
 
Adjusted YTD 2021 figures 6,955 (5,761) 1,194 
Total adjustments YTD 2021*
-
 16
 16
 
YTD 2021 figures
 6,955
 (5,745)
 1,210
 

-       Quantity -  the negative impact on the segment's profit derives mainly from a decrease in phosphate fertilizers, phospahte rock
* See "Adjustments to reported operating and dairy proteins quantities sold. This negative impact was partly offset by an increase in phosphate-based acids quantities sold.net income (non-GAAP)" above.
 
-       Price – the negative impact on the sales and on the segment's profit derives mainly from a decrease in the selling prices of phosphate fertilizers and phosphate-based acids.
-       Exchange rate – the negative impact on the segment’s profit derives mainly from the upward revaluation of the shekel and the euro against the dollar increasing production costs. This decrease was partly offset by the upward revaluation of the euro against the dollar increasing revenues.
-       Raw materials – the positive impact on the segment's profit derives mainly from a decrease in sulphur prices.
-       Energy –  the negative impact on the segment’s profit derives mainly from higher energy prices in Israel.
-       Transportation – the positive impact on the segment’s profit derives mainly from a decrease in quantities sold, partly offset by an increase in marine transportation prices.

-
Operating
Sales – The Company's sales increased by $1,912 million compared to 2020. The increase was primarily related to a $278 increase in the average realized price per ton of potash year-over-year, as well as an increase in the selling prices of phosphate fertilizers, acids, bromine and other expenses -phosphorus-based flame retardants, bromine-based industrial solutions, Innovative ag solutions products, phosphate specialties business and FertilizerpluS products. In addition, an increase was recorded in sales volumes of bromine-based flame retardants, Innovative ag solutions products, bromine-based industrial solutions, mainly clear brine fluids, FertilizerpluS products, phosphate specialties business and specialty minerals. In addition, the positive impact onincrease in sales included an increase of $341 from the segment’s profit derives mainly fromacquisitions of Fertiláqua and ADS and the appreciation of the average exchange rate of the euro, the Chinese yuan and the Israeli shekel against the dollar. The increase was partly offset by a decrease in depreciation expensessales volumes of Potash and phosphate fertilizers.
 

-
Cost of sales – Cost of sales increased by $791 million compared to 2020. The increase was primarily related to higher prices of sulphur consumed during the period, raw materials used in the production of bromine- and phosphorus-based flame retardants, commodity fertilizers and ammonia. In addition, an increase of $225 million was derived from the acquisitions of Fertiláqua and ADS, as well as an increase of $185 million in sales volumes of bromine-based flame retardants, Innovative ag solutions products, bromine-based industrial solutions, mainly clear brine fluids FertilizerpluS products, phosphate specialties business and specialty minerals. Another contribution to the increase was due to lower production (lower stripping costs),the appreciation of the average exchange rate of the Israeli shekel, the euro and the Chinese yuan against the dollar and higher electricity prices. The increase was partly offset by a decrease in royalties paidsales volumes of potash and an insurance income in Israel, partly offset by an environment related provision.phosphate fertilizers.
ICL Group Limited 177
166


Phosphate Solutions: Backward Integrated Value Chain

Thousands
-
Selling and marketing – Selling and marketing expenses increased by $301 million compared to 2020, mainly due to higher transportation costs, higher sales volumes, the acquisitions of tonnes
20172016Fertiláqua and ADS and favorable exchange rate.
Phosphate rock  
Production4,8775,744
Green phosphoric acid  
Used for production of phosphate commodities451645
Used for production of phosphate specialties281261
Other2828
Phosphate fertilizers  
Production2,094 2,725
Sales*2,291 2,645
Pure phosphoric acid  
Production275266


* To external customers.
 
-     Production of phosphate rock – in 2017, production of phosphate rock was lower by 867 thousand tonnes than in 2016, mainly due to adjusting production volumes to the business environment at ICL Rotem, which included a shutdown of the Zin plant during part of the third and the fourth quarters of 2017. The plant returned to activity towards the end of the fourth quarter. In addition, the production of phosphate rock decreased due to a production optimization process in YPH.

-
General and administrative – General and administrative expenses increased by $44 million compared to 2020, mainly due to higher labor costs, the appreciation of the average exchange rate of the Israeli shekel and the euro against the dollar and the acquisitions of Fertiláqua and ADS.
 
-     Green phosphoric acid – in 2017, green phosphoric acid used for production of phosphate commodities was lower by 194 thousand tonnes than in 2016, mainly due to decreased production of phosphate fertilizers in YPH. Green phosphoric acid used for production of phosphate specialties in 2017, was higher by 20 thousand tonnes than in 2016, mainly due the shift to specialty products in YPH.

-
Research and Development – Research and development expenses increased by $10 million compared to 2020, mainly due to higher labor costs.
 
-     Production of phosphate fertilizers – in 2017, production of phosphate fertilizers was lower by 631 thousand tonnes than in 2016, mainly due to decreased production in YPH as a result of the shift to specialty products.

-
Other expenses, net – Other expenses, net, decreased by $242 million compared to 2020. The decrease was primarily due to higher expenses in 2020 related to impairment of assets, early retirement of employees, site closure and restoration costs (see ‘Adjustments to reported operating and net income – non-GAAP financial measures’ above).
 
-     Salesof phosphate fertilizers – the quantity of phosphate fertilizers sold in 2017 was 354 thousand tonnes lower than in 2016, mainly due to a decrease in sales to Asia.
-     Production of pure phosphoric acid – in 2017, production of pure phosphoric acid was higher by 9 thousand tonnes than in 2016, mainly due to continuously growing demand in China.
167

Results of operations for the year 2017 – Innovative Ag Solutions segment
 20172016
 $ millions$ millions
Total Sales 692 661
   Sales to external customers 671 632
   Sales to internal customers 21 29
Segment profit 56 55
Depreciation and Amortization 19 17
Capital expenditures 12 7

Below is a geographical breakdown of our sales to external customers, by customer location:
 
 Year Ended December 31,
 20212020
 $ millions$ millions

Europe 2,159 1,822
Asia 1,876 1,432
North America 1,186 859
South America 1,305 517
Rest of the world
 429
 413
Total
 6,955
 5,043

 Year Ended December 31,
 20172016
 $ millions$ millions


-
Europe – The increase in sales was primarily related to an increase in sales volumes and selling prices of Innovative ag solutions products, bromine and phosphorus-based flame retardants, phosphate salts and white phosphoric acid (WPA), as well as a higher selling prices of phosphate fertilizers and potash. The increase was partly offset by a decrease in sales volumes of potash, phosphate fertilizers and clear brine fluids.

-
Asia – The increase in sales was primarily related to an increase in sales volumes and selling prices of bromine-based flame retardants, bromine industrial solutions products, Innovative Ag Solutions segment products and phosphate salts, as well as an increase in the selling prices of potash, phosphate fertilizers and acids. The increase in sales was also supported by an increase in sales volumes of clear brine fluids and the positive impact of the appreciation of the average exchange rate of the Chinese yuan against the dollar. The increase was partly offset by a decrease in sales volumes of potash, phosphate fertilizers and acids.

-
North America – The increase in sales was primarily related to an increase in sales volumes and selling prices of potash, phosphate fertilizers, bromine and phosphorus-based flame retardants, especially minerals products, phosphate-based food additives and Innovative ag solutions products.
Europe 324 314
Asia 99 72
North America 87 100
South America 22 19
Rest of the world 139 127
Total 671 632
ICL Group Limited 178


-
South America – The increase in sales was primarily related to an increase in sales volumes and selling prices of specialty agriculture products, which include sales from our acquired Fertiláqua and ADS business, potash, phosphate fertilizers and white phosphoric acid (WPA), as well as an increase in sales volumes of clear brine fluids. The increase was partly offset by a decrease in selling prices of clear brine fluids.


-
Rest of the world – The increase in sales was primarily related to higher sales volumes and selling prices of specialty fertilizers products and higher selling prices of specialty minerals products.
Financing expenses, net
Net financing expenses in the year ended December 31, 2021, amounted to $122 million, compared to $158 million in the corresponding year, a decrease of $36 million. This decrease derived mainly from changes in hedging transactions results in the amount of $39 million.
Tax expenses
The tax expenses for the year ended December 31, 2021, amounted to $260 million compared to $25 million for the year ended December 31, 2020, reflecting an effective tax rate of about 24% and 51%, respectively. The relatively high effective tax rate in previous year was mainly due to the recognition of deferred tax on significant impairment losses and provisions at a beneficiary tax rate.
ICL Group Limited 179

Segment Information
Segment revenue, expenses and results include inter-segment transfers which are based on transaction prices in the ordinary course of business. These are aligned with reports that are regularly reviewed by the Chief Operating Decision Maker. Inter-segment transfers are eliminated as part of the financial statements' consolidation process.
Results of operations for the year 2021 – Industrial Products segment
 20212020
 $ millions$ millions

Segment Sales
 1,617
 1,255
   Sales to external customers
 1,601
 1,242
   Sales to internal customers
 16
 13
Segment Operating Income
 435
 303
Depreciation and amortization
 65
 77
Capital expenditures
 74
 84

 
Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20212020
 $ millions$ millions

Europe
 529
 458
Asia
 597
 405
North America
 360
 296
South America
 62
 40
Rest of the world
 53
 43
Total
 1,601
 1,242


ICL Group Limited 180


 SalesExpensesOperating income 
 
$ millions

YTD 2020 figures
 1,255
 (952)
 303
 
Quantity
 198
 (104)
 94
 
Price
 150
-
 150
 
Exchange rates
 14
 (26)
 (12)
 
Raw materials
-
 (57)
 (57)
 
Energy
-
 2
 2
 
Transportation
-
 (22)
 (22)
 
Operating and other expenses
-
 (23)
 (23)
 
YTD 2021 figures
 1,617
 (1,182)
 435
 



-
Quantity – The positive impact on the segment’s operating income was primarily due to higher sales volumes of bromine- and phosphorus-based flame retardants, as well as bromine-and phosphorus industrial solutions and specialty minerals products.

-
Price – The positive impact on the segment’s operating income was primarily related to the record level of elemental bromine prices in China and higher selling prices of bromine- and phosphorus-based flame retardants, as well as specialty minerals products.

-
Exchange rates – The unfavorable impact on the segment’s operating income resulted primarily from the appreciation of the average exchange rate of the Israeli shekel against the US dollar, which increased operational costs. This was partly offset by the appreciation of the average exchange rate of the euro against the US dollar.

-
Raw materials –The negative impact on the segment’s operating income was primarily related to higher prices of raw materials used in the production of bromine- and phosphorus-based flame retardants.

-
Transportation - The negative impact on the segment’s operating income was primarily related to higher marine transportation costs.

-
Operating and other expenses – The negative impact on operating income was primarily related to higher operational costs and royalties, due to higher revenue.
ICL Group Limited 181


Results of operations for the year 2021 - Potash segment
 20212020
 $ millions$ millions

Segment Sales 1,931 1,346
   Potash sales to external customers 1,401 979
   Potash sales to internal customers 94 95
   Other and eliminations (1) 436 272
Gross Profit 894 472
Segment Operating Income 399 120
Depreciation and amortization* 165 166
Capital expenditures 298 296
Average realized price (in $) (2) 337 230



(1)Mainly includes polysulphate produced in UK, salt produced in underground mines in the UK and Spain, magnesium-based products and sales of electricity produced in Israel.

(2)Potash average realized price (dollar per ton) is calculated by dividing total Potash revenue by total sales’ quantities. The difference between FOB price and average realized price is mainly marine transportation costs.
Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20212020
 $ millions$ millions

Asia 511 431
Europe 442 354
South America 506 230
North America 216 86
Rest of the world
 93
 82
Total
 1,768
 1,183


ICL Group Limited 182


SalesExpensesOperating income
$ millions

YTD 2020 figures 1,346 (1,226) 120 
Quantity 72 (85) (13) 
Price 496- 496 
Exchange rates 17 (48) (31) 
Energy- (30) (30) 
Transportation- (97) (97) 
Operating and other expenses
-
 (46)
 (46)
 
YTD 2021 figures
 1,931
 (1,532)
 399
 



-
Quantity – The negative impact on the segment’s operating income was primarily related to a decrease in sales volumes of potash from both ICL Dead Sea and ICL Iberia.

-
Price – The positive impact on the segment’s operating income was primarily related to an increase of $278 in the average realized price per ton of potash year-over-year, as well as an increase in the selling prices of FertilizerpluS products.

-
Exchange rates – The unfavorable impact on the segment’s operating income related primarily to the appreciation of the average exchange rate of the Israeli shekel and the British pound against the US dollar, which led to a negative effect on operating income. This was accompanied by the appreciation of the average exchange rate of the euro against the US dollar, which contributed to sales as much as it increased operational costs.

-
Energy - The negative impact on the segment’s operating income was primarily due to an increase in electricity prices, mainly in Europe.

-
Transportation – The negative impact on the segment’s operating income was primarily related to an increase in marine transportation costs.

-
Operating and other expenses – The negative impact on the segment’s operating income was primarily related to a higher operational cost, as well as higher payments of royalties due to the increase in potash prices.

ICL Group Limited 183


Potash – Production and Sales

Thousands of Tons20212020

Production 4,514 4,527
Total sales (including internal sales) 4,434 4,666
Closing inventory 355 275



-
Production – In 2021, potash production was 13 thousand ton lower than the corresponding year, mainly due to a planned shutdown of more than one week at ICL Dead Sea during the first quarter of 2021.

-
Sales – The quantity of potash sold in 2021 was 232 thousand tons lower year-over-year, as significantly higher sales to the US, Brazil, Vietnam and Taiwan were offset by lower sales to China and India.
Results of operations for the year 2021 – Phosphate Solutions segment
 20212020
 $ millions$ millions

Segment Sales 2,432 1,948
   Sales to external customers 2,334 1,871
   Sales to internal customers 98 77
Segment Operating Income 307 66
Depreciation and amortization* 215 210
Capital expenditures 238 275


Below is a geographical breakdown of our sales to external customers, by customer location:
 Year Ended December 31,
 20212020
 $ millions$ millions

Europe 748 651
Asia 610 468
North America 491 371
South America 358 227
Rest of the world
 127
 154
Total
 2,334
 1,871


ICL Group Limited 184



Sales
Expenses
Operating income
$ millions
 
YTD 2016 figures 661 (606) 55 
Quantity 46 (39) 7
Price (12)- (12)
Exchange rate (3) 1 (2) 
Raw materials  12 12
Energy -- 
Transportation -- 
Operating and other expenses  (4) (4) 
YTD 2017 figures 692 (636) 56 

YTD 2020 figures 1,948 (1,882) 66 
Quantity 35 (2) 33 
Price 384- 384 
Exchange rates 65 (71) (6)
Raw materials- (159) (159) 
Energy- (1) (1) 
Transportation- (32) (32) 
Operating and other expenses
-
 22
 22
 
YTD 2021 figures
 2,432
 (2,125)
 307
 

-     Quantity

-
Quantity – The positive impact on the segment's operating income was primarily related to an increase in the sales volumes of acids in all regions, salts and phosphate-based food additive. This trend was partly offset by a decrease in sales volumes of phosphate fertilizers.

-
Price – The positive impact on the segment's operating income was primarily related to an increase in the selling prices of phosphate fertilizers and acids, as well as higher selling prices in the phosphate specialties business.

-
Exchange rates – The unfavorable impact on the segment’s operating income was primarily related to the appreciation of the average exchange rate of the Israeli shekel against the dollar, which increased operational costs. This was partly offset by the depreciation of the average exchange rate of the euro against the dollar which contributed to the operating income.

-
Raw materials – The negative impact on the segment’s operating income was due to higher prices of sulphur consumed during the period.

-
Transportation – The negative impact on the segment’s operating income was primarily related to an increase in marine and inland transportation costs.

-
Operating and other expenses – The positive impact on operating income was primarily related to lower operational costs.
ICL Group Limited 185


Results of operations for the year 2021the positive impact on the segment's profit derives mainly from an increase in the quantities sold of specialty agriculture products.Innovative Ag Solutions segment
 20212020
 $ millions$ millions

Segment Sales 1,245 731
   Sales to external customers 1,226 715
   Sales to internal customers 19 16
Segment Operating Income 121 40
Depreciation and amortization 38 25
Capital expenditures 36 20

 
-     Price – the negative impact on theBelow is a geographical breakdown of our sales and on the segment's profit derives mainly from a decrease in the selling prices of specialty agriculture products.to external customers, by customer location:
 
 Year Ended December 31,
 20212020
 $ millions$ millions
-     Raw materials – the positive impact on the segment's profit derives mainly from a decline in commodity fertilizers prices.
Europe 421 332
Asia 156 126
North America 117 103
South America 378 21
Rest of the world
 154
 133
Total
 1,226
 715


ICL Group Limited 186


Sales
Expenses
Operating income
$ millions

YTD 2020 figures 731 (691) 40 
New Brazilian Businesses' contribution 341 (290) 51 
Quantity 71 (52) 19 
Price 60- 60 
Exchange rates 42 (38) 4 
Raw materials- (39) (39) 
Energy- 1 1 
Transportation- (2) (2) 
Operating and other expenses
-
 (13)
 (13)
 
YTD 2021 figures
 1,245
 (1,124)
 121
 



-
New Brazilian businesses' contribution - In January 2021, the Company completed the acquisition of Fertiláqua and in July 2021, the acquisition of ADS.
 

-
Quantity – The positive impact on the segment's operating income was due to strong sales volumes in most regions and business lines, primarily in specialty agriculture and turf and ornamental products.
-    Operating and other expenses – the negative impact on the segment's profit derives mainly from an increase in sales commissions paid, due to higher revenue.

-
Price – The positive impact on the segment's operating income was due to higher sales prices in most business lines, especially in specialty agriculture and turf and ornamental products.

-
Exchange rate – The favorable impact on the segment’s operating income was primarily related to the appreciation of the average exchange rate of the euro against the dollar, which contributed to the segment's revenue. The appreciation in the average exchange rate of the Israeli shekel against the dollar offset each other and had no impact on the segment's operating income.

-
Raw materials – The negative impact on the segment's operating income was primarily related to higher costs of commodity fertilizers and ammonia.

-
Operating and other expenses – The negative impact on operating income was primarily related to higher operational costs, mainly selling and marketing costs.
 
168
ICL Group Limited 187


B. LIQUIDITY AND CAPITAL RESOURCES


Overview
 
As atof December 31, 2018,2021, ICL had a balance of $213$564 million in cash, cash equivalents, short-term investments and deposits. As at December 31, 2018,In addition, the Company'sCompany has unutilized long‑term credit facilities of $1,030 million and a securitization agreement in the amount of $300 million, of which the Company has utilized approximately $180 million of the facility’s framework
Furthermore, our net financial liabilities were $2,212$2,449 million, including $1,815$2,436 million of long‑term debt (excluding current maturities) and debentures, and $610 million of short‑term debt of$577 million (including current maturities of long‑term debt). The long-term debt consists of debentures of $1,708 million together with loans from financial institutions and lease liabilities of $728 million, while the short‑term debt consists of short-term loans from financial institutions and lease liabilities of $327 million and current maturities of debentures and loans of $250 million. For more information about the currencies in which the Company's liabilities are denominated and their interest rates, see Note 13 to our Audited Financial Statements.
 
The Company's policy isWe aim to secure sources of financing for itsour operating activities and investments while diversifying the sources of financing among various financial instruments, and between local and international financing entities. The Company's sources of financing are short and long‑term loans from banks (mainly international banks) and institutional entities in Israel, debentures issued to institutional investors in Israel and the United States, and securitization of customer receivables. The Company's policy is to utilizeCompany utilizes the various financing facilities according to our cash flow requirements, alternative costs and market conditions.
 
ICL's management believesWe believe that itsour sources of liquidity and capital resources, including working capital, are adequate for itsour current requirements and business operations and should be adequate to satisfy itsour anticipated working‑capital requirements during the next twelve months, along with its capital expenditures and other current corporate needs.
 
Distributions of dividends to ICL from its subsidiaries and transfers of funds through certain countries may under certain circumstances result in the creation of tax liabilities. However, taxation on dividend distributions and funds transfers have not had, and are not expected to have, a material impact on the Company'sour ability to meet itsour cash obligations.

As of December 31, 2021, we had no material off-balance sheet arrangements, other than the amounts described in Notes 10 and 18A to our Audited Financial Statements.
The Company’s primary contractual obligations consist of commitments to purchase raw materials and energy in the ordinary course as well as agreements to secure its gas supply needs. For information about the Company's contractual obligations, see Note 18 to our Audited Financial Statements.
ICL Group Limited 188


Credit Facilities
In additionJanuary 2021, ICL completed the acquisition of Fertiláqua for a consideration of $131 million, including net debt of $43 million.
Subsequently, in March 2021, we signed a framework credit facility agreement with MUFG Bank for a period of two years, according to its operating expenses and dividend distributions, in 2018which the Company continued several major capital expenditure projects, such as the salt harvesting project, raising the coastal dykes in the evaporation ponds, investment in the new power station in Sodom, construction of a new pumping station in the Northern Basincan withdraw up to BRL 230 million (about $42 million). As of the Dead Sea and constructiondate of phosphogypsum ponds in ICL Rotem. Additional major capital expenditures scheduled to run over the coming years are investments in the YPH joint venture in China along with further investment in Spain. On the other hand, as part of its strategy of divesting low synergy businesses, in December 2017,this Report, the Company completed salehas withdrawn BRL 180 million (about $33 million), with a maturity date of its holdings in IDE Technologies Ltd., for net proceeds of $168 million. March 2023.
In addition, on March 2018, the CompanyJuly 2021, we completed the sale transactionacquisition of the Fire Safety and Oil Additives businesses,South American plant nutrition business of ADS for a total consideration of $1,010about $443 million, including net debt of about $104 million.
In September 2020, the Company entered into a new securitization agreement with three international banks for a committed amount of $300 million and an additional uncommitted amount of $100 million, maturing in September 2025. The securitization agreement replaces a previous one in the amount of $350 million which matured in September 2020. The new agreement includes similar terms as the previous agreement. As of December 31, 2021, ICL utilized approximately $180 million of which $953the facility’s framework.
In October 2021, an additional bank joined the credit facility agreement, increasing the revolving credit facility by an additional $100 million, leading to an aggregate $1.2 billion. Most banks signed on to continue the credit facility agreement, and from March 2023 to March 2025, the total credit facility will amount to $1 billion. For further information see Note 13 to the Company's Annual Financial Statements. As of December 31, 2021, ICL utilized approximately $170 million of the facility’s framework.
Debentures
In January 2021, we repaid $84 million of a private placement bond as scheduled. In March 2021, the Company repaid NIS 392 million (approx. $118 million) Series E Bond, out of the total NIS 1,569 million (approx. $487 million), as scheduled. In December 2021, the Company repaid an amount of $ 69.4 million loan from a European bank, in accordance with the agreement.
In September 2021, we executed a new €250 million sustainability linked loan ("SLL") agreement, with a five-year term through 2026 and a fixed annual interest rate of 0.8%. The loan is an innovative step forward in cashour ongoing sustainability efforts and $57includes three sustainability performance targets. These targets were designed to align with ICL’s sustainability strategy and goals, and each will be assessed at specific times during the term of the loan by third party certification. As part of this effort, ICL is targeting an annual 4% to 5% reduction in direct and indirect Scope 1 and Scope 2 COe emissions resulting from ICL global operations. As of the 2021 fiscal year, third-party monitoring will commence in accordance with accounting and reporting standards published by the GHG Protocol. The Company is also planning to expand its participation in the formTogether for Sustainability (TfS) global initiative that is dedicated to developing and implementing a global supplier engagement program that assesses and improves sustainability sourcing practices. Through 2025, the Company is committed to add, each year, a significant number of a long-term loanTfS qualified vendors who meet certain criteria in the areas of management, environment, health and safety, labor and human rights, ethics, and governance. In addition, ICL will continue to a subsidiaryfocus on inclusion, equality and expanding the representation of women among its senior management, executive and Board of Director roles. ICL has worked to increase the number of women in senior management, and this segment has already grown from 9% in 2018 to 19% in 2021. As part of the buyer. For additional information on divestitures currently in progress, see “Item 3 - Key Information— A. Selected Financial Data”.SLL, the Company has set a target for women to hold at least 25% of senior management roles by the end of 2024.
169In September 2021, ICL Iberia signed a new loan agreement in the amount of €25 million with a 45-month term through 2025 and a fixed annual interest rate of 0.95%.
ICL Group Limited 189


Ratings and financial covenants
S&P
 
On May 29, 2018,June 23, 2021, the Company completed a cash tender offer for anyS&P credit rating agency reaffirmed the Company’s international credit rating and all its debentures Series D, senior notes due in 2024 with a coupon of 4.5%. Following the tender offer, the Company repurchased an amount of $616 million out of the original principal of $800 million. On October 31, 2018, ICL's Board of Directors authorized the Company to repurchase from time to time up to an additional $80 million of the Company's series D debentures due in 2024, which following the completion of the tender offer for the series D debentures on May 29, 2018, amount to $184 million, pursuant for one or more privately negotiated transactions, at a price which shall not exceed the market price of each such repurchase.
On May 31, 2018, the Company completed a private offering of senior unsecured notes (hereinafter – Series F Debentures) to institutional investors pursuant to Rule 144A and Regulation S underrating of 'BBB-'. In addition, the U.S. Securities Act of 1933, as amended, in a total amount of $600 million, due in 2038. The Series F Debentures carry an annual coupon of 6.375%, to be paid in semiannual installments on May 31 and November 30 of each year, commencing November 30, 2018 and until the repayment date. The Series F Debentures have been rated BBB- by S&P Global Inc. and Fitch Rating Inc.Ma'alot credit rating agency reaffirmed our credit rating of 'ilAA' with a stable rating outlook.
 
On May 10, 2018 and on June 21, 2018, respectively, the credit rating agency S&P ratified the Company’s international credit rating, BBB- with a stable rating outlook, and credit rating agency S&P Ma’alot ratified the Company’s credit rating, ‘ilAA’ with a stable rating outlook.Fitch Ratings
 
On October 29, 2018,June 21, 2021, Fitch Ratings reaffirmed our long-term issuer default rating and senior unsecured rating at 'BBB-'. The outlook on the Company entered into an agreement according to which, its commitment under certain revolving credit facility agreements were reduced by a total aggregate amount of $655 million, to an amount of $1.2 billion (hereinafter – the agreement). In accordance with the agreement, the maturity date of the $1.2 billion revolving credit facility has been extended from March 2022 to March 2023, with two options for an extension (at the banks’ option) of an additional one year each, so that the final maturity date, if all options are consummated, will be March 2025. All the other material original terms of the revolving credit facility agreements were maintained. The agreement entered into effect in November 2018.
long-term issuer default rating is stable.
 
Financial Covenants
For a description of material financial covenants in the Company’s loan agreements and any potential risk relating to compliance with them, credit facilities, sale of receivables under securitization transaction and information on material loans and debentures outstanding as of December 31, 2021, see Note 13 to our Audited Financial Statements.
Sources and Uses of Cash
 
The following table sets forth our cash flowsflow for the periods indicated:
 
 Year Ended December 31,
 20212020
 $ millions$ millions
 Year Ended December 31,
 201820172016
 $ millions$ millions$ millions

Net cash provided by operating activities 620 847 966
Net cash provided by (used in) investing activities 331 (333) (800)
Net cash used in financing activities (894) (511) (239)


170
Net cash provided by operating activities 1,065 804
Net cash used in investing activities (579) (583)
Net cash used in financing activities (244) (105)


Operating Activities
 
The cash flowsCash flow provided by operating activities are a significant source of liquidity for the Company. In 2018,2021, the cash flowsflow from operating activities amounted to $620$1,065 million, compared with $847 million last year. This decrease derives mainly from an increase in payments of royalties partly as a result of arbitration decision received at the end of 2018 and cash paid from losses in derivative transactions in the current year along with an increase in working capital in the current year compared with a decrease in the last year. This decrease was partly offset by return of advanced tax payment at the beginning of 2018 in the amount of $ 40 million.
In 2017, the cash flows from operating activities amounted to $847 million, compared with $966 million in 2016. This decrease derives mainly from an increase in payments of taxes along with higher cash payments made due to retirement of employees in 2017 as well as a lower reduction in the working capital, mainly from an increase in sales in Industrial Products and in the Fire Safety and Oil Additives businesses. In addition, there were cash payments relating to discontinuance of the activities of Allana Afar in Ethiopia and the global ERP project (Harmonization Project).
Investing Activities
The net cash provided from investing activities in 2018 amounted to $331 million, compared with $333 million used in investing activity last year. This increase derives mainly as a result of net proceeds received from selling the fire safety and oil additives businesses in the amount of $902 million compare with $168 million received from selling an equity-accounted investee (IDE) in last year. This increase was partly offset by higher cash flows used for investments in property, plant and equipment.
In 2017, the net cash used in investing activities amounted to $333 million, compared with $800 million in 2016. The decrease in the cash used in investing activities derives, mainly, from proceeds received from selling an equity-accounted investee (IDE), in the amount of $168 million, a decrease in the cash flows used for investment in property, plant and equipment, lower purchases of intangible assets due to the discontinuance of the global ERP project (Harmonization Project) along with the acquisition of 15% of the shares of YTH made in 2016, in exchange for a consideration of about $250 million.
Financing Activities
The net cash used in financing activities in 2018 amounted to $894 million, compared with $511$804 million last year. This increase is mainly due to repayment of short-term credit, froman increase in the net income.
Investing Activities
Net cash used in investing activities in 2021 amounted to $579 million, compared with $583 million last year. In 2021, the amount includes net cash paid for business combination, which was offset by proceeds received from sellingthe divestment of YYTH shares and repayment of a loan to the buyer of the fire safety and oil additives businesses, in the amount of $283 million, compared with short-term credit received in the amount of $147 million last year.business.
ICL Group Limited 190


 
The netFinancing Activities
Net cash used in financing activities in 20172021 amounted to $511$244 million, compared with net cash provided by financing activities of $239$105 million in 2016. Thelast year. This increase in the net cash used by financing activities is mainly due to repayment of long term loans, net, in the amount of $421 million, compared with the amount of $87 million made in 2016, along with higher dividend payments to the Company’s shareholders, in the amount of $75 million compared with 2016. On the other hand, there was an increase in receipt of short-term credit from banks and others, net, in the amount of $133 million, compared with 2016.
171

As at December 31, 2018, the Company’s non‑current liabilities consisted of loans from financial institutions in the amount of $345 million and debentures in the amount of $1,470 million. For information about the currencies in which the Company's liabilities are denominated and their interest rates, see Note 15 to our Audited Financial Statements. As at December 31, 2018, the Company had $1,134 million of unutilized long‑term credit lines. As of February 26, 2019, the Company withdrew an additional $94 million from its existing credit facilities.
A portion of ICL's loans bear variable interest rates based on the short‑term LIBOR rate for a period of one to twelve months, plus a margin as defined in each loan agreement. Therefore, the Company is exposed to changes in the cash flows arising from changes in these interest rates. Some of the loans and debentures issued by ICL bear fixed interest for the entire loan period. The Company hedges part of this exposure using financial instruments to fix the range of the interest rates, in order to conform the actual interest‑rate structure to the projections regarding the anticipated developments in the interest rates.
For a description of material financial covenants in the Company’s loan agreements and any potential risk relating to compliance with them – see Note 15 to to our Audited Financial Statements.
172

Credit Facilities:
The Company’s credit facilities, as at December 31, 2018, are as follows:
IssuerEuropean bank (1)Group of twelve international banks (2)European bank (3)
Date of the credit facilityMarch 2014March 2015December 2016
    
Date of credit facility terminationMarch 2019March 2023May 2025
    
The amount of the credit facility
USD 35 million
Euro 100 million
USD 1,200 millionUSD 100 million
    
Credit facility has been utilizedEuro 40 millionUSD 200 millionUSD 70 million
    
Interest rate
Up to 33% use of the credit: Libor/Euribor + 0.90%.
From 33% to 66% use of the credit: Libor/Euribor + 1.15%
66% or more use of the credit: Libor/Euribor + 1.40%
Up to 33% use of the credit: Libor/Euribor + 0.70%.
From 33% to 66% use of the credit: Libor/Euribor + 0.80%
66% or more use of the credit: Libor/Euribor + 0.95%
Libor + 0.45% + spread
    
Loan currency typeUSD and Euro loansUSD and Euro loansUSD loans
    
Pledges and restrictionsFinancial covenants - see Section D, a cross-default mechanism and a negative pledge.Financial covenants - see Section D, a cross-default mechanism and a negative pledge.Financial covenants - see Section D and a negative pledge.
    
Non-utilization fee0.32%0.21%0.30%
(1)After the date of the report, the Company elected not to realize the option of revolving credit facility extension, and to repay the utilized credit facility on the date of its termination.
(2)In October 2018, the Company entered into an agreement according to which, its commitment under certain revolving credit facility agreements will be reduced by a total aggregate amount of $655 million, to an amount of $1.2 billion.
(3)In June 2018, the maturity date of the credit facility was extended to 2025. In November 2018, the credit facility was reduced from $136 million to $100 million. As at the date of the report, the Company utilized $70 million of that credit facility.
173

Sale of receivables under securitization Transaction
In 2015, the Company and certain Group subsidiaries (hereinafter – the Subsidiaries) signed a series of agreements regarding a securitization transaction with three international banks (hereinafter – the Lending Banks) for the sale of their trade receivables to a foreign company which was established specifically for this purpose and which is not owned by the ICL Group (hereinafter – the Acquiring Company)year.
Those agreements replace the prior securitization agreements which came to an end in July 2015. The main structure of the new securitization agreement is the same as the prior securitization agreement. The Company's policy is to utilize the securitization limit based on its cash flow needs, alternative financing sources and market conditions. The new securitization agreement will expire in July 2020. Under the agreements, ICL undertook to comply with a financial covenant whereby the ratio of net debt to EBITDA will not exceed 4.75. If ICL does not meet with this ratio, the Acquiring Company can discontinue acquiring new trade receivables (without affecting the existing acquisitions). As at the date of the report, ICL meet the above financial covenant.
The Acquiring Company finances acquisition of the debts by means of a loan received from a financial institution, which is not related to ICL. As at December 31, 2018, the amount of the securitization framework is $350 million.
The period in which the Subsidiaries are entitled to sell their trade receivables to the Acquiring Company is five years from the closing date of the transaction, where both parties have the option at the end of each year to give notice of cancellation of the transaction. Once the Company transferred its trade receivables, it no longer has the right to sell them to another party. The selling price of the trade receivables is the amount of the debt sold, less the calculated interest cost based on the anticipated period between the sale date of the customer debt and its repayment date. Upon acquisition of the debt, the Acquiring Company pays most of the debt price in cash and the remainder in a subordinated note, which is paid after collection of the debt sold. The rate of the cash consideration varies according to the composition and behavior of the customer portfolio. The Subsidiaries handle collection of the trade receivables included in the securitization transaction, on behalf of the Acquiring Company. In the case of a credit default, the Company bears approximately 30% of the overall secured trade receivable balance.
In addition, as part of the agreements several conditions were set in connection with the quality of the customer portfolios, which give the Lending Banks the option to end the undertaking or determine that some of the Subsidiaries, the customer portfolios of which do not meet the conditions provided, will no longer be included in the securitization agreements. Based on the above terms, the securitization of trade receivables does not meet the conditions for derecognition of financial assets prescribed in International Standard IFRS 9, regarding Financial Instruments – Recognition and Measurement, since the Group did not transfer all the risks and rewards deriving from the trade receivables. Therefore, the receipts received from the Acquiring Company are presented as a financial liability as part of the short-term credit. As of December 31, 2018, utilization of the securitization facility and trade receivables within this framework amounted to $ 332 million (December 31, 2017 - $331 million).

174

Information on material loans and debentures outstanding as at December 31, 2018:
Instrument typeLoan dateOriginal principal (millions)Currency
Carrying amount
($ millions)
Interest ratePrincipal repayment dateAdditional information
Loan-Israeli institutionsNovember 2013300Israeli Shekel674.74% (1)
2015-2024
(annual installment)
Partially prepaid
Debentures (private offering) – 3 seriesJanuary 2014
84
145
46
U.S Dollar
84
144
46
4.55%
5.16%
5.31%
January 2021
January 2024
January 2026
 
Loan-international institutionsJuly 201427Euro252.33%2019-2024Partially prepaid
Debentures - Series DDecember 2014800U.S Dollar1824.50%December 2024(2)
Loan - European BankDecember 2014161Brazilian Real19CDI+1.35%
2015-2021
(Semiannual installment)
 
Debentures - Series EApril 20161,569Israeli Shekel4162.45%
2021- 2024
(annual installment)
 
Loan - others April - October, 2016600Chinese Yuan Renminbi295.23%2019(3)
Loan - Asian BanksJune - October, 2018600Chinese Yuan Renminbi874.79% - 5.44%2019 
Loan - Asian BankApril 2018400Chinese Yuan Renminbi58CNH Hibor + 0.50%2019 
Debentures - Series FMay 2018600U.S Dollar5966.38%May 2038(4)
Loan - European BankDecember 201870U.S Dollar70Libor + 0.66%December 2021 
175

Additional information:
(1)          From April 2018, in accordance with the loan agreement, there has been a decrease in the interest rate, from 4.94% to 4.74%.
(2)          Debentures Series D
Private issuance of debentures pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933, as amended, to institutional investors in the U.S., Europe, and Israel. The notes are registered for trade in the TACT Institutional; by the Tel-Aviv Stock Exchange Ltd. The notes have been rated BBB (stable). In March 2017, the rating company “Fitch Rating Ltd.” lowered the Company’s credit rating, together with the rating of the debentures, from BBB to BBB- with a stable rating outlook. In November 2017, the rating company “Standard & Poor’s” reaffirmed the Company’s credit rating, together with the rating of the debentures, at BBB-, with a stable rating outlook. On May 29, 2018, the Company completed a cash tender offer for its Series D debentures. Following the tender offer, the Company repurchased an amount of $616 million out of the original principal amount of $800 million. 
On May 10, 2018 and on June 21, 2018, respectively, the credit rating agency S&P ratified the Company’s international credit rating, BBB- with a stable rating outlook, and credit rating agency Maalot ratified the Company’s credit rating, ‘ilAA’ with a stable rating outlook.
(3)          Loans from others
In July 2018, ICL and YTH agreed to convert their owner’s loans in the YPH joint venture (each company holds 50%) in the amount of $146 million into equity by issuing shares. As a result, the consolidated debt was reduced by $73 million against “non‑controlling interest” equity balance.
(4)          Debentures-Series F
On May 31, 2018, the Company completed a private offering of senior unsecured notes to institutional investors pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. According to the terms of the Series F Debentures, the Company is required to comply with certain covenants, including restrictions on sale and lease-back transactions, limitations on liens, and standard restrictions on merger and/or transfer of assets. The Company is also required to offer to repurchase the Series F Debentures upon the occurrence of a "change of control" event, as defined in the indenture for the Series F Debentures. In addition, the terms of the Series F Debentures include customary events of default, including a cross‑acceleration to other material indebtedness. The Company is entitled to optionally repay the outstanding Series F Debentures at any time prior to the final repayment date, under certain terms, subject to payment of an agreed early repayment premium. The Series F Debentures have been rated BBB- by S&P Global Inc. and Fitch Rating Inc. with a stable rating outlook.
176

Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
The evaluation of accounting estimates used in the preparation of ICL’s financial statements requires management of the Company to make assumptions regarding laws interpretations which apply to the Company, circumstances and events that involve considerable uncertainty. Management of the Company prepares the estimates based on past experience, various facts, external circumstances, and reasonable assumptions based on the pertinent circumstances of each estimate. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Information about assumptions made by ICL with respect to the future and other reasons for uncertainty with respect to estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year are included in the following table:
EstimatePrincipal assumptionsPossible effectsReference
Recognition of deferred tax asset
Tax rates expected to apply when the timing differences applied to Beneficiary Enterprise are realized is based on forecasts of future revenues to be earned. The reasonability of future revenues to be earned to use future tax benefits.
Recognition or reversal of deferred tax asset in profit or loss.See Note 17 regarding taxes on income
Uncertain tax positions
The extent of the certainty that ICL’s tax positions will be accepted (uncertain tax positions) and the risk of it incurring any additional tax and interest expenses. This is based on an analysis of several matters including interpretations of tax laws and the ICL’s experience.
Recognition of additional income tax expenses.See Note 17 regarding taxes on income
Post-employment employee benefitsActuarial assumptions such as the discount rate, future salary increases and the future pension increase.
An increase or decrease in the post-employment defined benefit obligation.
See Note 18 regarding employee benefits.
Assessment of probability of contingent and environmental liabilities including cost of waste removal/restoration
Whether it is more likely than not that an outflow of economic resources will be required in respect of potential liabilities under the environmental protection laws and legal claims pending against ICL and the estimation of their amounts. The waste removal/ restoration obligations depend on the reliability of the estimates of future removal costs and interpretation of regulations.
Creation, adjustment or reversal of a provision for a claim and/or environmental liability including cost of waste removal/restoration.See Note 20 regarding contingent liabilities
Recoverable amount of a cash generating unit, among other things, containing goodwill
Expected cash-flow forecasts, the discount rate, market risk and the forecasted growth rate.Change in impairment loss.See Note 13 regarding impairment testing.
Assessment of the fair value of the assets and liabilities acquired in business combinationsExpected cash‑flow forecasts of the acquired business, and models for calculating the fair value of the acquired items and their depreciation and amortization periods.
Impact on the balance of assets and liabilities acquired and the depreciation and amortization in the statement of income.
Assessment of the net realizable value of inventoryFuture selling price and expected replacement price when used as the best available evidence for realizable value.
Decrease in the carrying value of the inventories and the results of operations accordingly.
Concessions, permits and business licenses
Forecast of obtaining renewed concessions, permits and business licenses which constitute the basis for the Company's continued operations and /or the Company's expectations regarding the holding of the operating assets by it and / or by a subsidiary until the end of their useful lives
Impact on the value of the operation, depreciation periods and residual values of related assets.
See Note 20 regarding contingent liabilities
Mineral reserves and resource deposits
Quantities and qualities estimates of mineral reserves and resource deposits are based on engineering, economic and geological data that is compiled and analyzed by the Company’s engineers and geologists.
Impact on the useful life of the assets relating to the relevant activity.

177

 
Principal Capital Expenditures and Divestitures
 
ICL had cash capital expenditures of $572 million, $457$611 million and $632 $626million for the years ended December 31, 2018, 20172021 and 2016,2020, respectively. The aboveThese capital expenditures comprise of investments in fixed and intangible assets.assets.
 
ICL’S principal capital expenditures since January 1, 2016over the last three years have consisted of work on the following main projects:
 
Construction work with respect to a new power station at Sodom. The cogeneration plant has the capacity to generate 230MW and 330 tonnes/hour of steam and is reducing ICL's carbon footprint. As of December 31, 2018, the plant was operational. The Company intends to operate the station concurrently with the existing power station, which will be operated on a partial basis in a "hot back up" format, for production of electricity and steam.
Consolidation of production site and expanding logistic capacity in Spain. A closure of a mine and processing plant, in parallel to a development of an adjacent mine and processing plants through a capacity increase of the remaining mine up to about 1.3 million ton KCl /year and surrounding logistics infrastructures. The investment includes a tunnel that will connect the mine to the surface plants through conveyor belts, as well as a new port loading bay facility at Barcelona.
Raising the coastal dykes of the evaporation ponds at the Dead Sea. The objective of the project is to protect the hotels, which are located on the Western coast of Pond 5 from flooding due to a rise in water levels in the evaporation pond, and until the harvest project (see below) will commence operations. The project is managed by the governmental Dead Sea Protection Company, and ICL is participating in 39.5% of its funding.
New pumping station (P-9)P-9 Pumping Station in Sodom.Due to the receding water level in the Northern basin of the Dead Sea, the water line is receding from the current pumping station and construction of a new pumping station is therefore necessary. The new P-9 pumping station will serve as the main brine intake station for pumping brine from the Dead Sea to the coastal transmission system. The project consists of a sea base for the pumps, a bridge to the shore, a shore base, delivery pipes and an open canal.The new P-9 pumping station commenced its operation in January 2022.
New alternative-protein fiber production facility. As part of ICL’s efforts to expand its global Food Specialties portfolio, focusing on the development of healthier and more sustainable food products, in December 2021, the Company launched its new 10,000-square-foot alternative-protein fiber production facility in St. Louis, USA. The new facility will produce, at full capacity, more than 15 million pounds of plant-based protein fibers to be used in the production of meat substitute products sold by food companies, food-service distributors, restaurants and grocery chains.
New white phosphoric acid (WPA) facility in YPH. In 2017,our subsidiary YPH in China, we are expanding production of specialty phosphate solutions, among other things, by the Board of Directors approved an investment in construction of the P-9 pumping station.  In 2017a white phosphoric acid (WPA) facility, which commenced its operation in 2021. The new WPA facility will add up to 70 thousand tons of food grade acid production capacity, once fully ramped-up. The facility produces qualified commercial food-grade acid quantities and 2018, DSW signed agreements with several execution and infrastructure companies, in a total amount of $160 million (out of the total project cost of about $250 million), for construction of the P-9 Pumping Station. The P-9 Pumping Station is expected to commence its operation during the year 2020.strengthen our phosphate specialties operations and enable additional diversification into higher value-added products.
 
Salt harvesting in the Dead Sea. A project aiming to keepprovide a constantpermanent solution for raising the water level in Pond 5 that compliesand stabilizing of the water therein at a fixed level by harvesting of the salt from this pond and transferring it to the Northern Basin of the Dead Sea. According to the agreement with the Israeli regulatory requirements of 15.1m, through dredginggovernment, the salt settlement in the pondplanning and transporting it for submergence in the Dead Sea. ICL's share in the project's funding is 80%. In October 2017, ICL signed a 12-year agreement that the cost of which for ICL is $280 million, for execution of the first stageSalt Harvesting Project will be performed by DSW. The Company will bear 80% and the state of Israel will bear 20% of the costs of the Salt Harvesting Project. However, the State's share will not exceed NIS 1.4 billion. The salt harvesting project with Holland Shallow Seas Dredging Ltd., which includes, among others,dredger, as part of the construction of a special dredger that is designed to execute the salt harvesting. The dredger is expected to enter into service towardsSalt Harvesting Project, commenced operation at the end of 2019.2020.
 
Raising the coastal dikes of evaporation pond 5 at the Dead Sea. The objective of the project was to protect from structural damage to the foundations and the hotel buildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructure located along the western shoreline of the Pond. The project was implemented by the Government of Israel, through the Dead Sea Preservation Government Company Ltd., together with DSW (who financed 39.5% of the project's cost). The construction work with respect to the hotels' coastline was, the Dead Sea Preservation Government Company Ltd. is conducting elevation work in the intermediate area between the two hotel complexes. As the maximum height of the level of the solutions (15.1 meters) was reached at the end of 2021, from 2022 onwards, the solutions' volume in Pond 5 will be preserved by way of harvesting the salt as part of the Salt Harvesting Project.
178
ICL Group Limited 191

Consolidation of production sites and the ramp project in Spain. The Company consolidated its activities into one site by means of expanding the Suria production site and discontinuing the mining activity at Sallent. In 2018,addition, in 2021, we successfully completed the main capital investments (CAPEX) includedexcavation of the ramp connecting the Cabanasses mine with the Suria plant, including the installation of operational equipment and infrastructure, as well as an upgrade of the mine's surrounding logistics infrastructures. The consolidation of the potashfacilities and the ramp project are expected to increase our production capacity to an expected annual running rate of approximately 1 million tons by the second half of 2022, while lowering cost per ton.
New production capacity of TBBA in Spain (mine, logisticsNeot Hovav. In the face of growing demand for TBBA and port), constructionthe signing of several long-term strategic agreements, the Company is working to increase its production capacity. Accordingly, the Company has built a phosphogypsum pond in ICL Rotem (pond 5), raisingnew facility to increase its TBBA production capacity, which has operated at full capacity since the coastal dykes in the evaporation ponds, as well as investment in the new power station in Sodom, commencementbeginning of construction of the new pumping station (P-9) in the northern basin of the Dead Sea, the salt harvesting project in the Dead Sea and Clean Air Act related projects in Israel.2021.
 
In 2019addition, in 2021, ICL entered into the Company's plan isfast-growing EV market segment through the sale of phosphate-based raw materials for the production of LFP batteries in China and expects to focus on continuinggrow that business in the development of itscoming years, by increasing production capacity, in Spain, the new pumping station (P-9) in Sodom, Clean Air Act related projects in Israelglobal R&D collaborations and the salt harvesting project in the Dead Sea. In addition, the Company will be investing in a new production capacity of white phosphoric acid as part of its partnership in China (YPH).by moving downstream through innovative solutions.
 
The Company finances its capital expenditures from cash flows from operations and from credit facilities.
 
ICL’s integrated business model is based on its unique access to essential minerals that support its specialty downstream activities – with the focus on crop nutrition and industrial markets. Our model creates significant operational synergies, which derive from the combination of our attractive assets and broad value‑added solutions. In 2018
ICL launched its “Business Culture of Leadership” strategy, focused on enhancing market leadership across its three core mineral value chains of bromine, potash and phosphate, as well as realizing the growth potential of Innovative Ag Solutions. As part of the Company's strategy to obtain leadership positions in all its activities and given ICL’s integrated business model we are constantly considering measures, including divestiture opportunities, with respect to our low synergy businesses and businesses where we cannot be the market leader. ICL is constantly monitoring the competitive environment and will continue to seek ways to adhere with its strategy.Group Limited 192
In December 2017, the Company completed the sale of its holdings in IDE Technologies Ltd., for net proceeds of $168 million. in March 2018, the Company completed the sale transaction of the Fire Safety and Oil Additives businesses, for a total consideration of $1,010 million, of which $953 million is in cash and $57 million is in the form of a long-term loan to a subsidiary of the buyer. Furthermore, in July 2018, the Company completed the sale of the assets and business of its subsidiary, Rovita, for no consideration.

179

 
C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.


Research and development
 
ICL’s R&D and Innovation (RD&I) activities are part of itsour global strategic plan.plan and include product, formulation, and process developments. The activities include both internal research and joint activitiescollaborative research with a wide range of universities, research institutes, and start-ups along with other long‑term innovative activities. ICL’s R&Dstart-ups. Our RD&I is aimed towards presentcurrent and future market and customer needs and focuses onin addition to identifying additionalnew uses for our core minerals and derivatives. The Company’s core RD&I activities support each of our business segments, while the minerals in uselonger-term strategic projects, digital platforms, and their derivatives. technological solutions for farmers and agronomists are coordinated at the corporate level.
 
Fields of R&DRD&I include:
 
Advanced crop nutritionNext Generation Fertilization: bio/no bio degradable coating;nutrient use efficiency, biodegradable coatings; nutrient sensing; growth enhancers (bio/non bio stimulants); N fixation.enhancers; nitrogen fixation and soil health.
 
Advanced
In 2021, we acquired Fertiláqua, one of Brazil's leading specialty plant nutrition companies, and the South American Plant Nutrition business of ADS. These acquisitions helped to establish ICL as the leading specialty plant nutrition business in Brazil and allows us to offer a broad range of solutions for plant nutrition and stimulation, covering all key Brazilian crops. The product portfolio includes enhanced efficiency fertilizers and controlled-release fertilizers, soil and foliar micronutrients, secondary nutrients, bio-stimulants, and adjuvants. In addition, the two companies provide us with significant R&D knowledge and capabilities which are being used to supplement our existing R&D infrastructure.
Food Technology: texture improvement, stabilization, salt reduction, shelf-life extension and alternative proteins.
E-mobility/Sustainability: energy storage; hydrogen carriers for fuel cells; lithium battery recycling.
Novel Materials: energy storage and low energy consumption applications; construction andflame retardants; paints & coatings additives; flame retardants; biocides; circularbiocides.
Circular economy – "from: waste to product" concept.product; recycling; efficiency improvement.
 
We proactively lookIndustry 4.0:  IOT in manufacturing, safety and environment; machine learning and artificial intelligence for open innovation platforms with research institutes, academia, startupsmanufacturing optimization and others. In 2018, the Company significantly strengthened its core area research activities with third parties. The Agronomic research collaboration between ICL and the Volcani Institute (CPFN), which is based in Gilat in the southern part of Israel, executed 21 active projects in addition to field trials and agronomic workshops. The activities of ICL Innovation, which focuses mainly on high‑risk technologies in the initial stages of development, has 22 running projects, which are done in collaboration with partners from the academy and/or industry. YPRTECH, our JV in China, is running 10 projects for new products and technologies, based on Phosphor derivatives.product development.
 
The CTO office leads Digital Agriculture:
ICL’s Technology Roadmap, which is drivendigital platform continues to evolve in our mission to integrate multiple precision-ag technologies (sensors, imagery, and others) with additional agronomical research data from scoutingmultiple partners.
Digital technology developed by ICL digests data from multiple sources, automatically aggregating, standardizing and enriching it, thus creating one harmonized data lake with strong AL/ML engines. Those powerful engines enable us to deploy advanced data-driven solutions that drive real time agronomic decisions making like increasing crop yields and farmer's profitability. An increasing number of global trends combinedpartners are joining our revolutionary digital platform including leading global academic institutions and multinational agriculture companies solidifying this strong digital foundation with ICL's constant developmenthigh quality and improvement needs.highly actionable agronomic data.
 
The defined goalsThese efforts enable ICL to leverage its digital platform and data driven solutions to create an agro-professional community that enables sharing of our researchinformation & knowledge between all parties: growers and development operations are:agro-professionals, dealers, retailers and food producers to extract the most value from agriculture.
 

1.          Implement an innovation thinking in the company and encourage ideation processes;ICL Group Limited 193
2.          Focus on balanced portfolio based on time to market, value and risks;
3.          Increase the Company’s new products ratio;
4.          Continuous process improvement in the Company’s manufacturing facilities by reducing production costs, operating optimization and reduction of waste streams and environmental impacts based on circular economy environment;
5.          Cultivating the R&D human resources and the technological leadership;
6.          Investing in external collaboration for achieving new ideas and/or know-how knowledge; and
7.          Joining consortiums for external funding and backward integration over the entire project value-chain, in order to reduce risks and enhance controls.

180


Below are the main areas of the R&D activities by segments:
 
Industrial Products
 
New flame retardants for printed wire boards: commercialization of new phosphorus-based solutions for PWB according to emerging demands from the market, for example, Polyquel® P100. This is a polymeric phosphorus-based flame retardant active ester curing agent for epoxy laminates with superior performance. It is in the market development stage.
Flame retardants for polyurethanes: development of new phosphorus-based solutions and integrated phosphorus/bromine solutions as flame retardants for the polyurethane market (flexible and rigid foam). For example, our VeriQuel® F series, a new flexible phosphorus based active flame retardant for flexible polyurethane being launched in the market, and VeriQuel®R100, new reactive phosphorus-based flame retardant for rigid insulation foams in building and construction markets.
Energy storage: continued development of bromine-based energy storage solutions for Br-battery companies, using diverse compounds, and commercialization of the new bromine based electrolyte.
Biocides: continued development of new materials for water treatment and prevention of biofilm in industrial water-cooling systems and pulp & paper plants. Promotion of the Bactesperse® technology for pulp & paper, Reverse Osmosis membranes & cooling towers.
Phosphorus based products: Development of new phosphorus-based solutions for hydraulic fluids.
 
A new product, Bromoquel®, for safer handling of bromine was developed and implemented in the plants.

·
New Flamefire retardants for Printed wire boards: Development of new phosphorus‑based solutions for PWB according to new emerged demands fromthe textile market were developed and arein the market development stage e.g. Polyquel® P100. This is a polymeric halogen free flame-retardant active ester curing agent for epoxy laminates with superior performance., Alexiflam NF-LS product.
A new product to treat uncontrolled Chlorine release is being developed and reached a pilot testing stage.
 
·Brominated polymeric flame retardants: Development of the next generation polymeric/active brominated flame retardants which are more environmentally friendly and future substitutes for threatened products.
Magnesia based products: Development of formulations to fulfill unmet needs in the markets such as eliminating Aluminum salt in deodorants, for example, CareMag® D, which is already in the market with several leading international companies.

Knowledge transfer and technical support for the manufacturing of Lopon® ST (a stabilizer used as an additive in silicate-based paints) at our Bitterfeld plant (Germany). First production runs are expected during January 2022.
 
·Flame retardants for polyurethanes: development of new phosphorus‑based solutions and integrated phosphorus/bromine solutions as flame-retardants for the polyurethane market (flexible and rigid foam). VeriQuel F100 is a new flexible halogen free active flame retardant for flexible polyurethane being launched to the market.
Additional products were developed for baby care applications (CareMag® B) and a cosmetic face mask (CareMag® M).
ICL Group Limited 194



Use of artificial intelligence for identifying new applications for bromine and bromine derivatives.
 
·
Textiles: continuing development of TexFRon®, a series of textile flame‑retardant products. The series includes TexFRon 9001, the FR acrylic binder TexFRon P and the low-melt polymeric TexFRon 4002. Additionally, it includes TexFRon AG and TexFRon 5001, both are non-halogen flame retardants. TexFRon®4002 is an effective and environmentally friendly solution for diverse textile products, replacing DECA and offering a transparent and laundry‑durable solution that is not currently available in the market. In addition, unique ATO-free (Antimony Trioxide) flame‑retardant systems were introduced to the market. These green solutions created interest among the Company's customers and are being commercially evaluated; TexFRon 4002 and TexFRon 5001 are Oeko-Tex® certified.
Support of production: improving product quality, production costs, energy-saving, recycling and waste treatment. Changing and improving processes while using the principles of green chemistry.
 
·Energy storage: continued development of bromine‑based energy storage solutions for Br-Battery companies, using diverse compounds.
Implementation of a new modified process for TBBA production was assimilated in the plants.
 
·
Ecological research to reduce emissions:  e.g. wastewater management, air emissions and solid/organic waste reuse.
Troubleshooting and equipment maintenance cycle improvement using better construction materials preventing accelerated corrosion, wear & tear and equipment adaptation.
 
·Biocides: continued development of new materials for water treatment and prevention of biofilm in industrial water cooling systems and pulp & paper plants.
A special emphasis is given to research in the sustainability field on developing recycling technologies for all kinds of materials, e.g., polymers and rare earth metals, etc., and on the recycling and use of side streams/by-products.
 
·Phosphorus‑based products: development of new phosphorus‑based solutions for hydraulic fluids.
Total R&D expenses by the Industrial Products segment in 2021 amounted to about $23 million.
 
·Magnesia-based products: development of formulations in order to fulfil unmet needs in the markets, such as replacing aluminum products in deodorants and zinc oxide in several consumer products.  
Potash
 
·
Support of production: improving product quality, production cost, energy saving, recycling and waste treatment. Changing and improving processes while using the principles of green chemistry.  
Efficiency activities and synergy measures to increase potash production and reduce its cost per ton at potash and magnesium plants in Sodom.
 
·
Trouble shooting and equipment maintenance cycle improvement using better construction materials preventing of accelerated corrosion, wear and tear, and equipment adaptation.
Advancement of research regarding environmental protection, including development of methods for treating and reducing effluents.
 
The total Industrial Products segment’sAnalysis of alternative methods for increasing the production capacity of carnallite at our evaporation ponds.
Implementation of the R&D department recommendations designed to clear bottlenecks, focused on flotation and crystalizing areas, for the purpose of increasing production capacity at ICL Iberia.
Total R&D expenses in 20182021 in the Potash segment were about $21 million.$5.6 million.
 

181

Phosphate Solutions
 
Potash

·Activities of efficiency and synergy measures in order to increase potash production and reducing cost per tonne at the potash and magnesium plants in Sodom;
·Advancement of research regarding environmental protection, including development of methods for treating and reducing effluents;
·Analysis of alternative methods for increasing the production capacity of carnallite at the evaporation ponds;
·Implementation of the recommendations of the R&D department designed to clear bottlenecks, focused on the flotation and compaction areas, with the purpose of increasing the production capacity in Spain;
·PotashpluS compaction – commissioning of operation at the compaction facility and optimization of the compaction process parameters;
·PotashpluS granulation – development is carried out at IFDC (International Fertilizer Development Center) and is currently at the stage of increasing production capacity to 400 kg per hour. This being a preliminary stage prior to development unto production on a full industrial scale;
·Granular Polysulphate – optimization of the process on two aspects: output and quality, as well as implementation of a new organic coating.
The total Potash segment's R&D expenses in 2018 were about $8 million.
182

Phosphate Solutions
·The segment continues to check the adaptation of various potential types of phosphate rock (bituminous and brown phosphates) for the production ofto produce phosphoric acid and its downstream products as part of an effort to utilize and increase existing phosphate reserves. In 20192022, the segmentCompany will further analyze theseadditional types of phosphate including R&D, pilots, plant testing activities, and itsother economic feasibility.feasibility assessments.
 

·Improvement of processes and reduction of costs in the production plants;
·Research regarding environmental protection, including the development of methods to treat and reduce effluents and applications for treating and reducing effluents;Phosphogypsum uses.
Integration of secondary source Phosphate technologies (circular economy) - immediate uses in our production facilities in Europe and development of future sources for our fertilizer products, including technology road map for recycle and recovery of Phosphorous and nitrogen from secondary sources to transform our products into sustainable fertilizers.
 
·Development of applications for water conservation and improving availability of the fertilizers around the root;
Development of fertilizers with higher agronomic nutrient efficiency (NUE).
 
·Development of a new PK fertilizer fully soluble;
Development of a new PK fertilizer that is fully water soluble.
ICL Group Limited 195


R&D Food Specialties supported further growth in the traditional markets and application areas of Meat/Poultry/Seafood (MPS), Dairy, and Bakery by expanding its footprint in emerging markets.
 

·
ImplementationContinued diversification and development of software to track global product life cycle to support global visibility of projects and formulas
·
The R&D unit continuously looks out for new areas of innovation, for example to translate megatrends like sodium reduction with the target to create a full product portfolio based on ICL’s mineral tool box. This trend is relevant for processed meat applications. Furthermore, the segment participates in the trend of meat substitutes to complement a competitive product portfolio for classical phosphate customersmeat substitutes. Several patent applications were filed in 2021 to protect ICL's proprietary technologies. The newly developed continuous process to produce vegan protein fibers will be implemented in a dedicated US plant, which started to operate in Q4 2021. The product is suited for tender white meat imitations for chicken and fish replacements; the meat, poultry and seafood industriesemulsion technology was successfully transitioned from vegetarian to vegan to emulate hotdogs, cold cuts, etc. The award-winning technology for ROVITARIS® textured proteins was further improved in terms of quality to drive a global roll-out outside the US.
The established dedicated Front-End Innovation group screened over 100 technologies and start-ups within the first year. The corporate incubator platform Planet ICL invested in Protera Bioscience whose focus is the discovery and upscaling of protein-based functional ingredients.
 
·
Successful launch of the phosphate-based additive HALOX® CW-314 into the paints & coatings market. The additive is enhancing the infrared (IR) reflectance and thermal emissivity of elastomeric roof coating while maintaining the dirt pick-up resistance (DPUR) and prevention of mildew growth; and
Total R&D expenses in the Phosphate Solutions segment in 2021 were about $8 million.
 
·
At the end of 2018, the R&D departments for food specialties and industrial phosphate applications were integrated into one support platform. The technical capabilities and the project portfolio were streamlined to fulfill the actual business needs and to realize financial synergies.
Innovative Ag Solutions
 
The total PhosphateInnovative Ag Solutions segment'ssegment promotes innovation and development of new products and services.
Main R&D targets:

Development of controlled release fertilizers with a faster biodegradable coating to satisfy the upcoming requirements from the EU Fertilizer Product Regulation in July 2026.
Development of new biostimulant products and fertilizer products with embedded biostimulant to boost their performance.
Improvement of liquid and fully soluble fertilizers.
Development of products which improve water use efficiency.
Improvement of micronutrients solutions and sulfur fertilizer solutions
Development of tailor-made formulations based on customer requirements.
Total R&D expenses in 2018 were about $12 million.
Innovative Ag Solutions
The IAS segment will function as ICL’s innovative arm, promoting innovation, developing new products and services as well as digital platforms and technological solutions for farmers and agronomists.
The segment will drive collaborations with innovative technologies and its goal is to introduce and integrate new digital solutions for the agricultural world by utilizing, among other things, external knowledge and platforms.
183

Additional targets:
·Improvement of product portfolio with new product formulations; Mainly tailored formulations on customer demand
·Development of improved production options for HiPeaK;
·Development of controlled‑release NPK fertilizers with a quicker fully degradable coating;
·Development of applications for water conservation and improving availability of the fertilizers around the root; and
·Initiation and development of new technologies to increase nutrient use efficiency.
The total Innovative Ag Solutions segment’s R&D expensessegment in 20182021 were about $11$13 million.

ICL Group Limited 196
184

Circular Economy
For the past few years, we have engaged in the Circular Economy. For further information see “Item 4 - Information on the Company— Environment Social and Governance Practices— Circular Economy”.
Intellectual property
 
The Company believesWe believe that itsour intellectual property is crucial for protecting and developing itsour business activities.ICL has about 850770 granted patents in various countries.countries and 220 patent families.
 
ICLThe Company also has over 3,000 registered trademarks worldwide, including inter-alia:
 
·Fyrol® - a brand name for a range of phosphorus-containing flame retardants targeting flexible and rigid polyurethane foam applications.
 
·Joha® - a global trademark for dairy specialties, which specializes in emulsifying salts for processed cheese.
 
·Merquel® - a line of inorganic brominated salts which can be used to control mercury emissions from coal power plants.
 
·Osmocote® - a leading brand in the area of controlled released fertilizers which uses innovative technologies and is used globally by container nursery stocks, pot- plant growers and more.
 
·Peters® - a brand of water solublePeters® - a brand of water-soluble fertilizers, specifically designed for bedding-, pot- and container nursery plants.
 
·Tari® - a brand in the meat industry as well as in the artisan business which focuses on the production and processing of meat products with functional additives, spices and flavors.
 
·Brifisol® - a global brand in the meat and seafood industries, which concentrates in improving texture by adding cryoprotectant for frozen food products such as meat, shrimp, fish filets and more.
Brifisol® - a global brand in the meat and seafood industries, which concentrates in improving texture by adding cryoprotectant for frozen food products such as meat, shrimp, fish filets and more.
Rovitaris® - a brand name for plant-based meat alternatives that are virtually indistinguishable from their traditional meat counterparts.
 
We do not believe that the loss of any single or group of related patents or trademarks would have a material effect on our operations or our financial results.
 
ICL Group Limited 197


D. TREND INFORMATION
 
Trend information is included throughout the other sections of “Item 5 - Operating and Financial Review and Prospects— A. Operating Results”. In addition, the fluctuations in the operating results may continue in the upcoming quarters. Specific material drivers of these trends are identified in the discussion above with respect to the years ended December 31, 2018, 20172021 and 2016.2020. Seasonality of our business is included in “Item 4 - Information on the Company— B. Business Overview”.
 
E. OFF-BALANCE SHEET ARRANGEMENTSCRITICAL ACCOUNTING ESTIMATES
 
AsThe preparation of December 31, 2018, we had no material off-balance sheet arrangements, other thanfinancial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the amounts reported as operating lease obligations in “Item 5 – Operating and Financial Reviews and Prospects - .F - Contractual Obligations”application of accounting policies and the reported amounts describedof assets, liabilities, income and expenses. Actual results may differ from these estimates.
The evaluation of accounting estimates used in the preparation of ICL’s Financial Statements requires the Company's management to make assumptions regarding interpretations of laws which apply to the Company, circumstances and events involving considerable uncertainty. The Company's management prepares the estimates based on past experience, various facts, external circumstances, and reasonable assumptions relating to the pertinent circumstances of each estimate. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
Note 15H (2)2 to our Audited Financial Statements.Statements contains a table that sets forth information about assumptions made by ICL with respect to the future and other reasons for uncertainty regarding to estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the next financial year.
 
ICL Group Limited 198

185

  F. CONTRACTUAL OBLIGATIONS

The following table presents information related to our contractual obligations, including estimated interest payments, as of December 31, 2018.
As at December 31, 2018
Total
amount (2)
12 months
or less
1-2
years
3-5
years
More than
5 years
$ millions$ millions$ millions$ millions$ millions
Credit from banks and others (not including current maturities) 556 556---
Trade payables 715 715---
Other payables 330 330---
Operating lease obligations 359 50 45 103 161
Purchase obligations(1) 3,033 646 192 606 1,589
Employee Benefits 526 25 80 126 295
Long-term debt and debentures 2,855 152 453 1,084 1,166
Total 8,374 2,474 770 1,919 3,211

(1)This information excludes agreements in the ordinary course of business for purchases within the next twelve months.
(2)
The amounts presented, including long-term items, are presented in nominal values (and include estimated interest, so that they differ from their carrying amount).
As at December 31, 2018
Total
amount
12 months
or less
1-2
years
3-5
Years
More than
5 years
$ millions$ millions$ millions$ millions$ millions
Financial liabilities – derivative instruments utilized for economic hedging     
Foreign currency and interest derivative instruments 16 16---
Derivative instruments on energy and marine transport 5 4 1--
  21 20 1--

G. SAFE HARBOR
The safe harbor provided in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Exchange Act, or the statutory safe harbors, shall apply to forward‑looking information provided pursuant to ”Item 5. Operating and Financial Review and Prospects—F. Contractual obligations” above. For our cautionary statement on the forward-looking statements in this Annual Report, see ”Special Note Regarding Forward-Looking Statements”.
186


Item 6 – DIRECTORS, SENIOR MANAGEMENT ANDND EMPLOYEES


A.DIRECTORS AND OFFICERS
 
The following table lists the names and ages of our directors as atof the publication date of this Annual Report. The mailing address of our directors is c/o Israel ChemicalsICL Group Ltd., 23 Aranha Street, Millennium Tower, Tel Aviv, 6120201, Israel.Israel.
 
NameAgeCommencement date as directorDirector QualificationFinancial ExpertiseMembership in Board Committees
 Under the Israeli Companies LawUnder the NYSE rulesUnder the Israeli Companies LawUnder the SEC rules
Yoav Doppelt (Executive Chairman of the Board)5312/18 and as CoB since 07/19(3)--Operations Committee (Chair)
Aviad Kaufman51March 2014(3)Financial Expert-Financing Committee (member)
Avisar Paz65April 2001(3)Financial Expert-
Financing Committee (member)
Operations Committee (member)
Lior Reitblatt64November 2017Independent DirectorIndependent Director
Financial Expert
 
Audit Committee Financial Expert
Audit & Accounting Committee (member)
Compensation Committee (member)
Financing Committee (member)
Operations Committee (member)
Ovadia Eli76August 2011(3)--
Safety, Environment, Climate & Public Affairs Committee (member)
Operations Committee (member)
Reem Aminoach60March 2017(4)Independent DirectorFinancial Expert-
Safety, Environment, Climate & Public Affairs Committee (member)
Operations Committee (member)
Sagi Kabla45February 2016(3)Financial Expert-
Financing Committee (Chair)
Safety, Environment, Climate & Public Affairs Committee (member)
Operations Committee (member)
Tzipi Ozer Armon55January 2020Independent DirectorIndependent DirectorFinancial Expert--
Gadi Lesin54March 2021Independent DirectorIndependent DirectorFinancial ExpertAudit Committee Financial Expert
Audit & Accounting Committee (member)
Safety, Environment, Climate & Public Affairs Committee (member)
Operations Committee (member)
Dr. Miriam Haran(1)72July 2021External DirectorIndependent DirectorFinancial ExpertAudit Committee Financial Expert
Audit & Accounting Committee (Temporary Chair until 05/22)
Compensation Committee (Chair)
Safety, Environment, Climate & Public Affairs Committee (Cahir)
Dafna Gruber(2)
 
56January 2022External DirectorIndependent DirectorFinancial ExpertAudit Committee Financial Expert
Audit & Accounting Committee (will become Chair as of 05/22)
Compensation Committee (member)

ICL Group Limited 199


NameAgeCommencement date as director
Johanan Locker62April 2016 and as Chairman of the Board since August 2016
Aviad Kaufman48March 2014
Avisar Paz62April 2001
Lior Reitblatt61November 2017
Nadav Kaplan(1)
73August 2018
Ovadia Eli74August 2011
Reem Aminoach58March 2017
Ruth Ralbag58January 2018
Sagi Kabla42February 2016
Yoav Doppelt(2)
50December 2018

(1)On August 20, 2018, the annual General MeetingDr. Miriam Haran's first 3-year tenure commenced as of the Company'sdate of approval of ICL's shareholders appointedin July 2021. Dr. Haran replaced Dr. Nadav Kaplan which served as an external director until August 19, 2021. For additional information about Dr. Haran, refer to her bio below.


(2)
Ms. Dafna Gruber's first 3-year tenure commenced as of the date of approval of ICL's shareholders in January 2022. Ms. Gruber replaced Ms. Ruth Ralbag who served as an external director until November 3, 2021. Ms. Ruth Ralbag notified the Chairman of ICL's Board of Directors in October 2021 of her decision to resign from her position as an external director of the Company, for a first three-year termBoard, following her recent appointment to the position of office.CEO of Clalit Health Services in Israel, which will require all of her time. For further detailsadditional information about Dr. Kaplan, seeMs. Gruber, refer to her bio below.
 

(2)(3)
On December 12, 2018, the Board of Directors appointed Mr.Messrs. Yoav Doppelt, as a directorAviad Kaufman, Sagi Kabla, Avisar Paz and Ovadia Eli are not considered independent directors under the above rules by virtue of the Company, until the next annual General Meeting. For further details about Mr. Doppelt, see below.
(3)On January 10, 2018, Mr. Shimon Eckhaus ceased serving as a director ofpositions they hold, or previously held, with our controlling shareholder or in the Company.
 

(4)On February 13, 2018,
Mr. Geoffery Merszei ceased servingReem Aminoach meets all qualifications under the Companies Law for Independent Director but was not formally classified as a director of the Company.one.
 
(5)On February 26, 2018, Mr. Yaacov Dior ceased serving as an external director of the Company.
(6)On August 29, 2018. Dr. Miriam Haran ceased serving as an external director of the Company.
187


Dr. Nadav Kaplan and Ms. Ruth Ralbag are “external directors” pursuant to the Israeli Companies Law, 5759-1999 (the “Companies Law”), as described underFor further details see “Item 6 - Directors, Senior Management and Employees — C. Board Practices — External Directors”.
 
Mr. Lior Reitblatt is an independent director pursuant to the Israeli Companies Law.
ICL Group Limited 200

 
Ms. Ruth Ralbag, Messrs. Nadav Kaplan, Reem Aminoach
Yoav Doppelt. Mr. Doppelt serves as the Chief Executive Officer of Israel Corp. Previously Mr. Doppelt served as the Chief Executive Officer of Kenon Holdings Ltd., a global company (NYSE: KEN), and Lior Reitblatt are independent directors underExecutive Chairman of IC Power Ltd., a power generation company, from March 2014 to September 2017. Prior thereto, Mr. Doppelt was the rules applicable to U.S. companies listed on the NYSE. Messrs. Johanan Locker, Avisar Paz, Aviad Kaufman, Sagi Kabla, Ovadia Elifounder and Yoav Doppelt are not considered independent directors by virtueChief Executive Officer of the positions they hold with our controlling shareholder orOfer Group’s private equity fund where he was involved in numerous investments in the Company; these directors areprivate equity and technology sectors. Mr. Doppelt has served as the Chief Executive Officer of XT Investments (formerly known as XT Capital and Ofer Hi-Tech) since 2001. Mr. Doppelt has actively led several public offerings of equity and debt offerings in the US and Europe, and he has extensive operational and global business experience with growth companies. Mr. Doppelt also not considered independent directors under Israeli law due to their relationship with our controlling shareholder or with the Company.
Johanan Locker. Mr. Locker serves as chairman of the board of the Soroka Medical Center Friends’ Association. Prior to joining the Board, Mr. Locker was the CEO of Clal Heavy Industries and Real Estate Ltd. (2014-2016). He served as Chairman of the Boards of several companies, including Beit Shemesh Engines, Hadera Paper, the Golf & Co. Group and Clal Sun. He was also a Board member at Mashav Initiating and Development, Taavura Holdings and Jafora-Tabori. Mr. Locker servedOPC Energy Ltd. (TASE: OPC), as strategic consultant of Clal Industries Ltd. (2013-2014) and as the Military Secretary to the Prime Minister of Israel (2010-2012). Mr. Locker, a Major General (reserve), held various command positions in the Israeli Air Force, among them, IAF Chief of Staff, deputy IAF commander (2008-2010), Head of Air Division (2005-2008), Commander of the Hatzerim IAF Base (2001-2004) and Head of the Planning Division (1997-2001). Mr. Locker held several positions in the Operations Department of the Israeli Air Force (1994-1996) and servedwell as a fighter squadron commander (1991-1994).director of Zim Integrated Shipping Services Ltd and of Melisron Ltd. Mr. LockerDoppelt holds a BA degree in economicsEconomics and business administration (with honors)Management from the Bar Ilan UniversityTechnion – Israel Institute of Technology, and an MA in public administrationMBA degree from the Kennedy School of Government at Harvard University.Haifa University.
 
Aviad Kaufman. Mr. Kaufman is the chief executive officerChief Executive Officer of Quantum Pacific (UK) LLP,One Globe Business Advisory Ltd, the chairman of the board of Israel Corporation Ltd., and a board member of Kenon Holdings Ltd., OPC Energy Ltd. and other private companies, each of which may be associated with the same ultimate beneficiary, Mr. Idan Ofer. Previously, heFrom 2017 until July 2021, Mr. Kaufman served as chief financial officerthe Chief Executive Officer of Quantum Pacific (UK) LLP (2008-2017)and from 2008 until 2017 as Chief Financial Officer of Quantum Pacific (UK) LLP (and its predecessor Quantum Pacific Advisory Limited). He served as director of international taxation and held variousFrom 2002 until 2007, Mr. Kaufman fulfilled different senior corporate finance roles at Amdocs Ltd. (2002-2007). Previously, Mr. Kaufman held various consultancy positions with KPMG. Mr. Kaufman is a certified public accountant and holds a BABachelor’s degree in Accounting and Economics from the Hebrew University ofin Jerusalem (with honors)distinction), and an MBA majoringa Master’s of Business Administration in Finance from Tel Aviv University. University
 
Avisar Paz. Mr. Paz isserved as the Chairman of the Board of Directors of OPC Energy Ltd. until January 3, 2021. Previously, Mr. Paz served as the Chief Executive Officer of Israel CorporationCorp. and was previously Israel Corporation'sprior to that, as the Chief Financial Officer.Officer of Israel Corp. Mr. Paz serves as directorreceived a B.A. degree in various subsidiaries of Israel Corporation, including in Oil Refineries Ltd. Mr. Paz holds a BA in economicsEconomics and accountingAccounting from Tel AvivTel-Aviv University and is a Certified Public Accountantcertified public accountant in Israel.Israel (CPA).
 
Lior Reitblatt.Mr. Reitblatt is a Certified Public Accountant, and holds a BA in accounting and economics from Tel Aviv University and an MBA from the University of California, Berkeley. Until recently, Mr. Reitblatt served as CEOChief Executive Officer and Chairman of the Board of Super-Pharm (Israel) Ltd. Mr. Reitblatt has also previously served, among other things,positions, as Chairman of the Board of Life Style Ltd. and member of the board of Office Depot Israel Ltd.
188

Nadav Kaplan. Dr. Kaplan Mr. Reitblatt is the chairman of the board of ORAN Safety Glass, since 2008. He served as chairman of the board in 11 industrial companiesa certified public accountant, and was also a board member of 4 Israeli public companies. Dr. Kaplan held the military rank of Colonel (res.), served as a combat navigator in regular and reserve service (1964-1997). Prior to his retirement (1986), he was the head of the Planning Division of IAF. Dr. Kaplan holds a BA degree in Accounting and Economics from Tel Aviv University and Business Administrationan MBA degree from Bar Ilanthe University a Master of Science in Management from Massachusetts Institute of Technology (M.I.T) and Ph.D from Haifa University in Memory StudiesCalifornia, Berkeley.
 
Ovadia Eli. Mr. Eli isserved as the Chairman of the Board of Oil Refineries Ltd. HeLtd for two terms, the first from 1996 to 2003 and the second from 2015 to August 2021. Mr. Eli also served as Chairman of the Board of the Israel Airports Authority, Israel Military Industry (I.M.I), Shmanim Besisyim Haifa Ltd. and I.C.P.I. He wasMr. Eli served as a member of the BoardsBoard of Directors of Salt Industries Israel Ltd., Shaarei Ribit Ltd., Zim Integrated Shipping Services Ltd. and OPC Rotem Ltd. Mr. Eli holds a BA degree in educational counselingEducational Counseling and bible studiesBible Studies from the Haifa University and is a graduate of the Lifshitz Teachers College in Jerusalem.
 
ICL Group Limited 201

Reem Aminoach. Mr. Aminoach is a Certified Public Accountant, and holds a BA in accounting and economics, Tel-Aviv University (academic honors, Dean's honor list) and MBA in business administration, Tel-Aviv University.currently serves as director of Israel Aerospace Industries. Until recently, Mr. Aminoach served as the founding partner of the accounting firm Shtainmetz Aminoach & Co. In his military service, Mr. Aminoach, Brigadiera brigadier general, served as a member of the General Staff Forum of the IDF, Head of Budgets at the Ministry of Defense, financial advisorFinancial Advisor to the IDF Chief of Staff and Head of the IDF Budget Division. Previously, Mr. Aminoach served as director at Ofer Investments Ltd. and as director and Chairman of the Audit Committee at Zim Ltd., of the Israel CorporationCorp. group. Mr. Aminoach also served as a member of the Board of Governors of Hadassah Medical Center.
Ruth Ralbag. Ms. Ralbag has served as CFO of the Shaare Zedek Medical Center in Jerusalem since 2011, Mr. Aminoach is a certified public accountant, and previously served as Deputy Director of Medical Finance at the Tel Aviv Sourasky (Ichilov) Medical Center (2009-2011), Head of the Hospital Administration and Deputy Director General of Planning, Budget and Pricing at the Ministry of Health (2004-2009), VP and Head of Commercial and Retail Banking Division at FIBI (2001-2003). Ms. Ralbag also served, among other things, as Acting Chairperson of the Board of FIBI Mortgages Ltd. for a period of 4 years, Acting Chairperson of the Board of Atzmaut Mortgage Bank Ltd. for a period of 4 years, a Director at Sarel Ltd., a Director at ARAM Provident Fund and as an external director at Hachsharat HaYishuv Insurance Ltd. Ms. Ralbag presently serves, among other things, as an external director at Halman Aldubi Investment House Ltd. and Golf & Co. Group Ltd. Ms. Ralbag holds a BA degree in economicsAccounting and business administrationEconomics, Tel-Aviv University (academic honors, Dean's honor list) and an MBA degree in public policy, both from the Hebrew University in Jerusalem.Business Administration, Tel-Aviv University.
 
Sagi Kabla. Mr. Kabla is the Chief Financial Officer of Israel CorporationCorp. since December 2015. HeMr. Kabla serves as director in Bazan Groupof Oil Refineries Ltd and previously served as Senior Executive of Business Development, Strategy and IR inat Israel Corporation.Corp. Prior to joining Israel Corp. he, Mr. Kabla held various management roles inat KPMG Corporate Finance.Finance and M&A. Mr. Kabla holds an MBA (Finance)degree in Finance from COMAS and a B.A. degree in Economics and Accounting from Bar-Ilan University and washe is qualified as CPA (Isr.)a certified public accountant (Israel).
 
Yoav DoppeltTzipi Ozer-Armon.Mr. Doppelt Ms. Ozer-Armon serves as the Chief Executive Officer of Lumenis Ltd. Before joining Lumenis, she headed the Japanese market activities of Teva Pharmaceutical Industries Ltd. and served as Senior Vice President of Sales and Marketing at SanDisk. Previously, Ms. Ozer-Armon also served as VP & General Manager at MSystems. In addition to ICL, Ms. Ozer-Armon is a director at the Strauss Group Ltd., among others, ChairmanSimilarWeb and IACC. Ms. Ozer-Armon holds a BA degree, magna cum laude, in Economics, and an MBA degree in Finance and Marketing from Tel-Aviv University, and she is an AMP graduate of the Board of OPC energy Ltd. (TASE:OPCE) and a member of the Board of Directors of Zim Integrated Shipping Services Ltd. He previouslyHarvard Business School.
Gadi Lesin. Mr. Lesin served as President and CEO of Kenon HoldingsStrauss Group Ltd. (NYSE:KEN)("Strauss Group"), an international food and beverage company and the largest food company in Israel, from 2009 to 2018. Mr. Lesin successfully led the Strauss Group through a time of intense economic, global and social change. Under his leadership, the Strauss Group strengthened its international operations, more than doubled its equity value, and grew its profits significantly. Mr. Lesin currently serves as a director in ORIAN SH.M. Ltd. and as an Executive Chairman of ICpower Ltd. as well asexternal director in Electra Consumer Products, both companies listed on the Founder and CEO of the Ofer Group private equity fund.TASE. Mr. DoppeltLesin holds a BAbachelor's degree in economics andbusiness management from the FacultyTel Aviv College of Industrial Management at the Technion and an MBA degree from HaifaBen Gurion University.
 
Miriam Haran. Dr. Haran has been involved in environmental management and safety issues for over forty years in various key positions. Dr. Haran is currently serving as chair of Israel Resource Efficiency Center – a knowledge and consulting center for reducing the environmental impact of industry by streamlining raw materials, energy, water, etc. She is chair of the Weitz Center for Sustainable Development and a board member of M.A.I – a major Israeli recycling company of electrical and electronic waste as well as the chair of the Public Safety Committee in the Prime Minister's Office. Dr. Haran previously served as Director General, Deputy Director General and Chief Scientist of Israel’s Ministry of Environmental Protection, as well as the Head of Ono Academic College’s MBA Program in Environmental Management. Dr. Haran has served in numerous scientific, corporate, and public organizations. She was Chair of the Israel Consumer Council, Environmental Consultant, Board Member of The Environmental Services Company Ltd. (ESC), Board Member of BGN Technologies Ltd., and Member of the General Assembly of the Jerusalem Institute for Israel Studies. Dr. Haran was Senior Researcher at A.Y. Laboratories, Researcher at Unikoor Biotechnology, Researcher and Senior Lecturer at the Hebrew University, and Researcher at Rutgers University in Newark, New Jersey. Dr. Haran served as an external director of ICL between 2010-2018. Dr. Haran holds a B.Sc. in Natural Sciences from the Hebrew University of Jerusalem and a PhD in Organic Chemistry from Brandeis University.
189
ICL Group Limited 202


Dafna Gruber. Ms. Gruber currently serves as the Chief Financial Officer of Netafim Ltd., a precision irrigation solutions company. Prior to joining Netafim Ms. Gruber held Chief Financial Officer positions in various companies including Clal Industries from 2015 to 2017, Nice Systems Ltd. from 2007 to 2015, and Alvarion Ltd. from 1999 to 2007. Ms. Gruber currently serves as an external director or independent director of several public companies, including Nova Measuring Instruments Ltd, Tufin Software Technologies Ltd, Cognyte Ltd. and Cellbrite Ltd. Ms. Gruber is a certified public accountant and holds a BA degree in Accounting and Economics from Tel Aviv University.
 
The following table lists the names, ages and positions of our Executive Officers (who are not directors) as of the publication date of this report.Annual Report. The address for sending notices is c/o Israel ChemicalsICL Group Ltd., 23 Aranha Street, Millenium Tower, Tel Aviv, 6120201, Israel.
 
NameAgePosition
Raviv Zoller(1)
5558President & Chief Executive Officer
Anat Tal-KtalavAmir Meshulam(2)(1)
5045Senior Vice President, Global Internal Auditor
Anantha N. Desikan54Executive Vice President, ICL Chief Innovation and Technology Officer
Anat Tal-Ktalav53President, ICL Industrial Products Division
Charles M. Weidhas59Chief Operating Officer
Eli GlazerAviram Lahav(2)
62President, ICL Innovative Agro Solutions Division
Ilana Fahima(3)
53Executive Vice President, Global Human Resources
Kobi Altman50Chief Financial Officer 
Lilach Geva-HarelChris Millington(4)(3)
4253SeniorPresident, ICL Phosphate Specialty Solutions Division
Elad Aharonson48Executive Vice President, ICL Innovative Ag Solutions Division
Ilana Fahima56Executive Vice President, Chief People Officer
Lilach Geva-Harel45Executive Vice President, Global General Counsel
Meir Mergi
59President, Potash Division
Miri Mishor(2)5558SeniorExecutive Vice President, Global Information Technology
Noam Goldstein(2)
Nitzan Moshe
5854Executive Vice President, ICL Potash DivisionGlobal Operations
Ofer Lifshitz(2)
Noam Goldstein
6061President, ICL Phosphate Solutions Division
Rani Lobenstein47SeniorExecutive Vice President, Corporate Relations
Amir Meshulam(5)
42Senior Vice President, Global Internal AuditorOperational Excellence, Energy, and Innovation
_________________

(1)Mr. Raviv Zoller entered into office as CEO of the Company on May 14, 2018, replacing the Company's Acting CEO, Mr. Asher Grinbaum.
(2)Further to the structural adjustments of the Company's business segments (see Note 5 to our Audited Financial Statements), as of August 31, 2018, Mr. Noam Goldstein serves as President of the Potash Segment, Ms. Anat Tal as President of the Industrial Products Segment, Mr. Ofer Lifshitz as President of the Phosphate Solutions Segment, and Mr. Eli Glazer as President of the Innovative Ag Solutions Segment. In addition, as of August 31, 2018 Mr. Noam Goldstein, Ms. Anat Tal and Ms. Miri Mishor, SVP Global IT are considered executive officeholders of the Company.
190

(3)On November 1, 2018, Mrs. Ilana Fahima joined ICL as EVP, Global HR, replacing Mr. Yakir Menashe which assumed the position of EVP, Global Procurement as of such date. As of the date of her appointment, Mrs. Fahima is considered as an executive officeholder of the Company. Mrs. Fahima's terms of Compensation as well as her entitlement to the insurance, indemnification and exemption arrangements as are currently in effect for the Company’s Executive Officers, were approved by the Company's HR & Compensation Committee and Board of Directors on October 25, 2018 and October 31, 2018, respectively.
(4)On February 1, 2019, Mrs. Lilach Geva Harel joined ICL as SVP, Global General Counsel, replacing Ms. Lisa Haimovitz. As of the date of her appointment, Mrs. Geva Harel is considered as an executive officeholder of the Company. Mrs. Geva Harel's terms of Compensation as well as her entitlement to the insurance, indemnification and exemption arrangements as are currently in effect for the Company’s Executive Officers, were approved by the Company's HR & Compensation Committee and Board of Directors on December 25 and 27, 2018, respectively.
(5)seeSee C. Board Practices – Internal Auditor.

(2)On January 1, 2022, Mr. Aviram Lahav joined ICL as Chief Financial Officer, replacing Mr. Kobi Altman.

(3)On January 1, 2022, Mr. Chris Millington entered into office as President, ICL Phosphate Specialty Solutions Division, replacing Ofer Lifshitz.
 
Raviv Zoller. Mr. Zoller entered officehas served as ICL's President & CEO onand Chief Executive Officer since May 14, 2018, following his appointment by the Board of Directors on February 25, 2018. Prior to joining ICL, from 2008, Mr. Zoller served as the CEOChief Executive Officer of I.D.I. Insurance Company Ltd. (“Bituach Yashir”), which is listed on the Tel Aviv Stock Exchange.TASE. In 1999, heMr. Zoller founded Ness Technologies Inc., which began trading on NASDAQ in 2004 and served as its President and CEOChief Executive Officer until 2007. Mr. Zoller voluntarily servesserved from 2012 to October 2019 as chairmanChairman of the Ethiopian National Project (ENP), a non-profit organization, since 2012.organization. Mr. Zoller holds a B.A. degree in Economics and Accounting from Tel Aviv University and is a qualified CPA.certified public accountant.
 
Anantha N. Desikan. Dr. Anantha Desikan was appointed Chief Innovation & Technology Officer of ICL in November 2018 and was promoted to EVP in November 2019. Dr. Desikan joined ICL in 2007 and has served in senior commercial and technology management roles including Senior Vice President of ICL Industrial Products’ Flame Retardants business (2014-2018), President, ICL-IP America (2013-2015) and VP Global Phosphorous R&D (2007-2013). Prior to joining ICL in 2007, Dr. Desikan held technology management roles at Supresta and Akzo Nobel. Mr. Desikan holds a Ph.D and M.S degree in Chemical Engineering from Clarkson University, Potsdam, New York, and a B.S. degree in Chemical Engineering from Coimbatore Institute of Technology, Madras University, India.
ICL Group Limited 203


Anat Tal-Ktalav. Mrs. Anat Tal-Ktalav has been servingserves as presidentPresident of ICL´s Industrial Products Division since August 2018. Mrs. Tal-Ktalav joined ICL in 1995 and served in various leading positions in the Industrial Products business segment, including Marketing Director of Flame Retardants, Vice President for Industrial Solutions (Bromine and Compounds Business Line), Deputy to the President of ICL Industrial products,Products, and until recently, as the Executive Vice President of ICL Industrial Products. Mrs. Tal-Ktalav holds a degree in chemical engineeringChemical Engineering from Ben Gurion University.
 
Charles M. Weidhas. Aviram Lahav. Mr. Weidhas has been servingLahav serves as Chief Operating Officer (COO)ICL CFO since July 2016. He2022. Mr. Lahav previously servedheld several senior positions as CFO of ADAMA group, a global agro-chemical company and part of Syngenta Group, and also as CEO of ICL Industrial Products (2013-2016) and asADAMA Agricultural Solutions. Prior to this experience, he worked at Delta Galil Industries, moving from group CFO to CEO of the U.S. division and then to global CEO and COO. Mr. Aviram is a certified public accountant (CPA) as of 1987, holds a BA in economics and finance from the Hebrew Jerusalem University and is a graduate of the Harvard Business School Advanced Management Program (AMP).
Chris Millington. Mr. Millington serves as President, ICL Performance Products (2007-2013).Phosphate Specialty Solutions Division since 2022. Mr. Millington joined ICL in 2021. He has more than 25 years of C-Level and Senior Executive experience with global and regional expertise transforming B2B and B2C businesses in North America, Europe, and the Asia Pacific, working at the highest levels within large, publicly listed, global and private companies. Since 2019 Mr. Millington has been a retained Executive Adviser to major global PE funds and advising ingredient industry companies on strategy, M&A, and business transformation. From 2012-18, Mr. Millington worked for Firmenich initially running the Americas, before being promoted to President of the Flavor Division, a 1 Bio + business with global presence, transforming the division to being the growth leader of the industry and driving a strong M&A agenda. Prior to ICLthis, he held managerial positions with Monsantoserved as Global Head of Foodservice Beverages at Nestlé; the youngest ever VP to manage a global BU at Nestlé HQ, and Solutia.then established the first AP regional office for Nestle Professional in Singapore. Mr. WeidhasMillington holds a B.Sc.business degree and has attended multiple IMD and London Business School courses in Chemical Engineering and an MBA from Northeastern University.support of his ongoing leadership development.
 
191


Eli Glazer.Elad Aharonson. Mr. Eli GlazerAharonson has been serving as President of ICL´sICL’s Innovative AgAg. Solutions Division since August 2018.April 2021. Prior to joining ICL, Mr. Glazer joined ICL in 1983Aharonson served at Elbit Systems 2004 and has held numerous positions with the Company, including CEO of ICL Performance Products in Europe and Asia Pacific for a period of 5 years and CEO of ICL China for a period of 5 years. Before that, Mr. Glazer held various positions in ICL Industrial Products, including Business Division Director of Bromine Products and Compounds. Mr. Glazer holds a BA in economics and an MA in industrial engineering from Ben Gurion University.
Ilana Fahima. Mrs. Ilana Fahima was appointedsenior management positions; he served as Executive Vice President Global Human Resources, inand General Manager -for ISTAR Division, from 2015 to 2021. From 2011 to 2015, he served as Executive Vice President and General Manager – for UAS Division. Prior thereto, from 2009 to 2011, he also served as Vice President – for UAV Systems. Mr. Aharonson holds a Law Degree (LL.B.) and a BBA from the Hebrew University of Jerusalem, Israel.

ICL Group Limited 204


Ilana Fahima. Ms. Fahima serves as EVP, Chief People Officer, since November 2018. Prior to joining ICL, Ms. Fahima served as Vice President HR for Global Quality and Head of Israel HR at Teva Pharmaceutical Industries Ltd. Before joining Teva, sheMs. Fahima held several positions at Maccabi Health Services, among them Regional HR Director and Regional Service Manager. Ms. Fahima holds a BA degree in Social Work and an MBA degree in Health Care Management, both from Ben Gurion University.
 
Kobi Altman. Mr. Altman has been serving as ICL CFO since April 2015. Mr. Altman previously held several senior positions at Teva Pharmaceutical Industries Ltd. (2006-2015). Mr. Altman is a Certified Public Accountant in Israel and holds a BA in Accounting and Economics from Bar Ilan University and an MA in Economics from Bar Ilan University.
Lilach Geva-Harel. Mrs. Geva-Harel entered officeserves as SVP,EVP, ICL's Global General Counsel onsince February 1, 2019, following her appointment by the Board of Directors on December 27, 2018.2019. Prior to joining ICL, from 2009 Mrs. Geva-Harel served as Senior Deputy to CEOthe Chief Executive Officer and Head of Investments House's Headquarters of Psagot Investment House Ltd., as well as the general legal counsel. Sheits General Legal Counsel. Mrs. Geva-Harel was previously served as a Partner in the Merger & Acquisitions Department at Gross, Kleinhendler, Hodak, Halevy, Greenberg & CoCo. Law Offices (GKH). Mrs. Geva-Harel serves as a director at REE Automotive Ltd. (NYSE: REE) a global company. Mrs. Geva-Harel holds an LLB degree and an LLM degree, both from Bar Ilan University and is a member of the Israel Bar.
 
Meir Mergi. Mr. Mergi serves as President of ICL Potash Division since March 2021 (first as acting President and starting January 2021 as President). From March 2017 to Meir served as SVP, ICL Dead Sea Operations. Prior to that Meir held the position of VP Operations in the Performance Products Division, based in Germany. From 2010 to 2014, Mr. Mergi served as the CEO of the Dead Sea Magnesium and before that he held various senior positions in the operations of Dead Sea Magnesium. Meir holds a BSc degree in Materials Engineering and MBA in Business Management, both from Ben Gurion University.
Miri Mishor. Mrs. Mishor has been servingserves as Senior Vice President,EVP, ICL Information Technology since 2014. Mrs. Mishor joined ICL in 1986 and served in various positions, including CIO of ICL Industrial Products and Vice PresidentVP Information Systems of ICL Fertilizers. Mrs. Mishor holds a B.Sc. degree in Mathematics and Computer Science and a M.Sc. degree in Industrial Management from Ben Gurion University.
 
Nitzan Moshe. Mr. Moshe serves as EVP, ICL Operations since October 2019. From 2014 to the present, Mr. Moshe has served as SVP, Operations of ICL Industrial Products. Prior to that, Mr. Moshe held several senior positions at Rotem Amfert Negev, Ltd., including VP of its Acids & Fertilizers Division, Head of Procurement and Contracts, and Manager of Rotem’s Sulfuric Acid Plant. Nitzan holds a MBA degree and BSc degree in Chemical Engineering, both from Ben Gurion University, Israel.
Noam Goldstein. Mr. Noam Goldstein has been servingserves as President of ICL´s Potash DivisionICL EVP for Operational Excellence, Innovation & Energy since August 2018.March 2021. Mr. Goldstein joined ICL in 1986 and served in various positions in the Potash business division,Division, including Vice President of Business Development, CFO in Europe, Vice President of Infrastructure, Senior Vice President Operations at ICL Dead Sea, and until recently Executive Vice Presidentas the president of ICL´s Potash and Magnesium.  He also serves as chair of the environmental committee and as a board member at Israel´s Manufacturing Association.Division. Mr. Goldstein holds a B.A. degree in Economics and Business Administration from the Hebrew University of Jerusalem and a M.A. degree in Economics from Ben Gurion University. HeMr. Goldstein is also a graduate of the Heschel Sustainability Leadership Fellowship Program.
 
Ofer Lifshitz. Mr. Lifshitz has been serving as President of ICL´s Phosphate Solutions Division since August 2018. Mr. Lifshitz joined ICL in 1996 and served in various senior leadership positions including Executive Vice President of ICL Industrial Products,  Senior Vice President of Global Processes and as the company’s Integration Manager, Excutive Vice President for Special Projects, and until recently, President of ICL Essential Minerals Division. Mr. Lifshitz holds a Bachelor’s degree in Economics and a Master’s degree in Industrial Management, both from Ben Gurion University.
192

Rani Lobenstein. Mr. Lobenstein has been serving as Senior Vice President for Corporate Relations since 2017. Before Joining ICL in 2014, he served as Chief of Staff and senior advisor to the Director General of the Israeli Ministry of Finance (2002-2007). He served as CEO of ASIC, a subsidiary of Israel Corporation, where he served as a member of management between 2008 and 2014. In addition, Mr. Lobenstein served as Vice President for Strategy and Regulatory Affairs in OPC Rotem between 2010 and 2014. Mr. Lobenstein holds a B.Sc. in economics and agriculture from the Hebrew University of Jerusalem, and an MBA (financing) from the Israeli branch of Manchester University.
Family Relationships
 
There are no family relationships between any members of our executive management and our directors.
 
Arrangements for Election of Directors and Members of Management
 
There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were elected.
 
ICL Group Limited 205


B. COMPENSATION


Directors Compensation: Under the Israeli Companies Law, and regulations promulgated thereunder (collectively, the "Companies Regulations" or “Compensation Regulations”), the compensation of directors must comply with the Company's compensation policy andgenerally requires the approval of the HR & Compensation Committee, the Board of Directors and the shareholders, in that order.  The approval of the HR & Compensation Committee and the Board of Directors must be in accordance with the Company’s compensation policy. In special circumstances, the HR & Compensation Committee and Board of Directors may approve a compensation arrangement that is inconsistent with the Company’s compensation policy, provided that they have considered the same considerations and matters required for the approval of a compensation policy in accordance with the Companies Law, and the approval of the Company’s shareholders is by the Special Majority for Compensation, as described in ”Item 7 - Major Shareholders and Related (and Interested) Party Transactions – B. Related (and Interested) Party Transactions – Approval of Directors and Officer Compensation”.
Generally, shareholder approval is not required for director compensation payable in cash (annual and participation fees) up to the maximum amounts set forth in regulations promulgated under the Companies Law governing the compensation of external directors (the “Compensation Regulations”). The Compensation Regulations set minimum and maximum amounts of cash compensation (an annual fee and participation fees), depending on the sizeamount of the company,Company’s shareholders’ equity, or alternatively cash and/or equity compensation may be paid at a certain ratio to the compensation paid to other directors who are not controlling shareholders or employed thereby and who are not employed by the Company (collectively, "Other Directors"), referred to as ‘relative cash compensation’.
 
Effective as of January 9, 2021, the compensation of our external directors and all other non-executive directors that are entitled to compensation for their service in such capacity, was reduced to the fixed annual and per meeting compensation amounts payable to expert directors under the Compensation Regulations, replacing the "relative compensation” model that was previously paid to our directors.  According to the determination of our Compensation Committee and Board of Directors, such compensation according to the Compensation Regulations) applies to all of our directors, as may serve from time to time, excluding directors who are office holders in(within the meaning of the Companies Law) of Israel Corp. do not receive additional cash compensationThe Compensation of such directors who are office holders of Israel Corp. for their servicesservice as directors. Instead, such fees are(excluding our Executive Chairman of the Board, Mr. Yoav Doppelt who has a separate compensation arrangement, as detailed below), is included in the annual management fees we paypaid to Israel Corp. pursuant to our agreement with it. TheAccordingly, the management fees that were paid to Israel Corp. during 2021, effective as of January 1, 2018,2021, following the approval of the general meeting of shareholders from April 24, 2018, include,on January 5, 2021, included, among other things, all compensation components, in equity (or the economic benefit thereof) and in cash, for the services of Company directors who are officer holders of Israel Corp., excluding Mr. Doppelt.
 
AtNotwithstanding the above, it was agreed by the Company and Israel Corp., that subject to the approval of the revised terms of our Executive Chairman of the Board, Mr. Yoav Doppelt, at the Annual General Meeting of Shareholdersour shareholders, expected to take place on December 23, 2015 (the "2015 AGM"), a ‘relative cash compensation’ for Non-Executive Directors (including external directors), who shall serve from time to time, in accordance with Section 8AMarch 30, 2022, the Management Agreement will be terminated effective as of the Companies Regulations  was approved,July 1, 2022, following which consists of a fixed annual fee in the amount of NIS 365,000 (approximately $101,500) and a per meeting attendance fee in an amount equal to the lowest fee payable to external directors of companies of ICL’s size pursuant to the Compensation Regulations, as adjusted from time to time currently equals NIS 2,391 (equivalent to approximately $665) per meeting for directors who do not meetare office holders of Israel Corp. (other than Mr. Yoav Doppelt) shall begin to be paid the qualifications of an expert directorDirector Cash Compensation. Mr. Sagi Kabla, Israel Corp.'s Chief Financial Officer, has requested that his Director Cash Compensation be either assigned and NIS 3,180 (equivalentpaid directly to approximately $885) per meeting for directors who meet the qualifications of an expert director. Approval was also given for the grant of equity compensation in restricted shares at a fixed annual value. As per the shareholders' approval in the extraordinary shareholders meeting that was held in February 26, 2015 (and thereafter in the general meetings that were held on December 23, 2015, January 3, 2017 and January 10, 2018), we pay the same cash and equity based compensationIsrael Corp. or paid directly to all of our Non-Executive Directors, whether or not they are external directorshim, as further detailed bellow, all in accordance with the Compensation Regulations. Accordingly, any changes to the directors’ compensation made from time to time, which require shareholder approval under Israeli law, including grants of additional equity based compensation, apply and will apply to all of our Non-Executive Directors, whether or not they are external directors (However, since the Company's Board of Directors currently consists of only one Other Director, the compensation currently paid to the external directors may not be changed as aforesaid, and therefore the annual equity compensation grant to our board members will be approved each year with equal value).instructed by Israel Corp.
 
193
ICL Group Limited 206

On May 15, 2018, the Company received a formal ruling from the Israeli Securities Authority (hereinafter "ISA") in response to the Company's application regarding the manner of implementation of the relative compensation mechanism with respect to external directors. According to the ISA's position, the Company acted lawfully in the manner of implementing the relative compensation to the Company's external directors, since the commencement of implementation of such mechanism in the Company.
As of February 13, 2018, Mr. Geoffery Merszei no longer serves as a board member of the Company and therefore, as of that date, there is only one Other Director serving at the date hereof (Mr. Reem Aminoach). At the Annual General Meeting of Shareholders that was held on August 20, 2018, Dr. Nadav Kaplan was elected as an external director, and was informed at that date that he will be entitled to receive equal compensation as the other external director, Mrs. Ralbag, for as long as Mrs. Ralbag remains in her first term of office (i.e., until January 9, 2021). Upon conclusion of Mrs. Ralbag’s first term of office (i.e., as of January 10, 2021), as per our HR & Compensation Committee and Board of Director’s decision, Dr. Kaplan’s compensation will be reduced to the fixed annual and per meeting compensation amounts paid to director who has "financial and accounting expertise" as set forth in tables in the Israeli Compensation Regulations pursuant to the classification of the Company based on its shareholders' equity, and he will not be entitled to equity based compensation as well. Our HR & Compensation Committee and Board of Directors further resolved that as of such date, all Non-Executive board members that are entitled to compensation for their service as such, will receive the reduced compensation to be paid pursuant to the compensation tables in the Compensation Regulations, and will not be entitled to equity compensation.

The Company also covers and/or reimburses its directors for expenses (including travel expenses) incurred in connection with meetings of the Board of Directors and its committees or performing other services for the Company in their capacity as directors, in accordance with the Company's Compensation Policy and the Compensation Regulations. Our Board Members are also entitled to the Company'sbenefit from directors' and officers' liability insurance and indemnification and exemption arrangements for office holders.entered into with them.  For further information, see “Item 6 - Directors, Senior Management and Employees— C. Board Practices – Insurance and Indemnification”.
 
194

Executive Chairman of the Board's Compensation: Mr. Doppelt's compensation terms as our Executive Chairman of the Board were approved by HR & Compensation Committee and Board of Directors on April 15, 2019, and by our shareholders at the Extraordinary General Meeting held on May 29, 2019.  Mr. Doppelt's compensation terms are in effect for three years from July 1, 2019, the date of his entry into office.
 
On January 31, 2022, and February 8, 2022, our HR & Compensation Committee and Board of Directors, respectively, approved, subject to the Annual General Meeting of our shareholders (the "Meeting"), expected to take place on March 30, 2022, new compensation terms for Mr. Yoav Doppelt, the Executive Chairman of our Board of Directors, which shall be effective as of the termination of the Management Agreement on July 1, 2022, and subject thereto, and subject both to his reelection and to the approval of our new compensation policy at the Meeting. Following their approval, Mr. Doppelt's new compensation terms shall be in effect for a period of three years. According to the proposed new compensation terms, Mr. Doppelt will be employed by the Company, and will continue to invest a significant portion of his time to the Company. Subject to their approval in the Meeting, the Mr. Doppelt's new compensation terms will include (i) a NIS 1.8 million (approximately $562,500) annual cost of employment, (ii) entitlement to an annual cash bonus with a Target STI, which will essentially also be his maximum STI payout in any given year, of NIS 1.2 million (approximately $375,000), calculated in accordance with the Executive Chairman’s STI formula set forth in the New Compensation Policy, as may be amended from time to time, an (iii) termination arrangement which includes a six-month adjustment period and six month advance notice period, during both of which he will continue to be entitled to all of his compensation terms, including STI payouts and continued vesting of his existing LTI plans, as well as additional severance payment by the Company, in addition to the mandatory severance payment, equal to his last monthly salary multiplied by the number of years that he was employed by the Company, serving as its Executive Chairman of the Board (i.e., as of July 1, 2022). In addition, our HR & Compensation Committee and Board of Directors approved on January 31, 2022 and February 6, 2022 and February 8, 2022, respectively, subject to shareholder approval at the Meeting, a three-year long-term incentive award to Mr. Yoav Doppelt, for the years 2022-2024, of non-marketable options, exercisable into Ordinary Shares, with a total value of NIS 9 million (approximately $2.8 million), or NIS 3 million (approximately $937,500) per vesting annum.
Other than the agreement with Mr. Doppelt in his capacity as Executive Chairman of the Board, described above, and the acceleration of equity awards upon termination of director service under certain circumstances, we do not have any written agreements with any current director providing for benefits upon the termination of such director’s relationship with us.
ICL Group Limited 207

Equity (LTI) Grants to Board Members:(1)
 
Grant for YearOfferreesGrant Date
Type of Equity(2)
Dates of Organs' ApprovalsGrant Value (ILS) per DirectorGrant Amount per DirectorExpiration Date & Vesting Schedule
2021Mr. Yoav Doppelt, Executive Chairman of the Board1.7.2019Options
HR & Comp. Committee & Board – 15.4.19
Shareholders (Extraordinary GM) – 29.5.19
3 million2,168,675
Expiration Date: 30.6.2024
Vesting: one-half of the Options vesting upon the lapse of 24 months from Grant Date and one-half upon the lapse of 36 months from the Grant Date
Grant for YearOfferreesAllocation Date
Type of Equity(2)
Dates of Organs' ApprovalsGrant Value (ILS)Grant AmountExceptions & Comments
2018    each of our directors who serve from time to time (excluding the Chairman of the Board)    10.1.2018    
restricted shares
 
HR & Comp.  Committee – 27.11.17
Board – 5.12.17
Shareholders (Annual GM) – 10.1.18
    
310,000    22,080    1.Our former board members, Messrs. Geoffery Merszei and Yaacov Dior, whose term of office ended on February 13 and 26, respectively, were entitled to 2,057 and 2,843 Restricted Shares, reflecting their entitlement to the relative portion of the 2018 Grant.
2.Dr. Miriam Haran, whose term of office ended in August 2018, was allocated 14,793 restricted shares.
3.
Dr. Nadav Kaplan was allocated 5,930 restricted shares on August 20, 2018.
4.Mr. Yoav Doppelt was allocated 758 restricted shares on December 12, 2018.
5.Messrs. Kaufman, Paz and Kabla waived in advance their entitlement to the equity compensation per 2018.
2019each of our directors who serve from time to time (excluding the Chairman of the Board & Office Holders of IC)1.1.2019restricted shares
HR & Comp. Committee & Board – 19.6.18
Shareholders (Annual GM) – 20.8.18
310,00014,623  


(1)The Equity awards are made pursuant to the Company’s Equity Compensation Plan (2014), as amended in June 2016.
 
195

(2)
On January 31, 2022 and February 6, 2022 and February 8, 2022, our HR & Compensation Committee and Board of Directors approved, respectively, subject to shareholder approval at the annual general meeting of our shareholders expected to take place on March 30, 2022 (the "Grant Date"), a three-year long-term incentive award to Mr. Yoav Doppelt, for the years 2022-2024, in the form of options, with a total value of NIS 9 million (approximately $2.8 million), or NIS 3 million (approximately $937,500) per vesting annum. The vesting of the 2022-2024 LTI Grant will be in three equal tranches, with one-third of the Options vesting upon the lapse of 12 months from Grant Date, one-third of the Options vesting upon the lapse of 24 months from Grant Date and one-third upon the lapse of 36 months from the Grant Date. The Options may be exercised, in whole or in part, as of the date of “maturity” of each tranche and until the lapse of five years after the Grant Date.
ICL Group Limited 208

 
(1) The allocations are in accordance with the Company’s EquitySenior Management Compensation Plan (2014), as amended in June 2016.
(2) The shares are subject to restriction pursuant to Section 15C of the Securities Law.
* On June 6, 2018, Mr. Lior Reitblatt gave notice to the Company that he has independently purchased 58,850 shares of the Company on the Tel Aviv Stock Exchange, at a total amount of ILS 1 million. The total quantity of shares held by Mr. Reitblatt as of the date of this annual report is 95,553.
** For further information on the fair value of the restricted shares and vesting conditions, see Note 21 to our Audited Financial Statements. For further details regarding the equity compensation granted to our Non-Executive directors, please see the Company's Proxy Statement dated July 7, 2018 (Reference Number: 2018-02-067711).
 
The aggregate compensation amount grantedincurred to all of the members of our senior management (Global Executive Committee – GEC) as of December 31, 2018,2021, was approximately $12.5$18 million for the year 2018.
196

2021. This amount includes an annual provision for pension or other retirement benefits for our senior management of approximately $1 million.
 
The following table and accompanying footnotesnotes describe the compensations grantedcompensation incurred for the year 20182021 with respect to the five highest earning senior officers in ICL.of ICL for such period.
 
 Details of the RecipientPayments for services
NamePositionScope of positionBase Salary
Compensation(1)
Bonus (STI) (2)
Equity based compensation (LTI)(3)
Total
 US$ thousands
Raviv Zoller(4)
President & Chief Executive Officer100%7591,103
1,045
 
1,118
 
3,266
 
Kobi Altman(5)
Former Chief Financial Officer100%4406047095451,858
Ofer Lifshitz(6)
Former President of Phosphate Solutions Division100%3815366393711,546
Anat Tal-Ktalav(7)
President of Industrial Products Division100%3104413863711,198
Elad Aharonson(8)
President, Innovative Agro Solutions Division100%319768285831,136
 Details of the RecipientPayments for services
NamePositionScope of positionHolding in equity
Base Salary(1)
Compensation (2)
Bonus(3)
Equity based compensation (4)
Total
  US$ thousands
Raviv Zoller (5)
President & CEO since May 14, 2018100%*4201,035
523(6)
4331,991
Johanan Locker (7)
Executive Chairman of the Board of Directors
90%*5347504925441,786
Charles Weidhas(9)
Chief Executive Officer, Industrial Products (COO) as of July 2016100%*379855350466
1,671
Asher Grinbaum (10)
Acting  CEO, ICL, between September 2016 to May 14, 2018100%*172477
909(11)
271,413
Kobi Altman(12)
Chief Financial Officer (CFO) as of April 2015100%*3915233674671,357

 
ICL Group Limited 209
* Less than 1%
197




(1)
The annual base salary for the officers in the above table was calculated according to their actual term of office in the Company in 2018.
(2)
The salary items (compensation) component column set out in the above table includes all of the following components: gross base salary, employer customary social benefits, customary social and related provisions, companyCompany car relocation expenses, rent and indemnification for tax payments in case of relocation, payments during advance notice period pursuant to the terms of employment agreements, inasmuch as relevant, and reimbursement of telephone expenses. The compensation is in accordance with the Company's Compensation Policy.
 

(3)(2)The bonusesshort-term incentives (STI/annual bonuses) to officer holders for 2018,2021, including the top-five earners in 2018,2021, were approved by our HR & Compensation Committee and Board of Directors on January 31 and February 4 and 5, 2019,8, 2022, respectively. The bonuses approved are in accordance with the provisions of our Compensation Policy, unless otherwise specifically mentioned.
 

(4)(3)The expense or income for the share-based payment component wascompensation is calculated according to IFRS.
(5)
Mr. Raviv Zoller entered into office asIFRS and is recognized in the Company’s statement of income over the vesting period of each portion. The amounts reported in this column represent the expense recorded in the Company’s financial statements for the year ended December 31, 2021 with respect to equity-based compensation granted to the senior officer. For details regarding the Company's President & CEO on May 14, 2018. equity compensation plans, see Note 19 to our Audited Financial Statements.

(4)
Mr. Zoller’s terms of employment, wereas approved by our HR & Compensation Committee and Board of Directors on February 22 and 25, 2018, respectively, and by the general meeting of our shareholders on April 24, 2018, and they are as follows:authorized organs, include: (a) annual base salary of NIS 2,400 thousand2.4 million (approximately $670 thousand)$750,000), indexed to the Israeli Consumer Price Index (CPI). Mr. Zoller's annual base salary as of December 31, 2018 is2021 remained NIS 2,433 thousand2.4 million (approximately $650 thousand)$750,000). Mr. Zoller's monthly base salary, as of December 31, 2021, was approximately NIS 202,800 (approximately $63,500); (b) annual cash bonus in accordance with ICL’s bonus plan and Compensation Policy. Mr. Zoller’s Target Bonus was set atas per his employment agreement is NIS 2,500 thousand2.5 million (approximately $695 thousand)$781,000), with the maximum annual bonus set atthat can amount to NIS 3.75 million (approximately $1.17 million). For details regarding Mr. Zoller's annual bonus in 2021, see the amount of NIS 3,750 thousand (approximately $1,040 thousand);Annual Bonus Component section below; (c) an annual equity compensation entitlementLTI (equity) grant of NIS 4.8 million (approximately $1.5 million), or any other amount per vesting annum, as determined and approved by the Company's authorized organs, including by the Company's shareholders. On January 31, 2022 and February 6, 2022 and February 8, 2022, our HR & Compensation Committee and Board of Directors approved, respectively, subject to shareholder approval at the amountannual general meeting of NIS 4,000 thousand (approximately $1,110 thousand)our shareholders expected to take place on March 30, 2022 (the "Grant Date"), as well as an annual equity grant for 2018 at a total amount of NIS 4,000 thousand (approximately $1,110 thousand), which was granted to Mr. Zoller upon his entry into office, comprising half of options exercisable into Company shares at a value of NIS 2,000 thousand (approximately $555 thousand), and half of restricted shares at a value of NIS 2,000 thousand (approximately $555 thousand). For details regarding the equity compensation grantedthree-year long-term incentive award to Mr. Zoller, for 2018, see to the descriptionyears 2022-2024, in the form of options, with a total value of NIS 16.56 million (approximately $5.18 million), or NIS 5.5 million (approximately $1.84 million) per vesting annum. The vesting of the 2022-2024 LTI Grant will be in three equal tranches, with one-third of the Options vesting upon the lapse of 12 months from Grant Date, one-third of the Options vesting upon the lapse of 24 months from Grant Date and one-third upon the lapse of 36 months from the Grant Date. The Options may be exercised, in whole or in part, as of the date of “maturity” of each tranche and until the lapse of five years after the Grant Date. For details regarding Mr. Zoller's equity compensation grants, set forth in the table and respective foot notes below;see Note 19 to our Audited Financial Statements; (d) Mr. Zoller will beis entitled to an advance notice period of 12 months in case of termination by the Company (not for cause) and will beis required to give the Company a 6 months advance notice in case he resigns. During such advance notice period Mr. Zoller may be required to continue working for ICL, and therefore Mr. Zoller would continue to be entitled to all of his compensation terms, including vesting of his LTI awards, but excluding an annual bonus in respect of the advanced notice period and excluding an equity grant, to the extent granted during such advance notice period; (e) in addition, in case of termination of office, Mr. Zoller will be entitled to an additional severances equal to his last his last base salary multiplied by the number of years that he served as ICL’s President & CEO; (f) Mr. Zoller is entitled to all other cash and non-cash benefits payable to our senior executives pursuant to our policies in effect from time to time, including but not limited to, pension, study fund, disability insurance, companyCompany car, gross up, etc., as well as the exemption, insurance and indemnification arrangements applying to the Company’s office holders.holders.
(6)The annual bonus for 2018 to Mr. Zoller, as specified in the table above, reflects the outcome of implementation of the annual bonus formula as provided in the Company’s compensation policy and described in the “Annual Bonus” section below with respect to Mr. Zoller's actual term of office in 2018 (i.e. beginning May 14, 2018), as approved by our HR & Compensation Committee and Board of Directors on February 4 and 5, 2019, respectively.
198

 
ICL Group Limited 210



(7)(5)
Mr. Johanan Locker servesKobi Altman served as director in the CompanyICL’s Chief Financial Officer (CFO) as of April 20, 2016, and as Chairman of our Board of Directors (at a scope of no less than 90% of a full-time position) as of August 15, 2016. Mr. Locker’s compensation terms were approved by our HR & Compensation Committee and Board of Directors on April 19, 2016, and on April 20, 2016, respectively, and by the general meeting of our shareholders on August 29, 2016, as follows: (1) annual base salary of NIS 1,920 thousand (approximately $535 thousand). Mr. Locker's annual base salary as of1, 2015, until December 31, 2018 has not changed; (2) annual cash bonus according to ICL’s bonus plan and compensation policy – the target bonus was set at NIS 1,900 thousand (approximately $530 thousand); (3) annual equity compensation entitlement at the amount of NIS 1,800 thousand (approximately $500 thousand)2021, following his retirement announcement from October 11, 2021 (the "Notice Date"). For details regarding an additional equity compensation granted to Mr. Locker in 2018, see to the description of the equity compensation grants, set forth in the table and respective foot notes below; (4) Mr. Locker will be entitled to an advance notice period of 12 months and will be required to give the Company a 6 months advance notice in case he resigns. During such advance notice period Mr. Locker may be required to continue working for ICL and therefore Mr. Locker would continue to be entitled to all of his compensation terms, including annual bonus; (5) in addition, in case of termination of service, Mr. Locker will be entitled to an additional severances equal to his last monthly salary multiplied by the number of years that he served as ICL’s Executive Chairman; (6) Mr. Locker is entitled to all other cash and non-cash benefits payable to our senior executives pursuant to our policies in effect from time to time, including but not limited to, pension, study fund, disability insurance, company car, etc.
(8)
On February 4 and 5, 2019, our HR & Compensation Committee and Board of Directors approved, respectively, the annual bonus for 2018 to Mr. Locker, as further detailed in the “Annual Bonus” section below. In addition, at the same dates, the HR & Compensation Committee and Board of Directors, further resolved to grant a special bonus to Mr. Locker for 2018, in an amount equals to three (3) monthly salaries, or. NIS 480,000 (approximately $134 thousand). The special bonus is subject to approval of the general meeting of our shareholders, and thus is not reflected in the table above.
(9)
Mr. Charles Weidhas serves as Chief Operating Officer (COO) as of July 1, 2016. Mr. Weidhas’ employment contract is for an unlimited period and may be terminated by either party at any time by prior written notice. Mr. Weidhas is entitled to an advanced notice period and adjustment period of 6 months each and is entitled to life insurance and health insurance for himself and his family. Beginning on October 13, 2013, and for a period of 5 years thereafter, which was extended for an additional year by the HR & Compensation Committee and Board of Directors on October 25 and 31, 2018, respectively, Mr. Weidhas is entitled to reimbursement of his rent. As of March 2016, Mr. Weidhas’ monthly base salary is paid in U.S. dollars. As of 31 December 2017, Mr. Weidhas’ monthly base salary is approximately $30,468. Mr. Weidhas is also entitled, as long as he resides in Israel, to maintain the net amount in respect of all payments made to him as would be obtained in the United States (tax equalization). In addition to the amount provided regularly for pension fund and severance pay, Mr. Weidhas is entitled to additional severance pay equal to his last salary multiplied by the number of his years of employment with ICL in Israel. For details regarding Mr. Weidhas annual bonus for 2018, see the “Annual Bonus” section below.
199

(10)
Mr. Asher Grinbaum served as Acting CEO of ICL between September 11, 2016 and May 13, 2018. During his service as Acting CEO, Mr. Grinbaum’s terms of employment remained similar to the terms he had in in his previous position in the Company – Executive Vice President and Chief Operating Officer (COO). Mr. Grinbaum’sAltman’s employment agreement (including amendments thereto), provided that: (a) Mr. Grinbaum’sAltman’s base salary will be updated twice a year according to the rise in the Consumer Price Index in the months that passed since suchthe previous update. According toAccordingly, Mr. Grinbaum's employment agreement and the salary updates pursuant thereto, as decided by our Board of Directors from time to time, Mr. Grinbaum’sAltman’s monthly base salary, as of December 31, 2018,2021, was approximately NIS 137,774119,271 (approximately $35,600). Mr. Grinbaum's annual base salary in$37,270); (b) the above table was calculated according to the actual term of office in the Company in 2018, i.e. the relative portion calculated until the last day in office, May 13, 2018. Subsequent to his retirement on May 13, 2018, and pursuant to his employment agreement Mr. Grinbaum was entitled to an accrued vacation period, between May 14, 2018 and July 16, 2018, which was followed by a 6 months advanced notice period. In the course of the two periods thereof, employer-employee relations continued to apply, and ceased on January 16, 2019. The Company has booked full provisions respecting the base salary for the remaining period of 2018 already as of December 31,2017, as well as for the accrued vacation period, the advanced notice period and Mr. Grinbaum's retirement benefits, except for the Special Bonus, as defined herein below. Therefore, all amounts that have been previously recorded in 2017 are not included in the table above.
(11)
The bonus amount in the above table includes: (A) an annual bonus for 2018, in an amount of NIS 1,570,000 (approximately $440,000), that was calculated in accordance with the Annual Bonus Calculation Formula and the provisions of our Compensation Policy, following the approval of HR & Compensation Committee and Board of Directors on February 4 and 5, 2019, respectively. In respect of the accrued vacation period and the advanced notice period, no Specific Personal Measurables (KPIs) were applied. For further details, see the “Annual Bonus” section below; (B) a Special Bonus in an amount of NIS 1,800,000 (approximately $500,550), that was granted to Mr. Grinbaum in light of his exceptional contribution and remarkable efforts when serving as our Acting CEO, as further set forth in the Proxy Statement for the Company's Annual General Meeting that was held on August 20, 2018. The Special Bonus was approved by the general meeting of our shareholders on August 20, 2018, following approval by our Compensation Committee and Board of Directors on June 19, 2018, and on February 4 and 5, 2019, respectively. According to the Company's Compensation Policy, the maximum special bonus payout with respect to the CEO in any given year cannot exceed the difference between three base monthly salaries and the non-measurable components of the annual bonus payout. In addition, the maximum special bonus payout in any given year with respect to any Executive Officer cannot exceed 6 base monthly salaries. Therefore, the special bonus to Mr. Grinbaum was approved by the general meeting of our shareholders in a deviation from the Company's Compensation Policy, according to section 272(C) to the Israeli Companies Law.
(12)
Mr. Kobi Altman serves as ICL’s Chief Financial Officer (CFO) as of April 1, 2015. Mr. Altman’s employment agreement provides that Mr. Altman’s base salary will be updated twice a year according to the rise in the Consumer Price Index in the months that passed since such previous update. The employment contract is for an unlimited period and may be terminated by either party at any time by advance written notice. Mr. Altman is entitled to an advance notice period of 6 months. According to the employment contractnotice; and the salary updates, as decided by our Board of Directors from time to time, Mr. Altman’s monthly base salary, as of December 31, 2018, is approximately NIS 117,000 (approximately $31,215). In addition,(c) Mr. Altman is entitled to all benefits customary in the Company, such as regular provisions for pension and severance, disability fund, company car, etc. Shortly after beginning hisCompany car. Mr. Altman’s termination terms, which are in compliance with the Company’s compensation policy and in accordance with Mr. Altman’s employment in April 2015, Mr. Altman was granted a special equity grant (as a signing bonus) of 59,391 restricted shares, the value thereof at the grant date was NIS 1,600 thousand, which vested in April 2018.
200


The following table specifies the equity compensation details of each of the top-five earners among ICL’s senior officers, with respect to all equity compensation plans which the company had recognized an expense for in the period of the report, i.e. as of the equity compensation grant for 2014. The allocations to the top-five earners among ICL’s senior officers were made in the framework of annual compensation plans for Company executives and senior employees, under which restricted shares and non-transferable option warrants were allocated for no consideration.
Year of grantApproval datesOffereeAllocation dateQuantity of option warrantsQuantity of restricted shares
NIS exercise price (subject to adjustments)
 
 
Quantity of valid option warrants as at February 20, 2019
Weighted economic value of each option warrant (4)
Fair value of restricted sharesExercise price of option warrantsShare priceQuantity of option warrants expired as at February 20, 2019Notes
On date immediately preceding allocation (NIS)as at February 20, 2019 (NIS)
2014 Raviv ZollerNA 
 Johanan LockerNA 
 Charles WeidhasSeptember 27, 201495,12922,25028.7163,4186.5728.0925.28920.231,711Exercise price of the option warrants is 25.2% higher than the share price on February 20, 2019; hence the option warrants are “out of the money”.
 
Asher Grinbaum(1)
September 27, 201495,12922,25028.7163,4186.5728.0925.28920.231,711
 Kobi AltmanNA 
2015Compensation Committee and Board: May 10 and 12, 2015, respectivelyRaviv ZollerNAExercise price of the option warrants is 27.8% higher than the share price on February 20, 2019; hence the option warrants are “out of the money”.
Johanan LockerNA
Charles WeidhasJuly 8, 2015137,36323,20027.7645,7874.5526.9425.82920.2    91,576
Asher Grinbaum(1)
July 8, 2015137,36323,20027.7645,7874.5526.9425.82920.291,576
Kobi AltmanJuly 8, 2015137,363
82,591(2)
27.7645,7874.5526.9425.82920.291,576
201

Year of grantApproval datesOffereeAllocation dateQuantity of option warrantsQuantity of restricted shares
NIS exercise price (subject to adjustments)
 
 
Quantity of valid option warrants as at February 20, 2019
Weighted economic value of each option warrant (4)
Fair value of restricted sharesExercise price of option warrantsShare priceQuantity of option warrants expired as at February 20, 2019Notes
On eve of allocation (NIS)as at February 20, 2019 (NIS)
2016Compensation Committee and Board: May 16 and 17, 2016, respectively. Respecting Mr. Locker, general meeting approval: August 29, 2016Raviv ZollerNAExercise price of the option warrants is 22.8% lower respecting Mr. Locker, 19.6% lower respecting Mr. Grinbaum and 22.2% lower respecting all others, than the share price on February 20, 2019, hence the option warrants are "in the money".
Johanan LockerAugust 29, 2016186,33555,21517.05186,3354.1915.4215.59520.2-
Charles WeidhasJune 30, 2016133,74739,63217.05133,7474.8316.315.71620.2-
Asher Grinbaum(1)
February 14, 2017114,06537,59217.22114,0655.8317.6916.23320.2-
Kobi AltmanJune 30, 2016145,54943,12917.05
85,549(5)
4.8316.315.71620.2-
2017Compensation Committee and Board: June 19 and 20, 2017, respectively. Respecting Mr. Locker, general meeting approval: August 2, 2017Raviv ZollerNAExercise price of the option warrants is 22% lower respecting Mr. Locker and 28.5% lower respecting all others, than the share price on February 20, 2019, hence the option warrants are "in the money".
Johanan LockerAugust 2, 2017164,91652,91016.49164,9165.4617.0115.74420.2-
Charles WeidhasJune 20, 2017128,62742,08915.31128,6275.1715.814.44820.2-
Asher Grinbaum(1) (3)
June 20, 2017128,62742,08915.31128,6275.1715.814.44820.2-
Kobi AltmanJune 20, 2017128,62742,08915.31128,6275.1715.814.44820.2-

202


Year of grantApproval datesOffereeAllocation dateQuantity of option warrantsQuantity of restricted shares
NIS exercise price (subject to adjustments)
 
 
Quantity of valid option warrants as at February 20, 2019
Weighted economic value of each option warrant (4)
Fair value of restricted sharesExercise price of option warrantsShare priceQuantity of option warrants expired as at February 20, 2019Notes
On eve of allocation (NIS)as at February 20, 2019 (NIS)
2018Comp Com & BoD - February 22 and 25, 2018, respectively, general meeting April 24, 2018Raviv ZollerMay 14, 2018384,615120,91915.76384,6155.1916.5415.38920.2-
Exercise price of the option warrants is 23.8% lower respecting Mr. Zoller, 12.5% lower respecting Mr. Locker and 29.7% lower respecting all others, than the share price on February 20, 2019; hence the option warrants are “in of the money”.
Comp Com & BoD - June 19, 2018, general meeting August 20, 2018Johanan Locker
August 20, 2018(6)
402,68547,24418.06402,6855.9619.0517.67920.2-
Comp Com & BoD – March 5 and 6, 2018, respectivelyCharles WeidhasMarch 6, 2018140,00043,89414.52140,0004.7515.1514.20520.2-
NA
Asher Grinbaum(1) (3)
NA
Comp Com & BoD – March 5 and 6, 2018, respectivelyKobi AltmanMarch 6, 2018140,00043,89414.52140,0004.7515.1514.20520.2-

203


(1) Mr. Asher Grinbaum is subject to “Rule 75”, provided in the Company’s equity plan, as amended in June 2016, whereby in case of termination of employment relations, and provided that the years of the offeree’s age plus his years of service with the Company equal or exceed 75, all option warrants and\or restricted share units and\or restricted shares allocated thereto and yet to vest until termination of the employment relationship shall become vested, and may be exercised into shares for a period of 12 months following the termination of employer-employee relations. The expense for the vast amount of Mr. Grinbaum's equity compensation was recordedagreement, were approved by the Company in 2017 for the total of option warrants and restricted shares allocated to Mr. Grinbaum, based on generally accepted accounting principles. Mr. Grinbaum did not receive equity based compensation in 2018.
 (2) Shortly after beginning his employment, in April 2015, Mr. Altman was granted a special equity bonus of 59,391 restricted shares as a signing bonus, the value thereof at the time of such grant was NIS 1,600 thousand, which vested in April 2018.
 (3) At the date of this allocation Mr. Grinbaum served as Acting CEO of the Company, although this grant was made according to the compensation terms to which he was entitled in his previous position, as EVP and COO of the Company.
 (4) The economic value of the option warrants is determined according to the Black & Scholes model (except with respect to 2014, where it was determined according to the binomial model).
(5)
On November 4, 2018, Mr. Altman exercised 60,000 option warrants. The exercise price as at the date of the sale was NIS 15.97 (approximately $4.26), and the share price as at that date was NIS 21.86 (approximately $5.83). The amount of shares that derived from the exercise of the options and that was immediately sold reflected the difference between the exercise price and the share price at the relevant date (net exercise).
(6)On June 19, 2018, our HR & Compensation Committee and our Board of Directors on November 1, 2021, and November 3, 2021, respectively, and include a six-month advance notice period which commenced on the Notice Date, during which Mr. Altman continues to be eligible for all of his employment terms, including vesting of his equity grants. Following utilization of accrued unused vacation days, Mr. Altman’s expected employment termination date will be April 20, 2022. In addition, our HR & Compensation Committee and Board of Directors approved on January 31, 2022 and on August 20, 2018, our general meeting of shareholders approved an issuanceFebruary 8, 2022, respectively, a special bonus to Mr. Locker, of options in a total value of NIS 2,400,000 (approximately $662,983), comprising of NIS 900,000 (approximately $248,619) as in the previous year, and an additional amount of OptionsAltman for 20182021 in the amount of approximately NIS 1,500,000715,600 (approximately $414,365)$230,000), equivalent to six base salaries, due to his extraordinary achievements in the 2022 budget planning and approval process, successful transformation of restricted sharesthe finance organization and successful hand over of the CFO role to his successor, Mr. Aviram Lahav. For details regarding Mr. Altman's annual bonus in 2021, see the Annual Bonus Component section below. The equity-based compensation (LTI) amount in the above table reflects the expense that was recognized by the Company for Mr. Altman’s LTI in the Company's 2021 Financial Statements.

(6)
Mr. Lifshitz served as President of the Phosphate Solution Division since August 2018 and has announced his wish to retire on November 18, 2021 (the "Notice Date"). Mr. Lifshitz’s employment agreement provided that: (a) Mr. Lifshitz’s base salary may be updated twice a year according to the rise in the Consumer Price Index in the months that passed since the previous update. Accordingly, Mr. Lifshitz’s monthly base salary, as of December 31, 2021, was approximately NIS 103,382 (approximately $32,300); (b) the employment agreement is for an unlimited period and may be terminated by either party at any time by advance written notice; (c) Mr. Lifshitz is entitled to an advance notice period of 3 months; and (d) Mr. Lifshitz is entitled to all benefits customary in the Company, such as regular provisions for pension and severance, disability fund, Company car. Mr. Lifshitz' termination terms were approved by our HR & Compensation Committee and our Board of Directors on January 31, 2021, and February 8, 2022, respectively. As part of his termination arrangement, our HR & Compensation Committee and Board of Directors, approved to extend Mr. Lifshitz' advance notice period by 3 months (to a total value of NIS 900,000 ($248,619)6 months), asto align his terms with the terms of the other executive management members. Accordingly, following additional utilization of accrued unused vacation days, Mr. Lifshitz' expected end of employment date will be on July 19, 2022. During this entire period, Mr. Lifshitz continues to be eligible for all of his employment terms, including vesting of his equity grants. In addition, our HR & Compensation Committee and Board of Directors approved a grant of a special bonus to Mr. Lifshitz for 2021 in the amount of approximately NIS 620,300 (approximately $194,000), which is equivalent to 6 base salaries, for achieving all-times record results in the PS division in 2021, and remarkable handover to his successor. For details regarding Mr. Lifshitz' annual bonus in 2021, see the Annual Bonus Component section below. The equity-based compensation (LTI) amount in the above table reflects the expense that was recognized by the Company for Mr. Lifshitz’ LTI in the Company's 2021 Financial Statements.
ICL Group Limited 211



(7)
Mrs. Tal-Ktalav’s employment agreement provides that: (a) Mrs. Tal-Ktalav’s base salary may be updated twice a year according to the rise in the Consumer Price Index in the months that passed since the previous year.update. Mrs. Tal-Ktalav monthly base salary, as of December 31, 2021, was approximately NIS 84,194 (approximately $26,300); (b) the employment agreement is for an unlimited period and may be terminated by either party at any time by advance written notice; (c) Mrs. Tal-Ktalav is entitled to an advance notice period of 6 months; and (d) Mrs. Tal-Ktalav is entitled to all benefits customary in the Company, such as regular provisions for pension and severance, disability fund, Company car and gross up. For details regarding Mrs. Tal-Ktalav's annual bonus in 2021, see the Annual Bonus Component section below. The equity-based compensation (LTI) amount in the above table reflects the expense that was recognized by the Company for Mrs. Tal-Ktalav’s LTI in the Company's 2021 Financial Statements.
 

(8)
Mr. Aharonson's employment agreement provides that: (a) Mr. Aharonson´s base salary may be updated twice a year according to the rise in the Israeli Consumer Price Index in the months that passed since the previous update. Mr. Aharonson´s monthly base salary, as of December 31, 2021, was approximately NIS 115,000 (approximately $36,000); (ii) the employment agreement is for an unlimited period and may be terminated by either party at any time by advance written notice; (iii) Mr. Aharonson is entitled to an advance notice period of six months; (iv) Mr. Aharonson is entitled to a six month adjustment period if his employment is involuntary terminated during the first two years of his employment, and (v) Mr. Aharonson is entitled to all benefits customary in the Company, such as regular provisions for pension and severance, disability fund, Company car and gross up . For details regarding Mr. Aharonson's annual bonus in 2021, see the Annual Bonus Component section below. The equity-based compensation (LTI) amount in the above table reflects the expense that was recognized by the Company for Mr. Aharonson’s LTI in the Company's 2021 Financial Statements.

ICL Group Limited 212
For further details respecting the equity compensation plans specified in the table above, including the vesting and expiration dates of the option warrants and\or restricted shares in each plan, see Note 21 to our Audited Financial Statements.

 
The Annual Bonus Component
 
Pursuant to ourThe Company's current compensation policy, as approved by the General Meeting of our Shareholders on August 29, 2016 (the “Company’s Compensation Policy”),Policy sets a formula was established for the calculation of the annual bonus to our CEO and Chairman of the Board. With respect to our other officers,officer holders, the Company's Compensation Policy provides that the annual bonuses may be calculated by usingmeasurable financial metrics and/or measurable key performance indicators,non-financial metrics, as pre-determined by our HR & Compensation Committee and Board of Directors, and/or a qualitative evaluation.
 
On January 31, 2022, February 46, 2022 and 5, 2019,February 8, 2022, our HR & Compensation Committee and Board of Directors, respectively, approved anthe annual bonusbonuses to officerour office holders for the year 2018,2021, including to the top-five earners in 20182021 among ICL’s senior officers, in accordance with the Company’s Compensation Policy.
 
PursuantCEO STI Formula: according to the Company’s Compensation Policy, the bonus formulaTarget short term incentive plan (“STI”) for the CEO (the “Annual Bonus Calculation Formula”) is calculated according to multiplicationrepresents the conceptual payout amount for 100% performance level (i.e, achieving weighted 100% of all targets) in a given year.  The Target STI for the CEO shall not exceed 120% of the CEO’sCEO' annual base salary. 80% of the CEO's STI target bonuswill be measured against performance level of annual measurable financial and measurable non-financial goals set forth by the HR & Compensation Committee and the Board of Directors at the beginning of each fiscal year, as detailed in the Compensation Policy. Out of the 80% STI target, at least 60% of STI target will be measured against financial goals that will be included in the annual budget. The other 20% (or less) of STI target will be measured against other measurable non-financial goals. The achievement level of each goal, whether measurable financial factor. The productgoals or measurable non-financial goals, will be measured independently of this multiplication is updated upwards or downwardsother goals, according to the CEO’s satisfaction of measurable quantitative personal targetsrating scale set forth in the beginningCompensation Policy, and then translated to payout factors. If either ICL adjusted operating income and/or adjusted net income actual performance will not meet the threshold performance level (60% of budget), there will be no payout for the 80% of STI that is measured against measurable financial and measurable non-financial goals.
The remaining 20% of the year (KPIs), at a rate of 50%, and according toCEO's STI target will be measured based on a qualitative evaluation by the HR & compensation committee and the Board of Directors after receiving a recommendation of the CEO’s performance made byExecutive Chairman of the Board, at a rateBoard. The maximum payout for this component cannot exceed the higher of 50%. 3 three base monthly salaries or 25% of total actual STI payout.
The CEO’s target bonus represents the complete satisfaction (100%) bymaximum STI payout for the CEO of all annual targets. Accordingpursuant to the Company's compensation policy,Compensation Policy cannot exceed, for any given year, the lower of 130% of the CEO's target bonus may be up to 120% of his annual salary.STI for such year or $1.5 million. Mr. Zoller's actual target bonusSTI, as determined in his employment agreement is NIS 2,500 thousand2.5 million (approximately $667 thousand)$781,000).
204

 
Raviv Zoller's STI for 2021: Mr. Zoller's annual STI for 2021 was calculated in accordance with the CEO STI formula described above. Mr. Zoller's STI payout for 2021 was NIS 3.25 million (approximately $1 million) and reflects a combined performance of 130% with respect to all of his formula components.
The annual financial factor is calculated by adding two “sub-factors”, each having
Kobi Altman's STI for 2021: Mr. Altman's STI payout for 2021 was NIS 1.49 million (approximately $468,000) and reflects a weightcombined performance of 50%104. The first sub-factor is the outcome1% with respect to all of the reported adjusted net profit for the relevant year (subject to further adjustments, if any, as approved by the HR & Compensation Committee and the Board), divided by the average reported adjusted net profit in the three preceding years. The second financial sub-factor is the outcome of the reported adjusted operating profit for the relevant year (subject to further adjustments, if any, as approved by the Compensation Committee and the Board), divided by the average reported adjusted operating profit in the three preceding years. In 2018, no further adjustments were made by the Compensation Committee and the Board beyond those in this Annual Report to the reported adjusted net and\or operating profit, as reported in the annual financial statements. Thehis formula components. This payout was determined based on ICL’s adjusted net income and adjusted operating income are not calculated in accordance with IFRS, but areIncome against budget (30% weight), other measurable financial and non-financials goals against budget (40% weight) and a qualitative evaluation of Mr. Altman's performance during 2021 (30% weight).
ICL Group Limited 213


Ofer Lifshitz' STI for 2021: Mr. Lifshitz' STI payout for 2021 was NIS 1.36 million (approximately $427,000) and reflects a combined performance of 110.1%. This payout was determined based uponon ICL’s adjusted net income and operating income pursuant to IFRS, which areagainst budget (30% weight), other measurable financial and non-financials goals against budget (40% weight) and a qualitative evaluation of Mr. Lifshitz' performance during 2021 (30% weight).
Mrs. Tal-Ktalav's STI for 2021: Mrs. Tal-Ktalav's STI payout for 2021 was NIS 1.19 million (approximately $375,000) and reflects a combined performance of 118.7%. This payout was determined based on ICL’s adjusted for certain items, as set forth in the Company's compensation policy. For details regarding the adjustments made to the Company's net income and operating income in 2018, see "Item 5 - Operatingagainst budget (30% weight), Other measurable financial and Financial Reviewnon-financials goals against budget (40% weight) and Prospects– A. operating results– Adjustments to Reported Operating and Net Income (Non-GAAP Financial Measures)"a qualitative evaluation of Mrs. Tal-Ktalav's performance during 2021 (30% weight).
 
The annual bonus amount
Mr. Aharonson's STI for 2018 to our President & CEO,2021: Mr. Raviv Zoller's, reflectsAharonson's STI payout for 2021, for the outcome of implementationrespective portion of the Annual Bonus Calculation Formula with respect to the actual termyear he had worked in ICL in 2018, as approved by our HR & Compensation Committee and Board of Directors on February 4 and 5, 2019, respectively. Mr. Zoller's pro-rated target bonus for the relative portionCompany, was NIS 0.89 million (approximately $285,000) and reflects a combined performance of 2018 or NIS 1,582 thousand (approx. $422 thousand)114.1%. This payout was determined based on ICL’s adjusted net income and operating income against budget (30% weight), was multiplied by ICL'sOther measurable financial factor in 2018 (0.97),and then updated according to a good performance of his KPIs, as were determined in the beginning of 2018 for the former acting CEO, Mr. Asher Grinbaumnon-financials goals against budget (40% weight) and to an exceptional performance fora qualitative evaluation of his performance. The HR & Compensation Committee and Board of Directors noted in their decision that Mr. Zoller successfully entered into the role of ICL's President & CEO, while showing an impressive learning curve in understanding ICL's business, as well as leadership, capabilities and involvement in the Company's business. Accordingly, the annual bonus payout to Mr. Zoller for 2018, is NIS 1,958 thousand (approximately $523 thousand).
The annual bonus to our Chairman of the Board is calculated according to the Annual Bonus Calculation Formula (i.e., multiplication of Mr. Locker's annual target bonus by the annual financial factor), however, the formula with respect to the Chairman does not include upward or downward updates according to the satisfaction of measurable quantitative personal targets and a qualitative evaluation. The Chairman’s target bonus represents the complete satisfaction (100%) by the Chairman of all annual targets. According to the Company's compensation policy, the target bonus of the Chairman of the Board, Mr. Johanan Locker, can amount to up to 120% his annual salary. Mr. Locker's annual target bonus for 2018, NIS 1,900 thousand (approximately $495 thousand), was multiplied by ICL's financial factor in 2018 (0.97). Accordingly, the annual bonus payout to Mr. Locker for 2018, is NIS 1,958 thousand (approximately $492 thousand). The total bonus payout to Mr. Locker for 2018, including the annual bonus and the special bonus, to the extent approved by the general meeting of our shareholders, will be NIS 2,323 thousand (approximately $620 thousand).
The annual bonus for 2018 to ICL's former acting CEO, Mr. Asher Grinbaum was calculated according to the Annual Bonus Calculation Formula (i.e., multiplication of Mr. Grinbaum's annual target bonus for his previous position as COO by ICL's annual financial factor (0.97), and then update according to a good performance of his KPIs and to an exceptional performance for qualitative evaluation of hisAharonson's performance during the term he had served as acting CEO)2020 (30% weight). In respect of the accrued vacation period and the advanced notice period, no Specific Personal Measurables (KPIs) were applied. The total bonus payout to Mr. Grinbaum for 2018, including the annual bonus and the special bonus for 2018, as approved by the general meeting of our shareholders is NIS 3,370 thousand (approximately $909 thousand).
 
205
ICL Group Limited 214

According to the resolution of the HR & Compensation Committee and Board of Directors, for purposes of determining the annual bonuses for 2018, the Annual Bonus Calculation Formula was applied also to the Company's officers, including Messrs. Weidhas and Altman, as follows:
The annual bonus to Mr. Weidhas was calculated according to the Annual Bonus Calculation Formula as aforesaid. The outcome of multiplying Mr. Weidhas' target bonus with ICL's financial factor (0.97) was updated according to a good performance of his KPIs and to a good qualitative evaluation of his performance.
The annual bonus to Mr. Altman was calculated according to the Annual Bonus Calculation Formula as aforesaid. The outcome of multiplying Mr. Altman' target bonus with ICL's financial factor (0.97) was updated according to a good performance of his KPIs and to a good qualitative evaluation of his performance.
Pension, Retirement and Similar Benefits
The annual provision of the Company for pension or other retirement benefits for our senior management (GEC) in 2018 amounted to approximately $1 million.
 
C. BOARD PRACTICES
 
Board of Directors
 
According to our Articles of Association, we must have no less than seven and no more than twenty directors.directors on our Board of Directors (including our external directors). Our directors (other than our external directors) are normallytypically elected by our shareholders at our annual meeting.general meeting of shareholders. Our Board of Directors is also authorized to appoint directors in order to fill vacancies or for any other reason. Each of our directors, other than our external directors, serves from the date of election or appointment until our next annual meeting of the shareholders. According to our Articles of Association, athe majority of the membersour Board of our BoardDirectors must be both citizens and residents of Israel. The approval of at least a majority of the voting rights represented at a shareholders’ meeting and voting on the matter is generally required to remove any of our directors from office (other than external directors as detailed below).
 
As of the date of this Annual Report, our Board of Directors consists of teneleven directors. In the event of equal votes of our Board of Directors, our Chairman of the Board has the right to cast the deciding vote. Mr.
Dr. Miriam Haran and Ms. Dafna Gruber serve as “external directors” according to the Companies Law. Messrs. Lior Reitblatt is anand Gadi Lesin and Ms. Tzipi Ozer Armon qualify as independent director,directors, as defined in the Israeli Companies Law, 5759-1999 (the “Companies Law”).Law. Board members Ms. Ruth Ralbag,Mses. Tzipi Ozer Armon, Miriam Haran and Dafna Gruber, as well as Messrs. Nadav Kaplan,, Reem Aminoach, and Lior Reitblatt areand Gadi Lesin qualify as independent directors under the rules applicable to U.S. companies listed on the NYSE. Board members Messrs. Johanan Locker, Avisar Paz,Yoav Doppelt, Aviad Kaufman, Sagi Kabla, Avisar Paz and Ovadia Eli and Yoav Doppelt are not considered independent directors by virtue of the positions they hold, or previously held, with our controlling shareholder's group or with the Company. Dr. Nadav Kaplan Ms. Ruth Ralbag are “external directors” according to the Companies Law.group. We do not have service contractsagreements with our current directors, excluding our Executive Chairman of the Board, Mr. Johanan Locker.Yoav Doppelt.
Board Composition
 
206The Company's Board of Directors has adopted an outline for institutionalizing and improving the structure and composition of the Board of Directors, reflecting, among other things, the Company's ambition to maintain a diverse composition of its board of directors, which represents diverse backgrounds, expanding skillsets and experience, and encompasses a wide range of special expertise and, such as high-level managerial experience in a complex organization; strong global experience; skills and experience in dealing with complex issues; experience with strategy setting; experience in managing global businesses, working with emerging markets and business development experience in high-volume businesses; experience in corporate governance, risk management and regulation, and gender diversity. The aforementioned outline also includes guiding principles for the appointment of external directors in the Company. In addition, the Company strives that its board of directors will be comprised of directors which have following characteristics: industry experts; corporate governance expertise; environmental, biodiversity and climate expertise; logistics and operational expertise; safety expertise, etc. Accordingly, the Company strives to integrate within its board, directors with expertise in such areas, whether with new appointments or upon replacement of a directors' vacant position.
Board Effectiveness Review
In 2020-2021, our board of directors underwent an evaluation of the business effectiveness of the board's work, which was conducted by one of the big four global accounting firms, pursuant to which the external consultants pointed out opportunities for improvement in relation to the best global practice in the field. The process included a review of the background materials and minutes of the board's discussions, interviews with a variety of company directors and officers, anonymous questionnaires to the board members regarding work practices, etc. The effectiveness assessment was done in accordance with a global methodology, and in relation to best practices and international corporate governance standards. According to such methodology the results of the assessment indicated a very high maturity level of the board of directors. The board of directors analyzed the findings of the assessment and the opportunities for improvement and created, with the assistance of the external consultants, and in collaboration with the Company and corporate secretariat, a mitigation plan for improvement of the effectiveness. Most of the items were already implemented or are in working progress.

ICL Group Limited 215



Following the external process for evaluating the effectiveness as described above, the board decided to adopt a tool that will allow it to independently self-assess its effectiveness over time. The tool was designed together with the abovementioned external firm and combines both business focus and comparison with leading global practices, while managing resources efficiently to achieve actual results. In February 2022 the board of directors launched the periodical review.
 
New Directors On-boarding & Directors' Trainings
The Company has a tailored and robust onboarding program for new directors, aimed to familiarize the new directors with key topics, ranging from the board’s structure, governance and responsibilities, the Company’s organizational structure, the Company’s strategic objectives and key performance indicators (KPIs), the Company’s business environment and market overview, financial reporting, legal proceedings, etc. The program is formalized and tailored to take into account the unique backgrounds, experiences and expected committee responsibilities of each new director. The program includes an educational effort of the Company's public disclosures, including website, regulatory filings and governance documents investor presentations, annual and long-term budget materials, etc. In addition, we schedule meetings for the new directors with other directors, key executives and business leaders to gain business insights about the Company, and the culture of the board and how it operates. Additional onboarding activities (such as site visits) are calendared throughout the year to foster an ongoing onboarding program.
The board operates according to annual and long-term plans, which include, among other things, trainings on various issues (such as climate change, sustainability, governance, compliance, HR & people trends, etc.), in addition to educational sessions on the business environment, our products, competition view, etc.
External Directors
 
As a public Israeli company, we are required by the Israeli Companies Law to have at least two external directors who meet certain independence criteria to ensure that they are not related parties to the Company or to our controlling shareholder. The definition of an “external director” or "independent director" under the Companies Law and the definition of an “independent director” under the NYSE rules are very similar, and thus, that we would generally expect a director who qualifies as one to also qualify as the other. However, since the definitions provided in Israeli law and U.S. law are not identical, it is possible for a director to qualify as one but not necessarily as the other.
 
An external director is required to have either financial and accounting expertise or professional qualifications, as defined in the relevant regulations promulgated under the Companies Law, and at least one of the external directors is required to have financial and accounting expertise. Our external directors, Ms. Ruth RalbagDafna Gruber and Dr. Nadav Kaplan,Miriam Haran, have financial and accounting expertise as defined in the Regulations. An external director is entitled to reimbursement of expenses and compensation as provided in the Compensation Regulations promulgated under the Companies Law but is otherwise prohibited from receiving any other compensation from us, directly or indirectly, during his or her term of office and for two years thereafter.
 
ICL Group Limited 216


Under the Companies Law, external directors must be elected at a shareholders’ meeting by a simple majority of the votes cast, provided that anyeither of the following conditions is met: that(i) such majority includes a majority of the votes cast by non‑controlling shareholders and shareholders who do not have a personal interest in the election (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder), excluding abstentions, or that(ii) the votes cast by suchnon-controlling shareholders and shareholders who do not have a personal interest in the election opposing the election (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder) did not exceed 2% of our aggregate voting rights. Generally, external directors may serve for up to three terms of three years each, and as a company whose shares are traded on the NYSE, our Audit and Accounting Committee and Board of Directors may nominate themexternal directors for additional three-year terms under certain circumstances.circumstances for election by the shareholders by the same majority required for election of an external director as described above. Even if an external director is not nominated by our Board of Directors for reelection for a second or third term, an external director may be nominated for reelection for up to two additional three year terms, by (i) one or more shareholders holding at least 1% of our voting rights have the right to nominate(provided the external director foris not an "affiliated or competing shareholder", or a relative of such a shareholder, at the time of the appointment, and is not "affiliated" with such a shareholder at the time of the appointment or within the two years preceding the date of appointment, as such terms are defined in the Companies Law). In such circumstances, the reelection and in addition,of the external director may nominate himself for reappointment. In such a case, the reelection can be approved withoutrequires the approval of our controlling shareholder if it is approvedshareholders by a majority of the votes cast by non‑controlling shareholders and shareholders who do not have a personal interest in the election (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder)shareholder and excluding abstentions) and the votes cast by such shareholders approving the electionreelection must exceed 2% of our aggregate voting rights.rights; and (ii) the external director him or herself, in which case the election by the shareholders is by the same majority required for the initial election of an external director, as described above. The term of office of an external director may be terminated prior to expiration only by a shareholder vote, by the same threshold required for election, or by a court, but in each case only if the external director ceases to meet the statutory qualifications for election or if the external director breaches his duty of trust to us.
 
Under the Companies Law, each committee of the Board of Directors that exercises power of the Board of Directors must include at least one external director and all external directors must be members of the Company’s Audit Committee and Compensation Committee, as further detailed below.Committee.
 
As of the date of this report,Annual Report, we have two external directors: Ms. Ruth Ralbag,Dr. Miriam Haran, whose first three-year term commenced on July 14, 2021, and Ms. Dafna Gruber, whose first three-year term commenced on January 10, 2018 and Dr. Nadav Kaplan, whose first term commenced on August 20, 2018. On February 26, 2018, Mr. Yaacov Dior ceased serving as an external director of the Company, after completing two three-year terms in the Company and on August 29, 2018, Dr. Miriam Haran ceased serving as an external director of the Company, after completing three three-year terms in the Company.27, 2022.
 
207
ICL Group Limited 217


Financial Experts
 
Our Board of Directors has resolved that at least three of its members must have financial and accounting expertise, as this term is defined in the Regulationsregulations promulgated under the Companies Law. Our Board of Directors has further determined, that, based on qualification statements delivered to the Company, seventhat nine out of our teneleven serving directors meet the said expertise requirements.requirements (For further details see “Item 6 - Directors, Senior Management and Employees — A. Directors and Officers”.
 
In addition, our Board of Directors has determined that all members of our Audit and Accounting Committee are financially literate for purposes of meeting the NYSE rules and that Ms. Ralbag and Messrs. Kaplan and Reitblatt are qualified to serve as “Audit Committee Financial Experts” as defined by SEC rules.
 
Alternate Directors
 
Our Articles of Association, consistent with Israeli law, provide that any director may appoint another person who is not a director or serving as an alternate director (or, in the case of an alternate director for a member of a committee of the Board of Directors, another director, provided the alternate director does not serve as a member of such committee) to serve as his alternate director, subject to the approval of the Board of Directors. A person who is not qualified to be appointed as an independent director, pursuant to the Companies Law, may not be appointed as an alternate director of an independent director qualified as such under the Companies Law. The term of an alternate director can be terminated at any time by the appointing director or the Board of Directors and automatically terminates upon the termination of the term of the appointing director. The Companies Law stipulates that an external director may not appoint an alternate director except under very limited circumstances. An alternate director has the same rights and responsibilities as a director, except for the right to appoint an alternate director. No alternate director was appointed during the reported period.period.
 
Our Board Committees
 
Our Board of Directors has established the following Committees,committees, which operate in accordance with written charters or procedures that set forth, among other things, such committee’s structure, manner of operations, qualification and membership requirements, responsibilities and authority of the committee,authorities, etc.
 
Audit and Accounting Committee
 
Under the Companies Law, the Board of Directors of a public company must establish an Audit Committee. The Audit Committee must consist of at least three directors who meet certain independence criteria and must include all of the Company’s external directors. The Chairman of the Audit Committee is required to be an external director. The responsibilities of an Audit Committee under the Companies Law include identifying and addressing flaws in the business management of the Company, reviewing and approving interested party transactions, establishing whistleblower procedures, overseeing the Company’s internal audit system and the performance of its Internal Auditor,internal auditor, and assessing the scope of the work and recommending the fees of the Company’s independent accounting firm. In addition, the Audit Committee is required to review and determine whether certain actions and transactions with a controlling shareholder or with a company officer are “material” or “extraordinary” and whether they are negligible according to the approval procedures required under the Companies Law and company procedures.Company procedures.
 
ICL Group Limited 218


In accordance with U.S. law and the NYSE requirements, our Audit and Accounting Committee is also responsible for the appointment, compensation and oversight of the work of our independent auditors. In accordance with such laws and rules and with the Israeli Companies Law and regulations promulgated thereunder, the Audit and Accounting Committee is also responsible for assisting our Board of Directors in monitoring our financial statements, the effectiveness of our internal controls and our compliance with legal and regulatory requirements.
 
208

As of the date of this report,Annual Report, our Audit and Accounting Committee consists of threefour directors, and also includescomposed of our two external directorsdirectors: Dr. Miriam Haran (Chairman until May 2022), Ms. Dafna Gruber (will replace Dr. Haran as Chairman as of May 2022), and ourtwo independent director, as follows: Ms. Ruth Ralbag (Chairman, external director), Dr. Nadav Kaplan (external director) anddirector: Mr. Lior Reitblatt (independent director).and Mr. Gadi Lesin. In addition to meeting the requirements of Israeli law, our Audit and Accounting Committee also complies with the requirements applicable to U.S. companies that are listed on the NYSE and with SEC rules. All members of our Audit and Accounting Committee members are also independent directors as thissuch term is defined in SEC rules and the NYSE listing requirements. Our Board of Directors has determined that all the members of the Audit and Accounting Committee are financially literate as provided in the NYSE rules and that Dr. Haran, Ms. RalbagGruber and Messrs. KaplanReitblatt and Reitblatt are qualified to serveLesin qualify as “audit committee financial experts” as defined by SEC rules.
 
Human Resources and Compensation Committee
 
Under the Companies Law, the Board of Directors of a public company must establish a Compensation Committee. The Compensation Committee must consist of at least three directors who meet certain independence criteria and include all of the Company’s external directors, who are required to constitute a majority of its members. The Chairman of the Compensation Committee must be an external director. The members of the Compensation Committee are remunerated for their service in accordance with the regulationsCompensation Regulations governing the compensation of external directors. The responsibilities of a Compensation Committee under the Companies Law include: recommending to the Board of Directors a policy governing the compensation of company officers and directors based on specified criteria, recommending to the Board of Directors, from time to time, updates to update such compensation policy and reviewing its implementation; deciding whether to approve transactions respectingwith respect to the terms of office and employment of officers and directors which require approval by the compensation committee under the Companies Law, including approving, under certain circumstances, an exemption from shareholder approval byof the General Meeting,terms of a candidate for chief executive officer who meets certain non-affiliation criteria, in accordance with the provisions of the Companies Law.Law.
 
Our HR &Compensation& Compensation Committee also oversees the Company's bonus and equity plans, evaluation of top management and employees, succession planning and so forth.forth.
 
Our HR & Compensation Committee consists of three directors, and includescomposed of our two external directorsdirectors: Dr. Miriam Haran (Chairman), Ms. Dafna Gruber, and ourone independent director, as follows: Dr. Nadav Kaplan (Chairman, external director), Ms. Ruth Ralbag (external director), and Mr. Lior Reitblatt (independent director).Reitblatt. All members of our HR & Compensation Committee members are also independent directors as thissuch term is defined in the NYSE listing requirements and SEC rules.rules.
 
ICL Group Limited 219



Safety, Environment, SafetyClimate, Diversity, Inclusion and Public Affairs Committee
 
Our Safety, Environment SafetyClimate, Diversity, Inclusion and Public Affairs Committee is not a statutory committee, and is designed to assist our Board of Directors in fulfilling its responsibilities respectingwith respect to oversight of our safety, environment, and safetyclimate related risks and opportunities policies and programs, our community outreach programs and public relations and advocacy. Our Environment, Safetyadvocacy and Public Affairsdiversity and inclusion aspects in the Company. This Committee is not authorized to exercise any power of our Board of Directors. ItDirectors and has advisory authority only. The committee consists of fourfive directors: Dr. Miriam Haran (Chairman), an environmental expert, whom is also the responsible director for diversity and inclusion issues on behalf of the Board of Directors, Mr. Reem Aminoach, (Chairman), Dr. Nadav Kaplan, Mr. Ovadia Eli, Mr. Sagi Kabla and Mr. Sagi Kabla.Gadi Lesin.
 
209

Operations Committee
 
Our Operations Committee is not a statutory committee and is designed to assist our Board of Directors in fulfilling its responsibilities with respect to business operations and strategy implementation, including reviewing M&A transactions and research and development strategy. Our Operations Committee is not authorized to exercise any power of our Board of Directors.Directors and has advisory authority only. The committee consists of sixseven directors: Mr. Johanan LockerYoav Doppelt (Chairman), Mr. Avisar Paz, Mr. Sagi Kabla, Mr. Ovadia Eli, Mr. Reem Aminoach, Mr. Lior Reitblatt and Mr. Lior Reitblatt.Gadi Lesin.
 
Financing Committee
 
Our Financing Committee is not a statutory committee, and its purpose is to assist our Board of Directors in fulfilling its responsibilities with respect to our financing and equity management and operations, including loans, equity offerings, hedging, debt and other financing vehicles. Our Financing Committee is not authorized to exercise any power of our Board of Directors. As of the date of this report, theDirectors and has advisory authority only. The Financing Committee consists of four directors: Mr. Avisar PazSagi Kabla (Chairman), Mr. Sagi Kabla,Avisar Paz, Mr. Aviad Kaufman and Ms. Ruth Ralbag.Mr. Lior Reitblatt.
 
Internal Auditor
 
Under the Companies Law, a Company’sthe Board of Directors of a public company is required to appoint an Internal Auditor pursuant to the recommendation of the Audit Committee. The role of the Internal Auditor is to examine, among other things, whether the Company’s actions comply with applicable law, companyCompany procedures and proper business procedures. Under the Companies Law, the Internal Auditor may not be an interested party (as defined in the Companies Law), a director or an officer of the company,Company, or a relative of any of the foregoing, nor may the Internal Auditor be the company’sCompany’s independent accountantauditor or a representative thereof. The Internal Auditor oversees the work of various internal auditors acting on his behalf throughout the organization.
As of the time of this report,Annual Report, our Internal Auditor is Mr. Amir Meshulam, a certified public accountant in Israel, holds an LLB from the College of Management and is a member of the Israel Bar. His education, skills and experience were among the Board of Directors’ considerations in approving the appointment. Mr. Meshulam has served in this position since August 2018, replacing Mr. Shmuel Daniel, who served2018. He is a Company employee, and reports to the Executive Chairman of the Board of Directors.
Our Internal Auditor oversees the work of various internal auditors acting on his behalf throughout the organization.
He acts in accordance with the defined Internal Audit Charter and obligated to comply with IIA Standards. He holds periodical meetings with the Audit Committee, without management present, as often as deemed necessary, and at least once a year. In addition, the Internal Auditor holds monthly meetings with our previousExecutive Chairman of the Board and with the Chairman of the Audit Committee.
The internal auditor since August 2014,audit's annual and has leftmulti-year work plans are risk-based plans. They have been designed based on retirement. Mr. Meshulam appointment wasa global risk assessment, and were examined against industry standards and benchmark. The plans are reviewed and approved by the Audit Committee and the Board of Director's on May 9, 2018, after receivingDirectors. In addition, a high-level risk assessment is carried out annually and the Audit Committee's recommendation from May 8, 2018.audit plan is reassessed and approved.
 
ICL Group Limited 220


Insurance and indemnification
 
(1)The Articles of Association of the Company and its Israeli subsidiaries include provisions that permit exemption, indemnification and insurance of the liability of officers, all in accordance with the provisions of the Israeli Companies Law.
 
The Company, with the approval of the HR & Compensation Committee, the Board of Directors and the General Meeting of the shareholders, granted its officers ana letter of exemption and letters of indemnification, and also hasmaintains an insurance policy covering directorsdirectors' and officers.officers' liability. The directors' and officers' liability insurance and the exemption and indemnity undertaking do not apply to those cases specified in Section 263 of the Israeli Companies Law. The exemption relates to damage caused and/or will be caused, by those officers as a result of a breach of the duty of care to the Company. Regarding directors who are office holders of Israel Corp., who may serve from time to time, on January 5, 2021, the General Meeting of the shareholders approved to extend the period for exemption and indemnification entered into with such office holders, for an additional 9 years, commencing November 30, 2020, provided that the exemption shall not apply to liabilities arising in connection with a transaction or resolution in which a controlling shareholder or an office holder, including an office holder who is other than the office holder party to the agreement, has a personal interest. The amount of the indemnification payable by the Company under the letter of indemnification, in addition to amounts received from an insurance company, if any, for all of the officers on a cumulative basis, for one or more of the events detailed therein, is limited to $350$300 million. The insurance is renewed annually.annually.
D&O Framework Transaction
 
210

On September 14, 2017, ourJanuary 30, 2020, the Company’s shareholders approved the Company's engagement in directors and officers insurance policies, as a three-year framework agreement.transaction which enables the Company to purchase, from time to time, directors’ and officers’ liability insurance policies for a two tier coverage of directors’ and officers’ liability, including a joint tier with Israel Corp., beginning February 1, 2020 (the "Framework Transaction"). The insurance policies under the framework agreementFramework Transaction include a joint primary tier with Israel Corp. with a joint liability cap of up to $20 million, and a separate tier covering the Company alone, with a liability cap of up to $200$330 million, forwith a total liability limit of $220up to $350 million for both tiers. Under the terms of the framework resolution, ourOur directors and officers are beneficiaries of both tiers. Pursuant to the framework agreement,Framework Transaction, the cost of the annual premium shall not exceed a cap of $10 million for both tiers. The division of the premium amount between the Company and Israel Corp. in the joint tier is that 70% are 80% to be paid by the Company and 30%20% by the Israel Corp. According to the approval of the general meeting of our shareholders,Corp, and the HR & Compensation Committee and the Board of Directors will have the authority to approve changeschange, from time to time, in connection with the rate of the premium distribution between the ICL Group and the Israel Corporation Groupallocation in respect of the joint tier as recommended bybetween the companies, according to the recommendation of the insurers and/or brokers, and provided that the new rate of the premium distributionsuch changes will not exceed 25% over the entire transaction period. Deviation from these limits shall require shareholder approval. In accordance with the shareholders approval. On December 4 and 5, 2017, the Audit & Accounting Committee and Board of Directors approved the renewalterms of the insurance policy, onFramework Transaction and the basis ofCompany's Compensation Policy, the framework agreement, for an additional year beginning on January 1, 2018,Company's directors’ and until December 31, 2018, with an annual premium of $900,000, which is within the maximum premium amount specified in the framework resolution.
On January 3 and 7, 2019, our Audit & Accounting Committee and Board of Directors approved the renewal of theofficers’ liability insurance policy for 2019, according to2021, was approved by the framework agreement, withCompany's authorized organs, effective as of March 2021. The 2021 directors’ and officers’ liability insurance policy includes a liability limit of US$116 million for both tiers (comprised of a limit of $205$40 million, with an additional coverage Side A (directors and officers only) limit of $20 million (as approved by our Audit & Accounting Committee on June 19, 2018$76 million). The Company is acting to renew its directors' and December 10, 2018 and by the Board on June 19, 2018 and December 12, 2018) and a total premiumofficers' liability insurance policy for 2022, effective as of up to $1,400,000. This amount (including the Side A premium), does not exceed the maximum premium amount pursuantMarch 2022, with similar terms to the framework agreement. The allocation of the premium distribution between ICL and Israel Corp was revised to 80% ICL and 20% Israel Corp.
The terms of the new2021 directors’ and officers’ liability insurance policy adhereand subject to the terms of the framework resolution and of the Company's Compensation Policy.transaction.
 
ICL Group Limited 221



Other Information
 
We didhave not engageengaged in any arrangements with directors providing for benefits upon termination of employment, with the following exceptions: (1) Mr. Yoav Doppelt's current termination arrangements include continued vesting of LTI grants for a period of 12 months following termination of employment. Notwithstanding the foregoing, subject to the approval by our shareholders at the Annual General Meeting expected to take place on March 30, 2022, of Mr. Doppelt's amended terms of compensation, as well as the Company's new compensation policy, in casethe event of termination of employer-employee relations, Mr. Johanan LockerDoppelt's term of office as Executive Chairman of the Board, he will be entitled to a bonus atsix-month adjustment period and six month advance notice period, during both of which he will continue to be entitled to all of his compensation terms, including STI payouts and continued vesting of his existing LTI plans. In addition, Mr. Doppelt will be entitled to an amountadditional severance payment by the Company, in addition to the mandatory severance payment, equal two timesto his last monthly salary multiplied by the number of his years of servicethat he was employed by the Company, serving as ICL’sits Executive Chairman of the Board and(i.e., as of July 1, 2022); (2) In accordance with the Equity Plan, the board members' vesting of the Restricted Shares would fully accelerate if the holder thereof ceases to serve as a director of the Company, unless he ceased to hold office due to those certain circumstances regarding early termination of office or imposition of enforcement measures, as set forth in section 231-232a and 233(2) of the Israeli Companies Law.
 
Number of meetings and average attendance rate of the meetings of ICL Board of Directors and its permanent committees
 
 Number of meetings in reported yearAverage Attendance
Board of Directors1894%
Audit & Accounting Committee1097%
HR & Compensation Committee7100%
Financing Committee380%
Operations Committee283%
Safety, Environment, Climate, Diversity, Inclusion and Public Affairs Committee3100%
 
Number of meetings in
reported year
Average Attendance
General Board Meetings1697%
Audit & Accounting Committee1391%
Financing Committee4100%
Operations Committee492%
Compensation Committee11100%
Environment Committee494%


 
ICL Group Limited 222
211


D. EMPLOYEES
 
As atof December 31, 2018, we had a2021, our workforce of 12,125includes 13,233 employees.
 
Breakdown of Employees by Segments
 
 2018
2021
2017
2020
2016
2019

Phosphate Solutions 5,259 5,533 6,274
 4,608
 4,601
 4,867
Potash 2,855 3,109 3,196
 2,498
 2,491
 2,541
Industrial Products 1,675 1,697 1,710
Industrial Product
 1,595
 1,654
 948
Innovative Ag Solutions 1,182 1,163 1,081
 2,406
 994
 1,651
Global functions and headquarters 1,154 1,158 1,253
 1,162
 1,092
 1,083
Sub Total
 12,269
 10,832
 11,090
Temporary employees
 964
 912
 1,027
Total employees 12,125 12,660 13,514
 13,233
 11,744
 12,117

 
Geographic Breakdown of Employees
 
 2018
2021
2017
2020
2016
2019

Israel 4,672 4,673 4,861
 4,462
 4,401
 4,507
China 2,467 2,413 2,816
 1,977
 2,048
 2,064
Spain 1,179 1,281 1,294
 872
 868
 892
USA
 772
 716
 720
Germany 860 1,012 1,157
 670
 697
 858
UK 659 836 827
 676
 670
 658
USA 728 817 895
Netherlands 627 626 639
 578
 584
Brazil 276 280 264
 1,644
 259
 262
France 125 125 127
 122
 117
 119
Other 532 597 634
All other
 496
 426
 523
Sub Total
 12,269
 10,786
 11,187
Temporary employees
 964
 912
 1,027
Total employees 12,125 12,660 13,514
 13,233
 11,698
 12,214


As atof December 31, 2018,2021, the Company’s workforce comprised 12,125of 13,233 employees, compared to 12,66011,744 employees as atof December 31, 20172020a decreasean increase of 5351,489 employees. The said decrease derivesThis increase is mainly from a decrease in the number of employees in the UK, due to the ceased productionacquisitions of potash in  Fertiláqua and ADS.
ICL Boulby mine and a shift to sole production of Polysulphate; in Germany - mainly as a result of the sale of the Fire Safety and Oil Additives (P2S5) in BKG, as well as the sale of the Rovita business; in the US - as a result of sale of the Fire Safety Business and Oil Additives (P2S5), mainly in ICL North America ; in Spain - as a result of the sale of the Fire Safety and Oil Additives (P2S5), mainly in Auxquimia SA.Group Limited 223

 
Employment Agreements, Collective Bargaining Agreements and Temporary Employees
 
ICLOur employees in Israel are employed under collective or individualpersonal employment agreements. The collective bargaining agreements are signed for specified termsnegotiated and are renewed from time to time. By law, in the event thatif a new collective bargaining agreement is not signed, the terms of the original agreement are extended for an unlimited period, unless one party gives notice to the other of its cancellation. As atof the date of publication of this Annual Report, no notice of cancellation had been given for any of the collective bargaining agreements currently in effect at ICL.
 
212

Subsidiaries Rotem, Fertilizers and Chemical Materials Ltd. (“FCM”The following subsidiaries in Israel have collective bargaining agreements in force up to the to the date indicated next to them: Dead Sea Works ("DSW") (September 2022), Mifalei Tovala (December 2022), TAMI (December 2022), Dead Sea Magnesium (December 2023), Fertilizers and chemicals (December 2023) and Bromine Compounds have collective bargaining agreements with termination dates ranging from January 2017 (an agreement that has not yet been renewed-in DSM) up to 2022.(March 2025).
 
In May 2018, a collectiveDuring 2021, the labor agreement was signed between Dead Sea Works Ltd. (“DSW”)agreements of both Rotem Amfert and Periclas expired, and the DSW Workers’ Union,parties are in negotiations on the New General Organization of Workers in Israel (the “Histadrut”) and the Negev District Organization of Workers, for a period of 5 years, commencing on October 1, 2017, the date of expirationrenewal of the previous labor agreement.
In November 2018, a collective labor agreement was signed between Mifalei Tovala Ltd. and the Mifalei Tovala Workers’ Union and the New General Organization of Workers in Israel (the “Histadrut”), for a period of 5 years, commencing on January 1, 2018, the date of expiration of the previous labor agreementagreements.
 
Senior employees in Israel serving in special positions and members of management are employed under individualpersonal agreements. These agreements are not limited in time and may be terminated with advance notice of a few months.
 
Employees of ICL’s subsidiaries overseas are employed according to the employment terms prevailing in the countries in which they are employed. Most of the overseas employees, primarily in China, Germany, the Netherlands, the United Kingdom, Spain and the United States, are employed under collective agreements.
A small number of employees at ICL’s sites in Israel are employed bythrough employment agencies for short terms. In addition, we have contracted in Israel with subcontractors for various outsourcing services such as security, packaging, maintenance projects, catering, cleaning, and other services. In accordance with thea decision received on October 2004 by ICL's Board of Directors and its Israeli subsidiaries,in 2004, contractors who employ workers at ICL’s plants in Israel are required to give more than the salary terms required by law toprovide their employees working on a regular basiswho permanently work for ICL. Pursuant to this decision, the employers are obligated to grant these employees, in addition to a current salary that must be at least 5% higher than the minimum wage stipulated by law,ICL holiday gifts and other benefits such as uniforms and meals.
Employees of ICL’s subsidiaries outside of Israel are employed according to the employment terms prevailing in the countries in which they are employed. Significant number of the overseas employees, primarily in China, Germany, the Netherlands, the United Kingdom, Spain, and the United States, are employed under collective agreements and/or arrangements.
 
Under Chinese labor law, it is a mandatory requirement for employers to enter into individualpersonal labor contractcontracts with their employees. As such, the permanent staff of YPH JV shall beare employed under respective individualpersonal labor contracts. However, under PRC law, employees have the right to establish a labor union to represent their interests and protect their legal rights. YPH JV has a labor union. The labor union may represent employees in negotiating with their employer for collective agreements regarding remuneration, working hours, work safety, etc. Such collective agreements are mainly used for providing a benchmark for certain working conditions.
 
Promoting gender equalityICL companies in Brazil were recently integrated into one organizational structure. ICL employees in Brazil are covered by a collective bargaining agreement with the Labor Council that negotiates annual increases collectively between all the companies.  Local ICL agreements exist for each site covering working conditions and benefits.  The staff responsible for sales varies according to the company between employees and independent contractors, based on business needs.
 
In January 2019
ICL Group Limited 224

Promoting Diversity, Inclusion & Belonging (DIB)
At ICL diversity means understanding, accepting, and valuing differences between people including those of different races, nationalities, religions, gender, ages, disabilities, sexual orientations, and ethnicities, and those with differences in education, personalities, experiences, and knowledge bases.

Inclusion means embracing colleagues who look, act and, importantly, think differently.
We view belonging as a human need, genetically wired in each one of us.
With all our differences, becoming stronger together
As part of our Employer of Choice journey, we have committed to becoming a more inclusive and attentive organization.

One of the key milestones in this important journey is to commit to
ICL’s Diversity and Inclusion (D&I) policy, first formulated in 2020, that will strengthen ICL’s direction and provide a measurement for this area.
As part of this process we appointed a
Global ICL D&I officer. The new role includes responsibility for supporting the Company announcedby developing a D&I culture and improving ICL’s D&I measures. We also launched a dedicated and interactive online intranet, (MyCampus), to inform and educate employees on diversity, inclusion and belonging issues.

Initiating Global Membership Catalyst
Catalyst is a global non-profit organization working with some of the world’s leading CEOs and companies to help build workplaces that it is oneare appropriate for women. With ICL’s membership, each of 230 public companies worldwide includedour employees have access to world-class resources that support individual career growth, inclusive leadership skill building, and organizational change efforts at www.catalyst.org.
Educational offerings
During each of our employees’ journey, they will learn to understand their biases and how to change their way of thinking to act in an inclusive way.

To achieve this goal, we offer virtual sessions on
Unconscious Bias, Understanding Privilege and Cultural Awareness, in addition to short knowledge bursts (e-learning) on “Leading Your Team in an Inclusive Manner” or “Running More Inclusive Meetings”.
ICL Group Limited 225



Global DIB@ICL ambassadors
40 of our employees around the world have enrolled to become ‘Diversity, Inclusion and Belonging Ambassadors’. ICL’s ambassadors amplify initiatives developed for the organization.
DIB@ICL Statistics and Trends
Each quarter detailed statistics and trends are produced to help ICL focus on those areas that can contribute the most when addressed.
          Talent Development and Learning
Shifts in the 2019 Bloomberg Gender-Equality Index (GEI). The GEI distinguishes companies committedworld of work and increasing worker expectations are driving organizations to transparencyapproach talent, development and learning in reporting gender policy and advancing gender equality. The GEI includes public companies that score above a globally-established threshold, based on transparency and their policies. The 2019 GEI includes firms from ten sectors headquartered across 36 countries and regions. Collectively,more integrated way. Supported by the firms have a combined market capitalizationoutcome of $9 trillion and employ more than 15 million people,the Employer of which 7 million are women. ICL is the only Israeli company included in the index,Choice, as well as the only company among its majorby a global peerssurvey to measure employee engagement and enablement, we introduced several initiatives during 2021 in learning and development.
ICL’s effective leadership is in the specialty chemicalscore of our business and fertilizers sectors.implemented in all our development offerings. With the ICL Leadership Model, we seek to embrace the key qualities and capabilities of an ICL leader, demonstrating and cultivating “Care, Dare, Grow, and Winning Spirit” – wherever they are and whatever they do. The model is designed in the shape of ICL’s logo to reflect the fact that our leadership model is at the heart of who we are as a company.
From MyCampus@ICL to WeGrow@ICL
Although we maintain the broadly accepted and popular “MyCampus@ICL” platform for learning offerings (primarily for our global events calendar overview and depth information for processes like performance management and ICLeaders), in 2021 we introduced the next generation of learning at ICL. “WeGrow@ICL” is open source, its curated content is powered by AI and based on an up-to-date skills profile that provides real-time insights about workforce skills, beyond their role (role-based skills, personal skills, and strategic, company-wide skills). With WeGrow@ICL we are not only enabling our employees to take their development into their own hands, but we also enable them to upskill, reskill and redefine their roles to better align with their future needs.
Bloomberg’s 2022 Gender-Equality Index (GEI)
We strive to promote equality at all ICL's facilities worldwide and committed to ongoing transparency and developing a diverse and inclusive workforce.
We’re pleased to be one of the 418 companies included in Bloomberg’s 2022 Gender-Equality Index and provide our investors and other stakeholder a greater disclosure around our investments in gender-related practices and policies.
 
213
ICL Group Limited 226

ICL strives to be an “employer of choice”, and as such, continually promotes equality, including the employment and promotion of women in its workplaces around the globe. For example, the percentage of women serving as executive officers of ICL increased from 11% in 2017 to 33% in 2018. The Company considers its inclusion in the GEI to be a major achievement, highlighting ICL's transparency and commitment to promoting gender equality. 
Infrastructure, performance management processes and human resources development
In 2018, the Company expanded the assimilation of the performance management infrastructure and the management of the human resource. In this context, the Company is assimilating a unified technological infrastructure for managing and developing the human resource within all its units worldwide, as well as globally unified work processes. The assimilated system includes the administration of employees’ data, as well the learning and training processes. In addition, the system enables managers and employees to participate in a performance management process based on goals, performance evaluation, and team and individual development plans deriving from them. Assimilation of the global processes is expected to expand and include additional processes in the areas of compensation and communications, as well as to improve the link between performance and rewards.
214

 
E. SHARE OWNERSHIP

Share-based payments to employees - Non-marketable options
Grant dateEmployees entitledNumber of instruments (thousands)Issuance's detailsInstrument termsVesting conditionsExpiration date
August 6, 2014Officers and senior employees 3,993An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan, to 450 ICL officers and senior employees in Israel and overseas.Upon exercise, each option may be converted into one ordinary share of NIS 1 par value of the Company. In case of on the exercise date the closing price of an ordinary share is higher than twice the exercise price (the “Share Value Cap”), the number of the exercised shares will be reduced so that the product of the exercised shares actually issued to an offeree multiplied by the share closing price will equal to the product of the number of exercised options multiplied by the Share Value Cap.
3 equal tranches:
(1) One third on December 1, 2016
(2) One third on December 1, 2017
(3) One third on December 1, 2018
Two years from the vesting date.
December 11, 2014Former CEO 367An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.
May 12, 2015Officers and senior employees 6,729An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan, to 550 ICL officers and senior employees in Israel and overseas.Upon exercise, each option may be converted into one ordinary share of NIS 1 par value of the Company.
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
The first and second tranches is at the end of 36 months after the grant date for the third tranche is at the end of 48 months after the grant date.
June 29, 2015Former CEO 530An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.
Former Chairman of BOD 404
June 30, 2016Officers and senior employees 3,035An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan, to 90 ICL officers and senior employees in Israel and overseas.June 30, 2023
September 5, 2016Former CEO 625An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.
Chairman of BOD 186
February 14, 2017Former CEO 114An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.February 14, 2024
June 20, 2017Officers and senior employees 6,868An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan  to 498 ICL officers and senior employees in Israel and overseas.June 20, 2024
August 2, 2017Chairman of BOD 165An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.

215


Grant dateEmployees entitledNumber of instruments (thousands)Issuance's detailsInstrument termsVesting conditionsExpiration date
March 6, 2018Officers and senior employees 5,554An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan (as amended) to 508 ICL officers and senior employees in Israel and overseas, ICL CEO and Chairman of the BOD.Upon exercise, each option may be converted into one ordinary share of NIS 1 par value of the Company.
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
March 6, 2025
May 14, 2018CEO 385May 14, 2025
August 20, 2018Chairman of BOD 403August 20, 2025
Share-based payments to employees - Restricted shares
Grant dateEmployees entitledNumber of instruments (thousands)Vesting conditions (*)Instrument termsAdditional InformationFair value at the grant date (Million)
August 6, 2014Officers and senior employees 922
3 equal tranches:
(1) One third on December 1, 2016
(2) One third on December 1, 2017
(3) One third on December 1, 2018
 
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 450 ICL officers and senior employees in Israel and overseas.The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required).8.4
December 11, 2014Former CEO 86An issuance for no consideration, under the 2014 Equity Compensation Plan.
February 26, 2015ICL’s Directors (excluding ICL's CEO) 99
3 tranches:
(1) 50% will vest August 28, 2015
(2) 25% will vest February 26, 2017
(3) 25% will vest February 26, 2018
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 11 ICL Directors.0.7
May 12, 2015Officers and senior employees 1,194
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 550 ICL officers and senior employees in Israel and overseas.9.7
June 29, 2015Former CEO 90An issuance for no consideration, under the 2014 Equity Compensation Plan.
Former Chairman of the BOD 68
December 23, 2015ICL’s Directors (excluding ICL's CEO & Chairman of the BOD) 121
3 equal tranches:
(1) One third on December 23, 2016
(2) One third on December 23, 2017
(3) One third on December 23, 2018
 
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 8 ICL Directors.0.5
(*) The vesting date is subject to the employee entitled continuing to be employed by the Company and the directors continuing to serve in their positions on the vesting date, unless they ceased to hold office due to certain circumstances set forth in sections 231-232a and 233(2) of the Israeli Companies LawShare-based payments to employees - Restricted shares

Grant dateEmployees entitledNumber of instruments (thousands)Vesting conditions (*)Instrument termsAdditional InformationFair value at the grant date (Million)
June 30, 2016Officers and senior employees 990
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 90 ICL officers and senior employees in Israel and overseas.The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required).4.8
September 5, 2016Chairman of the BOD 55An issuance for no consideration, under the 2014 Equity Compensation Plan.
Former CEO 185
January 3, 2017ICL’s Directors (excluding ICL's Chairman of the BOD) 146
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 8 ICL Directors.
The value includes a reduction of 5% from the value of the equity compensation, pursuant to the decision of the directors in March 2016, to reduce their annual compensation for 2016 and 2017.
0.6
February 14, 2017Former CEO 38An issuance for no consideration, under the 2014 Equity Compensation Plan.0.2
June 20, 2017Officers and Senior employees 2,211An issuance for no consideration, under the 2014 Equity Compensation Plan, to 494 ICL officers and senior employees in Israel and overseas.10
August 2, 2017Chairman of BOD 53An issuance for no consideration, under the 2014 Equity Compensation Plan.0.3
January 10, 2018ICL’s Directors (excluding ICL's CEO & Chairman of the BOD) 137An issuance for no consideration, under the 2014 Equity Compensation Plan, to 7 ICL Directors.0.6

(*) The vesting date is subject to the employee entitled continuing to be employed by the Company and the directors continuing to serve in their positions on the vesting date, unless they ceased to hold office due to certain circumstances set forth in sections 231-232a and 233(2) of the Israeli Companies Law.

217

Share-based payments to employees - Restricted shares
Grant dateEmployees entitledNumber of instruments (thousands)Vesting conditions (*)Instrument termsAdditional InformationFair value at the grant date (Million)
March 6, 2018Officers and senior employees 1,726
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
An issuance for no consideration, under the 2014 Equity Compensation Plan (as amended).The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required).8
May 14, 2018CEO 1210.6
August 20, 2018Chairman of BOD 470.2
ICL’s Directors (excluding ICL's CEO & Chairman of the BOD) 88Acceleration at January 2019.0.4
(*) The vesting date is subject to the employee entitled continuing to be employed by the Company and the directors continuing to serve in their positions on the vesting date, unless they ceased to hold office due to certain circumstances set forth in sections 231-232a and 233(2) of the Israeli Companies Law.

218


Share-based payments to employees
 
Additional Information
For additional information regarding the share-based payments to the Company's employees in the form of non-marketable options and restricted shares of the Company, and for information regarding under the amended 2014 Equity Compensation Plan and the grants in prior years made under the said Plan, see Note 2119 to our Audited Financial Statements.
 
For information with respect to share ownership of members of our Management and Supervisory Boards and our senior management see “Item 7 - Major Shareholders and Related (and Interested) Party Transactions”.
 
219
ICL Group Limited 227

 
Item 7 – MAJOR SHAREHOLDERS AND RELATED (AND INTERESTED) PARTY TRANSACTIONS
 
A. MAJOR SHAREHOLDERS
 
The following table presents, as of February 26, 201821, 2022 (unless otherwise noted below),*** the beneficial ownership of our ordinary shares by each person who is known by us to be the beneficial owner of 5% or more of our outstanding ordinary shares and each of our directors and executive officers. The data presented is based on information provided to us by the holders or disclosed in public regulatory filings.
 
The number of ordinary shares beneficially owned by each entity, person, executive officer or director is determined in accordance with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days through the exercise of any option, warrant or other right. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all common shares held by that person.
Unless otherwise indicated below, the address for each beneficial owner is c/o ICL Group Ltd., Millennium Tower, 23 Aranha Street, P.O. Box 20245 Tel Aviv, 6120201, Israel.
ICL Group Limited 228


 
Ordinary Shares

Beneficially Owned(1)
Special State

Share
ShareholdersNumber%Number%

Israel Corporation Ltd.(2)
587,178,76145.86%**--
State of Israel(3)
--1100%
Johanan Locker155,369*--
Avisar Paz-*--
Aviad Kaufman-*--
Sagi Kabla-*--
Ovadia Eli79,199*--
Nadav Kaplan20,553*--
Lior Reitblatt95,553*--
Reem Aminoach36,703*--
Ruth Ralbag36,703*--
Yoav Doppelt15,381*--
Raviv Zoller120,919*--
Kobi Altman211,703*--
Lilach Geva Harel-*--
Ilana Fahima-*--
Rani Lobenstein30,190*--
Charles Weidhas171,065*--
Ofer Lifshitz131,108*--
Eli Glazer163,979*--
Noam Goldstein55,327*--
Anat Tal-Ktalav55,327*--
Amir Meshulam20,793*--
Israel Corporation Ltd.(2)
587,178,75845.62%**--
State of Israel(3)
--1100%
Migdal Insurance & Financial Holdings Ltd. (4)
78,034,2676.06%--
Harel Insurance Investments & Financial Services Ltd. (5)
67,348,5035.23%--
Yoav Doppelt15,381*--
Avisar Paz16,926*--
Aviad Kaufman-*--
Sagi Kabla-*--
Ovadia Eli(6)
86,380*--
Lior Reitblatt(7)
53,629*--
Reem Aminoach(8)
53,629*--
Tzipi Ozer Armon(9)
16,220*--
Gadi Lesin-*--
Miriam Haran53,289*--
Dafna Gruber-*--
Raviv Zoller-*--
Aviram Lahav-*--
Lilach Geva Harel(10)
422,535*--
Ilana Fahima(11)
422,535*--
Eli Amon(12)
344,454*--
Nitzan Moshe-*--
Anantha Desikan(13)
379,644*--
Noam Goldstein(14)
561,972*--
Anat Tal-Ktalav(15)
721,387*--
Amir Meshulam(16)
147,888*--
Miri Mishor(17)
189,825*--
Chris Millington-*--
Elad Aharonson-*--
Meir Mergi33,356*--


*Less than 1%
** For additionalfurther information, please see section (2) below.
 
*** The information above is correct as of February 26, 2019.

(1)The percentages shown are based on 1,287,150,942 ordinary shares issued and outstanding as of February 22, 2022 (after excluding shares held by us or our subsidiaries). In accordance with SEC rules, beneficial ownership includes voting or investment power with respect to securities and includes the shares issuable pursuant to options that are exercisable within 60 days of the date of February 22, 2022. Shares issuable pursuant to options are deemed outstanding for computing the percentage of the person holding such options but are not considered outstanding for computing the percentage of any other person.
 
220
ICL Group Limited 229


According to the information conveyed to the Company, on June 25, 2018, XT Investments Ltd. (who, up to the sale date, held 20% of the issued share capital of Millennium Investments Elad Ltd. (holding, on its part, 46.94% of Israel Corp. Ltd share capital)) sold 377,662 ordinary shares of the Company that constituted, as at the sale date, approximately 0.03% of the Company’s issued share capital, in an off-market transaction according to a rate of ILS 17.10 per share. According to the information conveyed to the Company, following the sale, XT Investments Ltd. does not directly hold any shares of the Company.
On June 19 2018, our HR & Compensation Committee and the Board of Directors approved, and on August 20, 2018, the General Meeting of the shareholders approved, an issuance to our Executive Chairman of the Board, Mr. Johanan Locker, for no consideration, of an annual grant for 2018 of non-marketable options exercisable into Ordinary Shares and restricted Ordinary Shares, in a total value of NIS 3,300,000 (approx. $911,602). This amount was comprised of NIS 2,400,000 or $662,983 attributable to options (calculated on the basis of a Black & Scholes model, and comprised of NIS 900,000 ($248,619) which was the same amount of options as was granted in 2017, as well as an additional amount of options for 2018 in the amount of NIS 1,500,000 ($414,365)), collectively resulting in the grant of 402,685 options for 2018, and NIS 900,000 or $248,619 is attributable to the restricted shares, which was the same amount as was granted in 2017)which resulted in the grant of 41,244 restricted shares. See “Item 6 - Directors, Senior Management and Employees— B. Compensation”.

On July 12, 2018, our HR & Compensation Committee and the Board of Directors approved, respectively, and on August 20, 2018, the General Meeting of the shareholders approved an annual  equity grant for 2019, for no consideration, with a value per grant of NIS 310,000 (approximately $85,635), which amounted to 14,623 restricted shares, as determined according to the closing price of the Ordinary Shares on the TASE on December 31, 2018, being the trading day immediately preceding the Grant Date, to each of the Company's directors (excluding the Chairman of the Board, Mr. Johanan Locker and excluding Messrs. Aviad Kaufman, Avisar Paz, and Sagi Kabla, who are officers of our controlling shareholder, Israel Corporation Ltd.)), in accordance with the Company’s compensation policy. See Note 25 to our Audited Financial Statements and “Item 6. Directors, Senior Management and Employees— E. Share Ownership”.
 (1) The percentages shown are based on 1,280,301,147 ordinary shares issued and outstanding as of the date of this report (after excluding shares held by us or our subsidiaries). In accordance with SEC rules, beneficial ownership includes voting or investment power with respect to securities and includes the shares issuable pursuant to options that are exercisable within 60 days of the date of this report. Shares issuable pursuant to options are deemed outstanding for computing the percentage of the person holding such options but are not considered outstanding for computing the percentage of any other person.
(2) Israel Corp. is a public company listed for trading on the Tel Aviv Stock Exchange (TASE). Based on the information provided by Israel Corp., Millenium Investments Elad Ltd. (“Millenium”) and Mr. Idan Ofer are considered as joint controlling shareholders of Israel Corp., for purposes of the Israeli Securities Law (each of Millenium and Mr. Ofer hold shares in Israel Corp. directly, and Mr. Idan Ofer serves as a director of Millenium and has an indirect interest in it as the beneficiary of the discretionary trust that has indirect control of Millenium, as stated below). Millenium holds approx. 46.94% of the share capital in Israel Corp., which holds as at December 31, 2018 approx. 45.86%

(2)Israel Corp. is a public company listed for trading on the Tel Aviv Stock Exchange (TASE). Based on the information provided by Israel Corp., Millenium Investments Elad Ltd. (“Millenium”) and Mr. Idan Ofer are considered as controlling shareholders jointly of Israel Corp., for purposes of the Israeli Securities Law (each of Millenium and Mr. Idan Ofer hold shares in Israel Corp. directly, and Mr. Idan Ofer serves as a director of Millenium and has an indirect interest in it as the beneficiary of the discretionary trust that has indirect control of Millenium, as stated below). Millenium holds approximately 44.44% of the share capital in Israel Corp., which holds as of December 31, 2021 approximately 45.62% of the voting rights and approximately 44.76% of the issued share capital, of the Company.
To the best of Israel Corp.’s knowledge, Millenium is held by Mashat Investments(Investments) Ltd. (“Mashat”) and by XT Investments Ltd. (“XT Investments”), with 80%84.73% and 20%15.27% holding rates in the issued share capital, respectively. (It is noted that Mashat granted XT Investments a power of attorney for a fixed period (which is extendable) to vote according to XT's discretion  at General Meetings of Millenium in respect of shares constituting 5% of the voting rights in Millenium). Mashat is wholly owned by Ansonia Holdings Singapore B.V. (“Ansonia”) which is incorporated in the Netherlands.. Ansonia is a wholly owned subsidiary of Jelany Corporation N.V. (registered in Curaçao), which is a wholly owned subsidiary of a Liberian company,by Court Investments Ltd. (“Court”). Court is wholly owned by a foreign discretionary trust, in which Mr. Idan Ofer is the beneficiary. XT Investments is fully heldwholly owned by XT Holdings Ltd. (“XT Holdings”), a company whose. To the best of Israel Corp.’s knowledge, ordinary shares of XT Holdings are held in equal shares by Orona Investments Ltd. (which is indirectly controlled by Mr. Ehud Angel) and by Lynav Holdings Ltd. ("Lynav"), a company thatwhich is controlled by a foreign discretionary trust in which Mr. Idan Ofer is the beneficiary. Mr. Ehud Angel holds, among other things, a special share that grants him, inter alia, under certain limitations and for certain issues, an additional vote on the Board of Directors of XT Holdings. Lynav also holds directly 1.25% of the issued share capital of Israel Corp. In addition, Kirby Enterprises Inc., which is to the best of Israel Corp.’s knowledge, indirectly held by the same trust that holds Mashat, in which, as stated, Mr. Idan Ofer is the beneficiary, holds approximately 0.74% of the issued share capital of Israel Corp.Corp.. Furthermore, Mr. Idan Ofer holds directly approximately 3.85% of the issued share capital of Israel Corp.
 
221

As of December 31, 2018, the number of ICL's shares held by Israel Corp. does not include 9,909,848 ordinary shares, which are subject to certain forward sale agreements, as set forth on ICL's registration statement on Form F-1 (the "Forward Agreements"), filed with the Securities and Exchange Commission on 23 September 2014 (the "Financial Transaction"). Israel Corp. does not have voting rights or dispositive power with respect to the shares subject to the Financial Transaction, which have been made available to the financial entities (the “Forward Counterparties”) with whom it engaged in the Transaction. As at December 31, 2018, the settlement period of the Financial Transaction has commenced, which is expected to be executed, subject to its terms, in components at several settlement dates that will occur over a period of approx. 0.75 years. In accordance with the terms of the Financial Transaction, Israel Corp. will not regain voting rights and dispositive power with respect to the said shares (“physical settlement”), in whole or in part, unless it informs the Forward Counterparties otherwise at the relevant settlement dates specified in the Forward Agreements. Even though Israel Corp. holds less than 50% of the Company’s ordinary shares, it still has decisive influence at the General Meetings of the Company’s shareholders and, effectively, it has the power to appoint directors and to exert significant influence with respect to the composition of the Company’s Board of Directors.Directors
 
As of December 31, December 2018, 1412021, 184 million ordinary shares have been pledged by Israel Corporation to secure certain liabilities, almost entirely comprised of margin loans with an aggregate outstanding principal amount of $260$314 million.
 
(3)

(3)For a description of the different voting rights held by the holder of the Special State Share, see “Item 10 - Additional Information— B. Memorandum, Articles of Association and Special State Share — The Special State Share.”

(4)
Based solely upon and qualified in its entirety with reference to a Schedule 13G filed by Migdal Insurance & Financial Holdings Ltd. (“Migdal”) with the SEC on February 2, 2022. According to the Schedule 13G, of the 78,034,267 Ordinary Shares reported as beneficially owned by Migdal (i) 78,034,267 Ordinary Shares are held for members of the public through, among others, provident funds, mutual funds, pension funds and insurance policies, which are managed by direct and indirect subsidiaries of Migdal, each of which subsidiaries operates under independent management and makes independent voting and investment decisions, (ii) 5,574,849 Ordinary Shares are held by companies for the management of funds for joint investments in trusteeship, each of which operates under independent management and makes independent voting and investment decisions, and (iii) 0 are beneficially held for their own account (Nostro account).
ICL Group Limited 230



(5)Based solely upon and qualified in its entirety with reference to Amendment No.1 to Schedule 13G filed by Harel Insurance Investments & Financial Services Ltd. (“Harel”), with the SEC on January 31, 2022. According to the Schedule 13G, of the 67,348,503 Ordinary Shares reported as beneficially owned by Harel (i) 63,307,104 Ordinary Shares are held for members of the public through, among others, provident funds and/or mutual funds and/or pension funds and/or index-linked securities and/or insurance policies, which are managed by subsidiaries of the Reporting Person, each of which subsidiaries operates under independent management and makes independent voting and investment decisions, (ii) 1,682,923 Ordinary Shares are held by third-party client accounts managed by a subsidiary of Harel as portfolio managers, which subsidiary operates under independent management and makes independent investment decisions and has no voting power in the securities held in such client accounts, and (iii) 2,358,476 Ordinary Shares are beneficially held for their own account (Nostro account).

(6)Includes 77,917 ordinary shares and 8,463 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(7)Includes 45,166 ordinary shares and 8,463 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(8)
Includes 55,018 ordinary shares and 289,436 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(9)
Includes 8,110 ordinary shares and 8,110 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(10)
Includes 422,535 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(11)
Includes 422,535 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(12)
Includes 55,018 ordinary shares and 289,436 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(13)
Includes 379,644 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(14)
Includes 561,972 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(15)
Includes 87,310 ordinary shares and 634,077 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(16)Includes 147,888 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.

(17)Includes 41,937 ordinary shares and 147,888 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table.
CoB LTI: For information regarding the equity-based incentive grant to our Executive Chairman of the different voting rights heldBoard, Mr. Yoav Doppelt, for 2019-2021, in the form of options, approved by the holderGeneral Meeting of shareholders on May 29, 2019, see Note 19 to our Audited Financial Statements. For details regarding the Special State Share,new LTI grant for 2022-2024 in the form of options to Mr. Doppelt that was approved by our HR & Compensation Committee and Board of Directors on January 31, 2022 and February 6, 2022, and on February 8, 2022, respectively, subject to the approval of our shareholders at the annual general meeting expected to take place on March 30, 2022 (the "Meeting"), see “Description of Share Capital—The Special State Share” inNote 19 to our registration statement on Form F-1 (File no. 333-198711) filed with the SEC on September 22, 2014.Audited Financial Statements and “Item 6 - Directors, Senior Management and Employees— B. Compensation”
 
(4) According to the annual statements of Nutrien Ltd., the controlling shareholder of PotashCorp, published on February 5, 2018, on January 24, 2018 the sale of the full holdings of PotashCorp in ICL was completed, at the amount of 176,088,630 Company shares, mainly to institutional bodies in Israel and the U.S.
 
222ICL Group Limited 231



CEO LTI: For information regarding the equity-based incentive grant to our Chief Executive Officer, Mr. Raviv Zoller, for 2019-2021, in the form of options, approved by the shareholders on June 27, 2019, see Note 19 to our Audited Financial Statements. For details regarding the new LTI grant for 2022-2024 in the form of options to Mr. Doppelt that was approved by our HR & Compensation Committee and Board of Directors on January 31, 2022 and February 6, 2022, and on February 8, 2022, respectively, subject to the approval of our shareholders at the Meeting, see Note 19 to our Audited Financial Statements and “Item 6 - Directors, Senior Management and Employees— B. Compensation”.
 
Executive Officers LTI: For information regarding the equity-based grant in the form of options, granted in April 2019 to our executive office holders for the years 2019-2021, see Note 16 to our Audited Financial Statements. For details regarding the new LTI grant for 2022-2024 in the form of options to our executive officers, that was approved by our HR & Compensation Committee and Board of Directors on January 31, 2022 and February 6, 2022, and on February 8, 2022, respectively, see Note 19 to our Audited Financial Statements.
B. RELATED (AND INTERESTED) PARTY TRANSACTIONS


Approval of Related (and Interested) Party Transactions
 
Approval of Related (and Interested) Party Transactions
 
Under the Companies Law, an interested party transaction may be approved only if it is for the benefit of the company. A transaction that is not an extraordinary transaction in which a director or officer has a personal interest requires the approval of the Board of Directors, unless the Articles of Association of the company provide otherwise. Our Articles of Association provide that such a transaction, if it does not pertain to a director’s or officer’s compensation terms, may be approved by any of our Board of Directors, our Audit and Accounting Committee, a disinterested director or officer or a person authorized for this purpose by our Board of Directors. If the transaction is an extraordinary transaction, it must be approved by the Audit and Accounting Committee and the Board of Directors, and, under certain circumstances, by the shareholders of the Company. An “extraordinary transaction” is a transaction other than in the ordinary course of business, other than on market terms or that is likely to have a material impact on the company’s profitability, assets or liabilities.
 
Pursuant to the Companies Law, extraordinary transactions with thea controlling shareholder and extraordinary transactions in which a controlling shareholder has a personal interest, require the approval of the Audit Committee, or the Compensation Committee if such transaction is in connection with the terms of employment or service with the company, the Board of Directors and the shareholders of the company (unless a relief exists pursuant to the Israeli Relief Regulationrelief regulations concerning Related Parties Transactions)related parties transactions). The shareholder approval must be by a simple majority of all votes cast, provided that (i) such majority includes a simple majority of the votes cast by non‑controlling shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned in clause (i) above who voted against such transaction does not exceed 2% of the total voting rights in the company.company
 
ICL Group Limited 232


The Companies Law prohibits any director who has a personal interest in an extraordinary transaction from being present at the discussion and voting on such transaction in the Audit Committee or Board of Directors. Notwithstanding, a director who has a personal interest may be present at the meeting and vote on the matter if a majority of the directors or members of the Audit Committee have a personal interest in the approval of such transaction. If a majority of the members of the Board of Directors have a personal interest in the transaction, such transaction also requires shareholder approval.
 
223


Approval of Directors and Officer Compensation
 
Under the Companies Law, we are required to approve, at least once every three years, a compensation policy with respect to the terms of engagement of our directors and officers. Following the recommendation of our HR & Compensation Committee, the compensation policy must be approved by our Board of Directors and our shareholders. The shareholder approval must be by a simple majority of all votes cast, provided that (i) such majority includes a simple majority of the votes cast by non‑controlling shareholders and shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned in clause (i) above who voted against such transaction does not exceed 2% of the total voting rights in the company.company, which is referred to as the “Special Majority for Compensation. In general, the compensation terms of directors, the Chief Executive Officer and any employee or service provider who is considered a controlling shareholder, as well as a relative of a controlling shareholder, must be approved separately by the HR & Compensation Committee, the Board of Directors and the Shareholders (unless a relief exists pursuant to the Israeli Relief Regulation concerning Related Parties Transactions). Generally, shareholder approval is not required for director compensation payable in cash up to the maximum amount set forth in the regulationsCompensation Regulations governing the compensation of external directors. Generally, the compensation terms of other officers who report directly to the Chief Executive Officer (who is not a director) require the approval of the HR & Compensation Committee and the Board of Directors, unlessprovided that the HR & Compensation Committee approvesmay approve an amendment to an existing arrangement of such an officer if it determines that therethe amendment is nonot material changecompared to the existing terms of the compensation, and if such possibility exists under the Compensation Policy.compensation.
 
On May 17, 2016 and July 7, 2016, our Board of Directors approved, and recommended that the general meeting of our shareholders approve, an updated compensation policy for our directors and officers in accordance with the recommendation of our HR & Compensation Committee in its meetings held on May 16, 2016 and July 5, 2016. The Company’s compensation policycurrent Compensation Policy was approved by the general meeting of our shareholders on August 29, 2016 (the “Compensation Policy”).June27, 2019 for a period of three years
 
According to the Companies Law, a compensation policy for a period exceeding three years requires approval by the Board once every three years, based on a recommendation of the Compensation Committee, as well as approval by the Generalgeneral meeting of shareholders by the Special Majority for Compensation.
On January 31, 2022 and February 6, 2022, our HR & Compensation Committee discussed and recommended the Board of Directors to approve, and on February 8, 2022, our Board of Directors approved, subject to shareholder approval at the annual general meeting of shareholders expected to take place on March 30, 2022, a new compensation policy for the Company (the "Meeting"). If approved by the shareholders at the Meeting, the New Compensation Policy shall be in effect as of shareholders.the date of the Meeting, for a period of three consecutive years.
 
ICL Group Limited 233


Related (and Interested) Party Transactions
 
Registration Rights Agreement
 
We entered into a registration rights agreement with Israel CorporationCorp. on September 12, 2014. We obtained shareholder approval of our entry into this agreement on May 8, 2014. This agreement provides for customary demand, piggyback and shelf registration rights and provides that we will perform various actions and comply with various requirements to facilitate and promote such registrations, as well as cover certain expenses of Israel CorporationCorp. in connection with any such registration.
 
224

Controlling Shareholder
 
As of December 31, 2018,2021, Israel Corporation holds approximately 45.86%44.76% of our outstanding ordinary shares and approximately 45%45.62% of the voting rights of our Shareholders.shareholders.
 
Israel CorporationCorp. exercises control over our operations and business strategy and has sufficient voting power to control many matters requiring approval by our Shareholders, including:
 
·The composition of our Board of Directors (other than external directors, as described under “Item 6.The composition of our Board of Directors (other than external directors, as described under “Item 6 - Directors, Senior Management and Employees—C. Board Practices—External Directors”);
 
·Mergers or other business combinations;
 
·Certain future issuances of ordinary shares or other securities; and
 
·Amendments to our Articles of Association, excluding provisions of the Articles of Association that were determined by the Special State Share.
 
However, Israel CorporationCorp. does not exercise control with respect to our compensation policy and interested party transactions, since these must be approved by a majority of our non-related shareholders.
 
ICL Group Limited 234

Joint Insurance
 
On September 14, 2017, our shareholders approvedFor information regarding the Company's engagement in directorsa directors’ and officersofficers’ liability insurance policies, as a three-year framework agreement. The insurance policies underpolicy, including with respect to the framework agreement include a joint primary tier with Israel Corp. with a joint liability cap of up to $20 million,, see "Item 6 – Directors, Senior Management and a separate tier covering the Company alone, with a liability cap of up to $200 million, for a total liability limit of $220 million for both tiers. Under the terms of the framework resolution, our directorsEmployees – C. Board Practices – Insurance and officers are beneficiaries of both tiers. Pursuant to the framework agreement, the division of the premium amount between the Company and Israel Corp. in the joint tier is that 70% are to be paid by the Company and 30% by the Israel Corp.Indemnification."
 
According to the approval of the general meeting of our shareholders, the HR & Compensation Committee and the Board of Directors will have the authority to approve changes from time to time in connection with the rate of the premium distribution between the ICL Group and the Israel Corporation Group in respect of the joint tier, as recommended by the insurers and/or brokers, provided that the new rate of the premium distribution will not exceed 25% over the entire transaction period. Deviation from these limits shall require the shareholders approval. On December 4 and 5, 2017, the Audit & Accounting Committee and Board of Directors approved the renewal of the insurance policy, on the basis of the framework agreement, for an additional year beginning on January 1, 2018, and until December 31, 2018, with an annual premium of $900,000, which is within the maximum premium amount specified in the framework resolution.
On January 3 and 7, 2019, our Audit & Accounting Committee and Board of Directors approved the renewal of the insurance policy for 2019, according to the framework agreement, with a limit of $205 million, additional coverage Side A (directors only) limit of $20 million (as approved by our Audit & Accounting Committee on June 19, 2018 and December 10, 2018 and by the Board on June 19, 2018 and December 12, 2018) and a total premium of up to $1,400,000. This amount (including the Side A premium), does not exceed the maximum premium amount pursuant to the framework agreement. The allocation of the premium distribution between ICL and Israel Corp was revised to 80% ICL and 20% Israel Corp.
The terms of the new policy adhere to the terms of the framework resolution and of the Company's Compensation Policy.
225

Management Fees to Controlling Shareholder
 
We have been payingpay our parent company, Israel Corporation,Corp., annual management fees for management services, which include service of board members and ongoing general consulting services, such as professional, financial, strategic, legal and managerial consulting.advice. The parties may agree to expand the management services to additional areas.
 
On November 9, 2020, November 11, 2020, and January 17, 2018,5, 2021, our Audit and Accounting Committee, and our Board of Directors approved, and on April 24, 2018, our General Meeting of shareholders, respectively, approved the renewedrenewal of the management services agreement effective retroactively as of January 1, 2018,2021, for an additional term of three years, expiring on December 31, 2020. 2023. According to the renewed management services agreement, the annual management fee to be paid to Israel CorpCorp. for each calendar year shall not exceed $1,000,000,continue to be $1 million plus VAT.VAT, payable on a monthly basis. Such amount includes the overall value of the cash and equity compensation for the service of our directors whomwho are office holdersoffice-holders of Israel Corp., (except for the separate compensation arrangement between the Company and any and all prior or other compensation arrangements relating to such directors were cancelled. In addition, the renewed agreement was amended so as to no longer include an increase of management fees to a threshold of $3.5 million plus VAT in case an executive chairmanour Executive Chairman of the Board, is appointed on behalf of Israel Corporation. All other provisions of the management agreement remained unchanged. According to the decision of the General Meeting ofMr. Yoav Doppelt, as approved by our shareholders thein May 2019, and as may be amended by shareholder approval from time to time). The Audit & Accounting Committee will continue to annually examine the reasonableness of the Management Feesmanagement fees paid in the previous year against the Management Servicesmanagement services actually provided by Israel CorpCorp. to the Company in the same year. On February 4Nevertheless, the Company and 25, 2019,Israel Corp. have agreed, subject to the Audit & Accounting Committee examinedapproval by the management services that were actually rendered in 2018 againstshareholders at the management feesannual general meeting of our shareholders expected to take place on March 30, 2022, of the amended compensation terms of Mr. Yoav Doppelt, the Executive Chairman of our Board of Directors, to terminate the Management Agreement effective as of July 1, 2022, following which directors who are office holders of Israel Corp. (other than Mr. Yoav Doppelt), namely Mr. Aviad Kaufman and Mr. Sagi Kabla, shall begin to be paid in that year and concluded that the fees were reasonable.Director Cash Compensation.
 
Deposit agreement with the Controlling shareholder
For details regarding a deposit agreement with our controlling shareholder, Israel Corp., see Note 25 to our Audited Financial Statements.
Relationships with Other Companies
 
In 2013,
Gas Purchase Agreement: For details regarding the Company's Board of Directors authorized to certain subsidiaries in Israel to purchase electricity from OPC Rotem (a company related to the Company’s controlling shareholder).
In December 2017, each of the following: the Company, Oil Refineries Ltd. (a public company one of whose controlling shareholders is Israel Corporation Ltd., whose controlling shareholders are related to Kenon Holdings Ltd. (“Kenon”)), and OPC Energy Ltd. (a public company which, as conveyed to the Company, views Kenon as its controlling shareholders for purposes of the Israeli Securities Law), engaged in a gas purchase agreement with Energean Israel Limited (“Energean”), under which Energean willPLC and the continuous delays in supply the Company withof natural gas at a quantity of uppursuant to 13 BCM, at a value of $1.9 billion, over a period of 15 years. The agreement was examined and approved by an independent committee composed of external and independent directors of the Company on December 3, 2017, and thereafter by the Audit Committee and Board of Directors, on December 4 and 5, 2017, respectively. The Audit and Accounting Committee, in the presence of only Ms. Ruth Ralbag, Mr. Lior Reitblatt and Mr. Geoffrey Merszei, and the Company’s Board of Directors, have reapproved the agreement on January 17, 2018. The agreement was approvedfollowing their force majeure announcement, as well as the Bridge Agreement with Tamar Field in Israel, see Note 18 to our Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors - Our operations could be adversely affected by the General Meeting of our shareholders on February 22, 2018. For further details regarding the gas agreement see “Item 5 - Operating and Financial Review and Prospects— A. Operating Results— Principal Factors Affecting our Results of Operations and Financial Condition”.
In addition to any other transaction with our controlling shareholder set forth in this annual report, in 2018 the following transactions were approvedprice increases or shortages with respect to 2018 (allwater, energy and our principal raw materials".
Other Immaterial Transactions in the Ordinary Course of which were classified by the Audit and Accounting Committee as transactionsBusiness: The Company further engages, from time to time, in theits ordinary course of business, immaterialin various transactions with related parties, such as purchase of marine transportations services, sale of products, purchase of raw materials for its operations, receipt of banking services, etc. We do not deem these transactions as material for the Company, they are not viewed as unusual in their nature or conditions and in market terms),they are all classified as "ordinary" transactions under Israeli law and approved by our Board of Directors:
1.We obtain shipping services from Zim, an affiliate of Israel Corporation, and paid them about $8 million in each of the years 2016, 2017 and 2018.
2.We purchase Sulfur from Oil Refineries Ltd., a subsidiary of Israel Corporation, and paid them about $2 million, $2.5 million and $3.2 million, in 2016, 2017 and 2018, respectively.
3.We provide transportation servicesaccording to ZIM, an affiliate of Israel Corporation, and were paid by them about $2.1 million, $1.6 million and $1.4 million in 2016, 2017 and 2018, respectively.
4.We sell distilled water from Oil Refineries Ltd., a subsidiary of Israel Corporation, and were paid about $2 million in 2018.
In addition, the Company receives banking services in the ordinary course of business from Hamizrahi Bank, from time to time. To the best of the Company's knowledge, Mr. Eyal Ofer, Mr. Idan Ofer's brother, is considered an interested party in Hamizrahi Bank.
relevant procedures and according to any and all applicable laws.
 
ICL Group Limited 235

226

The table below sets forth certain income statement information with respect to balances of our related party transactions.
 
 For the year ended December 31
 202120202019
 $ millions$ millions$ millions
 For the year ended December 31
 201820172016
 $ millions$ millions$ millions


Sales 5 8 35 7 3 4
Cost of sales 19 97 113 6 3 8
Selling, transport and marketing expenses 7 8 7 13 7 10
Financing expenses (income), net 3 (9)- (2) (1)
General and administrative expenses 1 1 1 1
Management fees to the parent company 1 1 1 1

 
The table below sets forth certain balance sheet information with respect to balances of our related party transactions
 
 
As of December 31
 20212020
 $ millions$ millions
 As at December 31
 20182017
 $ millions$ millions

Other current assets 40 35
   
Other current liabilities 4 2


Other current assets 28 38
   
Other current liabilities 7 191


For additionalfurther information regarding our related party transactions, see Note 2523 to our Audited Financial Statements.
 
Option Plans
 
For a description of the Option Plans see “Item 6 - Directors, Senior Management and Employees—E. Share Ownership”.

C. INTERESTS OF EXPERTS AND COUNSEL

Not Applicable.
 
ICL Group Limited 236
227


Item8 – FINANCIAL INFORMATION
 

A.CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION
 
The fixed operating costs for the years ended December 31, 2018, 20172021, 2020 and 20162019 amounted to approximately $2,188$2,465 million, $2,265$2,349 million and $2,304$2,316 million, respectively. The variable operating costs for the years ended December 31, 2018, 20172021, 2020 and 20162019 amounted to approximately $1,849$3,279 million, $2,524$2,492 million and $3,062$2,199 million, respectively.

See “Item 18 - Financial Statements”.
 
Business Concentration Law
 
On December 11,2013, the Law for Encouragement of Competition and Reduction of Business Concentration, 5774-2013 (the “Business Concentration Law"), was published,enacted, which includes, among other things, provisions requiring regulators authorized to grant rights in areas defined as essential infrastructure in Israel, to take into account considerations for encouraging industry‑wide competition and reducing business concentration in the overall economy prior to granting rights in public assets to private entities defined as high‑concentration entities. The Business Concentration Law sets forth a list of "rights", including authorization, license, concession or permit and a contract, and also includes a list of matters defined as an essential infrastructure, including areas in which we are engaged, such as quarrying, mining, water, etc. The list of high‑concentration entities was published in accordance with the criteria provided in the Business Concentration Law, and ICL and its main subsidiaries in Israel are included therein, as aforesaid. In our estimation, inclusion of the Company and its main subsidiaries in Israel in the list of high‑concentration entities is not expected to have a significant adverse effect on us and itsour financial results. However, in light of the frequent changes in the regulatory environment in Israel and the existing uncertainty regarding the manner of granting rights in natural resources in a manner other than that provided in current legal provisions, among other things in relation to the manner of granting a concession for minerals extraction from the Dead Sea in 2030, as well as in relation to the granting of phosphate mining licenses, under the provisions of the IsraeliIsrael Mining Ordinance, it is possible that our estimation will prove to be inaccurate.
 
228


Price Monitoring
 
The prices of fertilizer‑grade phosphoric acid for local Israeli customers are regulated under the Supervision of Prices for Commodities and Services Law 1996. The quantity of these products sold in Israel by the Phosphate Solutions segment is not material to ICL.ICL.
 
In the United States and Brazil, import of magnesium and magnesium alloys from China is subject to anti-dumping duties imposed in order to protect the local industry in these countries, which are the main markets in which ICL Magnesium sells its products.products, imports of magnesium and magnesium alloys from China are subject to anti-dumping duties.
 
ICL and some of its subsidiaries have been declared a monopoly in Israel in the following areas: potash, phosphoric acid, sulphuric acid, ammonia, chemical fertilizers, granular triple super phosphate fertilizers, phosphates, bromine and bromine compounds. Due to their having been declared monopolies, ICL and its subsidiaries are subject to limitations set forth in Chapter 4 of the Economic Competition Law, 1988 (formerly, Restrictive Business Practices Law, 1988), most significantly its prohibition on monopolies against abusing their positions as monopolies. In 20182021 and 20172020 approximately 4% and 3%5%, respectively of our revenue derived from Israeli sales and, therefore, in our estimation, and without derogating from the legal implications of the above-mentioned declaration, on the whole, the said declaration does not have a material impact on us. We also have an internal antitrust compliance program in place.

ICL Group Limited 237

Legal Proceedings
 
Tax Proceedings
 
1.
The Company and the main operational companies in Israel (DSW, Rotem, Bromine, DSM, BCL and F&C), along with most of the other companies in Israel, have received final tax assessments up to and including 2011. The main subsidiaries outside of Israel have final tax assessments up to and including 2011 and 2012.
For information regarding our tax proceedings, see Note 15D to our Audited Financial Statements.
 
2.
Israel - In December 2018, the Israeli Tax Authorities (hereinafter - the ITA) rejected the company's objection relating to an assessment issued to the Company and to certain Israeli subsidiaries, and demanded an additional tax payment, for the years 2012‑2014, in the amount of $73 million. The Company disputes the assessment and filed an appeal to the Jerusalem District Court. In the Company’s estimation, it is more likely than not that its claims will be accepted.
In addition, regarding tax assessment for the years 2010-2015 for Tetrabrom (one of the downstream production companies in Israel), in October 2018, the company reached an agreement with the ITA, which resulted in immaterial amounts.
3.The company's subsidiary in Belgium recognized a notion deduction on its capital based on its interpretation of the Belgian tax law, which was validated by the Court of Appeals in Belgium. The tax authorities dispute the eligibility of the deduction by appealing to the Supreme Court against the Court of Appeals' resolution and issuing tax assessments in a total amount of $27 million for the years commencing 2010. The Company believes, it is more likely than not that its tax position will also be accepted by the Supreme Court.

229

4.
Currently, the Company is also under tax audits in Spain and Germany for the years 2012‑2015. As at the date of the report, there are no additional tax payment requests from the tax authorities, excluding immaterial amounts in Germany. The Company believes that the provisions in its books are sufficient.
Derivative Actions
 

1.On July 10 and 19, 2016, two applications for certification of derivative actions were filed with the Economic Division of the Tel-Aviv District Court by two of our shareholders, with respect to the annual bonuses granted for the years 2014 and 2015 to our top-five highest-paid senior officers, including our CEO and Chairman of the Board at the time, alleging that such bonuses were granted in a manner deviating from our compensation policy and contrary to the Company’s best interest.
On December 6, 2016, the Court issued an order to dismiss the first application and to proceed with deliberation of the second application (the “Certification Application”).
The second application, at an estimated amount of NIS 21 million (approximately $6 million), was filed against the Company, the aforementioned top-five highest paid senior officers and the members of our Board of Directors, who approved the grant of said bonuses. The Court was requested to order our top-five highest paid senior officers and our other officers to return the bonuses paid to them. Alternatively, the Court was requested to compel the members of our Board of Directors to compensate the Company for damages incurred following the decision to approve these bonuses.
On December 15, 2016, our Board of Directors decided to establish an independent external special committee, its members being Hon. Justice (ret.) Prof. Oded Mudrick, Prof. Sharon Hannes and Prof. Haim Assayag, CPA, to examine all aspects arising from the Certification Application and to formulate conclusions and recommendations to our Board of Directors, including with respect to the possibility of filing a claim by the Company based on the allegations made in the Certification Application (the “External Committee”). On April 18, 2017 the Special Committee report was delivered, wherein the Special Committee recommended objecting to the Certification Application. Following the Committee's report which was adopted by ICL's Board of Directors, on June 6, 2017, the Company filed its response to the Certification Application, wherein the Court was requested to approve submission of the Special Committee’s report. On December 25, 2017, a hearing was held respecting the respondents’ motion to submit the Special Committee’s report, and on January 15, 2018, the Court denied the Company’s request to submit the Special Committee’s report. Hence, on January 30, 2018, The Company filed an application for permission to appeal the decision, wherein it requested the Supreme Court to reverse the decision and rule that the Company may submit the Special Committee’s report. On May 2, 2018, the Supreme Court accepted the Company's appeal. Following the Supreme Court's decision, the Company filed the Committee's report to the District Court. On July 1, 2018, the plaintiff appealed to the District Court to reveal certain documents that the Company filed to the Committee and to subpoena Hon. Justice (ret.) Prof. Oded Mudrick. On November 22, 2018, the court accepted the request. The application is scheduled for hearings on June and July 2019.
At this stage, the company is unable to estimate the risks involved and the outcome of this proceeding. However, in most cases, an application for certification of a derivative action, even if approved, does not constitute any exposure to the Company (rather to the contrary – sustaining it would lead to enrichment of the Company’s coffers).
230

2.On December 8, 2016, the Company received a motion for disclosure and review of documents, in accordance with Section 198A of the Israeli Companies Law. The motion was filed in the District Court in Tel Aviv by a shareholder of the Company, as a preliminary proceeding towards an application for certification of a derivative action with regard to the manner of management and discontinuation of the Harmonization Project (the global ERP project), which he claimed allegedly led to write-off of the amount invested in the project. On January 17, 2018, the Court denied the motion and imposed upon the applicant the legal expenses incurred by the respondent and its attorneys’ fees. To the best of the Company’s knowledge, on February 15, 2018 an application for permission to appeal was filed with the Supreme Court regarding the District Court’s decision to deny the motion. On October 11, 2018, the Supreme Court has rejected the application for permission to appeal, and imposed upon the applicant the legal expenses and attorney’s fees incurred by the respondent. For details regarding an application for certification of a class action against the Company concerning ICL's IT (Harmonization) Project that was filed by the same shareholder, and for details regarding a law suit filed by the Company against IBM due to the Failure of the said IT Project, see Note 20 to our Audited Financial Statements.
3.On January 10, 2018, an application for certification of a derivative action was filed by a shareholder of Oil Refineries Ltd. (“Bazan”) with the Tel Aviv-Yafo District Court, against former and current board members of Bazan, OPC Energy Ltd. OPC Rotem Ltd., OPC Hadera Ltd. and the Company, (hereinafter, jointly: the “Additional Companies”), and against Israel Corporation Ltd., Mr. Idan Ofer and Mr. Ehud Angel (the “Application”).
 
The Application pertains to gas purchase transactions of the Company, Bazan and OPC, including the intercompany aspects thereof, which include a 2012 transaction involving Bazan for the purchase of natural gas from the Tamar gas field (the “Tamar Transaction”), as well as a transaction for the purchase of natural gas from Energean Israel Limited (the “Energean Transaction”). The Company’s engagement in the Energean Transaction was approved by the general meetingat a General Meeting of our shareholders on February 22, 2018.
 
In a nut shell, theThe applicant argues that Bazan should have certifycertified the Tamar Transaction as a "Controlling Shareholder" transaction and that the Company and OPC enjoyed Bazan's economicaleconomic advantages in the Energean Transaction and thus must compensate it. On August 7, 2018, all the defendants filed their responses with the court. On April 15, 2019, the applicant's response was filed. A Preliminary hearing is scheduled forwas convened on September 15, 2019. The Evidentiary hearings convened on July 5, 2020, November 25, 2020, June 23, 2019.13, 2021, June 21, 2021, July 7, 2021 and December 9, 2021.
 
In light
Subsequently, the applicant will submit its closing arguments until March 15, 2022 and the Company will submit its closing arguments until June 1, 2022. The applicant will respond to the Company’s closing arguments until July 1, 2022.
Since the derivative motion was filed on behalf of Bazan, and the early stageapplicant didn’t include any specific amount of this proceeding,damages allegedly caused by the Company, it is challenging to provide an estimate with regard to the action’s chances and risks involved cannotrisks. However, we believe that as long as the factual and circumstantial settings that were provided to us by your company are correct and will be estimated. However, on the surface it seems thatproved in court, the Company has goodsolid defense arguments.arguments that can potentially dismiss the derivative motion.

ICL Group Limited 238


Other Claims
 

4.1.
According to the announcement issued by the Company on May 10, 2017, ICL Europe Coöperatief U.A. (“ICL Europe”), a subsidiary of the Company, filed a Notice of Arbitration against the Federal Democratic Republic of Ethiopia ("Ethiopia") under the Agreement of Encouragement and Reciprocal Protection of Investments between the Ethiopia and the Kingdom of the Netherlands ("the Ethiopia- Netherlands BIT"). A three-member arbitration tribunal ("Tribunal") was constituted under the Arbitration Rules of the United Nations Commission on International Trade Law ("UNCITRAL Rules") to hear the case, which is being administered by the Permanent Court of Arbitration located in The Hague, the Netherlands. Following ICL Europe's filing of Notice of Arbitration on May 10, 2017 and Ethiopia's response thereto on June 12, 2017, ICL Europe submitted to the Tribunal on June 19, 2018, its Statement of Claim seeking compensation in the amount of $181 million plus interest for damage its claims as a result of Ethiopia's coercive, arbitrary, discriminatory and unlawful conduct, culminating in the imposition without legal basis of a purported tax on ICL Europe's indirectly owned Ethiopian company, Allana Potash Afar Plc, and Ethiopia's violation of multiple provisions of the Ethiopia- Netherlands BIT, including the requirements to accord fair and equitable treatment to ICL Europe's investment, to provide full protection and security to ICL Europe's investment and not to expropriate unlawfully ICL Europe's investment. Ethiopia submitted to the Tribunal on October 19, 2018,, its Statement of Defense and Objections to Jurisdiction. Among other things, Ethiopia argues that ICL Europe failed to make its investment in compliance with Ethiopian law and that the Tribunal lacks jurisdiction under the Ethiopia-Netherlands BIT as a result, that the challenged tax was lawful and does not provide a basis for presenting a claim under the Ethiopia- Netherlands BIT and that ICL terminated its investment for reasons unrelated to any of the alleged unlawful acts and omissions of Ethiopia. On August 12, 2019, ICL submitted its Reply in support of its claims against Ethiopia and in response to which Ethiopia submitted on November 25, 2019 its Rejoinder. Due to the emergence of the COVID-19 pandemic the Tribunal decided on June 19, 2020 that the hearing would proceed in two phases, in August and December 2020, with the first phase to proceed by videoconference and with the examination of Ethiopia’s fact witnesses deferred to the second phase of the hearing. On August 13, 2020, the first phase was completed and on December 8, 2020, the second phase was completed (also by videoconference). On July 9, 2021, the arbitration tribunal rendered its award. Despite indications that Ethiopia’s tax assessment was flawed, the tribunal interpreted the BIT as significantly limiting the BIT’s protections in relation to disputes regarding taxation. Among other things, this had the significant effect of precluding ICL Europe's claims that Ethiopia violated the requirement to accord fair and equitable treatment to ICL Europe's investments in Ethiopia. Consequently, the tribunal rejected ICL Europe's claims and ordered ICL Europe to pay an amount of approximately $2.5 million as reimbursement of arbitration costs in accordance with the applicable arbitration rules. Since 2017, Allana Afar is not included in ICL's consolidated financial statements. This award does not have a material impact on the Company’s Financial Statements.

2.
The Inter-Ministry Directors General Committee recommendations on the Haifa Bay: In connection with our subsidiary, Fertilizers & Chemicals (F&C), on April 26, 2021, the Inter-Ministry Directors General Committee published its recommendations on the Haifa Bay, which aim to promote and develop the Haifa Bay area and realize its potential by rezoning of the Bay and determining land designations that will enable the development of the area for the welfare of its residents and end all petrochemical industry and the fertilizers plants within a decade. The Committee recommended the establishment of a government team with the aim of negotiating with companies operating in the Haifa Bay, including F&C, in order to reach renewed agreements regarding the possibility of changing their operations in Haifa Bay, as part of the aforesaid land rezoning, by way of mutual collaboration and by trying to achieve the purpose of the engagement with them, and if possible, in a way that is as compatible as possible with the needs of the employees and the interests of the companies.

In February 2022, the Company received a draft government decisions proposal regarding the advancement of a strategy for the development and promotion of Haifa Bay in Israel (hereinafter – the draft).
ICL Group Limited 239


In accordance with the draft, it was suggested to decided, among other things, on the establishment of an inter-ministerial team to negotiate the outline for ceasing the industry’s activities in Haifa Bay with the relevant companies, including ICL and to impose on the Commissioner for Budgets to offer sources of funding for the entire project. In connection with the negotiations with ICL, it was proposed that the team deliberate with the Company on relocating the industrial activity to another site, as much as possible by 2025.

In light of the preliminary stage of the recommendations and since this is still a draft decision proposal, the Company is unable to assess the consequences and feasibility of the aforesaid

For information regarding significant claims and legal proceeding, which are pending against the Group, see Note 2018 to our Audited Financial Statements.
231

 
Dividend policy
 
On March 6, 2018February 12, 2020, our Board of Directors revisitedresolved to extend the Company's existing dividend distribution policy until further notice, such that was previously approved in May 2016, and resolved that in the years 2018 and 2019 our dividend distribution rate shall continue to constitute up to 50% of the Company's adjusted annual net profit (comparedprofit. According to our previous dividend distributionthe extended policy, dividends will be distributed at a payout ratio of up to 70%50% of annual adjusted net profit,income, as was in place until revised in May 2016). Our Board of Directors will revisit this policy upon conclusionexpected at the date of the said period.decision regarding the distribution, and subject to applicable law. In addition, dividends will be paid out inasmuch as declared by our Board of Directors and may be discontinued at any time. Such changes could include either a reduction in the amount orof the targeted dividend, or modification of the calculation formula.
 
All decisions respecting dividend distribution are made by our Board of Directors, which considers a variety of factors, including our profits, ability to pay our debt and obligations, investment plans, financial state and other factors, as applicable. The distribution of a dividend is not assured, and our Board of Directors may decide, at its sole discretion, at any time and for any reason, not to distribute a dividend, to reduce the rate thereof, to distribute a special dividend, to change the dividend distribution policy or to adopt a share buy-back plan.
 
The amount of distributableDistributable profits as of December 31, 20182021 amounted to $3,483$4,061 million. The terms of certain of our existing liabilities require us to maintain a minimum level of the Company’s equity, which could restrict our ability to pay dividends in the future. See Note 15D13D to our Audited Consolidated Financial Statements for additionalfurther information regarding covenants in our loan agreements and their impact on our ability to pay dividends.dividends. In addition, the distribution of dividends is limited by Israeli law, which permits the distribution of dividends only out of distributable profits and only if there is no reasonable concern that such distribution will prevent us from meeting our existing and future obligations when they become due. Generally, dividends paid by an Israeli company are subject to an Israeli withholding tax. For a discussion of certain tax considerations affecting dividend payments, see “Item 10 - Additional Information— E. Taxation”.
 
B. SIGNIFICANT CHANGES

To the best of our knowledge, no significant changes have occurred since the date of our consolidated financial statements.statements, other than as disclosed in this Annual Report.
232

 
ICL Group Limited 240


Item9 – THE OFFER AND LISTING



A.OFFER AND LISTING DETAILS


Not applicable.
 
B. PLAN OF DISTRIBUTION


Not applicable. 
 
C. MARKETS


Our ordinary shares are listed on the NYSE and on the TASE under the symbol “ICL.” 
 
D. SELLING SHAREHOLDERS


Not applicable. 
 
E. DILUTION


Not applicable. 
 
F. EXPENSES OF THE ISSUE


Not applicable. 
 
Item 10 – ADDITIONAL INFORMATION

A. SHARE CAPITAL
 
As of December 31, 2018,2021, our authorized share capital consisted of 1,484,999,999 ordinary shares, par value NIS 1 per share, of which 1,304,890,7781,311,740,778 ordinary shares were issued and outstanding (including shares held by us or our subsidiaries), and 1 Special State Share, par value NIS 1 per share, issued and outstanding. All of our outstanding shares have been lawfully issuedand are fully paid. As of December 31, 2018,2021, 24,589,836 ordinary shares were held by us or our subsidiaries. Shares acquired by our subsidiaries prior to February 2000 have both economic rights and voting rights. However, in accordance with Israeli law, ordinary shares issued to our subsidiaries or purchased by our subsidiaries after February 2000 have economic rights but not voting rights. Shares held by us have no economic rights or voting rights. Therefore, out of the ordinary shares held by us or our subsidiaries as of December 31, 2021, 24,589,836 have no voting rights.
 
As of December 31, 2018,2021, an additional quantityamount of approximately 18.912 million ordinary shares were issuable upon the exercise of outstanding options granted to our officers and employees at a weighted average exercise price of approximately ILS 20.54 (about $5.48) NIS 16.87 (about $5.42) per share. The weighted average exercise price of the outstanding vested options is approximately ILS 18.53 (about $4.94) NIS 14.29 (about $4.59) per share. For additionalfurther information about the issuance of options and restricted shares to officers and senior employees and their exercise in 2017-2018, as well as the allocation of restricted shares to directors and approval of the issuance of restricted shares to directors,2020-2021, see Note 2119 to our Audited Financial Statements and “Item 6 - Directors, Senior Management and Employees— E. Share Ownership”.Statements.
 
233

In 2018,2021, approximately 0.716 million options under our equity compensation plans were exercised into approximately 5 million ordinary shares. In 2020, approximately 1 million options under our equity compensation plants were exercised into approximately 0.150.1 million ordinary shares. In 2016 and 2017, no2019, approximately 1 million options under our equity compensation plants were exercised.exercised into approximately 0.2 million ordinary shares.
 
In September 2014, we completed the initial public offering of our ordinary shares in the United States, pursuant to which Israel Corporation sold 36 million ordinary shares and certain forward counterparties sold 24 million ordinary shares to hedge their positions under forward sale agreements covering up to 36 million ordinary shares owned by Israel Corporation. Subsequent to the closing of the initial public offering, the underwriters exercised their option to purchase an additional 6 million ordinary shares from Israel Corporation.  We did not issue any ordinary shares in connection with the initial public offering or receive any proceeds from the sale of our ordinary shares by Israel Corporation or the forward counterparties. Israel Corporation ceased to have voting rights with respect to the ordinary shares subject to the forward sale agreements and made available to the forward counterparties under those agreements. However, Israel Corporation will regain voting rights with respect to all or a portion of the ordinary shares it makes available to the forward counterparties under the forward sale agreements to the extent it elects a cash settlement or a net share settlement. Settlement under the forward sale agreements is scheduled on various dates between 2016 and 2019.
ICL Group Limited 241


B. MEMORANDUM, ARTICLES OF ASSOCIATION AND SPECIAL STATESHARE
 
Our shareholders adopted the Articles of Association attached as Exhibit 3.2 to our registration statement on Form F-1 (File no. 333-198711) filed with the SEC on September 12, 2014.
 
We incorporate by reference into this Annual Report the description of our Amended and Restated Articles of Association, which became effective upon the closing of our IPOinitial public offering in the Unites States and listing on the NYSE, contained in our F-1 registration statement (File No. 333-198711) originally filed with the SEC on September 12, 2014, as amended.Exhibit 2.1 of this Annual Report. Such description sets forth a summary of certain provisions of our Articles of Association as currently in effect.
The Special State Share
 
The State of Israel holds a nontransferable Special State Share in ICL in order to preserve the State’s vital interests. Any change in the provisions of our Articles of Association relating to the rights attached to the Special State Share requires approval from the State of Israel. The Special State Share grants its holder the rights described below.
 
The sale or transfer of material assets of the Company (in Israel) or grantingthe grant of any other rights in the abovementionedsuch assets, not in the ordinary course of our business, whether in one transaction or in a series of transactions, shall be invalid. Unless it receivedinvalid, without the approvalconsent of the holder of the Special State Share, howwho may oppose thesuch a transfer of a material asset as stated above only if, in its opinion, such transfer is likely to harm one of the “State’s vital interests”"vital interests of the State" as such term is defined in the Article of Association and described below. Restrictions are also imposed on voluntary liquidation, mergers and reorganizations, excluding certain exceptions enumerated in our Articles of Association.
 
234

In addition, without the approvalconsent of the holder of the Special State Share, any acquisition or holding of 14% or more of our outstanding share capital is not valid. In addition, any acquisition or holding of 25% or more of our outstanding share capital (including an increase of holdings to 25%) is not valid without the approvalconsent of the holder of the Special State Share, even if in the past the approvalconsent of the holder of the Special State Share had been receivedobtained for ownership of less than 25%. Our Articles of Association set forth procedures required to be followed by a person who intends to acquire shares in an amount that would require the approval of the holder of the Special State Shares. A pledge over shares is treated like an acquisition of shares. As a condition to voting at any shareholders’shareholder meeting, each interested party in the Company, including a holder of 5% or more of our outstanding shares, will beis required to certify in writing that the voting power derived from the holding of shares does not require the approval of the holder of the Special State Share or that such approval has been obtained.
 
In addition to the aforesaid,above, the approvalconsent of the holder of the Special State Share is required for the ownership of any shares that grant their holder the right, ability or practical potential to appoint, directly or indirectly, 50% or more of our directors, and such appointments will not be valid as long as that approvalsuch consent has not been obtained.
 
ICL Group Limited 242


The holder of the Special State Share has the right to receive information from us, as provided in our Articles of Association. Our Articles of Association also provide that the holder of the Special State Share will use this information only to exercise its rights under the Articles of Association for purposes of protecting the State’s vital interests.
 
Our Articles of Association also impose a periodic reporting obligation on us for the benefit of the holder of the Special State Share, regarding all asset‑related transactions approved by our Board of Directors during the three months prior to the date of the report, any changes in share capital ownership and any voting agreements among the Company’s shareholders signed during that period.
 
The following are the “State’s vital interests” as defined in our Articles of Association for purposes of the Special State Share:
 

To preserve the character of the Company and its subsidiaries, ICL Dead Sea, ICL Rotem, Dead Sea Bromine Company, Bromine Compounds and Tami, as Israeli companies whose centers of business and management are in Israel. In our estimation, this condition is met.
 
To monitor the control over minerals and natural resources, for purposes of their efficient development and utilization, including maximum utilization in Israel of the results of investments, research and development.

To monitor the control over minerals and natural resources, for purposes of their efficient development and utilization, including maximum utilization in Israel of the results of investments, research and development.
 
To prevent acquisition of a position of influence in the Company or the foregoing Israeli subsidiaries by hostile entities or entities likely to harm foreign relations or security interests of the State of Israel.

To prevent acquisition of a position of influence in the Company or the foregoing Israeli subsidiaries by hostile entities or entities likely to harm the foreign and security interests of the State of Israel.
 
To prevent acquisition of a position of influence in the Company or the foregoing Israeli subsidiaries or management of such companies, whereby such acquisition or management might create a situation of significant conflicts of interest likely to adversely affect any of the vital interests enumerated above.

To prevent acquisition of a position of influence in the Company or the foregoing Israeli subsidiaries or management of such companies, whereby such acquisition or management may create a situation of significant conflicts of interest likely to harm any of the vital interests enumerated above.
 
Furthermore, our headquarters and the ongoing management and control over our business activities must be in Israel. The majority of the members of our Board of Directors must be citizens and residents of Israel. In general, meetings of our Board of Directors are to take place in Israel.
 
235

Other than the rights enumerated above, the Special State Share does not grant the holder any voting or equity rights.
 
The State of Israel also holds a Special State Share in the following ICL subsidiaries: ICL Dead Sea, Dead Sea Bromine Company, ICL Rotem, Bromine Compounds, Tami and Dead Sea Magnesium. The rights granted by these shares according to the Articles of Association of these subsidiaries are substantially similar to the rights enumerated above. The full provisions governing the rights of the Special State Share appear in our Articles of Association and in the Articles of Association of the said subsidiaries and are available for the public’s review. We report to the State of Israel on an ongoing basis in accordance with the provisions of our Articles of Association. Certain asset transfer or sale transactions that in our opinion require approval, have received the approval of the holder of the Special State Share.
 
ToDuring the bestsecond half of our knowledge,2018, an inter-ministry team has recently beenwas established, headed by the Ministry of Finance, tasked with arrangingwhose purpose is, among other things, to regulate the issue of authority and oversight relating to special state shares, interest decrees and reductionsupervision in respect of the Special State of Israel Share, as well as reduce the regulatory burden. In 2019, the work of this team was suspended until further notice due to the dissolution of the Knesset and the lack of permanent government. As atof the date hereof, we areof this report, the Company is unable to estimate when or whether the team will recommence and what are the implications of this process would have onover the Company, if any, but it is possible that the introduction of anany. An additional array of regulatory provisions coupled with strict enforcement, may increase the uncertainty in the management of the Companymanaging our operations relating to natural resources in Israel and may have a material adverse effect on our business, our financial condition and results of operations.operations.
ICL Group Limited 243

 
C. MATERIAL CONTRACTS

Except as otherwise disclosed in this Annual Report, we are not currently, and have not been in the last two years, party to any material contract, other than contracts entered into in the ordinary course of business. For additional information on divestitures currently in progress, see “Item 3 - Key Information— A. Selected Financial Data”.
 
D. EXCHANGE CONTROLS

There are currently no Israeli currency control restrictions on the paymentsremittance of dividends, interest or other distributionspayments with respect to our ordinary shares to non-residents of Israel or on the proceeds from the sale of the shares, except for the obligationshareholders who are subjects of Israeli residents to file reportscountries that are, or have been, in a state of war with the Bank of Israel regarding certain transactions. However, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time..
 
ICL Group Limited 244
236

 
E. TAXATION
Israeli Tax Considerations
 
A.  Taxationofcompanies in Israel
 
1. IncomeFor information regarding the taxation of companies in Israel, including issues regarding the income tax rates,
Presented hereunder are the tax rates relevant to the Company in the years 2016–2018 and after:
2016 – 25%
2017 – 24%
2018 and after 23%
On December 22, 2016 the Israeli Knesset plenary passed the Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for 2017 and 2018), 2016, which provides, among other things, for a reduction of the Companies Tax rate from 25% to 23% in two steps – the first step to the rate of 24% commencing from 2017 and the second step to the rate of 23% commencing from 2018 and thereafter, along with reduction of the tax rate applicable to “Preferred Enterprises” (see A.2.b below) regarding factories in the peripheral suburban areas, from 9% to 7.5%, as part of amendment of the Law for Encouragement of Capital Investments.
The current taxes for the periods reported are calculated in accordance with the tax rates shown above.
2. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (hereinafter – the Encouragement Law)
a) Beneficiary Enterprises
The production facilities of some of the Company’s subsidiaries in Israel (hereinafter – the Subsidiaries) have received “Beneficiary Enterprise” status under the Encouragement law, as worded after Amendment No. 60 to the Law published in April 2005.
The benefits granted to the company are mainly:
1) Reduced tax rates
The Company chose 2005 as the election year of a "tax exemption" track. The benefits deriving from this track ended in 2014. Within those years the Company benefited from reduced tax rates as well as in some cases full tax exemption.
A company having a “Beneficiary Enterprise” that distributes a dividend out of exempt income, will be subject to companies tax in the year in which the dividend was distributed on the amount distributed (including the amount of the companies tax applicable due to the distribution) at the tax rate applicable under the Encouragement Law in the year in which the income was produced, had it not been exempt from tax.
As at December 31, 2018, the temporary difference related to distribution of a dividend from exempt income, in respect of which deferred taxes were not recognized, is in the amount of about $650 million of distributable amount and about $162 million of derived taxes.
237

Under the “Ireland” track, the company paid reduced tax rate of 11.5% as of 2008 on parts of its income. The benefit deriving from the "Ireland" track ended in 2017.
The part of the taxable income entitled to benefits at reduced tax rates is calculated based on the ratio of the turnover of the “Beneficiary Enterprise” to the Company’s total turnover. The turnover attributed to the “Beneficiary Enterprise” is generally calculated according to the increase in the turnover compared to a “base” turnover, which is the average turnover in the three years prior to the year of election of the “Beneficiary Enterprise”.
b) Preferred Enterprises
On December 29, 2010, the Israeli Knesset approved the Economic Policy Law for 2011‑2012, whereby the Encouragement law, was amended (hereinafter – the Amendment). The Amendment is effective from January 1, 2011 and its provisions will apply to preferred income derived or accrued by a Preferred Enterprise, as defined in the Amendment, in 2011 and thereafter.
The Amendment does not apply to an Industrial Enterprise that is a mine, other facility for production of minerals or a facility for exploration of fuel. Therefore, ICL plants that are defined as mining plants and mineral producers will not be able to take advantage of the tax rates included as part of the Amendment. In addition, on August 5, 2013, the Law for Change in the Order of National Priorities, 2013, was passed by the Knesset, which provides that the tax rate applicable to a Preferred Enterprise in Development Area A will be 9% whereas the tax applicable to companies in the rest of Israel will be 16%. Pursuant to the amendment to the Encouragement law that was approved as part of the Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for 2017 and 2018), 2016, the tax rate applicable to enterprises in the suburban areas was reduced from 9% to 7.5%. The Company has Preferred Enterprises at the tax rate of 7.5%.
On November 30, 2015, the Economic Efficiency Law was passed by the Knesset, which expanded the exception to all of the Enterprise’s activities up to the time of the first marketable product (for additional details – see Section 4 below). Nonetheless, tax benefits to which a Beneficiary Plant is entitled will not be cancelled in respect of investments up to December 31, 2012. Therefore, those plants will be able to utilize the tax benefits in respect of qualifying investments made up to December 31, 2012, in accordance with the provisions of the old law.
It is further provided in the Amendment that tax will not apply to a dividend distributed out of preferred income to a shareholder that is an Israeli‑resident company. A dividend distributed out of preferred income to a shareholder that is an individual or a foreign resident is subject to tax at the rate of 20%, unless a lower tax rate applies under a relevant treaty for prevention of double taxation.
3. The Law for the Encouragement of Industry (Taxation), 1969
a) Some of and the Company’s Israeli subsidiaries are “Industrial Enterprise”, as defined in the above‑mentioned law. In respect of buildings, machinery and equipment owned and used by any "Industrial Enterprise", the Company is entitled to claim accelerated depreciation as provided by the Income Tax Regulations – Adjustments for Inflation (Depreciation Rates), 1986 which allow accelerated depreciation to any "Industrial Enterprise" as of the tax year in which each asset is first placed in service.
238

b) The Industrial Enterprises owned by some of the Company's Israeli subsidiaries have a common line of production and, therefore, they file, together with the Company, a consolidated tax return in accordance with Section 23 of the Law for the Encouragement of Industry. Accordingly, each of the said companies is entitled to offset its tax losses against the taxable income of the other companies.
4. The Law for Taxation of Profits from Natural Resources,
The Law for Taxation of Profits from Natural Resources (hereinafter – the Law), is effective since January 1, 2016. The government take on natural resources in Israel includes three elements: Royalties, Natural Resources Tax and Companies Income Tax. The highlights of the Law are set forth below:
Royalties:
In accordance with the Mines Ordinance, the rate of the royalties, in connection with resources produced from the quarries, will be 5%. For production of phosphates, the royalty rate is 5% of the value of the quantity produced.
Pursuant to the salt harvesting agreement signed with the Government in July 2012, the parties agreed, inter‑alia, to an increase in the rate of the royalties from 5% to 10% of the sales, for quantities of chloride potash DSW sells in excess of 1.5 million tonnes annually.
In addition, the salt harvesting agreement states that if legislation is enacted that changes the specific fiscal policy in connection with profits or royalties deriving from the mining of quarries from the Dead Sea, the Company's consent to the increase of the royalties' rate on the surplus quantities referred to above will not apply, after the enactment of the legislation, to the period in which such additional tax is collected as stated in the said legislation. In January 2016, the Law entered into effect and accordingly the rate of the royalties' provision was updated to 5%. For additional information - see Note 20C15 to our Audited Financial Statements.
 
Imposition of Natural Resources Tax:
The Natural Resources Tax is applied for all minerals from 2016 and for Potash from 2017. The tax base, which will be calculated for every mineral separately, is the mineral’s operating income in accordance with the accounting statement of income, to which certain adjustments will be made, less financing expenses at the rate of 5% of the mineral’s average working capital, and less an amount that reflects a yield of 14% on the property, plant and equipment used for production and sale of the quarried material (hereinafter – the Yield on the Property, Plant and Equipment). On the tax base, as stated, a progressive tax will be imposed at a rate to be determined based on the Yield on the Property, Plant and Equipment in that year. For the Yield on the Property, Plant and Equipment between 14% and 20%, Natural Resources Tax will be imposed at the rate of 25%, while the yield in excess of 20% will be subject to Natural Resources Tax at the rate of 42%.
In years in which the Natural Resources Tax base is negative, the negative amount will be carried forward from year to year and will constitute a tax shield in the succeeding tax year. The above computations, including the right to use prior years’ losses, are made separately, without taking into account setoffs, for each natural resource production and sale activity.
239

Limitations on the Natural Resources Tax – the Natural Resources Tax will only apply to profits deriving from the actual production and sale of each of the following resources: potash, bromine, magnesium and phosphates, and not to the profits deriving from the downstream industrial activities. Calculation of the Natural Resources Tax will be made separately for every mineral. Nonetheless, regarding Magnesium, it was provided that commencing from 2017, upon sale of carnalite by DSW to Magnesium and reacquisition of a Sylvinite by‑product by DSW, Magnesium will charge DSW $100 per tonne of potash which is produced from the Sylvinite (linked to the CPI).
A mechanism was provided for determination of the market price with respect to transactions in natural resources executed between related parties in Israel, as well as a mechanism for calculation of the manner for allocation of the expenses between the production and sale of the natural resource, on the one hand, and the downstream activities, on the other hand.
Regarding the bromine resource, the Natural Resources Tax will apply in the same manner in which it applies to the other natural resources, except with respect to the manner of determining the transfer price in sales made to related parties in and outside of Israel. For purposes of calculating the total revenues from bromine sold to related parties for purposes of downstream manufacturing activities in every tax year, a calculation method will be employed (Netback) whereby the price will be determined based on the higher of the following:
1) The price for a unit of bromine (tonne) provided in the transaction;
2) The normative price of a unit of bromine. The normative price of a unit of bromine is the total sales of the downstream products produced less the operating expenses attributable to the downstream activities, without the acquisition cost of the bromine, and less an amount equal to 12% of the total revenues of the downstream products produced as part of the downstream activities, where the result is divided by the number of bromine units used to produce the downstream products sold.
Regarding the phosphate resource, for purposes of calculating the total revenues from phosphate sold to related parties for purposes of downstream manufacturing activities in every tax year, a calculation method will be employed (Netback) whereby the price will be determined based on the higher of the following:
1) The price for a unit of phosphate (tonne) provided in the transaction;
2) The normative price of a unit of phosphate. The “normative price” of a unit of phosphate is the total sales of the downstream products produced less the operating expenses attributable to the downstream activities, without the acquisition cost of the phosphate rock, and less an amount equal to 12% of the total revenues of the downstream products produced as part of the downstream activities, where the result is divided by the number of phosphate units used to produce the downstream products sold.
3) The production and operating costs attributable to a unit of phosphate.
The Company took a tax filing position, according to which, all the Dead Sea minerals should be taxed as a unified mineral under the above-mentioned mechanism.
240

Companies Tax:
The Law for Encouragement of Capital Investments was revised such that the definition of a “Plant for Production of Quarries” will include all the plant’s activities up to production of the first marketable natural resource, of potash, bromine, magnesium and phosphates. Accordingly, activities involved with production of the resource will not be entitled to tax benefits under the Law, whereas activities relating to downstream products, such as bromine compounds, acids and fertilizers, will not constitute a base for calculating the Excess Profits Tax and will not be exempted from inclusion in the Law.
The Natural Resource Tax will be deductible from the Company's taxable income and the Company will pay the Companies Tax on the balance as is customary in Israel.
Taxation of Investors
 
The following are material Israeli income tax consequences to investors of acquiringwho acquire and disposingdispose of our ordinary shares. That which is stated below does not purport to be a comprehensive description of all the tax considerations that may be relevant to a particular person’s decision to acquire and/or dispose theof our ordinary shares.
 
Capital Gains Tax
 
Israeli law generally imposes a capital gains tax on the sale of capital assets by residents of Israel, as defined for Israeli tax purposes, and on the sale of capital assets located in Israel, including shares of Israeli companies, by non‑residents of Israel, unless a specific exemption is available or unless a tax treaty between Israel and the shareholder’s country of residence provides otherwise. The law distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain that is equivalent to the increase of the relevant asset’s purchase price which is attributable to the increase in the Israeli Consumer Price Index or a foreign currency exchange rate between the date of purchase and the date of sale. The real gain is the excess of the total capital gain over the inflationary surplus.
 
Israeli Residents
 
Generally, as of January 1, 2012, the tax rate applicable to capital gains derived from a sale of shares, whether listed on a stock market or not, is the regular corporate tax rate in Israel of 23%applicable for Israeli companies (23% since 2018) and 25% for Israeli individuals, unless such individual shareholder is considered a “significant shareholder” at any time during the 12‑month period preceding such sale, in which case the tax rate will beis 30%. A “significant shareholder” is defined as one who holds, directly or indirectly, including together with others, at least 10% of any means of control in the company. However, different tax rates will apply to dealers in securities. Israeli companies are subject to the corporate tax rate on capital gains derived from the sale of listed shares.shares.
 
As of January 1, 20182017, individual (foreign or Israeli) taxpayers having taxable income ofabove NIS 641,880 or above647,640 (for 2021) in a certain tax year will be subject to an additional tax payment at the rate of 3% on the portion of their taxable income for such tax year that is in excess of such threshold. For this purpose, taxable income includes inter alia taxable capital gains from the sale of our shares and taxable income from dividend distributions.distributions.
 
ICL Group Limited 245
241


 
Non‑Israeli Residents
 
Under the domestic tax law, non‑Israeli residents are generally exempt from Israeli capital gains tax on any gains derived from the sale of shares of Israeli companies publicly traded on a recognized stock exchange outside Israel, so long asprovided such shareholders did not acquire their shares prior to the company’s initial public offering and the gains did not derive from a permanent establishment of such shareholders in Israel. However, shareholders that are non‑Israeli corporations will not be entitled to such exemption if Israeli residents hold an interest of more than 25% in such non‑Israeli corporation or are the beneficiaries or are entitled to 25% or more of the revenues or profits of such non‑Israeli corporation, whether directly or indirectly.
 
In certain instances where our shareholders may be liable to Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax at the source.
 
In addition, pursuant to the Convention between the US Government of the United States of America and the Israeli government with respect to taxes on income, as amended, or the U.S.‑U.S.US Israel Tax Treaty, the sale, exchange or disposition of ordinary shares by a person who qualifies as a resident of the United States within the meaning of the U.S.‑U.S.US Israel Tax Treaty and who is entitled to claim the benefits afforded to such person by the U.S.‑U.S.US Israel Tax Treaty generally will not be subject to the Israeli capital gains tax unless such person holds, directly or indirectly, shares representing 10% or more of our voting power during any part of the 12‑12 month period preceding such sale, exchange or disposition, subject to particular conditions, or the capital gains from such sale, exchange or disposition can be allocated to a permanent establishment in Israel or is considered to be derived from or sale of Israeli real property interests for purposes of the U.S.Israel Tax Treaty. If a U.S.US.S. investor is not exempt from Israeli taxes under the U.S.Israel Tax Treaty, such U.S. investor may be subject to Israeli tax, to the extent applicable as described above; however, under the U.S.Israel Tax Treaty, such person may be permitted to claim a credit for such taxes against the U.S. federal income tax imposed with respect to such sale, exchange or disposition, subject to the limitations in the U.S. laws applicable to foreign tax credits. The U.S.Israel Tax Treaty does not relate to U.S. state or local taxes.
 
Taxation of Dividend Distributions
 
Israeli Residents
 
Israeli resident individuals are generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares, other than bonus shares (share dividends). The tax rate applicable to such dividends is 25% or 30% for a shareholder that is considered a significant shareholder at any time during the 12‑month period preceding such distribution. Dividends paid from income derived from Approved Enterprises or Benefited Enterprises are subject to withholding at the rate of 15%. Dividends paid from income derived from Preferred Enterprises are subject to withholding at the rate of 20%.
 
Israeli resident companies are generally exempt from tax on the receipt of dividends paid on our ordinary shares (excluding dividends paid from income derived from Approved or Benefited Enterprises).
 
242

As of January 1, 20182017, individuals (both foreign or Israeli) taxpayers having taxable income of above NIS 641,880 or above647,640 NIS (for 2021) in a certain tax year will be subject to an additional tax payment at the rate 3% on the portion of their taxable income for such tax year that is in excess such threshold.
ICL Group Limited 246

 
Non‑Israeli Residents
 
Non‑residents of Israel are subject to income tax on income accrued or derived from sources in Israel, including dividends paid by Israeli companies. On distributions of dividends other than stock dividends, income tax (generally collected by means of withholding) will generally apply at the rate of 25%, or 30% for a shareholder that is considered a significant shareholder (as defined above) at any time during the 12‑month period preceding such distribution, unless a different rate is provided in a treaty between Israel and the shareholder’s country of residence. Dividends paid from income derived from Approved or Benefited Enterprises are subject to withholding at the rate of 15%, or 4% for Benefited Enterprises in the Ireland Track. Dividends paid from income derived from Preferred Enterprises will be subject to withholding at the rate of 20%.
 
Under the U.S.Israel Tax Treaty, the maximum tax on dividends paid to a holder of ordinary shares who qualifies as a resident of the United States within the meaning of the U.S.Israel Tax Treaty is 25%. The treaty provides for reduced tax rates on dividends if (a) the shareholder is a U.S.USU.S. corporation holding at least 10% of our issued voting power during the part of the tax year that precedes the date of payment of the dividend and held such minimal percentage during the whole of its prior tax year, and (b) not more than 25% of the Israeli company’s gross income consists of interest or dividends, other than dividends or interest received from subsidiary corporations or corporations 50% or more of the outstanding voting shares of which is owned by the Israeli company. The reduced treaty rate, if applicable, is 15% in the case of dividends paid from income derived from Approved, Benefited or Preferred Enterprise or 12.5% otherwise.
 
Material U.S. Federal Income Tax Considerations for U.S. Holders
 
The following are material U.S. federal income tax consequences to the U.S. Holders described below of owning and disposing of our ordinary shares, but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a particular person’s decision to hold the ordinary shares. This discussion applies only to a U.S. Holder that holds the ordinary shares as capital assets for U.S. federal income tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S. Holder’s particular circumstances, including alternative minimum tax consequences, any aspect of the provisions of the Internal Revenue Code of 1986, as amended (the “Code”) commonly known as the Medicare tax and tax consequences applicable to U.S. Holders subject to special rules, such as:
 

·
certain financial institutions;
 

·
dealers or traders in securities that use a mark-to-market method of tax accounting;
 

·
persons holding ordinary shares as part of a “straddle” or integrated transaction or persons entering into a constructive sale with respect to the ordinary shares;
 

·
persons whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
 
243


·
entities classified as partnerships for U.S. federal income tax purposes;
 

·
tax exempt entities, “individual retirement accounts” or “Roth IRAs":
Persons who acquired our ordinary shares pursuant to the exercise of an employee stock option or otherwise as compensation;
 
·Persons who acquired our ordinary shares pursuant to the exercise of an employee stock option
ICL Group Limited 247


persons that own or are deemed to own 10% or more of our stock by vote or value; or otherwise as compensation;
 

·persons that own or are deemed to own 10% or more of our stock by vote or value; or
·persons holding our ordinary shares in connection with a trade or business conducted outside of the United States.States.
 
If an entity that is classified as a partnership for U.S. federal income tax purposes owns ordinary shares, the U.S. federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships owning ordinary shares and partners in such partnerships should consult their tax advisers as to the particular U.S. federal tax consequences of owning and disposing of the ordinary shares.
 
This discussion is based on the Code, administrative pronouncements, judicial decisions, the U.S.-Israel Tax Treaty (the “Treaty”) and final and proposed Treasury regulations, changes to any of which subsequent to the date of this Annual Report  may affect the tax consequences described herein.
 
For purposes of this discussion, a “U.S. Holder” is a person who, for U.S. federal income tax purposes, is a beneficial owner of ordinary shares and is:
 

·
a citizen or individual resident of the United States;
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or
 

·a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States, any state therein or the District of Columbia; or
·
an estate or trust the income of which is subject to U.S. federal income taxation regardless of its source.
 
U.S. Holders should consult their tax advisers concerning the U.S. federal, state local tax and non-U.S. consequences of owning and disposing of our ordinary shares in their particular circumstances.
 
This discussion assumes that we are not, and will not become, a passive foreign investment company, as described below.
 
Taxation of Distributions
 
Distributions paid on our ordinary shares, other than certain pro rata distributions of ordinary shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). Because we do not calculate our earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported to U.S. Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S. Holders may be taxable at the favorable tax rates applicable to “qualified dividend income”. Non-corporate U.S. Holders should consult their tax advisers regarding the availability of these favorable rates on dividends in their particular circumstances. Dividends will not be eligible for the dividends received deduction generally available to U.S. corporations under the Code. Dividends will generally be included in a U.S. Holder’s income on the date of receipt. Dividend income will include any amounts withheld by us in respect of Israeli taxes, and will be treated as foreign source income for foreign tax credit purposes. If any dividend is paid in NIS, the amount of dividend income will be the dividend’s U.S. dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S. dollars. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt. Such gain or loss would generally be treated as U.S.-source ordinary income or loss.

ICL Group Limited 248


Subject to applicable limitations, some of which vary depending upon the U.S. Holder’s circumstances, Israeli taxes withheld from dividends on our ordinary shares will be creditable against the U.S. Holder’s U.S. federal income tax liability. The rules governing foreign tax credits are complex, and U.S. Holders should consult their tax advisers regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, U.S. Holders may, at their election, deduct foreign taxes, including Israeli taxes, in computing their taxable income, subject to applicable limitations. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.
 
244

Sale or Other Taxable Disposition of Ordinary Shares
 
For U.S. federal income tax purposes, gain or loss realized on the sale or other taxable disposition of our ordinary shares will be capital gain or loss, and will be long term capital gain or loss if the U.S. Holder held the ordinary shares for more than one year. The amount of the gain or loss will equal the difference between the U.S. Holder’s tax basis in the ordinary shares disposed of and the amount realized on the disposition, in each case as determined in U.S. dollars. This gain or loss will generally be U.S. source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.
 
Passive Foreign Investment Company Rules
 
In general, a non-U.S. corporation will be a “passive foreign investment company” (a “PFIC”) for any taxable year if (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the average quarterly value of its assets (generally determined on a quarterly basis) consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S. corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation. Passive income generally includes dividends, interest, rents, royalties and gains from transactions in commodities (other than certain active business gains from the sales of commodities).
 
Based on the manner in which we operate our business, we believe that we were not a PFIC for 2018.2021. However, because PFIC status depends on the composition and character of a company’s income and assets and the value of its assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year.
 
If we were a PFIC for any taxable year during which a U.S. Holder held ordinary shares, gain recognized by a U.S. Holder on a sale or other disposition (including certain pledges) of the ordinary shares would be allocated ratably over the U.S. Holder’s holding period for the ordinary shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed on the resulting tax liability for each such taxable year. Further, to the extent that distributions received by the U.S. Holder in any distributiontaxable year in respect of ordinary shares in excess ofexceed 125% of the average of the annual distributions received by a U.S. Holder during the preceding three years or the U.S. Holder’s holding period, whichever is shorter, those excess distributions would be subject to taxation in the same manner. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the ordinary shares in the case that we were a PFIC for any taxable year.
 
245

If we were a PFIC for any taxable year during which a U.S. Holder owned ordinary shares, the U.S. Holder generally will be required to file annual reports on Internal Revenue Service Form 8621. In addition, the favorable tax rates described above with respect to dividends paid to certain non-corporate U.S. Holders would not apply if we were a PFIC for the taxable year of distribution or the preceding taxable year.
 
ICL Group Limited 249


Information Reporting and Backup Withholding
 
Payments of dividends and sales proceeds that are made within the United States or through certain U.S. related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S. Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. Backup withholding is not an additional tax.
 
The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the Internal Revenue Service.
 
Certain U.S. Holders who are individuals (or certain specified entities) may be required to report information relating to their ownership of securities of non-U.S. issuers, such as our ordinary shares, unless the securities are held in accounts at financial institutions (in which case the accounts may be reportable if maintained by non-U.S. financial institutions). U.S. Holders should consult their tax advisers regarding their reporting obligations with respect to the ordinary sharesshares.
 
F. DIVIDENDS AND PAYING AGENTS


Not applicable.
 
G. STATEMENT BY EXPERTS


Not applicable.
246

 
H. DOCUMENTS ON DISPLAY


In light of the listing of our ordinary shares for trade on the New York Stock Exchange (NYSE) within the framework of an initial public offering executed in 2014, we are subject to the informational requirements of the US Securities Exchange Act of 1934. Accordingly, we are required to file or furnish reports and other information with the SEC pursuant to the requirements applying to foreign issuers, including annual reports on Form 20-F and reports on Form 6-K. The SEC maintains a website that contains reports and other information about issuers, like us, that file electronically with the SEC.  The address of that website is www.sec.gov.
 
I. SUBSIDIARY INFORMATION


The Company and its subsidiaries do not maintain any direct or indirect connection with Iran or with enemy nations (as defined in the Israel Trade with the Enemy Ordinance - 1939).
 
ICL Group Limited 250


Item 11 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Management
 
In the ordinary course of our business activities, we are exposed to various market risks that are not atin our control, including fluctuations in the prices of certain of our products and inputs, currency exchange rates, interest rates, energy prices and marine shipping prices, that may have an adverse effect on the value of our financial assets and liabilities, future cash flows and profit. As a result of these market risks, we could suffer a loss due to adverse changes such as the prices of our products or our inputs, foreign exchange rates, interest rates, energy prices or marine shipping prices.
 
ForAs relates to financial assets and financial liabilities in currencies that are not the functional currency of our subsidiaries, our policy is to try and minimize this exposure as much as possible using various hedging instruments. We do not currently hedge against some severance pay liabilities, lease liabilities (IFRS 16) or tax balances sinceas they are long termlong-term exposures. In addition, we do not use hedging instruments to hedge the prices of our products. ForAs far as hedging against price changes of energy products and marine shipping costs, projected income and expenses in currencies that are not in the functional currency of our subsidiaries, price changes of energy products, marine shipping costs and interest rates, our policy is to hedge part of the exposure, as described below.
 
We regularly monitor the extent of our exposure and the hedging activities and rates for the various risks described below. Webelow and we execute hedging activities according to our hedging policy with reference to the actual developments and expectations in the various markets.markets.
 
We use financial instruments and derivatives for hedging purposes only. These hedging instruments reduce our exposure as described above. SomeMost of these transactions do not meet the hedging conditions provided in IFRS, and therefore they are measured at fair value, and changes in the fair value are charged immediately to earnings. The counterparties for our derivatives transactions are banks or financial institutes. We believe the credit risk in respect thereof is small.
 
247

For additionalfurther information about our hedging activities, see Note 2321 to our Audited Financial Statements.Statements.
 
Exchange Rate Risk
 
The U.S.US dollar is the principal currency of the business environment in which most of our subsidiaries operate. Most of our activities—activities — sales, purchase of materials, selling, marketing expenses and financing expenses, as well as the purchase of property, plant and equipment—equipment — are executed in U.S.US dollars, and, soas a result, we use the U.S.US dollar is used as theour functional currency for measurement and reporting of the Company and most of our subsidiaries.
 
We have several consolidated subsidiaries whose functional currencies are their local currency—mainlycurrency —mainly the euro, the British pound, the Brazilian real, the Israeli shekel and the Chinese yuan.
 
Set forth below is a description of our principal exposures in respect of changes in currency exchange rates.
ICL Group Limited 251


 
Transactions by our subsidiaries in currencies that are not their functional currency expose us to changes in the exchange rates of those currencies compared with the functional currencies of those companies. Measurement of this type of our exposure is based on the surplus of net income or expenses in each currency that is not the functional currency of that company.
 
Part of the costs of our inputs in Israel are denominated and paid in NIS. Thus, we are exposed to a strengthening of the NIS exchange rate against the U.S.US dollar (NIS revaluation)revaluation). This exposure is similar in substance to the exposure described above for transactions in foreign currencies but is much larger than the other currency exposures.
 
The results for tax purposes for the Company and its subsidiaries operating in Israel are measured in NIS. As a result, we are exposed to the rate of the change in the U.S.US dollar exchange rate and the measurement base for tax purposes (the NIS) in respect of these companies.
 
Our subsidiaries have severance pay liabilities that are denominated in the local currency, and in Israel they are sometimes also affected by rises in the CPI. Our subsidiaries in Israel have reserves to cover part of these liabilities. The reserves are denominated in NIS and affected by the performance of the funds in which the sums are invested. As a result, we are exposed to changes in the exchange rates of the U.S.US dollar against various local currencies in respect of net liabilities for severance pay. For further information regarding our hedging policy, see "Item 11 – Quantitative and Qualitative Disclosures about Market Risk– Risk Management".
 
Our subsidiaries have financial assets and liabilities that are denominated in or linked to currencies other than their functional currencies. A surplus of assets over liabilities denominated in currencies that are not the functional currency creates exposure for us in respect of exchange rate fluctuations.
 
For Investmentinvestment in subsidiaries whose functional currency is not the U.S.US dollar, the end of period balance sheet accounts of these subsidiary companies are translated into U.S.US dollars based on the exchange rate of the U.S.US dollar to the reporting currency of these companiessubsidiaries at the end of the relevant period. The beginning of period balance sheet balances, as well as capital changes during the period, are translated into U.S.US dollars at the exchange rate at the beginning of the period or on the date of the change in capital, respectively. The differences arising from the effect of the change in the exchange rate between the U.S.US dollar and the currency in which the subsidiary companies report create exposure. The effects of this exposure are charged directly to equity.
 
248

We examine periodically the extent of the hedging transactions implemented to hedge each of the exposures described above and decidesdecide on the required scope of the hedging within the hedging policy frame.framework. We use various financial instruments for our hedging activity, including derivatives.
 
Explanations of the main changes between the periods
 
Exchange rate:
 
As atof December 31, 2018,2021, the net positive fair value of the derivative instruments with respect to exchange rates was about $12$141 million, compared to a positive fair value of $63$97 million as atof December 31, 2017.2020. As a result, in 2018, an expense2021, income of about $51$44 million was recorded with respect to these transactions.
 
ICL Group Limited 252

Energy:
 
As atof December 31, 2018, the negative fair value of the2021, there are no derivative instruments with respect to energy costs was about $3 million compared to a positivenegative fair value of $2.2$0.5 million as atof December 31, 2017.2020. As a result, in 2018, an expense2021, the Company recorded income in the amount of about $5.2$0.5 million was recorded with respect to these transactions.
 
Dry bulk marine shipping:
 
As atof December 31, 2018,2021, the negativepositive fair value of the derivative instruments with respect to dry bulk marine shipping was about $2.3 million compared to a positive fair value$1.6 while as of $1.9 million as at December 31, 2017.2020 there were no derivative instruments. As a result, in 2018, an expense2021, income of about $4.2$1.6 million was recorded with respect to these transactions.
249

 
The tables below set forth the sensitivity of our derivative instruments and certain balance sheet items to 5% and 10% increases and decreases in the exchange rates as atof December 31, 2018.2021.
 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
USD/NIS$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%Increase of 5% Decrease of 5%Decrease of 10%

Cash and cash equivalents (0.2) (0.1) 1.8 0.1 0.2 (0.3) (0.1) 3.1 0.2 0.3
Short term deposits and loans 0.0 0.1 0.0
Trade receivables (5.5) (2.9) 60.2 3.2 6.7 (7.5) (3.9) 82.0 4.3 9.1
Receivables and debit balances (1.1) (0.6) 11.8 0.6 1.3 (1.7) (0.9) 18.7 1.0 2.1
Long-term deposits and loans
 (0.1)
 (0.1)1.50.10.2
Credit from banks and others 2.8 1.4 (30.3) (1.6) (3.4)
Trade payables 24.1 12.6 (265.1) (14.0) (29.5) 37.2 19.5 (409.7) (21.6) (45.5)
Other payables 17.5 9.2 (192.3) (10.1) (21.4) 1.6 0.8 (17.8) (0.9) (2.0)
Long-term loans 6.6 3.5 (73.0) (3.8) (8.1) 17.3 9.1 (60.3) (10.0) (21.1)
Fixed rate debentures (series E) 38.8 20.3 (426.8) (22.5) (47.4)
Fixed rate debentures 57.8 30.3 (635.8) (33.5) (70.6)
Options (74.8) (40.9) (13.8) 19.1 43.4 (39.7) (18.1) 13.5 25.1 54.9
Forward (32.0) (16.7) 1.6 18.5 39.1 (47.5) (24.7) 1.5 27.7 58.4
Swap (47.6) (24.9) 14.7 27.6 58.2 (69.3) (36.3) 118.8 40.2 84.8
Total (71.5) (39.2) (909.6) 17.2 39.3 (52.1) (24.3) (886.0) 32.5 70.4

 
ICL Group Limited 253

 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
EUR/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%
Increase of
5%
 Decrease of 5%Decrease of 10%

Cash and cash equivalents (1.9) (1.0) 21.3 1.1 2.4 (2.1) (1.1) 22.8 1.2 2.5
Short term deposits and loans (0.2) (0.1) 2.7 0.1 0.3 0.0 0.2 0.0
Trade receivables (20.2) (10.6) 221.9 11.7 24.7 (23.7) (12.4) 260.3 13.7 28.9
Receivables and debit balances (1.1) (0.6) 11.7 0.6 1.3 (2.0) (1.1) 22.2 1.2 2.5
Long-term deposits and loans (0.1) 1.1 0.1 (0.3) (0.2) 3.6 0.2 0.4
Credit from banks and others 15.1 7.9 (166.4) (8.8) (18.5)
Trade payables 17.1 8.9 (187.6) (9.9) (20.8) 19.7 10.3 (216.3) (11.4) (24.0)
Other payables 4.2 2.2 (46.0) (2.4) (5.1) 6.6 3.5 (72.6) (3.8) (8.1)
Long-term loans from banks 0.5 0.3 (5.4) (0.3) (0.6) 28.2 14.8 (310.6) (16.3) (34.5)
Options 4.6 2.1 1.3 (1.8) (3.7) 5.6 2.7 1.7 (2.4) (5.0)
Forward 9.5 4.5 2.5 (4.1) (7.7) 22.1 11.0 4.3 (11.0) (22.1)
Swap 33.6 16.8 (1.0) (16.8) (33.6)
Total 61.1 30.3 (143.9) (30.5) (61.2) 54.1 27.5 (284.4) (28.6) (59.4)


250

 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
GBP/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%
Increase of
5%
 Decrease of 5%Decrease of 10%

Cash and cash equivalents (0.4) (0.2) 4.4 0.2 0.5 (0.5) (0.2) 5.2 0.3 0.6
Trade receivables (5.5) (2.9) 60.3 3.2 6.7 (3.7) (2.0) 41.2 2.2 4.6
Receivables and debit balances 0.0 0.4 0.0 (0.1) 0.0 0.8 0.0 0.1
Credit from banks and others 1.7 0.9 (18.7) (1.0) (2.1)
Trade payables 2.1 1.1 (22.7) (1.2) (2.5) 2.6 1.4 (28.5) (1.5) (3.2)
Other payables 0.6 0.3 (6.6) (0.3) (0.7) 0.3 0.2 (3.8) (0.2) (0.4)
Options (1.3) (0.6) (0.1) 0.4 0.8 (1.2) (0.7) (0.1) 0.5 1.1
Forward (3.5) (1.7) 0.3 1.5 2.9 (1.6) (0.8) (0.3) 0.8 1.6
Total (6.3) (3.1) 17.3 2.8 5.6 (4.2) (2.1) 14.5 2.1 4.4

 
ICL Group Limited 254
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
GBP/EUR$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%
Increase of
5%
Decrease of 5%Decrease of 10%
Forward (3.7) (1.9) 0.3 2.1 4.5


 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
BRL/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of   10%
Increase of
5%
 Decrease of 5%Decrease of 10%

Cash and cash equivalents (0.5) (0.2) 5.0 0.3 0.6 (6.9) (3.6) 76.3 4.0 8.5
Trade receivables (2.3) (1.2) 25.2 1.3 2.8 (20.2) (10.6) 221.8 11.7 24.6
Trade payables 1.0 0.5 (10.9) (0.6) (1.2) 9.4 4.9 (103.3) (5.4) (11.5)
Long-term deposits and loans (0.6) (0.3) 6.2 0.3 0.7
Other payables 0.2 0.1 (2.2) (0.1) (0.2) 0.9 0.5 (10.3) (0.5) (1.1)
Long-term loans from banks 1.7 0.9 (19.1) (1.0) (2.1) 0.2 0.1 (2.3) (0.1) (0.3)
Forward 3.4 1.8 (0.9) (2.0) (4.2)
Total 0.1 (2.0) (0.1) (13.8) (7.2) 188.4 8.0 16.7

 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
CNY/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of   10%
Increase of
5%
 Decrease of   5%Decrease of 10%

Cash and cash equivalents (3.4) (1.8) 37.2 2.0 4.1
Trade receivables (6.5) (3.4) 71.5 3.8 7.9
Trade payables 6.5 3.4 (71.9) (3.8) (8.0)
Other payables 1.8 0.9 (19.4) (1.0) (2.2)
Credit from banks and others 16.7 8.8 (184.0) (9.7) (20.4)
Forward (2.6) (1.4) (0.1) 1.5 3.2
Long-term loans (CNY) 0.1 0.0 (0.7) 0.0 (0.1)
Total 12.6 6.5 (167.4) (7.2) (15.5)


251
Cash and cash equivalents (23.9) (12.5) 262.8 13.8 29.2
Short term investments and deposits (0.3) (0.2) 3.2 0.2 0.4
Trade receivables (8.2) (4.3) 90.7 4.8 10.1
Trade payables 8.3 4.3 (90.9) (4.8) (10.1)
Other payables 1.4 0.7 (15.0) (0.8) (1.7)
Long-term loans (CNY) 3.2 1.7 (34.8) (1.8) (3.9)
Forward (4.2) (2.2) 0.7 2.5 5.2
Total (23.7) (12.5) 216.7 13.9 29.2


The tables below set forth the sensitivity of our derivative instruments and certain balance sheet items to 5% and 10% increases and decreases in the exchange rates as atof December 31, 2017.2020.
 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
USD/NIS$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%Increase of 5% Decrease of 5%Decrease of 10%

Cash and cash equivalents (0.1) 1.4 0.1 (0.2) (0.1) 2.2 0.1 0.2
Short term deposits and loans 0.0 0.1 0.0
Trade receivables (5.9) (3.0) 59.0 3.0 5.9 (5.3) (2.8) 58.0 3.1 6.4
Receivables and debit balances (3.9) (2.0) 39.4 2.0 3.9 (0.6) (0.3) 6.7 0.4 0.7
Credit from banks and others 3.3 1.6 (32.7) (1.6) (3.3) 3.3 1.7 (35.8) (1.9) (4.0)
Trade payables 28.9 14.4 (288.8) (14.4) (28.9) 29.6 15.5 (325.8) (17.1) (36.2)
Other payables 9.6 4.8 (96.3) (4.8) (9.6) 1.5 0.8 (17.0) (0.9) (1.9)
Long-term loans 7.8 4.1 (86.0) (4.5) (9.6) 12.4 6.5 (135.9) (7.2) (15.1)
Fixed rate debentures (series E) 42.8 22.4 (470.9) (24.8) (52.3)
Fixed rate debentures 67.9 35.6 (747.4) (39.3) (83.0)
Options (35.6) (9.1) 3.2 20.5 50.0 (26.1) (13.6) 11.2 19.2 43.9
Forward (39.1) (20.5) 1.8 22.7 47.8 (39.0) (20.4) 8.1 22.6 47.7
Swap (52.9) (27.4) 64.0 31.7 66.2 (81.7) (43.0) 115.2 47.8 101.0
Total (45.1) (14.8) (806.0) 29.9 70.2 (38.2) (20.1) (1,060.5) 26.8 59.7


ICL Group Limited 255

 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
EUR/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%
Increase of
5%
 Decrease of 5%Decrease of 10%

Cash and cash equivalents (1.8) (0.9) 17.9 0.9 1.8
Short term deposits and loans (0.1) 0.0 0.7 0.0 0.1
Trade receivables (24.6) (12.3) 246.4 12.3 24.6
Receivables and debit balances (0.1) 0.0 0.9 0.0 0.1
Long-term deposits and loans (0.1) (0.1) 1.1 0.1 0.1
Credit from banks and others 15.8 7.9 (157.6) (7.9) (15.8)
Trade payables 18.2 9.1 (182.1) (9.1) (18.2)
Other payables 7.7 3.8 (76.9) (3.8) (7.7)
Long-term loans from banks 2.9 1.4 (29.0) (1.4) (2.9)
Options 5.7 2.8 (1.8) (3.1) (6.7)
Forward 35.0 16.6 (2.6) (15.0) (28.7)
Swap 5.3 2.7 (0.6) (2.5) (5.1)
Total 63.9 31.0 (183.6) (29.5) (58.4)


252
Cash and cash equivalents (1.2) (0.6) 12.8 0.7 1.4
Short term deposits and loans (0.5) (0.2) 5.0 0.3 0.6
Trade receivables (20.7) (10.8) 227.4 12.0 25.3
Receivables and debit balances (3.7) (1.9) 40.6 2.1 4.5
Long-term deposits and loans (0.2) (0.1) 2.5 0.1 0.3
Credit from banks and others 6.4 3.3 (70.0) (3.7) (7.8)
Trade payables 14.9 7.8 (163.5) (8.6) (18.2)
Other payables 6.2 3.2 (68.0) (3.6) (7.6)
Long-term loans from banks 3.3 1.7 (35.9) (1.9) (4.0)
Options 3.8 2.1 (1.5) (2.8) (6.1)
Forward 13.6 7.1 (0.1) (7.9) (16.6)
Swap 33.4 17.5 (41.1) (19.4) (40.9)
Total 55.3 29.1 (91.8) (32.7) (69.1)


 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
GBP/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%
Increase of
5%
 Decrease of 5%Decrease of 10%

Cash and cash equivalents (0.5) (0.2) 5.0 0.3 0.6
Trade receivables (3.2) (1.7) 35.1 1.8 3.9
Credit from banks and others 7.7 4.0 (84.7) (4.5) (9.4)
Trade payables 2.0 1.0 (21.5) (1.1) (2.4)
Other payables 0.3 0.2 (3.6) (0.2) (0.4)
Long-term loans 2.0 1.1 (22.3) (1.2) (2.5)
Swap (6.2) (3.3) 5.0 3.6 7.6
Options (0.8) (0.4) 0.4 0.5 1.1
Forward (2.5) (1.3) 0.3 1.4 3.0
Total (1.2) (0.6) (86.3) 0.6 1.5

Cash and cash equivalents (0.7) (0.3) 6.7 0.3 0.7
Trade receivables (4.8) (2.4) 47.8 2.4 4.8
Receivables and debit balances 0.0 0.0 0.1 0.0 0.0
Credit from banks and others 2.0 1.0 (20.3) (1.0) (2.0)
Trade payables 2.3 1.2 (23.0) (1.2) (2.3)
Other payables 1.5 0.7 (14.7) (0.7) (1.5)
Options-----
Forward 2.6 1.2 0.1 (1.1) (2.2)
Total 2.9 1.4 (3.3) (1.3) (2.5)


 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
GBP/EUR$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of 10%
Increase of
5%
Decrease of 5%Decrease of 10%
ICL Group Limited 256
Forward 2.2 1.2 0.1 (1.3) (2.7)



 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
BRL/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of   10%
Increase of
5%
 Decrease of 5%Decrease of 10%

Cash and cash equivalents (0.7) (0.3) 6.5 0.3 0.7 (0.6) (0.3) 6.4 0.3 0.7
Trade receivables (3.1) (1.5) 30.8 1.5 3.1 (1.9) (1.0) 21.4 1.1 2.4
Trade payables 1.5 0.8 (15.5) (0.8) (1.5) 1.0 0.5 (11.0) (0.6) (1.2)
Long-term deposits and loans (0.3) (0.2) 3.6 0.2 0.4
Other payables 0.2 0.1 (1.9) (0.1) (0.2) 0.0 0.0 (0.1) 0.0 0.0
Long-term loans from banks 3.0 1.5 (30.0) (1.5) (3.0) 0.8 0.4 (8.9) (0.5) (1.0)
Options (0.2) (0.2) 0.2 0.2
Forward 0.1 0.0 (0.1) (0.1)
Total 0.9 0.6 (10.1) (0.6) (0.9) (1.1) (0.8) 11.6 0.6 1.4


 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
CNY/USD$ millions$ millions$ millions$ millions$ millions
Type of instrumentIncrease of   10%
Increase of
5%
 Decrease of   5%Decrease of 10%

Cash and cash equivalents (2.2) (1.1) 21.6 1.1 2.2 (5.5) (2.9) 60.2 3.2 6.7
Short term investments and deposits (0.3) (0.2) 3.7 0.2 0.4
Trade receivables (9.2) (4.6) 91.7 4.6 9.2 (4.6) (2.4) 51.1 2.7 5.7
Investments at fair value through other comprehensive income (12.3) (6.5) 135.7 7.1 15.1
Trade payables 8.5 4.3 (85.3) (4.3) (8.5) 6.0 3.2 (66.3) (3.5) (7.4)
Other payables 2.1 1.0 (20.8) (1.0) (2.1) 2.4 1.2 (26.0) (1.4) (2.9)
Credit from banks and others 17.3 8.7 (173.3) (8.7) (17.3) 5.6 2.9 (61.9) (3.3) (6.9)
Long-term loans (CNY) 5.4 2.8 (59.8) (3.1) (6.6)
Forward 3.1 1.6 (0.7) (1.8) (3.8) 2.1 1.1 (0.2) (1.2) (2.6)
Long-term loans (CNY) 9.8 4.9 (98.1) (4.9) (9.8)
Total 29.4 14.8 (264.9) (15.0) (30.1) (1.2) (0.8) 36.5 0.7 1.5


253
ICL Group Limited 257

 
Interest Rate Risk
 
We have loans bearing variable interest that expose our finance expenses and cash flowsflow to changes in interest rates. With respect to our fixed‑interest loans, there is exposure to changes in the fair value of the loans due to changes in the market interest rate.
 
We use some hedging transactions in order to hedge some of the above exposure. The hedging is implemented by using a fixed interest range and by hedging variable interest.
 
The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the LIBORUSD interest rate as atof December 31, 2018.2021.
 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
 $ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
1%
Increase of 0.5% Decrease of 0.5%Decrease of 1%

Fixed-USD interest debentures 77.5 40.0 (1,068.9) (42.7) (88.4) 98.5 50.9 (1,302.1) (54.4) (112.6)
Swap transactions 7.7 3.9 0.4 (4.0) (8.2) 4.2 2.1 (6.5) (2.2) (4.3)
NIS/USD swap 17.6 8.9 14.7 (9.1) (18.4) 28.8 14.8 118.8 (15.6) (31.9)
EUR/USD swap (0.2) (0.1) (1.0) 0.1 0.2
Total102.8 52.8 (1,054.8) (55.8) (115.0) 131.5 67.8 (1,189.8) (72.2) (148.8)

 
The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the LIBORUSD interest rate as atof December 31, 2017.2020.
 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
 in fair value
 $ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
1%
Increase of 0.5% Decrease of 0.5%Decrease of 1%

Fixed-USD interest debentures58.229.6(1,107.9)(30.7)(62.4) 108.0 55.8 (1,419.1) (59.8) (124.0)
Swap transactions10.15.1(2.7)(5.3)(10.8) 5.9 3.0 (13.1) (3.0) (6.1)
NIS/USD swap33.122.464.0(11.7)(23.6) 36.6 18.8 115.2 (19.5) (39.5)
GBP/USD swap 0.2 0.1 5.0 (0.1) (0.2)
EUR/USD swap (0.9) (0.5) (41.1) 0.5 1.0
Total101.457.1(1,046.6)(47.7)(96.8) 149.8 77.2 (1,353.1) (81.9) (168.8)


The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the NIS interest rate as atof December 31, 2018.2021.
 
Sensitivity to changes in the shekel interest rate
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
$ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
1%
Increase of 0.5% Decrease of 0.5%Decrease of 1%

Fixed-interest long-term loan 0.2 0.1 (60.3) (0.1) (0.1)
Fixed rate debentures 26.6 13.6 (635.8) (14.4) (29.5)
NIS/USD swap (35.1) (18.1) 118.8 19.2 39.4
Total (8.3) (4.4) (577.3) 4.7 9.8

Fixed-interest long-term loan 2.7 1.4 (73.0) (1.4) (2.9)
Fixed rate debentures (series E) 14.5 7.4 (426.8) (7.5) (15.3)
NIS/USD swap (18.5) (9.4) 14.7 9.6 19.5
Total (1.3) (0.6) (485.1) 0.7 1.3


254ICL Group Limited 258


The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the NIS interest rate as atof December 31, 2017.2020.
 
Sensitivity to changes in the shekel interest rate
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
$ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
1%
Increase of 0.5% Decrease of 0.5%Decrease of 1%

Fixed-interest long-term loan 3.7 1.9 (86.0) (2.0) (4.0) 1.9 0.9 (135.9) (1.0) (1.9)
Fixed rate debentures (series E) 20.1 10.2 (470.9) (10.5) (21.3)
Fixed rate debentures 31.6 16.2 (747.4) (17.1) (35.1)
NIS/USD swap (25.9) (13.1) 64.0 13.5 27.5 (42.4) (22.1) 115.2 23.8 49.0
Total (2.1) (1.0) (492.9) 1.0 2.2 (8.9) (5.0) (768.1) 5.7 12.0


Energy Price Risk
 
We use Energyenergy as part of operating our mines, facilities and logistics channels. We are executingexecute some hedging transactions to hedge somea portion of this exposure.
 
The table below sets forth the sensitivity of instruments hedging energy price risks to 5% and 10% increases and decreases in energy prices asAs of December 31, 2018.2021, there were no hedging transaction related to energy.
 

 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
$ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
10%
Increase of 5% Decrease of 5%Decrease of 10%

Energy hedges 1.5- 0.8- (3.0)0.0 (0.9)- (2.0)-


The table below sets forth the sensitivity of instruments hedging energy price risks to 5% and 10% increases and decreases in energy prices as of December 31, 2017.2020.
 
 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
$ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
10%
Increase of 5% Decrease of 5%Decrease of 10%

Energy hedges 2.1-- 1.0(0.5) 2.2- (1.0) (1.9)-




ICL Group Limited 259
255

 
Marine Shipping Price Risk
 
We are shippingship substantial amounts of goods worldwide using marine shipments. We execute some hedging transactions to reduce somea portion of our exposure to marine bulk shipping prices.
 
The table below sets forth the sensitivity of instruments hedging marine shipping price risk to 5% and 10% increases and decreases in marine shipping prices as of December 31, 2018.2021.
 

 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
$ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
10%
Increase of 5% Decrease of 5%Decrease of 10%

Marine shipping hedges 2.70.8 1.30.4 (2.2)1.6 (1.3)(0.4) (2.7)(0.8)

 
The table below sets forth the sensitivity of instruments hedging marine shipping price risk to 5% and 10% increases and decreases in marine shipping prices asAs of December 31, 2017.2020, there were no hedging transaction for marine shipping.

 
Increase (decrease)
in fair value
Fair value
Increase (decrease)
in fair value
$ millions$ millions$ millions$ millions$ millions
Type of instrument
Increase of
10%
Increase of 5% Decrease of 5%Decrease of 10%

Marine shipping hedges 2.2- 1.1- 1.9- (1.0)- (2.1)-


Item12 – DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Not Applicable.
 
Item13 – DEFAULTS, DIVIDEND ARRANGEMENTS AND DELINQUENCIES

Not Applicable.
 
Item14 – MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

Not Applicable.
 
256ICL Group Limited 260

Item15 – CONTROLS AND PROCEDURES

A. DISCLOSURE CONTROLS AND PROCEDURES

ICL’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of ICL’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) as of the end of the period covered by this annual report, have concluded that, as of such date, ICL’s disclosure controls and procedures were effective to ensure that the information required in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and such information is accumulated and communicated to its management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
 
B. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING 

ICL’s management is responsible for establishing and maintaining adequate internal control over financial reporting. ICL’s internal control over financial reporting system was designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements, for external purposes, in accordance with generally accepted accounting principles. These include those policies and procedures that:
 
·pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets;
 
·provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements, in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorization of our management and directors; and
 
·provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, effective control over financial reporting cannot, and does not, provide absolute assurance of achieving our control objectives. Also, projections of, and any evaluation of effectiveness of the internal controls in future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
257


Our management, including our Chief Executive Officer and our Chief Financial Officer, assessed the effectiveness of ICL’s internal control over financial reporting as of December 31, 2018.2021. In making this assessment, our management used the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission of 2013 (COSO). Based on such assessment, our management has concluded that, as of December 31, 2018,2021, ICL’s internal control over financial reporting is effective based on those criteria.
 
ICL Group Limited 261


C. Attestation Report of the Registered Public Accounting Firm

Somekh Chaikin, member firm of KPMG International, an independent registered public accounting firm, has audited and reported on the effectiveness of ICL’s internal controls over financial reporting as of December 31, 2018.2021. See Somekh Chaikin’s attestation report on page F-2 of this annual report.report.
 
D. Changes in internal control over financial reporting

There has been no identified change in our internal control over financial reporting in connection with the evaluation required by Rules 13a-15 or 15d-15 that occurred during the period covered by this annual report that has materially affected, or is likely to materially affect, our internal control over financial reporting.reporting.
 
Item16A – AUDIT AND ACCOUNTING COMMITTEE FINANCIAL EXPERT

Our Board of Directors has determined, based on qualification statements delivered to the Company, that Board members, Dr. Miriam Haran, Ms. Ruth RalbagDafna Gruber and Messrs. Nadav KaplanLior Reitblatt and Lior ReitblattGadi Lesin shall serve as financial experts of the Audit and Accounting Committee, as that term is defined in Item 16A(b) of Form 20-F, and that all members of the Audit and Accounting Committee, Dr. Miriam Haran, Ms. Ruth RalbagDafna Gruber and Messrs. Nadav KaplanLior Reitblatt and Lior ReitblattGadi Lesin, are financially literate and are independent directors for the purposes Rule of 10A-3 of the Exchange Act and of the NYSE trade listing requirements.requirements.
 
Item 16B – CODE OF ETHICS
 
Our Board of Directors havehas adopted a Code of Conduct that applies to our Board of Directors, senior management and employees, including our chief executive officer, chief financial officer, chief accounting officer or controllerChief Executive Officer, Chief Financial Officer, Controller and any other persons who perform similar functions for us. Our Code of Ethics is available, on our website,www.icl-group.com www.icl-group.com. We intend to disclose future amendments to our code of ethics, or any waivers of such code, on our website or in public filings. The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Annual Report.
 
258ICL Group Limited 262

 

Item16C – PRINCIPAL ACCOUNTANT FEES AND SERVICES
 
Somekh Chaikin, Tel Aviv, Israel (PCAOB ID 1057), a member of KPMG International, has served as our independent registered public accounting firm for 20182021 and 2017.2020. Following are the billedKPMG International's fees for their professional services in each of thosethe respective fiscal years:
 20182017
 US$ thousandsUS$ thousands

 
2021
2020
 
US$ thousands
US$ thousands

Audit fees(1) 4,897 5,1324,6454,739
Audit-related fees(2) 192 395148146
Tax fees(3) 1,751 1,473
1,303
1,643
Total 6,840 7,000
6,096
6,528


(1) Audit fees are the aggregate fees billed or expected to be billed for the audit of our annual financial statements. This category also includes services that are generally provided by the independent accountant, such as consents and review of documents filed with the SEC.
 
(2) Audit-related Fees are the aggregate fees billed for assurance and related services rendered during the yearyears ended December 31, 20182021 and 2020, that are reasonably related to the performance of the audit and are not reported under Auditaudit fees. These fees include mainly audits of financial statements of a carve-out entity in anticipation of a divestiture and accounting consultation on proposed transactions.
 
(3) Tax fees are the aggregate fees billed for professional services rendered during the yearyears ended December 31, 2021 and 2020, rendered for tax compliance, tax advice, and tax planning, assistance with tax audits and appeals.
 
Audit Committee’s pre-approval policies and procedures


All services provided by our independent auditors are approved in advance by either the Audit and Accounting Committee or members thereof, to whom authority has been delegated, in accordance with the Audit and Accounting Committee's pre-approval procedure respecting such services.services.
 
Item16D – EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

Not Applicable.
 
259

Item16E – PURCHASE OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

Not Applicable.

ICL Group Limited 263


Item16F –CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT

Not Applicable.
 
Item 16F – CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not Applicable.
Item 16G – CORPORATE GOVERNANCE

Corporate Governance Practices
 
We are incorporated in Israel and therefore subject to various corporate governance provisions under the Companies Law and the regulations promulgated thereunder, relating to such matters as external directors, the audit committee, the compensation committee and the internal auditor. These are in addition to the requirements of the NYSE and relevant provisions of U.S.US securities laws that apply to foreign companies listed for tradetrading in the U.S.US.
 
As a foreign private issuer whose shares are listed on the NYSE, we have the option to follow certain corporate governance practices applyingthat apply in the country of incorporation of the foreign company, Israel, rather than those of the NYSE, except to the extent that such laws would be contrary to U.S.US securities laws and provided that we disclose the practices that we are not following and describe the home country practices which we elected to follow instead. We intend to rely on this “foreign private issuer exemption” with respect to the following NYSE requirements:
 

·
Majority Independent Board.Under Section 303A.01 of the NYSE Listed Company Manual (the “LCM”), a U.S.US domestic listed company, other than a controlled company, must have a majority of independent directors. sixSix of our ten directors are not considered independent directors under Israeli law whether due to their relationship with the Company, our controlling shareholder or the length of their tenure on our Board of Directors.
 

·
Nominating/Corporate Governance Committee.  Under Section 303A.04 of the LCM, a U.S.US domestic listed company, other than a controlled company, must have a nominating/corporate governance committee composed entirely of independent directors. Our controlling shareholder, Israel Corporation, has significant control over the appointment of our directors.directors (other than external directors).
 

·
Equity Compensation Plans. Under Section 303A.08 of the LCM, shareholders must be given the opportunity to vote on all equity‑compensation plans and material revisions thereto, with certain limited exemptions as described therein. We follow the requirements of the Israeli Companies Law, under which approval of equity compensation plans and material revisions thereto is within the authority of our HR & Compensation Committee and the Board of Directors. However, under the Israeli Companies Law, any compensation to directors, the chief executive officerChief Executive Officer or a controlling shareholder or another person in which a controlling shareholder has a personal interest, including equity compensation plans, generally requires the approval of the compensation committee, the boardBoard of directorsDirectors and the shareholders, in that order. TheUnder the Companies Law, the compensation of directors and officers is generally required to comply with a shareholder‑approved compensation policy, which is required, among other things, to include a monetary cap on the value of equity compensation that may be granted to any director or officer.
ICL Group Limited 264
260


·
Shareholder Approval of Securities Issuances. Under Section 312.03 of the LCM, shareholder approval is a prerequisite to (a) issuing common stock,ordinary shares, or securities convertible into or exercisable for ordinary shares, to a related party, a subsidiary, affiliate or other closely related person of a related party or any company or entity in which a related party has a substantial interest, if the number of ordinary shares to be issued exceeds either 1% of the number of ordinary shares or 1% of the voting power outstanding before the issuance, and (b) issuing ordinary shares, or securities convertible into or exercisable for ordinary shares, if the ordinary share has, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance or the number of ordinary shares to be issued is equal to or in excess of 20% of the number of ordinary shares before the issuance, in each case subject to certain exceptions. We seek shareholder approval for all corporate actions requiring such approval under the requirements of the Israeli Companies Law, which are different from the requirements for seeking shareholder approval under Section 312.03 of the LCM. Under the Israeli Companies Law, shareholder approval is a prerequisite to any extraordinary transaction with a controlling shareholder or in which a controlling shareholder has a personal interest. Under the Israeli Companies Law, shareholder approval is also a prerequisite to a private placement of securities if it will cause a person to become a controlling shareholder or in case all of the following conditions are met:
The securities issued amount to 20% or more of the Company’s outstanding voting rights before the issuance;
 
·The securities issued amount to 20% or more of the company’s outstanding voting rights before the issuance;
Some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and
 
·Some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and
·The transaction will increase the relative holdings of a 5% shareholder or will cause any person to become, as a result of the issuance, a 5% shareholder.
 
Except as stated above, we intend to comply with virtually all the rules applicable to U.S. companies listed on the NYSE. We may decide in the future to use additional and/or other foreign private issuer exemptions with respect to some or all of the other NYSE listing requirements. Following governance practices of our home country, Israel, as opposed to the requirements that would otherwise apply to a company listed on the NYSE, may provide less protection than is accorded to investors under NYSE listing requirements applicable to domestic issuers. For morefurther information, see Item“Item 3 - Key Information— D. Risk Factors—As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of applicable SEC and NYSE requirements, which may result in less protection than is afforded to investors under rules applicable to domestic issuers”.
 
261ICL Group Limited 265

 
Item16H – MINE SAFETY DISCLOSURE

Not applicable.

Item 16I – DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.
 
Item 17 – FINANCIAL STATEMENTS

See “Item 18 - Financial Statements”.
 
Item 18 – FINANCIAL STATEMENTS

See page F-1.
 

ICL Group Limited 266

 
Item 19 – EXHIBITS

We have filed certain exhibits to our Form 20-F filed with the SEC, which are available for perusal at: www.sec.gov.
ITEM 19 – EXHIBITS
 
2.1
4.1
4.3*4.3
**
Incorporated by reference to our annual report on Form 20-F (file no. 001-13742) for the year endedeffective December 31, 2016, dated March 16, 2017.2021.
****
101.INS
XBRL Instance Document
Incorporated by reference to our annual report on Form 20-F (file no. 001-13742) for the year ended December 31, 2017, dated March 7, 2018.
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
101.INS
XBRL Instance Document
 
ICL Group Limited 267
262

SIGNATURES
SIGNATURE
 
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

 
ISRAEL CHEMICALS LTD.
ICL Group Ltd.
 By:/s/ Kobi AltmanAviram Lahav
  Name:Kobi AltmanAviram Lahav
  Title:Chief Financial Officer
 
ICL Group Ltd.
 By:/s/ Aya Landman
  Name:Aya Landman
  Title:GlobalVP, Company Secretary & Global Compliance
 
Date: February 27, 201923, 2022


263
ICL Group Limited 268



Consolidated Financial Statements
As of December 31, 2021

 

ICL Group Ltd


 

Consolidated Financial Statements as atof December 31, 2018

2021


Contents

Auditors' Report (PCAOB 1057)
 
  
F - 1
  
F - 2
  
F - 3
  
F -
4
  
F - 7
  
F - 98

 


Somekh Chaikin
KPMG Millennium Tower
Telephone   972 3 684 8000
17 Ha'arba'a Street, PO Box 609
Tel Aviv 61006 Israel
Telephone    972 3  684  8000
Fax              972 3 684 8444
Tel Aviv 61006 Israel
Internet       www.kpmg.co.il
 
Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Israel Chemicals LtdICL Group LTD
 
Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated statements of financial position of Israel ChemicalsICL Group Ltd. and subsidiaries (the “Company”) as of December 31, 20182021 and 2017,2020, and the related consolidated statements of income, comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2018,2021, and the related notes (collectively, the "consolidated financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
 
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20182021 and 2017,2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2018,2021, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2018,2021, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission
Commission.
Basis for Opinions
 
Basis for Opinions

The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.


We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
opinions.
 
Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board,generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
 
KPMGCritical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Useful lives of the long-lived assets associated with Dead Sea Works Ltd. concession
As discussed in Note 18b (1) to the consolidated financial statements, the concession of Dead Sea Works Ltd. (DSW) will end on March 31, 2030. The consolidated financial statements were prepared based on the Company's assumption that it is more likely than not that DSW will continue to operate its long-lived assets for their remaining useful lives, which extend beyond the term of the current concession period, by obtaining the renewed concession or by operating the assets for an alternative holder.
We identified the evaluation of the useful lives of the long-lived assets associated with DSW's concession (hereinafter – the relevant assets) as a critical audit matter. Specifically, challenging auditor judgment was required to evaluate the Company’s determination that the useful lives of the relevant assets exceed the current concession period due to uncertainty relating to concession renewal and to effects from potential changes of the concession holder. Changes in the estimated useful lives of the relevant assets could have a significant effect on the depreciation expenses of these assets.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internal control related to the determination of useful lives of the long-lived assets associated with the with Dead Sea Works Ltd. concession. We evaluated the Company's estimate regarding the useful lives of the relevant assets by examining its analysis of potential alternatives of operating the assets for an alternative concession holder, as well as considering relevant publicly available information, such as, the Concession Law and the report released by the Israeli Ministry of Finance regarding the actions that the government may take towards the end of the concession period.
Uncertain tax treatment under the Law for Taxation of Profit from Natural Resources
As discussed in Note 15E to the consolidated financial statements, the Law for Taxation of Profits from Natural Resources in Israel (the Law) became effective in 2016. Under the law, the Company has taken a position regarding the value assigned to certain property, plant and equipment for tax purposes at the date the law became effective. Specifically, that the value of certain property, plant and equipment for tax purposes can be determined based on its fair value as determined by an independent appraiser using a replacement cost method and not based on its historical depreciated cost. The Company believes that it is more likely than not that its position will be accepted.
We identified the evaluation of uncertain tax treatment under the Law as a critical audit matter. Due to the lack of tax regulations, circulars, or court cases, complex auditor judgment was required in evaluating the Company’s position that the value of certain property, plant and equipment for tax purposes can be determined, at the date the law became effective, based on its fair value as determined by an independent appraiser using a replacement cost method and not based on its historical depreciated cost.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internal control related to the interpretation of the new tax law and the Company's application in the tax provision estimation process. We read letters received directly from the Company’s external legal counsel that evaluated the Company's interpretation of the Law. In addition, we involved tax professionals with specialized skills and knowledge who assisted in evaluating the Company’s interpretation of the Law and its potential impact on the tax provision.
(signed) Somekh Chaikin
Member Firm of KPMG International
We have served as the Company’s auditor since 2006.
Tel Aviv, Israel
February 26, 201922, 2022
Somekh Chaikin, a partnership registered under the Israeli partnership
Ordinance, is the Israeli member firm of KPMG International,
a Swiss cooperative.


 
Consolidated Statements of Financial Position as atof December 31

  20182017
 Note$ millions$ millions
 
2021
2020
Note
$ millions
$ millions
Current assets   
Cash and cash equivalents  121 83
Short-term investments and deposits  92 90
Trade receivables  990 932
Inventories 6 1,290 1,226
Assets held for sale - 169
Other receivables7,14 295 225
Total current assets  2,788 2,725
    
Non-current assets   
Investments in equity-accounted investees  30 29
Investments at fair value through other comprehensive income  145 212
Deferred tax assets 17 122 132
Property, plant and equipment 11 4,663 4,521
Intangible assets 12 671 722
Other non-current assets9,14,18 357 373
Total non-current assets  5,988 5,989
    
Total assets  8,776 8,714
    
Current liabilities   
Short-term credit 15 610 822
Trade payables  715 790
Provisions 19 37 78
Liabilities held for sale - 43
Other current liabilities14,16 647 595
Total current liabilities  2,009 2,328
    
Non-current liabilities   
Long-term debt and debentures 15 1,815 2,388
Deferred tax liabilities 17 297 228
Long-term employee liabilities 18 501 640
Provisions 19 229 193
Other non-current liabilities  10 7
Total non-current liabilities  2,852 3,456
    
Total liabilities  4,861 5,784
    
Equity 21  
Total shareholders’ equity  3,781 2,859
Non-controlling interests  134 71
Total equity  3,915 2,930
    
Total liabilities and equity  8,776 8,714
Current assets
   
Cash and cash equivalents
 
 473
 214
Short-term investments and deposits
 
 91
 100
Trade receivables
 
 1,418
 883
Inventories
 6
 1,570
 1,250
Investments at fair value through other comprehensive income
 
0
53
Prepaid expenses and other receivables
 7
 357
 341
Total current assets
 
 3,909
 2,841
    
Non-current assets
   
Investments at fair value through other comprehensive income
 
 0
 83
Deferred tax assets
 15
 147
 127
Property, plant and equipment
 10
 5,754
 5,550
Intangible assets
 11
 867
 670
Other non-current assets
9,16
 403
 393
Total non-current assets
 
 7,171
 6,823
    
Total assets
 
 11,080
 9,664
    
Current liabilities
   
Short-term debt
 13
 577
 679
Trade payables
 
 1,064
 740
Provisions
 17
 59
 54
Other payables
 14
 912
 704
Total current liabilities
 
 2,612
 2,177
    
Non-current liabilities
   
Long-term debt and debentures
 13
 2,436
 2,053
Deferred tax liabilities
 15
 384
 326
Long-term employee liabilities
 16
 564
 655
Long-term provisions and accruals
 17
 278
 267
Other
 
 70
 98
Total non-current liabilities
 
 3,732
 3,399
    
Total liabilities
 
 6,344
 5,576
    
Equity
   
Total shareholders’ equity
 19
 4,527
 3,930
Non-controlling interests
 
 209
 158
Total equity
 
 4,736
 4,088
    
Total liabilities and equity
 
 11,080
 9,664



The accompanying notes are an integral part of these consolidated financial statements.

ICL Group LimitedAnnual Report1
F - 1

Consolidated Statements of Income for the Year Ended December 31

  
2021
2020
2019
 
Note
$ millions
$ millions
$ millions
  201820172016
 Note$ millions$ millions$ millions

Sales22 5,556 5,418 5,363
20
 6,955
5,043
5,271
Cost of sales22 3,702 3,746 3,703
20
4,344
3,553
3,454
      
Gross profit  1,854 1,672 1,660 
2,611
1,490
1,817
      
Selling, transport and marketing expenses22 798 746 722
20
1,067
766
767
General and administrative expenses22 257 261 321
20
276
232
254
Research and development expenses22 55 55 73
20
64
54
50
Other expenses22 84 90 618
20
57
 256
30
Other income22 (859) (109) (71)
20
(63)
 (20)
 (40)
      
Operating income (loss)  1,519 629 (3)
Operating income
 
1,210
202
756
      
Finance expenses  214 229 157 
216
219
 220
Finance income  (56) (105) (25) 
(94)
(61)
(91)
      
Finance expenses, net22 158 124 132
20
122
158
129
      
Share in earnings of equity-accounted investees  3- 18 
4
5
1
      
Income (loss) before income taxes  1,364 505 (117)
Income before taxes on income
 
1,092
49
628
      
Provision for income taxes17 129 158 55
Taxes on income
15
260
25
147
      
Net income (loss)  1,235 347 (172)
Net income
 
832
24
481
      
Net loss attributable to the non-controlling interests  (5) (17) (50)
Net income attributable to the non-controlling interests
 
49
13
6
      
Net income (loss) attributable to the shareholders of the Company  1,240 364 (122)
Net income attributable to the shareholders of the Company
 
783
11
475
      
Earnings (losses) per share attributable to the shareholders of the Company:24  
Earnings per share attributable to the shareholders of the Company:
22
  
      
Basic earnings (losses) per share (in dollars)  0.97 0.29 (0.10)
Basic earnings per share (in dollars)
 
0.61
0.01
0.37
      
Diluted earnings (losses) per share (in dollars)  0.97 0.29 (0.10)
Diluted earnings per share (in dollars)
 
0.60
0.01
0.37
      
Weighted-average number of ordinary shares outstanding:24  
22
  
      
Basic (in thousands)  1,277,209 1,276,072 1,273,295 
1,282,807
1,280,026
1,278,950
      
Diluted (in thousands)  1,279,781 1,276,997 1,273,295 
1,287,051
1,280,273
1,282,056

 

The accompanying notes are an integral part of these consolidated financial statements.

F - ICL Group LimitedAnnual Report2

Consolidated Statements of Comprehensive Income for
the Year Ended December 31

 
2021
2020
2019
 
$ millions
$ millions
$ millions
 201820172016
 $ millions$ millions$ millions

Net income

 832
 24
 481
    
Components of other comprehensive income that will be reclassified subsequently to net income
   

Foreign currency translation differences

(105)
118
(20)
Change in fair value of cash flow hedges transferred to the statement of income
(15)
(54)
(38)
Effective portion of the change in fair value of cash flow hedges
13
53
42
Tax relating to items that will be reclassified subsequently to net income
0
0
(1)
 
 (107)
117
 (17)
    
Components of other comprehensive income that will not be reclassified to net income
   
Net changes of investments at fair value through other comprehensive income
155
18
10
Gains (losses) from defined benefit plans
85
(15)
(75)
Tax relating to items that will not be reclassified to net income
(44)
(6)
10
 
 196
(3)
 (55)
    
Total comprehensive income
921
138
409
    
Comprehensive income attributable to the non-controlling interests
54
23
4
    
Comprehensive income attributable to the shareholders of the Company
867
115
405

Net income (loss) 1,235 347 (172)
    
Components of other comprehensive income that will be reclassified subsequently to net income (loss)   
Currency translation differences (95) 152 (90)
Changes in fair value of derivatives designated as a cash flow hedge-- (1)
Net changes of investments at fair value through other comprehensive income- (57) 17
Tax income (expenses) relating to items that will be reclassified subsequently to net income (loss)- 5 (5)
  (95) 100 (79)
    
Components of other comprehensive income that will not be reclassified to net income (loss)   
Net changes of investments at fair value through other comprehensive income (58)--
Actuarial gains (losses) from defined benefit plans 56 (17) (48)
Tax income (expense) relating to items that will not be reclassified to net income (loss) (3) 3 8
  (5) (14) (40)
    
Total comprehensive income (loss) 1,135 433 (291)
    
Comprehensive loss attributable to the non-controlling interests (9) (13) (59)
    
Comprehensive income (loss) attributable to the shareholders of the Company 1,144 446 (232)


The accompanying notes are an integral part of these consolidated financial statements.
ICL Group LimitedAnnual Report3
F - 3

Consolidated Statements of Changes in Equity
 
 
Attributable to the shareholders of the Company
Non- controlling interests
Total equity
 
Share capital
Share premium
Cumulative translation adjustment
Capital reserves
Treasury shares,
at cost
Retained earnings
Total shareholders’ equity
  
 
$ millions

For the year ended December 31, 2018         
Balance as at January 1, 2018 545 186 (333) 30 (260) 2,691 2,859 71 2,930
          
Share-based compensation 1 7- 11-- 19- 19
Dividends----- (241) (241) (1) (242)
Capitalization of subsidiary debt------- 73 73
Comprehensive income (loss)-- (91) (58)- 1,293 1,144 (9) 1,135
Balance as at December 31, 2018 546 193 (424) (17) (260) 3,743 3,781 134 3,915
For the year ended December 31, 2021
         
Balance as of January 1, 2021
546
204
(334)
22
(260)
3,752
3,930
158
4,088
          
Share-based compensation
2
 20
0
 (16)
0
0
 6
0
 6
Dividends
0
0
0
0
0
 (276)
 (276)
 (3)
 (279)
Comprehensive income
0
0
 (110)
 132
0
 845
 867
 54
 921
Balance as of December 31, 2021
 548
 224
 (444)
 138
 (260)
 4,321
 4,527
 209
 4,736


The accompanying notes are an integral part of these consolidated financial statements.
ICL Group LimitedAnnual Report4
 
F - 4

Consolidated Statements of Changes in Equity (cont'd)

 
Attributable to the shareholders of the Company
Non- controlling interests
Total equity
 
Share capital
Share premium
Cumulative translation adjustment
Capital reserves
Treasury shares,
at cost
Retained earnings
Total shareholders’ equity
  
 
$ millions

For the year ended December 31, 2017         
Balance as at January 1, 2017 544 174 (481) 79 (260) 2,518 2,574 85 2,659
          
Share-based compensation 1 12- 3-- 16- 16
Dividends----- (177) (177) (1) (178)
Comprehensive income (loss)-- 148 (52)- 350 446 (13) 433
          
Balance as at December 31, 2017 545 186 (333) 30 (260) 2,691 2,859 71 2,930
For the year ended December 31, 2020
         
Balance as of January 1, 2020
 546
 198
 (442)
 3
 (260)
 3,880
 3,925
 136
 4,061
          
Share-based compensation
0
6
0
2
0
0
8
0
8
Dividends
0
0
0
0
0
 (118)
 (118)
 (1)
 (119)
Comprehensive income
0
0
 108
 17
0
 (10)
 115
 23
 138
Balance as of December 31, 2020
 546
 204
 (334)
 22
 (260)
 3,752
 3,930
 158
 4,088


The accompanying notes are an integral part of these consolidated financial statements.
 
F - ICL Group LimitedAnnual Report5


Consolidated Statements of Changes in Equity (cont'd)


 
Attributable to the shareholders of the Company
Non- controlling interests
Total equity
 
Share capital
Share premium
Cumulative translation adjustment
Capital reserves
Treasury shares,
at cost
Retained earnings
Total shareholders’ equity
  
 
$ millions

For the year ended December 31, 2016         
Balance as at January 1, 2016 544 149 (400) 93 (260) 2,902 3,028 160 3,188
          
Share-based compensation*- 25- (10)-- 15- 15
Dividends----- (222) (222) (4) (226)
Changes in equity of equity-accounted investees--- (15)-- (15)- (15)
Non-controlling interests in business combinations from prior periods------- (12) (12)
Comprehensive loss-- (81) 11- (162) (232) (59) (291)
          
Balance as at December 31, 2016 544 174 (481) 79 (260) 2,518 2,574 85 2,659
For the year ended December 31, 2019
         
Balance as of January 1, 2019
 546
 193
 (424)
 (17)
 (260)
 3,743
 3,781
 134
 3,915
          
Share-based compensation
 0
 5
0
 7
0
0
 12
0
 12
Dividends
0
0
0
0
0
 (273)
 (273)
 (2)
 (275)
Comprehensive income
0
0
 (18)
 13
0
 410
 405
 4
 409
Balance as of December 31, 2019
 546
 198
 (442)
 3
 (260)
 3,880
 3,925
 136
 4,061

* Less than $1 million.
 
The accompanying notes are an integral part of these consolidated financial statements.
 
ICL Group LimitedAnnual Report6
F - 6

Consolidated Statements of Cash Flows for the Year Ended
December 31
 
 
2021
2020
2019
 
$ millions
$ millions
$ millions
 201820172016
 $ millions$ millions$ millions
Cash flows from operating activities
   
Net income
 832
24
481
Adjustments for:
   
Depreciation and amortization
490
489
443
(Reversal of) Impairment of fixed assets
(6)
90
(10)
Exchange rate, interest and derivative, net
99
88
109
Tax expenses
260
25
147
Change in provisions
(4)
113
(21)
Other
(21)
5
(1)
 
 818
810
667
    
Change in inventories
(267)
54
(72)
Change in trade receivables
(426)
(89)
199
Change in trade payables
274
84
(58)
Change in other receivables
9
5
5
Change in other payables
107
54
4
Net change in operating assets and liabilities
(303)
108
78
    
 Interest paid, net
(89)
(107)
(114)
 Income taxes paid, net of refund
(193)
(31)
(120)
    
Net cash provided by operating activities
1,065
804
992
    
Cash flows from investing activities
   
Proceeds (payments) from deposits, net
355
34
(2)
Business combinations
(365)
(27)
0
Purchases of property, plant and equipment and intangible assets
(611)
(626)
(576)
Proceeds from divestiture of businesses net of transaction expenses
31
26
0
Other
11
10
53
Net cash used in investing activities
(579)
(583)
(525)
    
Cash flows from financing activities
   
Dividends paid to the Company's shareholders
(276)
(118)
(273)
Receipt of long-term debt
1,230
1,175
657
Repayments of long-term debt
(1,120)
(1,133)
(689)
Repayments of short-term debt, net
(58)
(52)
(183)
Receipts (payments) from transactions in derivatives
(17)
24
0
Other
(3)
(1)
(2)
Net cash used in financing activities
(244)
(105)
(490)
    
Net change in cash and cash equivalents
242
116
(23)
Cash and cash equivalents as of the beginning of the year
214
95
121
Net effect of currency translation on cash and cash equivalents
17
3
(3)
Cash and cash equivalents as of the end of the year
473
214
95

Cash flows from operating activities   
Net income (loss) 1,235 347 (172)
Adjustments for:   
Depreciation and amortization 403 390 401
Impairment of non-current assets 17 28 5
Exchange rate and interest expenses, net 35 137 76
Share in earnings of equity-accounted investees, net (3)- (18)
Loss (gain) from divestiture of businesses (841) (54) 1
Capital losses-- 432
Share-based compensation 19 16 15
Deferred tax expenses (income) 76 (46) (2)
  (294) 471 910
    
Change in inventories (115) 57 70
Change in trade and other receivables (104) 21 150
Change in trade and other payables (36) (45) (90)
Change in provisions and employee benefits (66) (4) 98
Net change in operating assets and liabilities (321) 29 228
    
Net cash provided by operating activities 620 847 966
    
Cash flows from investing activities   
Proceeds from deposits, net (3) (65) (198)
Purchases of property, plant and equipment and intangible assets (572) (457) (632)
Proceeds from divestiture of businesses net of transaction expenses
* 902
 6 17
Proceeds from sale of equity-accounted investee- 168-
Dividends from equity-accounted investees 2 3 12
Proceeds from sale of property, plant and equipment 2 12 5
Other-- (4)
Net cash provided by (used in) investing activities 331 (333) (800)
    
Cash flows from financing activities   
Dividends paid to the Company's shareholders (241) (237) (162)
Receipt of long-term debt 1,746 966 1,278
Repayment of long-term debt (2,115) (1,387) (1,365)
Short-term credit from banks and others, net (283) 147 14
Other (1)- (4)
Net cash used in financing activities (894) (511) (239)
    
Net change in cash and cash equivalents 57 3 (73)
Cash and cash equivalents as at the beginning of the year 83 87 161
Net effect of currency translation on cash and cash equivalents (24) (2) (1)
Cash and cash equivalents included as part of assets held for sale 5 (5)-
Cash and cash equivalents as at the end of the year 121 83 87

 
The accompanying notes are an integral part of these condensed consolidated financial statements.
 
 ICL Group LimitedAnnual Report7
* See Note 10.
 
F - 7

Consolidated Statements of Cash Flows for the Year Ended
December 31 (cont'd)
Additional Information

 
For the year
ended 31, December
 201820172016
 $ millions$ millions$ millions

Income taxes paid, net of refunds 56 127 84
Interest paid 103 111 112

The accompanying notes are an integral part of these condensed consolidated financial statements.
F - 8

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 1 – General

A. The reporting entity
 
A.
The reporting entity
Israel Chemicals

ICL Group Ltd. (hereinafter – the Company), is a company domiciled and incorporated in Israel. The Company's shares are traded on both the Tel-Aviv Stock Exchange (TASE) and the New York Stock Exchange (NYSE). under the ticker: ICL. The address of the Company’s registered headquarterheadquarters is 23 Aranha St., Tel‑Aviv, Israel. The Company is a subsidiary of Israel Corporation Ltd., a public company traded on the TASE.TASE under the ticker: ILCO:TA. The Company together with its subsidiaries, associated companies and joint ventures (hereinafter – the Group or ICL), is a leading specialty minerals group that operates a unique, integrated business model. The Company competitively extracts certain minerals as raw materials and utilizes processing and product formulation technologies to add value to customers in two main end-markets: agriculture and Industrial (including food additives). ICL’s products are used mainly in the areas of agriculture, electronics, food, fuel and gas exploration, water purification and desalination, detergents, cosmetics, medicinespharmaceuticals, and vehicles.automotive.

 
The State of Israel holds a Special State Share in ICL and in some of its subsidiaries, entitling the State the right to safeguard the State of Israel interests (seevital interests. For additional information, see Note 21).19 - Equity.
 
B.

Impact of the COVID-19 spread

B. Definitions

The COVID-19 pandemic continues to create business and economic uncertainty and volatility in the global markets. Many countries around the world are experiencing further outbreaks of the pandemic, following which governments are once again imposing various restrictions. At the same time, there is a recovery trend in the volume of economic activity around the world that leads on one hand, to significant demand for certain products and services and on the other hand, disruptions to worldwide supply chain routes and some raw materials. The Company continues to take measures to ensure the health and safety of its employees, suppliers, other business partners and the communities in which it operates in order to ensure, among others, the operation level, the proper functioning of its facilities around the world and to minimize the pandemic's potential impact on its business. Manufacturing continues at the Company's sites around the world without interruptions. However, there is still a difficulty in assessing the future impacts of the pandemic on the Company's operations, inter alia, in light of the uncertainty of its duration, the extent of its intensity and effects on global supply chains and global markets, and additional countermeasures that may be taken by governments and central banks.

ICL Group LimitedConsolidated Financial Statements8

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 1 – General (cont'd)
 
1.C.
Definitions
1.
Subsidiary – a company over which the Company has control and the financial statements of which are fully consolidated with the Company's statements as part of the consolidated financial statements.
 
2.
Investee company – Subsidiaries, and companies, including a partnership or joint venture, the Company's investment in which is accounted for directly or indirectly, using the equity method.
 
3.
Related party – Within its meaningAs in IAS 24 (2009), “Related Party Disclosures”.
 
Note 2 - Basis of Preparation of the Financial Statements

A. Statement of compliance with International Financial Reporting Standards
 
A.
Statement of compliance with International Financial Reporting Standards
The consolidated financial statements have beenwere prepared by ICL in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Boards (IASB).
 
The consolidated financial statements were authorized for issuance by the Company’s Board of Directors on February 26, 2019.22, 2022.
 
B.
B.
Functional and presentation currency
 
The consolidated financial statements are presented in United States Dollars (“US Dollars”; $), which is the functional currency of the Company and have been rounded to the nearest million, except when otherwise indicated.
Items included in the consolidated financial statements of the Company are measured using the currency of the primary economic environment in which the individual entity operates (“the functional currency”).
 
F - 9

Notes to the Consolidated Financial Statements as at December 31, 2018
C.
Basis of measurement
 
Note 2 - Basis of Preparation of the Financial Statements (cont’d)

C. Basis of measurement
The consolidated financial statements were prepared using the depreciated historical cost basis except for the following assets and liabilities: derivativeFinancial instruments measured at fair value through profit or loss, financial instruments non-current assets held-for-sale,measured at fair value through other comprehensive income, Investments in associates, and joint ventures, deferred tax assets and liabilities, provisions and assets and liabilities in respect of employee benefits.
For further information regarding the measurement of assets and liabilities, see Note 3 below.3.
ICL Group LimitedConsolidated Financial Statements9

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 2 - Basis of Preparation of the Financial Statements (cont'd)
 
D.
D.
Operating cycle
 
The Company’s regular operating cycle is up to one year. As a result, the current assets and the current liabilities include items for which the realization of which is intended and anticipated to take place within one year.
 
E. Use
E.Classifications
The Company made a number of estimates and judgmentinsignificant adjustments to the classification of comparative figures in order to adjust them to the manner of classification in the current financial statements. The said classifications have no effect on the total profit (loss).
 
F.
Use of estimates and judgment
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
 
The evaluation of accounting estimates used in the preparation of ICL’s financial statementsFinancial Statements requires management of the CompanyCompany's management to make assumptions regarding interpretations of laws interpretations which apply to the Company, circumstances and events that involveinvolving considerable uncertainty. Management of the CompanyThe Company's management prepares the estimates based on past experience, various facts, external circumstances, and reasonable assumptions based onrelating to the pertinent circumstances of each estimate. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.
F -

ICL Group LimitedConsolidated Financial Statements10

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2 - Basis of Preparation of the Financial Statements (cont'd)

E.
F.
Use of estimates and judgment (cont'd)
 
Information about assumptions made by ICL with respect to the future and other reasons for uncertainty with respect to estimates that have a significant risk of resulting in a material adjustment to carrying amounts of assets and liabilities in the nextfuture financial yearyears are included in the following table:
 
Estimate
Principal assumptions
Possible effects
Reference
Recognition
Concessions, permits and business licenses
Forecast of deferred tax assetobtaining renewed concessions, permits and business licenses which constitute the basis for the Company's continued operations and the Company's expectations regarding the holding of the operating assets by it and / or by a subsidiary until the end of their useful lives
Tax rates expected to apply when
Impact on the timing differences applied to Beneficiary Enterprise are realized is based on forecastsvalue of future revenues to be earned. The reasonabilitythe operation, depreciation periods and residual values of future revenues to be earned to use future tax benefits.related assets.
Recognition or reversal of deferred tax asset in profit or loss.
See Note 17 regarding taxes on income18 - Concessions.
Recoverable amount of a cash generating unit, among other things, containing goodwill
Expected cash-flow forecasts including estimates of mineral reserves, discount rate, market risk and the forecasted growth rate.
Change in impairment valuation.
See Note 12 - impairment testing.
Uncertain tax positions
The extent of the certainty that ICL’s tax positions will be accepted (uncertain tax positions) and the risk of it incurring any additional tax and interest expenses. This is based on an analysis of several matters, including interpretations of tax laws and the ICL’sCompany’s past experience.
Recognition of additional income tax expenses.
See Note 17 regarding15 - taxes on incomeincome.
Post-employment employee benefitsActuarial assumptions such as the discount rate, future salary increases and the future pension increase.
An increase or decrease in the post-employment defined benefit obligation.
See Note 18 regarding employee benefits.
Assessment of probabilityProbability assessment of contingent and environmental liabilities including cost of waste removal/restoration
Whether it is more likely than not that an outflow of economic resources will be required in respect of potential liabilities under the environmental protection laws and legal claims pending against ICL and the estimation of their amounts. The waste removal/ restoration obligations depend on the reliability of the estimates of future removal costs and interpretation of regulations.
Creation, adjustment or reversal of a provision
A change in the Company's estimated provisions for a claim and/or environmental liability, including cost of waste removal/removal and restoration.
See Note 20 regarding18 - contingent liabilities
Recoverable amount of a cash generating unit, among other things, containing goodwillliabilities.
Expected cash-flow forecasts, the discount rate, market risk and the forecasted growth rate.Change in impairment loss.See Note 13 regarding impairment testing.
Assessment of the fair value of the assets and liabilities acquired in business combinationsExpected cash‑flow forecasts of the acquired business, and models for calculating the fair value of the acquired items and their depreciation and amortization periods.
Impact on the balance of assets and liabilities acquired and the depreciation and amortization in the statement of income.
Assessment of the net realizable value of inventoryFuture selling price and expected replacement price when used as the best available evidence for realizable value.
Decrease in the carrying value of the inventories and the results of operations accordingly.
Concessions, permits and business licenses
Forecast of obtaining renewed concessions, permits and business licenses which constitute the basis for the Company's continued operations and /or the Company's expectations regarding the holding of the operating assets by it and / or by a subsidiary until the end of their useful lives
Impact on the value of the operation, depreciation periods and residual values of related assets.
See Note 20 regarding contingent liabilities
Mineral reserves and resource depositsQuantities and qualities estimates of mineral reserves and resource deposits are based on engineering, economic and geological data that is compiled and analyzed by the Company’s engineers and geologists.Impact on the useful life of the assets relating to the relevant activity.
F -

ICL Group LimitedConsolidated Financial Statements11

Notes to the Consolidated Financial Statements as atof December 31, 20182021
Note 2 - Basis of Preparation of the Financial Statements (cont'd)

F. Changes in accounting policies

1.Initial application of IFRS 9 (2014), Financial Instruments
As of January 1, 2018, ICL applies IFRS 9, Financial Instruments (hereinafter - the standard), which replaces IAS 39, Financial Instruments: Recognition and Measurement (hereinafter - IAS 39) and the consequential amendments to IFRS 7, Financial Instruments: Disclosures, and to IAS 1, Presentation of Financial Statements. Implementation of the Standard did not have a material effect on the financial statements and, therefore, the balance of retained earnings as of January 1, 2018 was not adjusted.
Classification and measurement of financial assets and financial liabilities
The standard contains three principal classification categories for financial assets: (1) measured at amortized cost; (2) fair value through profit or loss; and (3) fair value through other comprehensive income. 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. The standard eliminates the previous IAS 39 categories of held to maturity, loans and receivables and available for sale. There was no significant change to the classification or measurement of financial liabilities.
On the initial implementation date, the Company chose to designate the investment in YYTH shares at fair value through other comprehensive income (under IAS 39, the investment in YYTH shares was classified as an available-for-sale financial asset). For further information on the measurement and classification of financial instruments, see Note 3.
Financial assets value impairment
The standard replaces the impairment model of IAS 39 with an 'expected credit loss' (ECL) model. The model applies to financial assets measured at amortized cost, investments in debt instruments measured at fair value through other comprehensive income, contract assets (IFRS 15) and lease receivables. The model will not apply to investments in equity instruments.
2.IFRS 15, Revenue from Contracts with Customers
As of January 1, 2018, ICL applies International Financial Reporting Standard 15 (hereinafter - the standard) which provides new guidance on revenue recognition. ICL elected to apply the standard using the cumulative effect approach. Implementation of the Standard did not have a material effect on the financial statements and, therefore, the balance of retained earnings as of January 1, 2018 was not adjusted.
The standard introduces a new five step model for recognizing revenue from contracts with customers: (1) Identifying the contract with the customer; (2) Identifying distinct performance obligations in the contract; (3) Determining the transaction price; (4) Allocating the transaction price to distinct performance obligations; and (5) Recognizing revenue when the performance obligations are satisfied.
ICL recognizes revenue when the customer obtains control over the promised goods or services. The revenue is measured according to the amount of the consideration to which ICL expects to be entitled in exchange for the goods or services promised to the customer, other than amounts collected for third parties. For further information, see Note 3.
F - 12

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 3 - Significant Accounting Policies
 
The accounting policies in accordance with IFRS are consistently applied by ICL companies for all the periods presented in these consolidated financial statements.
A. Basis for Consolidation
 
1.A.Business combinations
Basis for Consolidation
 
1.
Business combinations
ICL implements the acquisition method to all business combinations. The acquisition date is the date on which the acquirer obtains control over the acquiree. Control exists when ICL is exposed or has rights to variable returns from its involvement with the acquiree and it could affect those returns through its power over the acquiree. Substantive rights held by ICL and others are considered when assessing control.
 
ICL recognizes goodwill on an acquisition according to the fair value of the consideration transferred including any amounts recognized in respect of non-controlling interest in the acquiree as well as the fair value at the acquisition date of any pre-existing equity right of ICL in the acquiree, less the net amount of the identifiable assets acquired, and the liabilities assumed.
 
Costs associated with the acquisition that were incurred by ICL in a business combination such as finder’s fees, advisory, legal, valuation and other professional or consulting fees, other than those associated with an issue of debt or equity instruments connected to the business combination, are expensed in the period the services are received.
 
2.
Subsidiaries
 
Subsidiaries are entities controlled by ICL. The financial statements of the subsidiaries are included in the consolidated financial statements from the date control commenced until the date control ceases to exist. The accounting policiesfinancial statements of subsidiaries have been changed when necessary to align them with theICL's accounting policies adopted by ICL.policies.
 
3.Structured entities
Non-controlling interests
 
ICL operates with structured entities for purposes of securitization of financial assets. ICL has no direct or indirect holdings in the shares of the structured entities. A structured entity is included in the financial statements where it is controlled by the Company.
4.Non-controlling interests
Non-controlling interests comprise of the subsidiary's equity that cannot be attributed, directly or indirectly, to the parent companycompany. Profit or loss and they include additional components such as:any part of other comprehensive income are allocated to the equity componentowners of convertible debenturesthe Company and the non-controlling interests, even if the result is a negative balance of subsidiaries, share-based payments that will be settled with equity instruments of subsidiaries and share options of subsidiaries.non-controlling interests.
 
Measurement of non-controlling interests on the date of the business combination – Non‑controlling interests that are instruments that give rise to a present ownership interest and entitle the holder to a share of net assets in the event of liquidation, (for example: ordinary shares), are measured at the date of the business combination at either fair value, or at their proportionate interest in the identifiable assets and liabilities of the acquiree, on a transaction-by-transaction basis.
 
F - 13

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 3 - Significant Accounting Policies (cont’d)

A. Basis for Consolidation (cont’d)
4.Non-controlling interests (cont’d)
Allocation of profit or loss and other comprehensive income to the shareholders - Profit or loss and any part of other comprehensive income are allocated to the owners of the Company and the non-controlling interests. Total profit or loss and other comprehensive income is allocated to the owners of the Company and the non-controlling interests even if the result is a negative balance of non-controlling interests
Transactions with non-controlling interests, while retaining control - Transactions with non-controlling interests while retaining control are accounted for as equity transactions. Any difference between the consideration paid or received and the change in non‑controlling interests is included in the share of the owners of the Companycompany directly in a separate category in equity.

ICL Group LimitedConsolidated Financial Statements12

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
 
The amount of the adjustment to non-controlling interests - For an increase in the holding rate, according to the proportionate share acquired from the balance of non-controlling interests in the consolidated financial statements prior to the transaction. For a decrease in the holding rate, according to the proportionate share realized by the owners of the subsidiary in the net assets of the subsidiary, including goodwill. Furthermore, when the holding rate of the subsidiary changes, while retaining control, the Company re-attributes the accumulated amounts that were recognized in other comprehensive income to the owners of the Company and the non-controlling interests.
5.A.Loss of control
Basis for Consolidation (cont'd)
 
4.
Loss of control
Upon the loss of control, ICL derecognizes the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. If ICL retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. The difference between the sum of the proceeds and fair value of the retained interest, and the derecognized balances is recognized in profit or loss underas other income or other expenses. Subsequently the retained interest is accounted for as an equity-accounted investee or as a financial asset in accordance with the provisions of IFRS 9, depending on the level of influence retained by ICL in the relevant company. The amounts recognized in capital reserves through other comprehensive income with respect to the same subsidiary are reclassified to profit or loss or to retained earnings.
 
6.5.
Transactions eliminated in consolidation
 
Intra-group balances, and transactions, and any unrealized income and expenses and gains and losses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with associates and joint ventures are eliminated against the investment to the extent of ICL’s interest in these investments. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
 
F - 14

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 3 - Significant Accounting Policies (cont’d)

A. Basis for Consolidation (cont’d)
7.6.
Investment in associatesassociated companies and joint ventures
 
Associates are those entities in which ICL has significant influence, but not control or joint control, over the financial and operating policies. There is a rebuttable presumption that significant influence exists when a company holds between 20% and 50% of another entity. In assessing significant influence, potential voting rights that are currently exercisable or convertible into shares of the investee are considered.
Joint ventures are joint arrangements in which ICL has rights to the net assets of the arrangement. Associates and joint ventures are accounted for using the equity method (equity accounted investees) and are recognized initially at cost. The cost of the investment includes transaction costs.
 
B.
B.
Foreign Currency
 
1.
Transactions in foreign currency
 
Transactions in foreign currency are translated to the functional currency of the Company and each of its subsidiaries based on the exchange rate in effect on the dates of the transactions. Monetary assets and liabilities denominated in foreign currency on the report date are translated into the functional currency of the Company and each of its subsidiaries based on the exchange rate in effect on that date. Exchange rate differences in respect of monetary items are the difference between the net book value in the functional currency at the beginning of the year adjusted for effective interest and payments during the year, plus the payments during the year and the net book value in foreign currency translated based on the rate of exchange at the end of the year. Exchange rate differences deriving from translation into the functional currency are recognized in the consolidated statement of income.
 

Non‑monetary items denominated in foreign currency and measured in terms ofat historical cost are translated using the exchange rate at the date of the transaction.

 
2.
Foreign operations
 
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising onfrom acquisition, are translated to USD at exchange rates at the reporting date. The income and expenses of foreign operations are translated to USD at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income and are presented in equity in the foreign currency translation reserve (hereinafter –Translation Reserve).
 
When the foreign operation is a non-wholly-ownednon-wholly owned subsidiary of the Company, then the relevant proportionate share of the foreign operation translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of, such that control, significant influence or joint control is lost, the cumulative amount in the Translation Reserve related to that foreign operation is reclassified to profit or loss as a part of the capital gain or loss on disposal. Furthermore, when ICL’s interest in a subsidiary that includes a foreign operation changes, while retaining control in the subsidiary, a proportionate part of the cumulative amount of the translation difference that was recognized in other comprehensive income is reattributed to non-controlling interests.
 
F - 15
ICL Group LimitedConsolidated Financial Statements13

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 3 - Significant Accounting Policies (cont’d)(cont'd)
 
B.
B.
Foreign Currency (cont'd)
 
2.3.
Foreign operations (cont'd)
 
Generally, foreign currency differences from a monetary item receivable from or payable to a foreign operation, including foreign operations that are subsidiaries, are recognized in profit or loss in the consolidated financial statements. Foreign exchange gains andor losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign operation and are recognized in other comprehensive income and are presented within equity in the Translation Reserve.
 
C.
C.
Financial Instruments
 
1.
Non-derivative financial assets (IFRS9)
 
Initial recognition of financial assets:
 
ICL initially recognizes trade receivables and debt instruments issued on the date that they are originated. Alloriginated and for all other financial assets are recognized initially onat the trade date atin which ICL becomes a party to the contractual provisions of the instrument. A financial asset is initially measured at fair value plus direct transaction costs that are directly attributable to the acquisition or issuance of the financial asset. A trade receivable without a significant financing component is initially measured at the transaction price. Receivables originating from contract assets are initially measured at the carrying amount of the contract assets on the date classification was changed from contract asset to receivables.costs.
 
Derecognition of financial assets:
 
FinancialDerecognition of financial assets are derecognizedoccurs when the contractual rights of ICL to the cash flows from the asset expire, or when ICL transfers the rights to receive the contractual cash flows on the financial asset in a transaction in whichand substantially all the risks and rewards of ownership of the financial asset are transferred.asset. When ICL retains substantially all the said risks and rewards, of ownership of the financial asset, it continues to recognize the financial asset.
 
Classification of financial assets into categories and the accounting treatment of each categorycategory:
 
Financial assets are classified at initial recognition to one of the following measurement categories: (1) amortized cost; (2) fair value through other comprehensive income – investments in debt instruments; (3) fair value through other comprehensive income – investments in equity instruments; or (4) fair value through profit or loss. FinancialThe reclassification of the financial assets are not reclassified in subsequent periods unless, andwill only occur if ICLICL's changes its business model for the management of financial debt assets in which case the affected financial debt assets are reclassified at the beginning of the period following the change in the business model.
 
F - 16

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)

C. Financial Instruments (cont'd)
1.Non-derivative financial assets (IFRS9) (cont'd)
A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated at fair value through profit or loss: (1) It is held within a business model whose objective is to hold assets so as to collect contractual cash flows; and (2) the contractual terms of the financial asset give rise to cash flows representing solely payments of principal and interest on the principal amount outstanding on specified dates. These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.

ICL Group LimitedConsolidated Financial Statements14

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
C.
Financial Instruments (cont'd)
1.
Non-derivative financial assets (IFRS9) (cont'd)
 
In certain cases, on initial recognition of an equity investment that is not held for trading, ICL irrevocably elects to present subsequent changes in the investment’s fair value in other comprehensive income. This election is made on an investment-by-investment basis.
ICL has balances of trade and other receivables and deposits that are held within a business model whose objective is collecting contractual cash flows, which represent solely payments of principal and interest (for the time value and the credit risk). Accordingly, these financial assets are measured at amortized cost.
 
Subsequent measurement and gains and losses - Financial assets at fair value through profit or loss
These assets - are subsequently measured at fair value. Net gains andor losses, including any interest income or dividend income, are recognized in profit or loss (other than certain derivatives designated as accounting hedging instruments).
 
Subsequent measurement and gains and losses - Investments in equity instruments at fair value through other comprehensive income
These assets - are subsequently measured at fair value. Dividends are recognized as income in profit or loss, unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in other comprehensive income and are never reclassified to profit or loss.
 
Subsequent measurement and gains and losses - Financial assets at amortized cost
These assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
F - 17

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)

C. Financial Instruments (cont'd)
2.
Non-derivative financial liabilities
 
Non-derivative financial liabilities include bank overdrafts, loans and borrowings from banks and others, marketable debt instruments, finance lease liabilities, and trade and other payables.
 
Initial recognition of financial liabilities:
ICL initially recognizes debt securities issued on the date that they originated. All other financial liabilities are recognized initially on the trade date at which ICL becomes a party to the contractual provisions of the instrument.
Subsequent Measurement of Financial Liabilities:
Financial liabilities (other than financial liabilities at fair value through profit or loss) are recognized initially at fair value less any directly attributable transaction costs. Subsequent to initial recognition these financial liabilities are measured at amortized cost using the effective interest method.
Derecognition of the financial liabilities:
Financial liabilities are derecognizedoccur when the obligation of ICL, as specified in the agreement, expires or when it is discharged or cancelled.
 
Change in terms of debt instruments:
 
AnA substantial modification of the terms of an existing financial liability or part of it and an exchange of debt instruments having substantially different terms, between an existing borrower and lender is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability at fair value. Furthermore, a substantial modification of the terms of the existing financial liability or part of it, is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. In such cases the entire difference between the amortized cost of the original financial liability and the fair value of the new financial liability is recognized in profit or loss as financing income or expense.
 
TheSubstantially different terms are substantially different- if the discounted present value of the cash flows according to the new terms including any commissions paid, less any commissions received and discounted using the original effective interest rate, is different by at least ten percent (10%) from the discounted present value of the remaining cash flows of the original financial liability. In addition to the aforesaid quantitative criterion, ICL examines, inter alia, whether there have also been changes in various economic parameters inherent in the exchanged debt instruments (e.g. linkage).
In a non-substantial modification of terms (or exchange) of debt instruments, the new cash flows are discounted using the original effective interest rate, and the difference between the present value of the new financial liability and the present value of the original financial liability is recognized in profit or loss.
 
F - 18
ICL Group LimitedConsolidated Financial Statements15

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 3 - Significant Accounting Policies (cont’d)

C. Financial Instruments (cont'd)
 
2.C.
Financial Instruments (cont'd)
2.
Non-derivative financial liabilities (cont'd)
Upon the swap of debt instruments with equity instruments, equity instruments issued at the extinguishment and de-recognition of all or part of a liability, are a part of “consideration paid” for purposes of calculating the gain or loss from de-recognition of the financial liability. The equity instruments are initially recognized at their fair value, unless fair value cannot be reliably measured – in which case the issued instruments are measured at the fair value of the derecognized liability. Any difference between the amortized cost of the financial liability and the initial measurement amount of the equity instruments is recognized in profit or loss under financing income or expenses.

Offset of financial instruments:
 
Financial assets and liabilities are offset, and the net amount is presented in the statement of financial position when, and only when, ICL currently has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
 
3.
Derivative financial instruments
 
ICL holds derivative financial instruments in order to reduce exposure to foreign currency risks, risks with respect to commodity prices, marine shipping prices, and interest risks.interest. Derivatives are recognized according to fair value and the changes in value are recorded in the statement of income as financing income or expense, except for derivatives used to hedge cash flows (accounting hedging). The attributable transaction costs are recorded in the statement of income as incurred. Changes in the fair value of the derivatives are recorded in the statement of income, except for derivatives used to hedge cash flows, as detailed below.
 
Cash flow hedges
 
Changes in the fair value of derivatives used to hedge cash flows, in respect ofaccordance with the effective portion of the hedge, are recorded through other comprehensive income directly in a hedging reserve. With respect to the non‑effective part, changes in the fair value are recognized in the statement of income. The amount accumulated in the capital reserve is reclassified and included in the statement of income in the same period as the hedged cash flows affected profit or loss under the same line item in the statement of income as the hedged item. Where the hedged item is a non-financial asset, the amount recorded in the capital reserve is transferred to the book value of the asset, upon recognition thereof.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or exercised, then hedge accounting is discontinued prospectively.discontinued. The cumulative gain or loss remains in the other comprehensive income and is presented in the hedging reserve in equity remains there until the forecasted transaction occurs or is no longer expected to occur and then will beis reclassified to the profit or loss.statements of income.
 
F - 19

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)

C. Financial Instruments (cont’d)
3.4.Derivative financial instruments (cont'd)
Economic hedge that does not meet the conditions of an accounting hedge
Changes in the fair value of derivatives that do not meet the conditions of an accounting hedge in accordance with IFRS, after the date of the initial recognition thereof, are recorded in the statement of income as financing income or expenses.
4.CPI-linked assets and liabilities not measured at fair value
 

The value of index-linked financial assets and liabilities, which are not measured at fair value, is re-measuredre‑measured every period in accordance with the actual increase/ decrease in the CPI.

 
5.
Share capital
 
Ordinary shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
Incremental costs directly attributable to an expected issuance of an instrument that will be classified as an equity instrument are recognized as an asset in the statement of financial position. The costs are deducted from the equity upon the initial recognition of the equity instruments or are amortized as financing expenses in the statement of income when the issuance is no longer expected to take place.
 
Treasury shares
When share capital - when shares recognized as equity isare repurchased by ICL,the Group, the amount of the consideration paid, which includes directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares. When treasury shares are sold or reissued subsequently, the amount received is recognized as an increase in equity, and the resulting surplus on the transaction is carried to share premium, whereas a deficit on the transaction is deducted from retained earnings.
F - 20

ICL Group LimitedConsolidated Financial Statements16

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 3 - Significant Accounting Policies (cont’d)(cont'd)

D. Property, plant and equipment
 
1.D.Recognition and measurement
Property, plant and equipment
1.
Recognition and measurement
Property, plant and equipment in the consolidated statements are presented at cost less accumulated depreciation and provision for impairment. The cost includes expenses that can be directly attributed to the acquisition of the asset after deducting the related amounts of government grants. The cost of assets that were self-constructed includes the cost of the materials and direct labor, as well as any additional costs that are directly attributable to bringing the asset to the required position and condition so that it will be able to function as management intended, as well as an estimate of the costs to dismantle, remove and remove the items and to restore, its location, where there is an obligation to dismantle and remove or to restore the sitefor such, and capitalized borrowing costs. The cost of purchased software, which constitutes an inseparable part of operating the related equipment, is recognized as part of the cost of the equipment.
 
Spare parts for facilities are valued at cost determined based on the moving average method, after recording a write‑down in respect of obsolescence. The portion designated for current consumption is presented in the “inventories” category in the current assets section. Where significant parts of an item of property, plant and equipment (including costs of major periodic inspections) have different life expectancies, they are treated as separate items (significant components) of the property, plant and equipment.
Changes in a commitment to dismantle and remove items and to restore their location, except for changes stemming from the passage of time, are added to or deducted from the cost of the asset in the period in which they occur. The amount deducted from the cost of the asset does not exceed its book value and any balance is recognized immediately in profit or loss. Gains and losses on disposal of a property, plant or equipment item are determined by comparing the proceeds from disposal withof the carrying amount of the asset and are recognized net in the income statement in other income or other expenses, as applicable.statement.
 
2.
Subsequent Costs (after initial recognition)
The cost of replacing part of an item of property, plant and equipment and other subsequent costs areis recognized as part of the book value of the item, if it is expected that the future economic benefit inherent therein will flow to ICL and that its cost can be reliably measured. The book value of the part that was replaced is derecognized. Routine maintenance costs are charged to the statement of income as incurred.
 
2.3.Subsequent Costs (after initial recognition)
Depreciation
 
The cost of replacing part of a fixed asset item and other subsequent expenses are capitalized if it is probable that the future economic benefits associated with them will flow to ICL and their cost can be measured reliably. The carrying amount of the replaced part of a fixed asset item is derecognized. The costs of day-to-day servicing are expensed as incurred.
F - 21

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)

D. Property, plant and equipment (cont’d)
3.Depreciation
Depreciation is a systematic allocation of the depreciable amount of an asset over its estimated useful life. The depreciable amount is the cost of the asset, or other amount substituted for cost, less its residual value. Depreciation of an item of property, plant and equipment begins when the asset is available for its intended use, that is, when it has reached the place and condition required in order that it can be used in the manner contemplated for it by Management.
 
Depreciation is recorded in the statement of income according to the straight-line method over the estimated useful life of each significant component of the property, plant and equipment items, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Owned land is not depreciated.
 
The estimated useful life for the current period and comparative periods is as follows:
 
 
In Years
Buildings
15 - 30
Land development, roads
Technical equipment and structuresmachinery (1)
15-30
5 - 33
Facilities, machinery
Dikes and equipment (1)evaporating ponds (2)
8-25
20 - 40
Dams and ponds (2)
Other
20-40
Heavy mechanical equipment, train cars and tanks5-15
Office furniture and equipment, motor vehicles, computer equipment and other3-10
3 - 10
 
(1)  Mainly 2533 years
(2)  Mainly 40 years

ICL Group LimitedConsolidated Financial Statements17

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
D.
Property, plant and equipment (cont'd)
3.
Depreciation (cont'd)
 
The Company reviews, at least at the end of every reporting year, the estimates regarding the depreciation method, useful lives and the residual value, and adjusts them if appropriate. Once every five years, the Company actively examines the useful lives of the main property, plant and equipment items and, if required, updates them. Over the years, the Company has succeeded in maintainingto extend the useful lives of part of property, plant and equipment items beyond the original estimated useful life, as a result of investments therein and other current, ongoing maintenance thereof.
E. Intangible Assets
 
1.E.Goodwill
Intangible Assets
1.
Goodwill
 
Goodwill recorded consequent to the acquisition of subsidiaries is presented at cost less accumulated impairment charges, under intangible assets.
 
2.Costs of exploration and evaluation of resources
Costs incurred in respect of exploration of resources and the evaluation thereof are recognized at cost less a provision for impairment, under intangible assets. The cost includes, inter‑alia, costs of performing research studies, drilling costs and activities in connection with assessing the technical feasibility with respect to the commercial viability of extracting the resources.
F - 22

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)
E. Intangible Assets (cont'd)
3.Research and development
 
Expenditures for research activities are expensed as incurred.
Development expenditures are recognized as intangible asset only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and ICL has the intention and sufficient resources to complete development and to use or sell the asset. Other development expenditures costs are expensed as incurred. Subsequent to initial recognition, development expenditures are measured at cost less accumulated amortization and any accumulated impairment losses.
 
4.3.
Other intangible assets
 
Other intangible assets purchased by ICL, with a defined useful life, are measured according to cost less accumulated amortization and accumulated losses from impairment. Intangible assets with indefinite useful lives are measured according to cost less accumulated losses from impairment.
 
5.4.
Subsequent costs
 
Subsequent costs are recognized as an intangible asset only when they increase the future economic benefit inherent in the asset for which they were incurred. All other costs including costs relating to goodwill or trademarks developed independently, are charged to the statement of income as incurred.
 
6.5.
Amortization
 
Amortization is a systematic allocation of the amortizable amount of an intangible asset over its useful life. The amortizable amount is the cost of the asset less its residual value. Amortization is recorded in the statement of income according to the straight-line method from the date the assets are available for use, over the estimated useful economic life of the intangible assets, except for customer relationships and geological surveys, which are amortized according to the rate of consumption of the economic benefits expected from the asset based on cash flow forecasts.

ICL Group LimitedConsolidated Financial Statements18

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
E.
Intangible Assets (cont'd)
5.
Amortization (cont'd)
Goodwill and intangible assets having an indefinite lifespan are not amortized on a systematic basis but, rather, are examined at least once a year for impairment in value.
Internally generated intangible assets are not systematically amortized as long as they are not available for use, i.e. they are not yet on site or in working condition for their intended use. Accordingly, these intangible assets, such as development costs, are tested for impairment at least once a year, until such date as they are available for use.
 
F - 23

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)
E. Intangible Assets (cont'd)
6.Amortization (cont'd)
The estimated useful life for the current period and comparative periods is as follows:
 
 
In Years

Concessions and mining rights – over the remaining duration of the rights granted

 
Concessions – over the balance of the concession granted to the companies
Trademarks
15 - 20
Software costs
Technology / patents
3-10
7 - 20
Trademarks
Customer relationships
15-20
15 - 25
Customer relationships
Computer applications
15-25
Agreements with suppliers and non-competition agreement10-15
Patents7-20
3 - 10
 
ICL periodically examines the estimated useful life of an intangible asset that is not amortized, at least once a year, in order to determine if events and circumstances continue to support the determination that the intangible asset has an indefinite life.
Deferred expenses in respect of geological surveys are amortized over their useful life based on a geological estimate of the amount of the material that will be produced from the mining site.
 
The estimates regarding the amortization method and useful life are reviewed, at a minimum, at the end of every reporting year and are adjusted where necessary. ICL assesses the useful life of the customer relationships on an ongoing basis, based on an analysis of all the relevant factors and evidence, considering the experience the Company has with respect to recurring orders and churn rates and considering the future economic benefits expected to flow to the Company from these customer relationships.
F.
Inventories
 
ICL periodically examines the estimated useful life of an intangible asset that is not amortized, at least once a year, in order to determine if events and circumstances continue to support the determination that the intangible asset has an indefinite life.
F. Leased Assets
Leases, where ICL assumes substantially all the risks and rewards of ownership of the asset, are classified as financing leases. Upon initial recognition, the leased assets are measured, and a liability is recognized at an amount equal to the lower of its fair value or the present value of the future minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.
Other leases are classified as operating leases where the leased assets are not recognized in ICL’s statement of financial position. Payments under an operating lease are recorded in the statement of income on the straight-line method, over the period of the lease.
F - 24

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)
G. Inventories
Inventories are measured at the lower of cost or net realizable value. The cost of the inventories includes the costs of purchasing the inventories and bringing itthem to itstheir present location and condition. In the case of work in process and finished goods, the cost includes the proportionate part of the manufacturing overhead based on normal capacity. Net realizationrealizable value is the estimated selling price in the ordinary course of business, after deduction of the estimated cost of completion and the estimated costs required to execute the sale.
 
The cost of the inventories of raw and auxiliary materials, maintenance materials, finished goods and goods in process, is determined mainly according to the “moving average” method.

ICL Group LimitedConsolidated Financial Statements19

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
F.
Inventories (cont'd)
If the benefit from stripping costs (costs of removing waste produced as part of a mine's mining activities during its production stage) is attributable to inventories, the Company accounts for these stripping costs as inventories. In a case where the benefit is improved access to the quarry, the Company recognizes the costs as a non‑current addition to the asset, provided the criteria presented in IFRIC 20 are met. Inventories which are expected to be sold in a period of more than 12 months from the reporting date are presented as non-current inventories, as part of non-current assets.
G.
Capitalization of Borrowing Costs
 
H. Capitalization of Borrowing Costs
A qualifying asset is an asset that requires a significant period of time to prepare for its intended use or sale. Specific and non-specific borrowing costs are capitalized to qualifying assets during the period required for their completion and establishment, until the time when they are ready for their intended use. Other borrowing costs are charged to "financing expenses" in the statement of income as incurred.
H.
Impairment
1.
Non-derivative financial assets
 
I. Impairment
1.Non-derivative Financial assets
Provision for expected credit losses in respect of a financial asset at amortized cost, including trade receivables, will beis measured at an amount equal to the full lifetime of expected credit losses. Expected credit losses are a probability-weighted estimate of credit losses. With respect to other debt instruments, provision for expected credit losses will beis measured at an amount equal to 12-month expected credit losses, unless their credit risk has increased significantly since initial recognition. Provision for such losses in respect of a financial asset at amortized cost, will beis presented net of the gross book value of the asset.
 
2.
Non-financial assets
 
In everyeach reporting period, an examination is made with respect to whether there are signs indicating impairment in the value of ICL’s non-financial assets, other than inventories and deferred tax assets. If such signs exist, the estimated recoverable amount of the asset is calculated. ICL conducts an annual examination, on the same date, of the recoverable amount of goodwill and intangible assets with indefinite useful lives or those that are not available for use – or more frequently if there are indications of impairment.
 
F - 25

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)
I.Impairment (cont'd)
2.Non-financial assets (cont'd)
Assets that cannot be tested individually are grouped together into the smallest group of assets that generatesgenerate cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”). Goodwill is not monitored for internal reporting purposes and, accordingly, it is allocated to the Company’s operating segments and not to the cash- generating units, the level of which is lower than the operating segment.
 
The recoverable amount of an asset or a cash- generatingcash-generating unit is the higher of its value in use or the net selling price (fair value less cost of disposal). When determining the value in use, ICL discounts the anticipated future cash flows according to aan after-tax discount rate that reflects the evaluations of the market's participants regarding the time value of money and the specific risks relating to the asset or to the cash- generatingcash-generating unit, in respect of which the future cash flows expected to derive from the asset or the cash- generatingcash-generating unit were not adjusted.

ICL Group LimitedConsolidated Financial Statements20

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
H.
Impairment (cont'd)
2.
Non-financial assets (cont'd)
 
Assets of the Company's headquarters and administrative facilities do not produce separate cash flows and they serve more than one cash-producingcash-generating unit. Such assets are allocated to cash‑producingcash-generating units on a reasonable and consistent basis and are examined for impairment as part of the examination of impairment of the cash‑producingcash-generating units to which they are allocated.
 
Impairment losses are recognized if the carrying amount of an asset or cash-producingcash-generating unit in the books exceeds its estimated recoverable amount and are recognized in the statement of income. For operating segments that include goodwill, an impairment loss is recognized when the book value of the operating segment in the books exceeds its recoverable value. Impairment losses recognized in respect of an operating segment are allocated first to reduce the carrying amount of its goodwill and then to reduce the carrying amounts of the other assets of that segment on a proportionate basis.
 
An impairment loss is allocated between the owners of the Company and the non-controlling interests on the same basis that the profit or loss is allocated.
 
A loss from impairment in value of goodwill recognized in previous periods is not reversible prospectively. A loss from impairment of other assets recognized in previous periods is examined in future periods to assess whether there are signs indicating that these losses have decreased or no longer exist. A loss from impairment of value is reversed if there is a change in the estimates used to determine the recoverable value, only if the book value of the asset, after reversal of the loss from impairment of value, does not exceed the book value, after deduction of depreciation or amortization, that would have been determined if the loss from impairment of value had not been recognized.
I.
Employee Benefits
 
F - 26

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 3 - Significant Accounting Policies (cont’d)
I.Impairment (cont'd)
3.Investments in associates and joint ventures
An investment in an associate or joint venture is tested for impairment when objective evidence indicates there has been impairment.
ICL estimates the recoverable amount of the investment, which is the greater of its value in use and its net selling price. In assessing value in use of an investment in an associate or joint venture, ICL either estimates its share of the present value of estimated future cash flows that are expected to be generated by the associate or joint venture, including their cash flows from operations and their consideration from the final disposal of the investment, or estimates the present value of the estimated future cash flows that are expected to be derived from dividends that will be received and from the final disposal.
An impairment loss is recognized when the carrying amount of the investment, after applying the equity method, exceeds its recoverable amount, and it is recognized in the statements of income. An impairment loss is reversed only if there has been a change in the estimates used to determine the recoverable amount of the investment after the impairment loss was recognized.
J. Employee Benefits
ICL has several post-employment benefit plans. The plans are funded partly by deposits with insurance companies, financial institutions or funds managed by a trustee. The plans are classified as defined contribution plans and as defined benefit plans.
 
1.
1.
Defined contribution plans
 
A defined contribution plan is a post-employment benefit plan under which ICL pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts.
 
ICL’s obligation to make depositsdeposit in a defined contribution plan is recorded as an expense in the statement of income in the periods duringin which the employees provided the services. Contributions to a defined contribution plan, that are due more than 12 months after the end of the period in which the employees render the service are discounted to their present value.
 
2. Defined benefit plans
Defined benefit plans are retirementRetirement benefit plans that are not defined contribution plans.plans:
 
ICL’s net obligation regarding defined benefit plans for post-employment benefits, is calculated for each plan separately, by estimating the future amount of the benefit to which an employee will be entitled as compensation for services in the current and past periods. The benefit is presented at present value after deducting the fair value of the planplan's assets. The discount rate for ICL companies operating in countries having a “deep” market wherein there is afor high level of trading inquality corporate bonds is in accordance with the yield on thesuch corporate bonds, including Israel.

ICL Group LimitedConsolidated Financial Statements21

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
I.
Employee Benefits (cont'd)
1.
Defined contribution plans (cont'd)
The discount rate for ICL companies operating in countries not having a “deep” market wherein there is afor high level of trading inquality corporate bonds as stated above, is in accordance with the yield on government bonds – the currency and redemption date of which are similar to the terms binding ICL. The calculations are performed by a qualified actuary using the projected unit credit method.
F - 27

Notes to the Consolidated Financial Statements as at December 31, 2018method
 
Note 3 - Significant Accounting Policies (cont’d)

J. Employee Benefits (cont’d)
2.
Defined benefit plans
 
2. Defined benefit plans (cont’d)
When a net asset is created for ICL, the asset is recognized up to the net present value of the available economic benefits in the form of a refund from the plan or by a reduction in future deposits to the plan. An economic benefit in the form of a refund from the plan or a reduction in future deposits will be considered available when it can be realized in the lifetime of the plan or after settlement of the obligation.
 
Costs in respect of past services are recognized immediately and without reference to whether the benefits have vested.
The movement in the net liability in respect of a defined benefit plan that is recognized in every accounting period in the statement of income is comprised of the following: (1) Current service costs – the increase in the present value of the liability deriving from employees’ service in the current period; (2) The net financing income (expense) is calculated by multiplying the net defined benefit liability (asset) by the discount rate used for measuring the defined benefit liability, as determined at the beginning of the annual reporting period; (3) Exchange rate differences; (4) Past service costs and plan reduction – the change in the present value of the liability in the current period as a result of a change in post-employment benefits attributed to prior periods.
 
(1)Current service costs – the increase in the present value of the liability deriving from employees’ service in the current period.
(2)The net financing income (expenses) are calculated by multiplying the net defined benefit liability (asset) by the discount rate used for measuring the defined benefit liability, as determined at the beginning of the annual reporting period.
(3)Exchange rate differences;
(4)Past service costs and plan reduction – the change in the present value of the liability in the current period as a result of a change in post-employment benefits attributed to prior periods.
The difference, as atof the date of the report, between the net liability at the beginning of the year plus the movement in profit and lossthe net liability as detailed above, and the actuarial liability less the fair value of the fund assets at the end of the year, reflects the balance of the actuarial income or expenses recognized in other comprehensive income and is recorded in retained earnings. The current interest costs and return on plan assets are recognized as expenses and interest income in the respective financing category. Costs in respect of past services are recognized immediately and without reference to whether the benefits have vested.
 
3.
3.
Other long-term employee benefits
 
Some of the Company’s employees are entitled to other long-term benefits that do not relate to a post-retirement benefit plan. Actuarial gains and losses are recorded directly to the statement of income in the period in which they arise.
In cases where the amount of the benefit is the same for every employee, without considering the years of service, the cost of the benefit is recognized when entitlement to the benefit is determined. The amount of these benefits is discounted to its present value in accordance with an actuarial evaluation.
F - 28

ICL Group LimitedConsolidated Financial Statements22

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 3 - Significant Accounting Policies (cont’d)

J. Employee Benefits (cont’d)(cont'd)
 
4. Early retirement pay
I.
Employee Benefits (cont'd)
 
4.
Early Retirement Pay
Early retirement pay is recognized as an expense and as a liability when ICL has clearly undertaken to pay it, without any reasonable chance of cancellation, in respect of termination of employees, before they reach the customary age of retirement according to a formal, detailed plan. The benefits provided to employees upon voluntary retirement are charged when ICL proposes athe plan to the employees, encouraging voluntary retirement, it is expected that the proposal will be accepted, and it is possible to reliably estimate the number of employees that will accept the proposal. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value. The discount rate is the yield at the reporting date on high-quality, index-linked corporate debentures, the denominated currency of which is the payment currency, and that have maturity dates approximating the terms of ICL’s obligations.
 
5.
5.
Short‑term benefits
 
Obligations for short-term employee benefits are measured on a non-discounted basis, and the expense is recorded at the time the service is provided or upon the actual absence of the employee when the benefit is not accumulated (such as maternity leave).
 
A provision for short-term employee benefits in respect of cash bonuses or profit-sharing plans is recognized for the amount expected to be paid, when ICL has a current legal or implied obligation to pay for the services provided by the employee in the past and it is possible to reliably estimate the obligation.
 
Classification of employee benefits as a short‑term employee benefit or a long‑term employee benefit (for measurement purposes) is determined based on ICL's expectation with respect to full utilization of the benefits and not based on the date on which the employee is entitled to utilize the benefit.
 
6.
6.
Share-based compensation
 
The fair value on the grant date of share-based compensation awards granted to employees is recognized as a salary expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense in respect of share-based compensation awards that are conditional upon meeting vesting conditions that are service conditions and non-market performance conditions, is adjusted to reflect the number of awards that are expected to vest.
J.
Provisions
 
F - 29

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)

K. Provisions
A provision is recognized when ICL has a present legal or implied obligation, as the result of an event that occurred in the past, that can be reliably estimated, and when it is expected that an outflow of economic benefits will be required in order to settle the obligation. The provisions are made by means of discounting of the future cash flows at a pre-tax interest rate reflecting the current market estimates of the time value of money and the risks specific to the liability, and without considering the Company’s credit risk. TheICL reviews its provisions in each reporting period and adjusts if necessary. In order to reflect the length of time that has elapsed, the book value of the provision is adjusted in everyeach period in order to reflect the amount of time that has elapsed and is recognized as financing expenses. In rare cases where it is not possible to estimate the outcome of a potential liability, no provision is recorded in the financial statements.

ICL Group LimitedConsolidated Financial Statements23

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
J.
Provisions (cont'd)
 
ICL recognizes a reimbursement asset if, and only if, it is virtually certain that the reimbursement will be received if the Company settles the obligation. The amount recognized in respect of the reimbursement does not exceed the amount of the provision.
 
(1)
Warranty
 
A provision for warranty is recognized when the products or services, in respect of which the warranty is provided, are sold. The provision is based on historical data and on a weighting of all possible outcomes according to their probability of occurrence.
 
(2)
Provision for environmental costs
 
ICL recognizes a provision for an existing obligation for prevention of environmental pollution and anticipated provisions for costs relating to environmental restoration stemming from current or past activities.
 
Costs for preventing environmental pollution that increase the life expectancy or efficiency of a facility or decrease or prevent the environmental pollution are recorded as a provision, are capitalized to the cost of the property, plant and equipment and are depreciated according to the usual depreciation rates used by ICL.
 
(3)
Restructuring
 
A provision for restructuring is recognized when ICL has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. The provision includes direct expenditures caused by the restructuring and necessary for the restructuring, and which are not associated with the continuing activities of ICL.
 
(4)
Site restoration
 
In accordance with ICL’s environmental policy and applicable legal requirements, a
A provision for sitereclamation and restoration in respect of contaminated land, and the related expense,ICL's sites is recognized when the land is contaminated.Company has a legal obligation which could arise, among others, from environmental regulations.
 
F - 30

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)

K. Provisions (cont'd)
(5)
Legal claims
 
(5)Legal claims
A provision for legal claims is recognized when ICL has a present legal or constructive obligation as a result of an event that occurred in the past, if it is more likely than not that an outflow of economic resources will be required to settle the obligation and it can be reliably estimated. Where the time value is significant, the provision is measured based on its present value.
K.
Revenue Recognition
Identifying a contract
 
L. Revenue Recognition
Identifying a contract
ICL accounts for a contract with a customer only when the following conditions are met:
(a)The parties to the contract have approved the contract (in writing, orally or according to other customary business practices) and they are committed to satisfying the obligations attributable to them;
(b)ICL can identify the rights of each party in relation to the goods or services that will be transferred;
(c)ICL can identify the payment terms for the goods or services that will be transferred;
(d) (a) The parties to the contract have approved the contract and they are committed to satisfying the obligations attributable to them; (b) ICL can identify the rights of each party in relation to the goods that will be transferred; (c) ICL can identify the payment terms for the goods that will be transferred; (d) The contract has a commercial substance (i.e. the risk, timing and amount of the entity’s future cash flows are expected to change as a result of the contract); and
(e)It is probable that the consideration, to which ICL is entitled to in exchange for the goods or services transferred to the customer, will be collected.
For the purpose of paragraph (e) above, ICL examines, inter alia, the percentage of the advance payments received and the spreadentity’s future cash flows are expected to change as a result of the contractual payments, past experience withcontract); and (e) It is probable that the customer andconsideration, to which ICL is entitled to in exchange for the status and existence of sufficient collateral. If a contract with a customer does not meet all of the above criteria, consideration received from the customer is recognized as a liability until the criteria are met or when one of the following events occurs: ICL has no remaining obligations to transfer goods or servicestransferred to the customer, and any consideration promised by the customer has been received and cannotwill be returned; or the contract has been terminated and the consideration received from the customer cannot be refunded.collected.
 
Combination of contracts
ICL combines two or more contracts entered into on the same date or on proximate dates with the same customer (or related parties of the customer) and accounts for them as one contract when one or more of the following conditions are met:
(a)Negotiations were held on the contracts as one package with a single commercial purpose;
(b)The amount of the consideration in one contract depends on the price or performance of a different contract; or
(c)The goods or services promised in the contracts (or certain goods or services promised in each one of the contracts) are a single performance obligation.
 
F - 31
ICL Group LimitedConsolidated Financial Statements24

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 3 - Significant Accounting Policies (cont’d)(cont'd)

L.
K.
Revenue Recognition (cont'd)
Identifying a contract (cont'd)
 
Identifying performance obligations
OnFor the contract’s inception date,purpose of clause (e) above, ICL assesses the goods or services promised in the contracttakes into consideration its past experience with the customer, the financial stability information over the customer, the status and identifies asexistence of sufficient collateral and the percentage of advances received.
Identifying performance obligations
ICL is a global specialty minerals and chemicals company engaged in the sale of various goods produced in its different segments of operation. ICL's contracts primarily derived from a single performance obligation any promise to transfer todeliver the customer one of the following:
(a)Goods or services (or a bundle of goods or services) that are distinct; or
(b)A series of distinct goods or services that are substantially the same and have the same pattern of transfer to the customer.
ICL identifies goods or services promised to the customer as being distinct when the customer can benefit from the goods or services on their own or in conjunction with other readily available resources and ICL’s promise to transfer the goods or services to the customer is separately identifiable from other promisesproduct specified in the contract. In order to examine whether a promise to transfer goods or services is separately identifiable, ICL examines whether it is providing a significant service of integratingFor additional information about the goods or services with other goods or services promised in the contract into one integrated outcome that is the purpose of the contract.Company's products, see note 5 – Operating Segments.
 
An option that grants the customer the right to purchase additional goods or services constitutes a separate performance obligation in the contract only if the option grants to the customer a material right it would not have received without the original contract.
Determining the transaction price
 
TheICL's transaction price is the amount of the consideration tospecified in the contract with the customer, which ICLit expects to be entitled in exchange for the goods or services promised to the customer, other than amounts collected for third parties. The variable considerations at ICL, considerswhich are mainly trade discounts, commercial returns and volume rebates, have no material impact on the effectsCompany's financial statements.
Satisfaction of allperformance obligation
Revenue is recognized at the following elementspoint in time, when determining the transaction price: variable consideration, the existence of a significant financing component, non-cash consideration, and consideration payableCompany transfers control over promised goods to the customer. As The transfer of control over goods to a customer generally takes place upon shipment or when accepted by the customer, as provided for in the sales contract.
Payment terms
ICL does nothas various payment terms which are aligned with the acceptable commercial conditions in the relevant markets. ICL's policy is to engage in agreements with payment terms not exceeding one year, itand applies the practical expedient included in the standard to not separate a significant financing component where the difference between the time of receiving payment and the time of transferring the goods or services to the customer is one year or less.
L.
Government grants
Government grants are recognized initially at fair value when there is reasonable assurance that they will be received, and the Group will comply with the conditions associated with the grant. Unconditional government grants are recognized when the Group is entitled to receive them. Grants that compensate the Group for expenses incurred are presented as a deduction from the corresponding expense. Grants that compensate the Group for the cost of an asset are presented as a deduction from the related assets and are recognized in profit or loss on a systematic basis over the useful life of the asset.

ICL Group LimitedConsolidated Financial Statements25

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
 
M. Financing Income and Expenses
M.
Leases
Determining whether an arrangement contains a lease
 
On the inception date of the lease, ICL determines whether the arrangement is a lease or contains a lease, while examining if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. In its assessment of whether an arrangement conveys the right to control the use of an identified asset, ICL assesses whether it has the following two rights throughout the lease term: (a) the right to obtain substantially all the economic benefits from use of the identified asset; and (b) the right to direct the identified asset’s use.
For lease contracts that contain non-lease components, such as services or maintenance, that are related to a lease component, ICL elected to account for the contract as a single lease component without separating the components.
Leased assets and lease liabilities:
Contracts that award ICL control over the use of a leased asset for a period of time in exchange for consideration, are accounted for as leases. Upon initial recognition ICL recognizes a liability at the present value of the balance of future lease payments, and concurrently recognizes a right-of-use asset at the same amount of the lease liability, adjusted for any prepaid or accrued lease payments, plus initial direct costs incurred in respect of the lease. Subsequent to initial recognition, the right-of-use asset is accounted for using the cost model and depreciated over the shorter of the lease term or useful life of the asset.
ICL has elected to apply the practical expedient by which short-term leases of up to one year and/or leases in which the underlying asset has a low value, are recognized in profit or loss on a straight-line basis, over the lease term, without recognizing an asset and/or liability in the statement of financial position.
The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option if it is reasonably certain that the lessee will or will not exercise the option, respectively.
Variable lease payments that depend on an index or a rate, are initially measured using the index or rate existing at the commencement of the lease and are included in the measurement of the lease liability. When the cash flows of future lease payments change as the result of a change in an index or a rate, the balance of the liability is adjusted against the right-of-use asset. Other variable lease payments that are not included in the measurement of the lease liability are recognized in profit or loss in the period in which the event or condition that triggers payment occurs.
After lease commencement, a right-of-use asset is measured on a cost basis less accumulated depreciation and accumulated impairment losses. Depreciation is calculated on a straight-line basis over the useful life or contractual lease period, whichever earlier.

ICL Group LimitedConsolidated Financial Statements26

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
M.
Leases (cont'd)
Sale and leaseback:
ICL applies the requirements of IFRS 15 to determine whether an asset transfer is accounted for as a sale. If an asset transfer satisfies the requirements of IFRS 15 to be accounted for as a sale, ICL measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount that relates to the right of use retained by ICL. Accordingly, ICL only recognizes the amount of gain or loss that relates to the rights transferred.
If the asset transfer does not satisfy the requirements of IFRS 15 to be accounted for as a sale, the transaction is accounted for as a financing transaction. Insofar as ICL is the seller-lessee of the asset, it continues to recognize the transferred asset and recognizes a financial liability in accordance with IFRS 9, at an amount equal to the transferred proceeds.

N.
Financing Income and Expenses
Financing income includes income from interest on amounts invested, gains from derivative financial instruments recognized in the statement of income, andforeign currency gains, gains on changes in the disposalfair value of available-for-sale financial assets.assets at fair value through profit or loss and financing income recorded in relation to employee benefits. Interest income is recognized as accrued, using the effective interest method.
 
Financing expenses include interest on loans received, changes in the time value of provisions, securitization transaction costs, losses from impairment or disposal of available for sale financial assets, losses from derivative financial instruments, changes due to the passage of time in liabilities in respect of defined benefit plans for employees less interest income deriving from plan assets of a defined benefit plan for employees and losses from exchange rate differences. Borrowing costs, which are not capitalized, are recorded in the income statement using the effective interest method.
 
F - 32

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 3 - Significant Accounting Policies (cont’d)

M. Financing Income and Expenses (cont'd)
Gains and losses from exchange rate differences and from derivative financial instruments are reported on a net basis, as financing income or financing expenses, based on the fluctuation in the exchange rates and based on their position (net gain or loss).basis.
 
In the consolidated statements of cash flows, interest received and interest paid, are presented as part of cash flows from operating activities. Dividends paid are presented as part of cash flows from financing activities.
 
N.
O.
Taxes on Income
 
Taxes on income (including surplus profit levy on natural resources) include current and deferred taxes. Current tax and deferred taxtaxes, that are recognized in profit or loss, unless they relate to a business combination or are recognized directly in equity or in other comprehensive income when they relate to items recognized directly in equity or in other comprehensive income.
 
Current tax is the expected tax payable (or receivable) on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date. Current taxes also include taxes in respect of prior years and any tax arising from dividends. Current tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and there is intent to settle current tax liabilities and assets on a net basis or the tax assets and liabilities will be realized simultaneously.basis.
 
A provision for uncertain tax positions, including additional tax and interest expenses, is recognized when it is more likely than not that ICL will have to use its economic resources to pay the obligation.

ICL Group LimitedConsolidated Financial Statements27

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
O.
Taxes on Income (cont'd)
 
Recognition of deferred taxes relates to temporary differences between the book values of the assets and liabilities for purposes of financial reporting and their value for tax purposes. The Company does not recognize deferred taxes for the following temporary differences: initial recognition of goodwill initial recognition of assets and liabilities for transactions that do not constitute a business combination and do not impact the accounting income and the income for tax purposes, as well as differences deriving from investments in subsidiaries, investee companies and associated companies that are presented according to equity method, if it is not expected that they will reverse in the foreseeable future and if ICL controls the date the provision will reverse, whether via sale or distribution of a dividend. The deferred taxes are measured according to the tax rates expected to apply to the temporary differences at the time they are realized, based on the law that was finally legislated or effectively legislated as atof the date of the report. Deferred taxes in respect of intra-company transactions in the consolidated financial statements are recorded according to the tax rate applicable to the buying company.
 
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset deferred tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle deferred tax liabilities and assets on a net basis or their deferred tax assets and liabilities will be realized simultaneously.basis.
 
A deferred tax asset is recognized in the books when it is expected that in the future there will be taxable income against which the temporary differences can be utilized. Deferred tax assets are examined at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
 
F - 33

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 3 - Significant Accounting Policies (cont’d)

N. Taxes on Income (cont'd)
Deferred taxes that were not recognized are re‑evaluated at every reporting date and are recognized if the expectation has changed such that it is expected that in the future there will be taxable income against which it will be possible to utilize them.
ICL could become liable for additional taxes in the case of distribution of intercompany dividends between ICL's companies. These additional taxes are not included in the financial statements as ICL's companies decided not to cause distribution of a dividend that involves additional taxes to the paying company in the foreseeable future. In cases where an investee company is expected to distribute a dividend involving additional tax, the Company records a reserve for taxes in respect of the saidexpected additional tax it is expected to incur due to distribution of the dividend. Additional income taxes that arise from the distribution of dividends by the Company are recognized when the liability to pay the related dividend is recognized. Deferred taxes in respect of intra-company transactions in the consolidated financial statements are recorded according to the tax rate applicable to the buying company.taxes.
P.
Earnings per share
 
O. Earnings per share
ICL presents basic and diluted earnings per share data for its ordinary share capital. The basic earnings per share are calculated by dividing the income or loss attributable to the holders of the Company’s ordinary shares by the weighted-average number of ordinary shares outstanding during the year, after adjustment in respect of treasury shares. The diluted earnings per share are determined by adjusting the income or loss attributable to the holders of the Company’s ordinary shares and the weighted-average number of ordinary shares outstanding after adjustment in respect of treasury shares and for the effect of restricted shares and options for shares granted to employees.
Q.
Transactions with controlling shareholder
 
P. Transactions with controlling shareholder
Assets and liabilities included in a transaction with a controlling shareholder are measured at fair value on the date of the transaction. As

ICL Group LimitedConsolidated Financial Statements28

Notes to the transaction is on the equity level, the Company includes the difference between the fair value and the consideration from the transaction in its equity.Consolidated Financial Statements as of December 31, 2021

Note 3 - Significant Accounting Policies (cont'd)
 
Q.
R.
Non-current assets and disposal groups held for sale
 
Non-current assets (or disposal groups composed of assets and liabilities) are classified as held for sale if it is highly probable that they will be recovered primarily through a sale transaction and not through continuing use. This applies also to when the Company is obligated to a sale plan that involves losing control over a subsidiary, whether the Company will retain any non-controlling interests in the subsidiary after the sale.
 
Immediately before classification as held for sale, the assets (or components of the disposal group) are remeasured in accordance with ICL’s accounting policies. Thereafter, the assets (or components of the disposal group) are measured at the lower of their carrying amount and fair value less costs to sell.
 
F - 34

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 3 - Significant Accounting Policies (cont’d)
Q. Non-current assets and disposal groups held for sale (cont'd)
Any impairment loss on a disposal group is initially allocated to goodwill, and then to remaining assets on a pro rata basis, except that no loss is allocated to assets that are not in the scope of the measurement requirements of IFRS 5 such as: inventories, financial assets, deferred tax assets and employee benefit assets, which continue to be measured in accordance with ICL’s accounting policies. Impairment losses recognized on initial classification as held for sale, and subsequent gains or losses on remeasurement, are recognized inas profit or loss. Gains are not recognized in excess of any cumulative impairment loss. In subsequent periods, depreciable assets classified as held for sale are not depreciated on a periodic basis.

R. New Standards and Interpretations not yet adopted
IFRS 16, Leases (hereinafter – “IFRS 16” or the "standard")
IFRS 16 The standard replaces IAS 17, Leases and its related interpretations. The standard's instructions annul the existing requirement from lessees to classify leases as operating or finance leases. The new standard presents a unified model for the accounting treatment of all leases according to which the lessee has to recognize a right-of-use asset and a lease liability in its financial statements.
Manner of implementation and expected implementation
The standard will be implemented for annual periods starting on January 1, 2019. The Company plans to apply the transitional provision of recognizing a lease liability at the initial application date according to the present value of the future lease payments discounted at a group borrowing rate at that date, and concurrently recognizing a right-of-use asset at the same amount of the liability, adjusted for any repaid or accrued lease payments that were recognized as an asset or liability before the date of initial application. Therefore, application of the standard is not expected to influence the balance of retained earnings and equity at the date of initial application.
Main Expedients the Company elected:
1)Not applying the requirement to recognize a right-of-use asset and a lease liability in respect of short-term leases of up to one year. Furthermore, not applying the requirement to recognize a right-of-use asset and a lease liability for leases that end within 12 months from the date of initial application.
2)Not separating non-lease components from lease components and instead accounting for all the lease components and related non-lease components as a single lease component.
3)Relying on a previous assessment of whether an arrangement contains a lease in accordance with current guidance, IAS 17, Leases, and IFRIC 4, Determining whether an Arrangement contains a Lease, with respect to agreements that exist at the date of initial application.
4)Not applying the requirement to recognize a right-of-use asset and a lease liability in respect of leases where the underlying asset has a low value.
F - 35ICL Group LimitedConsolidated Financial Statements29

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 3 - Significant Accounting Policies (cont’d)
R. New Standards and Interpretations not yet adopted (cont'd)
IFRS 16, Leases (hereinafter – “IFRS 16” or the "standard") (cont'd)
For leases in which the Company is the lessee and which were classified before the date of initial application as operating leases, except for when the Company has elected to apply the standard’s expedients as aforesaid, the Company will recognize a right-of-use asset and a lease liability at initial application for all the leases that award it control over the use of identified assets for a specified period of time. Based on the assessment as at December 31, 2018, the changes in the initial application are expected to result in an increase of $280 million in the balance of right-of-use assets and in the balance of the lease liabilities. Accordingly, depreciation and amortization expenses will be recognized in respect of the right of use asset, and the need for recognizing impairment of the right-of-use asset will be examined in accordance with IAS 36. Furthermore, financing expenses will be recognized in respect of the lease liabilities. Therefore, as from the date of initial application, the lease payments relating to assets leased under an operating lease, will be recognized as a right-of-use asset and depreciated in subsequent periods as a part of depreciation and amortization expenses and as interest expenses. ICL's discount rates used for measuring the lease liability are in the range of 3.4% to 6.4%. The Company does not anticipate any material implications on its ability to satisfy the required financial covenants, as described in Note 15.
IFRIC 23, Uncertainty Over Income Tax Treatments (hereinafter – “IFRIC 23”)
IFRIC 23 clarifies how to apply the recognition and measurement requirements of IAS 12 for uncertainties in income taxes. According to IFRIC 23, when determining the taxable profit (loss), tax bases, unused tax losses, unused tax credits and tax rates when there is uncertainty over income tax treatments, the entity should assess whether it is probable that the tax authority will accept its tax position. If it is probable that the tax authority will accept the entity’s tax position, the entity will recognize the tax effects on the financial statements according to that tax position. If it is not probable that the tax authority will accept the entity’s tax position, the entity is required to reflect the uncertainty in its accounts. IFRIC 23 also emphasizes the need to provide disclosures of the judgments and assumptions made by the entity regarding uncertain tax positions.
IFRIC 23 is effective for annual reporting periods beginning on or after January 1, 2019. The interpretation includes two alternatives for applying the transitional provisions, so that companies can choose between retrospective application or prospective application as from the first reporting period in which it initially applied the interpretation.
The Company has examined the implications of applying IFRIC 23, and in its opinion the effect on the financial statements will be immaterial.
S. Indexes and exchange rates
Balances in or linked to foreign currency are included in the financial statements at the representative exchange rate on the date of the report. Balances linked to the Consumer Price Index (hereinafter – “the CPI”) are included based on the index relating to each linked asset or liability.
F - 36

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 4 - Determination of Fair Values
 
As part of the accounting policies and disclosures, ICL is required to determine the fair value of both financial and non-financial assets and liabilities. The fair values have been determined for measurement and/or disclosure purposes based on the methods described below. Further information about the assumptions made in determining the fair values is disclosed in the notes specific to that asset or liability.
 
A.
A.
Investments in equity securities
 
The fair value of financial assetsinvestments in equity instruments classified as fair value through other comprehensive income -investments- investments in equity instruments and as fair value through profit and loss, is determined based on their market price at date of the report. If the asset or liability measured at fair value has a bid price and an ask price, the price in the range between them that best reflects fair value under the circumstances will be used for measuring fair value.
 
B.
B.
Derivatives
 
The fair value of forward contracts on foreign currency is determined by averaging the exchange rate and the appropriate interest coefficient for the period of the transaction and the relevant currency index.
The fair value of currency options is determined based on the Black and Scholes model, considering the intrinsic value, standard deviation and the interest rates. The fair value of interest rate swap contracts is determined by discounting the estimated amount of the future cash flows based on the terms and length of period to maturity of each contract, while using market interest rates of similar instruments at the date of measurement.
Future contracts on energy and marine shipping prices are presented at fair value based on quotes of the prices of products on an ongoing basis.
The reasonableness of the market pricefair value is examined by comparing it to quotations by banks.banks’ quotations.
 
For further information regarding the fair value hierarchy, see Note 23 regarding financial instruments.
C.
Liabilities in respect of debentures
 
C. Liabilities in respect of debentures
The fair value of the liabilities and theincluding debentures is determined for disclosure purposes only. The fair value of marketable debentures is determined based on the stock market prices as at the date of the report. The fair value of the non‑marketable debenturesonly and is calculated based on the present value of future cash flows in respect of the principal and interest components, discounted at the market rate of interest as atof the reporting date.
D. Share-based compensation
The fair value of employee share options and share appreciation rightsmarketable debentures is measured using the Black and Scholes model or a binomial model, in accordance with the plan (see Note 21). The model’s assumptions include the share pricedetermined based on the measurement date, exercise pricestock market prices as of the instrument, expected volatility (based on the weighted‑average historic volatility), the weighted average expected lifedate of the instruments (based on historical experience and general option‑holder behavior), expected dividends, and the risk-free interest rate (based on government debentures).report.
 
D.

Property, plant and equipment of the subsidiaries Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium in Israel

F - 37

Notes to the Consolidated Financial Statements as at December 31, 2018
 
Note 4 - Determination of Fair Values (cont'd)

E. Property, plant and equipment of the subsidiaries Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium in Israel
The fair value of property, plant and equipment of the subsidiaries Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium (hereinafter - the Subsidiaries) was valuatedmeasured in their statutory reports based on the Replacement Cost Methodology.Methodology under IFRS. This evaluation was performed mainly forin recent years and serve, among others, as the Subsidiaries’ financial statements of 2016 and onward, which serve as a basis for the mineral based financial reports filedprepared pursuant to the provisions of the Taxation of Natural Resources Law. For further information, see Note 20.15.

ICL Group LimitedConsolidated Financial Statements30

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 5 - Operating Segments

A. General
 
1. Information on operating segments:
 
ICL is a global specialty minerals and chemicals company operating bromine, potash and phosphate mineral value chains in a unique, integrated business model. To align with ICL's strategy of enhancing market leadership across its three core-mineral value chains of bromine, potash and phosphate, as well as realizing the growth potential of Innovative Ag Solutions, commencing August 31, 2018, the Company operates viaOur operations are organized under four segments: Industrial Products, Potash, Phosphate Solutions and Innovative Agriculture Solutions.
As part of management’s strategy to strengthen the focus on its specialties products a decision was made regarding the Company’s managerial structure, according to which, as of January 2022, the activities of ICL Boulby and ICL Amfert will be allocated from the potash and phosphate solutions segments, respectively, to the Innovative Ag Solutions. The comparative data has been restated to reflect the changeSolutions segment. This transition is not reflected in the structure of the reportable segments, as stated above.
presentation set forth below.
 
Industrial Products The Industrial Products segment produces bromine out of a solution that is a by‑product of the potash production process in Sodom, Israel, as well as bromine‑based compounds. Industrial Products segment uses most of the bromine it produces for self‑production of bromine compounds at its production sites in Israel, the Netherlands and China. Industrial Products is also engaged in the production and marketing of phosphorous-based products. In addition, the Industrial Products segment produces several grades of potash, salt, magnesium chloride and magnesia products. The segment is also engaged in the production and marketing of phosphorous-based flame retardants and additional phosphorus‑based products.
 
Potash – The PotashPotash segment usesproduces and sells mainly potash, salt, Polysulphate®, magnesium and electricity. Potash is produced in Israel and Spain, using an evaporation process to extract potash from the Dead Sea in Israel and uses conventional mining to produce potash and salt from an underground mine in Spain. The segment marketsIn its potash fertilizers globally and also carries on certain other operations not solely related to the potash activities. At the end of the second quarter of 2018, the Company ceased the production of potash in the ICL Boulby mine in the UK, the Company produces Polysulphate®, which is composed of sulphur, potash, calcium and shifted to sole production of Polysulphate™.magnesium. The Polysulphate™ is produced in an underground mine at ICL Boulby in the UK, and is the basis for a significant part of the Company'sCompany’s FertilizerpluS product line is based mainly on Polysulphate®. The segment also includes a magnesium activities underproduct line which it produces markets and sells pure magnesium and magnesium alloys, and also produces related by-products, includingas well as chlorine and sylvinite. In addition, the Potash segment sells salt that is produced in its potash and Polysulphate® underground mines in Spain and the UK. The Company has a power plant in Sodom, which supplies electricity to ICL companies in Israel (electricity surplus is sold to external customers) and steam to all facilities in the Sodom site.
 
F - 38

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 5 - Operating Segments (cont’d)

A. General (cont’d)
1. Information on operating segments: (cont'd)
Phosphate Solutions – The Phosphate Solutions segment is based on a phosphate value chain which uses phosphate commodity products, such as phosphate rock and fertilizer-grade phosphoric acid (“green phosphoric acid”), to produce specialty products with higher added value. The segment also produces and markets phosphate-based fertilizers.
 
Phosphate rock is mined and processed from open pit mines, threetwo of which are located in the Negev Desert in Israel, while the fourththird is locatedsituated in Yunnan province in China. Sulphuric acid, green phosphoric acid and phosphate fertilizers are produced in facilities in Israel, China and Europe.

ICL Group LimitedConsolidated Financial Statements31

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 5 - Operating Segments (cont'd)
 
A. General (cont'd)
1. Information on operating segments: (cont'd)
The Phosphate Solutions segment purifies some of itsmanufactures purified phosphoric acid by purifying green phosphoric acid. Pure phosphoric acid and green phosphoric acid and manufactures thermal phosphoric acidare used to provide solutions based on specialtymanufacture downstream products with high added value, such as phosphate salts and acids, for diversifieda wide range of food and industrial applications. Phosphate salts and acids are used in various industrial end markets, such as oral care, cleaning products, paints and coatings, LFP batteries, water treatment, asphalt modification, construction, metal treatment, and metal treatment.more. The specialty phosphate salts and acids are mainly produced insegment’s products for the Company’s facilities in US, Brazil, Germany and China. The segment is also a leader in developing and producingfood industry include functional food ingredients and phosphate additives, which provide texture and stability solutions for the processed meat, meat alternatives, poultry, seafood, dairy, beveragebeverages and baked goods markets.goods. In addition, the segment supplies purepurified phosphoric acid to ICL’s specialty fertilizers business and produces alternative protein meat substitutes, as well as milk and whey proteins for the food ingredients industry.
 

Innovative Ag Solutions – The Innovative Ag Solutions segment was established on the foundations of ICL’s specialty fertilizers business. The segment aims to achieve global leadership in specialty fertilization markets by enhancing its global positions in its core markets of specialty agriculture, ornamental horticulture, turf and landscaping, targeting high-growth markets such as Latin America,Brazil, India and China, by leveraging its unique R&D capabilities, vast agronomic experience, global footprint, backward integration to potash and phosphate and chemistry know-how, as well as seeking M&A opportunities. while integrating and generating synergies from acquired businesses.

In January 2021, the Company completed the acquisition of Fertiláqua, one of Brazil’s leading specialty plant nutrition companies, and in July 2021, the acquisition of the South American Plant Nutrition business of Compass Minerals América do Sul S.A. (hereinafter - ADS).

ICL is continuously working to expand its broad product portfolio of specialty plant nutrition, plant stimulation and plant health solutions, which consists of enhanced efficiency and controlled release fertilizers (CRF), water soluble fertilizers (WSF), liquid fertilizers slow release fertilizers (SRF) and straights (MKP/MAP/Pekacid).

PeKacid), soil and foliar micronutrients, secondary nutrients, biostimulants, soil conditioners, seed treatment products, and adjuvants.

The Innovative Ag Solutions segment develops, manufactures, markets and sells fertilizers that are based primarily on nitrogen, potash (potassium chloride)its products globally, mainly in Brazil, Europe, Asia, North America and phosphate.Israel. It produces water soluble specialty fertilizers in Belgium, Israel and the US,Spain, liquid fertilizers in Israel, Spain, China and Brazil, straights soluble fertilizers in IsraelChina and Spain, andIsrael, controlled‑release fertilizers in the Netherlands, Brazil and the United States. ICL's specialty fertilizers business markets its products worldwide, mainlyStates, as well as secondary nutrients, biostimulants, soil conditioners, seed treatment product, and adjuvants in Europe, Asia, North America and Israel.Brazil.

 
The segment will also function as
Other Activities – Business activities which include, among other, ICL’s innovative arm, which will seek to focus on R&D,promoting innovation, developing new products and services, as well as implementing digital innovation.
Other Activities – business activitiesplatforms and technological solutions for farmers and agronomists. This category includes Growers and Agmatix,  innovative start-ups that are developing agricultural data processing and analysis capabilities for the future of agriculture. These activities are not reviewed regularly bypresented as reportable segments, since they do not meet the organization’s chief operating decision maker.required quantitative thresholds.
F - 39

ICL Group LimitedConsolidated Financial Statements32

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 5 - Operating Segments (cont’d)(cont'd)

A. General (cont’d)
A.
General (cont'd)
 
2. Segment capital investments
 
The capital investments made by the segments, for each of the reporting years,periods, include mainly property, plant and equipment, andas well as intangible assets acquired in the ordinary course of business and as part of business combinations.
 
3. Inter–segment transfers and unallocated income (expenses)
 
Segment revenues,Segment’s revenue, expenses and results include inter-segment transfers whichthat are priced mainly based on transaction prices in the ordinary course of business – this being based onbusiness. This is aligned with the reports that are regularly reviewed by the chief operating decision maker. TheseChief Operating Decision Maker. The inter-segment transfers are eliminated as part of financial statements’ consolidation of the financial statements.process.
 
The segmentSegment profit is measured based on the operating income, without the allocation of certain expenses that are not allocated to the operating segments, including general and administrative expenses, as it is includedpresented in the reports that are regularly reviewed by the chief operating decision maker.
Chief Operating Decision Maker. This is the basis for analyzing segment results, since management believes that it is the most relevant measure for the assessment of such results.
F - 40

Notes to the ICL Group LimitedConsolidated Financial Statements as at December 31, 2018
Note 5 - Operating Segments (cont’d)
B. Operating segment data

Industrial ProductsPotashPhosphate SolutionsInnovative Ag Solutions
Other
Activities
ReconciliationConsolidated
$ millions

For the year ended December 31, 2018       
        
Sales to external parties 1,281 1,481 2,001 719 74- 5,556
Inter-segment sales 15 142 98 22 5 (282)-
Total sales 1,296 1,623 2,099 741 79 (282) 5,556
        
Segment profit 350 393 208 57 9 (7) 1,010
General and administrative expenses       (257)
Other income not allocated to the segments       766
Operating income       1,519
        
Financing expenses, net       (158)
Share in earnings of equity-accounted investee       3
Income before income taxes       1,364
        
Capital expenditures 50 356 180 15 1 3 605
        
Depreciation, amortization and impairment 63 141 172 19 4 21 420


F - 41

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 5 - Operating Segments (cont'd)

B. Operating segment data (cont'd)

Industrial ProductsPotashPhosphate SolutionsInnovative Ag Solutions
Other
Activities
ReconciliationConsolidated
$ millions

For the year ended December 31, 2017       
        
Sales to external parties 1,179 1,258 1,938 671 372- 5,418
Inter-segment sales 14 125 99 21 12 (271)-
Total sales 1,193 1,383 2,037 692 384 (271) 5,418
        
Segment profit 303 282 149 56 127 (4) 913
General and administrative expenses       (261)
Other expenses not allocated to the segments       (23)
Operating income       629
        
Financing expenses, net       (124)
Income before income taxes       505
        
Capital expenditures 49 270 154 12 19 3 507
        
Depreciation, amortization and impairment 61 128 172 19 8 30 418


F - 42

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 5 - Operating Segments (cont’d)

B. Operating segment data (cont'd)

Industrial ProductsPotashPhosphate SolutionsInnovative Ag Solutions
Other
Activities
ReconciliationConsolidated
$ millions

For the year ended December 31, 2016       
        
Sales to external parties 1,111 1,213 2,082 632 325- 5,363
Inter-segment sales 9 125 104 29 15 (282)-
Total sales 1,120 1,338 2,186 661 340 (282) 5,363
        
Segment profit 286 282 224 55 93 (37) 903
General and administrative expenses       (321)
Other expenses not allocated to the segments       (585)
Operating loss       (3)
        
Financing expenses, net       (132)
Share in earnings of equity-accounted investees       18
Loss before income taxes       (117)
        
Capital expenditures 38 311 237 7 1 58 652
        
Depreciation, amortization and impairment 52 127 203 17 3 4 406
33

F - 43

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 5 - Operating Segments (cont'd)


C. Information based on geographical locationB. Operating segment data
 
Industrial Products
Potash
Phosphate Solutions
Innovative Ag Solutions
Other
Activities
Reconciliations
Consolidated
$ millions
The following table presents the distribution of ICL's sales by geographical location of the customer:
 
 201820172016
 
$
millions
% of
sales
$
millions
% of
sales
$
millions
% of
sales

USA 903 16 1,091 20 1,070 20
China 848 15 724 13 669 12
Brazil 656 12 594 11 521 10
United Kingdom 382 7 328 6 306 6
Germany 365 7 378 7 392 7
France 267 5 265 5 226 4
Spain 262 5 264 5 258 5
Israel 223 4 171 3 237 4
India 211 4 200 4 199 4
Australia 126 2 85 2 187 3
All other 1,313 23 1,318 24 1,298 25
Total 5,556 100 5,418 100 5,363 100
For the year ended December 31, 2021
       
        
Sales to external parties
 1,601
1,768
2,334
1,226
26
0
  6,955
Inter-segment sales
 16
163
98
19
2
(298)
0
Total sales
  1,617
1,931
2,432
1,245
28
(298)
  6,955
        
Segment operating income (loss)
435
399
307
121
(8)
(60)
 1,194
Other income not allocated to the segments
      
 16
Operating income
      
 1,210
        
Financing expenses, net
      
 (122)
Share in earnings of equity-accounted investees
      
 4
Income before income taxes
      
 1,092
        
Depreciation amortization and impairment
 65
165
215
38
2
(1)
 484
        
Capital expenditures 
74
298
238
36
 6
17
 669
Capital expenditures as part of business combination
 0
0
0
377
0
0
 377

F - 44

ICL Group LimitedConsolidated Financial Statements34

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 5 - Operating Segments (cont'd)

B. Operating segment data (cont'd)
Industrial Products
Potash
Phosphate Solutions
Innovative Ag Solutions
Other
Activities
Reconciliations
Consolidated
$ millions
For the year ended December 31, 2020
       
        
Sales to external parties
1,242
1,183
1,871
715
32
0
5,043
Inter-segment sales
13
163
77
16
3
(272)
0
Total sales
1,255
1,346
1,948
731
35
(272)
5,043
        
Segment operating income (loss)
303
120
66
40
(5)
(15)
509
Other expenses not allocated to the segments
      
(307)
Operating income
      
202
        
Financing expenses, net
      
(158)
Share in earnings of equity-accounted investees
      
5
Income before income taxes
      
49
        
Depreciation amortization and impairment
77
166
210
25
3
98
579
        
Capital expenditures
84
296
275
20
6
15
696
Capital expenditures as part of business combination
0
0
0
0
26
0
26

ICL Group LimitedConsolidated Financial Statements35

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 5 - Operating Segments (cont'd)
B. Operating segment data (cont'd)
Industrial Products
Potash
Phosphate Solutions
Innovative Ag Solutions
Other
Activities
Reconciliations
Consolidated
$ millions
For the year ended December 31, 2019
       
        
Sales to external parties
1,307
1,330
1,901
699
34
0
5,271
Inter-segment sales
11
164
79
18
3
(275)
0
Total sales
1,318
1,494
1,980
717
37
(275)
5,271
        
Segment operating income
338
289
100
21
19
(7)
760
Other expenses not allocated to the segments
      
 (4)
Operating income
      
756
        
Financing expenses, net
      
(129)
Share in earnings of equity-accounted investees
      
1
Income before income taxes
      
628
        
Depreciation amortization and impairment
67
149
177
21
22
(3)
433
        

Implementation of IFRS 16

8
95
113
9
105
9
339
Capital expenditures
66
383
213
21
4
6
693

ICL Group LimitedConsolidated Financial Statements36

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 5 - Operating Segments (cont'd)
C. Information based on geographical location (cont'd)
 
The following table presents the distribution of ICL’s sales by geographical location of the customer:
 
2021
2020
2019
 
$
millions
% of
sales
$
millions
% of
sales
$
millions
% of
sales
Brazil
1,178
17
447
9
581
11

USA

1,091
16
793
16
840
16
China
1,060
15
806
16
802
15
United Kingdom
386
6
336
7
347
7
Germany
345
5
327
6
334
6
Israel
291
4
260
5
241
5
Spain
280
4
243
5
249
5
France
270
4
238
5
257
5
India
213
3
194
4
178
3
Italy
145
2
114
2
116
2
All other
 1,696
24
1,285
25
1,326
25
Total
 6,955
100
5,043
100
5,271
100

ICL Group LimitedConsolidated Financial Statements37

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 5 - Operating Segments (cont'd)
C.
Information based on geographical location (cont'd)
The following table presents the distribution of the operating segments sales by geographical location of the customer:
 
 
Industrial Products
Potash
Phosphate Solutions
Innovative Ag Solutions
Other
Activities
Reconciliation
Reconciliations
Consolidated
 
$ millions
For the year ended December 31, 2021
       
Europe
 530
497
765
424
23
(80)
2,159
Asia
 597
513
621
156
1
(12)
1,876
South America
 64
507
359
378
0
(3)
1,305

North America

363
216
492
120
1
(6)
1,186
Rest of the world
 63
198
195
167
3
(197)
429
Total
 1,617
1,931
2,432
1,245
28
(298)
6,955

For the year ended December 31, 2018       
Europe 473 459 719 362 49 (92) 1,970
Asia 399 519 481 105 2 (18) 1,488
North America 347 107 405 103 24 (8) 978
South America 21 408 264 21 1 (3) 712
Rest of the world 56 130 230 150 3 (161) 408
Total 1,296 1,623 2,099 741 79 (282) 5,556

 
 
Industrial Products
Potash
Phosphate Solutions
Innovative Ag Solutions
Other
Activities
Reconciliation
Reconciliations
Consolidated
 
$ millions
For the year ended December 31, 2020
       
Europe
458
411
665
334
30
(76)
1,822
Asia
405
433
480
127
1
(14)
1,432
South America
40
230
227
21
0
(1)
517
North America
299
86
372
105
2
(5)
859
Rest of the world
53
186
204
144
2
(176)
413
Total
1,255
1,346
1,948
731
35
(272)
5,043


For the year ended December 31, 2017       
Europe 456 386 749 326 87 (86) 1,918
Asia 351 433 476 100 3 (21) 1,342
North America 327 116 369 94 282 (13) 1,175
South America 19 347 277 22 5 (4) 666
Rest of the world 40 101 166 150 7 (147) 317
Total 1,193 1,383 2,037 692 384 (271) 5,418

ICL Group LimitedConsolidated Financial Statements38

F - 45

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 5 - Operating Segments (cont'd)

C.
C.
Information based on geographical location (cont'd)
 
The following table presents the distribution of the operating segments sales by geographical location of the customer: (cont'd)
 
 
Industrial Products
Potash
Phosphate Solutions
Innovative Ag Solutions
Other
Activities
Reconciliation
Reconciliations
Consolidated
 
$ millions

For the year ended December 31, 2016       
Europe 424 421 717 319 77 (95) 1,863
Asia 301 396 511 74 6 (13) 1,275
North America 330 93 380 110 250 (22) 1,141
South America 25 267 274 19 1 2 588
Rest of the world 40 161 304 139 6 (154) 496
Total 1,120 1,338 2,186 661 340 (282) 5,363


F - 46
For the year ended December 31, 2019
       
Europe
469
422
712
336
31
(85)
1,885
Asia
399
470
447
118
1
(12)
1,423
South America
56
327
263
23
0
(1)
668
North America
 353
95
370
95
0
(3)
910
Rest of the world
41
180
188
145
5
(174)
385
Total
1,318
1,494
1,980
717
37
(275)
5,271

ICL Group LimitedConsolidated Financial Statements39

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 5 - Operating Segments (cont'd)

C.
C.
Information based on geographical location (cont'd)
 
The following table presents the distribution of ICL'sthe Company’s sales by geographical location of the assets:main facilities from which they were produced.
 
 For the year ended December 31
 201820172016
 $ millions$ millions$ millions
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Israel
 3,526
2,636
2,815
Europe
 2,437
2,014
2,079
South America
 1,095
424
441
North America
 897
757
816
Asia
 861
643
615
Others
 56
48
47
 
 8,872
6,522
6,813
Intercompany sales
 (1,917)
(1,479)
(1,542)
Total
 6,955
5,043
5,271

Israel 2,841 2,548 2,470
Europe 2,198 2,119 2,124
North America 831 1,045 1,045
Asia 617 583 556
Others 211 215 218
  6,698 6,510 6,413
Intercompany sales (1,142) (1,092) (1,050)
    
Total 5,556 5,418 5,363

 
The following table presents operating income (loss) by geographical location of the assets from which it was produced:
 
 For the year ended December 31
 201820172016
 $ millions$ millions$ millions
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Israel*
863
105
578
Asia
179
64
59
South America**
95
35
19
North America
71
47
61

Europe

7
(50)
32
Others
4
4
3
Intercompany eliminations
(9)
(3)
4
Total
1,210
202
756

Europe* 834 (45) (117)
Israel 526 475 304
North America 74 154 83
Asia 52 8 (41)
Others 2933 (203)
Intercompany eliminations 44 (29)
Total 1,519 629 (3)

 
*
Israel operating income for 2020 includes a loss of $274 million resulting from impairments and the initiation of efficiency initiatives and measures. 
**  Europe profitSouth America operating income for 2021 includes $51 million resulting from the year ended December 31, 2018 includes gain from divestitureoperations of businesses inFertilaqua and ADS, which were acquired during the amount of $841 million.year. For furtheradditional information see Note 10.8B.
 
F - 47ICL Group LimitedConsolidated Financial Statements40

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 5 - Operating Segments (cont'd)

C. Information based on geographical location (cont'd)
 
The following table present the non-current assets by geographical location of the assets (*)
 
As of December 31
 
2021
2020
 
$ millions
$ millions
Israel
 4,079
3,952
Europe
 1,505
1,575
Asia
 483
490
South America
391
58
North America
 333
319
Other
 5
5
Total
 6,796
6,399

(*)
Mainly consist of property, plant and equipment, intangible assets and non-current inventories.
 
 For the year ended December 31
 20182017
 $ millions$ millions
Note 6 – Inventories

 
As of December 31
 
2021
2020
 
$ millions
$ millions
Israel 3,570 3,387
Europe 1,228 1,227
Asia 401 455
North America 309 321
Other 59 94
Total 5,567 5,484
Finished products
 946
 807
Work in progress
 299
 263
Raw materials
 349
 207
Spare parts
 125
 125
Total inventories
 1,719
 1,402
Of which:
  

Non-current inventories - mainly raw materials (presented in non-current assets)

 149
 152
Current inventories
 1,570
 1,250

(*) Mainly consist of property, plant
Note 7 - Prepaid expenses and equipment and intangible assets, non-current inventories and lease rights.other receivables
 
 
As of December 31
 
2021
2020
 
$ millions
$ millions
F - 48
Government institutions
 97
 72
Current tax assets
 97
 65
Prepaid expenses
 51
 50
Derivative instruments
48
24
Financial asset at amortized cost
0
66
Other
 64
 64
 
357
341

ICL Group LimitedConsolidated Financial Statements41

Notes to the Consolidated Financial Statements as atof December 31, 20182021
Note 6 – Inventories

 As at December 31
 20182017
 $ millions$ millions

Finished products 772 709
Work in progress 258 269
Raw materials 216 212
Spare parts 143 142
Total inventories 1,389 1,332
Less – non-current inventories. mainly raw materials (presented in non-current assets) 99 106
Current inventories 1,290 1,226

Note 7 - Other Receivables

 As at December 31
 20182017
 $ millions$ millions

Government institutions 108 78
Current tax assets 79 16
Prepaid expenses 52 43
Insurance receivables 1 26
Other 55 62
  295 225



F - 49

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 8 - Investments in Subsidiaries
 
A.
Non-controlling interests in subsidiaries
 
The following tables present information with respect to non-controlling interests in a Group subsidiary, YPH JV (at the rate of 50%), before elimination of inter-company transactions. The information includes fair value adjustments that were made on the acquisition date, other than goodwill and presented without adjustments for the ownership rates held by the Group.Company.
 
 20182017
 $ millions$ millions
 
As of December 31
 
2021
2020
 
$ millions
$ millions
   
Current assets
231
149
Non-current assets
408
400
Current liabilities
(168)
(189)
Non-current liabilities
(83)
(76)
Equity
(388)
(284)


   
Current assets 192 197
Non-current assets 318 367
Current liabilities 225 241
Non-current liabilities 49 215
Equity 236 108
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Sales
528
359
349
Operating Income
105
29
23
Depreciation and amortization
38
37
41
Operating income before depreciation and amortization
143
66
64
Net Income
96
23
11
Total Comprehensive income
104
40
8

 
B.
Business Acquisition and Divestiture
 201820172016
 $ millions$ millions$ millions
(1)
As part of the Company's strategy to expand the specialty fertilizers business and focus on growing markets, such as achieving leadership positions in Brazil, a high growth specialty plant nutrition market, in January 2021, the Company completed the acquisition of Agro Fertiláqua Participações S.A., one of Brazil's leading specialty plant nutrition companies, for a consideration of $131 million, including net debt of $43 million.

In July 2021, the Company completed the acquisition of the South American plant nutrition business of ADS, for a total consideration of about $443 million, including net debt of about $104 million. ADS offers a broad range of solutions for plant nutrition and stimulation, soil treatment, seed treatment and plant health, covering all key Brazilian crops, and as such significantly expands ICL's product portfolio and segment profitability, while providing seasonal balance between the Northern and Southern hemispheres.

    
Sales 387 363 377
Operating loss- (21) (78)
Depreciation and amortization 34 34 34
Operating income (loss) before depreciation and amortization 34 13 (44)
Net loss (13) (38) (104)
Comprehensive income (loss) 3 (26) (126)
ICL Group LimitedConsolidated Financial Statements42

Note 9 – Other non-current assets

 As at December 31
 20182017
 $ millions$ millions

Lease rights 102 106
Non-current inventories 99 106
Surplus in defined benefit plan 73 89
Long-term loan 59-
Derivatives 15 64
Other 9 8
  357 373


F - 50

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 108 - Business DivestitureInvestments in Subsidiaries (cont'd)
Pursuant to the Company’s strategy to focus its operation on the mineral’s chains, divest low synergies businesses, reduce debt ratios and generate funds for growth initiatives, during 2018, the Company completed the following divestitures:

1)B.
In December 2017, the Company entered into an agreement to sell its fire safetyBusiness Acquisition and oil additives business to SK Invictus Holding L.P., an affiliate of SK Capital (hereinafter – the Buyer). In March 2018, the Company completed the sale transaction for a consideration of $1,010 million, of which $953 million in cash and $57 million in the form of a long-term loan to a subsidiary of the Buyer. As a result, the Company recorded, in the financial statements of 2018, a capital gain of $841 million (net of transaction expenses), under "other income" in the statement of income. the table below presents the book value of the sold assets and liabilities.
Divestiture (cont'd)
 2018
 $ millions

Identifiable assets acquired and liabilities assumed (*):

Cash and cash equivalents 1
Trade and other receivables 34
Inventories 59
Property, plant and equipment 26
Intangible assets 64
Trade payables and other current liabilities (28)
Deferred tax liabilities (3)
Net assets and liabilities 153

$ millions

  
Consideration received in

Cash and cash (*)equivalents

 938

34

Income tax paid

Inventories

 (35)

102

Cash disposed of

Trade and Other receivables

 (1)

169

Property, plant and equipment

125

Intangible assets

252

Other non-current assets

23

Trade and Other payables

(106)

Loans and Credit

(169)

Provisions

(3)

Net cash inflowidentifiable assets

 902

427

* The consideration received in cash is net of $16 million transaction expenses.
 
(*) As of the reporting date, the Company is still in a process of finalizing ADS' Purchase Price Allocation (PPA).
2)(2)
In June 2018,July 2021, the Company completed the sale of Jiaxing ICL Chemical Co. Ltd (ICL Zhapu), which was part of the Industrial Products segment to China Sanjiang Fine Chemicals Company Limited, for a consideration of about $25 million. As a result, in 2021, the Company recognized a capital gain of about $18 million, as "other income".
(3)
As part of the Company's strategy to divest low synergy businesses and non-core business activities, in January 2022, the Company entered into a definitive agreement to sell its 50% share in the joint venture Novetide Ltd., which was accounted for according to the equity method. The sale's consideration is about $33 million, of which $8 million represent an agreementestimate for the salefair value of a contingent consideration. The closing of the assets and business of its subsidiary, Rovita, for no consideration (hereinafter – the Agreement). Rovita produces commodity milk protein products, using by-products from the whey protein business of Prolactal, whichtransaction is part of the Phosphate Solutions segment. In July 2018, the company completed the sales transaction and asexpected in early March 2022. As a result, recognized a loss deriving from the write-off of all Rovita’s assets, in the amountfirst quarter of $162022, the Company will recognize a capital gain of about $20 million, ($12 million after tax), under “other expenses” insubject to net debt and working capital adjustments at the statement of income.closing date.
 
F - 51Note 9 – Other non-current assets
 
As of December 31
 
2021
2020
 
$ millions
$ millions
Non-current inventories
 149
 152
Surplus in employees' defined benefit plans (1)
 115
 91
Derivative designated as a cash flow hedge
 97
 115
Investments in equity-accounted investees
 26
 27
Other
16
8
 
403
393

(1)
See Note 16.

ICL Group LimitedConsolidated Financial Statements43

Notes to the Consolidated Financial Statements as atof December 31, 2018
2021

Note 1110 - Property, Plant and Equipment

A.    Composition

 
Land roads and buildings
Installations
Technical equipment and equipmentmachinery
Dikes and evaporating
ponds
Heavy mechanical equipmentFurniture, vehicles and equipment
Plants under construction and spare parts for installations
(1)
Other
Right of use
asset
Total
 
$ millions
$ millions$ millions$ millions$ millions$ millions$ millions

  
Cost    
Balance as at January 1, 2018 844 5,788 1,888 150 242 898 9,810
Balance as of January 1, 2021
880
7,419
1,441
778
1,003
496
12,017
Additions in respect of business combinations
85
20
0
9
2
9
125
Additions 42 789 100 5 20 (367) 589
193
382
51
(99)
78
37
642
Disposals (2) (19)- (2) (7)- (30)
(2)
(44)
(1)
0
(6)
(20)
(73)
Exit from consolidation
(9)
(21)
0
(1)
(2)
(33)
Translation differences (23) (76) (13)- (4) (16) (132)
(40)
(92)
(26)
(24)
(3)
(2)
(187)
Balance as at December 31, 2018 861 6,482 1,975 153 251 515 10,237
Balance as of December 31, 2021
1,107
7,664
1,465
664
1,073
518
12,491
Accumulated depreciation    
Balance as at January 1, 2018 451 3,520 1,053 84 181- 5,289
Depreciation for the year 24 234 96 7 12- 373
Impairment 5- 1- 11
Balance as of January 1, 2021
491
4,300
763
0
817
96
6,467
Depreciation
30
227
55
0
71
454
Reversal of impairment
0
(6)
0
(6)
Disposals (1) (16)- (2) (8)- (27)
(5)
(34)
0
(4)
(19)
(62)
Exit from consolidation
(3)
(19)
0
(22)
Translation differences (11) (50) (10)- (1)- (72)
(11)
(58)
(21)
0
(3)
(1)
(94)
Balance as at December 31, 2018 468 3,693 1,139 89 185- 5,574
Depreciated balance as at December 31, 2018 393 2,789 836 64 66 515 4,663
Balance as of December 31, 2021
502
4,410
797
0
881
147
6,737
  
Depreciated balance as of December 31, 2021
605
3,254
668
664
192
371
5,754

 
(1) The additions for the year are presented net of items thefor which construction of which werehas been completed and accordingly were recorded inreclassified to other categories in the “property, plant and equipment” section.
F - 52

ICL Group LimitedConsolidated Financial Statements44

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1110 - Property, Plant and Equipment (cont’d)(cont'd)

A.    Composition (cont'd)

 
Land roads and buildings
Installations
Technical equipment and equipmentmachinery
Dikes and evaporating
ponds
Heavy mechanical equipmentFurniture, vehicles and equipment
Plants under construction and spare parts for installations
(1)
Other
Right of use asset
Total
 
$ millions
$ millions$ millions$ millions$ millions$ millions$ millions

    
Cost      
Balance as at January 1, 2017 763 5,408 1,715 149 244 879 9,158
Balance as of January 1, 2020
804
6,865
1,392
765
945
423
11,194
Additions 42 302 140 7 13 (14) 490
63
467
21
(24)
68
80
675
Disposals (6) (28)- (12) (17)- (63)
(7)
(34)
0
(7)
(21)
(69)

Exit from consolidation

(14)
(5)
0
(6)
(1)
(26)
Translation differences 49 136 33 7 9 35 269
34
126
28
37
3
15
243
Reclassification to assets held for sale (4) (30)- (1) (7) (2) (44)
Balance as at December 31, 2017 844 5,788 1,888 150 242 898 9,810
Balance as of December 31, 2020
 880
7,419
1,441
778
1,003
496
12,017
Accumulated depreciation     
Balance as at January 1, 2017 409 3,232 944 83 181- 4,849
Depreciation for the year 23 227 84 7 14- 355
Balance as of January 1, 2020
445
3,950
666
0
760
42
5,863
Depreciation
35
246
47
0
66
67
461
Disposals
(6)
(31)
0
(7)
(15)
(59)
Impairment- 13---- 13
0
58
27
0
85
Disposals (4) (23)- (12) (17)- (56)

Exit from consolidation

(2)
(4)
0
(4)
0
(10)
Translation differences 24 85 25 7 6- 147
19
81
23
0
2
127
Reclassification to assets held for sale (1) (14)- (1) (3)- (19)
Balance as at December 31, 2017 451 3,520 1,053 84 181- 5,289
Depreciated balance as at December 31, 2017 393 2,268 835 66 61 898 4,521
Balance as of December 31, 2020
491
4,300
763
0
817
96
6,467
 
Depreciated balance as of December 31, 2020
 389
3,119
678
778
186
400
5,550

(1) The additions for the year are presented net of items thefor which construction of which werehas been completed and accordingly were recorded inreclassified to other categories in the “property, plant and equipment” section.
F - 53

ICL Group LimitedConsolidated Financial Statements45

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 10 - Property, Plant and Equipment (cont'd)
Note 12 - Intangible Assets

B.    Additional information

(1)In accordance with the Company’s policy regarding the periodic examination of the estimated useful life of Property, Plant and Equipment, in 2021, the Company conducted an examination of the estimated remaining useful life of Property, Plant and Equipment at its facilities in Israel, which was based on the Company’s experience, level of maintenance and operation of the facilities over the years. According to the examination, it was found that following the increase in maintenance activity and the implementation of operational excellence processes, the life expectancy of certain Property, Plant and Equipment is higher than their previously estimated remaining useful life. Based on the assessment, the estimated useful life of the said assets was extended by 5-10 years, as of January 2021. The impact of this update is a reduction in depreciation expenses, of $51 million in earnings and a balance of $18 million as a change in inventory value.

(2)    In December 2021, the Company entered into an agreement with a third party for the sale of an asset located in the industrial area of Ashdod, Israel, for a consideration of about $16.5 million. As a result, the Company recognized a capital gain of $16 million as "other income" in its Statement of Income.


A.Composition

GoodwillConcessions and mining rightsTrademarksTechnology / patentsCustomer relationshipsExploration and evaluation assets
Computer
application
OthersTotal
$ millions$ millions$ millions$ millions$ millions$ millions$ millions$ millions$ millions

Cost         
Balance as at January 1, 2018 348 216 91 80 183 39 76 34 1,067
Additions--- 1- 1 13 1 16
Disposals------- (2) (2)
Translation differences (17) (6) (3) (6) (5) (1) (2)- (40)
          
Balance as at December 31, 2018 331 210 88 75 178 39 87 33 1,041
          
 Amortization and impairment losses         
Balance as at January 1, 2018 22 63 24 35 94 25 61 21 345
Amortization for the year- 5 3 5 10 1 4 2 30
Impairment--- 3 3--- 6
Disposals------- (1) (1)
Translation differences-- (1) (4) (2) (1) (2)- (10)
          
Balance as at December 31, 2018 22 68 26 39 105 25 63 22 370
          
Amortized Balance as at December 31 ,2018 309 142 62 36 73 14 24 11 671


F - 54ICL Group LimitedConsolidated Financial Statements46

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1211 - Intangible Assets (cont'd)

A.Composition (cont’d)

 GoodwillA.
Composition
Goodwill
Concessions and mining rights
TrademarksTechnology / patentsCustomer relationshipsExploration and evaluation assets
Computer
applicationTrademarks
Others
Technology /
patents
Customer relationships
Computer
application
Others
Total
 
$ millions
$ millions$ millions$ millions$ millions$ millions$ millions$ millions$ millions
Cost
        
Balance as of January 1, 2021
341
218
92
93
172
118
73
1,107
Additions in respect of business combinations
210
0
1
2
39
0
0
252
Additions
0
0
0
6
1
19
1
27
Translation differences
(29)
(3)
(5)
(4)
(9)
(13)
(4)
(67)
Balance as of December 31, 2021
522
215
88
97
203
124
70
1,319
Amortization
        
Balance as of January 1, 2021
21
74
34
55
123
76
54
437
Amortization for the year
0
6
3
5
12
7
3
36
Translation differences
(1)
0
(3)
(2)
(4)
(9)
(2)
(21)
Balance as of December 31, 2021
20
80
34
58
131
74
55
452
         
Amortized Balance as of December 31 ,2021
502
135
54
39
72
50
15
867

Cost         
Balance as at January 1, 2017 398 205 86 80 214 35 65 76 1,159
Additions--- 3- 1 10 3 17
Discontinuance of consolidation (55)------- (55)
Translation differences 16 11 7 7 16 3 2 1 63
Reclassification to assets held for sale (11)- (2) (10) (47)- (1) (46) (117)
          
Balance as at December 31, 2017 348 216 91 80 183 39 76 34 1,067
          
Amortization and impairment losses         
Balance as at January 1, 2017 21 57 19 34 88 9 57 50 335
Amortization for the year- 6 3 5 12 1 3 5 35
Impairment-- 1-- 14-- 15
Translation differences 1- 1 3 5 1 2 1 14
Reclassification to assets held for sale--- (7) (11)- (1) (35) (54)
        - 
Balance as at December 31, 2017 22 63 24 35 94 25 61 21 345
          
Amortized Balance as at December 31 ,2017 326 153 67 45 89 14 15 13 722



F - 55ICL Group LimitedConsolidated Financial Statements47

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1211 - Intangible Assets (cont'd)

A.
Composition (cont'd)
B. Total book value of intangible assets having defined useful lives and those having indefinite useful lives are as follows:
Goodwill
Concessions and mining rights
Trademarks
Technology /
patents
Customer
relationships
Computer
application
Others
Total
$ millions

 As at December 31
 20182017
 $ millions$ millions

Cost
 
 
 
 
 
 
 
 
Balance as of January 1, 2020
323
209
86
84
176
99
69
1,046

Additions in respect of business combinations

18
0
0
7
1
0
0
26

Additions

0
0
0
1
0
18
2
21

Exit from consolidation

0
0
0
(5)
(10)
0
0
(15)
Translation differences
0
9
6
6
5
1
2
29
Balance as of December 31, 2020
341
218
92
93
172
118
73
1,107
Amortization and impairment losses
 
 
 
 
 
 
 
 
Balance as of January 1, 2020
21
70
28
49
114
68
44
394
Amortization
0
2
3
5
9
7
2
28

Impairment

0
0
0
0
0
0
5
5

Exit from consolidation

0
0
0
(2)
(3)
0
0
(5)
Translation differences
0
2
3
3
3
1
3
15
Balance as of December 31, 2020
21
74
34
55
123
76
54
437
 
 
 
 
 
 
 
 
 
Amortized Balance as of December 31 ,2020
320
144
58
38
49
42
19
670
Intangible assets having a defined useful life 332 365
Intangible assets having an indefinite useful life 339 357
  671 722

 
ICL Group LimitedConsolidated Financial Statements48

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 1311 - Intangible Assets (cont'd)
B.Total book value of intangible assets having defined useful lives and those having indefinite useful lives are as follows:
 
As of December 31
 
2021
2020
 
$ millions
$ millions
Intangible assets having a defined useful life
333
317
Intangible assets having an indefinite useful life
534
353
 
867
670

Note 12 - Impairment Testing

Impairment testing for intangible assets with an indefinite useful life
 
A.
Impairment testing for intangible assets with an indefinite useful life
Goodwill -
The goodwill is not monitored for internal reporting purposes and, accordingly, it is allocated to the Company’s operating segments and not to the cash-generating units, the level of which is lower than the operating segment.segment, as long as the acquired unit is presented in the Company’s reportable segments. The examination of impairment inof the carrying amount of the goodwill is made accordingly.
 
Trademarks - For impairment testing purpose, the trademarks with indefinite useful life were allocated to the cash-generating units, which represent the lowest level within the Company.
 
The carrying amounts of intangible assets with an indefinite useful life are as follows:
 
As of December 31
 
2021
2020
 
$ millions
$ millions
Goodwill
  
Phosphate Solutions
 114
 116
Industrial Products
 91
 94
Innovative Ag. Solutions*
 260
 73
Potash
 19
 19
Other
18
18
 
502
320
   
Trademarks
32
33
   
 
534
353

 
 As at December 31
 20182017
 $ millions$ millions

*      The increase is mainly from the acquisitions of Fertiláqua and ADS businesses. For further information, see Note 8B.


Goodwill  
Phosphate Solutions 127 140
Industrial Products 92 93
Innovative Ag. Solutions 71 73
Potash 19 20
  309 326
   
Trademarks  
Industrial Products, United States 13 13
Phosphate Solutions, United States 12 12
Industrial Products, Europe 5 6
  3031
  339 357


F - 56
ICL Group LimitedConsolidated Financial Statements49

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1312 - Impairment Testing (cont’d)(cont'd)

Impairment testing for intangible assets with an indefinite useful life (cont’d)
A.
Impairment testing for intangible assets with an indefinite useful life (cont'd)
 
As a resultThe Company conducted its annual impairment test of a structural change, which entered into effect on August 31, 2018, (see Note 5)goodwill during the Company is operating through four business segmentsthird quarter and consequently, goodwill has been reallocated to the new segments. The comparative Goodwill amounts have been restated to reflect this change.
In preparation of the goodwill impairment testing, the after‑tax discount rate used for the calculation of the recoverable amount of the operating segments is 9.5% nominal. The long‑term growth rate is between 0% and 2%, in industries and markets in which the Company is engaged.
did not identify any impairment. The recoverable amount of the operating segments was determined based on their value in use, which is an internal valuation of the discounted future cash flows that will be generated from the continuing operationoperations of the operating segments. 
The examinations determined thatfuture cash flow of each operating segment was based on the carrying amount ofsegment approved five-year plan, which includes the segment estimations for revenues, operating income and other factors, such as working capital and capital expenditures. The segments’ projections were based, among other things, on the assumed sales volume growth rates based on long-term expectations, internal selling prices and raw materials prices based on external data sources, when applicable and relevant.  
The key assumptions used to calculate the operating segmentssegments’ recoverable amounts are the nominal after‑tax discount rate of 8% and the long‑term growth rate of 2%, reflecting the industries and markets the Company is lower than their recoverable amount and, accordingly, no impairment loss was recognized.
Note 14 - Derivative Instruments

As at December 31, 2018As at December 31, 2017
AssetsLiabilitiesAssetsLiabilities
$ millions$ millions
involved in. 
     
Included in current assets and liabilities:    
Foreign currency and interest derivative instruments 13 (16) 1 (3)
Derivative instruments on energy and marine transport- (5) 4-
     
  13 (21) 5 (3)
     
Included in non-current assets and liabilities:    
Foreign currency and interest derivative instruments 15- 64 (3)


F - 57

Notes to the ICL Group LimitedConsolidated Financial Statements as at December 31, 2018
Note 15 - Credit from Banks and Others
A.Composition
 As at December 31
 20182017
 $ millions$ millions

Short-term credit  
     
From financial institutions 544 635
From the parent company- 175
  544 810
Current maturities  
Long-term loans from financial institutions 32 12
Long-term loans from others 34-
Total Short-Term Credit 610 822
   
Long- term debt and debentures  
Loans from financial institutions 377 786
Other loans 35 98
  412 884
 Less – current maturities 66 12
  346 872
   
Marketable debentures 1,195 1,241
Non-marketable debentures 274 275
   
Total Long- term debt and debentures 1,815 2,388
50

For additional information, see Note 23.
B. Yearly movement in Credit from Banks and Others*
 As at December 31
 20182017
 $ millions$ millions

Balance as at January 1 3,227 3,399
   
Changes from financing cash flows  
Receipt of long-term debt 1,746 966
Repayment of long-term debt (2,115) (1,387)
Repayment of short-term credit, net of receipt (283) 147
Interest paid (103) (111)
Total net financing cash flows (755) (385)
   
Effect of changes in foreign exchange rates (63) 101
Other changes 33 112
   
Balance as at December 31 2,442 3,227
(*) Short term credit, loans and debentures, including interest payables.
F - 58

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1513 - Credit from Banks and Others (cont’d)

C. Maturity periods
 
A.
Composition
Following are the future maturity periods of the credit and the loans from banks and others, including debentures (net of current maturities):
 
 As at December 31
 20182017
 $ millions$ millions

   
Second year 17 261
Third year 273 18
Fourth year 113 213
Fifth year 308 644
Sixth year and thereafter 1,104 1,252
  1,815 2,388

For additional information, see Note 15F below.
D. Restrictions on the Group relating to the receipt of credit
As part of the loan agreements the Group has signed, various restrictions apply including financial covenants, a cross‑default mechanism and a negative pledge.
Set forth below is information regarding the financial covenants applicable to the Company as part of the loan agreements and the compliance therewith:
Financial Covenants (1)Financial Ratio Required under the AgreementFinancial Ratio
As of December 31
2018
2021
2020
$ millions
$ millions
 
Short-term debt
From financial institutions
327
296
Current maturities of:
Debentures
131
206
Long-term loans from financial institutions
56
90
Lease Liability
63
64
Long-term loans from others
0
23
250
383
Total shareholder's equityShort-Term debt
Equity greater than 2,000 million dollars
577
3,781 million dollars
679
Long- term debt and debentures
Long term lease liability
299
325
Loans from financial institutions
679
194
Other loans
0
24
978
543
   
The Ratio of the EBITDA to the net interest expenses
Marketable debentures
Equal to or greater than 3.5
1,517
11.17
1,618
Non-marketable debentures
191
275
1,708
1,893
2,686
2,436
Less – current maturities of:
Debentures
131
206
Long-term loans from financial institutions
56
90
Lease liability
63
64
Long-term loans from others
0
23
250
383
   
Ratio of the net financial
Total Long- term debt to EBITDA (2)and debentures
Less than 4.0
2,436
1.62
Ratio of certain subsidiaries loans to the total assets of the consolidated companyLess than 10%1.87%
2,053

 
(1)Examination of compliance with the above‑mentioned financial covenants is made as required based on the Company's consolidated financial statements. As at December 31, 2018, the Company complies with its financial covenants.
For further information, see Note 21.
 
(2)
According to the Company’s covenants, the required ratio of the net financial debt to EBITDA as of January 1, 2019 will be reduced to 3.5.
F - 59ICL Group LimitedConsolidated Financial Statements51

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 1513 - Credit from Banks and Others (cont'd)

E. Sale of receivables under securitization transaction
 
B.
Yearly movement in Credit from Banks and Others (*)
As of December 31
2021
2020
$ millions
$ millions
Balance as of January 1
2,660
2,559
Changes from financing cash flows

Additions in respect of business combination

171
0
Receipt of long-term debts
1,230
1,175
Repayment of long-term debt
(1,120)
(1,133)
Repayment of short-term credit
(58)
(52)
Interest paid
(112)
(109)
Receipt (payments) from transaction in derivatives
(17)
24
Total net financing cash flows
94
(95)
Initial recognition of lease liability
37
80
Interest expenses
126
120
Effect of changes in foreign exchange rates
(21)
84
Change in fair value of derivatives
(24)
(53)
Other changes
42
(35)
Balance as of December 31
2,914
2,660

(*) The balance includes Short-term debt, derivatives on loans and debentures, loans and debentures and interest payables.
ICL Group LimitedConsolidated Financial Statements52

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 13 - Credit from Banks and Others (cont'd)
C.
Sale of receivables under securitization transaction
In 2015,September 2020, the Company and certain Group subsidiaries (hereinafter – the Subsidiaries) signed a series of agreements regarding a securitization transaction with three international banks (hereinafter – the Lending Banks) for the sale of their trade receivables to a foreignspecial company which was established specifically for this purpose and which is not owned by the ICL Group (hereinafter – the Acquiring Company).
 
ThoseThe new securitization agreements were signed with a committed amount of $300 million and an additional uncommitted amount of $100 million, maturing in September 2025 (hereinafter – the Agreements). These Agreements replace the prior securitization agreements, which came to an endexpired in July 2015.September 2020. The main structure and terms of the new securitization agreement is the same asAgreements are very similar to the prior securitization agreement.
The Company'sCompany’s policy is to utilize the securitization limit based on its cash flow needs, alternative financing sources and market conditions. The new securitization agreement will expire in July 2020. UnderAccording to the agreements, ICLAgreements, the Company undertook to comply with a financial covenant wherebyaccording to which the ratio of net debt to EBITDA will not exceed 4.75. If ICLthe Company does not meet with this ratio, the Acquiring Company can discontinue acquiring new trade receivables (without affecting the existing acquisitions). As at the date of the report, ICL meetreporting date, the Company complies with the above financial covenant.
 
The Acquiring Company finances acquisition of the debts by means ofthrough a loan received from a financial institution whichthat is not related to ICL. As at December 31, 2018,affiliated with the amount of the securitization framework is $350 million.
Company. The period induring which the Subsidiaries are entitled to sell their trade receivables to the Acquiring Company is five years from the closing date of the transaction, where both parties have the option, at the end of each year, to give notice of cancellation ofnotify for the transaction.transaction’s cancellation. Once the Company has transferred its trade receivables, it no longer has the right to sell them to another party. The selling price of the trade receivables is the amount of the debt sold, less the calculated interest cost based on the anticipatedexpected period between the sale date of the customer debt and its repayment date. Upon acquisition of the debt, the Acquiring Company pays mostpart of the debt price in cash and the remainder in a subordinated note, which is paid after collection of the debt sold. The rate of the cash consideration varies according todepending on the composition and behavior of the customer portfolio. The Subsidiaries continue to handle the collection of the trade receivables included in the securitization transaction, on behalf of the Acquiring Company. In the case of a credit default, the Company bears approximately 30% of the overall secured trade receivable balance.
 
In addition, as part of the agreementsAgreements set several conditions were set in connection withregarding the quality of the customer portfolios, which give the Lending Banks the option to endof terminating the undertaking or determine that some ofexcluding the Subsidiaries, thesubsidiaries whose customer portfolios of which do not meet the provided conditions provided, will no longer be includedfrom the Agreements.
The trade receivables are fully presented in the securitization agreements.
F - 60

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 15 - Credit from Banks and Others (cont'd)

E. Sale of receivables under securitization transaction (cont’d)
Based on the above terms, the securitization of trade receivables does not meet the conditions for derecognitionCompany’s statements of financial assets prescribed in International Standard IFRS 9, regarding Financial Instruments – Recognitionposition and Measurement, since the Group did not transfer all the risks and rewards deriving from the trade receivables. Therefore, the receipts received from the Acquiring Company are presented as a financial liability as part of theunder short-term credit. As of December 31, 2018,2021, utilization of the securitization facility and trade receivables within this framework amounted to $ 332$180 million (December 31, 20172020 - $331$183 million).
 
The value of the transferred assets (which is approximately their fair value), fair value of the associated liabilities and net position are as follows:
 Year ended December 31,
 201820172016
 $ millions$ millions$ millions

Carrying amount of the transferred assets 332 331 331
Fair value of the associated liabilities 332 331 331
Net position *---
ICL Group LimitedConsolidated Financial Statements53

 * Less than $1 million.
F - 61

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 1513 - Credit from Banks and Others (cont'd)

F. Information on material loans and debentures outstanding as at December 31, 2018:

Instrument typeLoan dateOriginal principal (millions)Currency
Carrying amount
($ millions)
Interest ratePrincipal repayment dateAdditional information
Loan-Israeli institutionsNovember 2013300Israeli Shekel674.74% (1)
2015-2024
(annual installment)
Partially prepaid
Debentures (private offering) – 3 seriesJanuary 2014
84
145
46
U.S Dollar
84
144
46
4.55%
5.16%
5.31%
January 2021
January 2024
January 2026
 
Loan-international institutionsJuly 201427Euro252.33%2019-2024Partially prepaid
Debentures - Series DDecember 2014800U.S Dollar1824.50%December 2024(2)
Loan - European BankDecember 2014161Brazilian Real19CDI+1.35%
2015-2021
(Semiannual installment)
 
Debentures - Series EApril 20161,569Israeli Shekel4162.45%
2021- 2024
(annual installment)
 
Loan - othersApril - October, 2016600Chinese Yuan Renminbi295.23%2019(3)
Loan - Asian BanksJune - October, 2018600Chinese Yuan Renminbi874.79% - 5.44%2019 
Loan - Asian BankApril 2018400Chinese Yuan Renminbi58CNH Hibor + 0.50%2019 
Debentures - Series FMay 2018600U.S Dollar5966.38%May 2038(4)
Loan - European BankDecember 201870U.S Dollar70Libor + 0.66%December 2021 
 
D.
Information on material loans and debentures outstanding as of December 31, 2021:
Instrument type
Loan date
Original principal
(millions)
Currency
Carrying amount
($ millions)
Interest rate
Principal repayment date
Additional information
Debentures - Series F
May 2018, December 2020
693
U.S. Dollar
715
6.38%
May 2038
(4), (5)
Debentures - Series E
April 2016
1,569
Israeli Shekel
378
2.45%
2021- 2024
(annual installment)
Partially repaid (1), (4)
Debentures (private offering) – 3 series
January 2014
275
U.S. Dollar
145
46
5.16%
5.31%
January 2024
January 2026
(1)
Debentures - Series G
January/May 2020
766
Israeli Shekel
241
2.40%
2022- 2034
(annual installment)
(4)
Debentures - Series D
December 2014
184
U.S. Dollar
183
4.50%
December 2024
(4), (5)
SLL
September 2021
250
Euro
282
0.80%
September 2026
(2)
Loan - European Bank
September 2021
25
Euro
28
0.95%
June 2025
(3)
Loan-Israeli institutions
November 2013
300
Israeli Shekel
56
4.74%
2015-2024
(annual installment)
Partially repaid
Loan - Asian Bank
May 2020, May 2021
151
Chinese Yuan
20
4.25%-4.95%
December 2020 - May 2023
March 2021-March 2024
Partially repaid
September 2020, March 2021
380
56
4.25%-4.40%
Loan - Brazilian Bank
December 2014-January 2021
350
Brazilian Real
47
4%-8%
January 2015-June 2025
Partially repaid
F - 62

Notes to the ICL Group LimitedConsolidated Financial Statements as at December 31, 2018
Note 15 - Credit from Banks and Others (cont'd)

F. Information on material loans and debentures: (cont’d)
Additional Information:
(1)From April 2018, in accordance with the loan agreement, there has been a decrease in the interest rate, from 4.94% to 4.74%.
(2)Debentures Series D
Private issuance of debentures pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933, as amended, to institutional investors in the U.S., Europe, and Israel. The notes are registered for trade in the TACT Institutional; by the Tel-Aviv Stock Exchange Ltd. The notes have been rated BBB (stable). In March 2017, the rating company “Fitch Rating Ltd.” lowered the Company’s credit rating, together with the rating of the debentures, from BBB to BBB- with a stable rating outlook. In November 2017, the rating company “Standard & Poor’s” reaffirmed the Company’s credit rating, together with the rating of the debentures, at BBB-, with a stable rating outlook. On May 29, 2018, the Company completed a cash tender offer for its Series D debentures. Following the tender offer, the Company repurchased an amount of $616 million out of the original principal amount of $800 million.
On May 10, 2018 and on June 21, 2018, respectively, the credit rating agency S&P ratified the Company’s international credit rating, BBB- with a stable rating outlook, and credit rating agency Maalot ratified the Company’s credit rating, ‘ilAA’ with a stable rating outlook.
(3)Loans from others
In July 2018, ICL and YTH agreed to convert their owner’s loans in the YPH joint venture (each company holds 50%) in the amount of $146 million into equity by issuing shares. As a result, the consolidated debt was reduced by $73 million against “non‑controlling interest” equity balance.
(4)Debentures-Series F
On May 31, 2018, the Company completed a private offering of senior unsecured notes to institutional investors pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933. According to the terms of the Series F Debentures, the Company is required to comply with certain covenants, including restrictions on sale and lease-back transactions, limitations on liens, and standard restrictions on merger and/or transfer of assets. The Company is also required to offer to repurchase the Series F Debentures upon the occurrence of a "change of control" event, as defined in the indenture for the Series F Debentures. In addition, the terms of the Series F Debentures include customary events of default, including a cross‑acceleration to other material indebtedness. The Company is entitled to optionally repay the outstanding Series F Debentures at any time prior to the final repayment date, under certain terms, subject to payment of an agreed early repayment premium. The Series F Debentures have been rated BBB- by S&P Global Inc. and Fitch Rating Inc. with a stable rating outlook.
F - 6354

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 15 - Credit from Banks and Others (cont'd)

G. Credit facilities:

IssuerEuropean bank (1)Group of twelve international banks (2)European bank (3)
Date of the credit facilityMarch 2014March 2015December 2016
Date of credit facility terminationMarch 2019March 2023May 2025
The amount of the credit facility
USD 35 million
Euro 100 million
USD 1,200 millionUSD 100 million
Credit facility has been utilizedEuro 40 millionUSD 200 millionUSD 70 million
Interest rate
Up to 33% use of the credit: Libor/Euribor + 0.90%.
From 33% to 66% use of the credit: Libor/Euribor + 1.15%
66% or more use of the credit: Libor/Euribor + 1.40%
Up to 33% use of the credit: Libor/Euribor + 0.70%.
From 33% to 66% use of the credit: Libor/Euribor + 0.80%
66% or more use of the credit: Libor/Euribor + 0.95%
Libor + 0.45% + spread
Loan currency typeUSD and Euro loansUSD and Euro loansUSD loans
Pledges and restrictionsFinancial covenants - see Section D, a cross-default mechanism and a negative pledge.Financial covenants - see Section D, a cross-default mechanism and a negative pledge.Financial covenants - see Section D and a negative pledge.
Non-utilization fee0.32%0.21%0.30%
(1)After the date of the report, the Company elected not to realize the option of revolving credit facility extension, and to repay the utilized credit facility on the date of its termination.
(2)In October 2018, the Company entered into an agreement according to which, its commitment under certain revolving credit facility agreements will be reduced by a total aggregate amount of $655 million, to an amount of $1.2 billion.
(3)In June 2018, the maturity date of the credit facility was extended to 2025. In November 2018, the credit facility was reduced from $136 million to $100 million. As at the date of the report, the Company utilized $70 million of that credit facility.
F - 64

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 1513 - Credit from Banks and Others (cont'd)

D.
Information on material loans and debentures outstanding as of December 31, 2021: (cont'd)
H. Pledges
Additional Information:

(1)In January 2021, the Company repaid $84 million of a private placement bond as scheduled. In March 2021, the Company repaid NIS 392 million (about $118 million) of Series E debentures, out of the total NIS 1,569 million (about. $487 million), as scheduled. In December 2021 the Company repaid an amount of $ 69.4 million in accordance with the agreement of loan with European Bank.
(2)

In September 2021, the Company entered into a new sustainability linked loan (SLL) agreement in the amount of €250 million, with a five-year term through 2026 and a fixed annual interest rate of 0.8%. The loan was entered into with a group of five leading global lenders.

The loan is an innovative step forward in the Company’s ongoing sustainability efforts and includes three sustainability performance targets: (1) an annual 4% to 5% reduction in direct and indirect Scope 1 and Scope 2 CO2e emissions resulting from ICL global operations. (2) Through 2025, the Company is committed to adding a significant number of Tfs (Together for Sustainability) qualified vendors each year who meet criteria of management, environment, health and safety, labor and human rights, ethics, and governance and (3) for women to hold at least 25% of senior management roles, by the end of 2024.

(3)

In September 2021, ICL Iberia signed a new loan agreement in the amount of €25 million with a 45-month term through 2025 and a fixed annual interest rate of 0.95%.

(4)

On June 23, 2021, the credit rating agency S&P reaffirmed the Company’s international credit rating and senior unsecured rating 'BBB-’. In addition, the credit rating agency S&P Ma’alot reaffirmed the Company’s credit rating 'ilAA’ with a stable rating outlook. As of December 31, 2021, the Company is in compliance with all its financial covenants set forth in its financing agreements. For more details see note 13F.

(5)

On June 21, 2021, the credit rating agency Fitch Ratings reaffirmed the Company’s long-term issuer default rating and senior unsecured rating at 'BBB-’. The outlook on the long-term Issuer default rating is stable.

ICL Group LimitedConsolidated Financial Statements55

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 13 - Credit from Banks and Restrictions Placed in RespectOthers (cont'd)
E.
Credit facilities:
Issuer
Group of international banks (1)
European bank
Brazilian bank (2)
Date of the credit facility
March 2015
December 2016
March 2021
Date of credit facility termination
March 2025
May 2024
March 2023
The amount of the credit facility
USD 1,200 million
USD 30 million
BRL 230 million
Credit facility has been utilized
Euro 150 million
USD 30 million
BRL 180 million
Interest rate
Up to 33% use of the credit: Libor/Euribor + 0.70%. From 33% to 66% use of the credit: Libor/Euribor + 0.80% 66% or more use of the credit: Libor/Euribor + 0.95%
30 million dollar-Libor + 0.80%
CDI + 0.95%
Loan currency type
USD and Euro loans
USD loans
BRL loans
Pledges and restrictions
Financial covenants - see Section D, a cross-default mechanism and a negative pledge.
Financial covenants - see Section D and a negative pledge.
-
Non-utilization fee
0.21%
0
0

(1)
In October 2021, an additional bank joined the credit facility agreement, increasing the revolving credit facility by an additional $100 million, leading to a total amount of $1.2 billion. Most banks signed on to continue the credit facility agreement and from March 2023 to March 2025, the total credit facility will amount to $1 billion. As of December 31, 2021, the Company had utilized approximately $170 million of the facility’s framework.

(2)
In March 2021, the Company signed a framework credit facility agreement with MUFG Bank for a period of two years, according to which the Company can withdraw up to BRL 230 million (about $42 million). As of December 31, 2021, the Company has withdrawn BRL 180 million (about $32 million), with a maturity date of March 2023.

ICL Group LimitedConsolidated Financial Statements56

Notes to the Consolidated Financial Statements as of LiabilitiesDecember 31, 2021
Note 13 - Credit from Banks and Others (cont'd)

F.
Restrictions on the Group relating to the receipt of credit
As part of the loan’s agreements the Company has signed, various restrictions apply including sustainability performance targets and financial covenants, a cross‑default mechanism and a negative pledge.
Set forth below is information regarding the financial covenants applicable to the Company as part of the loan agreements and the compliance therewith.
Financial Covenants:
Financial Covenants (1)
Financial Ratio Required
under the Agreement
Financial Ratio
December 31, 2021
Total shareholder’s equity
Equity greater than $2,000 million
$4,527 million
Ratio of EBITDA to the net interest expenses
Equal to or greater than 3.5
14.98
Ratio of the net financial debt to EBITDA
Less than 3.5
1.38
Ratio of certain subsidiaries loans to the total assets of the consolidated company
Less than 10%
4.51%

(1)

The examination of compliance with the financial covenants is based on the Company’s consolidated financial statements. As of December 31, 2021, the Company complies with all of its financial covenants.

 
 1)G.
Pledges and Restrictions Placed in Respect of Liabilities
(1)
The GroupCompany has undertaken various obligations in respect of loans and credit receivedlines from non‑Israeli banks, including a negative pledge, whereby the Group,Company committed, among other things, in favor of the lenders, to limit guarantees and indemnities to third parties (other than the guarantees in respect toof subsidiaries) up to an agreed amount forof $550 million. The GroupCompany has also undertakencommitted to grant loans only to subsidiaries and to associated companies, in which it holds at least 25% of the voting rights – not more than stipulated by the agreement with the banks. ICLrights. The Company has further committed not to grant any credit, other than in the ordinary course of business, and not to register any charges including rights of lien, except those defined in the agreement as “liens permitted to be registered” on its existing and future assets and income. For further information regarding to the covenants in respect of these loans see item D above.
2)In the third quarter of 2018, YPH JV entered into loan agreements in the total amount of RMB 500 million ($74 million) with the Bank of China. Since the partner (YTH) provided the bank with a full guarantee against the said loan, the Company pledged a portion of its shares in YPH JV (22%), which represents its part of the debt to YTH (RMB 250 million). The pledge agreement does not include restrictions on, among others, management of YPH JV's operations. The realization of the pledge will take place only if the guarantee is forfeited. For further information relating to loan for Bank of China,and credit lines, see item F above.
 
 3)(2)
As atof December 31, 20182021, the total guarantees provided by the Company provided were about $79 million.in the amount of $93 million (December 31, 2020 - $92 million).
 
Note 16 – Other Current Liabilities

 As at December 31
 20182017
 $ millions$ millions

   
Employees 284269
Accrued expenses 8583
Governmental (mainly in respect of royalties) (1) 6167
Current tax liabilities 11288
Others 10588
   
  647595
ICL Group LimitedConsolidated Financial Statements57

(1)See Note 20.
F - 65

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 1714 – Other Payables
 
As of December 31
 
2021
2020
 
$ millions
$ millions
Employees
 414
 322
Current tax liabilities
 183
 87
Governmental (mainly in respect of royalties)
 103
 75
Accrued expenses
 75
 76
Income received in advance
 33
 17
Derivative designated as an economic hedge
 3
 43
Others
 101
 84
 
 912
704

Note 15 - Taxes on Income

A.
A.
Taxation of companies in Israel
The current and deferred taxes expenses of Israeli entities are booked under the applicable tax rates below:
1.
Income tax rate
The Israeli statutory primary income tax rate is 23%.
2.
Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (hereinafter – the Encouragement Law)
a) Beneficiary Enterprises
 
1. Income tax rates
Presented hereunder are the tax rates relevant to the Company in the years 2016–2018 and after:
2016 – 25%
2017 – 24%
2018 and after 23%
On December 22, 2016 the Israeli Knesset plenary passed the Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for 2017 and 2018), 2016, which provides, among other things, for a reduction of the Companies Tax rate from 25% to 23% in two steps – the first step to the rate of 24% commencing from 2017 and the second step to the rate of 23% commencing from 2018 and thereafter, along with reduction of the tax rate applicable to “Preferred Enterprises” (see A.2.b below) regarding factories in the peripheral suburban areas, from 9% to 7.5%, as part of amendment of the Law for Encouragement of Capital Investments.
The current taxes for the periods reported are calculated in accordance with the tax rates shown above.
2. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (hereinafter – the Encouragement Law)
a) Beneficiary Enterprises
The production facilities of some of the Company’s subsidiaries in Israel (hereinafter – the Subsidiaries) have received “Beneficiary Enterprise” status under the Encouragement law as worded after Amendment No. 60 to the Law was published in April 2005.
The main benefit granted to the companySubsidiaries is mainlya preferred tax rate.

Under the “Ireland” track, the Company paid a reduced tax rate of 11.5% as of 2008 on parts of its income. The benefit deriving from the "Ireland" track ended in 2017, excludinga single entity in Israel for which the entitlement ended in 2021.

The part of taxable income entitled to benefits at reduced tax rates.

rates is calculated based on the ratio of the “Beneficiary Enterprise”turnover to a company’s total turnover. The Company chose 2005 asturnover attributed to the “Beneficiary Enterprise” is generally calculated according to the increase in the turnover compared to a “base” turnover, which is the average turnover in the three years prior to the election year of a "tax exemption" track. The benefits deriving from this track ended in 2014. Within those years the Company benefited from reduced tax rates as well as in some cases full tax exemption.
“Beneficiary Enterprise”.

A company having a “Beneficiary Enterprise” that distributes a dividend out of exempt income, will be subject to companiescorporate tax in the year in which the dividend was distributed on the amount distributed (including the amount of the companiescorporate tax applicable amount due to the distribution) at the tax rate applicable under the Encouragement Law in the year in which the income was produced,generated, had it not been exempt from tax.

As at December 31, 2018, the temporary difference related to distribution of a dividend from exempt income, in respect of which deferred taxes were not recognized, is in the amount of about $650 million of distributable amount and about $162 million of derived taxes.

F - 66
ICL Group LimitedConsolidated Financial Statements58

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1715 - Taxes on Income (cont’d)

A. Taxation of companies in Israel (cont’d)(cont'd)
 
A.
Taxation of companies in Israel (cont'd)
2.
2.Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (cont'd)
a)     Beneficiary Enterprise (cont'd)

On November 15, 2021, the Israeli Economic Efficiency Law for the years 2021 and 2022 was published, which consists of numerous legislative amendments and arrangements, including an amendment to Section 74 of the Encouragement Law, which deals with the identification of Capital Investments, 1959 (cont’d)

a) Beneficiary Enterprises (cont’d)
Under the “Ireland” track, the company paid reduced tax ratesources of 11.5%dividend distributions as of 2008 on parts of its income. August 15, 2021 (hereinafter - the amendment).

The benefit derivingamendment stipulates that in any dividend distribution from the "Ireland" track ended in 2017.

Thecompanies holding accumulated profits that were exempt from tax until their distribution as a dividend ("trapped earnings"), a certain part of the taxable incomedistribution will be considered a distribution of those trapped earnings, which will be fully taxed upon release.

In addition, a temporary provision to the Encouragement Law was published, which offers a reduced tax payment arrangement to companies that have trapped earnings. The temporary provision, which is valid until November 14, 2022, stipulates that companies that have chosen to apply it, will be entitled to benefitsa tax rebate on corporate income tax, for the released trapped earnings. The release of trapped earnings allows their distribution at reduceda beneficiary corporate tax rates is calculated based onrate according to the ratio of the turnover of the “Beneficiary Enterprise” to the Company’s total turnover. distributed profits.

The turnover attributed to the “Beneficiary Enterprise” is generally calculatedbeneficiary corporate tax will be determined according to the increaseratio of the trapped earnings that the company seeks to release from all its trapped earnings. It will range between 40% to 70% of the corporate tax rate that would have applied to income in the turnover comparedyear it was generated, but in any case, not less than 6%. Eligibility for the beneficiary corporate tax rate is conditional on a company's decision to a “base” turnover, which isrelease part or all of its trapped earnings and the average turnoverpayment of the tax due until November 14, 2022, as well as on making investments in the threecompanies' industrial plants over five years, priorin accordance with the formula set forth in the amendment.

Considering the above-mentioned amendment, the Company assessed its deferred tax liabilities with regards to the year of electionpossibility to release trapped earnings in its future dividend distributions. In December 2021, due to the Company's settlement agreement with the Israeli Tax Authorities, regarding tax assessments for the years 2015-2019, and as a result of the Beneficiary Enterprise”Company's decision to apply the said temporary provision, the Company recognized a tax provision for the release of trapped earnings in the total amount of $47 million. Accordingly, no additional tax provision is required in respect of the unreleased trapped earnings which as of December 31, 2021, amounted to about NIS 950 million ($305 million).

ICL Group LimitedConsolidated Financial Statements59

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 15 - Taxes on Income (cont'd)
A.Taxation of companies in Israel (cont'd)
2.Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (cont'd)
 
b)Preferred Enterprises
 
OnIn December 29, 2010, the Israeli Knesset approved the Economic Policy Law for 2011‑2012, whereby the Encouragement law, was amended (hereinafter – the Amendment). The Amendment is effective from January 1, 2011 and its provisions will apply to preferred income, derived or accrued by a Preferred Enterprise, as defined in the Amendment, in 2011 and thereafter.
 
The Amendment does not apply to an Industrial Enterprise that is a mine, or any other facility for production of minerals or a facility for exploration of fuel. Therefore, ICL plants that are defined as mining plants and mineral producers will not be able to take advantage of the tax rates included as part of the Amendment.
The tax rates applicable to Preferred Enterprises in Israel:
1)
Preferred Enterprises located in Development Area A – 7.5%.
2)
Preferred Enterprises located in the rest of the country – 16%.
In addition, on August 5, 2013, the Law for Change in the Order of National Priorities, 2013, was passed byNovember 2015, the Knesset which provides that the tax rate applicable to a Preferred Enterprise in Development Area A will be 9% whereas the tax applicable to companies in the rest of Israel will be 16%. Pursuant to the amendment to the Encouragement law that was approved as part ofpassed the Economic Efficiency Law, (Legislative Amendments for Achieving the Budget Targets for 2017 and 2018), 2016, the tax rate applicable to enterprises in the suburban areas was reduced from 9% to 7.5%. The Company has Preferred Enterprises at the tax rate of 7.5%.
F - 67

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 17 - Taxes on Income (cont’d)

A. Taxation of companies in Israel (cont’d)
2. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (cont’d)
b) Preferred Enterprises (cont’d)
On November 30, 2015, the Economic Efficiency Law was passed by the Knesset, which expanded the exception to all of the Enterprise’s activities up to the time of the first marketable product (for additional details – see Section 4 below). Nonetheless,However, tax benefits to which a Beneficiary Plant iswas entitled willwere not be cancelled in respect of investments made up to December 31, 2012. Therefore, thosesuch plants will beare able to utilize the tax benefits in respect of qualifyingsuch investments, made up to December 31, 2012, in accordance with the provisions of the old law.
 
It is further provided in the Amendment that tax will not apply to a dividend distributed out of preferred income to a shareholder that is an Israeli‑resident company. A dividend distributed out of preferred income to a shareholder that is an individual or a foreign resident is subject to tax at thea rate of 20%, unless a lower tax rate applies under a relevant treaty for prevention of double taxation.

ICL Group LimitedConsolidated Financial Statements60

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 15 - Taxes on Income (cont'd)
 
3. The Law for the Encouragement of Industry (Taxation), 1969
A.
Taxation of companies in Israel (cont'd)
 
a)3.
The Law for the Encouragement of Industry (Taxation), 1969
a)
Some of the Company’s Israeli subsidiaries are “Industrial Enterprise”, as defined in the above‑mentionedabovementioned law. In respect of buildings, machinery and equipment owned and used by any "Industrial Enterprise", the Company is entitled to claim accelerated depreciation as provided by the Income Tax Regulations – Adjustments for Inflation (Depreciation Rates), 1986 which allow accelerated depreciation to any "Industrial Enterprise" as of the tax year in which each asset is first placed in service.
 
b)
The Industrial Enterprises owned by some of the Company's Israeli subsidiaries have a common line of production or similar industrial branch activity and, therefore, they file, together with the Company, a consolidated tax return in accordance with Section 23 of the Law for the Encouragement of Industry. Accordingly, each of the said companies is entitled to offset its tax losses against the taxable income of the other companies.
4.
The Law for Taxation of Profits from Natural Resources
 
4. The Law for Taxation of Profits from Natural Resources
The Law for Taxation of Profits from Natural Resources (hereinafter – the Law), is effective since January 1, 2016. The government take on natural resources in Israel includes three elements: Royalties, Natural ResourcesCorporate Income Tax and Companies Income Tax.Surplus Profit Levy. The highlights of the Law are set forth below:
Royalties:
 
Royalties:
In accordance with the Mines Ordinance, the rate of the royalties, in connection with resources produced from the quarries, will be 5%. For production of phosphates, the royalty rate is 5% of the value of the quantity produced.

Imposition of Surplus Profit Levy:
 
Pursuant to the salt harvesting agreement signed with the Government in July 2012, the parties agreed, inter‑alia, to an increase in the rate of the royalties from 5% to 10% of the sales, for quantities of chloride potash DSW sells in excess of 1.5 million tonnes annually.
F - 68

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 17 - Taxes on Income (cont'd)

A. Taxation of companies in Israel (cont'd)
4. The Law for Taxation of Profits from Natural Resources (cont’d)
In addition, the salt harvesting agreement states that if legislation is enacted that changes the specific fiscal policy in connection with profits or royalties deriving from the mining of quarries from the Dead Sea, the Company's consent to the increase of the royalties' rate on the surplus quantities referred to above will not apply, after the enactment of the legislation, to the period in which such additional tax is collected as stated in the said legislation. In January 2016, the Law entered into effect and accordingly the rate of the royalties' provision was updated to 5%. For additional information - see Note 20C.
Imposition of Natural Resources Tax:
The Natural Resources TaxSurplus Profit Levy is applied for allthe bromine, phosphate and magnesium minerals from 2016 and for Potashpotash from 2017. The tax base, which will be calculated for every mineral separately, is the mineral’s operating income, in accordance with the accounting statement of income, to which certain adjustments will be made, less financing expenses atmade.
The taxable profit is based on the ratemineral operating income, as adjusted, after a deduction of 5% of the mineral’s averageyear end working capital, and less an amount that reflects a yield of 14% on the value of property, plant and equipment used for production and sale of the quarried material (hereinafter – the Yield on the Property, Plant and Equipment)Yield).
On the tax base, as stated, a progressive tax will be imposed at a rate to be determined based on the Yield on the Property, Plant and Equipment in that year. For thea Yield on the Property, Plant and Equipment between 14% and 20%, Natural Resources Tax will be imposed at the rate of 25%, while the yieldYield in excess of 20% will be subject to Natural Resources Tax at the rate of 42%. In years in which the Natural Resources Tax base is negative, the negative amount will be carried forward from year to year and will constitute a tax shield in the succeeding tax year. The above computations, including the right to use prior years’ losses, are made separately, without taking into accountconsidering setoffs, for each natural resource production and sale activity.
ICL Group LimitedConsolidated Financial Statements61

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 15 - Taxes on Income (cont'd)
A.
Taxation of companies in Israel (cont'd)
4.The Law for Taxation of Profits from Natural Resources (cont'd)
Imposition of Surplus Profit Levy: (cont'd)
 
Limitations on the Natural Resources Tax – the Natural Resources Tax will only apply to profits deriving from the actual production and sale of each of the following resources: potash, bromine, magnesium and phosphates, and not to the profits deriving from the downstream industrial activities. Calculation of the Natural Resources Tax will be made separately for every mineral.mineral mining concession. Nonetheless, regarding Magnesium,magnesium, it was provided that commencing from 2017, upon sale of carnaliteCarnalite by DSW to Magnesiummagnesium and reacquisition of a SylviniteSylvinite by‑product by DSW, Magnesiummagnesium will charge DSW $100 per tonne of potash, which is produced from the Sylvinite (linked to the CPI).
 
A mechanism was provided for determination of the market price, with respect to transactions in natural resources executed between related parties in Israel, as well as a mechanism for calculation of the manner for costs allocation of the expenses between the production and sale of the natural resource, on the one hand, and the downstream activities, on the other hand.
 
Regarding the bromine resource, the Natural Resources Tax will apply in the same manner in which it applies to the other natural resources, except with respect to the mannersale price of determining the transfer price in sales madebromine sold to related parties, in and outside of Israel.Israel, who use the bromine for bromine compounds manufacturing activities, shall be, in each tax year, the higher of:
 
1)
Actual price in the sale transaction.
F - 69

Notes to the Consolidated Financial Statements as at December 31, 2018
2)

 A price which will provide an operating profit for the bromine compounds manufacturer of 12% out of the revenue it generates from bromine compounds sales.

 
Note 17 - Taxes on Income (cont'd)

A. Taxation of companies in Israel (cont'd)
4. The Law for Taxation of Profits from Natural Resources (cont’d)
For purposes of calculating the total revenues from bromine sold to related parties for purposes of downstream manufacturing activities in every tax year, a calculation method will be employed (Netback) whereby the price will be determined based on the higher of the following:
1)The price for a unit of bromine (tonne) provided in the transaction;
2)The normative price of a unit of bromine. The normative price of a unit of bromine is the total sales of the downstream products produced less the operating expenses attributable to the downstream activities, without the acquisition cost of the bromine, and less an amount equal to 12% of the total revenues of the downstream products produced as part of the downstream activities, where the result is divided by the number of bromine units used to produce the downstream products sold.
Regarding the phosphate resource, for purposesthe sale price of calculating the total revenues from phosphate sold to related parties for purposes of downstream manufacturing activities shall be, in everyeach tax year, a calculation method will be employed (Netback) whereby the price will be determined based on the higher of the following:of:
 
1)The
Actual price for a unit of phosphate (tonne) provided in the transaction;sale transaction.
 
2)
The normativeA price of a unit of phosphate. The “normative price” of a unit of phosphate is the total sales ofwhich will keep an operating profit with the downstream products produced less the operating expenses attributable to the downstream activities, without the acquisition costmanufacturer of 12% out of the revenue it generates from downstream phosphate rock, and less an amount equal to 12%made of the total revenues of the downstream products produced as part of the downstream activities, where the result is divided by the number of phosphate units used to produce the downstream products sold.sales.
 
3)
The production and operating costs attributable to a unit of phosphate.
 
The Company took aan alternative tax filing position, according to which, all the Dead Sea minerals should be taxed as a unified mineral under the above-mentioned mechanism.mechanism as the natural resource that is used by the company is the Dead-Sea brine.

ICL Group LimitedConsolidated Financial Statements62

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 15 - Taxes on Income (cont'd)
 
Companies Tax:
A.Taxation of companies in Israel (cont'd)
4.The Law for Taxation of Profits from Natural Resources (cont'd)
 
Corporate income Tax:
The Law for Encouragement of Capital Investments was revised such that the definition of a “Plant for Production of Quarries” will include all the plant’s activities up to production of the first marketable natural resource of potash, bromine, magnesium and phosphates. Accordingly, activities involved with production of the resource will not be entitled to tax benefits under the Law, whereas activities relating to downstream products, such as bromine compounds, acids and fertilizers, will not constitute a base for calculatingbe entitled to tax benefits under the Excess Profits Tax and will not be exempted from inclusion in the Law.
 
The Natural Resource Tax will be deductible from the Company's taxable income and the Company will pay the CompaniesCorporate Tax on the balance as is customary in Israel.
 
F - 70

Notes

Amendment number 3 to the Consolidated Financial Statements as at December 31, 2018Law

In November 2021, Amendment number 3 to the Law was approved by the Israeli Kneset, according to which the arrangement of tax collection will be altered so that companies will be required to pay 75% of the disputed tax, after objecting to a tax assessment by appeal to the district court, and prior to a Court ruling. Prior to this amendment, the payment of the Surplus Profit Levy in dispute was not required until a Court ruling is rendered. This amendment may impact the collection of Surplus Profit Levy from the Company for the years 2016 and onwards.

 
Note 17 - Taxes on Income (cont'd)

B.
B.
Taxation of non-Israeli subsidiaries
 
Subsidiaries incorporated outside of Israel are assessed for tax under the tax laws in their countries of residence. The principal tax rates applicable to the major subsidiaries outside Israel are as follows:
 
CountryTax rateNote
Tax rate
Note
Brazil34% 
34%
 
Germany29% 
29%
 
United States26% (1)
26%
 (1)
Netherlands25% (3)
25%
 
Spain25% 
25%
 
China25% 
25%
 
United Kingdom19% (2)
19%
 

 
(1)
The tax rate aboveis an estimated average and includes federal and states tax. In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (hereinafter - the Tax Act). The Tax Act significantly revises the future ongoing U.S. federal corporate income tax by, among other things, lowering U.S. corporate income tax rates and implementing a territorial tax system. The lower corporate income tax rates are effective as of January 1, 2018. The Company examined the effects of the Tax Act's implementation and found that the main impact is the re‑measurement of the deferred tax assets and liabilities to incorporate the lower Federal corporate taxDifferent rate of 21% andmay apply in each specific year, as a result inof different allocation of income between the financial statements of 2017, the Company reduced the balances of the assets and liabilities for deferred taxes, in the net amount of $13 million.different states.
 
The Tax Act is comprehensive and complex and may lead to future interpretations regarding the manner of its implementation, which may impact the Company’s estimations and conclusions. The Company believes the tax expenses and liabilities in its financial statements are in accordance with the Tax Act and represent its best estimate.
(2)The tax rate in the UK was reduced to 19% effective from April 1, 2017 and 17% commencing from April 1, 2020.
(3)The tax rates in the Netherlands will be reduced, in stages, by the total of 4% by 2021, as follows: 1% in 2019, 1.5% in 2020 and 1.5% in 2021. In 2021, The tax rate will be 21%.
F - 71ICL Group LimitedConsolidated Financial Statements63

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1715 - Taxes on Income (cont'd)

C. Carried forward tax losses
 
C.
Carried forward tax losses

As atof December 31, 2018,2021, the balances of the carryforward tax losses of subsidiaries for which deferred taxes were recorded, is about $477$286 million (December 31, 20172020 – about $308$418 million).

As atof December 31, 2018,2021, the balances of the carryforward tax losses to future years of subsidiaries for which deferred taxes were not recorded, is about $322$338 million (December 31, 20172020 – about $322 million)$392 million).

As at of December 31, 2018,2021, the capital losses for tax purposes available for carryforward to future years for which deferred taxes were not recorded is about $134$161 million (December 31, 20172020 – about $159$163 million).

D.
Tax assessments
 
As at December 31, 2018, the capital losses for tax purposes available for carryforward to future years for which deferred taxes were recorded is to about $15 million (December 31, 2017 – about $16 million).
D. Tax assessments
1)
(1)
The Company and the main operational companies in Israel (DSW, Rotem, Bromine, DSM, BCL and F&C)BCL), along with most of the other companies in Israel, have received final tax assessments up to and including 2011.2019 (see items 2 and 3 below). Other companies in Israel received final tax assessments up to and including 2016. The main subsidiaries outside of Israel have final tax assessments up to and including 2011 and 20122015.
 
2)(2)
Israel - In December 2018,

Regarding the tax assessment for the years 2012‑2014 issued by the Israeli Tax Authorities (hereinafter - the ITA) rejected the company's objection relating to an assessment issued(ITA) to the Company and to certain Israeli subsidiaries, in September 2021, a judgment was given approving a settlement agreement between the Company and demanded an additional tax payment,the ITA, for the final and complete settlement of all claims, demands and arguments of the ITA against the Company in connection with such tax assessments. As a result, the Company paid $30 million, plus interest and linkage. The settlement had no material impact on the Company's Financial Statements.

Regarding the tax assessment for the year 2015 issued by the ITA, in December 2021, the Company reached an agreement with the ITA regarding the tax years 2012‑2014, in2015‑2019, pursuant to which the amountCompany will pay $105 million, plus interest and linkage. The agreement will constitute complete and final settlement of $73 million.all ITA's claims, demands and arguments against the Company for the said tax years. The Company disputessettlement had no material impact on the assessment and filed an appeal toCompany's Financial Statements. For the Jerusalem District Court. In the Company’s estimation, it is more likely than not that its claims will be accepted.release of trapped earnings see item A(2) above.

 
In addition, regarding tax assessment for the years 2010-2015 for Tetrabrom (one of the downstream production companies in Israel), in October 2018, the company reached an agreement with the ITA, which resulted in immaterial amounts.
3)
(3)

The company'sCompany's subsidiary in Belgium (hereinafter - ICL Belgium or the Company) recognized a notion deduction on its capital, based on its interpretation of the Belgian tax law, whichlaw. This position was validateddisputed by the Court of Appeals in Belgium. The tax authorities dispute the eligibility of the deduction by appealing toauthorities. In November 2021, the Supreme Court againstaccepted the Court of Appeals' resolution and issuingCompany's position, which finalized all tax assessments in a total amount of $27 million fordisputes with the years commencing 2010. The Company believes, it is more likely than not that itslocal tax position will also be accepted by the Supreme Court.authorities.

4)
Currently, the Company is also under tax audits in Spain and Germany for the years 2012‑2015. As at the date of the report, there are no additional tax payment requests from the tax authorities, excluding immaterial amounts in Germany. The Company believes that the provisions in its books are sufficient.
F - 72

ICL Group LimitedConsolidated Financial Statements64

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 1715 - Taxes on Income (cont'd)


E.
E.
Uncertain Tax Position
 
The measurement of the estimated Tax provisions as at December 31, 2018, requires judgment relatingrelated to certain tax positions, which may result in future demand for additional tax payments by the Tax authorities. A tax provision will beis recorded only when the Company estimates that the chances of its positionsposition to be accepted are lower than the chances theyit will be rejected. It is possible that the tax authorities will demand additional tax payments that are not known to the Company at this stage.
 
The Law for Taxation of Profits from Natural Resources in Israel (hereinafter – the Law) is a new law that entered into effect with respect to the bromine, phosphate and magnesium minerals in 2016, and with regard to the potash mineral, in 2017.
As at the date of the report,reporting date, no regulations under the Law have yet been issued under the Lawenacted (except for regulations regarding to advancedadvances on account of tax payments, regulations published in July 2018), no circulars have been published and no court decisions have been rendered as to the implementation of this Law. The manner of applicationnew Law that was imposed, to the best of the Law, including preparation of theCompany's knowledge, only on one other company. The financial statements of Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium (hereinafter – the Subsidiaries), serve as a basis for eachthe mineral based financial reports (hereinafter – Surplus Profit Reports) required to be filed for tax calculation under the Law. Such calculation involves interpretations and assumptions on a number of several significant matters, which require management’s judgment.
Based
The Company's position is that the Surplus Profit Levy should be calculated on the law's interpretation,Dead Sea Solution, which is the natural resource used by the Company, and not for each product produced from the Dead Sea Solution. Furthermore, based on the Company’s position is thatunderstanding of the law, the carrying amount of the property, plant and equipment, for the purpose of preparation of the Subsidiaries’ financial statements for 2016 and onward of the Subsidiaries, which serve as athe basis for the reports filed pursuant to the provisions of the Law,  can beSurplus Profit Reports, are presented on the basis of fair value revaluation,their replacement cost (as used assets), on the date the Law entersentered into effect. Presenting property, plant and equipment based on fair value revaluationReplacement cost is in accordance with one of the permitted methods inan accounting method according to International Financial Reporting Standards (IFRS), which apply toare the accepted accounting principles in Israel, applied by the Company and its SubsidiariesSubsidiaries. The presentation of property, plant and are accepted accounting principlesequipment in Israel. Therethe Subsidiaries' financial statements according to the aforesaid method, is no resulting changenot reflected in the Company's consolidated financial statements.
 
As part of the preparation of the Subsidiaries' financial statements, the Company received an opinion from an independent appraiser regarding the fair value of the property, plant and equipment, which was based on the Replacement Cost methodology (as used assets). According to the opinion, the fair value of the property, plant and equipment was estimated at about $6 billion, as of December 31, 2015, the date the Law entered into effect.
ICL Group LimitedConsolidated Financial Statements65

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 15 - Taxes on Income (cont'd)
E.
Uncertain Tax Position (cont'd)

Given the mineral's price environment, its effect on the profitability of the Subsidiaries and after deduction of a 14% allowed deductible on the balance of property, plant and equipment, as stated in the law and based on the replacement cost, as of December 31, 2021, no natural resources tax liability was payable. In respect of the phosphate resource, due to prior years' losses, no natural resources tax liability was payable.

The tax authority's Tax Authority's position could be materially different, even in very significant amounts, mainly, as a result of the different interpretation regarding the implementation of the Law, including regarding matters other thanwith respect to the measurementcarrying amount for natural resources tax purposes of the property, plantplant and equipment. If

Should the above-mentioned tax position is rejected byITA, and subsequently the Israel tax authority, meaningapplicable District Court, in case of an appeal, decides that the measurement of the property, plant and equipment, for this purpose, should have beenbe in accordance with depreciated historical values,cost, and fully rejectsthe Company's arguments with respect to this issue, the result wouldcan be an increase in the company'sCompany's tax liabilities in an aggregate amount of about $100 $237million (including interest and linkage and net of corporate income tax) for the years 2016-2018.

2016‑2021. The Company estimatesbelieves that it is more likely than not that its position will be accepted. As at

In March 2021, the dateITA issued an assessment for the years 2016‑2017, which includes a demand for payment of Surplus Profit Levy, in the report,amount of approximately $77 million, plus interest and linkage. The amount represents, in essence, the Company believes thatdifferent interpretation regarding the tax provision in its financial statements represents the best estimatemeasurement of the tax payment expected to be incurred with reference to the Law.

Given the mineral's price environment, its effect on the profitability of the subsidiaries and after deduction of a 14% return on the balance ofoperational property, plant and equipment, as stated in the law, as at December 31, 2018, no natural resources tax liability was payable.
equipment. The total royalties paid by the companyCompany submitted its objection to the Israeli government in 2018 amounted to $133 million (see Note 20).ITA. As of the reporting date, no decision has yet been made regarding the said objection.

 
F - 73
ICL Group LimitedConsolidated Financial Statements66

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 1715 - Taxes on Income (cont'd)

F. Deferred income taxes
 
F.
Deferred income taxes
1. The composition of the deferred taxes and the changes therein, are as follows:
1.
The composition of the deferred taxes and the changes therein, are as follows:
 
 
In respect of financial position
In respect
of carry forward tax losses
Total
 
Depreciable property,
plant and equipment and intangible assets
Inventories
Provisions for employee benefits
Other
 
$ millions

Balance as of January 1, 2020

 (421)
 32
 84
 19
 54
 (232)
Changes in 2020:
      
Amounts recorded in the statement of income
 (17)
 6
13
 (28)
 60
 34

Amounts recorded to a capital reserve

00(6)0

(3)

(9)

Translation differences

(1)
0
 3
2
4
 8
Balance as of December 31, 2020
(439)
38
94
(7)
115
(199)

Changes in 2021:

      

Additions in respect of business combinations

0
1
1
9
2
13
Amounts recorded in the statement of income
 16
 0
 2
 (14)
 (24)
 (20)
Amounts recorded to a capital reserve
0
0
(22)
(1)
0
(23)
Translation differences
2
0
 (2)
 (3)
 (5)
 (8)
Balance as of December 31, 2021
 (421)
 39
 73
 (16)
 88
 (237)


2.
The currencies in which the deferred taxes are denominated:
Balance as at January 1, 2017 (374) 45 75 2 99 (153)
Changes in 2017:      
Amounts recorded in the statement of income 74 (17) 1 11 (36) 33
Change in tax rate 13---- 13
Amounts recorded to a capital reserve-- 3 5- 8
Translation differences (6)- 5- 1-
Transfer to the group assets held for sale 2-- 1- 3
       
Balance as at December 31, 2017 (291) 28 84 19 64 (96)
       
Changes in 2018:      
Amounts recorded in the statement of income (123) (2) (6)- 55 (76)
Amounts recorded to a capital reserve-- (3) 2- (1)
Translation differences 2- (1) (1) (2) (2)
       
Balance as at December 31, 2018 (412) 26 74 20 117 (175)
 
As of December 31
 
2021
2020
 
$ millions
$ millions
Euro
 84
 73

Brazilian Real

13
(4)
British Pound
 0
 17
U.S Dollar
(10)
(6)

Israeli Shekels

(327)
(280)
Other
3
1
 
(237)
(199)

ICL Group LimitedConsolidated Financial Statements67


F - 74

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1715 - Taxes on Income (cont'd)

F. Deferred income taxes (cont'd)
 
2. The currencies in which the deferred taxes are denominated:
G.
Taxes on income included in the income statements
 
1.Composition of income tax expenses (income)
 As at December 31
 20182017
 $ millions$ millions
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions

Euro 22 33
British Pound 21 22
U.S Dollar (7) 10
Israeli Shekels (204) (166)
Other (7) 5
  (175) (96)


G. Taxes on income included in the income statements
 
1.  Composition of income tax expenses (income(
Current taxes
 145
 70
 91
Deferred taxes
22
 (43)
��61
Taxes in respect of prior years
 93
 (2)
(5)
 
 260
25
147
 For the year ended December 31
 201820172016
 $ millions$ millions$ millions

Current taxes 53 208 68
Deferred taxes 76 (23) (45)
Taxes in respect of prior years- (27) 32
  129 158 55


F - 75

Notes to the Consolidated Financial Statements as at December 31, 2018
 
Note 17 - Taxes on Income (cont'd)

G. Taxes on income included in the income statements (cont'd)
2.  Theoretical tax
2.Theoretical tax
 
Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates in Israel (see A(2) above) and the tax expense presented in the statements of income:
 
 For the year ended December 31
 201820172016
 $ millions$ millions$ millions
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Income before taxes on income, as reported in the statements of income
 1,092
 49
 628
Statutory tax rate (in Israel)
23%
23%
23%
Theoretical tax expense
 251
 11
 144
Add (less) – the tax effect of:
   
Reduced tax due to tax benefits
 (64)
 (6)
 (8)
Differences deriving from additional deduction and different tax rates applicable to foreign subsidiaries
 (10)
 (4)
 (15)
Tax on dividend
3
2
2
Deductible temporary differences and their reversal (including carryforward losses) for which deferred taxes assets were not recorded and non–deductible expenses
 (8)
 14
 17
Taxes in respect of prior years*
 93
 (2)
(5)
Differences in measurement basis
 (8)
 10
 15
Other differences
3
0
(3)
Taxes on income included in the income statements
 260
25
147


* In 2021, including $47 million in respect of trapped earnings release
Income (loss) before income taxes, as reported in the statements of income 1,364 505 (117)
Statutory tax rate (in Israel)23%24%25%
Theoretical tax expense (income) 314 121 (29)
Add (less) – the tax effect of:   
Tax benefits deriving from the Law for Encouragement of Capital Investments net of natural Resources Tax (20) (4) (3)
Differences deriving from additional deduction and different tax rates applicable to foreign subsidiaries (1) (186) 23 (38)
Income taxes from intercompany dividend distribution- 18-
Deductible temporary differences for which deferred taxes assets were not recorded and non–deductible expenses 24 15 135
Taxes in respect of prior years- (27) 32
Impact of change in tax rates- (13) (32)
Differences in measurement basis (mainly ILS vs USD) (11) 18 1
Other differences 8 7 (11)
Taxes on income included in the income statements 12915855

ICL Group LimitedConsolidated Financial Statements68

(1)Mainly related to the exempt income resulting from the sale of the fire safety and oil additives business in March 2018. For additional information see Note 10.
H. Taxes on income relating to items recorded in equity

 For the year ended December 31
 201820172016
 $ millions$ millions$ millions

Tax recorded in other comprehensive income   
Actuarial gains from defined benefit plan (3) 3 8
Change in investments at fair value through other comprehensive income- 5 (5)
Taxes in respect of exchange rate differences on equity loan to a subsidiary included in translation adjustment 2 (5) (1)
Total (1) 3 2

F - 76

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1815 - Taxes on Income (cont'd)
H.
Taxes on income relating to items recorded in equity
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Tax recorded in other comprehensive income
   
Actuarial gains from defined benefit plan
 (22)
 (6)
 10
Change in investments at fair value through other comprehensive income
(21)
0
(1)
Taxes in respect of exchange rate differences on equity loan to a subsidiary included in translation adjustment
(1)
(3)
1
Total
 (44)
 (9)
 10

Note 16 - Employee Benefits

A. Composition
 
A.
Composition
Composition of employee benefits:
 
As of December 31
 
2021
2020
 
$ millions
$ millions
Fair value of plan assets
 648
 629
Termination benefits
 (135)
 (158)
Defined benefit obligation
 (993)
 (1,075)
 
 (480)
 (604)

 
 As at December 31
 20182017
 $ millions$ millions

Fair value of plan assets 518 631
Termination benefits (111) (142)
Defined benefit obligation (860) (1,068)
  (453) (579)

Composition of fair value of the plan assets:
 
 
As of December 31
 
2021
2020
 
$ millions
$ millions
 As at December 31
 20182017
 $ millions$ millions
Equity instruments
  
With quoted market price
 230
 224
Without quoted market price
 50
 40
 
 280
 264
Debt instruments
  
With quoted market price
 337
 334
Without quoted market price
 3
 3
 
 340
 337
Deposits with insurance companies
28
28
   
 
648
629


Equity instruments  
With quoted market price 200 197
   
Debt instruments  
With quoted market price 164 179
Without quoted market price 119 145
  283 324
   
Deposits with insurance companies 35 110
   
  518 631

ICL Group LimitedConsolidated Financial Statements69


F - 77

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 1816 - Employee Benefits (cont'd)

B. Severance pay
 
B.
Severance Pay
1. Israeli companies
1.
Israeli companies
 
Pursuant to IsraeliThe labor laws andin Israel require the labor contracts in force, the Company and its Israeli subsidiaries are required to pay severance pay to employees who were dismissed employees and employees leaving their employmentor have retired (including those who left the Company in certain other circumstances. Severancespecific circumstances). The liability for the payment of severance pay is computed based on length of service and generallycalculated according to the latest monthlylabor agreements in effect on the basis of salary and one month’s salary for each year worked.components which, in the opinion of Company management, create an obligation to pay severance pay. 
 
The liabilities relating to employeeCompany has two severance pay rights are coveredplans: one plan according to the provisions of section 14 of the Severance Pay Law, which is accounted for as follows:
a)Under collective labor agreements, the Group companiesa defined contribution plan; and the other for employees to whom section 14 does not apply, which is accounted for as a defined benefit plan. The Company’s liability in Israel make current deposits in outside pension plans for some of the employees. These plans generally provide full severance pay coverage.
The severance pay liabilities covered by these plans are not reflected in the financial statements, since all the risks relating to the payment of the severance pay to employees is mostly covered by current deposits in the names of the employees in recognized pension and severance pay funds, and by the acquisition of insurance policies, which are accounted for as described above, have been transferred to the pension funds.plan assets.
 
b)2.The Group companies in
Certain subsidiaries outside Israel make current deposits in insurance policies in respect of employees holding management positions. These policies provide coverage for the severance pay liability in respect of the said personnel. Under employment agreements, subject to certain limitations, these insurance policies are the property of the employees. The amounts funded in respect of these policies are not reflected in the statements of financial position since they are not under the control and management of the Group.
 
c)As to the balance of the liabilities that are not funded, as mention above, a provision is recorded in the financial statements based on an actuarial calculation.
2. Certain subsidiaries outside Israel
In countries wherein subsidiaries operate that have no law requiring payment of severance pay, the Group companiessubsidiaries have not recorded a provision in the financial statements for possible eventual future severance payments to employees, except in cases where part of the activities of the enterprise is discontinued and, as a result, the employees are dismissed.
 
C. Pension and early retirement
1)C.
Pension and Early Retirement
(1)
Some of the Group’sCompany’s employees in and outside of Israel (some of whom have already left the Group) have defined benefit pension plans for their retirement, which are controlled by the Company. Generally, according to the terms of the plans, as stated, the employees are entitled to receive pension payments based on, among other things, their number of years of service (in certain cases up to 70% of their last base salary) or computed, in certain cases, based on a fixed salary. Some employees of a subsidiary in Israel are entitled to early retirement if they meet certain conditions, including age and seniority at the time of retirement.
F - 78

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 18 - Employee Benefits (cont'd)

C. Pension and early retirement (cont'd)
In addition, some Group companies
(2)
Some subsidiaries have entered intosigned plans with funds – and with a pension fund for some of the employees – under which such companiessubsidiaries make current deposits with that fund which releases them from their liability for making a pension payment under the labor agreements to all of their employees upon reaching a retirement age. The amounts funded are not reflected in the statements of financial position, since they are not under the control and management of the Group companies.
2)
In May 2018, a collective labor agreement was signed between Dead Sea Works Ltd. (hereinafter - DSW) and the DSW’s Workers Council, the New General Organization of Workers in Israel and the Histadrut’s Negev District branch, for a period of five years (hereinafter – the Agreement), commencing on October 1, 2017, the termination date of the previous labor agreement. The key provisions of the Agreement are as follows:subsidiaries.
a) Arrangement of wage increases to the employees to whom the Agreement applies;  b) completion of execution of the DSW efficiency plan by September 30, 2021, in accordance with the provisions specified in the Agreement; c) during the efficiency period, mentioned above, no collective dismissals shall be implemented; d) the declared labor disputes are cancelled and throughout the Agreement period appropriate labor relations shall be maintained and no actions shall be taken which may cause a work disruption; e) payment of a signing bonus upon signing of the Agreement.
Considering the aforesaid, in the financial statements for 2018, the Company recognized an expense in the amount of $5 million due to the signing bonus, under "salary expenses" in the statement of income.
3)In January 2018, considering the Company's decision to discontinue the production of potash at ICL Boulby and to commence full production of Polysulphate in the second half of 2018, a personnel reduction's plan was approved. As a result, the Company recorded, in its financial statements of 2018, an increase of about $7 million under "provision for employee benefits".
 
F - 79
ICL Group LimitedConsolidated Financial Statements70

Notes to the Consolidated Financial Statements as atof December 31, 20182021


Note 1816 - Employee Benefits (cont'd)

D. Post-employment retirement benefits
 
D.
Post-employment retirement benefits
Some of the Company retirees of the Group companies receive, aside from the pension payments from a pension fund, benefits that are primarily holiday gifts and weekends.paid vacations. The companies’company’s liability for these costs accrues during the employment period. The Group companies includeCompany includes in theirits financial statements the projected costs in the post-employment period according to an actuarial calculation.
E.
Movement in net defined benefit obligation and in its components:
 
Fair value of plan assets
Defined benefit obligation
Defined benefit obligation, net
 
2021
2020
2021
2020
2021
2020
 
$ millions
$ millions
$ millions
$ millions
$ millions
$ millions
Balance as of January 1
629
583
(1,075)
(1,004)
(446)
(421)
Income (costs) included in profit or loss:
      
Current service costs
0
0
 (24)
 (22)
 (24)
 (22)
Interest income (expenses)
 6
  5
 (14)
 (14)
 (8)
 (9)
Past service cost
0
0
 12
 11
 12
 11
Effect of movements in exchange rates, net
 8
  16
 (16)
 (34)
 (8)
 (18)
Included in other comprehensive income:
      

Actuarial profits (losses) deriving from changes in financial assumptions

0
0
 68
 (24)
 68
 (24)
Other actuarial gains
 17
  9
0
0
 17
 9
Change with respect to translation differences, net
 (10)
 18
 21
 (32)
 11
 (14)
Other movements:
      
Benefits received (paid)
 (6)
 (6)
 35
 44
 29
 38
Employer contribution
 4
 4
-
-
 4
 4
Balance as of December 31
648
629
(993)
(1,075)
(345)
(446)

 
E. Movement in net defined benefit assets (liabilities) and in their components:

 Fair value of plan assetsDefined benefit obligationDefined benefit obligation, net
 201820172018201720182017
 $ millions$ millions$ millions$ millions$ millions$ millions

Balance as at January 1 631 552 (1,068) (934) (437) (382)
       
Income (costs) included in profit or loss:      
Current service costs-- (24) (24) (24) (24)
Interest income (costs) 14 17 (26) (29) (12) (12)
Past service cost-- 7- 7-
Effect of movements in exchange rates, net (17) 23 37 (39) 20 (16)
Included in other comprehensive income:      
Actuarial gains (losses) deriving from changes in financial assumptions-- 71 (42) 71 (42)
Other actuarial gains (losses) (15) 25-- (15) 25
Change in respect to translation differences, net (19) 36 21 (65) 2 (29)
Other movements:      
Benefits paid (38) (36) 73 64 35 28
Conversion to defined contribution plans (49)- 49---
Transferred to assets held for sale--- 1- 1
Employer contribution 11 14-- 11 14
Balance as at December 31 518 631 (860) (1,068) (342) (437)

The actual return (loss) on plan assets in 20182021, is $(-1)$23 million, comparecompared with $42$14 million in 20172020 and $47$61 million in 2016.2019.

F.
Actuarial assumptions
 
F - 80

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 18 - Employee Benefits (cont’d)

F. Actuarial assumptions
Principal actuarial assumptions as of the reporting date (expressed as weighted averages):
 
 
For the year ended December 31
 
2021
2020
2019
 
%
%
%
 For the year ended December 31
 201820172016
 %%%

Discount rate as at December 31 3.0 2.7 2.9
Discount rate as of December 31
 2.1
 1.7
 2.1
Future salary increases 3.3 3.2 2.6
3.9
3.4
3.2
Future pension increase 2.2 2.2
2.3
2.0
2.1

 
ICL Group LimitedConsolidated Financial Statements71

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 16 - Employee Benefits (cont'd)
G.
Sensitivity analysis
Assuming all other assumptions remain constant, the following reasonable possible changes affect the defined benefit obligation as of the date of the financial statements in the following manner:
December 2021
Decrease
10%
Decrease
5%
Increase
5%
Increase
10%
$ millions
$ millions
$ millions
$ millions
Significant actuarial assumptions
    
Salary increases
 (14)
(7)
7
14
Discount rate
 20
10
(10)
(20)
Mortality table
 24
12
(12)
(24)

The assumptions regarding the future mortality rate are based on published statistics and accepted mortality tables.

 
G. Sensitivity analysis
Assuming all other assumptions remain constant, the following reasonable possible changes effect the defined benefit obligation as of the date of the financial statements in the following manner:
 December 2018
Decrease 10%H.
Decrease
5%
Increase
5%
Increase
10%
The Effect of the plans on the Company's future cash flows
$ millions$ millions$ millions$ millions

Significant actuarial assumptions    
Salary increase 18 9 (9) (18)
Discount rate (32) (16) 16 32
Mortality table (17) (9) 9 17


H. Effect of the plans on the Group's future cash flows
 
The expenses recorded in respect of defined contribution plans in 20182021 are $35$43 million (in 2017 and 2016 $372020 $39 million and $38 million, respectively)in 2019 $37 million).
 
The Company’s estimate ofCompany estimates that the expected deposits expectedin 2021 to be made in 2019 in fundedfund defined benefit plans isare about $10$9 million.
 
In the Company’s estimation, as atAs of December 31, 2018,2021, the Company estimates that the life of the defined benefit plans, based on a weighted average, is about 13.813.6 years (2017(2020 – about 16.315.3 years).
 
I.
Long-term incentive plan
F - 81

(1)
In February 2022, the Company’s HR & Compensation Committee and the Board of Directors approved a triennial equity grant for the years 2022-2024 in the form of options exercisable to the Company's ordinary shares. For further information - see Note 19.
(2)In November 2021, Company's HR & Compensation Committee and the Board of Directors approved a new Cash LTI plan, according to which, other senior managers will be awarded a cash incentive in 2024, the fair value of the grant as of the grant date is about $40 million. The grant is subject to achievement of certain financial targets over the three years and can be affected by the change in share price.
(3)
In April 2019, Company’s HR & Compensation Committee and the Board of Directors approved a Cash LTI plan, according to which, senior managers will be awarded with a cash incentive of about $32 million to be paid in 2022, subject to compliance with certain financial targets over the three years. As of December 31, 2021, the financial targets were met.

ICL Group LimitedConsolidated Financial Statements72

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 17 – Provisions
 
Note 19 – Provisions

Composition and changes in the provision

 Restoration's siteA.
Composition and equipment'schanges in the provision
Site restoration and equipment dismantling
Legal claims
Other
Total
 
$ millions
$ millions
$ millions
$ millions
Balance as of January 1, 2021
 279
 10
 32
 321
Provisions recorded during the year
 24
5
 12
 41
Provisions recorded in respect of business combinations
0
3
0
3
Provisions reversed during the year
 0
(3)
 (1)
 (4)
Payments during the year
 (13)
 (1)
 (2)
 (16)
Translation differences
 (7)
(1)
0
 (8)
Balance as of December 31, 2021
 283
 13
 41
 337


(1)
Main items under 'Site restoration and equipment dismantling':
a.
Spain – In June 2018, a new restoration plan was approved for the Suria and Sallent sites, which included a plan for handling the salt piles and dismantling of facilities. The restoration plan for the Suria site is scheduled to extend until 2094, and for the Sallent site up to 2075.
Balance as at January 1, 2018 194 28 49 271
Provisions recorded during the period (1) 25 2- 27
Provisions reversed during the period (3)- (6) (9)
Payments during the period (6) (11)- (17)
Translation differences (5) (1)- (6)
Balance as at December 31, 2018 205 18 43 266
Estimation of the projected costs for the closure and restoration of the Sallent site – the main portion of the estimated costs for closure and restoration is attributed to restoration of the salt pile. The Company is treating the salt pile, by both utilizing the salt for production and sale for de-icing purposes, and by processing the material and removing it to the sea via a Collector. As of December 31, 2021, the total provision for the closure and restoration of the Sallent site amounts to $77 million. The estimation is based on a long-term forecast, covering a period of more than 50 years, along with observed estimates and, therefore, the actual costs that may be required to restore the Sallent site may differ, even substantially, from the current provision. In the Company's estimation, the provision in its books reflects the best estimate of the expense required to settle this obligation.
b.
Rotem Israel – as of December 31, 2021, according to the Company's estimation, the provision for the restoration of the mining sites and waste repositories, for Rotem Israel's operations, amounted to $89 million. The provision is measured based on the present value of the cash flows, which relies on the Company's estimation of the future expense required for the restoration of the mining sites. The actual costs that may be required may differ, even substantially, from the current provision, as a result of the inherent complexity of such estimation, the Company's future decisions regarding the facilities and regulatory requirements.

ICL Group LimitedConsolidated Financial Statements73

(1)For additional information, see Note 20.
F - 82

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 17 – Provisions (cont'd)
 
A.
Composition and changes in the provision (cont'd)
c.
Bromine Israel (Neot Hovav) – pursuant to the Ministry of Environmental Protection, the Company is required to treat both solid waste of past periods which is stored in a designated defined area on the site's premises, and currently-produced waste created during the ongoing production processes in the plant. Waste treatment is partly conducted through a hydro-bromine acid recovering facility (BRU), operated by the Company. Part of the waste is sent for external designated treatment. As of December 31, 2021, the provision for prior periods waste treatment amounted to about $43 million. In the Company's estimation, based on the information currently available to it, the provision included in its financial statements covers the estimated cost for treating prior periods waste.
(1)
In 2016, a court decision was rendered which determined that ICL Iberia bears responsibility for contamination of water in certain wells at the Suria and Sallent sites (due to an over concentration of salt). In 2018, claims were received from several owners of the land surrounding the wells, demanding compensation from ICL Iberia for damages in the aggregate amount of $22 million. In the Company's estimation it is more likely than not that it would be required to compensate the owners in the amount of up to $4 million. The provision in the Company's books reflects this estimate.
(2)
In 2017, the Israeli Water Law was amended, according to which saline water of the kind produced for Dead Sea plants by the Company's own water drilling is charged with water fees. The Company objected to the charges relating to water drilling within the concession area, which constitutes about 65% of the total charge, based on various arguments, most notably the provisions of the Concession Law. In October 2021, the Water Authority informed the Company that water fees will not be charged for water production within the concession area.
In addition, in March 2021, a decision was made by the Water Authority, whereby despite the Company's objection, its definition should be changed to "Consumer-Producer", as defined in the Water Law, starting with the production license for 2021. The main implication of this change is an increase in the water fees of about $3 million per year for water from drillings outside the concession area. The Company filed an appeal with the water court against the said decision and the parties presented their arguments in a preliminary hearing. A hearing procedure is being held, in the framework of which an additional deliberation was scheduled for April 2022.
ICL Group LimitedConsolidated Financial Statements74

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 2018 - Commitments, Concessions and Contingent Liabilities
 
A.
A.
Commitments
 
(1)
Several of the Group’s subsidiaries have entered into agreements with suppliers for the purchase of raw materials and energy in the ordinary course of business, for various periods ending on December 31, 2023.2036. As of December 31, 2018,2021, the total amount of the commitments under the said purchase periods of the agreements is about $2.67$2.4 billion. This item takes into consideration part of the agreements described below.
 
(2)
Several of the Group’s subsidiaries have entered into agreements with suppliers for the acquisition of property, plant and equipment. As atof December 31, 2018,2021, the subsidiaries have capital purchaseexpenditures commitments of about $368$617 million. This item takes into consideration part of the agreements described below.
 
(3)
As part of the collaboration between ICL's subsidiary in Spain (ICL Iberia) and the government of Catalonia to achieve environmental sustainability goals, the Company has undertaken to carry out restoration of the salt piles in its sites, mainly by processing and removing them to the sea via a collector. In October 2017, Dead Sea Works (hereinafter - DSW)April 2021, the Company signed an agreement with the cost of which for ICL is $280 million,Catalan Water Agency for the executionconstruction and operation of a collector. The main highlights of the first stageagreement include, among other things, the guidelines by which the project will be managed, the financing aspects of the Salt Harvesting Project, with a contracting company Holland Shallow Seas Dredging Ltd.project, the definition of project costs and the determination of the operational maintenance mechanism, including usage costs. Based on the said agreement and Spain's water law, it was determined that ICL Iberia will assume up to 90% of the project's cost (approximately $110 million), which includes, among others,to be paid throughout the construction of a special dredger that is designed to execute the salt harvesting. The dredgerand operating periods. Construction, which has already begun, is expected to enter into service towardsextend over a four-year period and the end of 2019. For further information - see item C(2).
(4)In 2017 and 2018, DSW signed agreements with several execution and infrastructure companies, in a total amount of $160 million (out of the total project cost of about $250 million), for construction of the new pumping station (hereinafter - the P-9 Pumping Station). The P-9 Pumping Stationoperations period is expected to commence its operation duringbe over 25 years.
(4)
In December 2017, the year 2020. For further information – see item C(2).
(5)
Subsequent toCompany entered into a gas purchase agreement with Energean Israel Limited (hereinafter - Energean) who holds a license for the datedevelopment of the report, in February 2019,Karish and Tanin gas reservoirs. Under the agreement, Energean is expected to supply the Company signed agreements for the salewith natural gas (NG) at a quantity of two office buildings, located in Be'er Sheva, Israel, forup to 13 BCM, at a total considerationvalue of NIS 78 million ($21 million). The carrying amount of the two buildings is $7.3 million. Concurrent with the sale agreements, the Company signed lease agreements for the said buildings, for$1.8 billion, over a period of 1015 years, commencing with an option to terminate after four years. In accordance with IFRS16, since the above‑mentioned transactions meetcommercial operation of Karish and Tanin. The NG from the definition of sale and leaseback, part of the expected profitreservoirs will be deferred by being deducted from the right‑to‑use asset.used for running ICL’s factories and power stations in Israel.
 
(6)
In 2012, the Company started the construction of a new cogeneration power station (EPC) in Sodom, Israel (hereinafter – the Station). The Station has a production capacity of about 330 tonnes of steam per hour and about 230 MW, which supply electricity and steam requirements for the production plants at the Sodom site and for third party customers. In August 2018, the process of certification approval was completed, and the Power Station started operating in full. The Company intends to operate the Station concurrently with the existing power station, which will continue operating on a partial basis in a "hot back‑up" format, for production of electricity and steam. The total power produced at both stations can reach up to 245 MW.
Regarding to the construction agreement of the Station, in light of the continued violations by the executing contractor (the Spanish Company - Abengoa), in September 2017, the Company notified of the cancellation of the agreement. Due to financial disputes between the Company and Abengoa, in NovemberIn 2018, the Company announcedentered into two supply agreements with Tamar and Leviathan reservoirs to secure its gas supply needs until the initiationend of an arbitration proceeding, in accordance with2025 or until the provisionsentry of the agreement.Karish and Tanin reservoirs into service, whichever occurs first.
 
In February 2020, Energean announced a "Force Majeure" under the GSPA and of potential expected delays in the supply of NG. ICL rejected the announcement.
In October 2020, the Company chose to exercise its rights for early termination of its agreements with Tamar and Leviathan reservoirs, and to sign an exclusive agreement with Tamar reservoir to supply the full amount of NG consumed by the Company in the interim period, until full gas supply is obtained from Energean, at a price of about $4 per MMBTU (hereinafter – the Bridge Agreement). The Bridge Agreement is in effect until the end of April 2022, on a firm basis, with an extension option on an interruptible basis until December 31, 2022.
F - 83
ICL Group LimitedConsolidated Financial Statements75

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2018 - Commitments, Concessions and Contingent Liabilities (cont'd)
 
A.

A.

Commitments (cont'd)

(4)(Cont'd)
In January 2022, Energean announced that the gas supply is expected to be postponed until the third quarter of 2022, following its previous announcement of postponement until mid‑2022. The Company has reserved all of its rights in relation to Energean's announcements.
 
(6)(cont'd)
The Company is taking measures to secure its supply of NG considering the continued delays in Energean's supply and believes it is more likely than not that it will obtain sufficient NG for its facilities in Israel until the full supply of NG from Energean is obtained. Nevertheless, considering the current circumstances and additional possible delays in Energean’s supply, as well as expected high demand, which may lead to potential shortage and/or significant price increase of NG in Israel, there is no certainty that the Company will successfully secure the required NG quantities for its facilities, or their prices from the end of April 2022. Failure to ensure sufficient supply of NG for the Company's facilities and/or to preserve the current price environment may lead to a material impact on the Company's business, financial position and results of operations.
 
In the Company's estimate, the damages caused by Abengoa amounted to about euro 77 million (about $ 84 million). On January 30, 2019, Abengoa submitted its response, denying ICL's claims, and claiming a payment of euro 15 million ($17 million) for the contract's termination, which was, allegedly, done unlawfully and for convenience. As at the date of the report, considering the early stages of the proceedings, there is a difficulty in estimating the chances of the outcome.
(7)(5)
In February 2018,June 2020, the Company entered into two supply agreementsa long-term lease agreement with Tamar and “Leviathan” reservoir (hereinafter –a third party, according to which ICL will lease an office building in Be'er Sheva Israel for a period of 15 years, with a 10-year extension option, at an annual rent of about $3 million. The lease period is expected to commence in 2024 (at the Agreements), to secure its gas supply needs until the end of 2025 or until the entrycompletion of the “Karish” and “Tanin” reservoirs into service, whichever occurs first. The gas price in the Agreements is in accordance with the gas price formulas stipulated under the government’s gas outline. The Company anticipates that the scope of the annual gas consumption will be about 0.75 BCM.construction period).
 
The Company is entitled to terminate the Agreements in order to start the new agreement with Energean Israel Ltd. (hereinafter – “Energean”), which was signed in December 2017. According to the new agreement, Energean will supply up to 13 BCM of natural gas over a period of 15 years, amounting to about $1.9 billion. Energean holds licenses for development of the Karish and Tanin gas reservoirs, which are located in Israel’s territorial waters. Supply of the natural gas is expected to commence, at the earliest, in the first half of 2021, depending on completion of the development and commencement of production of natural gas from the reservoirs, and will be used for running ICL’s factories and power stations in Israel. In November 2018, following the completion of Energean's Financial Closing, all precedent conditions for the closing of the agreement have been met.
(8)(6)
The Articles of Association of the Company and its Israeli subsidiaries include provisions that permit exemption, indemnification and insurance of the liability of officers, all in accordance with the provisions of the Israeli Companies Law.
 
The Company, with the approval of the Audit its HR & Compensation Committee, the Board of Directors and the General Meeting of the shareholders, granted its officers ana letter of exemption and letters of indemnification, and also hasmaintains an insurance policy covering directors' and officers.officers' liability. The directors' and officers' liability insurance and the exemption and indemnity undertaking do not apply to those cases specified in Section 263 of the Israeli Companies Law. The exemption relates to damage caused and/or will be caused, by those officers as a result of a breach of the duty of care to the Company. Regarding directors who are office holders of Israel Corp., who may serve from time to time, on January 5, 2021, the shareholders' general meeting approved the extension of the period for exemption and indemnification entered into with such office holders, for an additional 9 years, commencing November 30, 2020, provided that the exemption shall not apply to liabilities arising in connection with a transaction or resolution in which a controlling shareholder or an office holder, including an office holder who is other than the office holder party to the agreement, has a personal interest.
The amount of the indemnification payable by the Company under the letter of indemnification, in addition to amounts received from an insurance company, if any, for all of the officers on a cumulative basis, for one or more of the events detailed therein, is limited to $350$300 million. The insurance is renewed annually.
 
F - 84ICL Group LimitedConsolidated Financial Statements76

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2018 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions
 
(1)B.
Concessions
(1)

Dead Sea Works Ltd. (hereinafter – DSW)

 
Pursuant to the Israeli Dead Sea Concession Law, 1961 (hereinafter – the Concession Law), as amended in 1986, and the concession deed attached as an addendum to the Concession Law, DSW was granted a concession to utilize the resources of the Dead Sea and to lease the land required for its plants in Sodom for a period that is expected to endending on March 31, 2030, accompanied by a priority right to receive the concession after its expiration, should the Government wishdecide to offer a new concession to a third party.concession.
 
In accordance with section 24 (a) of the Supplement to the Concession Law, it is stated, among other things, that at the end of the concession period all the tangible assets at the concession area will be transferred to the government, in exchange for their amortized replacement value – the value of the assets as if they are purchased as new at the end of the concession period, less their technical depreciation based on their maintenance condition and the unique characteristics of the Dead Sea area.
Pursuant to section 24 (b) of the Supplement to the Concession Law, it is stated that capital investments made 10 years before the concession ends (i.e., April 2020) to the end of the concession period require a prior consent of the Government, unless they can be fully deducted for tax purposes before the end of the concession period. However, the Government's consent to any fundamental investment that may be necessary for the proper operation of the plant, will not be unreasonably delayed or suspended. In 2020, a work procedure was signed between the Company and the Israeli Government for the purpose of implementing section 24(b). The procedure determines, among other things, the manner of examining new investments and the consent process. In addition, the procedure determines the Company's commitment to invest in fixed assets, including for preservation and infrastructure, and for ongoing maintenance of the facilities in the concession area (for the period beginning in 2026) and the Company's commitment to continue production of potassium chloride and elemental bromine (for the period commencing 2028), all subject to the conditions specified in the procedure. Such commitments do not change the way the Company currently operates. The Company operates with the Israeli Government in accordance with the procedure and obtains investment approvals from time to time as required.
In 2015, the Minister of Finance appointed a team to determine the “governmental activities to be conducted towards the end of the concession period”. The public’s comments in this matter were submitted to an inter-ministerial team.
ICL Group LimitedConsolidated Financial Statements77

Notes to the team. Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B.

Concessions (cont'd)

(1)

DSW (cont'd)

Based on the interim report and its recommendations published in May 2018, and following a public hearing, onin January 21, 2019, the Israeli Ministry of Finance released the final report of the inter-ministry team headed by Mr. Yoel Naveh, former Chief Economist, which includes a series of guidelines and recommendations regarding the actions that the government should take towards the end of the concession period. As at the date of the report, sinceSince the report includes guiding principles and a recommendation to establish sub-teamssub‑teams to implement such principles, the Company is unable to assess, at this stage, the concrete implications, manner in whichor if the recommendations wouldwill be implemented in practice, and on which schedules.as well as the relevant timing. In addition, there is no certainty as to how the Government wouldgovernment will interpret the Concession Law and the manner in which this process and methodology would ultimately be implemented.implement processes accordingly.
 
The Financial Statements were prepared under the assumption that DSW will continue to operate the relevant assets for at least their remaining useful lives. In addition, the Financial Statements were prepared under the assumption that it is more likely than not that ICL will not sell DSW.
In addition, in 2015, the Minister of Finance appointed a team headed by the (former) Accountant General to evaluate the manner in which, according to the current concession, the replacement value of DSW’s tangible assets would be calculated, assuming that these assets would be returned to the government at the end of the concession period. The determination date of the actual calculation is only in 2030.at the end of the concession period. As far as the Company is aware, this work has not yet been completed.
 
In December 2018,
The consolidated Financial Statements were prepared under management's belief that it is more likely than not, that DSW will continue to operate the relevant assets for their remaining useful lives, which extends beyond the term of the current concession period, by obtaining the renewed concession or by operating the assets for an alternative holder. The consolidated depreciation expenses in 2021, relating to the assets located within the concession area, amounted to about $86 million.
As part of the preparation process for the Israeli Subsidiaries’ financial statements, DSW, Dead Sea Bromine and Dead Sea Magnesium for 2016 and onward, which serve as a basis for the financial reports prepared pursuant to the provisions of the Taxation of Natural Resources Law (hereinafter – the Law), the Company received an opinion from an independent appraiser regarding the fair value of the property, plant and equipment of the subsidiaries Dead Sea Works, Dead Sea Bromine and Dead Sea Magnesium in Israel (hereinafter – the Subsidiaries). The Opinion was prepared mainly for the Subsidiaries’ financial statements for 2016 and onward, which serve as a basis for the reports filed pursuant to the provisions of the Taxation of Natural Resources Law.fixed assets. The Property, Plant and Equipment value provided in the opinion is based on the Replacement Cost methodology (as used assets) and iswas estimated at about $6 billion, as atof December 31, 2015, and at December 31, 2016.the date the Law entered into effect.
 
F - 85

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
B. Concessions (cont’d)
(1)Dead Sea Works Ltd. (hereinafter – DSW) (Cont’d)
Though the assets assessed for tax purposes and the assets that may be valuated under the Concession Law are highly correlated, there is no complete identity between them. The Company believes that the applied Replacement Cost Methodology used in the opinion for estimating the fair value coincides with the methodology mentioned in the Concession Law for future valuation of the Property, Plant and Equipment upon termination of the concession period. Nevertheless, there could be other interpretations to the manner of implementation of the Concession Law’s provisions or with respect to the valuation methodology, hence,methodology. Therefore, the estimated value with respect to the Concession Law could materially differ from the value provided in the said opinion,Company's estimates, even with respect to the same assets and dates.
ICL Group LimitedConsolidated Financial Statements78

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)

B.

Concessions (cont'd)

(1)

DSW (cont'd)

It is expected that the value of the Property, Plant and Equipment, at the end of the concession period, will change as time passes and as a result of purchase and disposals of assets included in the future valuation.assets.
 
Royalties
In consideration of the concession, DSW pays royalties to the Government of Israel, calculated at thea rate of 5% of the value of the products at the factoryplant gate, less certain expenses.According to the Salt Harvesting Agreement signed in July 2012 (hereinafter – the SLA), in case the annual quantity of chloride potash sold is in excess of 1.5 million tonnes, the royalties rate would be 10%. In addition, the SLA states that if legislation is enacted that changes the specific fiscal policy in connection with profits or royalties deriving from the mining of quarries from the Dead Sea, the Company’s consent to the increase of the royalties' rate on the surplus quantities referred to above will not apply, after the enactment of the legislation, to the period in which such additional tax is collected as stated in the said legislation.
In January 2016, the Law for Taxation of Profits from Natural Resources, including implementation of the Sheshinski Committee’s recommendations, which address royalties and taxation of excess profits from Dead Sea minerals (hereinafter – the Law), entered into effect. Accordingly, the rate of the royalties' provision was updated to 5%. The Company's position, pursuant to the SLA and its arguments in the royalties' arbitration, is that increasing royalties at a rate exceeding 5% requires the Company's consent, which expired with the enactment of the Law. The State holds a different position regarding the royalties' rate in 2016. Nevertheless, in the Company's estimation, in the event this matter would be challenged in arbitration, it is more likely than not that its claims regarding the royalties' rate increase, following the enactment of the Law in 2016, will be accepted.
 
DSW granted a sub‑concession to Dead Sea Bromine Ltd. (hereinafter –the Bromine Company) to produce bromine and its compounds from the Dead Sea, the expiration date of which is concurrent with the DSW'sDSW concession. The royalties in respect of the products manufactured by theDead Sea Bromine Company are received by DSW, from the Bromine Company, and DSWwhich then pays them over to the State.
F - 86

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
B. Concessions (cont’d)
(1)   Dead Sea Works Ltd. (hereinafter – DSW) (Cont’d)
There is an arrangement relating to paymentState of royaltiesIsrael. Royalties are also paid by Dead Sea Magnesium (hereinafter – DSM) for the production of metal magnesium by virtue of a specific arrangement with the State provided in the Government’s decision dated September 5, 1993. Pursuant to this arrangement, royalties are paid by DSM on the basis of carnallite used for production of magnesium. The arrangement with DSM provides that during 2006 the State may demand a reconsideration in connection with the amount of the royalties and the method of their calculation for 2007 and thereafter. The State’s demand for reconsideration, as stated, was initially received at the end of 2010, and the matter is presently in an arbitration proceeding, as described below.
In 2007, a letter was received from the former Accountant General of the Israeli Ministry of Finance, claiming an underpayment of royalties amounting to hundreds of millions of shekels. Pursuant to the concession, disputes between the parties, including royalties, are to be decided by an arbitration panel of three arbitrators, comprising of two arbitrators appointed by each party, who in turn jointly appoint a third arbitrator.
In 2011, the arbitration proceeding commenced between the State of Israel and DSW, regarding the manner of calculation of the royalties under the concession and the royalties to be paid for magnesium metals and the payments or refunds deriving from these matters, if any. In the statement of claim filed by the State of Israel in the arbitration proceedings, the State of Israel claimed for $265 million in respect of underpayment of royalties for the years 2000 through 2009, with the addition of interest and linkage differences, and a change in the method of calculating the royalty payments from the sale of metal magnesium.
In 2014, a partial arbitration decision was received regarding the royalties’ issue, whereby, DSW is also required to pay the State royalties on the sale of downstream products manufactured by companies that are controlled by ICL that have production plants located both in and outside of the Dead Sea area, including outside of Israel.
The royalties are to be paid according to the value of the downstream products, which will be set according to the formula described in Section 15(a)(2) of the Concession Deed, based on the selling price of the downstream products to unrelated third parties less the deductions set forth in subsections (I), (II) and (III) of that Section. Regarding metal magnesium, it was decided that the State of Israel and DSW are to conclude their discussions on the subject of the amount of the royalties to be paid by DSW on metal magnesium, and if no agreement is reached the matter is to be returned to arbitration.
F - 87

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
B. Concessions (cont’d)
(1)   Dead Sea Works Ltd. (hereinafter – DSW) (Cont’d)
In 2016, as part of the second stage of the arbitration, which addressed the financial calculation principles, the arbitrators issued their decisions regarding the various issues relating to the financial calculations. In addition, the arbitrators issued their resolution on the principles of calculating the interest and linkage differences to be added to the principal amounts paid to the State of Israel, according to which, the calculation of the principal amounts of the royalties paid for the period should be on an NIS basis and accordingly, NIS interest and linkage differences apply as stipulated in the Israeli Interest and Linkage Law.
In 2017, the State submitted a calculation, in the amount of about $120 million (before interest and linkage differences) relating to the years 2000 through 2014 reflecting, according to its contention, an additional amount of underpaid royalties. In October 2018, the arbitrators reached a decision resolving part of the remaining unresolved disputes, and on December 12, 2018, in accordance with the arbitrators' instructions, discussions were held between the State and the Company which resulted in a settlement agreement on a series of additional disputes that were left open at that time. On December 31, 2018, the settlement agreement was approved by the arbitrators. On January 14, 2019, the arbitrators' decision regarding the remaining unresolved disputes was rendered adopting the Company's position.
Following the arbitrators' decision in October 2018 and the settlement agreement abovementioned, the Company recorded an expense in its 2018 financial statement of $43 million (including interest and linkage), which was paid to the State. On January 10, 2019, the State sent a letter disputing the said payment and argued that there is a gap of about $30 million, between the amount paid and the State's view of the calculations. The disputed calculation is subject to the arbitrators' approval. In the Company's estimation, it is more likely than not that its approach to the calculations will be accepted. The Company is conducting discussions with the State in order to resolve all the remaining disputes. Considering the early stage of the discussions there is a difficulty in estimating whether they will mature into an agreement between the parties.
The total expense relating to the royalties' dispute, for the eighteen years between 2000 and 2017, recognized in the Company's financial statements commencing 2014, including payment of part of the State's legal expenses, is $208 million ($33 million in 2018) and $70 million in respect of interest and linkage differences ($10 million in 2018).
In 2018, 2017 and 2016, DSW paid current royalties to the Government of Israel in the amounts of $66 million, $60 million, and $53 million, respectively. In addition, in 2018, the Company paid an amount of $62 million, in respect of royalties relating to prior periods.
F - 88

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
B. Concessions (cont’d)

(2)

Rotem Amfert Ltd.Israel (hereinafter – “Rotem”“Rotem Israel”)

 

Rotem Israel has been mining phosphates in the Negev in Israel for more than sixty years. The mining is conducted in accordance with the phosphate mining concessions, which are granted from time to time by the Minister of National Infrastructures, Energy and Water under the Mines Ordinance, by the Supervisor of Mines in his Office, (hereinafter – the Supervisor), as well as the mining authorizations issued by the Israel Lands Authority (hereinafter – the Authority). The concessions relate to quarries (phosphate rock), whereas the authorizations cover use of land as active mining areas.

Mining Concessions

 
Mining Concessions
Rotem Israel hadtwo mining concessions: (1) Rotem Field (including the Hatrurim Field) and (2) Zafir Field (Oron‑Zin)which were valid until the end of 2021.
 
In December 2021, the Ministry of Energy granted Rotem hasIsrael an extension to a unified concession (which includes all Rotem's mining fields) for an additional three years, until the followingend of 2024. In order to comply with the concession's provisions, the Company undertook, among other things, to assure that Rotem meets its existing obligations to rehabilitate its mining concessions:and plants areas, according to outlined requirements attached to the new concession, also by means of a bank guarantee in the amount of $19 million.
As part of the Company’s efforts to secure Rotem Israel’s future phosphate rock resources, in January 2022, the Ministry of Energy granted Rotem Israel an exploration license for phosphate in an area of 1,065 dunams, North of the Oron Concession. The license is valid until the end of 2023. The Company intends to carry out the examinations required to establish the existence of minerals in this area.
ICL Group LimitedConsolidated Financial Statements79

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)

B.

Concessions (cont'd)

(2)

Rotem Israel (cont'd)

 
a)Rotem Field (including the Hatrurim Field) – valid up to the end of 2021.

Lease Agreements

 
b)Zafir Field (Oron‑Zin) – valid up to the endRotem Israel has two lease agreements in effect until 2024 and 2041 and an additional lease agreement of 2021.
As at the date of this report,Oron plant, which the company isCompany has been working to extend since 2017, by exercising the said concessions withextension option provided in the relevant authorities.agreement.
Mining Royalties
 
Mining Royalties
As part of the terms of the concessions in respect of mining of the phosphate, Rotem Israel is required to pay the State of Israel royalties based on a calculation as stipulated in the Israeli Mines Ordinance.

In January 2016, a legislative amendment entered into effect covering implementationaccordance with the Mines Ordinance (Third addendum A), the royalty rate for production of the recommendations of the Sheshinski Committee that changed the formula for the calculation of the royalties, by increasing the rates from 2% to phosphates is 5% of the value of the quarried material and left the Supervisor the possibility of collecting royalties at a higher rate if he decided to grant a mining right in a competitive process wherein onematerial. As part of the selection indicesprocess of extending the concession as detailed above, an order was issued by the Ministry of Energy to amend the Third addendum A which is intended to anchor and clarify the royalty rate.basis for calculating the royalties and its components in the coming years. Following the provision of the order, the Company also aligned its royalties' calculation for prior years, and as a result, recognized an additional amount of $7 million.

Planning and Building

 
In 2018, 2017 and 2016, Rotem paid royalties to the State of Israel in the amounts of $5 million, $4 million, and $5 million, respectively.
Planning and Building
The mining and quarrying activities require a zoning approval of the site based on a plan in accordance with the Israeli Planning and Building Law, 1965. These plans are updated, as needed, from time to time. As atof the reporting date, of this report, there are various requests at different stages of deliberations pending before the planning authorities.
 
Zin-Oron area - In November 2016, the District Board for the Southern District approved a detailed site plan for mining phosphatephosphates in the Zin‑Oron area. This plan, which covers an area of about 350 square kilometers, will permit the continued mining of phosphate located in the Zin valley and in the Oron valley for a period of 25 years or up tountil the exhaustion of the raw material – whichever occurs first, with the possibility for extension (under the authority of the District Planning Board).
 
FBarir field - 89

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
B. Concessions (cont’d)
(2)   Rotem Amfert Ltd. (hereinafter – “Rotem”) (Cont’d)
The Company is working to promote the plan for mining phosphates in Barir field, (which is located in the southern part of the South Zohar field)deposit in the Negev Desert. In 2015, the National Planning and Building Council (hereinafter – the National Council) approved the Policy Document regarding Mining and Quarrying of Industrial Minerals, which included a recommendation to permit phosphate mining in the Barir field. In February 2017, the Committee for Principle Planning Matters, decided to continue advancement of the mining in the South Zohar field. Concurrently,deposit and based on a decision of the National Council, instructions were prepared by the competent authorities with respect to the performance of an environmental survey of the Barir field for purposes of its further advancement. In April 2017, the National Council recommended to the government to approve National Outline Plan (hereinafter – NOP 14B), which includes South Zohar field, and determined that Barir field will be advanced as part ofadvance a detailed National Outline Plan which was approved by for the Barir field mining site. According to the recommendation of the National Council, the government’s Housing Cabinet in January 2018.approved the National Outline Plan (hereinafter - NOP 14B).
 
In January 2018, the Minister of Health filed an appeal of the said approval, requiring compliance with the Ministry of Health’s recommendation to conduct a survey regarding the health impact in each site included in NOP 14B. As part of a discussion regarding the appeal, which was held in the Housing Cabinet regarding the appeal, it was decided, with the consent of the Ministries of Health, Finance and Energy, to remove the appeal and to approve the NOP 14B. 14B, which was formally published later.
ICL Group LimitedConsolidated Financial Statements80

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B.

Concessions (cont'd)

(2)

Rotem Israel (cont'd)

In addition, it was decided to establish a team with representatives of the ministriesof Treasury, Health, Transportation, Environmental Protection and Energy(hereinafter The Inter-ministerial team), which will present to the Housing Cabinet a report that includes health aspects for NOP 14B. In April 2018, the NOP 14B was formally published.
 
In July 2018 a petition wasand 2019, petitions were submitted to the Israeli Supreme CourtCourt of Justice by the municipality of Arad against the National Planning and Building Council, the Ministry of Health, the Ministry of Environmental Protection and Rotem, to revoke the approval of NOP 14B. In January 2019,by residents of the Bedouin diaspora in the "Arad Valley" submitted a petition to the High Court of Justice (hereinafter – the Court) against the National Council, the Government of Israel and Rotem inIsrael, to revoke the approval of NOP 14B and to order the National Council to discuss the NOP directives, while giving proper weight to the health risk.
In 2020, the inter-ministerial team reached anoutline agreement regarding the examination of the health aspects of the NOP 14B, which, according to the state, constitutes an appropriate response for the review of potential health hazards on which the petitions focus.
In October 2021, the Israeli Supreme Court was requestedof Justice decided to cancelreject the petitions. The court’s decision followed the National Planning and Building Council's decision, from August 2021, to incorporate the main points of the outline agreement in the provisions of NOP 14B.
In November 2021, the Housing Cabinet, approved once again the amended NOP 14B, andfollowing which, the Minister for Environmental Protection submitted a request for a government review of past decisions, which in accordance with the decision of the National Council from December 5, 2017, regardingMinistry of the Interior will be held within 180 days, prior to promoting the Barir Detailed NOP.
In addition to the advancementprocedures described above, securing the future of a detailed plan forthe phosphate mining in operations at Rotem Israel depends among other things, on the South Zohar field. In addition, the Court was requested to issue an interim injunction preventing the implementation of the NOP 14B instructions and the National Council's said decision until a final resolution. On January 22, 2019, the Supreme Court consolidated the hearing of the petition together with the other petition filed against NOP 14B and decided that at this stage there is no basis for granting the interim injunction. On February 5, 2019, the Company filed its response.following matters:
 

Emissions permit under the Israeli Clean Air Act (hereinafter - the Law): In June 2021, the Company's emission permit was renewed by the Israeli Ministry of Environmental Protection (MoEP), until September 2023. The renewed permit reflects an updated outline of requirements. Postponement in the execution of a limited number of projects was granted within the framework of an administrative order under Section 45 of the Law, received in July 2021. Management still expects difficulties in meeting the execution schedules of a limited number of projects and accordingly continues to work with the MoEP to find a satisfactory solution regarding the timing of the investments, taking into account the impact of uncertainty surrounding Rotem Israel's activity, as far as the implementation of long-term projects is concerned.

F - 90
ICL Group LimitedConsolidated Financial Statements81

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2018 - Commitments, Concessions and Contingent Liabilities (cont’d)
B. Concessions (cont’d)
(cont'd)

(3)

B.

Concessions (cont'd)

(2)

Rotem Israel (cont'd)

Oron's lease agreement - The Company has been working to extend the lease agreement for Oron's plant area since 2017 by exercising the extension option provided in the agreement.
Phosphogypsum storage - In October 2021, a new Urban Building Plan was approved, the main objectives of which are to regulate areas for phosphogypsum storage reservoirs.  According to the new Plan, the Company is required to obtain building permits involving permit fees. Due to the ambiguity of the guidelines regarding the fee's calculation, there is a difficulty in estimating the future required outflows.

Energy Production – In order to ensure the continuity of energy production in Rotem Israel, and in accordance with the policy of the Ministry of Energy and the Ministry of Environmental Protection, the Company is working to accelerate the completion of a project to replace existing energy production infrastructure at Rotem, which utilizes oil shale, with a natural gas-based steam boiler, so it will be completed before the existing mined reserves of oil shale are utilized.

Finding economically feasible alternatives for continued mining of phosphate rock in Israel – According to the Company's assessment of economic phosphate reserves in the existing mining areas and the estimated useful life of Rotem's phosphate rock reserves, which are essential for its production, is limited to only a few years. As described above, the Company is working to obtain permits and approvals which will provide an economic alternative for future mining of phosphate rock in Israel.

The Company is continuing its discussions with the relevant authorities, in order that the required approvals, permits and future phosphate rock resources are granted. The Company estimates that it is more likely than not that the said approvals, permits and future phosphate rock resources will be granted within a timeframe that will not materially impact the Company's results. Nevertheless, there is no certainty as to the receipt of such approvals, permits and future phosphate rock resources and/or the date of their receipt. Failure to obtain these approvals, permits and future phosphate rock resources, or a significant delay in receiving them can lead to a material impact on the Company's business, financial position and results of operations.

ICL Group LimitedConsolidated Financial Statements82

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)

B.

Concessions (cont'd)

(3)

ICL Iberia – a subsidiary in Spain

A subsidiary in Spain (hereinafter – ICL Iberia) was granted mining rights based on legislation of Spain’s Government from 1973 and the regulations accompanying this legislation. Further to the legislation, as stated, the Government of the Catalonia region published special mining regulations whereby ICL Iberia received individual licenses for each of the 126 different sites that are relevant to the current and possible future mining activities. Some of the licenses are valid up to 2037 and the rest are effective up to 2067. The concession for the "Reserva Catalana", an additional site wherein mining has not yet been commenced, expired in 2012. The Company is acting in cooperation with the Spanish Government to obtain a renewal of the concession. According to the Spanish authorities, the concession period is valid until a final decision is made regarding the renewal.
(4)United Kingdom

ICL Iberia was granted mining rights based on legislation of Spain’s Government from 1973 and the regulations accompanying this legislation. Further to the legislation, the government of the Catalonia region published special mining regulations whereby ICL Iberia received individual licenses for each of the 126 different sites that are relevant to current and possible future mining activities. Some of the licenses are valid until 2037 and the remainder are effective until 2067. The concession for the "Reserva Catalana", an additional site where mining did not commence, expired in 2012. The Company is acting in cooperation with the Spanish Government to obtain a renewal of the concession. According to the Spanish authorities, the concession period is valid until a final decision is made regarding the renewal.

A.(4)

United Kingdom

A.
The mining rightsmineral leases of aICL Boulby, ICL's subsidiary in the United Kingdom (hereinafter – ICL Boulby), are based on approximately 114 mining74 mineral leases and licenses for extracting various minerals, in addition to numerous easements and rights of way from private owners of land under which ICL Boulby operates, and miningmineral lease rights under the North Sea granted by the BritishThe Crown (Crown Estates), which includesEstates. The mineral lease rights with The Crown Estates, include provisions to explore and exploit theall targeted and known polyhalite mineral resources of the Polysulphate mineral. The said mining rightsinterest to ICL Boulby. Said leases cover a total area of about 374822 square kilometers. As atkilometers (onshore leases total around 32 square kilometers and offshore leases from the date of this report, allCrown Estates cover around 790 square kilometers). All the lease periods, licenses, easements and rights of way are effective, some until 2022 and others until 2038. In 2018 and 2017,The Company is acting to renew the rights necessary for the mining royalties amountedoperation which expire in 2022, or, alternatively, to $1.3 million and $2 million, respectively.
seek ownership of these rights.
 

Regarding ICL Boulby's planning permit for mineral exploitation, which is valid until 2023, in December 2021, the North York Moors Park Authority Planning Committee approved ICL Boulby Mine’s application for the continuation of polyhalite and salt production for an additional 25 years, commencing 2023.

The Company believes, it is more likely than not that it will obtain renewal or ownership of all the needed rights and permits.

With respect to the mining royalties, ICL Boulby pays royalties of 1.5% which in 2021, amounted to $1.4 million.

B.
A UK subsidiary from ICLwhich is a part of the Innovative Ag Solutions segment (hereinafter – Everris UK)Limited), has peat mines in the UK (Creca, Nutberry and Douglas Water). Peat is used as a raw material for production of detached beds for soil improvement and use as soil substitutes incomponent to produce professional growing media. The Nutberry and Douglas Water miningAll sites are owned by Everris UK, while the Creca mine is held under a long‑term lease.Limited. The miningcurrent extraction permits are granted by the local authorities and are renewed after examination ofexamining the local authorities.renewal applications. The miningextraction permits for Nutberry and Douglas Water were granted up tountil the end of 2024.2024 and until 2037 for Creca.
ICL Group LimitedConsolidated Financial Statements83

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)

B.

Concessions (cont'd)

(5)

YPH - China

Mining Concessions

(5)China
YPH JV,ICL's subsidiary in China, which is equally owned with Yunnan Phosphate Chemicals Group Corporation Ltd. ("YYTH"), holds two phosphate mining licenses that were issued in July 2015, by the Division of Land and Resources of the Yunnan district in China. With reference toChina: (1) a mining license for the Haikou Mine (hereinafter – Haikou),Haikou) which the Company operates and which is valid until January 2043, and (2) a mining license is valid up to January 2043, whereas regardingfor the Baitacun Mine, (hereinafter – Baitacun),which was renewed in 2021, and is valid until 2023. The Company intends to conduct a risk survey toassess the feasibility and profitably of mining license expired in November 2018. The mining activities at Haikou are carried out in accordance with the above‑mentioned license. Regarding Baitacun, the Company is examining the option to renew the concession, subject to the phosphate reserves soil survey results and achieving the required understanding with the authorities.site.

F - 91

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
B. Concessions (cont’d)
(5)China (cont'd)

Grant of Mining Rights to Lindu

Natural Resources Royalties
With respect to the mining rights, in accordance with the "Natural Resources Tax Law", YPH JV will pay royalties of 8% on the selling price based on the market price of the rock prior to its processing. In 2018 and 2017, YPH JV paid royalties in the amount of $3 million and $2 million, respectively.
Grant of Mining Rights to Lindu
In 2016, YPCa subsidiary of YYTH (hereinafter – YPC) issued a statement whereby in 2010 YPCit entered into agreements with the local authority of Jinning County, Yunnan Province and Jinning Lindu Mining Development and Construction Co. Ltd. (hereinafter - Lindu Company), according to which Lindu Company is permitted to mine up to two million tonnestonnes of phosphate rock from a certain area measuring 0.414 square kilometers within the area of the Haikou mine (hereinafter – the Daqing Area) and to sell such phosphate rock to any third party in its own discretion.
 
Prior to the establishment of YPH JV, YPC proposed to the local authority of Jinning County and Lindu Company to swap the rights granted to Lindu Company in the Daqing Area with another area that is not a part of the Haikou mine, where Lindu Company would mine. In March 2016, in a meeting held between YPC, ICL and other relevant parties, YPC stated that it could not exchange its other mines to replace the Daqing Area since Lindu Company’s benefit is connected to the Daqing Area. Under the above‑mentioned statement, YPC has undertaken that YPH JV’sYPH’s mining rightright in the Haikou mine will not be adversely affected by the above-mentioned arrangements. It was decided that YPH should conduct further communications with YPC and Lindu Company, for the purpose of protecting its legal rights and to urge the parties to reachreach a fair, just, and reasonable solution to this issue, as soon as possible.

Natural Resources Royalties

 
F - 92With respect to the mining rights, in accordance with China "Natural Resources Tax Law", YPH pays royalties of 8% on the selling price based on the market price of the rock prior to its processing.

Planning and Building

The production process in YPH requires the Company to operate gypsum and flotation ponds that accumulate phosphogypsum fluid and other materials formed in the production processes. The Company has successfully reached an alignment with the authorities to allow the continuation of its current operations in its ponds until March 2022. YPH is planning to expand its ponds area as part of its ongoing operations plan beyond that date. As of the reporting date, the Company is awaiting the final official certification, which was already obtained verbally in the discussions with the authorities, that will enable the required ponds expansion.
ICL Group LimitedConsolidated Financial Statements84

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2018 - Commitments, Concessions and Contingent Liabilities (cont’d)(cont'd)
 
C.
C.
Contingent liabilities
(1)

Ecology

A.
In September 2020, an application for a class action was filed in the Beer Sheva District Court in Israel against the Company, the Company's subsidiary Rotem Israel, and certain of the Company's present and past office‑holders by a number of local residents in the Arava region in the south of Israel (hereinafter – the Applicants). The Applicants claim that discharge, leakage and seepage of wastewater from ICL's Zin site allegedly caused various environmental hazards to the Zin stream, which resulted in damage to various groups in Israel’s population, including: the Israeli public whose property is Zin stream; those who avoided visiting Zin stream due to the environmental hazards; visitors of Zin stream who were exposed to the aforementioned hazards and the residents of the area near Zin stream who were affected by the hazards. Accordingly, the Applicants request several remedies, including restitution and compensation for the damage that they claim was caused to the various groups in a minimum amount of NIS 3 billion (approximately $933 million), the majority of which relates to compensation for claimed consequential damages. Following the Applicants’ request for temporary relief, a hearing procedure is being held, in the framework of which the Court ordered to receive a regulator position before giving a final decision. The regulator position is expected to be submitted in March 2022.The Company rejects all the said allegations. Considering the preliminary stage of the proceeding and lack of precedents of such cases in Israel, there is a difficulty in estimating its outcome. No provision has been recorded in the Company's financial statements.
B.
In July 2019, an application for approval of a claim as a class action was submitted to the Jerusalem District Court by an Israeli environmental association (hereafter - the Applicant) against 30 defendants, including Fertilizers and Chemicals Ltd., a subsidiary of the Company (hereinafter – the Respondents). The application includes claims relating to air pollution in Haifa Bay (located in northern Israel) and to alleged illness therefrom to the population of the said area.
 
Within the framework of the petition, the Applicant requests declarative relief and the establishment of a mechanism for compensation awards, without specifying their amount, or alternatively, for splitting remedies to allow each group member to sue for damages in a separate proceeding. On January 10, 2022, the Company filed its response objecting to the petition. A hearing procedure is currently being held, in the framework of which a deliberation should take place in the first quarter of 2022. Considering the early stage of the proceeding and the limited precedents of such cases in Israel, there is a difficulty in estimating its outcome. No provision has been recorded in the Company's financial statements.
ICL Group LimitedConsolidated Financial Statements85

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
(1)C.
Contingent liabilities (cont'd)
(1)

Ecology (cont'd)

 
A.C.
In 2015, a request was filedMarch 2018, an application for certification of a claim as a class action inwas filed with the Be’er Sheva District Court in Tel‑Aviv–Jaffa, against eleven defendants, including a subsidiary, Fertilizers and Chemical Ltd., in respect of claims relating to air pollution in Haifa Bay and forby two groups: the harm allegedly caused from it tofirst class constituting the residentsentire public of the Haifa Bay area. The amountState of Israel and the second-class constituting visitors of the claim is about NIS 13.4 billion (about $3.5 billion). In the Company’s estimation, based on the factual material provided to itBokek stream and the relevant court decision, it is more likely than not thatDead Sea (hereinafter – the plaintiffs’ contentions will be rejected.Applicants), against the subsidiaries, Rotem Israel and Periclase Dead Sea Ltd. (hereinafter – the Respondents).
 
B.In connection with the 2017 event of the partial collapse of the dyke in Pond 3, which is used for accumulation of phosphogypsum water that is created as part of the production processes in Rotem plants in Israel, the Company is taking action to rectify environmental impacts caused to the Ashalim Stream and its surrounding area, to the extent required. The Company’s actions are being carried out in full coordination and close cooperation with the Israeli environmental authorities. The Company is committed to the matter of environmental protection, and for years has worked closely with the Israeli environmental protection authorities to maintain the Negev’s natural reserves in the area of its facilities. As at the date of this report, the event is being investigated by the Ministry of Environmental Protection and the Nature and Natural Parks Authority. In 2017, the Company recognized restoration costs, in immaterial amounts, that were incurred in the short term. Several applications for certification of claims as class actions were filed against the Company (see item C below) contending, among others, that the Company should bear the restoration costs in the long‑term. In light of the complexity of the process and the uncertainty regarding the final restoration plans to be determined by the relevant authorities, the Company is unable at this stage to estimate the expected costs of the restoration work, as stated. The Company is in contact with its insurance carriers to activate the insurance policies in respect of the matters described above.
Relating According to the active gypsum Pond 5 in Rotem Amfert plants in Israel,claim, the Respondents have allegedly caused continuous, severe and the process of obtaining a permit for its operation, in January 2018, an appeal was filed by Adam Teva V’Din - Israeli Association for Environmental Protection (hereinafter - ATD) to the District Planning and Building Appeals Committeeextreme environmental hazards through pollution of the Southern District“Judea group – Zafit formation” groundwater aquifer (hereinafter – the Appeals Committee) againstAquifer) and the Local CouncilEin Bokek spring with industrial wastewater, and Rotem,, in connection withdoing so, the decisionRespondents have violated various provisions of the Local Committee from December 2017, to dismiss ATD’s objection to approval of the leniencyproperty law and issuance of a building permit for Pond 5. In light of the Appeals Committee's dismissal of ATD's said claims, in May 2018 ATD filed an administrative petition against the Appeal Committee requesting the Court to order that: (1) the Appeals Committee's ruling is void, as well as any permit issued by virtue thereof; (2) the “relief” in implementation of the outline plan applying to the region, as provided in the Appeals Committee ruling, constitutes a breach ofenvironmental protection law, including the provisions of the outline plan applyingLaw for Prevention of Environmental Hazards and the Water Law, as well as violations relating to the region;Torts Ordinance – breach of statutory duty, negligence and (3)unjust profits.
As a result, the Local Committee shall actCourt was requested to enforceorder the lawRespondents to eliminate the proprietary violation in reference to the Aquifer and abstainBokek stream by restoration thereof and to pay the public compensation in an estimated amount of NIS 1.4 billion (about $435 million).
In July 2019, the Respondents filed their response, together with three expert opinions, in which they denied all the Applicant's claims. In 2021, the petitioners notified the Court of their decision to cease the mediation process, which was initiated at the end of 2020. Following the petitioners request, the Court's proceedings were renewed. Considering the early stage of the proceedings, the limited precedents of such cases in Israel and due to preliminary issues that arise from further planning procedures and permits until such enforcement actions are taken.the request, there is a difficulty in estimating their outcome. No provision has been recorded in the Company's financial statements.
 
F - 93

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
C. Contingent liabilities (cont’d)
(1)D.Ecology (cont'd)
B.(cont’d)
On October 11, 2018, the Court approved a settlement agreement between ATD and the Company, the main points of which are: withdrawing the abovementioned petition, in return for a re-deliberation of the Appeals Committee on its decision regarding the implementation of the relief for obtaining building permits for the operation of Pond 5 and future restoration of Ponds 1-4. On October 24, 2018, the Appeals Committee approved the issuing of the building permits for the operation of Pond 5, until the date of December 31, 2020. In November 2018, the building and use permits for Pond 5 were received. The Company is working with the relevant authorities to obtain all the required permits, for the continued operation of the gypsum ponds beyond 2020, and this is in accordance with the requirements set by law and/or instructions of the Planning and Building Committee.
C.In July and August 2017, three applications for certification of claims as class actions were filed against the Company, as a result of a partial collapse of the dyke in thean evaporation pond ofat Rotem Amfert Israel which causedresulted in contamination of the Ashalim Stream and its surrounding area. The claimants contend that the Company breached various provisions of the environmental laws, including, the provisions of the Law for Prevention of Environmental Hazards, the Water Law, as well as provisions of the Torts Ordinance, a breach of a statutory duty and negligence. In the framework of the first application, the Court was requested to instruct the Company to rectify the harm caused as a result of its omissions, in order to prevent recurrence of the damage caused as well as to grant a monetary remedy for non‑pecuniary damages. The monetary remedy was not defined, however, according to the claimants, the amount of the personal claim is NIS 1,000 ($267)311) for each resident of the State of Israel, which totalswho number approximately 8.68 million persons. In the framework of the second application, the Court was requested to grant a monetary remedy in an amount of no less than NIS 250 million ($67 million), and concurrently to award personal compensation in the amount of NIS 2,000 ($534) for each resident of the State of Israel, this being in respect of non‑pecuniary damages. Furthermore, the Court was requested to instruct the Company to comply with the relevant laws and the rules provided thereunder. As part of the third application, the Court was requested to instruct the Company, among other things, to prepare plans for removal of the pollution, restoration of the Ashalim Stream and its surrounding area, for control and prevention of recurrence of the damage caused, to pay monetary relief to the class of injured parties, in the amount of NIS 202.5 million ($54 million), and to provide compensation by means of restoring the natural values impaired and returning the area to its former condition. On May 1, 2018, the Nature and Parks Authority (hereinafter – NPA) filed a motion with the Be’er Sheva District Court to strike the three applications mentioned above as, according to NPA, it is the entity most suitable to serve as the representative plaintiff in a class action in this regard.
 
F - 94ICL Group LimitedConsolidated Financial Statements86

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2018 - Commitments, Concessions and Contingent Liabilities (cont’d)(cont'd)
 
C. Contingent liabilities (cont’d)
C.
Contingent liabilities (cont'd)
(1)

Ecology (cont'd)

 
(1)D.Ecology (cont'd)(Cont'd)
 
Concurrently, NPAIn the framework of the second application, the Court was requested to grant a monetary remedy in an amount of no less than NIS 250 million ($77 million), and concurrently to award personal compensation in the amount of NIS 2,000 ($622) for each resident of the State of Israel, this being in respect of non‑pecuniary damages. Furthermore, the Court was requested to instruct the Company to comply with the relevant laws and the rules provided thereunder. As part of the third application, the Court was requested to instruct the Company, among other things, to prepare plans for removal of the contamination, restoration of the Ashalim Stream and its surrounding area, for control and prevention of recurrence of the damage caused, to pay monetary relief to the class of injured parties, in the amount of NIS 202.5 million ($63 million), and to provide compensation by means of restoring the natural values impaired and return the area to its former condition.
In May 2018, the Nature and Parks Authority (hereinafter – NPA), filed an application for certification of a class action against the Company, Rotem Amfert Israel and past and present officers of the Company and Rotem Amfert Israel (jointly hereinafter - the Respondents), with respect to the Ashalim incident. According to the NPA, the Respondents, jointly and/or severally, are liable for compensation due to the Ashalim incident, among other things by virtue of torts lawthe Torts Ordinance and/or unjust enrichment lawprofits and by virtue of any other law. In the Application, the Court was requested, among other things, to issue orders, the purpose of which is to take all necessary measures to prevent the recurrence of the environmental hazard, and also to cooperate with the NPA and the State's authorities in order to minimize the ecological and environmental damage and seein order to allow for the restoration of the nature reserve. Furthermore, the Court was requested to grant monetary relief to the public injured by the ecological and environmental damage, and to grant a monetary relief for the purpose of the restoration of the nature reserve, in the aggregate amount of NIS 397 million (about $106$123 million).
 

In Octoberconjunction with the aforesaid application, the NPA filed a motion to strike the three applications mentioned above and to prefer the approval application on its behalf, as it argues that it is the most suitable to serve as the representative plaintiff in a class action in this regard, as its application is detailed and well-established as well as the special status conferred upon it under the Class Actions Law, which allows for specific benefits.

ICL Group LimitedConsolidated Financial Statements87

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C.
Contingent liabilities (cont'd)
(1)

Ecology (cont'd)

D.(Cont'd)

In November 2018, the Company was notified that all four applicants had agreed to join efforts and manage the class actions in a joint and coordinated manner. Consequently, in November 2018, the parties have informed the Courtmanner, as well as of their consent to take part in a mediation process in an attempt to resolve the disputes outside of court. In February 2019,January 2020, the parties signed a procedural agreement that regulates the procedure by which the disputes will be addressed in the mediation process wasprocedure which has been initiated. As at the reporting date, consideringConsidering the early stage of the proceedings, there is a difficulty in estimating their outcome.

The Company is in contact with its insurance carriers to activate the relevant insurance policies. No provision has been recorded in the Company's financial statements.

In May 2018, the Company was served with a motion for discovery and perusalpursual of documents (hereinafter – the Motion), filed with the Tel Aviv District Court, by a shareholder of the Company (hereinafter – the Movant), as a preliminary proceeding in preparation for the possible filing of an application for certification of a multiple derivative action against officers of the Company and Rotem Israel who, according to the Movant, caused the alleged damages incurred and to be incurred by the Company as a result of the Ashalim incident. In August 2018, the Company submitted its position to the Court. In December 2018, the parties reached an arrangement, according to which, the said legal proceedings will be helddelayed until the relevant investigation's materials will beare provided to Rotem.

the Company by the investigating authority. As of the reporting date, such investigative materials have not yet been received. Considering the proceedings are in an early stage and even suspended, there is a difficulty in estimating their outcome.

D.E.
In March 2018, an application2015, a request was filed for certification of a claim as a class action, was filed within the Tel Aviv-Jaffa District Court, against eleven defendants, including a subsidiary, Fertilizers and Chemical Ltd., in Be’er Shevarespect of claims relating to air pollution in Haifa Bay and for the harm allegedly caused by two groups:it to residents of the first class constitutingHaifa Bay area. The amount of the entire public inclaim is about NIS 13.4 billion (about $4.2 billion). In the Company’s estimation, based on the factual material provided to it and the relevant court decision, it is more likely than not that the plaintiffs’ contentions will be rejected.
F.
In December 2021, the Company, along with the State of Israel, received a letter of warning prior to pursuing legal action, by Kibbutz Mitzpe Shalem in Israel, claiming, among others, that they were allegedly responsible for the closure of Mineral Beach in January 2015, as a result of a sinkhole. The Kibbutz claims alleged damages of $27 million and the second class constituting visitors of Bokek stream and the Dead Sea (hereinafter – the Applicants), against the subsidiaries, Rotem Amfert Negev Ltd. and Periclase Dead Sea Ltd. (hereinafter – the Respondents).has requested a dialogue meeting to be held before pursuing legal action.
 
According to the claim, the Respondents have allegedly caused continuous, severe and extreme environmental hazards through pollution of the “Judea group – Zafit formation” groundwater aquifer (hereinafter – the Aquifer) and the Ein Bokek spring

The Company operates in accordance with industrial wastewater, and in doing so the Respondents have violated various provisions of property law and environmental protection law, including the provisions of the Concession Law for Preventionand permits issued by the local Authorities. The Company rejects all of Environmental Hazards and the Water Law, as well as violations relatingallegations against it by the Kibbutz. Considering the preliminary stage of the proceeding it is difficult to the Torts Ordinance – breach of statutory duty, negligence and unjust enrichment.estimate its outcome.

 
F - 95ICL Group LimitedConsolidated Financial Statements88

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2018 - Commitments, Concessions and Contingent Liabilities (cont’d)(cont'd)
 
C. Contingent liabilities (cont’d)
(1)C.Ecology
Contingent liabilities (cont'd)
(2)

Increase in the level of the evaporation Pond in Sodom (hereinafter – Pond 5)

D.(cont’d)
 
As a result, the Court was requested to order the Respondents to eliminate the proprietary violation in reference to the Aquifer and Bokek stream by restoration thereof and to pay the public compensation in an estimated amount of NIS 1.4 billion (about $410 million). As at the date of the report, considering the early stage of the proceeding and due to unprecedented issues, that arise from the request, there is a difficulty in estimating the chances the application will be accepted.
E.In October 2018, an application for certification of a class action was filed with the Beer Sheva Magistrate Court against Dead Sea Works Ltd. and Dead Sea Bromine Company Ltd., with respect to a bromine leak that occurred in June 2018, within the premises of Dead Sea Works. According to the plaintiff, the alleged air pollution caused an environmental hazard and a health risk to passersby and to those present in the vicinity of the plant, as well as in the settlements Neot Hakikar and Ein Tamar, and the blocking of Route 90. According to the statement of claim, the Court is requested to award compensation for the alleged damages, in the total amount of about NIS 1.5 million (about $0.4 million). In December 2018, the parties signed a settlement agreement at immaterial amounts to conclude the application proceeding for certification of a class action. The agreement is subject to the Court's approval.
(2)Increase in level of Pond 5 (hereinafter – the Pond)

The minerals from the Dead Sea are extracted by way of solar evaporation, whereby salt precipitates onto the bed of one of the evaporation ponds at Sodom (Pond 5),Pond 5, located in one of the sites of Dead Sea Works (hereinafter – DSW).DSW. The precipitated salt creates a layer on the Pond 5 bed with a volume of approximately 2016 million tonnes annually. cubic meters per year.

The production process of production of the raw material requires that a fixed brine volume is preserved in the Pond.Pond 5. Failure to maintain a constant volume of brine in Pond 5 could result in a reduction in production capacity. To this end, up to the solutionsend of 2021, the raising of the brines' level of the Pond is raised each year5 was according to the rate at which the poolpond floor rises.

The Ein Boqeq and Hamei Zohar hotels,rises, while performing the settlementsalt harvest. Since the solutions' level maximum height (15.1 meters) was reached at the end of Neve Zohar and other facilities and infrastructures are located on2021, from 2022 onwards, the western beachsolutions' volume in Pond 5 will be preserved by way of harvesting the Pond. salt ("the Permanent Solution" and/or "the Salt Harvesting Project" as described below).

Raising the water level of the Pond 5 above a certain level is likely tomay cause structural damage to the foundations and theof hotel buildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructuresinfrastructure located along the western shoreline of the Pond. This situation requires establishment

Until the end of defenses for2020, in order to ensure that Pond 5 water level does not exceed the facilities and infrastructuresmaximum height (15.1 meters), the Government of Israel, through the hotels located on the shores of the Pond.

F - 96

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
C. Contingent liabilities (cont’d)
(2)Increase in level of Pond 5 (hereinafter – the Pond) (cont'd)
TheDead Sea Preservation Government Company Ltd., implemented a project for construction of the coastline defenses, together with respect to the hotels and infrastructures on the coastlineDSW (which financed 39.5% of the Pond has been underway for several years. Asproject's cost), as part of such defenses, from time to time,which the dykedike along the western beachfront of the Pond 5, across from the hotels, iswas raised, together with in many places, a system for lowering subterranean water. As at the date of the report, theThe construction work with respect to the hotels coastlinehotels' coastlines was completed and currently the Dead Sea Preservation Government Company Ltd. is complete, andcarrying out elevation work in the related dykes have been raised to accommodateintermediate area between the maximal brine level (15.1 meters). two hotel complexes.

The current brine level is 14.6 meters. Nevertheless, there is additional ongoing work on raising"Permanent Solution", which should provide a defense at least until the roads level along pond 5.

There is an agreement between DSW and the Government of Israel that the Company will bear 39.5%end of the costs of financingcurrent concession period in 2030, was established in the coastline defenses and the Government will finance the balance thereof. In July 2012, an agreement was signed with the Government of Israel regarding "Execution and Funding of the Dead Sea Protection Project and Increase of the Royalties Paid to the State" (hereinafter – the Salt Harvesting Project).signed in 2012. The purpose of the Salt Harvesting Project isagreement was, among others, to provide a permanent solution for raising the water level in the Pond 5 and stabilizing of the water therein at a fixed level by harvesting of the salt from this pond and transferring it to the Northern Basin of the Dead Sea.
The highlights According to the agreement, the planning and execution of the Permanent Solution will be through the Salt Harvesting Project which will be performed by DSW. In addition, the agreement are set forth below:
a.The planning and execution of the Salt Harvesting Project will be performed by DSW.
b.The Salt Harvesting Project as well as the project for the new pumping station that is to be constructed (hereinafter – the P-9 Pumping Station), constitute an Israeli national infrastructure project that will be promoted by the Israeli Committee for National Infrastructures.
c.
Starting from January 1, 2017, the water level in the pond will not rise above 15.1 meters in DSW’s network (about 390 meters below sea level). DSW will be required to pay compensation in respect of any damages caused, if at all, as a result of a rise of the water level beyond the level determined. In the casestipulates that from January 1, 2017, the water level in the pond will not rise above 15.1 meters. Nevertheless, in the event of a material deviation from the timetables for the execution of the Salt Harvesting Project as a result of a requirement for changes by the planning institutions, as a result of which the Plan is not approved on time, or due to a decision of a judicial tribunal that caused a delay of at least one year in provision of effect to the Salt Harvesting Project by the planning institutions, without the Company having violated its obligations, the Company will be permitted to request raising of the water level above that stated above.

F - 97

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
C. Contingent liabilities (cont’d)
(2)Increase in level of Pond 5 (hereinafter – the Pond) (cont'd)
d.
Increase in the rate of the royalties from 5% to 10% of sales, for quantities of chloride potash DSW sells in excess of 1.5 million tonnes annually. This increase applies to sales starting January 1, 2012. In July 2012, as part of the agreement, the Government committed that at this time it sees no need to make additional changes to its specific fiscal policy regarding mining from the quarries at the Dead Sea, including the commercial utilization thereof and, accordingly, at this time, it will not initiate and will even object to, as applicable, proposed laws regarding this matter. The Company’s consent to the increase of the rate of the royalties is contingent on implementation of the Government of Israel’s decision.
The agreement further provides that if legislation is enacted that changes the specific fiscal policy in connection with profits or royalties deriving from mining of quarries from the Dead Sea,project's timetables, without the Company’s consent Company having violated its obligations, the Company will be permitted to the increase of royalties' rate on the surplus quantities referred to above will not apply, after the enactmentrequest raising of the legislation, to the period in which such additional tax is collected as stated in the said legislation. In January 2016, the Law for Taxation of Profits from Natural Resources, which includes the Sheshinski Committee’s recommendations that address royalties and taxation of excess profits from Dead Sea minerals (hereinafter – the Law), entered into effect. Accordingly, the rate of the royalties' provision was update to 5%. For further information, see item B(1) above.
water level above 15.1 meters.

The Company will bearbears 80% and the Government will bearState of Israel bears 20% of the cost of the Salt Harvesting Project, howeverProject. However, the Government'sState's share will not exceed NIS 1.4 billion.

In 2015 and in 2016, the National Infrastructures Committee and the Israeli Government, respectively, approved National Infrastructures Plan 35A (hereinafter – the Plan), which includes the statutory infrastructure for establishment of the Salt Harvesting Project in Pond 5, and construction of the P-9 pumping station in the northern basinNorthern Basin of the Dead Sea. As at the date of the report, the building permits for the Salt Harvesting Project and the P-9 pumping station have been received and the construction work has commenced. The P-9 pumping station is expected to commence its operations during 2020. For further information see item A above relating commitments.

 
F - 98ICL Group LimitedConsolidated Financial Statements89

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2018 - Commitments, Concessions and Contingent Liabilities (cont’d)(cont'd)
 
C. Contingent liabilities (cont’d)
(3)C.Spain
Contingent liabilities (cont'd)
(2)

Increase in the level of Pond 5 (cont'd)

 
A salt dredger, which is part of the implementation of the Salt Harvesting Project, commenced operations in the fourth quarter of 2020 and allowed DSW to establish the pond level below its maximum height at the end of 2021. The P-9 pumping station commenced operation in early 2022.
A.(3)The

Spain

A.
subsidiary in Spain (hereinafter – ICL Iberia) hasoperated two potash production centers in Suria and Sallent. As part of thean efficiency plan, the Company intends to consolidateconsolidated the activities of ICL Iberia into one site by means of expanding the Suria production site and discontinuing the mining activities onat the Sallent site. The mining activities in Spain require, among other things, an environmental mining license and an urban license.
 
SallentICL Iberia holds an urban license for the Suria site,
Environmental mining license – in 2013, the Spanish Regional Court issued a judgment invalidating ICL Iberia's followed by an environmental mining license contending that there were flaws in provision of the license by the Government of Catalonia including no environmental impact assessment of the Cogulló salt deposit (hereinafter - the salt pile). In September 2015, the Spanish Supreme Court affirmed this judgment.
Following the Company’s request and as part of the Company’s effort to obtain the environmental mining license, in August 2017, the Mining Authorities issued a new environmental mining license, which includes a new environmental impact assessment approved by the Environmental Authorities. The environmental mining license replaces definitively the license previously invalidated and accordingly ICL Iberia is allowed to continue its activity.
Urban license – in 2014, the District Court of Barcelona determined that the urban license was not valid. In January 2017, the Regional Court affirmed this judgment. An appeal process was conducted before the Supreme Court. Following the resolution, the municipality of Sallent initiated a protection case relating to urban planning legality and the Company was required to legalize its salt pile activity by obtaining the urban license. In July 2018, the City Council issued the urban license to the Company.
As part of enforcement of the judgement, the local planning board of the Catalonian government (CUCC) determined new provisions, which include limitation over the height of the salt pile of up to 538 meters and a temporary extension to the salt pile activity. The Company received the CUCC's approval to continue piling up the salt up to June 30, 2019, and the height of the salt pile is 514 meters.
Suria site
In April 2014, after a favorable survey was received from the Environmental Protection Authority in Catalonia, ICL Iberia received an environmental license that complies with the new environmental protection regulations in Spain (autoritzacio substantive), this being after(Autoritzacio Substantive). In November 2021, an updated environmental mining license was granted, which allows for higher volume processing.
In addition, since 2018, ICL Iberia received theprepared an environmental impact assessment, as well as new urban license.
F - 99

Notespermits to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
C. Contingent liabilities (cont’d)
(3)Spain (cont'd)
Restoration plan
In 2015, in accordance with the provisionsexpand capacity of the Spanish Waste Management regulation, ICL Iberia submittedsalt mountain in Suria, which allows it to continue piling salt in upcoming years, until the Government of Cataloniaevacuation solution by a mining sitecollector is applied. The restoration plan for the two production sites Suria site, which was approved in 2018, and Sallent,updated in 2021, and which also includes a plan for handling the salt piles and dismantling of facilities. The restoration plan for the Suria sitefacilities is scheduled to run upcontinue until 2094.
B.
Following an arbitration proceeding conducted between a Spanish subsidiary (IBP) and Nobian concerning the termination of a partnership agreement between them, in October 2021 an agreement was signed to terminate the partnership, under which the Company will pay a net amount of approximately $17 million for Nobian's holding in Sal Vesta (51%), Nobian’s share in a joint venture (SOPAA) and for the net settlement of all additional disputes between the parties.
ICL Group LimitedConsolidated Financial Statements90

Notes to 2094, whereas for the Sallent site up to 2070. In June 2018, the new restoration plan was approved.Consolidated Financial Statements as of December 31, 2021
 
Regarding the estimation of the projected costs for the closureNote 18 - Commitments, Concessions and restoration of the Sallent site, as part of the restoration solution, the Company is taking action to utilize the salt for production and sale as a product in the De-icing business. In light of changes in market conditions, mainly in the future selling prices of the said product, the Company updated its provision in the amount of $18 million, under "other expenses" in the Statement of Income.Contingent Liabilities (cont'd)
 
The provision is based on a long‑term forecast, covering a period of more than 50 years, along with observed estimates and, accordingly, the final amount that will be required to restore the Sallent site could change, even significantly, from the amount of the present provision. In the Company’s estimation, the provision in its books reflects the best estimate of the expense required to settle this obligation.
C.
Contingent liabilities (cont'd)
 
B.(4)
FurtherIn March 2021, an application for a class action was filed with the Tel Aviv-Jaffa District Court against the Company, Israel Corporation Ltd. and the controlling shareholder of Israel Corporation (hereinafter – the Respondents). The application includes a series of allegations concerning, among others, alleged misleading and violation of the Company’s reporting and disclosure obligations to the court decision received in 2016 providing that ICL Iberia bears sole responsibility for contaminationpublic under the Israeli Securities Law, 5728-1968, relating to the implications of the waterroyalties' claim filed in certain wells on Suria2011 by the State of Israel against its subsidiary, Dead Sea Works Ltd., pursuant to the Dead Sea Concession Law, 5721-1961, which was conducted and Sallent sites (due toconcluded within an over concentration of salt), in January 2018, claims were received from several ownersarbitration proceeding. The applicant is a shareholder of the land surroundingCompany asking to act on behalf of a represented class including all those who acquired Company shares or Israel Corp. shares and held them between August 17, 2011, and May 27, 2014. According to the wells, whereby ICL Iberiaapplication, this group incurred alleged damages by the Respondents, and accordingly, the Court is requiredrequested to compensate them for theirrule in favor of the group members who are shareholders of the Company, damages in the aggregate amount of $22 million. Inabout NIS 133 million (about $40 million) and in favor of group members, who are shareholders of Israel Corp. an additional amount of NIS 57 million (about $17 million), as of May 27, 2014.
The Company rejects the claims made in the application and, accordingly, in September 2021 filed its response within the framework of the legal proceeding. Considering the preliminary stage of the proceeding there is a difficulty in estimating its outcome. No provision has been recorded in the Company's estimation, it is more likely than not that it will be required to compensatefinancial statements.
(5)
In connection with the ownersHarmonization Project (to create one global ERP system), which was discontinued in 2016 by a decision of the Company's Board of Directors, in December 2018, the Company filed a lawsuit in the Tel Aviv District Court against IBM Israel, the leading project provider (hereinafter – IBM), in the amount of $12 million. Accordingly, in 2017$300 million (about a provision was recorded.billion NIS) for compensation of damages incurred to the Company due to IBM’s failure to meet its undertakings within the Project, which led to the failure of the Project.

In March 2019, IBM filed its statement of defense, together with a counterclaim against the Company, according to which IBM claims that ICL allegedly refrained from making certain payments, conducted negotiations in bad faith, and terminated the project unilaterally, in a way that harmed IBM's reputation and goodwill and therefore claims an amount of about $53 million (about ILS 170 million), including VAT and interest. In June 2019, the Company filed a statement of defense with respect to the counterclaim in which the Company rejected all of IBM's claims. In January 2021, IBM filed a request for dismissal including the deletion of the remedies claimed by the Company arising from the termination of the agreement between the parties. In August 2021, the Company filed a request to delete IBM's statements of claim, on the grounds that IBM acted in order to delay, burden and disrupt a professional expert's work, and thus to impair the documents discovery process. Considering the early stage of the proceedings and the complexity of the claims, it is difficult to estimate their outcome. Nevertheless, the Company believes it is more likely than not that IBM's claims in its counterclaim will be rejected.
ICL Group LimitedConsolidated Financial Statements91

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C.
Contingent liabilities (cont'd)
(4)(6)

In December 2018, an application for certification of a class action was filed with the Tel Aviv District Court against the Company, Israel Corporation, and office holders, including directors who held office during the said dates which are stated in the application, with respect to the manner in which the IT (the Harmonization) project was managed and terminated. According to the allegations made in the Application, the Company failed to properly report negative developments which occurred on certain dates during the said IT project, whoseand such failure caused the company immense financial damages.

The represented class was defined in the application as all those who acquired the Company's shares at any time during the period commencing June 11, 2015 and did not sell them until September 29, 2016 (hereinafter – the Applicants).

 
F - 100

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
C. Contingent liabilities (cont’d)
(4)(cont'd)
The represented class was defined in the application as all those who acquired the Company's share at any time during the period commencing on June 11, 2015 and did not sell them until September 29, 2016. The aggregate amount of the claim, for all members of the represented class, is estimated to be between $113$123 million (about NIS 426395 million) for maximal damage, and $7$8 million (about NIS 26 million), for minimal damage. TheIn April 2019, the Company denies the allegations made in the application and will filefiled its position to the Court denying the allegations made in the application.
In January 2020, the Company filed an application, which was accepted in court, to postpone the proceedings until a verdict is received in its lawsuit against IBM (see item 5 above). The delay was accepted subject to the Company's on-going updates regarding the IBM proceeding. In April 2020, the Applicants filed a request with the Supreme Court for leave to appeal the said Court's decision. In July 2021, the Tel Aviv District Court ruled that the Applicants may file a reply as required by law. Consideringwell as an application for disclosure of documents, and that in November 2021, instructions will be given regarding the early stagecontinuation of the proceedings. Following this decision, the Applicants requested that the Supreme Court suspend the decision of the application to appeal, in relation to the District Court's ruling to delay the proceedings, until it receives its instructions regarding their continuation. In August 2021, the Supreme Court denied the petitioners' request for leave to appeal. In addition, in September 2021, the Applicants filed a motion for disclosure of documents to the Tel Aviv District Court. On February 13, 2022, a hearing was held, following which, the court issued interim orders regarding the discovery proceedings. Considering the proceedings are in early stages and even suspended, there is a difficulty in estimating the chances the application will be accepted.
No provision has been recorded in the Company's financial statements.
(5)(7)
In July 2018, an application for certification of a class action was filed with the Central District Court against the Company and its subsidiaries, Rotem Amfert Negev Ltd.Israel and Fertilizers and Chemicals Ltd. (jointly hereinafter – the Defendants). The causes of action are the alleged exploitation of the Defendants' monopolistic position to charge consumers in Israel excessive and unfair prices for products classified as "solid phosphate fertilizer" between 2011 and 2018, contrary to the provisions of the Restrictive Trade Practices Law, and unjust enrichmentprofits at the expense of the plaintiff and the represented group. The representative plaintiff is a Kibbutz member who grows various plants and trees in his yard and in a nearby orchard.
The represented group includes all the consumers who purchased, directly or indirectly, solid phosphate fertilizer products manufactured by the Defendants, or farming produce fertilized with solid phosphate fertilizer or food products that include such farming produce as stated above, in the years 2011-2018 (hereinafter – the Represented Group).
ICL Group LimitedConsolidated Financial Statements92

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C.
Contingent liabilities (cont'd)
(7)

(cont'd)


According to the statement of claim, the plaintiff requests, among other things, that the Court rules in his favor and in favor of the Represented Group, awarding them compensation for the damages allegedly caused to them, in the total amount of NIS 56 million (about $15$17 million), based on a calculation pursuant to the "difference test", measuring the difference between the price of a product and its cost, as described in the statement of claim, or in the amount of about NIS 73 million (about $20$23 million), based on the "comparison test", comparing the price of a product to its price in other markets, as described in the statement of claim. It should be noted that the Company's total sales of solid phosphate fertilizers in Israel during 2017 were negligible. In December 2018,March 2020, the Central District Court granted the Defendants a motion for delay in proceedings, until a decision is made by the Supreme Court in similar proceedings implicating the said case. The Company filed its written response. Indenies the Company’s estimation,allegations, and believes it is more likely than not that its claims will be accepted.
 
(6)In 2015, an appeal was filed in the Israeli Court for Water Matters by Adam Teva V’Din - Israeli Association for Environmental Protection (ATD) wherein the Court was requested to order the Government Water and Sewage Authority to issue a production license to DSW pursuant to the Water Law with respect to the transfer of water from the North Basin of the Dead Sea to the evaporation ponds in the Sea’s South Basin in order to regulate and supervise, within the framework of the production license, transfer of the water, as stated, in connection with certain aspects, including limitation of the quantities transferred.
F - 101

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 20 - Commitments, Concessions and Contingent Liabilities (cont’d)
C. Contingent liabilities (cont’d)
(6)(cont'd)
In August 2016, the Government Water and Sewage Authority issued directives to DSW (not in the framework of the production license), after hearing the latter’s position, which included limitations on the quantities of water transferred, as well as mechanisms for reporting of pumping volume. As at the reporting date, summaries have been filed by all the parties and the case is waiting for the Court's judgement. In the Company’s estimation, the legal proceedings in this matter will end without material influence on its operations.
(7)(8)
In September 2017, a decision of the District Court in Beer Sheva was received regarding a dispute between the National Company for Roads in Israel and DSW, whereby the Company is to participate in restoration of the bridges and bear responsibility for the damage caused as a result of leakage of chemical materials from DSW’s trucks. In October 2017, DSW filed an appeal in the Supreme Court of the District Court’s decision, and in November 2017, the National Company for Roads in Israel filed a counter appeal. In November 2018, the parties agreed to start a mediation process. Considering the early stage of the proceeding, there is a difficulty in estimating its chances.
(8)
Following the discontinuation of the Harmonization Project (global ERP system), the Company entered into a mediation proceeding with the lead supplier in the Project (hereinafter - IBM Israel), for settlement of mutual monetary disputes that arose upon the said discontinuation. In December 2018, following the termination of the mediation proceeding, under which the Company had paid an immaterial amount, the Company filed a lawsuit in the Tel Aviv District Court, against IBM Israel, in the amount of $300 million (about NIS 1.1 billion), for compensation of the damages incurred to the Company due to IBM’s failure to meet its undertakings within the Project, which led to the failure of the Project. Considering the early stages of the proceedings, there is a difficulty in estimating the certainty of the outcome.
(9)In October 2018, a petition was filed to the International Trade Administration of the U.S. Department of Commerce and the U.S. International Trade Commission by a US Magnesium company (hereinafter - US Magnesium), to impose antidumping and countervailing duties on imports of magnesium from Israel. US Magnesium claims that imports of magnesium produced in Israel by Dead Sea Magnesium Ltd. are being subsidized and sold at less than fair value in the U.S. market. The US Department of Commerce is expected to issue its preliminary determination with respect to subsidies on May 2, 2019.
Considering the early stage of the proceedings, there is a difficulty in estimating the chances the petition will be accepted or whether tariffs will be imposed in the future.
(10)
In addition to the contingent liabilities, as stated above, as atof the reporting date, the contingent liabilities regarding the matters of environmental protection and legal claims, which are pending against the Group, are in immaterial amounts. It is noted that part of the above claims is covered by insurance. According to the Company’s estimation, the provisions recognized in its financial statements are sufficient.
 
F - 102ICL Group LimitedConsolidated Financial Statements93

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2119 – Equity

A. Composition:

 A.
Composition:
As atof December 31, 20182021
As atof December 31, 20172020
 
Authorized
Issued and paid
Authorized
Issued and paid

 Number of Ordinary shares of Israeli Shekel 1 par value (in millions)1,485* 1,305 1,485* 1,303
     
 Number of Special State share of Israeli Shekel 1 par value 1 1 1 1
Number of ordinary shares of Israeli Shekel 1 par value (in millions)
1,485
  1,312
1,485
1,305
     
Number of Special State shares of Israeli Shekel 1 par value
1
1
1
1

 
(*) For information regarding the amount of treasury shares, see Note 21.G.19.G.(1).
 
The reconciliation of the number of shares outstanding at the beginning and at the end of the year is as follows:
 
 
Number of Outstanding Shares (in millions)
As of January 1, 2020
1,305
Issuance of shares
0
As of December 31, 2020
1,305
Issuance of shares
7
As of December 31, 2021
1,312

As at January 1, 20171,301
Issuance of shares2
As at December 31, 20171,303
Issuance of shares2
As at December 31, 20181,305

As at December 31, 2018, the number of shares reserved for issuance under the Company’s option plans was 18 million.
B.
Rights conferred by the shares
 
F - 103

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 21 – Equity (cont’d)

B. Rights conferred by the shares
1.
(1)
The ordinary shares confer upongrant their holders voting rights (including appointment of directors by a simple majority atin General Meetings of the shareholders),Company, the right to participate in shareholders’ meetings, the right to receive profitsdividends and the right to a share in excess assets upon liquidation of ICL.
 
2.(2)
The Special State of Israel Share, held by the State of Israel in order to safeguardfor the purpose of monitoring matters of vital interest ofto the State of Israel, confers upon itgrants special rights to make decisions, among other things, on the following matters:
 
-
Sale or transfer of Companycompany assets, which are “vital”“essential” to the State of Israel, not in the ordinary course of business.
 
-
Voluntary liquidation, change or reorganization of the organizational structure of ICL or merger (excluding mergers of entities controlled by ICL, directly or indirectly, that would not impair the rights or power of the Government, as holder of the Special State Share).
 
-
Any acquisition or holding of 14% or more of the issued share capital of ICL.
 
-
The acquisition or holding of 25% or more of the issued share capital of ICL (including augmentation of an existing holding up to 25%), even if there was previously an understanding regarding a holding of less than 25%.
ICL Group LimitedConsolidated Financial Statements94

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 19 – Equity (Cont'd)
B.
Rights conferred by the shares (cont'd)
 
-
Any percentage of holding of the Company’s shares, which confers upongrants its holder the right, ability or actual possibility to appoint, directly or indirectly, such number of the Company’s directors equal to half or more of the Company’s directors actually appointed.
 
During the second half of 2018, an inter-ministerialinter-ministry team was set up,established, headed by the Ministry of Finance, whose purpose is, among other things, to regulate the authority and supervision in respect of the Special State of Israel Share, as well as reduce the regulatory burden. As atIn 2019, the datework of this team was suspended until further notice due to the dissolution of the report, theKnesset and lack of permanent Government. The Company is unable to estimate when or whether the team will recommence and what are the implications of this process over the Company.Company, if any.
 
F - 104ICL Group LimitedConsolidated Financial Statements95

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2119 – Equity (cont'd)

C. Share-based payments to employees

1.C.
Share-based payments
1.
Non-marketable options

Grant dateEmployees entitledNumber of instruments (thousands)Issuance'sIssuance’s detailsInstrument termsVesting conditionsExpiration date
August 6, 2014
Officers and senior employees
 3,993
An issuance of non-marketable and non-transferrable options, for no consideration, under the amended 2014 Equity Compensation Plan, to 450 ICL officers and senior employees in Israel and overseas.Plan.
Upon exercise, each option may be converted into one ordinary share of NIS 1 par value of the Company. In case ofthat on the exercise date the closing price of an ordinary share is higher than twice the exercise price (the “Share Value Cap”), the number of the exercised shares will be reduced so that the product of the exercised shares actually issued to an offeree multiplied by the share closing price will equal to the product of the number of exercised options multiplied by the Share Value Cap.
3 equal tranches:
(1) Oneone third on December 1, 2016
(2) Oneone third on December 1, 2017
(3) Oneone third on December 1, 2018
Two years from the vesting date.
December 11, 2014

June 30, 2016

Former CEO 367An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.
May 12, 2015
Officers and senior employees
 6,729
 3,035
An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan, to 550 ICL officers and senior employees in Israel and overseas.
Upon exercise, each option may be converted into one ordinary share of NIS 1 par value of the Company.
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
The first and second tranches is at the end of 36 months after the grant date for the third tranche is at the end of 48 months after the grant date.

June 30, 2023

June 29, 2015

September 5, 2016

Former chairman of BOD 

186

February 14, 2017

Former CEO

 114

February 14, 2024

June 20, 2017

Officers and senior employees

 6,868

June 20, 2024

August 2, 2017 

Former chairman of BOD

 165

March 6, 2018

Officers and senior employees

5,554

March 6, 2025

ICL Group LimitedConsolidated Financial Statements96

Notes to the Consolidated Financial Statements as of December 31, 2021
Note 19 – Equity (cont'd)
C.
Share-based payments (cont'd)
 530
1.
Non-marketable options (cont'd)
Grant dateEmployees entitledNumber of instruments (thousands)Issuance’s detailsInstrument termsVesting conditionsExpiration date
May 14, 2018
CEO
385

An issuance of non-marketable and non-transferrable options, for no consideration, under the amended 2014 Equity Compensation Plan.

Former Chairman of BOD

 404
June 30, 2016Officers and senior employees 3,035An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan, to 90 ICL officers and senior employees in Israel and overseas.June 30, 2023
September 5, 2016Former CEO 625An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.
Chairman of BOD 186
February 14, 2017Former CEO 114An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.February 14, 2024
June 20, 2017Officers and senior employees 6,868An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan  to 498 ICL officers and senior employees in Israel and overseas.June 20, 2024
August 2, 2017Chairman of BOD 165An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan.
F - 105

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 21 – Equity (cont'd)

C. Share-based payments to employees  (cont'd)

1.Non-marketable options (cont'd)

Grant dateEmployees entitledNumber of instruments (thousands)Issuance's detailsInstrument termsVesting conditionsExpiration date
March 6, 2018Officers and senior employees 5,554An issuance of non-marketable and non-transferrable options, for no consideration, under the 2014 Equity Compensation Plan (as amended) to 508 ICL officers and senior employees in Israel and overseas, ICL CEO and Chairman of the BOD.Upon exercise, each option may be converted into one ordinary share of NIS 1 par value of the Company.
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
March 6, 2025
May 14, 2018CEO 385
May 14, 2025
August 20, 2018
Former chairman of BOD
403
August 20, 2025
April 15, 2019
Officers and senior manager
13,242
2 equal tranches:
(1) half at the end of 24 months after the grant date.
(2) half at the end of 36 months after the grant date.
5 years after the grant date
June 27, 2019
CEO
3,512

May 29, 2019 *

Chairman of BOD

 4032,169

June 30, 2021

August 20, 2025

Senior employees

647
*  The options were issued upon Mr. Doppelt’s entry into office on July 1, 2019.
 
F - 106ICL Group LimitedConsolidated Financial Statements97

Notes to the Consolidated Financial Statements as atof December 31, 20182021
Note 19 – Equity (cont'd)
C.
Share-based payments (cont'd)
1.
Non-marketable options (cont'd)
 
Note 21 – Equity (cont'd)

C. Share-based payments to employees (cont'd)

1. Non-marketable options (cont'd)Additional Information
 
Additional Information
The options issued to the employees in Israel are covered by the provisions of Section 102 of the Israeli Income Tax Ordinance. The issuance will beis performed through a trustee under the Capital Gains Track. The exercise price is linked to the known CPI that is known as of the date of payment, which is the exercise date. In a casethe event that the Company of distribution ofdistributes a dividend, by the Company, the exercise price is reduced on the “ex dividend” date, by the amount of the dividend per share (gross), based on the amount thereof in NIS onthereof at the effective date.
 
The fair value of the options granted in 2014, as part of 2014 amended equity compensation plan, was estimated using the binomial model for pricing options. The grants in 2015, 2016 2017until 2019 and 20182021 under the amended 2014 Equity Compensation Plan, were estimated using the Black & Scholes model for pricing options. The parameters used in applying the models are as follows:
 
2014 Plan
Granted 2014Granted 2015Granted 2016Granted 2017Granted 2018

2014 Plan
Granted 2014
Granted 2016
Granted 2017
Granted 2018
Granted 2019
Granted 2021
 
Share price (in $)8.27.03.94.54.4
8.2
3.9
4.5
4.4
5.4

6.8

CPI-linked exercise price (in $)8.47.24.34.34.3
8.4
4.3
5.3

7.1

Expected volatility:     
First tranche29.40%25.40%30.51%31.88%28.86%
29.40%
30.51%
31.88%
28.86%
27.85%

31.70%

Second tranche31.20%25.40%30.51%31.88%28.86%
31.20%
30.51%
31.88%
28.86%
27.85%

31.70%

Third tranche40.80%28.80%30.51%31.88%28.86%
40.80%
30.51%
31.88%
28.86%
0
0
Expected life of options (in years):     
First tranche4.33.07.07.07.0
4.3
7.0
4.4

4.4

Second tranche5.33.07.07.07.0
5.3
7.0
4.4

4.4

Third tranche6.34.07.07.07.0
6.3
7.0
0
0
Risk-free interest rate:     
First tranche(0.17)%(1.00)%0.01%0.37%0.03%
(0.17)%
0.01%
0.37%
0.03%
(0.67)%

0.43%

Second tranche0.05%(1.00)%0.01%0.37%0.03%
0.05%
0.01%
0.37%
0.03%
(0.67)%

0.43%

Third tranche0.24%(0.88)%0.01%0.37%0.03%
0.24%
0.01%
0.37%
0.03%
0
0
Fair value (in $ millions)8.49.04.011.38.8
8.4
4.0
11.3
8.8
7.5
0.6
Weighted average grant date fair value per option (in $)1.91.21.11.61.4
1.9
1.1
1.6
1.4
1.2
1.3


F - 107
ICL Group LimitedConsolidated Financial Statements98


Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2119 – Equity (cont'd)

C. Share-based payments to employees (cont'd)

1.C.
Share-based payments (cont'd)
1.

Non-marketable options (cont'd)

 
The expected volatility was determined based on the basis of the historical volatility in the Company’s share prices in the Tel-Aviv Stock Exchange.
 
The expected life of the options was determined on the basis ofaccording to Management’s estimate of the period in which the employees will hold the options, taking into consideration their position with the Company and the Company’s past experience regarding the turnover of employees.
 
The risk‑free interest rate was determined based on the basis of the yield to maturity of shekel‑denominated Israeli Government debentures, with a remaining life equal or similar to the anticipated life of the option.
 
The cost of the benefit embedded in the options and shares from the amended Equity Compensation Plan 2014 is recognized in the statement of income over the vesting period of each portion. Accordingly, in 2018, 2017,2021, 2020, and 2016,2019, the Company recorded expenses of $19$6 million, $16$8 million and $15$12 million, respectively.
 
The movement in the options during 2018 and 2017 are as follows:
 
 
Number of options (in millions)
 2014 Plan

(in millions)

Balance as of January 1, 2020
 30
Movement in 2020:
Expired during the year
(2)
Exercised during the year
(1)
Total options outstanding as of December 31, 2020
 27
Movement in 2021:
Granted during the year
1
Exercised during the year
(16)
Total options outstanding as of December 31, 2021
 12


Balance as at January 1, 2017 14Subsequent to the date of the report
  
Movement

In February 2022, the Company’s HR & Compensation Committee and the Board of Directors, approved a new triennial equity grant for the years 2022-2024 in 2017:

Granted during the year 7
Forfeited duringform of about 13 million non-marketable and non-transferable options for no consideration, under the year (1)
Totalamended 2014 Equity Compensation Plan to senior managers (including the CEO and the Chairman of the Board). The Fair value at the grant date (February 8, 2022) is about $24.5 million. Regarding to the grant of the CEO and the Chairman of the Board, the final quantity and fair value of their options outstanding aswill be determined at December 31, 2017 20
Movementthe date of the Annual General Meeting of Shareholders. The vesting period of the options will be in 2018:
Granted duringthree equal tranches, upon the year 6
Expired duringlapse of 12 months, 24 months and 36 months from the year (6)
Forfeited during the year (1)
Exercised during the year (1)
Total options outstanding as at December 31, 2018 18grant date.



F - 108ICL Group LimitedConsolidated Financial Statements99

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2119 – Equity (cont'd)

C.
Share-based payments (cont'd)
C. Share-based payments to employees (cont'd)

1.
1.
Non-marketable options (cont'd)
 
The exercise prices for options outstanding at the beginning and end of each period are as follows:
 
 
December 31, 20182021
December 31, 20172020
December 31, 20162019

Granted 2014 US Dollar6.777.436.81
0
0
7.15
Granted 2015 US Dollar6.927.596.95
Granted 2016 US Dollar4.214.684.35
4.61
4.56
4.36
Granted 2017 US Dollar3.894.35-
4.19
4.17
4.01
Granted 2018 US Dollar3.89-
4.11
4.12
3.99
Granted 2019 US Dollar
5.77
5.66
5.42
Granted 2021 US Dollar
7.3900

 
The number of outstanding vested options at the end of each period and the weighted average of the exercise price for these options are as follows (*):
 
 
December 31, 20182021
December 31, 20172020
December 31, 20162019

Number of options exercisable (In Millions) 11 12 10
Number of options exercisable (in Millions)
4
11
12
Weighted average exercise price in Israeli Shekel18.5322.5630.49
14.29
13.89
15.19
Weighted average exercise price in US Dollar4.946.517.93
4.59
4.32
4.40

 
(*) The share price as of December 31, 20182021, is NIS 21.2030.01 and $5.66.$9.65.
 
The range of exercise prices for the options outstanding vested at the end of each period areis as follows:
 
 
December 31, 20182021
December 31, 20172020
December 31, 20162019

Range of exercise price in Israeli Shekel
14.26-25.93
12.77-18.06
15.01-26.3
13.15-18.32
16.59-40.78
13.55-24.71
Range of exercise price in US Dollar
3.81-6.92
4.11-5.81
4.33-7.59
4.09-5.70
4.31-10.61
3.92-7.15

 
The average remaining contractual life for the outstanding vested options at the end of each period areis as follows:
 
December 31, 2018December 31, 2017December 31, 2016
 
December 31, 2021
December 31, 2020
December 31, 2019
Average remaining contractual life
2.83
3.58
3.85

Average remaining contractual life 3.90 2.60 2.40

 
F - 109

Notes to the
ICL Group LimitedConsolidated Financial Statements as at December 31, 2018
Note 21 – Equity (cont'd)
C. Share-based payments to employees (cont'd)
2.Restricted shares

Grant dateEmployees entitledNumber of instruments (thousands)Vesting conditions (*)Instrument termsAdditional InformationFair value at the grant date (Million)
August 6, 2014Officers and senior employees 922
3 equal tranches:
(1) One third on December 1, 2016
(2) One third on December 1, 2017
(3) One third on December 1, 2018
 
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 450 ICL officers and senior employees in Israel and overseas.The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required).8.4
December 11, 2014Former CEO 86An issuance for no consideration, under the 2014 Equity Compensation Plan.
February 26, 2015ICL’s Directors (excluding ICL's CEO) 99
3 tranches:
(1) 50% will vest August 28, 2015
(2) 25% will vest February 26, 2017
(3) 25% will vest February 26, 2018
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 11 ICL Directors.0.7
May 12, 2015Officers and senior employees 1,194
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 550 ICL officers and senior employees in Israel and overseas.9.7
June 29, 2015Former CEO 90An issuance for no consideration, under the 2014 Equity Compensation Plan.
Former Chairman of the BOD 68
December 23, 2015ICL’s Directors (excluding ICL's CEO & Chairman of the BOD) 121
3 equal tranches:
(1) One third on December 23, 2016
(2) One third on December 23, 2017
(3) One third on December 23, 2018
 
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 8 ICL Directors.0.5

(*) The vesting date is subject to the employee entitled continuing to be employed by the Company and the directors continuing to serve in their positions on the vesting date, unless they ceased to hold office due to certain circumstances set forth in sections 231-232a and 233(2) of the Israeli Companies Law.
F - 110100

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 21 – Equity (cont'd)
C. Share-based payments to employees (cont'd)
2.Restricted shares (cont’d)
Grant dateEmployees entitledNumber of instruments (thousands)Vesting conditions (*)Instrument termsAdditional InformationFair value at the grant date (Million)
June 30, 2016Officers and senior employees 990
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 90 ICL officers and senior employees in Israel and overseas.The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required).4.8
September 5, 2016Chairman of the BOD 55An issuance for no consideration, under the 2014 Equity Compensation Plan.
Former CEO 185
January 3, 2017ICL’s Directors (excluding ICL's Chairman of the BOD) 146
An issuance for no consideration, under the 2014 Equity Compensation Plan, to 8 ICL Directors.
The value includes a reduction of 5% from the value of the equity compensation, pursuant to the decision of the directors in March 2016, to reduce their annual compensation for 2016 and 2017.
0.6
February 14, 2017Former CEO 38An issuance for no consideration, under the 2014 Equity Compensation Plan.0.2
June 20, 2017Officers and Senior employees 2,211An issuance for no consideration, under the 2014 Equity Compensation Plan, to 494 ICL officers and senior employees in Israel and overseas.10
August 2, 2017Chairman of BOD 53An issuance for no consideration, under the 2014 Equity Compensation Plan.0.3
January 10, 2018ICL’s Directors (excluding ICL's CEO & Chairman of the BOD) 137An issuance for no consideration, under the 2014 Equity Compensation Plan, to 7 ICL Directors.0.6

(*) The vesting date is subject to the employee entitled continuing to be employed by the Company and the directors continuing to serve in their positions on the vesting date, unless they ceased to hold office due to certain circumstances set forth in sections 231-232a and 233(2) of the Israeli Companies Law.

F - 111

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2119 – Equity (cont'd)
 
C.
Share-based payments (cont'd)
C. Share-based payments to employees (cont'd)
2.
Restricted shares
Grant dateEmployees entitledNumber of instruments (thousands)
Vesting conditions (*)
Instrument termsAdditional InformationFair value at the grant date (Million)
June 30, 2016
Officers and senior employees
 990
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
 
An issuance for no consideration, under the amended 2014 Equity Compensation Plan.
 

The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the approval date of the BOD and/or the approval date of the General Meeting where required).

4.1
September 5, 2016        
Former chairman of BOD 
 55
June 20, 2017
Officers and senior employees
 2,211
10
August 2, 2017
Former chairman of BOD
 53
0.3
January 10, 2018
ICL’s Directors  (excluding ICL’s CEO & Chairman of the BOD)
 137
0.6
March 6, 2018
Officers and senior employees
 1,726
8
May 14, 2018
CEO
 121
0.6
August 20, 2018
Former chairman of BOD
 47
0.2
April 23, 2020
ICL’s Directors (excluding directors who are officers or directors of Israel Corporation Ltd.)
 177
3 equal tranches:
(1) one third on January 1, 2021
(2) one third on January 1, 2022
(3) one third on January 1,2023
The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the Grant Date (the approval date of the annual General Meeting of shareholders).
0.6
 

(*) 

3.

Vesting of the Restricted shares (cont’d)Shares would be fully accelerated if the holder ceases to serve as a director of the Company, unless he/she ceased to hold office due to those certain circumstances regarding early termination of office or imposition of enforcement measures, as set forth in Sections 231-232a and 233(2) of the Israeli Companies Law.


Grant dateEmployees entitledNumber of instruments (thousands)Vesting conditions (*)Instrument termsAdditional InformationFair value at the grant date (Million)
March 6, 2018Officers and senior employees 1,726
3 equal tranches:
(1) one third at the end of 12 months after the grant date
(2) one third at the end of 24 months after the grant date
(3) one third at the end of 36 months after the grant date
An issuance for no consideration, under the 2014 Equity Compensation Plan (as amended).The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required).8
May 14, 2018CEO 1210.6
August 20, 2018Chairman of BOD 470.2
ICL’s Directors (excluding ICL's CEO & Chairman of the BOD) 88Acceleration at January 2019.0.4
(*) The vesting date is subject to the employee entitled continuing to be employed by the Company and the directors continuing to serve in their positions on the vesting date, unless they ceased to hold office due to certain circumstances set forth in sections 231-232a and 233(2) of the Israeli Companies Law.
F - 112
ICL Group LimitedConsolidated Financial Statements101

Notes to the Consolidated Financial Statements as atof December 31, 20182021
 
Note 2119 – Equity (cont’d)(cont'd)

D.
Dividends distributed to the Company’s Shareholders
D. Dividends distributed to the Company's Shareholders

The date of Board of Directors
Directors’
decision date
to distribute
the dividend
Actual date of
distribution of
the dividend
Gross amount
of the dividend
distributed
(in millions of $)
Net amount of
the distribution
(net of the
subsidiary’s share)
(in millions of $)
Amount of
the dividend
per share
(in $)

February 4, 2019

March 13, 2019
62
61
0.05

May 6, 2019

June 19, 2019
76
75
0.06

July 30, 2019

September 24, 2019
74
73
0.06

November 5, 2019

December 18, 2019
65
64
0.05
Total 2019
 
277
273
0.22

February 11, 2020

March 18, 2020
23
23
0.02

May 10, 2020

June 17, 2020
30
30
0.02

July 27, 2020

September 16, 2020
36
36
0.03

November 10, 2020

December 16, 2020
29
29
0.02
Total 2020
 
118
118
0.09

February 10, 2021

March 16, 2021
34
34
0.03

May 5, 2021

June 16, 2021
67
67
0.05

July 27, 2021

September 1, 2021
68
68
0.05

November 3, 2021

December 15, 2021
107
107
0.08
Total 2021
 
276
276
0.21
February 8, 2022*
March 8, 2022
1691690.13


March 15, 2016April 18, 201667670.05
May 17, 2016June 22, 201635350.03
August 9, 2016September 27, 201660600.05
November 22, 2016January 4, 201760600.05
February 14, 2017April 4, 201757570.04
May 9, 2017June 20, 201734320.03
August 2, 2017September 13, 201732320.02
November 7, 2017December 20, 201757560.04
February 13, 2018March 14, 201870690.05
May 10, 2018June 20, 201852510.04
July 31, 2018September 4, 201856560.04
October 31, 2018December 19, 201866650.05
February 5, 2019 (after the reporting date)*March 13, 201962610.05


(*) The record date is February 28, 201923, 2022, and the payment date is March 13, 2019.8, 2022.

E. Cumulative translation adjustmentICL Group LimitedConsolidated Financial Statements102

Notes to the Consolidated Financial Statements as of December 31, 2021
 
Note 19 – Equity (cont'd)
E.
Cumulative translation adjustment
The translation reserve includes all translation differences arising from translation of financial statements of foreign operations.
 
F.
F.
Capital reserves
 

The capital reserves include expenses for share‑based compensation to employees against a corresponding increase in equity (see section C.(See item C above) and change in investment at fair value through other comprehensive income (investment in 15% of the share capital of YYTH, see(See Note 23.B)21.E(3)).

 
F - 113

Notes to the Consolidated Financial Statements as at December 31, 2018
G.
Treasury shares
 
Note 21 – Equity (cont’d)

G. Treasury shares
1)
During 2008 and 2009 22.4 million shares were acquired by the CompanyGroup under a purchase plan, for a total consideration of approximately $258 million. Total shares held by the company and it's subsidiariesGroup are about 24.5 million.
2)In determining the amount of retained earnings available for distribution as a dividend pursuant to the Israeli Companies Law, a deduction must be made from the balance of the retained earnings the amount of self‑acquisitions (that are presented separately in the “treasury shares” category in the equity section).
 
H. Retained earnings
The retained earnings include actuarial gains (see
Note 18.E) and dividends to the shareholders.
Note 2220 - Details of Income Statement Items

 For the year ended December 31
 201820172016
 $ millions$ millions$ millions

Sales 5,556 5,418 5,363
    
Cost of sales   
Materials 1,643 1,504 1,546
Cost of labor 791 777 753
Depreciation and amortization 384 363 317
Energy 349 343 315
Other 535 759 772
  3,702 3,746 3,703


 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
F - 114
Sales
 6,955
 5,043
 5,271
Cost of sales
   
Materials consumed
 2,342
 1,647
 1,702
Cost of labor
 906
 794
 766
Depreciation and amortization
 413
 416
 384
Energy and fuel
 343
 316
 340
Other
340
 380
 262
 
  4,344
  3,553
  3,454

Notes to the

ICL Group LimitedConsolidated Financial Statements as at December 31, 2018
Note 22 - Details of Income Statement Items (cont’d)

 For the year ended December 31
 201820172016
 $ millions$ millions$ millions

Selling, transport and marketing expenses   
Transport 553 497 475
Cost of labor 125 122 119
Other 120 127 128
    
  798 746 722
General and administrative expenses   
Cost of labor 172 170 188
Professional Services 44 49 77
Other 41 42 56
  257 261 321
    
Research and development expenses, net   
Cost of labor 38 40 48
Other 171525
    
  55 55 73

 For the year ended December 31
 201820172016
 $ millions$ millions$ millions

Other income   
Capital gain 841 54-
Past service cost 7- 14
Retroactive electricity charges- 6 16
Insurance compensation- 30 30
Other 11 19 11
    
Other income recorded in the income statements 859 109 71
    
Other expenses   
Provision for legal claims 31 31 21
Impairment of assets 19 32 489
Provision for historical waste removal and site closure costs 18- 51
Provision for early retirement and dismissal of employees 7 20 39
Environment related provisions 1 7-
Other 8- 18
  �� 
Other expenses recorded in the income statements 84 90 618

F - 115

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 22 - Details of Income Statement Items (cont’d)

 For the year ended December 31
 201820172016
 $ millions$ millions$ millions

Financing income and expenses   
Financing income:   
Financing income recorded in relation to employee benefits 7--
Net change in fair value of derivative financial instruments- 104 24
Net gain from changes in exchange rates and interest income 49 1 1
  56 105 25
    
Financing expenses:   
Interest expenses to banks and others 117 120 151
Financing expenses in relation to employee benefits- 38 17
Banks and finance institutions commissions (mainly commission on early repayment of loans) 18 16 4
Net change in fair value of derivative financial instruments 101--
Net loss from changes in exchange rates- 78 7
    
Financing expenses 236 252 179
Net of borrowing costs capitalized 22 23 22
  214 229 157
    
Net financing expenses recorded in the income statements 158 124 132
103


F - 116

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 20 - Details of Income Statement Items (cont'd)
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Selling, transport and marketing expenses
   
Land and Marine transportation
 742
 515
 509
Cost of labor
 171
 134
 133
Other
 154
 117
 125
 
 1,067
 766
 767
General and administrative expenses
   
Cost of labor
 166
 136
 153
Professional Services
 44
 32
 42
Other
 66
 64
 59
 
 276
 232
 254
Research and development expenses, net
   
Cost of labor
 52
 40
 36
Other
 12
 14
 14
 
 64
 54
 50
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Other income

 

 

 

Capital gain

16

0

12

Profit from divestment

 14
 0
 0

Past service cost

12
 11
 5

Reversal of provision for legal claims

11
 0
7

Reversal of Impairment of fixed assets

9
 0
10
Other
 1
 9
 6
Other income recorded in the income statements
 63
 20
 40
Other expenses
   

Provision for legal claims

17

0

14

Provision for historical waste removal and site closure costs

14

83

7

Transaction costs

 8
0
 0

Impairment and disposal of assets

9
 90
 0

Provision for early retirement and dismissal of employees

0
78
 5
Other
 9
 5
 4
Other expenses recorded in the income statements
 57
 256
 30
 

ICL Group LimitedConsolidated Financial Statements104

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 2320 - Details of Income Statement Items (cont'd)
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
Financing income and expenses
   
Financing income:
   

Net gain from change in fair value of derivative designated as economic hedge

 59
 0
45

Net gain from change in fair value of derivative designated as cash flow hedge

 18
54
38

Interest income from banks and others

17
7
 8
 
 94
 61
 91
Financing expenses:
   
Interest expenses to banks and others
 126
 120
 125
Net loss from changes in exchange rates
 79
 58
72
Financing expenses in relation to employees’ benefits
 23
 38
39

Banks and finance institutions commissions (mainly commission on early repayment of loans)

 6
4
 3

Net loss from change in fair value of derivative designated as economic hedge

 0
 23
 0
Financing expenses
 234
 243
 239
Net of borrowing costs capitalized
 18
 24
 19
 
 216
 219
 220
    
Net financing expenses recorded in the income statements
 122
 158
 129

ICL Group LimitedConsolidated Financial Statements105

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 21 - Financial Instruments and Risk Management
 
A. General
 
The GroupCompany has extensive international operations wherein it is exposed to credit, liquidity and market risks (including currency, interest and other price risks). In order to reduce the exposure to these risks, the GroupCompany holds financial derivative instruments, (including forward transactions, SWAP transactions, and options) to reduce the exposure to foreign currency risks, commodity price risks, energy and marine transport and interest risks. Furthermore, the GroupCompany holds derivative financial instruments to hedge the exposure and changes in the cash flows.
The transactions in derivatives are executed with large Israeli and non-Israeli financial institutions, and therefore GroupCompany management believes the credit risk in respect thereof is low.
 
This Note presents information about the Group’sCompany's exposure to each of the above risks, and the Group’sCompany's objectives, policies and processes for measuring and managing risk.
 
We
The Company regularly monitor the extent of our exposure and the rate of the hedging transactions for the various risks described below. WeThe Company execute hedging transactions according to our hedging policy with reference to the actual developments and expectations in the various markets.

ICL Group LimitedConsolidated Financial Statements106

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 21 - Financial Instruments and Risk Management (cont'd)
 
B. Groups and measurement bases of financial assets and financial liabilities
 
 
As of December 31, 2021
 
Financial assets
Financial liabilities
 
Measured at fair value through the statement of income
Measured at amortized cost
Measured at fair value through the statement of income
Measured at amortized cost
 
$ millions
$ millions
$ millions
$ millions
Current assets
    
Cash and cash equivalents
0
473
0
0
Short-term investments and deposits
0
91
0
0
Trade receivables
0
1,418
0
0
Other receivables
0
45
0
0
Foreign currency derivative designated as economic hedge
23
0
0
0

Marine transport derivative designated as economic hedge

2

0

0

0

Foreign currency and interest derivative instruments designated as cash flow hedge

23

0

0

0

Non-current assets
    
Foreign currency and interest derivative instruments designated as cash flow hedge
97
0
0
0
Other non-current asset
0
14
0
0
Total financial assets
145
2,041
0
0
Current liabilities
    
Short term debt
0
0
0
(577)
Trade payables
0
0
0
(1,064)
Other current liabilities
0
0
0
(153)
Foreign currency derivative designated as economic hedge
0
0
(3)
0
Non-current liabilities
    
Long term debt and debentures
0
0
0
(2,436)
Interest derivative instruments designated as economic hedge
0
0
(7)
0
Other non- current liabilities
0
0

0

(49)
Total financial liabilities
0
0
(10)
(4,279)
Total financial instruments, net
145
2,041
(10)
(4,279)
As at December 31, 2018
Financial assetsFinancial liabilities
Measured at fair value through the statement of incomeMeasured at fair value through the statement of comprehensive incomeMeasured at amortized costMeasured at fair value through the statement of incomeMeasured at amortized cost
$ millions$ millions$ millions$ millions$ millions


      
Cash and cash equivalents-- 121--
Short-term investments and deposits-- 92--
Trade receivables-- 990--
Other receivables 13- 30--
Investments at fair value through other comprehensive income- 145---
Other non-current assets 15- 66--
Total financial assets 28 145 1,299--
Short term credit---- (610)
Trade payables---- (715)
Other current liabilities--- (21) (330)
Long-term debt and debentures---- (1,815)
Other non-current liabilities---- (6)
Total financial liabilities--- (21) (3,476)
Total financial instruments, net 28 145 1,299 (21) (3,476)

ICL Group LimitedConsolidated Financial Statements107


F - 117

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
B. Groups and measurement bases of financial assets and financial liabilities (cont'd)
 
 
As atof December 31, 20172020
 
Financial assets
Financial liabilities
 
Measured at fair value through the statement of income
Measured at fair value through the statement
of comprehensive income
Measured at
amortized cost
Measured at fair value through the statement of income
Measured at amortized cost
 
$ millions
$ millions
$ millions
$ millions
$ millions
Current assets
     
Cash and cash equivalents
0
0
214
0
0
Short-term investments and deposits
0
0
100
0
0
Trade receivables
0
0
883
0
0
Other receivables
0
0
122
0
0

Investments at fair value through other comprehensive income

0

53

0

0

0

Foreign currency and interest derivative designated as economic hedge
24
0
0
0
0
Non-current assets
     
Foreign currency and interest derivative instruments designated as cash flow hedge
115
0
0
0
0
Investments at fair value through other comprehensive income
0
83
0
0
0
Other non-current asset
0
0
8
0
0
Total financial assets
139
136
1,327
0
0
Current liabilities
     
Short term debt
0
0
0
0
(679)
Trade payables
0
0
0
0
(740)
Other current liabilities
0
0
0
0
(156)
Foreign currency and interest derivative designated as economic hedge
0
0
0
(42)
0
Energy and marine transport derivative designated as economic hedge
0
0
0
(1)
0
Non-current liabilities
     
Long term debt and debentures
0
0
0
0
(2,053)
Foreign currency and interest derivative designated as economic hedge
0
0
0
(13)
0

Foreign currency and interest derivative instruments designated as cash flow hedge

0
0
0
(28)
0
Other non- current liabilities
-
0
0
0
(53)
Total financial liabilities
0
0
0
(84)
(3,681)
Total financial instruments, net
139
136
1,327
(84)
(3,681)

      
Cash and cash equivalents-- 83--
Short-term investments and deposits-- 90--
Trade receivables-- 932--
Other receivables 5- 81--
Investments at fair value through other comprehensive income- 212---
Other non-current assets 64- 9--
Total financial assets 69 212 1,195--
Short term credit---- (822)
Trade payables---- (790)
Other current liabilities--- (3) (311)
Long-term debt and debentures---- (2,388)
Other non-current liabilities--- (3) (1)
Total financial liabilities--- (6) (4,312)
Total financial instruments, net 69 212 1,195 (6) (4,312)


F - 118

ICL Group LimitedConsolidated Financial Statements108

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
C. Credit risk
 
(1) General
 
(a) Customer credit risks
 
Credit risk is the risk of financial loss to the GroupCompany if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and it arises mainly from the Group’sCompany’s receivables from customers and from other receivables as well as from investments in securities.
 
The Company sells to a wide range and large number of customers, including customers with material credit balances. On the other hand, the Company does not have a concentration of sales to individual customers.
 
The Company has a regular policy of insuring the credit risk of its customers by means of purchasing credit insurance with insurance companies, other than sales to government agencies and sales in small amounts. Most of all other sales are executed only after receiving approval of coverage in the necessary amount from an insurance company or other collaterals of a similar level.
 
The use of an insurance company as aforementioned ensures that the credit risk is managed professionally and objectively by an expert external party and transfers most of the credit risk to third parties. Nevertheless, the common deductible in credit insurances is 10% (even higher in a small number of cases) thus the GroupCompany is still exposed to part of the risk, out of the total insured amount.
 
In addition, the GroupCompany has an additional deductible cumulative annual amount of approximately $6 million through a wholly‑owned captive reinsurance Company.company.
 
Most of the Group’sCompany’s customers have been trading with the GroupCompany for many years and only rarely have credit losses been incurred by the Group.Company. The financial statements include specific allowance for doubtful debts that appropriately reflect, in Management’s opinion, the credit loss in respect of accounts receivables which are considered doubtful.
 
(b) Credit risks in respect of deposits
 
The GroupCompany deposits its balance of liquid financial assets in bank deposits and in securities. All the deposits are with a diversified group of leading banks preferably with banks that provide loans to the Group.Company.
F - 119

ICL Group LimitedConsolidated Financial Statements109

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
C. Credit risk (cont’d)(cont'd)
 
(2) Maximum Exposure to credit risk
 
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:
 
 
As of December 31
 
Carrying amount ($ millions)
 
2021
2020
 As at December 31
 Carrying amount ($ millions)
 20182017
Cash and cash equivalents
473
214
Short term investments and deposits
91
100
Trade receivables
1,418
883
Other receivables
45
122
Derivatives
145
139
Other non-current assets
14
8
 
2,186
1,466

Cash and cash equivalents 121 83
Short term investments and deposits 92 90
Trade receivables 990 932
Other receivables 43 86
Investments at fair value through other comprehensive income 145 212
Other non-current assets 81 73
 1,472 1,476

 
The maximum exposure to credit risk for trade receivables, at the reporting date by geographic region was:
 
 
As of December 31
 
Carrying amount ($ millions)
 
2021
2020
 As at December 31
 Carrying amount ($ millions)
 20182017

Asia

440
258

Europe

362
330

South America

306
68

North America

193
144
Israel
95
67
Other
22
16
 
1,418
883

Western Europe 294 332
Asia 342 293
North America 150 131
South America 106 70
Israel 72 70
Other 26 36
  990 932


F - 120

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 23 - Financial Instruments and Risk Management (cont'd)
C. Credit risk (cont'd)
 
(3) Aging of debts and impairment losses
 
The aging of trade receivables at the reporting date was:
 
 
As of December 31
 
2021
2020
 
Gross
Impairment
Gross
Impairment
 
$ millions
$ millions
$ millions
$ millions
 As at December 31
 20182017
 GrossImpairmentGrossImpairment
 $ millions$ millions$ millions$ millions

Not past due 829- 785-
1,313
(1)
788
0
Past due up to 3 months 114- 125-
82
0
58
0
Past due 3 to 12 months 38 (1) 23 (6)
23
(2)
7
(1)
Past due over 12 months 12 (2) 10 (5)
9
(6)
40
(9)
 993 (3) 943 (11)
1,427
(9)
893
(10)

ICL Group LimitedConsolidated Financial Statements110

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 21 - Financial Instruments and Risk Management (cont'd)
C. Credit risk (cont'd)
(3) Aging of debts and impairment losses (cont'd)
 
The movement in the allowance offor doubtful accounts during the year was as follows:
 
 
2021
2020
 
$ millions
$ millions
 20182017
 $ millions$ millions

Balance as at January 1 11 6
Balance as of January 1
10
3
Additional allowance 1 5
(3)
5
Write offs (7) (1)
Reversals (1)-
(2)
0
Changes due to translation differences (1) 1
4
2
Balance as at December 31 3 11
Balance as of December 31
9
10


F - 121

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 23 - Financial Instruments and Risk Management (cont'd)
 
D. Liquidity risk
 
Liquidity risk is the risk that the GroupCompany will not be able to meet its financial obligations as they fall due. The Group’sCompany’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to timely meet its liabilities, under both normal and stressed conditions, without incurring unwanted losses.
 
The Company manages the liquidity risk by holding cash balances, short-term deposits and secured bank credit facilities.
 
The following are the contractual maturities of financial liabilities, including estimated interest payments:
 
 
As atof December 31, 20182021
 
Carrying amount
12 months or less
1-2 years
3-5 years
More than 5 years
 
$ millions
Non-derivative financial liabilities
     
Short term debt (not including current maturities)
327
329
0
0
0
Trade payables
1,064
1,064
0
0
0
Other current liabilities
153
153
0
0
0
Long-term debt, debentures and others
2,735
352
1,003
799
1,532
 
4,279
1,898
1,003
799
1,532
Financial liabilities – derivative instruments
     

Foreign currency and interest derivative designated as economic hedge

10
3
0
7
0


      
Non-derivative financial liabilities     
      
Short term credit (not including current maturities) 544 556---
Trade payables 715 715---
Other current liabilities 330 330---
Long-term debt and debentures 1,881 152 453 1,084 1,166
  3,470 1,753 453 1,084 1,166
      
Financial liabilities – derivative instruments utilized for economic hedging     
      
Foreign currency and interest derivative instruments 16 16---
Derivative instruments on energy and marine transport 5 4 1--
  21 20 1--
ICL Group LimitedConsolidated Financial Statements111


F - 122

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
D. Liquidity risk (cont'd)
 
 
As atof December 31, 20172020
 
Carrying amount
12 months or less
1-2 years
3-5 years
More than 5 years
 
$ millions
Non-derivative financial liabilities
     
Short term debt (not including current maturities)
296
299
0
0
0
Trade payables
740
740
0
0
0
Other current liabilities
156
156
0
0
0

Long-term debt, debentures and others

2,489
489
529
859
1,559
 
3,681
1,684
529
859
1,559
Financial liabilities – derivative instruments utilized for economic hedging
     
Foreign currency and interest derivative designated as economic hedge
55
42
0
0
13
Energy and marine transport derivative designated as economic hedge
1
1
0
0
0

Foreign currency and interest derivative designated as cash flow hedge

28
0
0
0
28
 
84
43
0
0
41

Non-derivative financial liabilities     
      
Short term credit (not including current maturities) 810 822---
Trade payables 790 790---
Other current liabilities 310 310---
Long-term debt and debentures 2,400 102 345 1,085 1,358
  4,310 2,024 345 1,085 1,358
      
Financial liabilities – derivative instruments utilized for economic hedging     
      
Foreign currency and interest derivative instruments 6 3-- 3

 
E. Market risk
 
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the fair value or future cash flows of a financial instrument.
 
1. Interest risk
 

The GroupCompany has loans bearing variable interests and therefore its financial results and cash flows are exposed to fluctuations in the market interest rates.

ICL

The Company uses financial instruments, including derivatives, in order to hedge this exposure. The GroupCompany uses interest rate swap contracts mainly in order to reduce the exposure to cash flow risk in respect of changes in interest rates.


As part of the global reform in interest rate benchmarks, the Libor GBP settings ceased from 1 January 2022 and replaced by SONIA (GBP) Benchmark. Most US dollar LIBOR settings will continue to be calculated using panel bank submissions until mid-2023.

As of December 31,2021, USD LIBOR continues to be used as a reference rate and in valuation of instruments with maturities that exceed the expected end date for LIBOR. the Company has USD 30 million Libor Based Debt and USD 150 million LIBOR Based derivatives that exceed the expected end date for LIBOR.

As of December 31,2021, we have not finalized an agreement with the banks regarding the Libor transition effects on loans and derivatives.

F - 123

ICL Group LimitedConsolidated Financial Statements112

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont'd)
 
1. Interest risk (cont'd)
 
(a) Interest Rate Profile
 
Set forth below is detailare details regarding the type of interest on the Group’sCompany’s non-derivative interest‑bearing financial instruments:
 
 
As of December 31
 
2021
2020
 
$ millions
$ millions
 As at December 31
 20182017
 $ millions$ millions

Fixed rate instruments
 
 
Financial assets
338
165
Financial liabilities
(2,466)
(2,450)
 
(2,128)
(2,285)
Variable rate instruments
  
Financial assets
36
223
Financial liabilities
(562)
(296)
 
(526)
(73)
Fixed rate instruments:    
Financial assets 151 88
Financial liabilities (1,728) (1,800)
  (1,577) (1,712)
Variable rate instruments  
Financial assets 128 97
Financial liabilities (714) (1,428)
  (586) (1,331)

 
(b) Sensitivity analysis for fixed rate instruments
 
Most of the Group’sCompany’s instruments bearing fixed interest are not measured at fair value through the statement of income. Therefore, changes in the interest rate as at the date of the report will not be expected to have any impact on the profit or loss in respect of changes in the value of assets and liabilities bearing fixed interest.
 
(c) Sensitivity analysis for variable rate instruments
 
The below analysis assumes that all other variables (except for the interest rate), in particular foreign currency rates, remain constant.
 
 
As atof December 31, 20182021
 
Impact on profit (loss)
 
Decrease of 1%
in interest
Decrease of 0.5%
in interest
Increase of 0.5%
in interest
Increase of 1%
in interest
 
$ millions
$ millions
$ millions
$ millions
SWAP instruments
    
Changes in U.S. Dollar interest
(32)
(16)
15
29
Changes in Israeli Shekel interest
39
19
(18)
(35)


Changes in U.S Dollar interest    
Non-derivative instruments (1) (1) 1 1
SWAP instruments (18) (9) 9 18
  (19) (10) 10 19
Changes in Israeli Shekel interest    
SWAP instruments 19 10 (10) (19)
ICL Group LimitedConsolidated Financial Statements113


F - 124

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 23-21- Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont’d)(cont'd)
 
1. Interest risk (cont’d)(cont'd)
 
(d) Terms of derivative financial instruments used to hedge interest risk
 
 
As atof December 31, 20182021
 
Carrying amount (fair
(fair
value)
Stated
amount
Maturity date
Interest rate
range
 
$ millions
$ millions
Years
%
U.S. Dollar
    
SWAP contracts from variable interest to fixed interest
(7)
150
2024
2.47-2.6%
Israeli Shekel
    
SWAP contracts from fixed ILS interest to fixed USD interest
119
579
2034
2.4-4.47%

U.S Dollar    
SWAP contracts from variable interest to fixed interest- 2502019-20241.7%-2.6%
     
Israeli Shekel    
Swap contracts from fixed ILS interest to fixed USD interest 15 486 30/3/20242.45%-4.74%
     
Euro    
Swap contracts from variable USD interest to fixed EUR interest (1) 334 15/2/20191-month Libor

 
 
As atof December 31, 20172020
 
Carrying amount (fair
(fair
value)
Stated
amount
Maturity date
Interest rate
range
 
$ millions
$ millions
Years
%
U.S. Dollar
    
SWAP contracts from variable interest to fixed interest
(13)
150
2024
2.47%-2.60%
Israeli Shekel
    
SWAP contracts from fixed ILS interest to fixed USD interest
87
701
2034
2.40%-4.47%

GBP

    

SWAP contracts from variable USD interest to fixed GBP interest.

5
63

18/05/2021

1-month libor
Euro
    
SWAP contracts from variable USD interest to fixed EUR interest
(41)
324
19/05/2021
1-month libor

U.S Dollar    
SWAP contracts from variable interest to fixed interest (3) 3502018-20241.36% - 2.6%
     
Israeli Shekel    
SWAP contracts from fixed ILS interest to fixed USD interest 64 489 1/3/20242.45% - 4.74%
     
Euro    
SWAP contracts from variable USD interest to fixed EUR interest (1) 51 15/8/20181-month Libor


F - 125

ICL Group LimitedConsolidated Financial Statements114

Notes to the Consolidated Financial Statements as atof December 31, 2018
2021

Note 23-21 - Financial Instruments and Risk Management (cont'd)

E. Market risk (cont’d)(cont'd)
 
2. Currency risk
 
The GroupCompany is exposed to currency risk with respect to sales, purchases, assets and liabilities that are denominated in a currency other than the functional currency of the Group.Company. The main exposure is the NIS,New Israeli Shekel, Euro, British Sterling, Chinese Yuan Brazilian Real and Turkey Lira.Lira.
 
The GroupCompany enters into foreign currency derivatives – forward exchange transactions and currency options – all in order to protect the GroupCompany from the risk that the eventual cash flows, resulting from existing assets and liabilities, and sales and purchases of goods within the framework of firm or anticipated commitments (based on a budget of up to one year), denominated in foreign currency, will be affected by changes in the exchange rates.
 
(a) Sensitivity analysis
 
A 10% increase at the rate of the US$ against the following currencies would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
 
 
As of December 31
 
Impact on profit (loss)
 
2021
2020
 
$ millions
$ millions
 As at December 31
 Impact on profit (loss)
 20182017
 $ millions$ millions
Non-derivative financial instruments
  
U.S. Dollar/Euro
(80)
(96)
U.S. Dollar/Israeli Shekel
177
134
U.S. Dollar/British Pound
(1)
2
U.S. Dollar/Chinese Yuan
1
(1)
U.S. Dollar/Turkey Lira
0
(1)

Non-derivative financial instruments  
U.S Dollar/Euro (64) (9)
U.S Dollar/Israeli Shekel 92 92
U.S Dollar/British Pound (3) 3
U.S Dollar/Chinese Yuan (12) (4)
U.S Dollar/Turkey Lira (1) (1)

 
A 10% decrease of the US$ against the above currencies atas of December 31 would have the same effect but in the opposite direction.
F - 126

ICL Group LimitedConsolidated Financial Statements115

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont'd)
 
2. Currency risk (cont'd)

(a) Sensitivity analysis (cont'd)

 
Presented hereunder is a sensitivity analysis of the Group’sCompany’s foreign currency derivative instruments as atof December 31, 2018.2021. Any change in the exchange rates of the principal currencies shown below as at December 31 would have increased (decreased) profit and loss and equity by the amounts shown below. This analysis assumes that all other variables remain constant.
 
 
As atof December 31, 20182021
 
Increase 10%
Increase 5%
Decrease 5%
Decrease 10%
 
$ millions
$ millions
$ millions
$ millions
U.S. Dollar/Israeli Shekel
    
Forward transactions
(48)
(25)
27
58
Options
(40)
(18)
25
55
SWAP
(69)
(36)
40
85
     

Euro/ U.S. Dollar

    
Forward transactions
22
11
(11)
(22)
Options
5
2
(3)
(6)
     

U.S Dollar/RMB

    
Forward transactions
(4)
(2)
3
5


Euro/ U.S Dollar    
Forward transactions 9 4 (4) (8)
Options 5 2 (2) (4)
SWAP 34 17 (17) (34)
     
U.S Dollar/Israeli Shekel    
Forward transactions (32) (17) 19 39
Options (75) (41) 19 43
SWAP (48) (25) 28 58
     
British Pound/U.S Dollar    
Forward transactions (4) (2) 2 3
Options (1) (1)- 1
     
U.S Dollar/Chinese Yuan  Renminbi    
Forward transactions (3) (1) 2 3
     
British Pound/Euro    
Forward transactions (4) (2) 2 4

ICL Group LimitedConsolidated Financial Statements116


F - 127

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 21 - Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont'd)
2. Currency risk (cont'd)
(b) Terms of derivative financial instruments used to reduce foreign currency risk
As of December 31, 2021
Carrying amount
Stated amount
Average
$ millions
$ millions

exchange rate

Forward contracts
   
U.S. Dollar/Israeli Shekel
3
515
3.2
Euro/U.S. Dollar
4
240
1.2

U.S Dollar/Brazilian Real

(1)

37

5.4

U.S. Dollar/British Pound
0
16
1.4
U.S. Dollar/Chinese Yuan Renminbi
1
46
6.5
Other
0
23
0
Currency and interest SWAPs
   
U.S. Dollar/Israeli Shekel
119
579
3.7
Put options
   
U.S. Dollar/Israeli Shekel
14
660
3.2
Euro/U.S. Dollar
2
57
1.2
U.S. Dollar/Japanese Yen
0
4
109.7
U.S. Dollar/British Pound
0
12
1.4
Call options
   
U.S. Dollar/Israeli Shekel
(2)
660
3.2
Euro/U.S. Dollar
0
57
1.2
U.S. Dollar/Japanese Yen
0
4
109.7
U.S. Dollar/British Pound
0
12
1.4

ICL Group LimitedConsolidated Financial Statements117

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont'd)
 
2. Currency risk (cont'd)
 
(b) Terms of derivative financial instruments used to reduce foreign currency risk
(cont'd)

 
As atof December 31, 20182020
 
Carrying amount
Stated amount
Average
 
$ millions
$ millions

exchange rate

Forward contracts
   
U.S. Dollar/Israeli Shekel
8
377
3.2
Euro/U.S. Dollar
0
150
1.2
U.S. Dollar/British Pound
0
27
1.4
U.S. Dollar/Chinese Yuan Renminbi
0
23
6.6
Other
0
53
0
Currency and interest SWAPs
   
U.S. Dollar/Israeli Shekel
87
701
3.7
Euro/U.S. Dollar
(41)
324
1.1
U.S. Dollar/British Pound
5
63
1.3
Put options
   
U.S. Dollar/Israeli Shekel
13
400
3.3
Euro/U.S. Dollar
0
47
1.2
U.S. Dollar/Japanese Yen
0
2
107
U.S. Dollar/British Pound
0
10
1.3
Call options
   
U.S. Dollar/Israeli Shekel
(1)
380
3.3
Euro/U.S. Dollar
(2)
47
1.2
U.S. Dollar/Japanese Yen
0
2
107
U.S. Dollar/British Pound
0
10
1.3


Forward contracts   
U.S Dollar/Israeli Shekel 2 352 3.7
Euro/U.S Dollar 2 86 1.2
Euro/British Pound 1 19 0.9
U.S Dollar/British Pound- 32 1.3
U.S Dollar/Chinese Yuan Renminbi- 29 6.5
Other- 37-
    
Currency and interest SWAPs   
U.S Dollar/Israeli Shekel 15 486 3.7
Euro/U.S Dollar (1) 334 1.1
    
Put options   
U.S Dollar/Israeli Shekel 1 695 3.6
Euro/U.S Dollar 2 45 1.2
U.S Dollar/Japanese Yen- 3 114.3
U.S Dollar/British Pound- 11 1.3
    
Call options   
U.S Dollar/Israeli Shekel (15) 695 3.6
Euro/U.S Dollar- 45 1.2
U.S Dollar/Japanese Yen- 3 114.3
U.S Dollar/British Pound- 11 1.3
ICL Group LimitedConsolidated Financial Statements118


F - 128

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont'd)
 
2. Currency risk (cont'd)
(b) Terms of derivative financial instruments used to reduce foreign currency risk (cont’d)
 
As at December 31, 2017
Carrying amountStated amountAverage exchange rete
$ millions$ millions

Forward contracts   
U.S Dollar/Israeli Shekel 2 430 3.5
Euro/U.S Dollar (3) 320 1.2
Euro/British Pound- 20 0.9
U.S Dollar/British Pound- 24 1.3
U.S Dollar/Chinese Yuan  Renminbi (1) 33 6.7
Other- 33-
    
Currency and interest SWAPs   
U.S Dollar/Israeli Shekel 64 489 3.7
    
Put options   
U.S Dollar/Israeli Shekel 5 525 3.4
Euro/U.S Dollar- 63 1.2
U.S Dollar/Japanese Yen- 3 115.5
    
Call options   
U.S Dollar/Israeli Shekel (1) 525 3.4
Euro/U.S Dollar (2) 63 1.2
U.S Dollar/Japanese Yen- 3 115.5

The maturity date of all of the derivatives used to economically hedge foreign currency risk is up to a year.
F - 129

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 23 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont'd)
2. Currency risk (cont'd)
(c) Linkage terms of monetary balances – in millions of Dollars
 
 
As atof December 31, 20182021
 
US Dollar
Euro
British Pound
Israeli Shekel
Brazilian Real
Chinese Yuan Renminbi
Others
Other
Total

Non-derivative instruments:      
Cash and cash equivalents 41 21 4 2 5 37 11
89
23
5
3
76
263
14
473
Short term investments and deposits 74 3- 12 3
86
0
3
2
91
Trade receivables 516 222 60 25 72 35
684
260
41
82
222
91
38
1,418
Other receivables 6 12- 12--
2
22
1
19
1
0
45
Investments at fair value through other comprehensive income-- 145-
Other non-current assets 60 1- 1 4--
4
0
5
0
1
14
Total financial assets 697 259 64 75 34 266 49
865
309
47
104
304
357
55
2,041
   
Short-term credit 201 166 19 34 6 184-
Short-term debt
196
92
12
184
41
52
0
577
Trade payables 150 188 23 265 11 72 6
210
216
28
410
103
91
6
1,064
Other current liabilities 55 46 7 192 2 19 9
33
73
4
18
10
15
 
153
Long term debt, debentures and others 1,322 5- 480 13 1-
1,161
499
21
635
51
67
2
2,436
Other non-current liabilities
1
46
0
2
0
49
Total financial liabilities 1,728 405 49 971 32 276 15
1,601
926
65
1,247
207
225
8
4,279
   
Total non-derivative financial instruments, net (1,031) (146) 15 (896) 2 (10) 34
(736)
(617)
(18)
(1,143)
97
132
47
(2,238)
   
Derivative instruments:     
Forward transactions- 86 51 352- 29 37
0
240
16
515
37
46
23
877
Cylinder- 45 11 695- 3
0
57
12
660
0
4
733
SWAPS – U.S Dollar into Israeli Shekel-- 486--
SWAPS – U.S Dollar into Euro- 334--
SWAPS – U.S. Dollar into Israeli Shekel
-
579
-
579
Total derivative instruments- 465 62 1,533- 29 40
0
297
28
1,754
37
46
27
2,189
   
Net exposure (1,031) 319 77 637 2 19 74
(736)
(320)
10
611
134
178
74
(49)


F - 130

ICL Group LimitedConsolidated Financial Statements119

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont'd)
 
2. Currency risk (cont'd)
 
(c) Linkage terms of monetary balances – in millions of Dollars (cont'd)
 
 
As atof December 31, 20172020
 
US Dollar
Euro
British Pound
Israeli Shekel
Brazilian Real
Chinese Yuan Renminbi
Others
Total
Non-derivative instruments:
        
Cash and cash equivalents
114
13
5
2
6
60
14
214
Short term investments and deposits
88
5
0
0
0
4
3
100
Trade receivables
454
227
35
58
21
51
37
883
Other receivables
72
41
0
7
0
0
2
122
Investments at fair value through other comprehensive income
0
0
0
0
0
136
0
136
Other non-current assets
1
3
0
0
4
0
0
8
Total financial assets
729
289
40
67
31
251
56
1,463
Short-term debt
267
70
85
181
7
68
1
679
Trade payables
145
163
21
326
11
66
8
740
Other current liabilities
41
68
4
17
0
26
 
156
Long term debt, debentures and others
1,211
36
22
716
2
60
6
2,053
Other non-current liabilities
2
51
0
0
0
0
0
53
Total financial liabilities
1,666
388
132
1,240
20
220
15
3,681
Total non-derivative financial instruments, net
(937)
(99)
(92)
(1,173)
11
31
41
(2,218)
Derivative instruments:
        
Forward transactions
0
150
27
377
15
23
38
630
Cylinder
0
47
10
400
20
0
2
479
SWAPS – U.S. Dollar into Israeli Shekel
0
0
0
701
0
0
0
701
SWAPS – U.S. Dollar into Euro
0
324
0
0
0
0
0
324

SWAPS – U.S. Dollar into British Pound

0
0

63

0
0
0
0

63

Total derivative instruments
0
521
100
1,478
35
23
40
2,197
Net exposure
(937)
422
8
305
46
54
81
(21)


Non-derivative instruments:       
Cash and cash equivalents 19 18 7 1 7 22 9
Short term investments and deposits 82 1--- 5 2
Trade receivables 419 246 48 59 31 92 37
Other receivables 40 1- 39-- 1
Investments at fair value through other comprehensive income----- 212-
Other non-current assets 5 1-- 3--
Total financial assets 565 267 55 99 41 331 49
        
Short-term credit 427 158 20 36 8 173-
Trade payables 187 182 23 289 15 85 9
Other current liabilities 95 77 15 96 2 21 5
Long term debt, debentures and others 1,721 29- 522 22 98-
Total financial liabilities 2,430 446 58 943 47 377 14
        
Total non-derivative financial instruments, net (1,865) (179) (3) (844) (6) (46) 35
        
Derivative instruments:       
Forward transactions- 320 44 430- 33 33
Cylinder- 63- 525-- 3
Total derivative instruments- 383 44 955- 33 36
        
Net exposure (1,865) 204 41 111 (6) (13) 71

ICL Group LimitedConsolidated Financial Statements120

F - 131

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
 
E. Market risk (cont’d)(cont'd)
 
3. Other price risk
 
A.(a) Investment in shares
 
TheDuring the year 2021, the Company has ansold all of its remaining investment in YYTH shares (about 147 million shares), for a consideration of 15%$293 million.
(b) Financial asset at amortized cost
As part of the issuedsale of the fire safety and outstanding share capital onoil additives businesses, in 2018, the Company granted a fully diluted basis of YYTH,loan to the buyers, in the carrying amount of approximately $145$53 million (as at bearing interest to be paid along with the loan principal. As of December 31, 2018). The investment is measured at fair value, and fair value updates, are recognized directly2021, the loan has been fully repaid in the consolidated statementa total amount including interest of comprehensive income.
B. Hedging of marine shipping and energy transactions $74 million.
 
4. Hedge accounting
The Company is exposed to riskchanges in the exchange rate of the Israeli shekel against the dollar in respect of marine shippingprincipal and energy costs.interest in certain debentures, loans, labor costs and other operating expenses. The Company uses marine shipping and energy derivativesCompany's risk management strategy is to hedge the risk that itschanges in cash flows will be affectedderiving from liabilities, labor costs and other operational costs denominated in Israeli shekels by changesusing derivatives. These exposures are hedged from time to time, according to the assessment of the exposure and inherent risks against which the Company chooses to hedge, in marine shippingaccordance with the Company's risk management strategy.
In view of the above, in the fourth quarter of 2021, the Company designated several forward contracts and energy prices.options transactions for cash flow hedge and applied hedge accounting. These transactions, which include a portion of labor costs and other operational costs denominated in Israeli shekel, are intended to secure the effect of the change in the exchange rate of the dollar against the hedged portion, thereby protecting the Company's operating income from currency fluctuation. The Company applies a 1:1 hedging ratio. The main source of potential ineffectiveness in these hedging ratios is negligible schedule differences between the hedged item and the hedging instrument. As of the date of the hedge transaction, the total balance of the hedged instruments amounted to about $230 million
In January and May 2020, the Company designated several swap contracts for cash flow hedge and applied hedge accounting. These transactions, which include principal and interest of Series G debentures, entitle the Company to receive fixed Israeli shekel interest against a liability to pay dollar interest at December 31, 2018,a fixed rate. The Company designated the spot component of the exchange rate swap contracts for hedging the currency risk in the cash flows of the said debt balances. The Company applies a 1:1 hedging ratio. The main source of potential ineffectiveness in these hedging ratios is the effect of the Company's and counterparty's credit risk on the fair value of the marine shippingswap contracts. As of the date of the hedge transaction, the total balance of the hedged instruments amounted to about $110 million and energy derivatives was approximately $(5) million.$109 million, respectively.

ICL Group LimitedConsolidated Financial Statements121

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 21 - Financial Instruments and Risk Management (cont'd)
 
F. Fair value of financial instruments
 
The carrying amounts in the books of certain financial assets and financial liabilities, including cash and cash equivalents, investments, short-term deposits and loans, receivables and other debit balances, long-term investments and receivables, short-term credit, payables and other credit balances, long-term loans bearing variable interest and other liabilities, and derivative financial instruments, correspond to or approximate their fair value.
 
The following table details the book value and the fair value of financial instrument groups presented in the financial statements not in accordance with their fair value:
 
 
As atof December 31, 20182021
As atof December 31, 20172020
 
Carrying amount
Fair value
Carrying amount
Fair value
 
$ millions
$ millions
$ millions
$ millions

Loans bearing fixed interest (1) 238 244 271 279
407
408
89
96
  
Debentures bearing fixed interest     
Marketable (2) 1,201 1,217 1,247 1,291
1,524
1,730
1,625
1,870
Non-marketable (3) 281 279 281 288
195
208
281
296
 1,720 1,740 1,799 1,858
2,126
2,346
1,995
2,262

 
(1) The fair value of the shekel, euro, and yuan loans issued bearing fixed interest is based on calculation of the present value of the cash flows in respect of the principal and the interest and is discounted at the market interest rates on the measurement date for similar loans having similar characteristics and is classified as Level 2 in the fair value hierarchy. The average discount interest as at December 31, 2018 for the shekel, euro and yuan loans was 2.8%, 1.7%, and 5.0%, respectively (December 31, 2017 for the shekel, euro and yuan loans - 2.4%, 1.7%, and 6.1%, respectively).
(1)

The fair value of the Shekel, Euro, Brazilian Real and Yuan loans issued bearing fixed interest is based on calculation of the present value of the cash flows in respect of the principal and the interest and is discounted at the market interest rates on the measurement date for similar loans having similar characteristics and is classified as Level 2 in the fair value hierarchy. The average discount interest as of December 31, 2021, for the Shekel, Euro Brazilian Real and Yuan loans was 1.5%, 1.2%, 13% and 4%, respectively (December 31, 2020, for the Shekel, Euro and Yuan loans 1.6%, 1.4%, and 5.1%, respectively).

 
(2)
The fair value of the marketable debentures is based on the quoted stock exchange price and is classified as Level 1 in the fair value hierarchy.
(3)
The fair value of the non‑marketable debentures is based on calculation of the present value of the cash flows in respect of the principal and the interest and is discounted at the Libor rate customary in the market for similar loans having similar characteristics and is classified as Level 2 in the fair value hierarchy. The average discount interest as of December 31, 2021, was 2.5% (December 31, 2020 – 2.6%).
F - 132

ICL Group LimitedConsolidated Financial Statements122

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2321 - Financial Instruments and Risk Management (cont'd)
F. Fair value of financial instruments (cont'd)
(2) The fair value of the marketable debentures is based on the quoted stock exchange price and is classified as Level 1 in the fair value hierarchy.
(3) The fair value of the non‑marketable debentures is based on calculation of the present value of the cash flows in respect of the principal and the interest and is discounted at the Libor rate customary in the market for similar loans having similar characteristics and is classified as Level 2 in the fair value hierarchy. The average discount interest as at December 31, 2018 was 5.3% (December 31, 2017 – 4.57%).
 
G. Hierarchy of fair value
 
The following table presents an analysis of the financial instruments measured by fair value, using the valuation method.method (See Note 4).
 
The following levels were defined:
 
Level 1: Quoted (unadjusted) prices in an active market for identical instruments
 
Level 2: Observed data (directly or indirectly) not included in Level 1 above.
 
Level 1
As atof December 31, 20182021
As of December 31, 2020
Level 2
$ millions
$ millions

Investments at fair value through other comprehensive income (1)
 145
0
136

Level 2
As of December 31, 2021
As of December 31, 2020
Derivatives used for economic hedging, net
$ millions
 7
 152
$ millions
Derivatives designated as economic hedge, net
15
(32)
Derivatives designated as cash flow hedge, net
120
87
 
135
55

As at December 31, 2017
Level 2
$ millions

Investments at fair value through other comprehensive income (1) 212
Derivatives used for economic hedging, net 63
 275
ICL Group LimitedConsolidated Financial Statements123

(1) Investment in the share capital of YYTH was subject to a three-year lock‑up period as required by Chinese law, which was expired in January 2019. Measurement of the fair value of the discount rate in respect of the lock‑up period was calculated by use of the Finnerty 2012.
The impact deriving from a possible and reasonable change in these data items, which are not observed, is not material.
F - 133

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2422 - Earnings per Share
 
Basic earnings per share
 
Calculation of the basic earnings per share for the year ended December 31, 2018,2021, is based on the earnings allocated to the holders of the ordinary shares divided by the weighted-average number of ordinary shares outstanding, calculated as follows:
 
 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
 For the year ended December 31
 201820172016
 $ millions$ millions$ millions

Earnings (losses) attributed to the shareholders of the Company
 1,240
 783
 364
 11
 (122)
 475

Weighted-average number of ordinary shares in thousands:
 

 
 
For the year ended December 31
 
2021
2020
2019
 
Shares thousands
Shares thousands
Shares thousands
Balance as of January 1
 1,280,242
  1,279,379
  1,278,084
Shares issued during the year
 223
 29
 98
Shares vested
 2,342
 618
 768
Weighted average number of ordinary shares used in computation of the basic earnings per share
 1,282,807
  1,280,026
  1,278,950

 
Weighted-average number of ordinary shares in thousands:
 For the year ended December 31
 201820172016
 Shares thousandsShares thousandsShares thousands

Balance as at January 1 1,276,238 1,274,298 1,272,516
Shares issued during the year 73 1,054-
Shares vested 898 720 779
Weighted average number of ordinary shares used in computation of the basic earnings per share 1,277,209 1,276,072 1,273,295


F - 134

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 24 - Earnings per Share (cont’d)
Diluted earnings per share
 
Calculation of the diluted earnings per share for the year ended December 31, 2018,2021, is based on the earnings allocated to the holders of the ordinary shares divided by the weighted-average number of ordinary shares outstanding after adjustment for the number of potential diluted ordinary shares, calculated as follows:
 
Weighted average number of ordinary shares (diluted) in thousands:
 
For the year ended December 31
 
2021
2020
2019
 
Shares thousands
Shares thousands
Shares thousands
Weighted average number of ordinary shares used in the computation of the basic earnings per share
 1,282,807
  1,280,026
  1,278,950
Effect of stock options and restricted shares*
 4,244
 247
  3,106
Weighted average number of ordinary shares used in the computation of the diluted earnings per share
 1,287,051
  1,280,273
  1,282,056

 
 For the year ended December 31
 201820172016
 Shares thousandsShares thousandsShares thousands

Weighted average number of ordinary shares used in the computation of the basic earnings per share 1,277,209 1,276,072 1,273,295
Effect of stock options and restricted shares 2,572 925-
Weighted average number of ordinary shares used in the computation of the diluted earnings per share 1,279,781 1,276,997 1,273,295

At* As of December 31, 2018, 52021, all 12 million outstanding options, (at December 31, 2017 and 2016 – 20representing 4.2 million options and 14 million options, respectively),shares, were excluded fromincluded in the diluted weighted average number of ordinary shares calculationcalculation. As of December 31, 2020 and 2019 – 27 million and 17.5 million options, respectively, were not included since they did not have a diluting effect.
ICL Group LimitedConsolidated Financial Statements124

Notes to the Consolidated Financial Statements as their effect would have been anti‑dilutive.of December 31, 2021

Note 22 - Earnings per Share (cont'd)
 
The average market value of the Company’s shares, for purposes of calculating the dilutive effect of the stock options, is based on the quoted market prices for the period in which the options were outstanding.
 
Note 2523 - Related and Interested Parties
 
Related parties within its meaning in IAS 24 (2009), “Related Parties Disclosure”; Interested parties within their meaning in Paragraph 1 of the definition of an “interested party” in Section 1 of the Israeli Securities Law, 1968.
 
A.
Parent company and subsidiaries
 
Israel Corp. is a public company listed for trading on the Tel Aviv Stock Exchange (TASE). Based on the information provided by Israel Corp., Millenium Investments Elad Ltd. (“Millenium”) and Mr. Idan Ofer are considered as joint controlling shareholders jointly of Israel Corp., for purposes of the Israeli Securities Law (each of Millenium and Mr. Idan Ofer hold shares in Israel Corp. directly, and Mr. Idan Ofer serves as a director of Millenium and has an indirect interest in it as the beneficiary of the discretionary trust that has indirect control of Millenium, as stated below). Millenium holds approximately 46.94%44.44% of the share capital in Israel Corp., which holds as atof December 31, 20182021, approximately 45.86%45.62% of the voting rights and approximately 44.76% of the issued share capital, of the Company.
 
F - 135

Notes toTo the Consolidated Financial Statements as at December 31, 2018
Note 25 - Related and Interested Parties (cont’d)

A. Parent company and subsidiaries (cont’d)
best of Israel Corp.’s knowledge, Millenium is held by Mashat Investments(Investments) Ltd. (“Mashat”Mashat) and by XT Investments Ltd. (“XT Investments”Investments), with 80%84.73% and 20%15.27% holding rates in the issued share capital, respectively. (It is noted that Mashat granted XT Investments a power of attorney for a fixed period (which is extendable) to vote according to XT's discretion at General Meetings of Millenium in respect of shares constituting 5% of the voting rights in Millenium). Mashat is wholly owned by Ansonia Holdings Singapore B.V. (“Ansonia”) which is incorporated in the Netherlands.. Ansonia is a wholly owned subsidiary of Jelany Corporation N.V. (registered in Curaçao), which is a wholly owned subsidiary of a Liberian company,by Court Investments Ltd. (“Court”). Court is wholly owned by a foreign discretionary trust, in which Mr. Idan Ofer is the beneficiary. XT Investments is fully heldwholly owned by XT Holdings Ltd. (“XT Holdings”), a company whose. To the best of Israel Corp.’s knowledge, ordinary shares of XT Holdings are held in equal shares by Orona Investments Ltd. (which is indirectly controlled by Mr. Ehud Angel) and by Lynav Holdings Ltd. ("Lynav"), a company thatwhich is controlled by a foreign discretionary trust in which Mr. Idan Ofer is the beneficiary. Mr. Ehud Angel holds, among other things, a special share that grants him, inter alia, under certain limitations and for certain issues, an additional vote on the Board of Directors of XT Holdings. Lynav also holds directly 1.25% of the issued share capital of Israel Corp. In addition, Kirby Enterprises Inc., which is to the best of Israel Corp.’s knowledge, indirectly held by the same trust that holds Mashat, in which, as stated, Mr. Idan Ofer is the beneficiary, holds approximately 0.74% of the issued share capital of Israel Corp. Furthermore, Mr. Idan Ofer holds directly approximately 3.85% of the issued share capital of Israel Corp.
 
As of December 31, 2018, the number of ICL's shares held by Israel Corp. does not include 9,909,848 ordinary shares, which are subject to certain forward sale agreements, as set forth on ICL's registration statement on Form F-1 (hereinafter - the Forward Agreements), filed with the Securities and Exchange Commission on September 23, 2014 (the "Financial Transaction"). Israel Corp. does not have voting rights or dispositive power with respect to the shares subject to the Financial Transaction, which have been made available to the financial entities (hereinafter - the Forward Counterparties) with whom it engaged in the Transaction. As of December 31, 2018, the settlement period of the Financial Transaction has commenced, which is expected to be executed, subject to its terms, in components at several settlement dates that will occur over a period of approximately nine months. In accordance with the terms of the Financial Transaction, Israel Corp. will not regain voting rights and dispositive power with respect to the said shares (“physical settlement”), in whole or in part, unless it informs the Forward Counterparties otherwise at the relevant settlement dates specified in the Forward Agreements. Even though Israel Corp. holds less than 50% of the Company’s ordinary shares, it still has decisive influence at the General Meetings of the Company’s shareholders and, effectively, it has the power to appoint directors and to exert significant influence with respect to the composition of the Company’s Board of Directors.

ICL Group LimitedConsolidated Financial Statements125

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 23 - Related and Interested Parties (cont'd)
 
A.
Parent company and subsidiaries (cont'd)
As of December 31, 2018, 141 2021, 184 million ordinary shares have been pledged by Israel Corporation to secure certain liabilities, almost entirely comprised of margin loans with an aggregate outstanding principal amount of $260about $314 million.
F - 136

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 25 - Related and Interested Parties (cont’d)

B.

B.Benefits to key management personnel (including directors)
 
The senior managers, in addition to their salaries, are entitled to non-cash benefits (such as vehicle,, mobile etc.). The Group contributes to a post-employment defined benefit plan on their behalf. In accordance with the terms of the plan, the retirement age of senior managers is 67. Senior managers and directors also participate in the Company's incentive and equity remuneration plans (options for Company sharesshares) (see Notes 16 and restricted shares (see Note 21)19).
 
Set forth below are details of the benefits for key management personnel in 20182021 and 2017.2020.
 
The Company's key management personnel in 2018,2021, consists of 2722 individuals,, of whom 1411 are not employed by the company (directors). The number ofCompany's key management personnel in 2018, includes 7 individuals whose tenure was terminated during 2018. The Company's key management personnel in 2017,2020, consisted of 2119 individuals,, of whom 10 were not employed by the Company (directors).
 
For the year ended December 31
 
2021
2020
 
$ millions
$ millions
 
 For the year ended December 31
 20182017
 $ millions$ millions
Short-term benefits
 12
 9
Post-employment benefits
 1
 1
Share-based payments
 5
 7
Total *
 18
 17
* To interested parties employed by the Company
 3
 3
* To interested parties not employed by the Company
 1
 2

Short-term benefits 11 8
Post-employment benefits 1 1
Share-based payments 4 4
   
Total * 16 13
   
* To interested parties employed by the Company 5 4
* To interested parties not employed by the Company 1 1

The General Meeting of the Company’s shareholders held on April 24, 2018 approved the service and employment conditions of the Company’s incoming CEO, Mr. Raviv Zoller, including equity compensation; a special bonus to the Executive Chairman of the Company’s Board of Directors, Mr. Johanan Locker, in respect of 2017; and renewal of the management services agreement with the Company’s controlling shareholder, Israel Corporation Ltd.
On May 14, 2018, Mr. Raviv Zoller entered into office as CEO of the Company, replacing the Company's Acting CEO, Mr. Asher Grinbaum. Pursuant to the approval of the General Meeting of the Company’s shareholders, as aforementioned upon entering into office as CEO, Mr. Zoller was granted with an annual equity compensation for 2018 at a total value of ILS 4 million, consisting of 120,919 restricted shares and 384,615 options exercisable into Company shares.
F - 137

Notes to the Consolidated Financial Statements as at December 31, 2018

Note 25 - Related and Interested Parties (cont’d)

B. Benefits to key management personnel (including directors) (cont'd)
The Annual General Meeting of the Company's shareholders was held on August 20, 2018, approved an equity compensation for the year 2019 to each of the Company’s directors, as may serve from time to time, excluding the Chairman of the Company’s Board of Directors, Mr. Johanan Locker, and the directors who are officeholders in our controlling shareholder, Israel Corporation Ltd., Messrs. Aviad Kaufman, Avisar Paz and Sagi Kabla, to be issued on January 1, 2019, in the form of restricted Ordinary Shares, with a value per grant of NIS 310,000 (approximately $85,635), an equity compensation for 2018 to our Chairman of the Company’s Board, Mr. Johanan Locker  and annual bonus for 2017 in an amount of NIS 1,198,000 (approximately $330,939) and a special bonus in an amount of NIS 1,800,000 (approximately $497,238), to our retired Acting CEO of the Company, Mr. Asher Grinbaum, pursuant to the AGM's resolution out of the special bonus.
C. Ordinary transactions that are not exceptional
 
The Company’s Board of Directors, withfollowing the agreementapproval of the Audit Committee, decided that a transaction with related and interested parties will be considered a “negligible transaction” for public reporting purposes if all the following conditions have been met:
 
(1) It is not an “extraordinary transaction” within the meaning thereof in the Companies Law.
 
(2) The effect of each of the parameters listed hereunderbelow is less than one percent (hereinafter – the Negligibility Threshold)Threshold).

ICL Group LimitedConsolidated Financial Statements126

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 23 - Related and Interested Parties (cont'd)
 
C.
Ordinary transactions that are not exceptional (cont'd)

For every transaction or arrangement that is tested for the Negligibility Threshold, the parameters will be examined, to the extent they are relevant, on the basis of the Company's condensed or audited consolidated financial statements, as applicable, prior to the transaction, as detailed below:
 
Acquisition of assets
 
Assets ratio – the amount of the assets in the transaction divided by total assets
Sale of assets
Assets ratio – the amount of the assets in the transaction divided by total assets.
 
Sale of assets
Assets ratio – the amount of the assets in the transaction divided by total assets.
Profit ratio – the profit or loss attributed to the transaction divided by the total annual comprehensive income or loss during the period.
 
Financial liabilities
 
Liabilities ratio – the amount of the liabilities in the transaction divided by the total liabilities.
 
Financing expenses ratio – the expected financing expenses in the specific transaction divided by the total financing expenses in the statement of income.
 
F - 138

Notes to the Consolidated Financial Statements as at December 31, 2018
Note 25 - Related and Interested Parties (cont’d)

C. Ordinary transactions that are not exceptional (cont'd)
Acquisition and sale of products, services and manufacturing inputs
 
Revenue ratio – estimated revenue from the transaction divided by the annual revenue, or
 
Manufacturing expenses ratio – the amount of the expenses in the transaction divided by the annual cost of sales.
 
(3) The transaction is negligible also from a qualitative point of view. For the purpose of this criterion,criteria, it shall be examined whether there are special considerations justifying a special report onreporting of the transaction, even if it does not meet the quantitative criteria described above.
 
(4) In examining the negligibility of a transaction expected to occur in the future, among other things, the probability of the transaction occurring iswill be examined.

ICL Group LimitedConsolidated Financial Statements127

Notes to be examined.the Consolidated Financial Statements as of December 31, 2021

Note 23 - Related and Interested Parties (cont'd)
 
D. Transactions with related and interested parties

 
For the year ended December 31
 
2021
2020
2019
 
$ millions
$ millions
$ millions
 For the year ended December 31
 201820172016
 $ millions$ millions$ millions
Sales
 7
 3
 4
Cost of sales
6
3
8
Selling, transport and marketing expenses
13
7
10
Financing expenses (income), net
(2)
(1)
(1)
General and administrative expenses
1
1
1
Management fees to the parent company
1
1
1

Sales 58 35
Cost of sales 19 97 113
Selling, transport and marketing expenses 7 8 7
Financing expenses (income), net 3 (9)-
General and administrative expenses 1 1 1
Management fees to the parent company 1 1 1

(1)A subsidiary in the Phosphate Solutions segment is engaged in a long-term agreement with Nutrien, for acquisition of food‑quality phosphoric acid. The agreement is in effect until the end of 2018. In October 2017, the Company signed a new agreement with Nutrien for acquisition of phosphoric acid commencing January 2019 up to 2025. Nutrien was an interested party up to January 2018.
 
(2)In 2013, the Company's Board of Directors authorized certain subsidiaries in Israel to purchase electricity from OPC Rotem (a company related to the Company’s controlling shareholder).
(3)(1)
On January 17, 2018,November 9, 2020, and November 11, 2020, our Audit and Accounting Committee and our Board of Directors, respectively, approved, and on April 24, 2018,January 5, 2021, our General Meetinggeneral meeting of shareholders approved, the renewedrenewal of the management services agreement between the Company and Israel Corp. effective retroactively as of January 1, 2018,2021, for an additional term of three years, expiring on December 31, 2020.2023. According to the renewed management services agreement, the annual management fee to be paid to Israel Corp for each calendar year shall not exceedcontinue to be $1 million plus VAT. Such amount includesDuring the overall valueterm of the agreement, the Company will not pay or grant any cash andor equity compensation for the service of our directors whomwho are office holders of Israel Corp.,(except for the separate compensation arrangement between the Company and any and all prior or other compensation arrangements relating to such directors were cancelled. In addition, the renewed agreement was amended so as to no longer include an increase of management fees to a threshold of $3.5 million plus VAT in case an executive chairmanour Executive Chairman of the Board, is appointed on behalf of Israel Corporation. All other provisions of the management agreement remained unchanged. According to the decision of the General Meeting ofMr. Yoav Doppelt, as approved by our shareholders thein May 2019, and as may be amended by shareholder approval from time to time). The Audit & Accounting Committee will continue to annually examine the reasonableness of the Management Feesmanagement fees paid in the previous year against the Management Servicesmanagement services actually provided by Israel Corp to the Company in the same year. On February 4 and 25, 2019,21, 2022, the Audit & Accounting Committee examined the management services that were actually rendered in 20182021 against the management fees paid in that year and concluded that the fees were reasonablereasonable. Notwithstanding the above, it was agreed by the Company and Israel Corp., that subject to the approval of the revised terms of our Executive Chairman of the Board, Mr. Yoav Doppelt, at the Annual General Meeting of our shareholders, expected to take place on March 30, 2022, the Management Agreement will be terminated effective as of July 1, 2022, following which directors who are office holders of Israel Corp. (other than Mr. Yoav Doppelt) shall begin to be paid the Director Cash Compensation. Mr. Sagi Kabla, Israel Corp.'s Chief Financial Officer, has requested that his Director Cash Compensation be either assigned and paid directly to Israel Corp. or paid directly to him, as instructed by Israel Corp.
 
(2)
On January 30, 2020, our shareholders approved a new three-year framework transaction for the Company's engagement in directors' and officers' liability insurance policies, starting February 1, 2020 (the "New Framework Transaction"). The insurance policies under the New Framework Transaction shall include a joint primary tier with Israel Corp. with a joint liability cap of up to $20 million, and a separate tier covering the Company alone, with a liability cap of up to $330 million, with a total liability limit of up to $350 million for both tiers.
F - 139

ICL Group LimitedConsolidated Financial Statements128

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2523 - Related and Interested Parties (cont’d)(cont'd)

D. Transactions with related and interested parties(cont’d)parties (cont'd)
 

Our directors and officers are beneficiaries of both tiers. Pursuant to the New Framework Agreement, the cost of the annual premium shall not exceed a cap of $10 million for both tiers. The division of the premium amount between the Company and Israel Corp. in the joint tier are 80% to be paid by the Company and 20% by the Israel Corp, and the HR & Compensation Committee and the Board of Directors have the authority to change, from time to time, the premium allocation in respect of the joint tier between the companies, according to the recommendation of the insurers and/or brokers, and provided that such changes will not exceed 25% over the entire transaction period. Deviation from these limits shall require shareholder approval. In accordance with the terms of the New Framework Transaction and the Company's Compensation Policy, the Company's directors’ and officers’ liability insurance policy for 2021, was approved by the Company's authorized organs, effective as of March 2021. The 2021 directors’ and officers’ liability insurance policy includes a liability limit of $116 million for both tiers (comprised of a limit of $40 million, with an additional coverage Side A (directors and officers only) limit of $76 million). 

(4)(3)
In March 2017, ICL's Audit and Accounting Committee and its Board of Directors approved a framework agreement with the controlling shareholder, Israel Corporation Ltd. (hereinafter – Israel Corp.), for three years, according to which Israel Corp. can deposit, occasionally, an amount of up to $150 million in short‑term U.S. dollar or shekel deposits in ICL subject to ICL’s approval. In August 2017, the terms of the framework agreement were expanded to up to $250 million. The terms and conditions of the deposits, including the interest rate, will be determined on the date of the deposits. The deposits will be received by ICL without security. In fourth quarter of 2017, the Company received short-term loans, in a total amount of $175 million, for a period of 6 months, bearing interest at an annual rate of 1.72%–1.99%, which were repaid in the first quarter of 2018.
(5)
In December 2017, the Company, Oil Refineries Ltd. (a public company controlled by Israel Corporation Ltd.Corp.) and OPC Energy Ltd. (a public company that is controlled indirectly by one of the Company’s controlling shareholders) signed individual agreements with Energean Israel LimitedPLC for the supply of natural gas. The company shareUnder the agreement between the Company and Energean, the Company will be entitled to acquire up to 13 BCM of natural gas over a period of 15 years, in the total amount of about $1.9$1.8 billion. For further information see Note 20.18.

ICL Group LimitedConsolidated Financial Statements129

Notes to the Consolidated Financial Statements as of December 31, 2021

Note 23 - Related and Interested Parties (cont'd)
D.

Transactions with related and interested parties (cont'd)

(4)
In October 2020, the Company and Oil Refineries Ltd. signed individual bridge supply agreements with Tamar Reservoir for the supply of natural gas, following a process of joint negotiations with the supplier and the approval of ICL's general meeting of shareholders. For further information see Note 18.
 
E. Balances with related and interested parties
 
Composition:
 
 
As of December 31
 
2021
2020
 
$ millions
$ millions
 As at December 31
 20182017
 $ millions$ millions

Other current assets 28 38
 40
 35
   
Other current liabilities 7 191
 4
 2


F - 140
ICL Group LimitedConsolidated Financial Statements130

Notes to the Consolidated Financial Statements as atof December 31, 20182021

Note 2624 – Group Main Entities


  Ownership interest in its subsidiary and investee companies for the year ended December 31
Name of companyPrincipal location of the company’s activity20182017
ICL Israel Ltd.Israel100.00%100.00%
Dead Sea Works Ltd.Israel100.00%100.00%
Dead Sea Bromine Company Ltd.Israel100.00%100.00%
Rotem Amfert Negev Ltd.Israel100.00%100.00%
Mifalei Tovala Ltd.Israel100.00%100.00%
Dead Sea Magnesium Ltd.Israel100.00%100.00%
Ashli Chemicals (Holland) B.V.Israel100.00%100.00%
Bromine Compounds Ltd.Israel100.00%100.00%
Tetrabrom Technologies Ltd.*Israel0.00%100.00%
Fertilizers and Chemicals Ltd.Israel100.00%100.00%
Iberpotash S.A.Spain100.00%100.00%
Fuentes Fertilizantes S.L.Spain100.00%100.00%
ICL Europe Coöperatief U.A.The Netherlands100.00%100.00%
ICL-IP Europe B.V.The Netherlands100.00%100.00%
ICL IP Terneuzen B.V.The Netherlands100.00%100.00%
ICL Fertilizers Europe C.V.The Netherlands100.00%100.00%
ICL Finance B.V.The Netherlands100.00%100.00%
Everris International B.V.The Netherlands100.00%100.00%
ICL Puriphos B.V.The Netherlands100.00%100.00%
ICL-IP America Inc.United States of America100.00%100.00%
ICL Specialty Products Inc.United States of America100.00%100.00%
Everris N.A. Inc.United States of America100.00%100.00%
Phosphorus Derivatives Inc.**United States of America0.00%100.00%
BK Giulini GmbHGermany100.00%100.00%
ICL Holding Germany GmbHGermany100.00%100.00%
ICL I.P. Bitterfeld GmbHGermany100.00%100.00%
Rovita GmbHGermany100.00%100.00%
Prolactal GmbHAustria100.00%100.00%
Cleveland Potash Ltd.United Kingdom100.00%100.00%
ICL Brasil, Ltda.Brazil100.00%100.00%
ICL (Shanghai) Investment Co. Ltd.China100.00%100.00%
Yunnan Phosphate Haikou Co. Ltd.China50.00%50.00%
Sinobrom Compounds Co. Ltd., ChinaChina75.00%75.00%
ICL Asia Ltd.Hong Kong100.00%100.00%
ICL Trading (HK) Ltd.Hong Kong100.00%100.00%
Allana Potash Afar PLC***Ethiopia100.00%100.00%

  
Ownership interest in its subsidiary and investee companies for the year ended December 31
Name of company
Principal location of the company’s activity
2021
2020
ICL Israel Ltd.
Israel
100.00%
100.00%
Dead Sea Works Ltd.
Israel
100.00%
100.00%
Dead Sea Bromine Company Ltd.
Israel
100.00%
100.00%
Rotem Amfert Negev Ltd.
Israel
100.00%
100.00%
Mifalei Tovala Ltd.
Israel
100.00%
100.00%
Dead Sea Magnesium Ltd.
Israel
100.00%
100.00%
Bromine Compounds Ltd.
Israel
100.00%
100.00%
Fertilizers and Chemicals Ltd.
Israel
100.00%
100.00%
Iberpotash S.A.
Spain
100.00%
100.00%
Fuentes Fertilizantes S.L.
Spain
100.00%
100.00%
ICL Europe Coöperatief U.A.
The Netherlands
100.00%
100.00%
ICL Europe B.V.
The Netherlands
100.00%
100.00%
ICL IP Terneuzen B.V
The Netherlands
100.00%
100.00%
ICL Finance BV
The Netherlands
100.00%
100.00%
Everris International B.V.
The Netherlands
100.00%
100.00%
ICL Puriphos B.V.
The Netherlands
100.00%
100.00%
ICL-IP America Inc
United States of America
100.00%
100.00%
ICL Specialty Products Inc
United States of America
100.00%
100.00%
Everris NA, Inc.
United States of America
100.00%
100.00%
Growers Holdings, Inc.
United States of America
100.00%
100.00%
BK Giulini GmbH
Germany
100.00%
100.00%
ICL Holding Germany GmbH
Germany
100.00%
100.00%
ICL Bitterfeld GmbH
Germany
100.00%
100.00%
Prolactal GmbH
Austria
100.00%
100.00%
Cleveland Potash Ltd.
United Kingdom
100.00%
100.00%
Everris Ltd.
United Kingdom
100.00%
100.00%

ICL America do Sul

Brazil

100.00%

100.00%

Agro Fertilaqua Participacoes S.A.

Brazil

100.00%

100.00%

Qualyquímica Industria e Comercio de Produtos Quimicos Ltda

Brazil

100.00%

100.00%

ICL Brasil, Ltda.
Brazil
100.00%
100.00%
ICL Investment Co. Ltd.
China
100.00%
100.00%
Yunnan Phosphate Haikou Co. Ltd.
China
50.00%
50.00%
ICL Asia Ltd
Hong Kong
100.00%
100.00%
ICL Trading (HK) Ltd.
Hong Kong
100.00%
100.00%
Scora S.A.S., France
France
100.00%
100.00%
*            The company was merged into "Bromine Compounds Ltd.".
**         Company sold.
***       Company in liquidation proceedings.
ICL Group LimitedConsolidated Financial Statements131
 
F - 141