Annual Report
For the Period Ended
December 31, 2020
TABLE OF CONTENTS
PART I
Pag e
Special Note Regarding Forward-Looking Statements
Introduction
Glossary of Selected Terms
Item 1.
Identity of Directors, Senior Management and Advisers
1
Item 2.
Offer Statistics and Expected Timetable
1
Item 3.
Key Information
1
Item 4.
Information on the Company
38
Item 4A.
Unresolved Staff Comments
131
Item 5.
Operating and Financial Review and Prospects
132
Item 6.
Directors, Senior Management and Employees
167
Item 7.
Major Shareholders and Related Party Transactions
188
Item 8.
Financial Information
197
Item 9.
The Offer and Listing
201
Item 10.
Additional Information
201
Item 11.
Quantitative and Qualitative Disclosures About Market Risk
210
Item 12.
Description of Securities Other than Equity Securities
219
PART II
Item 13.
Defaults, Dividend Arrangements and Delinquencies
219
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
219
Item 15.
Controls and Procedures
220
Item 16A.
Audit and Accounting Committee Financial Expert
221
Item 16B.
Code of Ethics
221
Item 16C.
Principal Accountant Fees and Services
222
Item 16D.
Exemptions from the Listing Standards for Audit Committees
222
Item 16E.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
222
Item 16F.
Change in Registrant’s Certifying Accountant
223
Item 16G.
Corporate Governance
223
Item16H.
Mine Safety Disclosure
225
Item 17.
Financial Statements
225
Item 18.
Financial Statements
225
Item 19.
Exhibits
225
FS-1
S P ECIAL N OTE R EGARDIN G F ORW ARD -LOOKING STAT EMENTS
Th is A n n u al Report con t ain s st at e me nts t h at con st it ut e “forward - lookin g st at e me nt s,” ma ny of
wh ich can be ident ified by t he use of forward- lookin g words su ch as “an ticipate,” “b elieve,” “cou ld,”
“expect ,” “sh ou ld ,” “plan ,” “ in t en d,” “e stima t e”, "st rive ", "forecast", "t arg et s" a n d “pot e ntial,” among
ot h er s.
For ward - lookin g st a tement s appear in a n u mb er of pla ce s in t his A n nu a l Repor t an d in clu de, but
are n ot limit ed t o, st atemen ts r egardin g ou r in tent, b elie f or cu rren t e xpecta tion s. Forward- looking
st at emen ts are b ased on ou r man age me nt’s b eliefs an d a ssu mpt ion s a nd on in format ion cu rrently
availa b le to ou r ma nage ment. Su ch st at eme nt s are subje ct to risks an d un certaint ies, and th e a ctual
resu lt s may d iffer materially from t h ose expre ssed or implied in t he forwar d-lookin g st at eme nts due
to va riou s fa ct ors, in clu d in g , b u t n ot limit ed t o, t hose id en t ified in “I t em 3 - Key I nfor mat ion — D.
Risk Fact ors” in t his A nn ual Re port. Th ese risks an d u ncert ain ties in clud e factor s relating to:
Loss or impa irment of b u sin ess licen se s or min era l e xt ra ct ion s permit s or con cessions; vola t ilit y of
su pply a nd d eman d an d t he impact of compet it ion ; the d ifference between act ual reserve s an d our
rese rve est imates; n at ural d isast ers; fa ilur e to "h arvest" salt wh ich cou ld le ad to a ccumu lation of salt
at t h e b ot t om of t h e evapor ation Pond 5 in t h e Dead Sea ; con st ruct ion of a n ew pu mpin g st at ion;
d isr u pt ion s at ou r seaport sh ippin g facilit ies or reg ulatory rest rict ions affectin g ou r abilit y to export
ou r prod u ct s over seas; g en e ral mar ket, polit ical or econ omic con d it ion s in t h e cou n t ries in wh ich
we opera t e; price in cr eases or sh or t ag es wit h r espe ct to ou r prin cipa l raw ma t erials; d elays in the
complet ion of ma jor pr oject s by t h ird par t y con t r actor s an d /or t er min at ion of eng age me nts with
con t ract or s an d /or g overnme ntal ob lig a tion s; t h e in flow of sig n ifican t amou n ts of wat er in t o t he
De ad Se a cou ld ad verse ly a ffect prod u ct ion at ou r plan t s; lab or d ispu t es, slowd own s an d st rike s
in volvin g ou r employee s; pe nsion and he alt h in sur ance liab ilit ies; t h e on g oin g CO VI D-19 pan demic,
wh ich h as impact ed , an d ma y con t in u e to impact ou r sa le s, operat in g resu lt s a n d b u sin ess
operat ion s by d isr upt ing our a bilit y to pu rchase raw mat erials, by n eg at ive ly impa ctin g t he demand
an d pr icin g for some of ou r prod u ct s, by d isr u pt in g ou r ab ilit y to se ll an d / or d ist r ib ute pr od u cts,
impa ct in g cu st omers' ab ilit y to pay us for pa st or fu t u r e pu rcha ses a nd /or t emporarily closin g our
facilit ies or t h e fa cilit ies of ou r su pplier s or cu st omers and t h eir con t ract man u fa ct ur ers, or
rest r ict in g ou r a b ilit y to t ravel to su pport ou r sit es or ou r cu st omers ar ou nd t h e world ; ch an ges to
governmen t a l in cent ive prog rams or t a x b en efit s, crea t ion of n ew fiscal or t ax re lat ed leg isla tion;
ch an g es in ou r eva lu ation s and estimates, which se rve as a ba sis for t he r ecog nit ion a nd manner of
me asu re men t of asset s a nd liab ilit ies; h ig h er t ax liab ilit ies; failu re to int eg rate or re alize expected
b en efit s from mer ge rs a nd acqu isit ion s, org aniza t ion al rest ructu rin g an d join t ven t u res; cu rrency
rat e flu ct u at ions; risin g in t e rest ra tes; g ove rnmen t examin ation s or in ve st iga tion s; d isru ption of ou r,
or ou r ser vice provid e rs', in format ion t echn olog y syst ems or b rea ch es of ou r , or ou r ser vice
provid e rs', d at a secu rit y; failu re to r etain a nd/or recruit ke y per son nel; inabilit y to r ealize e xpected
b en efit s from ou r cost red u ct ion program accord ing to t he e xpe ct ed t imet a ble; in abilit y to a cce ss
capit al market s on fa vorab le t er ms; cyclica lit y of ou r b u sin esses; chan ges in d emand for ou r fe rt ilizer
prod u ct s d u e to a d eclin e in a gricultu ral produ ct prices, la ck of available credit , weather cond itions,
governmen t policies or ot h er fact ors b eyon d ou r con t rol; sa les of ou r mag n esiu m prod u ct s b eing
affect e d by var iou s fact or s t ha t are n ot wit hin ou r con t rol; ou r ab ilit y to se cu re approvals and
permit s fr om t he au t h orit ies in I srael to con t in u e ou r ph osph at e min in g oper at ion s in Rot em;
volat ilit y or cr ises in t he fin an cial mar ket s; u n ce rtaintie s su rr oun din g t h e pr opose d wit h d ra wal of
t he Unit e d Kin g d om from the Eu ropea n Un ion ; hazard s in he ren t to min in g and che mica l
ma nu fact u rin g; t h e fa ilu re to en su re t h e safet y of ou r wor kers a n d proce sse s; cost of complian ce
wit h e n viron me ntal regu lat ory leg islative an d lice nsin g r est rict ions; laws a nd regu lat ions re lated to,
an d ph ysical impact s of climat e ch an g e and g r eenh ouse g a s e mission s; lit ig at ion , ar b it r ation and
reg u lat ory proceedin gs; e xposu re to t hir d par ty and pr od uct liabilit y claims; prod uct r ecalls or other
liab ilit y claims as a r esu lt of food safet y and food - b orn e illn e ss con ce rn s; in sufficien cy of in su rance
cove rag e; closin g of t ransa ction s, mer g ers a nd acqu isit ion s; war or act s of t er ror an d / or polit ical,
econ omic a nd milit ary in stabilit y in Israel and it s r eg ion; filin g of cla ss action s and derivat ive actions
ag ain st t h e Compan y, it s exe cu tives a n d B oa rd memb ers; The Compan y is e xposed to risks relat ing
to it s cu r ren t a n d fu tu re a ctivit y in emer g ing mar ket s; and ot h er risk fact ors d iscussed u n der ”Item
3 - Key I nformat ion — D. Risk Fa ct ors".
For ward - lookin g st ate ments speak on ly as at t he d ate th ey are ma de, a nd we do not u nde rt ake any
ob ligat ion to u pd ate th em in lig h t of n ew in formation or futu re development s or to relea se pub licly
an y revision s to t h ese st a t ements in ord e r to reflect la t er e ve nt s or circu mst a nces or to r eflect the
occu rr en ce of u n anticipat ed events.
I N T RODUCT IO N
Th e fin an cial in format ion inclu ded in this A n nu al Report h as been prepa red in accordance with the
In t e rn ation al Fin an cial Re port in g St an dard s ( “I FRS”), as issu ed b y t h e In t e rnation al A ccou n ting
St an d a rds B oar d ( “IASB ”). Non e of t h e fin an cial in formation in t h is A n nual Report h as b een pr epared
in accord a nce wit h a ccou nt ing principle s g enerally a ccept ed in t h e Un ite d St at es.
Th is A n n u al Report con tains t ranslat ions of ce rt ain currencies amou nt s in to U.S. d ollar s at specified
rat e s solely for you r con ven ie n ce. Un less ot h erwise in d icate d, we h ave t r an slated NIS amou n ts as
at Decemb er 31, 2020, in t o U.S. d olla rs at an excha ng e rat e of NI S 3.215 to $1.00, the d a ily
repre se n t at ive e xchang e ra te reported by t he B an k of I sr ael for Decemb er 31, 2020. Eu ro amou nts
wer e t ran slated in to U.S. d ollar s at an exchan ge rat e of €0.815 to $1.00.
Ma rket d at a and cert ain in d u stry d at a u se d in t h is A n n u al Repor t were ob t ain ed from in t er nal
report s an d st u d ies, wh ere appropriat e, as we ll as est imat es, marke t rese arch, pu b licly a vailable
in format ion an d in d u st r y pu b licat ion s, in clu d in g pu b licat ion s, r eport s or relea ses of t he
In t e rn ation al Mon et a ry F u nd ( “I MF”), t h e U.S. Cen su s B u re au , t h e Food an d A g ricu lt ure
Org aniza tion of t he Unit e d Nat ion s ( “FAO”), t h e In tern ation al Fe rtiliz ers A ssociat ion ( “I FA ”), the
Unit ed St at es Depart ment of A g ricu lt ure ( “USDA ”), t h e Un it e d St at es Geolog ical Su rvey, t he CRU
Grou p ( "CRU") an d Fer t econ , t he Fer t iliz er A ssocia t ion of In d ia (“F A I”). I n d u st ry pu b licat ions
gen era lly st at e t h at t he in formation t h ey in clu d e h as b e en ob t ain ed from sou r ces b elie ved to be
reliab le, b u t t ha t t h e a ccu r acy a n d complet ene ss of su ch in format ion is n ot g u a ran teed . Similarly,
in t er n al repor t s an d st u die s, e st imat es and ma rket rese arch, which we b elieve to be reliab le and
accu rat ely ext racted by us for u se in t his Ann u a l Report , h ave n ot b een in d epen dently ver ified.
Howe ve r, we b elieve su ch d at a is a ccu r at e. T here is on ly a limit e d amou n t of in d e pen d e nt d ata
availa b le ab ou t cert ain aspect s of ou r in du stry, market and competit ive posit ion . As a re sult, ce rtain
d at a a n d in format ion ab ou t ou r market ran king s in cer t ain prod u ct areas are b a se d on ou r g ood
fait h est imat es, which are d erived from ou r review of in t er nal d at a a n d in format ion , in format ion
t hat we ob tain from ou r cu stome rs, and other thir d- pa rty sou rces. We be lieve th ese in ternal su rveys
an d ma nag emen t e st imat e s are r elia b le ; h owever, no in d epen d en t sou rces h ave verified su ch
su rveys an d e st imates.
In pr esen t in g an d d iscu ssin g ou r fin an cial posit ion , operat in g re su lt s and net in come r esu lt s, the
ma na g emen t u ses cert a in n on -IFRS fin an cial measu res. T h ese n on -IFRS fin an cial mea su res sh ould
not be vie wed in isolat ion or as alt ernatives to t he e quivalent IFRS me asur es and sh ou ld be used in
con ju n ct ion wit h t h e most d ire ct ly compa rab le IF RS mea su r es. A d iscu ssion of n on - IFRS measu res
in clu d e d in t h is A n n u al Repor t an d a recon cilia t ion of su ch measu res to t he most d ir ect ly
compar ab le I FRS mea su res are con t ain ed in t h is A n nu al Repor t u n d er “I te m 5 – Oper at in g and
Fin a ncia l Review an d Prospect s— A. O peratin g Resu lts”.
In t h is A n nual Report , u n less ot herwise in d icated or t h e con t ext ot he rwise requ ires, a ll refere nces
to “I CL,” t h e “Grou p,” t h e “Company,” “we,” “ou r ,” “ou rs,” “u s” or similar t erms re fer to ICL Gr ou p
Lt d ., t og et he r wit h it s con solid at ed su b sidiarie s. W h en we refer to ou r “pare nt Compan y” or to
“Isr ael Cor porat ion ,” we refer to ou r con t rollin g sh areh old er, I sr ael Corpor at ion Lt d . Un less
ot h er wise in d icated or th e con te xt ot her wise requir es, references in th is A nnu al Repor t to “NI S” are
to t h e leg al cu rre ncy of Isr ael, “U.S. d ollars”, “$” or “d ollars” are to Un it e d St a tes d olla rs, “eu ro” or
“€” are to th e Eu ro, t h e le g al cu rr en cy of cert ain cou n tries of t h e Eu rope an Un ion , an d “B ritish
pou n d ” or “£” are to t he lega l cu rre n cy of t h e Un it e d Kin g d om. Se e “I t em 4 - I n for ma t ion on t he
Compan y— A. Hist or y an d Developmen t of t h e Compa ny”. We own or h ave rig hts to t rad emarks or
t rad e n ames t hat we u se in con ju nction wit h t he operat ion of ou r b usin ess. Solely for con ven ie nce,
t rad emarks an d t ra de n ames r efe rred to in t h is A n n u al Report may appe ar wit h ou t t he ® or ™
symb ols, bu t su ch r efe rences are n ot in t e nded to ind icat e , in an y wa y, t h at we will n ot asser t , to
t he fu lle st ext e nt of t h e law, ou r rig ht s or t he rig hts of t h e a pplica b le lice n sor to t hese t rademarks
an d t ra d e n ames. In t h is A n n u al Repor t , we a lso r efe r to prod u ct n ames, t rad e ma rks, and t rade
name s t h at are t h e prope rty of ot he r compa nies. Each of t h e t rade ma rks a nd t rad e n ames of ot her
compan ies appear in g in t h is An n u al Re port b elongs to it s own ers. Ou r u se or display of ot h er
compan ies’ prod u ct n ames, t rad emarks, or t ra d e n ames is n ot in t e nd ed to a n d does n ot imply a
relat ion sh ip wit h , or end orse me nt or spon sor ship by us of, t he prod u ct , t rademark, or t ra d e n ame
owner, u n le ss we ot h erwise in dicate.
G L O SSARY OF SELECTED TERMS
Th e followin g is a g lossary of se lect ed t er ms u sed in this A nn ual Re port.
A 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.
Carbon Disclosure Project - A non-profit leading organization in the
greenhouse gas emissions reporting field.
Cost and freight. In a CFR transaction, the prices of goods to the
customer includes, 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.
Classification, Labeling and Packaging of Substances and Mixtures– EU
regulation.
The Consumer Price Index, as published by the Israeli Central Bureau of
Statistics.
Intelligence Company providing information on global mining, metal and
fertilizers market.
Dead Sea Bromine Company Ltd., included in Industrial Products
segment.
Diammonium Phosphate - a fertilizer containing nitrate and phosphorus
oxide.
US Environmental Protection Agency.
The Food and Agriculture Organization of the United Nations.
Free on-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.
Fertilizers and Chemicals Ltd., included in Innovative Ag Solutions
segment.
Greenhouse gases – air emissions contributing to climate change.
Fertilizer having granular particles.
A United Kingdom Company included in the Potash segment.
Iberpotash S.A., a Spanish Company included in Potash segment.
Israel Corporation Ltd.
Dead Sea Works Ltd., included in Potash segment.
Dead Sea Magnesium Ltd., included in Potash segment.
Subsidiaries in the Neot Hovav area in the south of Israel, including
facilities of Bromine Compounds Ltd. Included in Industrial Products
segment.
Rotem Amfert Negev Ltd., included in Phosphate Solutions segment.
The International Fertilizers Industry Association, an international
association of fertilizers manufacturers.
Israel Land Authority.
International Monetary Fund.
The element potassium, one of the three main plant nutrients.
Potassium Nitrate, soluble fertilizer containing N&P used as a stand-alone
product or as a key component of some water-soluble blends.
Potassium hydroxide 50% liquid.
Merchant grade phosphoric acid.
Israel Ministry of Environmental Protection.
The element nitrogen, one of the three main plant nutrients.
Complex fertilizer comprised primarily of 3 primary nutrients (N,P,K).
The New York Stock Exchange.
The element phosphorus, one of the three main plant nutrients, which is
also used as a raw material in industry.
Phosphate rock that contains the element phosphorus. Its concentration
is measured in units of P
2
O
5
.
A 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.
A chemical compound containing a long chain of repeating units linked
by a chemical bond and created by polymerization.
Potassium chloride (KCl), used as a plant’s main source of potassium.
Phosphorus pentoxide.
Phosphorus pentasulfide.
Registration, Evaluation, Authorization and Restriction of Chemicals, a
framework within the European Union.
Unless otherwise specified, sodium chloride (NaCl).
Sulphur – a chemical used for the production of sulfuric acid for sulfate
and phosphate fertilizers, and other chemical processes.
Soluble fertilizer containing the three basic elements for plant
development (nitrogen, phosphorus and potash).
Fertilizer having small particles.
Tami (IMI) Research and Development Institute Ltd., the central research
institute of ICL.
Tel Aviv Stock Exchange, Ltd.
United States Department of Agriculture.
White Phosphoric Acid, purified from MGA.
A white granular or prill solid fertilizer containing 46% nitrogen.
The Chinese partner in the Company’s joint venture YPH in China.
Clean green phosphoric acid, used as a raw material for purification
processes.
Particular matter
1 ICL Group Limited
Item 1 – IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
AND ADVISORS
Not A pplicab le.
Item 2 – OFFER STATISTICS AND EXPECTED TIMETABLE
Not A pplicab le.
Item 3 – KEY INFORMATION
A. SELECTED FINANCIAL DATA
We ha ve d erived t he con solid a t ed st at ement s of income d a t a for t he ye ars end ed Decemb er 31,
2020, 2019, 2018, 2017 a n d 2016 an d t h e con solid at e d st at e me nts of fin an cial posit ion as of
De cemb er 31, 2020, 2019, 2018, 2017 a n d 2016 from ou r au d it ed con solid ate d financial st a tements
wh ich h ave b e en prepa red in accord a nce wit h I FRS, as issu ed by t he IA SB for t h e yea rs ended,
De cemb er 31, 2020, 2019, 2018, 2017 an d 2016. You sh ou ld read t h e con solid ated fin an cial d ata
se t fort h b e low in con ju n ct ion wit h ou r con solid at ed au d ite d fin ancia l st atements an d related n otes
an d t h e in for ma t ion u n d er “I t em 5 - Oper at in g a n d Finan cial Re view an d Pr ospect s”, a ppearing
elsewh er e in t his A nn ual Report . O ur report ing currency is t h e U.S. d ollar. Our h istor ical resu lts are
not n ecessar ily ind icative of ou r results to be expected in a ny fu tu re period.
2 ICL Group Limited
For the Year Ended December 31,
2020
2019
2018
2017
2016
US$ millions, except for the share data
Sales
5 , 0 43
5,271
5,556
5,418
5,363
Gross pr ofit
1 , 4 90
1,817
1,854
1,672
1,660
Ope rat in g in come ( loss)
2 0 2
756
1,519
629
(3)
In come ( loss) b efore in come
t axes
49
628
1,364
505
(117)
Net in come ( loss) at t r ib ut able
to t h e sh are hold ers of t h e
Compan y
11
475
1,240
364
(122)
E a rn ing s (lo ss) pe r sh are (in
d ol lars):
B asic earn in g s ( loss) per
sh are
0 . 0 1
0.37
0.97
0.29
(0.10)
Dilu t ed e arnin gs ( loss) per
sh are
0 . 0 1
0.37
0.97
0.29
(0.10)
W e ig hte d averag e n u mber of
o r d in ary sh ares ou tst an ding :
B asic ( in t h ou sand s)
1 , 2 80,0 26
1,278,950
1,277,209
1,276,072
1,273,295
Dilu t ed ( in t hou san ds)
1 , 2 80,2 73
1,282,056
1,279,781
1,276,997
1,273,295
Divid e n d s d ecla red pe r sh are
( in d ollars)
0 . 0 9
0.22
0.18
0.13
0.18
For the Year Ended December 31,
2020
2019
2018
2017
2016
US$ millions
S t atements of Fin an cial
P o s it ion Da t a:
Tot al asset s
9 , 6 64
9,173
8,776
8,714
8,552
Tot al lia b ilit ie s
5 , 5 76
5,112
4,861
5,784
5,893
Tot al equ it y
4 , 0 88
4,061
3,915
2,930
2,659
B. CAPITALIZATION AND INDEBTEDNESS
Not A pplicab le.
C. REASONS FOR THE OFFER AND USE OF PROCEEDS
Not A pplicab le.
3 ICL Group Limited
D. RISK FACTORS
Su mma ry of Risk Fa ctors
Ou r b u sin ess, liqu id it y, fin an cial con d it ion and r esu lt s of opera t ion s cou ld be ad ver se ly a ffect ed,
an d even mat e rially so, if an y of t h e risks d escrib ed b elow occu r . As a r esu lt , t he t rad in g price of
ou r se cu rit ies cou ld d eclin e, and in vest ors cou ld lose a ll or pa rt of t heir in vest men t. Th is A nn ual
Repor t con t ain s forward - lookin g st a tements t h at in volve risks an d u n ce rta int ies, see “Spe cia l Note
Reg ard in g Forward -Lookin g St at emen ts.” Ou r act u al resu lt s cou ld d iffer mat e rially a n d ad ver se ly
from t hose an t icipat ed, as a resu lt of cert ain fact ors, in clu d ing t he risks fa cin g t h e Compan y as
d escrib ed b e low a nd e lse wh ere in the A n nu al Re port . Mat e rial risks t h at may affect ou r b u sin ess,
operat in g r esu lts an d fin ancial con d ition in clu de , b ut are n ot n ecessarily limit ed t o, t h ose r elating
t o:
• Ou r ab ilit y to operat e a nd / or expan d ou r prod u ction and ope rat ing facilit ies world wid e is
d epen d ent on ou r receipt of, and complia nce wit h, permit s issu ed by govern mental au thorit ies.
A d e cision by a g ove rn me nt a u t hority to d en y an y of ou r per mit applica t ion s may impair t he
Compan y’s b u sin ess and it s operation s.
• As a min in g a n d in d u st rial ch emicals Compan y, we are expose d to var iou s le gisla t ive and
lice nsin g re st riction s in t h e ar eas of en vironmen tal prot ect ion an d sa fet y. Related compliance
cost s an d lia b ilit ies ma y a d ve rsely affect t he r esults of ou r operat ions.
• Ou r min e ral e xt raction oper at ions are d ependent on con cession s, licen ses a nd permit s granted
to us by t h e re spect ive gove rnmen ts in t he cou ntries in wh ich we oper ate .
• Secu rin g t he fu tur e of t he ph osph ate min in g ope ration s at Rot em I srael d epends on ob ta ining
se ve ral a pprova ls an d per mit s fr om t h e auth or ities in I srael.
• Th e COVI D-19 ou t b reak has impact ed an d cou ld in t h e fu t ure mat erially a nd ad versely affect
ou r fin an cial con d it ion a n d re sult s of ope ration s.
• Ou r ope rat ions an d sales are expose d to volat ilit y in t he su pply and d eman d , merg ers of key
prod u ce rs\ cust omers\ supplier s, e xpa nsion of prod u ction capacity an d compet ition from some
of t h e world ’s lar gest chemical an d min in g compa n ies.
• Th e accu mu lat ion of sa lt at t h e b ot t om of Pon d 5, t h e cen t ra l e va poration pon d in ou r solar
evapor at ion pon d s syst em u sed to ext ract min er als from t h e Dead Sea, requ ire s reg u lar
ha rvest in g of th e salt in or d er to main t ain a fixed br in e volu me an d th er eby su st a in the
prod u ct ion capa cit y of e xt ract ed minerals and pre ve n t pot en tia l d amag e to t he fou n d at ions
an d st ru ctures of t he h otels an d ot he r bu ildin gs sit u ated close to t h e ed ge of t h e Pon d.
• Th e re ced in g wat er level in t h e Nort h ern B asin of t h e Dead Sea , may re qu ire capit al an d /or
operat ion al e xpen ses in ord e r to en able t h e con t inu at ion of t h e Compan y's ope rat ion s in the
De ad Se a.
• We are e xposed to risks associat e d wit h ou r in t e rn ation al sales a nd opera t ion s, wh ich cou ld
ad ver se ly affe ct ou r sa les to cu st omer s as well as ou r ope rat ion s an d asset s in var iou s cou n tr ies.
Some of t he se fact ors may also make it less at t ractive to d ist rib ut e ca sh g en e rated by our
operat ion s ou t sid e I srae l to ou r sh areh old ers, u se cash ge n era ted by ou r ope rat ion s in on e
cou n t ry to fu n d ou r ope rat ion s or r epayme n t s of ou r in d eb t e dness in an ot h er cou n t ry and
su ppor t ot h er corpor at e pu rposes or t he d istribu tion of d ivid en ds.
4 ICL Group Limited
• Chan ges in ou r e valu at ions a n d estimat es, wh ich ser ve as a b a sis for ana lyzing ou r con tingent
liab ilit ies an d for t he recogn ition an d me asure men t of a sse t s an d liab ilit ies, in clu d ing provisions
for wast e r emoval a nd t he re clamation of min es, may ad ve rsely affect our b usin ess results and
fin a ncia l sit u a tion .
• Ou r t ax liab ilit ies may be h igh er t han e xpe cte d.
• Du e to t he n at u re of ou r Compa ny, we are expose d to ad min ist r at ive and le g al proce edings,
both civil an d cr imin al, in clu d in g as a re su lt of alle ge d en viron mental con t amin at ion ca used
by ce rt ain of ou r facilit ies.
Risks Relat ed to Our B usin ess
O u r m ine ral e xtracti on o per at ions are d e pe nd en t on c on cessions, licen ses and permit s g ran ted to
us by t he respective g overn men ts in t he cou nt ries in wh ich we operat e
Ou r min er al ext r act ion bu sin esses d e pen d on con cession s gran t ed to us by t h e re spect ive
governmen t s in the coun tr ies in which we ope rate. Loss of con cessions, licen ses a n d/ or pe rmit s, as
well as mat erial ch an g es to t h e con d it ion s t h ere of, cou ld ma t erially an d ad versely affect ou r
b u sin ess, fin an cial con dit ion a nd r esult s of opera tion s.
We e xt ract pot ash , ph osph ate , b romin e, mag ne sium an d ce rtain ot h er min erals in I srae l, pot a sh and
sa lt in Spain , Polysu lpha t e ®, salt, an d cert ain ot he r min erals in t he Unit ed Kin gd om and ph osphate
in Ch in a, pu rsu ant to con cession s a n d pe rmit s in th ose cou ntr ies.
I s rael
Pu rsu an t to t h e I sr aeli Dead Sea Con ce ssion La w, 1961 ( h ere in after – t h e Con cession Law), as
amen d ed in 1986, and the con cession d eed a tta ched as an add en dum to t he Con cession Law, DSW
was g ra nt ed a con cession to u t iliz e t h e resou r ces of t h e Dead Sea a n d to lea se t h e lan d re qu ired
for it s pla nt s in Sod om for a per iod en d in g on March 31, 2030, a ccompa nied by a pr iorit y rig h t to
receive t h e con ce ssion aft er it s e xpiration , sh ou ld t h e Government d ecid e to offe r a ne w con ce ssion.
Th er e is no assu ra nce t hat t he Company will con t in ue to h old t he con cession b eyon d t ha t period.
In accor d an ce wit h sect ion 24 ( a) of t h e Su pplement to t h e Con cession La w, it is st at e d , a mong
ot h er t hin gs, t hat at t h e end of t he con cession pe riod a ll t he tang ible assets at t he con cession area
will be t ran sfe rred to the gover nme nt, in exch an ge of t h eir amortize d r eplacemen t valu e – t h e value
of t h e a sse t s as if t h ey are pu rcha sed as n ew at t h e en d of t he con cession pe riod , less t h eir t ech nical
d eprecia t ion b ased on t h eir main te na nce con d ition a nd th e u n ique charact eristics of t h e Dead Sea
area.
Th er e is no cer t ain ty as to t h e man ner of in t erpr eta tion of t h e provision s of t h e Con cession La w in
t his con t ext as will be a d opt ed in a leg al proceed in g , to t h e ext ent su ch proce edin g wou ld occur.
For fu rt h er in formation , see Not e 18( b) to ou r Au dited Fin ancia l Statements.
We min e ph osph at e rock from ph osph at e d eposit s in t h e Neg ev d e sert in accord ance wit h two
min in g con cessions from t he St at e of Isr ael, wh ich are va lid un t il t h e en d of 2021. For fu rt her
in format ion on r ece nt d evelopmen ts re gardin g t h e ext e nsion of t h e con ce ssion s for an a d d it ional
period of t hr ee yea rs, see Not e 18( b ) to ou r A u d it ed F in an cial St at emen ts. In a d dit ion, Rot em h as
t wo le ase agr eements in effect unt il 2024 a n d 2041 an d an add ition al le ase agree me nt of t he O ron
plan t , wh ich t h e Compa ny h as b e en workin g to ext en d sin ce 2017, by exer cisin g t h e e xt en sion
opt ion provid ed in t h e agreement.
5 ICL Group Limited
Th e Company is a ct in g to r en ew t h e said con cession s an d le ases, an d b elieves t h at it is likely to
occu r sin ce it is t he on ly en t it y wit h appropriat e prod u ct ion facilit ie s; n e vert heless, t h ere is no
cer t ain t y t hat t hese con cession s a nd lease s will be re newe d u nd er t he sa me t erms or at all. Fa ilure
to re ne w t h e said con ce ssion s an d lea se s or d iffere n t t er ms cou ld mat e rially a nd ad ver sely affect
ou r b u sin ess, fin an cial con dition an d result s of operation s. F or fu rthe r infor mation on con cessions,
leases and per mit s, see Not e 18( b) to t he Compa ny's A udit ed Financial St atement s.
Ou r exist in g ph osphat e mines in t h e Neg ev d ese rt hold limit e d rese rves of ph osph at e r ock
d esig nat ed for ph osphoric acid prod u ction . T he Compa ny is workin g to promot e t h e plan for min ing
ph osph at es in B ar ir field , which is locat ed in t h e sou t h ern pa rt of t h e Sou t h Zoh ar d eposit in t he
Neg ev Deser t . T h ere is no cert ain t y r eg ard ing t he t imelin e s for t h e su b mission of t h e plan , it s
approval, or fu rt h er d evelopme nt s wit h r espe ct to th e Barir fie ld sit e . Failu re to ob t ain su ch approval
or a sig n ifican t d elay in r ece ivin g it or in fin d in g a lt e rn ative sou rces of ph osph at es in I sr ael, will
ha ve a sig nifica n t n eg ative impact on t he Grou p’s fu tu re min in g reserves an d our b usin e ss, fin ancial
con d it ion a nd r esu lt s of ope rat ion s will be ad ve rsely affect ed , eve n mat erially. F or fu rt her
in format ion , see “It em 3 - Key I n for mat ion — D. Risk Fact ors— Se cu rin g t h e fu t ure of t h e ph osph ate
min in g operat ion s at Rot e m I sr ael d e pen d s on ob t ain in g several appr ovals a nd permit s from the
au t h or it ies in Isr ael”, “I t em 4 - I n format ion on t h e Compan y— D. Propert y, Plan t a nd Equ ipme nt—
Min er al Ext r act ion an d Minin g Operat ion s - Neg ev”, “Con cession s an d Min in g Rig h t s” and
“Rese rves”, an d Not e 18(b ) to ou r A u dite d Fin an cial St ate me nts.
S p a in
A su b sid iary in Spain ( he rein after – I CL I b er ia) was g ran t e d minin g rig ht s b ased on leg isla t ion of
Spa in ’s Governmen t fr om 1973 an d t h e re gu lat ions accompan yin g t h is leg isla t ion . Fu rth er to the
legislat ion , as st a t ed , the Government of t h e Catalon ia region pu blish ed spe cial min in g regula tions
wh ere b y I CL I b eria received in divid u al licen ses for each of t he 126 d ifferent sit e s t h at are r ele vant
to t h e cu rre nt and possib le fu t u re min in g activit ies. Some of t h e licen ses are valid up to 2037 and
t he rest are effect ive up to 2067. T h e con cession for t h e "Reserva Cat alan a", an ad d itional site
wh er ein min in g h as n ot yet b een comme n ced , expired in 2012. Th e Compan y is act in g in
cooperat ion wit h t h e Span ish Govern ment to ob ta in a r enewal of t h e conce ssion . A ccording to the
Spa n ish au t h or itie s, t h e con ce ssion per iod is va lid un t il a fin al d ecision is mad e r eg ard in g the
ren ewal. Ma in t ain in g t h e min in g a ct ivit y in Spain also requ ire s mu n icipa l a nd e nviron me ntal
lice nse s. If su ch lice n se s are not ren ewe d, t his wou ld be expect ed to affect , possib ly in a sub sta ntial
ma nn e r, t h e min ing activit y at certain sit es in Spain and t he Company’s fin ancial r esults. For fu rther
in format ion , see “It e m 4 - I n format ion on t h e Compa ny— D. Prope rt y, Plan t and Equ ipme nt— Min eral
Ext ract ion an d Min in g Operation s” and “ Concession s and Min in g Rig hts” and “Reserves”, a nd Note
18( b ) to ou r A u d ited Fin an cial St ate me nts.
U n it ed Kin gdo m
Th e min in g rig ht s of a su b sid ia ry in t he Unit ed Kingd om ( h er ein aft er – I CL B ou lb y), are b a se d on
approxima t ely 114 min in g le ases an d licen ses for ext r act in g var iou s min erals, in ad d it ion to
nu mer ou s e asemen t s a n d rig h t s of wa y fr om privat e owne rs of lan d u n d er wh ich I CL B ou lby
operat es, an d min ing rig ht s under th e Nort h Sea g ran ted by t he Br itish Crown (Crown Est ates). The
lease rig ht s wit h t h e Crown Est at es, inclu d e provision s to e xplor e an d e xploit all t arg et ed and
kn own Polysu lph at e min er al re sou rces of in t erest to ICL B ou lby. The sa id min eral le ases cover a t otal
area of ab ou t 720 squ ar e kilomet e rs ( onsh or e lea se s t otalin g aroun d 90 squ a re kilomet ers an d the
offshore le ases from t h e Cr own Est at es coverin g aroun d 630 squ are kilomet e rs). As at t h e d ate of
t his report , all t he le ase period s, lice nse s, ea se me nt s an d rig ht s of way a re effect ive, some up to
2022 a nd ot h er s up to 2038. T he Compan y is act in g to r en ew t he rig hts n ecessary for t h e min ing
operat ion which e xpire in 2022 or a lt ern at ive ly will seek to ob t ain own er sh ip of t h ese r ig h t s. The
6 ICL Group Limited
Compan y believes, it is more likely t h an n ot , t ha t it will ob t a in re ne wal or own ersh ip of all t he
need e d rig hts. Ne ve rth eless, in t h e event su ch Rig hts are n ot ob t a in ed , t h e min in g act ivit y in the
UK may be su b st a ntially a ffe ct ed . F or fu r t he r infor mat ion , se e “I t em 4 - I nformat ion on t he
Compan y— D. Pr opert y, Plan t a nd Equ ipme nt — Min er al Ext ra ct ion an d Min in g Opera t ion s” and
“Con cession s a nd Min in g Rig hts”, an d Not e 18(b ) to ou r A u dite d Fin an cial St ate me nts.
C h in a
The Compan y h old s a join t ven t u re ( “Y PH J V”) wit h Yun nan Phosph ate C he mica ls Grou p ( “ YPC”), a
ph osph at e prod u cer ope rat in g in Chin a. YPH JV h old s t wo ph osphat e min in g lice nse s t h at we re
issu ed in J u ly 2015, by t he Division of La n d an d Re sou rces of th e Yu n n a n d ist r ict in Ch in a: ( 1) a
min in g licen se for t he Ha ikou Min e ( h er ein aft er – Ha ikou ) in wh ich t he Compan y r u ns it s ope rat ions
an d which is va lid up to J an u ary 2043, an d ( 2) a minin g licen se for t he B ait acu n Min e , which expired
in Nove mb e r 2018. In ord er to prese rve th e rig hts for t h e B aitacun min in g licen se and facilit ate its
ren ewal in 2021, the Company paid an a d va nce in an immat e ria l a mou n t . Th e Compan y is
examin in g t h e fe asib ilit y of r en ewin g t h e B ait acun con cession , and will b ase it s d ecision , amon g
oth er t h in g s, on ph osph at e rese rves soil su rvey r esu lt s an d on t he u n d erst an din g to be a ch ieved
wit h t he au thorities. If Ha ikou's licen se is n ot r en ewed, t his wou ld be expect ed to affect , possib ly in
a su b st an t ial man n er, t h e min in g act ivity in Chin a and t he Company’s fin an cial resu lts. For fu r ther
in format ion , see “It e m 4 - I n format ion on t h e Compa ny— D. Prope rt y, Plan t an d Equ ipmen t— Min eral
Ext ract ion an d Min in g Oper ation s” an d “C on cession s an d Min in g Rig ht s" and “Reser ves”, an d Note
18( b ) to ou r A u d ited Fin an cial St ate me nts.
O u r ab ility to operate an d/or e xpand our prod uction a nd ope ratin g facilit ies world wide is d epe n den t
on ou r re ceipt of, an d compliance with, permit s issu ed by governmen ta l au thor it ies. A d ecision by
a g overn ment au th orit y to deny an y of ou r permit applica tion s may impair the Compan y’s busin ess
a n d it s o peration s
Exist in g per mit s are su b ject to challenges wit h respe ct to t he ir valid it y, re voca t ion, mod ifica t ion and
non - ren ewal, inclu d ing as a resu lt of en viron ment al e ve nts or ot h er u nforese eab le occu rren ces. Any
unsu ccessfu l ch allen g es cou ld lea d to sig n ifican t cost s an d mat erially ad verse ly a ffect ou r
operat ion s and fin an cial con d it ion . In ad d it ion, a failu re to comply wit h t h e t erms of ou r per mit s
cou ld r esu lt in paymen t of su b sta nt ial fin es a nd su b ject t he Compa ny a n d it s mana gers to cr iminal
sa n ct ion s.
Fu rt h ermore , our prod u ct ion proce sse s gen era te b yprod ucts, some of wh ich are salea b le wh ile
ot h er s mu st be reu sed or d isposed of as wast e . St orag e, t ra nsport at ion, r eu se and wa st e d isposal
are g en erally r eg u la ted by g ove rn me n t al au t h orities in t he ju risd ict ion s in wh ich we oper at e.
Permit s issu ed by g overn me nt al au t horities are con t in g ent on ou r complia nce wit h re le vant
reg u lat ion s in the ju r isdict ions in wh ich we ope rat e. If t he va lid ity of ou r per mit s or th e revocation,
mod ificat ion or n on - re newal of ou r per mit s occu rs as a re su lt of ou r non complia nce wit h re gula tions
relat in g to st ora ge, t ransport ation, reuse an d wast e d isposal, prod u ct ion may be in t errupte d or even
cea sed , wh ich can le ad to sig n ifican t cost s ad ver sely affect in g ou r ope rat ion s an d finan cial
con d it ion .
7 ICL Group Limited
O u r o peration s a nd s ales a r e e x posed to v o la t ility in t h e s u pply an d d eman d, merg ers of ke y
p r od u cers\cust omer s\sup pliers, e xpa nsion of p rodu ction capacity an d c ompet ition from some of
t he w orld’s lar gest ch emical and min in g co mpa nies
In ad d it ion to se ason al an d cyclica l va riation s, t he Compan y’s b u sin esse s are exposed to flu ctuations
cau se d , in part , by fact or s on t h e su pply sid e, su ch as e nt ry in t o t he mar ket of n ew man u facturers
an d pr od u ct s, me rg ers of ke y player s ( prod u cers\supplie rs), expan sion of t h e prod u ct ion ca pacity
of exist in g man u fact urers, an d cha nges on t he d eman d sid e, su ch as merg ers or collab orat ions
b et ween key cu stomer s. Ou r compet itors in clu de some of t h e world ’s lar gest chemical and min ing
compan ies, some of wh ich are st at e- owned or gover nment -su bsidize d. T he pot en t ial prod u ct ion
capacit y is cu rren tly g reater t han t he glob al de ma nd , which h as affected pr ice levels. In lig ht of the
fact t ha t some of ou r prod u ct s are commod it ies ava ilab le from sever al sou rces, th e primary
compet it ive fa ct or wit h respect to ou r pr od u ct s is th e price. T he price s of ou r prod u ct s are
in flu en ced by t h e prices pre va ilin g in t he ma rket , wh ile t h e ove rsu pply as compa red to d emand
con st it u t es a n egative factor in the field of commod it y pr ices such as pot a sh and ph osphat es, as do
low price s in t h e ag ricu lt u ral sect or. Ad d it ion al compe t it ive fa ct ors in clu d e pr od u ct qu a lit y,
cu st ome r ser vice an d t echn ica l a ssist ance. If we are u n ab le to compet e effect ive ly wit h th ese
compan ies, ou r re su lt s of operat ions wou ld almost cer tainly be sig nificantly an d adve rsely affected.
More over , some of ou r pr od u ct s are market ed t hr oug h d ist rib utors, main ly as pert ains to t he activity
of t h e Phosph at e Solu t ion s seg me n t an d Specialt y Fe rt ilize rs b u sin ess. An y replace me nt of, or
mod ificat ion to t he composit ion of ou r d ist rib u tor s mig ht ad ver se ly affect t he Company’s
compet it ive ab ilit y a nd cause a d ecrease in sales in certain mar kets, at least in the short te rm.
O v e restimation of m i n eral a n d resou rce r eser ve s c ould r esu lt in lower -than -expected sales an d/or
h i gher t han e xpe cte d c ost s an d may ha ve a mat erial ad ve rse effect on ou r b u siness, fin an cial
c o n d ition a nd re sults of o pera tion s
We b ase ou r est imat e s of min eral a n d re sou rce r eserve s on e ng ineering , econ omic an d g eolog ical
d at a t ha t is compiled a n d an alyzed by ou r e ng inee rs a nd g eolog ists. However , rese rves e st imates
are by n a t u re impr ecise a nd r ely to some ext e nt on st at ist ical infere nces d rawn from availa b le
d rillin g d a t a, wh ich may prove un reliable/in accurate. There are n umerous in h eren t un cer taint ies in
est ima t in g qu an titie s an d qu alities of min er al d eposit s a nd rese rve d e posit s, as well t he qu a lit y of
t he or e, an d t h e cost s of min in g recoverable re se rves and t he econ omic fea sib ilit y t hereof, in clu ding
ma ny fact ors b eyond ou r con t rol. Est imat es of econ omica lly feasib le commer cia l rese rves n e cessarily
rely on a n u mb e r of fact or s an d assu mpt ion s, all of wh ich may vary con sid era b ly from t h e act ual
resu lt s, su ch as:
• Geolog ical an d min in g con d it ion s an d / or effect s of prior min in g t h at may n ot be fu lly
id e nt ified /assessed with in t he a va ilable data or th at ma y d iffer from t hose b ased on exper ien ce;
• Assu mpt ion s con ce rn in g fu t ure pr ices of pr od u ct s, operat in g cost s, upda t es to t h e st atist ical
mod el and geolog ica l pa rameters accordin g to pa st e xpe rience a nd developin g practice s in this
fie ld , minin g t echn olog y improvemen ts, d evelopment cost s a nd re clamat ion cost s; and
• Assu mpt ion s con ce rn in g fu ture effects of r eg ulation , in clu din g t he issu an ce of r equ ired per mits
an d t axes impose d by g ove rnmen ta l age ncies.
If t h ese fact ors a n d assu mption s cha ng e, we may n eed to re vise ou r min era l a nd resource r eserves
est ima t es.
8 ICL Group Limited
Any re vision s to ou r previou s r eser ve est imat es or in accu ra cies in ou r est imat e s relat e d to our
exist in g mineral an d resou rce rese rves cou ld r esu lt in lowe r-t han-expe cte d sa les an d/or hig her than
expect ed cost s a nd ma y h ave a mat e rial ad ve rse e ffect on ou r b u sin ess, finan cial con d it ion and
resu lt s of oper at ion s.
In Oct ob er 2018, t h e SEC a d opt ed a fin a l ru le t h at will repla ce SEC I nd u st ry Gu id e 7 wit h n ew
d isclosu re requ ire men ts t h at are mor e closely alig n ed wit h cu rrent in d ust ry a nd g lob al re gula tory
pract ices an d st a ndards. Commen cin g wit h ou r an nu al r eport for t h e fisca l ye ar e nd ed De cember
31, 2021, we will comply wit h t h ese n ew d isclosu re require me nts. Upon implemen ta tion of the new
me t hod olog y as part of t h e ad opt ion of t he se n ew d isclosu r e re qu ire ments, we will present
in format ion re spect ing resou rce and r eserve estimates which may d iffer mat erially from t he reserve
est ima t es prese nted h istor ically a nd in t his A n nual Re port un der t he e xistin g SEC ru les.
We do n ot cu rre n t ly pre se nt r eserves est imate s in t h e UK ( b ecause cu rre ntly we d on 't b elie ve that
t he Polysu lph at e ® we are prod u cin g t h ere is mat erial to t h e over all Grou p r esu lts). In t he ab sence
of pu b lishe d re se rves, we are u n ab le to provid e life of min e est imat es in accor d an ce wit h SEC
In d u st ry Gu ide 7, t hat de termin e how lon g we are a ble to con tinue produ ction , an d th e life of mine
ma y be sh or t er t h an you expect.
For fu rt h er in format ion , se e “ It e m 4 - In format ion on t h e Compan y— D. Propert y, Plant a nd
Equ ipmen t — Re serves”.
T h e location s of so me of ou r min es and fa ci lities expo se us to va riou s n atu ra l d isasters
We are expose d to n at u r al d isaste rs, su ch as flood in g an d e art hqu akes wh ich may cau se mat e rial
d amag e to ou r b u sin ess. For e xample, in I srae l, some of ou r plan t s are locat ed on t h e J ord an Rift
Va lley, or Syr o- A frican Depr ession , a seismically act ive area. Furthermore, in recent ye ars sin kh oles
an d u n d er groun d cavit ie s h ave b e en d iscovered in t h e area of t h e Dead Sea, wh ich cou ld cause
ha rm to t h e Compan y’s plan t s. In ad d it ion , an “ u nd ermin ing ” pr ocess h as b eg u n in t h e n ort hern
part of t h e A rava st rea m, at t he e nd of wh ich , on b ot h b an ks, are t h e e vapor at ion pon d s of t he
Compan y’s plan t s at t h e De ad Sea. T h ere is a risk th at t h is ph en ome non wou ld jeopard iz e the
st ab ilit y of t h e Compan y’s d ikes a nd evaporat ion pond s. In t h e Sod om area, where many of t he
Compan y’s plan t s in Isra el are loca t ed , t h er e are occasion al fla sh flood s in t he st rea mb e ds. W h ile
we h ave in su rance coverage for t h ese t ypes of d amag e, su b ject to pa yment of d ed uctib les, the
in su ra nce may n ot be su fficient to cover all of t hese cost s. In add ition , we h ave un dergrou nd mines
in t h e Un it e d Kin g dom an d Spain an d a min e in Ch in a. W at er le akag e s in t o t h ese min es or ot h er
nat u ra l d isasters mig h t cau se d isruption s to ou r min in g activit ies or even to a loss of t h e min e. We
do n ot have fu ll pr opert y in su rance wit h respe ct to all ou r prope rty/a ssets.
9 ICL Group Limited
T h e a ccumu lation of s alt at t he b ott om of P on d 5, t h e c ent ral e vap oration po n d in ou r sola r
e vaporation pon ds syst em use d to extract mine rals fr om th e Dead Sea, re quires re gu lar ha rvest ing
of t h e sa lt in ord er to main ta in a fixe d b rine volume an d t he reby su st ain t he prod uction capacity
of e xt r act ed m in eral s an d p reve nt p ot entia l d amag e to t h e foun da tion s a nd st ructures of t h e
h o t els and ot her b uild ing s sit ua ted cl ose to t h e ed ge of t he Pon d
Th e min era ls from t he Dead Sea are ext racted by way of sola r evapor at ion , wh ereb y salt precipitates
on t o t he b ed of Pon d 5 ( h er ein afte r – t h e Pon d ), loca t ed in on e of t he sit e s of Dead Sea Works
( herein after – DSW ). T h e precipit at ed sa lt cr eat es a la ye r on th e Pon d b ed wit h a volu me of
approxima t ely 16 million cu b ic met ers per year. Th e process of prod u ct ion of t h e raw mat e rial
requ ires t ha t a fixed b rin e volu me is pre served in t h e Pon d. Failu re to main t ain a con st ant volume
of solu t ion s in t he Pon d cou ld resu lt in a r ed u ct ion in prod u ct ion capa cit y. To t his en d , up to t he
en d of 2021, t he raisin g of t h e solu t ion s' leve l of t he Pon d will con t in u e accord in g to t h e r ate at
wh ich t he pon d floor rise s, while per for min g t h e sa lt h ar ve st, in it iate d in t h e fou rth qu a rt er of 2020.
Th e solu t ion s' level ma ximu m heig h t ( 15.1) is expect ed to be r eached by t he en d of 2021. From
2022 on wa rd s, t h e solu t ions' volu me in t h e Pon d will be prese rved on ly by way of harvest in g the
sa lt .
Raisin g t h e wa t er level of t h e Pon d a b ove a cert a in level ma y cau se st r u ct u ral d amag e to t he
fou n d a t ion s and t h e h ot el b u ild ing s sit u at ed close to t h e wat e r’s ed ge, to t h e se t tlement of Neve
Zoh ar a n d to ot h er in fr astr uct ure locat ed alon g t he west ern sh orelin e of t h e Pon d . Up to t h e end
of 2020, in ord e r to ensu r e t h at t h e Pon d wa ter le ve l d oes n ot exceed t h e maximu m h eig ht ( 15.1),
t he Govern ment of Isr ael, t hr ou g h t h e Dead Sea Pr eser va t ion Gove rn men t Compa ny Lt d .,
impleme nt ed a project for con st ru ct ion of coast lin e d efen ses, t og et h er wit h DSW ( who fin an ced
39.5% of t he project 's cost ), as par t of which t h e d yke alon g t h e west ern b ea chfr on t of t h e Pond,
acr oss from t he hot els, is r aised , t og et he r wit h a syst e m for lowerin g su b t er rane an wat er. The
con st r u ct ion work wit h re spect to t h e h ot els' coast lin es is complet e an d at prese n t , t h e De ad Sea
Prese rvat ion Govern me nt Compan y Lt d . is carryin g ou t e le vat ion work in t he in t er media te area
b et ween t he t wo h ot el complexes. T h e Pon d level will be ma in t ain ed as part of t h e perma nent
solu t ion ( t he salt h arvesting pr oject ) d escrib ed b elow, wh ich sh ou ld provid e a d e fen se u ntil t h e end
of t h e cu r ren t con ce ssion pe riod in 2030.
Th er e is no gu a ran t ee t h at t he said project s for main t ain in g t h e Pon d ’s wat er level will be at t he
cost we cu rre nt ly est imat e or will pr even t d a ma ge to t h e su rrou n din g in frast ruct ure or to ou r
operat ion s in t he Pon d. Hig her cost of t h e h arve stin g proce ss or failu re to provid e solu t ions and/or
an y proof of d amag e cau sed cou ld mat erially and a dversely affect ou r b usin ess, fin an cial con dition
an d re su lt s of oper ation s.
For fu rt he r in format ion ab ou t th e coast lin e d efen ses an d t h e perman e nt solu t ion (the Salt
Ha rvest in g Pr oject ), see “I t em 4 – I nformat ion on t h e Company — D. Pr opert y, Pla n t a nd
Equ ipmen t — Min era l Ext ract ion a nd Min in g Opera t ions” and Not e 18( c) to ou r A u d it ed Fin ancial
St at emen ts.
10 ICL Group Limited
T h e re ced ing w a ter l evel in th e N orth ern B a s in of t he D e ad Sea, m ay require capit al a nd/or
o p e r at iona l expenses in ord er to ena ble the c ontin uation of th e Compa ny's oper ation s in th e Dea d
S e a
Du e to t he hydrolog ical d e ficit, t he wat er le ve l of t he Northern B asin of t he Dea d Se a is rece ding at
t he rat e of over 1 met er per year. As part of ou r prod u ction proce ss in Isr ael, we pu mp wa t er from
t he Nor t hern Basin of t h e Dead Sea t h rou gh a special pu mpin g st ation an d d elive r it t hroug hout a
fee d in g ch anne l to t h e salt a nd car n allit e e va poration pon d s in t h e Sou t h ern B asin . As t h e water
level re ced es, we may be pressu r ed to r edu ce ou r usa ge of min er als fr om t h e Dead Sea , which could
ha ve a mat er ia l a d ve rse e ffect on ou r b usin ess, fin an cial con d ition a n d re sults of opera t ion s.
Ou r ab ilit y to pu mp wat e r re lies on an act ive pu mpin g st at ion at t h e wat er lin e of t h e Nor t h ern
B asin of t h e Dead Sea . Due to t he re ced ing wate r level in t his ar ea , t he wate r lin e is reced ing from
t he cu r ren t pu mpin g st a tion area and con stru ction of a n ew pu mpin g station (h er ein a fter – the P-9
Pu mpin g St at ion ) was th ere for e requ ire d. T he P-9 Pu mpin g St a t ion is expect ed to comme nce it s
operat ion d u r in g t h e secon d h alf of 2021 . The Compan y expect s t h at it will be ab le to con t inue
pu mpin g wa t er in t h e comin g years. Fa ilu re to con struct an d opera te t he P-9 pu mpin g st ation or a
sig n ifican t d e lay in t h e plan n ed t imet ab les or fa ilu re to ext end it s life in fu t u r e yea rs cou ld h ave a
ma t erial ad verse e ffe ct on th e Compa ny’s b usin ess, it s fin ancia l con dition and resu lts of oper ations.
For in format ion respect in g t h e pet it ion t ha t was file d wit h t he Isr aeli Cou r t for W at er Mat t ers by
Ad am Te va V’Din , wherein t h e Cou rt was r equ este d to ord e r t h e Gover nmen t W ater a n d Sewage
Aut horit y to issu e a pr od u ct ion licen se to DSW pu rsu a nt to t h e W ate r La w wit h respect to the
t ran sfer of wa t er from t h e Nort he rn B asin of t he Dea d Sea to t h e eva porat ion pon d s in t he Sea ’s
Sou t he rn B asin , see Not e 18( c) to ou r A udit ed Financial St at eme nt s.
Ad d it ional risk of t h e d e clin e of t h e Dea d Se a level is t he er osion of A rava st ream, which flows a lon g
t he in t er nation al b or d er b et we en Isr ael an d J or d an an d in t o t he Dea d Sea . This erosion cou ld
en d an g er th e stabilit y of t he eastern dykes in t he future in th e arra y of salt a nd carn allit e ponds and
an y b rea ch or dama ge to t h e salt and carna llit e pon d s cou ld mat e rially a nd a d ve rsely affect our
b u sin ess, fin an cial con dit ion an d results of opera t ion s. The Compan y is endeavorin g to analyze the
ma t t er a nd to fin d solu t ion s for pr even t in g or ret ard ing t h is occu rre nce in t h e lon g t erm. The
Compan y is con d u ct in g on g oin g mon it orin g an d act in g on sit e in ord e r to prot ect t h e d yke s. As
part of t h ese efforts, a join t resea rch was con du cted with the Jor danian pot ash compan y A PC (Arab
Pot a sh Company), d esig n ed to gat her in formation for t he detaile d plan ning of a proje ct to pre vent
t he con t in u ed erosion of t h e st r eam. A pre-pla nnin g report b ased t hereupon is expect ed to be
receive d d u r ing t he first ha lf of 2021. Det ailed plan n ing wor k, b ased on t h e sa id report, will ser ve
as fou n d at ion for a b uild ing permit application . Prior to comme n cing t he project, ob tain ing pe rmits
from t he au t h or it ies is requ ir ed , d u e to it s en g in e erin g complexit y, pr oximit y to t h e b ord e r, soil
in st ab ilit y an d e nviron ment al se nsit ivit y of t h e en tire are a. In sofar as it is d e cid ed to commen ce with
t he pr oject , t he C ompa ny estimates t ha t it s comple t ion is likely to t ake several years.
Fu rt h ermore , as a resu lt of t h e d e clin e of t h e Dead Sea leve l, sin kh ole s an d u n d ergroun d ca vit ies
ha ve b een d iscover ed in t h e area of t he De ad Se a. Th e a ppear an ce of sin kh oles in t he De ad Sea
area is in cr easin g ove r t h e yea rs. Most of t he sin kh oles d evelop in t he Nor t hern B asin of t he Sea,
wh ere t h ere is low act ivit y by ICL Dea d Sea ( DSW ). However, in recen t ye ars t he re ha s b een a st eady
d evelopmen t of sin kh oles in t he ar ea of t he feed ing cha nn el, t hr ou gh which wate r is pu mped from
t he Nor t hern Basin to t h e Sou t he rn B asin . DSW t a kes act ion s to mon it or t h e d evelopmen t of t hese
sin kh oles a n d to fill t h em wh en t hey appea r. The d evelopmen t of sin kh oles in areas wh er e we
operat e, t oget h er wit h a failu re to d et ect and t re at t hose sin kh oles can ca u se sig n ifican t d amage
an d cou ld mat e rially an d adversely affect ou r b usin ess, fin an cial con d ition an d result s of ope rat ions.
11 ICL Group Limited
A n y m alfun ction in t h e t ransp ort at ion s y stem s we u se to sh ip ou r product s could h ave a ma teria l
a d verse effect on ou r b us iness, fin ancia l con dit ion and re sult s of o per ati ons
Part of ou r sales t u r n over is comprised of sales of b u lk prod u ct s ch ar acter ize d by larg e qu a ntities.
Most of t his pr od u ct ion qu an tity is sh ippe d t h rou gh d ed icate d facilit ies from t wo seapor ts in Isr ael,
on e sea port in Spa in an d anot h er se aport in t h e Un it ed Kin g d om. It is not possib le to sh ip large
qu a nt it ies in b u lk from ot her fa cilit ies in I srae l. A ny sig nifica nt d isrupt ion reg ardin g t h e se aport
facilit ies a nd /or t h e array of tr an sport a tion from t h e seaport s, in clu d in g d u e to st r ike s by port
worke rs, reg u lator y restriction s and ch an ges in th e r ig hts of u se of seaport facilit ies, cou ld d elay or
preve n t expor t s of ou r prod u ct s to ou r cu st omers, wh ich cou ld mat erially an d ad versely affect our
b u sin ess, fin an cial con dit ion an d results of opera t ion s. In add ition , any sig n ificant d isr upt ion in the
array of tr an sport a tion to t h e seapor t s an d b etween variou s sit es, primarily t h rou g h t rains and
t ru cks, mig ht ma t erially an d a d verse ly a ffect t he C ompa ny’s oper at ion s, it s fin ancial con d ition and
resu lt s of oper at ion s.
In ad d it ion , the C ompa ny t ran spor ts h azard ous ma t erials u sin g spe cialized transpor t facilit ies, such
as isot an ks for t h e t ran sport at ion of b romin e. A malfu n ct ion in t h e t ra nsport ation of h azardous
ma t erials, in on e of ou r specialized t ra nsport facilit ies mig h t h ave an environ mental impact and\or
cau se h arm to the welfare of local re sid e nt s, an d, as a resu lt , expose t h e Compan y to lawsu it s and\or
ad min ist ra t ive pr oce edin gs or fin es, an d also cau se a shu t d own of su ch mat erials’ t r an sport ation
syst e ms for a ce rt ain period u n t il t h e cau se for su ch malfu n ct ion h as b ee n d iscover ed an d \or for
pu rpose s of pre ve nt ative ma in ten ance a nd improve me nt of the tran sporta tion a rray, a nd as a result
ma y h ave mat erial a d ve rse e ffect on t he C ompa ny’s oper at ion s, fin an cial con d it ion a nd result s of
operat ion s.
We are exposed to risks associated with our in ter nation al sales and oper at ions, which could ad versely
a f fect ou r sales to cu stomer s as well as ou r ope rat ions an d asse ts in variou s coun tr ies. Some of
t hese f actors m a y a lso m ake it l e ss a t tracti ve to d istrib ute c a sh g en er ated by ou r operat ion s
o u tside Isr ael to ou r sh are ho lders, u se c a sh g en erat ed by ou r ope ration s in on e cou nt ry to fu nd
o u r o p era tion s or r e pay men ts of o u r in d e bt edn es s in a n oth er c o u nt ry a nd su ppor t ot he r
c o r por at e pu rposes or t h e d istribu tion of div ide nds
As a mu lt in a t ion al Compa ny, we sell in man y cou n t ries wh ere we do n ot prod u ce. A con sid erable
port ion of ou r prod u ction is desig na ted for export . As a result , we are su bject to n umerou s r isks and
u n cer t ainties r elating to in te rn ation al sales a nd operat ions, in clu din g:
• Difficu lt ies an d cost s associat e d wit h complyin g wit h a wid e variet y of complex laws, t re at ies
an d re gulation s, in clu d ing t h e U.S. Fore ig n Corru pt Pract ices A ct ( t he “F CPA”), t h e UK. B rib ery
Act of 2010 a nd Sect ion 291A of t h e I srae li Penal Law;
• Un expect ed chan ges in r eg u la t or y en viron ments an d increased g overnmen t own ersh ip and
reg u lat ion in the cou n tries in wh ich we operate;
• Polit ical and econ omic in st ab ilit y, in clu d in g civil u n rest , in fla t ion an d ad verse econ omic
con d it ion s r esu lt in g from gover nmen t a l at t empt s to red u ce in flat ion , su ch as imposit ion of
hig h er in t erest r ates an d wag e an d price con tr ols;
• Pu b lic h ealt h crise s, su ch as pan demics and epid emics; an d
• The imposit ion of t ar iffs, exch an g e con t rols, t r ad e b arr iers, ne w t axe s or t ax rates or ot her
rest r ict ion s, in clu din g t he cu rren t t rade dispu te b et ween t he US an d Ch ina .
Th e occu rre nce of an y of t h e ab ove in th e cou n t ries in wh ich we oper at e or elsewh ere cou ld
jeopa rd ize or limit ou r ab ilit y to t r an sact b u siness t h ere an d cou ld mat erially ad versely affect our
revenu e an d opera ting resu lts an d t he valu e of ou r asse ts.
12 ICL Group Limited
T h e CO VI D-19 o u tbreak h as i mpacte d an d c ould in t h e fu tu re materia lly an d ad versely affect ou r
f i n an cial c ond ition and r esu lts of o pera tion s
In Decemb er 2019, a nove l st ra in of coron aviru s ( C OVID- 19) was repor t ed to ha ve su r faced in
W u ha n, Ch in a, re su lt in g in shu t d own s of ma n u fact u rin g and commerce in t he mon t hs t hat
followed . In Mar ch 2020, t he W orld Healt h Org aniza tion d eclar ed COVI D-19 a pa nd emic. Sin ce
t hen , t h e pan d emic h as con t in u ed to spread a cross t h e g lob e at varyin g in fe ct ion rat es an d h as
in t rod u ced sig n ifican t b u sin ess an d econ omic u n ce rt ain ty and volat ilit y to g lob a l market s.
Accord in g ly, t h ere ha s b e en, an d ma y con t in u e to b e , a sig n ifican t d eclin e in g lob a l e con omic
act ivit y, in clu d in g d epresse d commod it y price s ( in clu d in g oil pr ices), in par t , d ue to preve nt ative
on g oin g me asu re s t aken by va riou s g ove rn me n tal org a niza tion s a rou nd t h e world , su ch as t ravel
b an s an d r estr iction s, qu ara ntin es, sh elt er -in-pla ce orders a nd sh u tdown s.
Th e spre ad of t he COVI D-19 pan d emic d u r in g 2020 ha s led us to mod ify ou r b u sin ess pra ct ices,
in clu d in g implemen t in g policies, h ea lt h an d safet y me asu re s a n d proce d u res to prot ect ou r
employe es in all of ou r facilit ies a n d offices. We ma y n ee d to t a ke fu r t h er act ion s as r equ ired by
governmen t aut hor ities or t hat we det er min e are in t he be st in t ere st of ou r employe es, cu st omers,
part n ers a n d su pplie rs.
For example, at t h e en d of Ma rch 2020, ou r pot a sh min in g operat ion s in Spain we re t e mpor arily
ha lt e d for approximat ely t hr ee weeks an d sin ce th en g ra du ally ra mped back up to n ormal capacity
at t he Su ria sit e ; Polysu lph at e
®
min in g a ct ivit ies in t h e UK were cu rtaile d an d g rad ually ra mped back
up to n or ma l capacit y; an d some of ou r e xt er na l con t r actor s d ecla red force majeu r e t h at led to a
d elay in few of ou r proje ct s. There is no cert ain ty t h at su ch measures will be su fficien t to mit ig ate
t he risks posed by t he pa nd emic. Fu rt he rmor e, ou r ab ilit y to perform ce rt ain fu n ct ion s mig h t be
affect e d if we are r equired to t ake addit iona l st eps.
Th e e me rg en ce of t h e CO VI D- 19 pan d e mic h ad a n e ga t ive impact on ou r b u sin ess performan ce
d u rin g 2020, as re venu e s d ecrea se d, ma in ly d u e to lower d eman d for some of ou r I n d u st rial
Prod u ct s se g ment's prod ucts su ch as clea r b r in e flu id s, as a resu lt of a sig n ifica n t d ecline in oil price s
an d d emand , a nd su ch as cer t ain flame ret ar d ants, d u e to lowe r act ivit y in t h e au t omot ive and
elect ron ics in d u stries. In ad dit ion, ou r ope ratin g re sult s wer e n eg atively impact ed , main ly as a result
of lowe r prod u ct ion in Eu rope a nd ot h er ope ration al cost s r ela ted to t he COVID-19 pan d emic.
We expect a con t in u in g impa ct on ou r resu lt s also over t h e n ext few qu arters, t h ou gh t he fu ll fu ture
effect of t h e COVI D-19 pand emic on t h e g lobal econ omy a nd ou r b usin ess is u n ce rt ain , and it may
be d ifficu lt to a sse ss or pred ict . Th e ext en t of t h e impact of t h e CO VI D-19 pa n d emic on ou r
operat ion al an d fin an cial per for mance will d e pe nd on fu t u r e d evelopmen ts, in clu d in g, b u t not
limit e d t o:
• The d u rat ion , se ve rity an d spr ead of t h e pa n d emic an d t h e action s requ ired by g ove rn ment
au t h or it ies or oth er h ealth or ganizat ion s to con ta in t he disea se or tr eat it s impa ct, in clu ding the
effect iven ess of t he va ccination s d eveloped and alre ad y admin ist er ed in most cou ntries.
• The d u rat ion an d sever ity of t h e su st ained g lob al re cession , an d t he u n certa in ty as to when
glob al econ omy will fu lly re cove r.
• The possib ilit y of ad d it ion al ou t b reaks of t h e vir u s, or th e d e ve lopmen t of more h armfu l a nd
resist an t va riants of t h e virus, or an y possib le re cu rrence of ot her similar t ypes of pa n d emics, or
an y ot h er wid espre ad pu blic h ealt h emerge ncies.
• Sig nifica n t d isr u pt ion of g lob al fin an cial market s an d cred it mar ket s, wh ich ma y red u ce our
ab ilit y to a cce ss capit al or ou r cu st omer s’ ab ilit y to pa y us for past or fu t u r e pu rchases, which
cou ld neg at ively affect ou r liqu id ity.
13 ICL Group Limited
• The possib ilit y of t empor ary closu re s of ou r fa cilit ies or t h e fa cilit ies of ou r su pplier s, cu st omers,
t heir con t ract manu factu re rs, an d t h e possib ilit y of cert ain in du str ies sh u ttin g d own .
• Lower d e man d and /or pricing for ou r prod ucts and a pot ent ial g lob al e con omic recession could
lead to re d u ce d d eman d in ou r end markets, pa rt icu larly b r omin e compou n d s. In a d dition , the
sig n ifican t d eclin e in cru d e oil price s an d t h e oil mar ket s’ cu rren t ab ility to a b sor b excess su pplies
an d re b alance in ve ntor y is like ly to con t in u e to r esu lt in d e cre ased d e ma nd for ou r cle ar b r ine
flu id s.
• The a b ilit y of ou r su ppliers, con t ractor s an d t hir d- pa rty provid ers to mee t th eir ob lig ations to us
at pre viou sly a nt icipat e d cost s and time lin es wit hou t sig nifican t d isru ption .
• Ou r a b ilit y to con tin ue to me et th e man ufact uring an d supply ar rang ement s with our cust omers
at pre viou sly a nt icipat e d cost s and time lin es wit hou t sig nifican t d isru ption .
• The a b ilit y to pu rch ase raw mat e rials t h at we u se to prod u ce ou r prod u ct s, d u e to short a ges
resu lt in g from su pply ch ain d isru pt ion s, qu ara n t ine s, lockd own ord er s an d prod u ct ion
sh u t d owns.
We cont in u e to closely mon it or t h e effect s an d implicat ion s of t h e pa nd emic. T h e u lt imate impact
of t h e COVI D-19 pandemic, or a simila r h ealth e pidemic, is h ig hly u ncert ain and su b ject to ch ange.
To t h e ext en t t hat t he CO VI D-19 pand e mic n egatively impact s ou r b u sin ess, re su lts of ope rat ion s,
liqu id it y or fin an cial con d it ion , it may also h ave t he effe ct of in cr easin g man y of t h e ot h er risks
d escrib ed in t his “Risk Factor s” se ction .
O u r o peration s c ould be a dversel y a ffected by p r ice in crea se s or s h ortag es with respect to wa ter ,
e n ergy a nd ou r pr in cipal raw ma terials, as well as by in cr ease s in transporta tion co sts
We u se wat er, en ergy and variou s raw ma terials as inpu ts an d we could be affected by h ig he r costs
or sh or t ag es in t h ese mat erials, as well as by ch an g es in t ra nspor tat ion prices.
For e xample, our ph osph at e fa cilities u se la rge qu an titie s of water purchased fr om Mekorot, I srae l’s
nat ion al wat er company, at pr ices set by t he g ove rn men t. If th ese price s rise sig nifica ntly, ou r costs
will rise as well. In ou r pla nt s in Sod om, we ob t a in wat er from an in d epen de nt syst e m t h at is n ot
part of t h e n at ion al wat er syst e m. A sh ort age of wat er at t he wat er sou rces in proximit y to t he
plan t s or t h e imposit ion of ad d it ion al cost s/ charg es for wat er u sag e wou ld force t h e Compan y to
ob t a in wat er fr om sou r ces locat ed fu rther a way a n d/or at a h ighe r cost . For in for ma tion r eg ar ding
t he amen d ment to th e Isr aeli W ater Law in Isra el an d its impact on t he Compan y’s prod uct ion costs
at t h e Dead Se a, see Not e 17 to ou r Au dit ed Fin ancial St atements.
Ou r pla nt s con su me lar ge amou n ts of en er gy. Moreover, e ne rgy is a sig n ifica n t compon en t of the
sh ipping cost s of a consid er ab le sha re of ou r prod u ct s. Sig n ifica n t price in cr eases for en er gy, or
en ergy sh or t ag es, wou ld affect sh ippin g cost s, prod u ction cost s a nd /or qu an titie s.
Th e su pply of elect ricit y to ou r product ion pr ocesses a nd fa cilit ies in Israel is provid ed by ou r power
st at ion in Sod om and t he n ation a l power g rid. Ou r ope ration s in I sra el is d epen d en t on t h ese two
sou rces, so sig n ifica n t malfu n ction s at t h e power st ation and/ or in terruption of powe r su pply fr om
t he n at ion al g rid in I srae l may lea d to addit ion al fin a ncial lia b ilitie s an d pot en tia l sh utd owns at our
prod u ct ion facilit ies, wh ich cou ld neg at ive ly affe ct I CL's ab ilit y to su pply it s prod u ct s to b oth
ext ern al cu st ome rs an d ot h er I CL's sit e s u sin g t he m as raw mat e rials an d red u ce revenue fr om
d ecrea se d prod uction capacit y. I n ad dit ion , ou r mag n esiu m pla n t require s a con t inuou s su pply of
elect ricit y, so a ny in t errupt ion in the powe r su pply to t h e mag n esiu m pla n t may ca u se a sig n ificant
d amag e to ou r mag nesiu m prod uction proce ss.
14 ICL Group Limited
Th e cu rren t su pply of nat u ra l g as to ou r power plan t and to ou r su bsid iaries in I srae l is d ependent
on a sin gle su pplier an d on a sin g le g as pipe lin e wit h limit ed t ra nsmission capacit y.
W hile ou r plant s are pre par ed for t he use of a lt e rn ative en er gy sou r ces (fu el oil a nd /or d iesel fu el),
an in crease in ou r e nerg y cost s, or en er g y sh ort ages, cou ld a d verse ly and mat erially affect our
b u sin ess, fin an cial con dit ion a nd r esult s of opera tion s.
Fu rt h ermore , an in cre ase in pr ice or short a g e of raw mat erials, in t er alia: ammon ia, su lph u r, WPA
an d 4D ( wh ich we pu rcha se from t h ird parties) cou ld adversely a n d ma ter ially affect ou r resu lts of
operat ion s, fin an cial posit ion , an d ou r b usin ess.
We can provid e no a ssu r ance th at we will be ab le to pa ss on to ou r cust ome rs in cr eased cost s with
respect to wat e r, en erg y an d ou r prin cipa l raw mat erials, as well as in creases in t r an sportation costs.
Ou r in a b ilit y to pass on su ch cost in crea se s cou ld a d ve rsely affect ou r mar gin s. For fu rt her
in format ion , see “It em 4 - I n format ion on t h e Compan y— B . B u sin ess Overview— Seg ment
In format ion ”.
C o m ple ti on of certain of t h e Co mpany’s major projects may be d e pen dent on t hird- party con tractor s
a n d / or g o vernme ntal o b lig at ions . Fu r th ermore, t e rmina tion of en gagements wit h con tract ors
m i g h t entail ad dition al cost s
In t h e comin g yea rs, t he Company plan s to complet e several ke y project s, t he complet ion of which
is very import a nt to th e Company’s con t in u ed opera t ion an d ab ility to sig n ifican t ly improve it s
compet it ive posit ion in some market s. T hu s, for example, we are ad van cing th e con stru ction of the
new pu mpin g st at ion (P-9) in t he De ad Se a, t h e con solid at ion of pot ash min es in Spain in clu d ing
complet ion of t h e n ew min e access t u n n el at Sú r ia , an d sig n ifica nt in ve st men ts in en vir on mental
proje ct s. Th e complet ion of key project s cou ld also be d e pend e n t on t hird -party con t ra ctors. F or
example , a project in Spain in cu r red sever al d elays a nd b u d get expan sion s t ha t were associated,
amon g ot hers, wit h th ir d-par ty con tract or. Sit u ation s wh erein su ch con t ractors e ncou nte r financial
or operat ion a l d ifficu lt ies, or ot he r sig n ifican t d isagr eement s wit h t he Compa ny, cou ld cau se a
sig n ifican t d e lay in t h e plan n ed t ime table s for complet ion of a proje ct a nd \ or ma t erial d e viations
from t he pr oject ’s b ud get an d may e ven jeopardiz e comple t ion of th e proje ct alt ogether . Th is could
ad ver se ly a nd even mat e rially a ffect t h e Compan y’s b u sin ess, it s fin a ncia l con d it ion an d r esult s of
operat ion s.
T h e inflow of sig nifican t amou nts of wa ter in to t he Dea d Se a could a dverse ly a ffect produ ction at ou r
p l ant s
Th e in flow of sig n ifican t amou n t s of wat er in to t h e Dea d Se a cou ld ad versely affect prod u ct ion at
ou r plan t s an d mig ht alt er t h e composit ion of t h e Dead Sea wat er, in a man n er t hat wou ld lower
t he con cen t ration of sod iu m chlorid e ( NaCl) in t h e wa t er, which cou ld a d ve rsely affect prod uction
at I CL plan t s. This risk may materia lize, a mon g ot he r thin gs, as a result of the con stru ction of a canal
con ne ct in g t he Med ite rra nean Se a wit h t he Dea d Se a, t he in flow of wa t er from t h e Sea of Galilee
( Kin n er et) to t h e Dead Sea via t he J ordan Rive r, or t he con st ruction of a ca nal from t he Red Sea to
t he De ad Sea.
If t h e pot ent ial in flows, as d escrib ed a b ove, r esu lt in a lower con cen t ra tion of sod iu m chlor id e in
t he wa t er of t he De ad Se a, it cou ld ad versely an d mat erially affect pr od u ct ion at ou r pla nt s, ou r
resu lt s of oper at ion s fin ancia l posit ion , and ou r b usin ess.
15 ICL Group Limited
We are exp ose d to t he r isk of labor d ispu tes, slo wdown s and st rikes
From t ime to t ime , we experience lab or d ispu t es, slowd own s an d st r ike s. A sig n ifica n t por t ion of
ou r e mployee s are su b je ct to collect ive labor ag reemen ts, main ly in Isr ael, Ch ina, German y, Un ited
Kin g d om, Spa in and t he Net h er la nds. Prolon g ed slowd own s or st r ike s at a n y of ou r pla nt s cou ld
d isr u pt prod u ct ion an d cau se t he n on - d elivery of prod u ct s t h at h ad a lread y b e en ord e red. Also,
ramp- up t ime is n ee d ed in ord er to r eturn to fu ll pr od u ction capacity at t he fa cilities. Furt hermore,
d u e to t h e mu t u al d e pend en cy b etween IC L pla nt s, slowd own s or st rikes in an y on e of ICL pla nt
ma y affect t h e prod u ction capa cit y an d/or prod u ction cost s at anot her I CL plan t s. Lab or d ispu tes,
slowd own s or st r ike s, as well as t h e ren ewal of collect ive lab or a greeme nt s, may lead to significant
cost s an d loss of profit s, which cou ld ad ver sely, a nd even mat e rially, affect ou r operat in g resu lts
an d ou r ab ilit y to implemen t fu t u r e oper at ion al ch ang es for efficien cy pu rpose s. In t he cou rse of
lab or d ispu t es, t h e worke rs u n ion may impose cert ain sa nct ion s wh ich ma y in clu d e b lockin g or
d elayin g t he t ran sfer of g ood s t hr ou gh t h e factor y g ate s; su ch d ispu tes may escalat e int o a st rike .
S o m e of ou r em ploye es h ave pen sion a nd h ealth insuran ce arrang eme nts t ha t are ou r resp onsib ilit y
Some of ou r employee s h ave pen sion a nd he alth in surance arran gements t hat are ou r r espon sibility.
Aga in st some of th ese liab ilit ies, we h ave mon et ary r eserves t ha t are in vest e d in fin a ncia l asset s.
Chan ges in life expect an cy, cha n ges in capit a l mar ket s or cha nge s in ot h er par ame t ers by which
u n d ertakin gs to e mployee s an d ret ire es are calcu lat ed, as well as st at u t ory a mendme nt s, could
in cr ease ou r n e t liab ilit ie s for t h ese a rra ngement s. For in for ma t ion ab ou t ou r employee b e n efits
liab ilit ies a n d composit ion of plan asset s, see Not e 16 to ou r A u dited Fin an cial Statements.
T h e d iscon tin uation , c ancellat ion or e xp iration of g ove rn ment in centive prog rams or t ax b en efit s;
en t ry into force of ne w or a me nded leg islation or regu lat ion s with respect to ad ditional a nd /or
i n cre ased f isca l l iabilit ies to be i m pose d on u s; or imposit ion of n ew t axe s or ch ang es to e xist ing
t a x ra tes, cou ld all ad versely affect ou r b u siness r esults
Any of t he followin g may h ave a mat e rial ad ve rse e ffect on ou r ope rat in g expen ses, e ffe ct ive tax
rat e an d ove rall b u siness result s:
• Some governmen t in cent ive progra ms may be discon t inued, expire or be ca nce lled;
• Gove rn men t s may in it iat e n e w le gislat ion or amen d e xist in g legislat ion in ord e r to impose
ad d it ion al a nd /or in crease d fiscal liab ilit ies on our b usin ess, su ch as ad dition al r oyalties, n atural
resou rce t a xes or re quire d in ve stment s, as has occu rred in I srael;
• The a pplica b le t a x r ate s ma y in crease;
• We may no lon ger be able to meet the requ ire ment s for contin uin g to qu alify for some in ce nt ive
prog rams;
• Su ch in cent ive prog rams a nd t ax b ene fits may be u navailab le at th eir cu rren t leve ls;
• Upon th e expir at ion of a pa rt icu lar b en efit, we may n ot be elig ib le to part icipat e in a new
prog ram or qu alify for a n ew t ax b e nefit tha t wou ld offse t th e loss of t h e expirin g t ax b e nefit.
• Ch an g es in t rad e a greemen ts b e twe en cou ntries, su ch as in t h e t r ad e ag re ements b etween the
Unit ed St a tes a nd Ch in a.
• Ch an g es in in t ernation al t a xation laws, as may be ad opt ed by several cou n t ries we opera t e in,
or se ll t o, ma y resu lt in a d d ition al taxe s or h igh t ax ra tes b ein g imposed on ou r ope ration s.
16 ICL Group Limited
C h a nges in o u r e va lu ati ons a nd e stimates, w h ich s er ve as a b as is for an alyzing ou r con tin gent
l i ab il ities and for t he recog nit ion an d me asur emen t of a sse ts an d liabilities, in clud ing provision s for
wast e re moval and the reclamation of min es, may ad ver se ly affe ct ou r b usin ess results and financial
s i t u at ion
As par t of t h e prepar at ion an d composit ion of ou r fin ancia l st at eme nt s, we are r equ ir ed to e xercise
d iscret ion , make u se of evalu at ion s an d est imate s an d ma ke assu mpt ion s t h at affect, amon g ot her
t hin g s, th e amou n t s of a sse t s a nd liab ilit ies, in come a nd e xpe nse s. W h en for mu lat in g su ch
est ima t es, t h e Company is required to make assumpt ion s concerning cir cumsta nces a nd events that
in volve u n ce rt ain ty, even g re at u ncert ain ty, su ch as, leg al claims pend ing a gainst I CL. We exe rcise
ou r d iscr et ion ba se d on ou r past e xperie nce, variou s fact s, e xt ern a l fa ct ors an d reason able
assu mpt ions, a ccord in g to t h e circu mst a nces relevan t to ea ch est ima t e. It shou ld be not ed that
act u al resu lts may d iffer, and even ma t erially so, fr om su ch estimat es. Therefore, t his may a d ve rsely
affect ou r fin ancia l r esu lts. For fu rth er in format ion, see Not e 2 to ou r Au dited Fin an cial St atemen ts.
Reg ard in g pen d in g le ga l mat t ers, t h e Compan y is requ ire d to est imat e t he prob ab ilit y of th eir
ou t come, wh ich cou ld be su b st a ntia lly d iffe ren t from t h eir a ct u al re su lt s d u e to t h e in h er ent
complexit y an d t h e u n ce rt ain ty of su ch pr oceed in g s. For e xample, a s pa rt of t h e arb it r ation
proce ed in g con d u cted b et ween a Span ish su b sid iar y an d Akzo Nob el In d u st ria l Che mica ls B .V.
( cu r ren tly - Nob ian ), con cern in g t h e t e rmin a tion of t h e part n e rship a gr eemen t b e t ween t he m, in
Ma y 2019, Nob ian su b mit t e d a st a t ement of claim to t he A rb it r al T rib unal, whereby it se eks t o
d et e rmin e t hat t he a greemen t t ermin ation b y t h e Compan y con st it u tes a n u n lawfully b re ach of
con t ract an d t h erefore it is en t it led t o e n for ce t h e ag reeme n t an d t o b e compen sat ed in a n
immat eria l amou n t . A lt e rn atively, in case it is d et e rmin ed t h at t he a greement is n ot en forceab le,
Nob ian ou t lin es sever al d iffere nt compe nsa t ion a lt ernatives in t h e amou n ts of u p t o $152 million .
Th e Company b elieves t h at t h e ag reement was lawfu lly t ermin ate d an d t hat it is more like ly t ha n
not t h at Nob ia n claims will b e reject ed . Failure t o pr edict t he act ual ou tcome cou ld mat erially and
ad ver se ly affect ou r fin ancia l re sult s.
In some of ou r variou s sit es of oper at ion , con ce ssion ag reemen ts an d/or licen se s in clu de ob lig ations
relat in g to th e expira tion t he reof, in clu ding reclamation a nd clearing of t he sit es ( re stor in g t he site
to it s former st at e ). Th er e is u n ce rt ain ty r eg ar d ing t he act ion s t h at wou ld be requ ired u pon
expir at ion of t he con cession an d / or licen se per iod an d , accor d in g ly, t h e cost s in volved in the
execu t ion of su ch action s, in cludin g t he scope of restor ation requ ire d. For example, wit h r espect to
t he est imat ed cost s of r eclamat ion of ou r min in g in Isr ael, we are r equ ired to make assessmen ts
con sid erin g n u mer ous a ssu mpt ion s, in clu d in g fu t u re ad dit ion al r est or ation re qu ireme nt s and the
impa ct t h er eof, in lig h t of regu la tor y de ve lopmen ts in t his field in r ecen t ye ars. It is ve ry d ifficu lt to
assess th e est imat e s for sit e rest or at ion an d cle arin g d u e to t h e complexit y of soil rest orat ion
t rea t men ts, t h e scope an d cost s re qu ire d for r est or at ion , which are occa sion ally d iscover ed on ly
d u rin g a ct u al exe cu tion of re st or at ion works, t h e ab se nce of a sin g le , un ified g lob a l st a n d ard
d et e rmin ing en vironme n tal rest oration requ irements, and t he absence of an y sig n ifica n t pre cedents
in t h is mat t e r in I sra el. A d d ition a l example is t h e est imat ion of t h e proje ct ed cost s for t h e closu re
an d re st oration of t he Sallent sit e – t he main cost of t h e est imated cost s for closu re an d rest oration
is at t r ib u ted to th e salt pile restoration . The Compan y is a cting to treat t he salt pile, by b oth utiliz ing
t he salt for produ ction an d sale for De- icin g purposes, a nd by processing the material a nd re moving
it to t h e sea via a Colle ct or. T he est imat ion is b ase d on a lon g - t er m fore cast, cove rin g a pe riod of
more t ha n 50 years, a lon g wit h ob served est imat e s an d , t h erefore, t h e act u al cost s t h at may be
requ ired to restor e t he Sallent sit e may d iffer, even su bst an tia lly, from t he cu rren t provision . In the
Compan y's est imat ion , t he provision in it s b ooks re flect s t h e b est estimat e of t he expen se requ ired
to set t le t his ob lig ation .
For fu rt h er in formation , see Not e 17 a n d 18 to ou r A ud ited Fin an cial St atemen ts.
17 ICL Group Limited
O u r tax l iab ilities m ay be h ig her t han expected
Ou r t ax expen ses a nd t h e re su lt in g effect ive t a x r at e re flect ed in ou r con solid at e d fin an cial
st at emen ts may in cre ase over t ime as a r esu lt of ch an g es in corpor at e in come t ax ra tes an d/or ot her
ch an g es in t a x la ws in t he va riou s cou nt ries in wh ich we ope rate. We are su b ject to t axe s in many
ju risd ict ion s, in clu d ing jurisdict ion s in which we h ave a limit ed presen ce, a n d d iscretion is re qu ired
in t he d et ermin ation of t h e provision s for ou r t a x liab ilit y. In light of re cen t t re nds in in t ern at ional
t ax law a nd OEC D re commen d a t ions, sig nifica nt ch an ge s to in t er na tion al t ax laws an d pr act ices
ma y be ad opt ed by var iou s ju risd ict ion s. Su ch ch an g es cou ld r esu lt in us b eing su b ject to t a x in
ju risd ict ion s in wh ich we cu r rently are n ot su bject to t ax ( inclu din g ju risdict ions in wh ich we h ave
limit e d or no opera t ion s ot h er t ha n per for min g sales act ivit ie s). Similarly, we are su b ject to
examin at ion by t h e t ax au thor ities in man y d ifferen t ju risd iction s. As par t of su ch tax e xamin ations,
t he relevant t ax a u t hor ities ma y d isag r ee wit h t he t axa ble in come report ed, an d may a lso d ispu te
ou r in t er pre t at ion of t h e applica b le t ax leg isla t ion re lat ing , amon g ot h er t hin gs, to in t e r-company
ag reeme n ts.
Th e Law for T axat ion of Pr ofit s from Na t ura l Resources
Th e Law for T axation of Profit s from Nat ural Resou rces in Isr ael ( he reinafter – t he Law) is a n ew law
t hat en t ered into e ffe ct wit h respe ct to t he b r omin e, ph osphat e an d magn esiu m minerals in 2016,
an d wit h re gard to t he pot a sh min er al, in 2017.
As at t h e d at e of t h e repor t , no regu lat ion s u n d er t h e La w have ye t b een en act ed ( except for
reg u lat ion s rega rd ing ad van ces on accou n t of t ax paymen t s, pu b lish ed in J u ly 2018), no circu la rs
ha ve b een pu b lish ed an d no cou rt d ecision s h ave b ee n ren dere d as to t h e implemen t at ion of t h is
new Law t h at was impose d , to t h e b est of t h e Compa ny's kn owledg e, on ly on on e ot h er compa ny.
Th e fin an cial st at emen t s of Dea d Sea W orks, De ad Se a B romin e an d Dea d Sea Mag n esium
( herein after – t h e Su bsid iarie s), serve as a b a sis for t h e min eral b ased fin an cial report s (h ere ina fter
– Su rplu s Pr ofit Report s) requ ire d to be file d for t a x calcu lat ion u n d er t h e Law. Su ch calcu lat ion
in volves in t er pr et ation s an d assu mpt ion s on several sig n ifican t mat t e rs, which requ ire
ma na g emen t’s ju d gme nt .
Th e Compan y's posit ion is t h at t h e Su rplu s Profit Le vy sh ou ld b e ca lcu lat ed on t he Dead Sea
Solu t ion , wh ich is t he n at u ral re sou rce u sed b y t h e Compa ny, an d n ot for ea ch prod u ct pr od uced
from t h e Dea d Sea Solu t ion . Fu rth er more , b ased on t h e Compan y’s u n d er stand ing of t h e law, the
car ryin g amou n t of t h e prope rt y, plan t a n d e qu ipmen t , for t h e pu r pose of pr epa rat ion of the
fin a ncia l st at e ments for 2016 a nd on ward of th e Su b sid ia ries, which se rve as t he b a sis for t he
Su rplu s Pr ofit Re port s, a re presen ted on t he b asis of t h eir replacement cost (a s u sed assets), on the
d at e t h e Law e nter ed in t o effect .
Th e T ax A u t hor ity's posit ion cou ld be mat erially d iffe ren t, eve n in ve ry sig n ifican t amou nt s, main ly,
as a re su lt of t h e d iffer en t in terpretation r eg ar ding t he imp lemen ta tion of t h e Law, wit h re spect to
t he carryin g amoun t for n atural re sou rces t ax pu r pose s of t h e propert y, pla nt a n d equipmen t.
Sh ou ld t h e Isra eli Tax Auth ority, a nd su b sequ ently t h e applica b le Dist r ict Cou rt, in case of an appea l,
d ecid es t hat t he measu rement of t he prope rty, pla nt an d e qu ipme nt, for t h is pu rpose , sh ould be in
accor d an ce wit h d epr eciated h istorica l cost , an d fu lly rejects t he Compan y's a rg uments wit h re spect
to t h is an d ot h er issu es, t h e r esult can be an in crea se in t h e Company' s t ax lia b ilit ie s in an ag gr egate
amou n t of ab ou t $185 million ( in clu d ing in terest and linkage a nd n et of Corpor at e in come t ax) for
t he year s 2016-2020.
18 ICL Group Limited
Su b sequ ent to t h e d at e of th e re port s, th e Compan y lear n ed t h at t he ITA in t en ds to issu e an
assessmen t to t he C ompa ny for the years 2016- 2017, which will in clu de a d eman d for surplu s profit
levy, in t he amou n t of ab ou t NI S 240 million (n ot in clu d in g int ere st an d lin kag e). T he C ompa ny
in t en d s to su bmit it s ob je ction to t h e said a sse ssment to t he ITA .
CFC taxa t ion
Th e Company ope rat es in ma ny cou n t ries a rou nd t he wor ld . Un der ce rtain con d ition s, t a x la ws in
cer t ain cou n tries provid e th at in come from passive act ivit ie s ( and in certain ca ses, act ive a ctivit ies)
from Con t r olle d Fore ig n Compa n ies ( "CFC") sh all be con sid er ed t a xab le in come e ve n if n ot
d ist r ib u ted. Th e con dit ion s inclu de, a mon g ot he r, t h e ra tio b et ween active and passive in come and
t ax rat es a pplied in t h e fore ign cou nt ries. Alt houg h t h e Compan y is act in g in accor dance wit h the
relevant t ax leg isla tion , t h ere is a risk t h at t h e t ax au th orities will re qu ire ad dition al t a x payments,
to t h e ext en t t hat t he Compa ny's posit ion rega rdin g mee tin g t he con d ition s of Con t rolled Fore ign
Compan ie s ( CFC) will n ot be accept ed .
B EPS reg u la tion
Th e B a se Erosion an d Profit Shiftin g ( “B EPS”) proje ct u ndert ake n by t he Organizat ion for Econ omic
Coope rat ion an d Developmen t ( “O ECD”) ma y h ave a d ve rse con seque nces to ou r t ax lia bilit ies. The
B EPS proje ct con t empla tes chang es to n umerou s in te rnation al tax principle s, as well as n at ional tax
in ce n t ives, a nd t h ese ch ang es, wh en ad opt ed by in d ivid u al cou n t ries, cou ld ad versely affect our
provision for in come t a xe s. Cou n t r ies h ave on ly recent ly b eg u n to tra nslat e t h e BEPS
recommen d at ion s in t o specific n at ion al t a x la ws, a n d it r ema in s d ifficu lt to pred ict t he mag n itude
of t h e effect of su ch new r ule s on ou r fin an cial r esu lts.
W e h a ve e x pan ded o u r b u sines s t hrou gh m e rge rs a n d a c quis ition s, as w e ll as or gan izat iona l
r e st ruct urin g a nd various in itiat ives design ed to in cr ease prod uct ion capacity an d red uce costs of
ou r e xist ing operation s. T h is cou ld resu lt in a diversion of resour ces a n d sig nificant expen ses, a
d isrupt ion of ou r existing b usin ess oper at ions a nd an adve rse effe ct on ou r fin ancia l con dit ion
a n d result s of operati ons
Neg ot iat ion pr oce sse s wit h r espe ct to pot en t ial acqu isit ion s or join t ven t u re s, as well as t he
in t eg r ation of acqu ire d or join t ly d eveloped b u sin esses, requ ire man ag ement to in vest t ime and
resou rces, in ad d it ion to sig n ifican t fin an cial in ve st me nt s, a nd we may not be a b le to realize or
b en efit from t h e pot e nt ial in volved in su ch opport u n it ies. Fu t u re acqu isit ion s cou ld lead to
su b st an tial cash expendit ures, d ilu tion d ue to issu a nces of equ it y secu rit ie s, t he in currence of debt
an d con t in g en t liab ilit ies, in clu d in g liab ilit ies for e n viron me nt al d amag e cau sed by acqu ired
b u sin esse s b efore we acqu ired t h em, a d e crease in ou r profit marg in s, impa irmen t of in t a ng ible
asset s a nd g ood will; and in cr ease d g ove rnmen tal ove rsig ht ove r t h e Compa ny’s act ivit y in cert ain
are as. Th er e is no gu ara ntee t h at b u sin esses t h at h ave b e en or will be a cqu ired or join t ven t u res
will be successfu lly int eg rated wit h ou r cu rren t b usin esses an d oper ation s, a nd we ma y n ot re alize
t he an t icipat e d b en efits of su ch acqu isit ion s or join t ve nt u res a nd even in cu r losses as a r esu lt
t hereof, part icula rly if su ch acquisit ion s or join t vent ures d isrupt ou r operation s.
Some of ou r part n ers or pot en t ia l par t n ers in t hese b u sin ess in it iat ives are g overn me nts,
governmen t a l b od ies or pu b licly own ed compa n ies. We may fa ce cert ain risks in con n ect ion with
ou r in ve st me n t s in t h e join t ven t u re s an d /or par t nerships in clu d in g, for exa mple , if ou r par t n ers'
need s, d esire s or in t en t s chan ge, if t he g overn men t cha nge s or if t h e own er sh ip st ru ct ure of ou r
part n ers ch ang es.
19 ICL Group Limited
In a d d it ion , we are employin g several in it iat ives to improve ou r exist in g opera t ion s, in clu d ing
in it ia t ives to in crease prod uct ion an d r ed uce ope rating cost s at ou r facilit ies. In I CL Ib eria in Spain
we are consolid a t in g all ou r facilit ies in t o a sin g le sit e wh ich in clu d es a min e an d a proce ssin g plant,
in ord er to red u ce cost s per t on n e an d allow for t h e elimin at ion of ad d it ion al b ot t lene cks and
fu rt h er expan sion . In t h e YPH JV in Ch in a we are expan d in g prod u ct ion of specialt y ph osph ate
solu t ion s, amon g ot h er t h ing s, by t h e con st ru ction of a whit e ph osphoric acid ( WPA) facilit y. Such
in it ia t ives in volve h ig h cost s an d/or t ake lon ger than we a nticipate a nd may n ot be r ealized and\or
u lt imat e ly ach ieve their goals. If th ese in itiative s will n ot su cceed, ou r fin ancial sit uat ion an d results
of b u sin ess a nd opera t ion s, as well as compet it ive posit ion , cou ld be ma t erially an d ad versely
affect e d .
As a mu ltin ati onal C om pan y, o u r s ales ma y be a d versely a ffect ed by c u rre ncy flu ctu ations a nd
r e st ricti ons, as well as by cr edit ris ks
Ou r g lob a l act ivit ies e xpose us to t h e impact of cu rr en cy e xch ang e ra t e flu ct uat ion s. O u r fin ancial
st at emen ts are pr epa red in U.S. d ollars. Ou r sa les are in a var ie t y of cu r ren cies, primarily in U.S.
d ollars a nd eu ros. As a re su lt, we a re cu rren tly su bject to sig nificant foreig n cu rrency risks and may
face g re at er risks as we enter new markets. We ma y a lso be expose d to cred it risks in some of t h ese
ma rket s. T h e imposit ion of price con t rols a n d rest r ict ion s on t h e con version of fore ig n cu rre ncies
cou ld a lso have a ma t erial ad ve rse effect on ou r fin an cial r esu lt s. Pa rt of ou r ope rat in g cost s are
in cu r red in cu rre n cie s ot her t h an U.S. d ollars, pa rt icu lar ly in e u ros, I LS, GB P, B RL an d RMB . As a
resu lt , flu ct u ation s in exchange r ate s betwe en t he cu rren cies in wh ich su ch cost s a re in cur red and
t he U.S. d ollar ma y h ave a mat erial adverse effect on t he resu lts of ou r opera t ions, t h e valu e of the
b alan ce sh eet it ems me asu red in foreig n cu rre ncies a nd ou r fin ancial con dit ion .
We u se d e riva t ive fin an cial in st ru men t s and "h ed g in g" me asu re s to man ag e some of ou r n et
exposu re to cu rre n cy excha nge rat e flu ct ua tion s in t he major for eig n cu rr en cies in wh ich we
operat e. However, n ot a ll of ou r pot en t ial exposu r e is covered , an d cert ain elemen t s of t he
Compan y’s fin an cial st a t emen t s, su ch as ope rat in g profit , lon g -t erm employee liab ilit ies ( IA S 19),
lease liab ilit ies ( IFRS 16) an d e qu it y, are n ot fu lly pr ot ect ed ag ain st foreig n cu rrency exposu res.
Th er efore , ou r exposu re to exchang e r ate flu ctu ation s cou ld h ave a mat erial a d ve rse e ffect on our
fin a ncia l r esu lt s.
See “ It e m 11 – Qu a nt ita tive and Qu alitative Disclosu res ab out Ma rke t Risk — Exch an g e Rate Risk”.
B e cause some of th e Company’s liab ilitie s b ea r int er est at varia b le rates, we are expose d to th e risk of
i n ter est rate in cr ease s, in clu ding in con ne ction wit h t he e n d of LI B OR r ate calcula ti ons in 2 021
A por t ion of ou r lia b ilit ie s b ea r in t e rest at variable ra tes and t her efore , we are expose d to t h e r isk
st emmin g from an in crea se in in t erest r ate s, which wou ld in crea se ou r fin an cing e xpense s and
ad ver se ly a ffect ou r re sult s. Su ch in crease in in t er est r ate s ma y a lso occu r as a result of d own grade
in ou r ra t in g .
Fu rt h er, a por t ion of I CL's loa ns b e ar var iab le in t er est ra t es b ase d on t h e short - t erm Lon d on
in t er b ank offer ed r ate for d eposit s of US d ollar s ( LIB O R) rate for a period of on e to t welve mon ths,
plu s a mar gin as d efin ed in e ach loa n ag reeme n t. LIBO R t en ds to flu ct uat e b ased on g en eral int erest
rat e s, r at es set by t he Fed er al Re se rve a nd ot he r cent ra l banks, t h e su pply of an d demand for credit
in th e Lon d on in t er b ank market an d ge n eral econ omic con d it ion s. In Ju ly 2017, t h e Fin an cial
Con d u ct Au t h orit y ( t h e au t horit y t h at reg u lat es LIBO R) a n nou n ce d th at it in t e nd s to st op
compellin g b a nks to su b mit rat es for t h e calcula tion of LIB O R after 2021. It is u n clear whe ther new
me t hod s of calcu lat in g LI BOR will be establish ed su ch t ha t it con tin ues to exist after 2021. T h e U.S.
Fed e ral Re se rve, in con ju n ct ion wit h t he Alt e rnative Referen ce Rat e s Commit t e e, is consid er ing
20 ICL Group Limited
replacin g U.S. d olla r LIBO R wit h a n ewly cr eat ed in d ex, calcu la ted wit h a b r oad set of sh ort -t erm
repu rchase agr eements b a cke d by t re asu ry se cu rit ies. A ny n ew b e n ch mark rat e will like ly n ot
replicat e LI B OR e xact ly, and it is n ot possib le to predict t he effect of su ch cha nges, ot h er refor ms or
t he est a blish me nt of alte rnative reference r at es in t he US or elsewh ere . To the ext en t th ese in terest
rat e s in crease , ou r in t erest e xpen se will in cr ease, in wh ich e ve n t we ma y h ave d ifficu lt ies ma king
in t er est paymen t s an d fu nd in g ou r ot h er fixed cost s, an d ou r availab le cash flow for g en eral
corporat e r equ ireme nts may be ad ver se ly a ffect ed. See “I t em 11 – Qu a n t it at ive an d Qu a litative
Disclosu res a b ou t Market Risk — I n ter est Rate Risk”.
We are e xposed to m aterial f in es, p enalties a nd ot h er sanct ions an d ot he r ad verse con seque nces
a r isin g ou t of FCPA in ve stig ation s and r elate d mat ters
We are r equ ir ed to comply wit h t h e U.S. Foreign Corru pt Pra ctices A ct (t he "FCPA "), t h e UK Bribery
Act an d similar a n ti-cor ru ption laws in ot her ju r isdict ion s arou nd th e world , in t he cou ntries wh ere
we opera t e. We ope rat e an d sell in cou n t ries t h at ma y be con sid ere d as h igh r isk in t his re gard.
Complian ce wit h t he se laws h as b een su b ject to in cr easin g focu s a n d act ivit y by regu lat ory
au t h or it ies, b oth in t he Un ite d St ate s an d e lsewh ere, in r ece nt years. A ct ions by ou r e mployees, as
well as t hird part y in t e rmedia rie s act in g on ou r b eh alf, in viola t ion of su ch laws, wh et h er ca rried
ou t in t he Unit ed States or elsewh ere in con ne ction with th e con du ct of ou r busin ess, cou ld expose
us to sig nifica n t lia b ilit y for violat ion s of t h e FCPA or ot he r an t i- corrupt ion laws and accor d in gly
ma y have a mat e rial ad ve rse effect on ou r re pu t at ion and ou r b u sin ess, fin an cial con d it ion a nd
resu lt s of oper at ion s.
S i g n ifica nt d isruptions in ou r, or ou r service provid ers’, in format ion t ech nology systems or breache s
of o u r , or ou r ser vice p r ovid ers’, in formation security s ystems c ould adve rsely a ffect ou r bu sine ss
In format ion t echnolog y ( I T) syst e ms, in clu d in g ou r h ar dwa re, soft ware an d t elecommu nications
net works, as well as d a t a cen t er s an d ot her in format ion t echnolog y syst ems of t hird par t ie s are
crit ica l to t h e ope rat ion of ou r b u sin ess a nd essent ial to ou r ab ilit y to su ccessfu lly per for m d a y-to-
d ay operat ion s. Our oper ation s also d e pend on t he t ime ly main t en an ce, u pg rade and replace ment
of su ch syst e ms, as we ll as pr e- empt ive e xpen se s to mit ig at e t he r isks of failu res. An in t r u sion,
in t er ru ption , d e st ruction or b r eakd own of ou r, or ou r service provid ers’, in format ion t echnology
syst e ms an d / or in fra structure by au th orize d or u n au thorize d per son s cou ld ad versely affect our
b u sin ess a n d ope rat ion s an d in some cases even lea d to en vir on men t al d amag e. In ad d ition, a
sig n ifican t d isru ption to our, or ou r service pr ovid ers’, compu t erize d syst ems cou ld cau se h arm of
d amag e to t he civilia n popu lat ion locat ed in t he vicin it y of ou r prod u ct ion fa cilit ies. Mor eove r, we
cou ld e xpe rie n ce bu siness in terrupt ion , in formation or mon ey t he ft a nd /or repu tat ional d amage as
a resu lt of cyb e r- at tacks, wh ich may compromise ou r, or ou r service provid ers’, syst ems, lea d to data
leakag e an d to d isr u pt ion of sen sit ive prod u ction facilit ies a n d /or t he secu rity t h ere of, whe ther
in t er n ally or at ou r t h ird -party provid ers. Ou r , an d some of ou r ser vice provid e rs’, syst ems have
b een , an d are expect ed to con t inu e to b e, t h e t arg et of malwa re a nd ot h er cyb er- att acks. De spite
ou r in ve st me n t in mea sure s to reduce these risks, we cannot g uar an tee tha t th ese measures will be
su cce ssfu l in preventing compromise an d/or disrupt ion of ou r in format ion syst ems and re lat ed data
or t h at su ch syst e ms a nd d ata h eld an d oper ate d by ou r se rvice provid e rs will be se cu re . We have
a limit ed ab ilit y to con t r ol t h e ope rat ion s an d secu rity of t h e in format ion syst ems u se d on ou r b ehalf
or provid e d to us by ou r service provid e rs and ma y ha ve limit e d re course wit h su ch se rvice providers
in t h e e ve nt an issu e arises. A s we b ecome more d epen d en t on in format ion t e chn olog ies to con duct
ou r ope rat ion s, a nd as t he nu mber and sophistication of cyb er- att acks in cr ease, t he risks associated
wit h cyb er se cu rit y in cre ase. T hese risks a pply b ot h to u s, a nd to t hird par ties on wh ose systems we
rely for th e con d u ct of ou r b u sin ess. Cyb er t hr eats are per sist ent an d con st antly e volvin g and
in clu d e , b u t are n ot limit ed t o, in st a llat ion of maliciou s soft ware , r an somwa re, viru ses, social
en g in ee ring ( in clu din g ph ish ing a t t acks), d enial of service or ot h er a t t acks, employee t heft or
21 ICL Group Limited
misu se, u n au t h orized access to d ata an d ot he r electron ic se cu rit y b rea ches. T h reat s may d e rive fr om
hu man error, fr au d or ma lice on t h e par t of e mployee s or t h ird part ie s, or may r esu lt from accid ental
t echn olog ical fa ilu re. Su ch t h re at s h ave in cre ased in fr equ en cy, scope a nd pot en t ial impact in
recen t years, wh ich in cre ase d t h e d ifficu lty of d e t ect ing a n d su ccessfully d e fen ding a g ainst t h em.
As cyb er t h re ats con t in ue to evolve, we may be requ ired to in cu r ad d ition al expen ses in or d er to
en h an ce ou r prot ect ive measu res or to r emed iat e an y in format ion se cu rit y vu lnera bilit y. Cyb er-
at t a cks and ot he r int ru sion , in terrupt ion, d e struction or b re akd own of ou r in for ma t ion t ech nology
syst e ms a nd / or in frastructure cou ld also requ ire sig n ifican t mana gement att en tion an d resou rces,
expose us to leg al liab ilit ies, neg at ively impact ou r repu t a t ion among ou r cu st omers, b u sin ess
part n ers a n d t he pu blic, a n d ca use us to in cu r sig nifica nt cost s, a ny of wh ich cou ld h ave a material
ad ver se effect on ou r b usin ess, fin an cial con dition an d results of opera t ion s.
Ou r ope rat ion s depend, amon g oth er thin gs, on t he timely main ten an ce, u pg ra de an d replacement
of n et works, e qu ipmen t , a nd in forma tion syst ems, as well as pre -empt ive e xpen se s to mit ig ate the
risks of failu res. We regu larly evalua te the need to u pgrad e a nd /or repla ce ou r in formation systems
to prot ect ou r in for mat ion t e chn ology environ ment, to st ay cu rre nt on ve n dor su ppor t ed pr oducts
an d to improve th e efficien cy a n d scope of ou r syst ems an d in format ion t echnolog y capabilit ies.
Th e imple me nt at ion of n ew syst e ms a n d in format ion tech nolog y cou ld ad ve rsely impact ou r
operat ion s by requ iring subst an tial capital expendit ures, d ivert ing managemen t’s a tte nt ion, and/or
cau sin g d elays or d ifficu lt ies in t ra nsit ion in g to new syst e ms. In a d d it ion , ou r syst ems
impleme nt at ion s may n ot r esu lt in prod u ct ivit y improvemen t s at t h e levels an t icipat ed. Syst e ms
impleme nt at ion d isr upt ion an d any ot her in format ion t ech nolog y d isrupt ion , if n ot a nticipa ted and
appropr iat ely mit ig at e d, cou ld have an ad verse a nd mat erial e ffect on ou r b usin ess.
F a ilu re to r etain a n d\or r ecruit p e rsonn el f or k ey o p e ration al/profession al p o sit ion s, or to at tra ct
a d d it ional e xecuti ve and man ag eria l t alent , cou ld a d verse ly affect ou r b usin ess
Give n ou r complexit y a nd th e g lobal reach of ou r busin esses, we rely u pon ou r abilit y to re cruit and
ret a in skilled mana geme n t an d ot he r employees, in clu d in g en g in ee rs, ag ron omist s, scien t ist s,
t echn ical equ ipmen t opera t or s, prog rammer s, d a ta scient ists, a nd ot h er employees wit h special
expert ise. Mu ch of ou r compet it ive ad van tage is b ased on t he e xpe rtise, e xper ie nce an d know-how
of ou r key man ag ement person nel. A ny loss of se rvice of key memb er s of ou r org an izat ion , or any
d imin u t ion in ou r a b ilit y to con t in u e to a t t ract h ig h-qualit y employees ma y d e lay or pr even t t he
ach ievemen t of major b u sin ess ob je ctives an d may h ave a mat erial a d ve rse effect on ou r b u siness,
fin a ncia l con d it ion a nd resu lts of opera t ion s.
We m ay n ot su cceed in redu cing ou r o peratin g e xpe nses w ith in t h e f rame work of var ious efficiency
p r og rams i mple me nted by t he Com pany in it s var iou s sit es
In ord e r to cope wit h t he challen g in g b usin ess en vir on men t pre va ilin g in recen t years an d the
in cr easin g level of compe t it ion , we con st an t ly review ou r t ot al expen ses a nd cost st r u ct u re, and
accor d in g ly imple ment , from time to t ime , variou s efficiency pr og ra ms d esig n ed to re d u ce cost s.
Su ch prog rams are su b ject to risks an d un cer taint ies, a nd act ual resu lts may d iffe r, even ma t erially,
from t hose pla nne d or expected , and mig ht adve rsely a ffect ou r opera tion s, as well as ou r ab ility to
rea lize ot h er a spects of ou r st rategy.
22 ICL Group Limited
T h e Com pany b orrows m on ey fr om va riou s sources to fu nd it s operat ions an d it fre qu en tly en gage s
in re finan cing activit ies , and t h er efore rely on access to t h e capit al markets
Th e level at wh ich t h e Company is leverag ed cou ld a ffect ou r a bilit y to ob ta in addit iona l fin ancing
for a cqu isit ion s, re fin a ncin g of exist in g d eb t , workin g ca pit al or ot h er pu rposes, cou ld ad verse ly
affect ou r credit ratin g, an d cou ld make us mor e vu ln erab le to in du str y down turns a nd compet itive
pressu res, as well as to in t e rest rate an d ot h er refin ancing risks. In ad d it ion, capit al ma rke t s h ave
b een more vola t ile in recent years. Su ch volat ilit y ma y ad ver sely affect ou r abilit y to ob t ain fin ancing
on fa vora b le t er ms at t imes in which we need to acce ss th e ca pit al markets. O u r abilit y to refin ance
exist in g d e b t a nd me et ou r d ebt ser vice ob lig ation s will be d epen dent u pon ou r fu tur e performance
an d access to capit a l market s, which will be su b ject to fin an cial, b u sin ess and ot her factors a ffecting
ou r ope rat ion s ( in cludin g ou r lon g-t erm cr ed it r at ing s), many of wh ich are be yon d ou r con trol. Our
cre d it rat ing may be d own grad ed , amon g ot her th ing s, d ue to ou r fu tur e pe rformance, t he de gree
we are lever ag ed and d et erioration of t h e bu sine ss e n viron me nt .
Th e in st ru men ts r elatin g to ou r d eb t con t ain covena nt s an d, in some cases, requ ire us to me et
cer t ain fin ancia l r at ios. A ny failu re to comply wit h t he se cove nan t s cou ld resu lt in an e ve nt of
d efa u lt u nder th e a pplica b le in st ru men t, wh ich could r esu lt in th e re la ted debt and t he debt issued
u n d er ot her in stru ments b ecomin g immed iately du e an d payable . In su ch event , we wou ld n eed to
raise fu n d s from a lt ern at ive sou rces, wh ich may n ot be a va ilable to us on favorable t e rms or at all.
Alt er n atively, an y su ch d efault cou ld re quir e us to se ll ou r asse ts or ot h erwise cu rtail operations in
ord er to sa t isfy ou r ob lig ation s to ou r credit ors.
T h e Company is exp osed to risks re la tin g to it s cu rren t a nd fut ure acti vity in emergin g m arkets
We operat e in se ve ral emer gin g ma rkets, a n d may h ave fu t u re a ctivit ies in ad d ition al e me rging
ma rket s. A ct ivit y in these reg ion s is exposed to th e socioecon omic con d ition s, as well as to the laws
an d reg u lat ion s g overning t h e ag ricu ltural, food an d in d u st rial sect ors in t he se cou n t ries. The
ad d it ion al risks en t ailed in opera t in g in eme rg in g markets in clu d e , b u t are n ot limit e d t o, high
in flat ion rat es; e xt re me flu ctu ation s in exchan ge rat es, mart ial law, war or civil wa r; social u n rest;
orga nized cr ime; expropriat ion s a n d n at ion alizat ions; rescin d me nt of exist in g license s, a pprova ls,
permit s and con t ract s; frequ e nt a n d sig nifica nt chan ges in t axa tion policies; re st riction s on t he use
an d t ra de of foreig n cu rren cy. Governme nts in certa in jurisdict ion s ofte n in t ervene in t he cou ntry’s
econ omy, an d at t ime s e ve n in t rod u ce sig nifica nt chan ges to policy an d r eg u la tion s. Ch an ges in
t he policies g overn in g t h e food , a gricu ltural an d in dust rial sect ors or ch an ges in polit ical at titudes
in th e cou n t ries wherein we operat e cou ld ad ver sely affect ou r ope rat ion s or profit a b ilit y. Our
operat ion s cou ld be affect ed at var iou s d egr ees by governme ntal reg ulation s relatin g to prod u ction
limit a t ion s, price con t rols, con t r ols of e xport , cu r ren cy t ran sfer, prod u ct import s a nd su pply, t a xes
an d royalt ies, d ivest u re of pr opert y, licen se s, a pprova l an d permit s, en vir on mental issu es, real estate
claims by local re sid ent s, wat er u se and workpla ce sa fet y. Fa ilu re to comply wit h d omest ic la ws,
reg u lat ion s and pr oced ur es may resu lt in t he loss, r evocation or d ivestu re of licen ses, imposit ion of
ad d it ion al local ove rsig h t of act ivit ies or ot h er in terests. We are mon it oring t he d evelopmen ts and
policies in t h e emer g in g ma rket s wh ere in we opera t e, an d regu larly assess t h eir effect on ou r
operat ion s; h owe ve r, su ch d e velopmen t s cann ot be accu rately an ticipat ed , which , in sofar as t hey
occu r, cou ld ad ve rsely an d even ma t erially affect ou r act ivity a nd/or profit abilit y.
23 ICL Group Limited
Risks Relat ed to Our I ndustry
S a le s of ou r ferti liz er prod ucts are su b ject to t h e c ond ition s in t he a gricult ural in d ustry
Most of ou r fe rt ilize r prod u cts are sold to prod u cers of ag r icult ural pr od u ce. Fe rtilizer sa les may be
ad ver se ly a ffect ed as a r esult of a d ecline in agr icult ural pr od u ce price s or t h e availa bilit y of cr edit,
or ot h er e ve nt s th at cause fa rmers to plan t less and con sequ ently redu ce t heir u se of fertiliz ers. For
example , per iod s of h ig h d e ma nd , in cr easin g profit s an d h ig h ca pa cit y u t ilization t e nd to lead to
new in ve st me n t in crops a nd in cr ease d prod u ction . T his g rowt h in cr ease s su pply u n t il t h e mar ket
is over -sa t u rated, lead in g to d eclin in g price s a n d d eclin in g ca pacit y u t iliz at ion u n t il t he cycle
repea t s. As a re su lt , t h e price s an d qu antit ies of fert ilize r prod uct s sold ha ve b een volat ile . As pot ash
an d ph osph at e pr ices and qu an tities sold h ave a ver y sig n ificant in flu ence on ou r b usin ess resu lts,
low prices a nd / or low qu an tities cou ld ca u se ou r resu lts of opera tion s to flu ctua te a nd, pot en tia lly,
ma t eria lly d et e riorate.
Th e price at which we sell ou r fert ilizer prod u ct s an d ou r sales volu mes cou ld fall in t h e eve nt of
in d u st r y oversu pply con d it ion s, wh ich cou ld ha ve a mat e rial ad ver se effect on ou r b u sin ess,
fin a ncia l con d it ion a n d r esult s of oper at ion s. A lt erna tive ly, h ig h pr ices may lead ou r cu st omer s to
d elay pu rcha se s in ant icipation of lowe r prices in t he fut ure, t hereby d ecreasin g ou r sa les volu mes.
Th ese fact or s cou ld ma t erially an d ad versely affect ou r b u sin ess, fin an cial con d ition an d r esu lts of
operat ion s.
In a d d it ion , g ove rn men t policies, an d specifica lly, su b sid y levels, ma y affect t h e amou n t of
ag ricu lt u ral cr ops an d , as a r esu lt , sales of ou r fe rt ilize r pr od u ct s. Gen erally, re d u ct ion s in
ag ricu lt u ral su b sid ies to t h e far me r or in creases in sub sid ies to loca l fert ilize r man u fa cturers in
cou n t ries where we sell ou r prod u ct s h ave an adve rse effect on ou r fe rtilizer b usin ess. In a d dition,
t he on g oin g t ra de d ispu t e b etwe en t he Un ited St a tes a n d Ch ina ma y a lso affect t h e sales of some
of t h e Compan y’s prod u ct s t hr ou gh con t in ued imposit ion of exist in g t a riffs or in cre ased t ar iffs or
ot h er t rad e b arrier s t hat ma y n ega tive ly affect ou r sales d ire ct ly an d\or in d ir ectly by affect in g our
cu st ome rs’ b u sin ess an d ope rat ion s, which cou ld ma t erially an d ad versely affect ou r b u sin ess,
fin a ncia l con d it ion a nd resu lts of opera t ion s.
Fin a lly, t h e a gr icu lt ural in d u stry is st r on g ly a ffect ed by local we at h er con d it ion s. Con d ition s such
as h eavy st orms, lon g period s of dr ou ght , flood s, or ext reme se asonal t empera tur es cou ld affe ct the
loca l cr op’s qu a lit y an d yield a nd cau se a r ed u ct ion in t h e u se of fert ilizers. Loss of sales in an
ag ricu lt u ral season in a t arget cou ntry as a result of weath er -r elated events ca n cause a loss of sales
for t he wh ole year.
In ad d it ion , ou r Polysu lph ate® b u siness in I CL B ou lb y min e in t h e UK, is expose d to n ew pot en t ial
prod u ce rs en t e rin g t he market . Polysu lph at e® is t h e b asis for man y of t he prod u ct s in t he
Compan y's Fe rt ilizerplu S pr emiu m fertilizers b usin ess line. It shou ld be not e d, in this con text, that a
new pot en t ia l prod ucer holds a con cession to develop a polyh alit e min e with a capacity of up to 20
million t on n es per ye ar, in a min e which is loca t ed in t h e same area of ou r B ou lb y min e. If even t ua lly
t his prod u cer proceed s to d evelop t h is ca pacit y, IC L will cea se to be t h e sole prod u cer of
Polysu lph at e® , a nd will n ot be t he ma rke t lea der, wh ich is in con sist e n t wit h t h e Compan y's st r ategy
to ob t ain lea d ersh ip posit ion in all it s act ivit ies. ICL is con st an t ly mon it or in g th e compet it ive
en viron me nt an d will con t in u e to see k wa ys to a d he re wit h it s st rategy. If we are u n able to compete
effect ively wit h n ew produ cers, ou r b usin ess, fin an cial con d ition a nd result s of opera tion s cou ld be
ma t erially an d ad versely affect ed . For fu rt h er in format ion , se e “It em 4 – I n format ion on t he
Compan y — B. B u sin ess Overview — Se gment I nformation – Pot ash Seg ment”.
24 ICL Group Limited
S a le s of ou r I nd ustrial Prod ucts an d Ph osph at e S olu tion s s e gme nt s’ product s are affect ed by variou s
f a ct ors t ha t are n ot w it hin ou r c ontr ol, in clud ing d evelo pments in t he en d m ar kets of in du str ial
m a t e rials and food , leg isla tive cha nges, recession or e con omic slowdown an d cha nges in curren cy
e x ch ang e ra tes
Sales of ou r I n d u st rial Pr odu cts a nd Phosph ate Solu tion s segmen ts’ prod ucts are affecte d by global
econ omic con d it ion s in t he ma rke t s in which we operat e . F or e xa mple, ou r sa les may be affected
by t h e slow econ omic re cove ry or an y reve rsal t h er eof in Eu rope. In a d d ition , we h ave sig nificant
ma nu fact u rin g ope ration s in Eu rope an d a lar ge port ion of ou r Eu ropea n sales are in e u ros, wh ile
some of ou r compe t it ors are ma nu fact urers loca t ed ou t side Eu rope whose ope rat ion al cu rre ncy is
t he U.S. d ollar. As a re su lt , a st re ng t he nin g of th e eu ro exchan ge rat e ag ain st t h e U.S. d ollar
in cr ease s t h e compe t itive adva ntag e of t h ese compet it or s.
Th e sa le s of oil d rillin g pr od u ct s d e pend on t h e ext en t of ope rat ion s in t he oil d rillin g ma rket, mainly
in d ee p-se a d rillin g , wh ich in t urn is d e pendent on oil price s, a nd on t he decision s of oil companies
reg ard in g rates of pr od u ction an d a rea s of prod u ction of oil a nd g as.
Th e operat ion of t h e Ph osphat e Solu t ion s seg men t in t h e food in d u st ry is affect ed by leg a l
provision s an d licen sing reg u lat ion s r elat in g to hea lt h . T h is area is ch ara ct e riz ed by st rin g ent
reg u lat ory r equ ir ement s th at are upd at ed fr om t ime to t ime by en forcement ag en cies. A d just ments
of ou r oper at ion s to t h e ch an g es in re g u lat ion, in clu d in g t he t echn olog ical complexit y and
fea sib ilit y of su ch a d ju st men t s, may ad ve rsely a ffect t h e sales of ou r prod u ct s, in cid en t a l to a n y
specific proh ib it ion s an d /or adjust me nts r equ ired in ord er to mee t r egulator y require me nts.
In ad d it ion , t h e on g oin g t rad e d ispu t e b e twe en t h e Un it ed St ates a nd Ch in a may a lso affe ct t he
sa le s of some of ou r prod u ct s t h rou gh con tin ued imposit ion of t he exist in g t ariffs or in crea se d t ariffs
or ot her t r ad e b a rriers t h at ma y n eg a t ively affect ou r sales d ire ct ly an d \ or in d irectly by affect ing
ou r cu st omer s’ b u sin ess and oper at ion s, which cou ld materially an d a d verse ly a ffect ou r b u siness,
fin a ncia l con d it ion a nd resu lts of operat ion s.
S a le s of o u r m ag n esiu m p rod ucts a r e a ffected by v ari ous f actors t h at a r e n ot within ou r con trol,
i n c ludin g de velo pments in t he en d marke ts of ma g ne siu m, le gislat ive cha ng es, recession or
e c on omic slowdown, ch an ge s in currency excha ng e r ate s, antid umping an d coun terva ilin g du tie s
Sales of ou r mag n esiu m pr od u ct s are a ffect ed by g lob al econ omic con d it ion s in t he market s in
wh ich we opera t e. For e xample, ou r sa les may be affe ct ed by an y econ omic reve rsal in t he a lu minum
se ct or, st ee l se ct or, an d t h e cast in g se ct or of pa rt s mad e of mag n esiu m alloys ( main ly for u ses in
t he ve hicle in d ust ry).
In ad d it ion , en vir on men ta l reg ula tion s, sig n ificant ch an ge s in t h e USD ag ain st t h e I LS exch ange
rat e an d t rad e b a rrier s ma y n ega t ively a ffect ou r sales d ire ct ly an d \ or in d irectly by a ffe ct in g our
cu st ome rs’ b u sin ess an d ope rat ion s, which cou ld ma t erially an d ad versely affect ou r b u sin ess,
fin a ncia l con d it ion a nd resu lts of opera t ion s.
Th e Company’s magn esiu m act ivit ies may be su b ject to a nt idumpin g an d coun te rvailin g d u ties on
import s of mag n esiu m, t h at are imposed in ord e r to prot ect t he local prod u cer in t h e t a rget markets.
If su ch d u t ies a re imposed , it ma y r esult in difficu lties or in abilit y to sell ou r mag ne siu m prod ucts in
t hese mar ket s a nd th us n ega tively affect th e Company's magne siu m a ctivit ies economic viab ilit y.
25 ICL Group Limited
Secu rin g t he futu re of t he phosphate min in g operat ion s at Rotem I srae l depends on ob ta inin g several
a p p r ovals a nd pe rmits fro m t he auth orities in I srae l
Secu rin g t h e fu t u re of t h e ph ospha t e min in g operat ion s at Rot em d epen d s on ob t a in in g several
approvals a nd per mit s from t h e au th orit ies in I srael, as follows:
• Emission pe rmit u n d er t h e I sraeli Clean A ir A ct ( h ere inafter - t h e Law): In 2018, t h e Company
con d u ct ed t wo risk a sse ssment s by exter nal e xperts re gard ing th e possib ilit y t o execute all the
clean air t asks requ ired b y t he e mission permit a s per t h eir a pproved t imelin e. Th e risk
assessmen t s focu se d on t he t ech n ical an d safe ty con sid e ration s a risin g from implemen t a t ion
of a la rg e n u mb er of project s in pa rallel, in an in d u st r ial sit e . T he asse ssmen ts in d icated that
t here is n o opera t ion al fea sib ilit y t o implemen t t h e fu ll r equ ir emen ts of t h e pe rmit wit h in the
d efin ed t imelin e , an d accor din gly t h e Compan y is u n able t o meet t he t imel in e se t in t h e current
permit . I n 2019, followin g d iscu ssion s wit h t h e I sr aeli Min ist r y of En viron ment al Pr ot ection
( herein after - MoEP), t he MoEP in formed the Compan y th at du rin g t he cour se of discu ssions to
ren ew Rot em Isr ael's emission permit , which cu r re nt ly re ma ins u n chang ed , t he y will con sider
t he sa fet y con st rain ts, t he comple xit y an d mu lt iplicit y of proje ct s, as we ll a s th e Compan y's
d iligen ce t o comply wit h t h e pr esen t permit con dit ions an d t heir sch ed ules, while pr iorit izing
proje ct s wit h sig nifican t e nviron mental impa ct . T h e Compa ny provid e d t he MoEP wit h it s
u pd a t ed pr ojects' ou tlin e, sch edu le a n d complet ion st at us.
In lig ht of b u sin ess u n cert ainty an d t h e COVI D-19 pan d emic, th e Compan y con t in u ed its
d iscu ssion s wit h t he MoEP rega rd ing t h e t imin g a nd scope of e xe cu t in g t h e in vest ments,
in clu d in g t he impa ct of t h e u n cert ain ty su r rou n din g Rot e m I srael's a ct ivit y, as fa r as t he
impleme nt at ion of lon g -t e rm project s is con cern e d. In Decemb er 2020, t he Compan y su b mitted
to t h e MoEP an applicat ion to upd a t e t he cu rrent emission permit , in clu d in g u pd ated sche dules
for proje ct s' exe cu t ion in accor d an ce wit h t heir en viron menta l sig n ificance . In respon se, in
De cemb er 2020, a su mmary let t er was re ceived from t h e MoEP reg ar d ing a prin ciple ou t line
t hat in clu d e s, a mon g ot h er t h in gs, post pon ing t h e exe cu t ion of cert ain pr oject s b eyon d the
cu rr en t per mit period , wh ich is to expire in Sept emb er 2023, an d a d e mand to comple t e certain
proje ct s wit h in t he permit per iod . Th e Compa ny con t inue s to h old d iscu ssion s wit h t he MoEP
reg ard in g priorit iz in g t h e proje ct s' e xecu t ion an d re ach in g u n d e rst an ding s wit hin t he
fra mewor k of t h e cu r rent emission permit .
• Min in g con cession s - Th e Company h as t he t wo min in g con cession s , wh ich are in e ffe ct u n til
t he e n d of 2021. Durin g th e fou rt h qu ar ter of 2020, as part of t he Compa ny's action s to extend
t he valid it y of t he said min in g con cession s a nd ob t ain t h e necessar y appr ovals, posit ive
recommen d at ion s were r ece ived from t h e Min ist r y of Ene rg y, t h e Commit t e e for Red u cing
Con cen t r ation an d t he Compet it ion A u th orit y, t o ext e nd t h e lice nses for an ad d ition al period
of th re e years. I n Decemb er 2020, t he Min ist e r of En er gy approached t he C ha irman of the
Fin a nce Commit t ee in t he Kn esse t r equestin g t h at t he Commit t ee g ra nt fin al a pprova l t o t he
sa id ext en sion .
• Oron 's lea se ag re emen t - The Company h as b ee n workin g t o ext end t h e lea se a greemen t for
Oron 's plan t area sin ce 2017, b y exer cisin g t he extension opt ion provid e d in t he agreement .
• Dr y an d we t ph osph og ypsu m st or ag e - in O ct ob er 2020, t h e con st ru ction an d u se permit for
pon d 5 we re e xt en d ed u n til Dece mb e r 31, 2021. T h e Compan y is workin g wit h t h e relevant
au t h or it ies t o ob t ain all t h e re quir ed permit s, for t h e con t inu ed opera tion of t he g ypsu m ponds
b eyond 2021 an d for the con tin ued p iling of g ypsu m, in a ccordan ce wit h t he requ ire ments set
b y law a n d / or in st ru ction s of t h e Plann ing a nd Bu ildin g Commit t ee.
26 ICL Group Limited
• Ext ension of oil sh ale e xt ract ion pe rmit – T h e ERD ( en er g y re sou rce d eve lopmen t ) facilit y in
Rot em I sra el, wh ich is u sed for ext ract in g energy fr om oil shale s ( h er ein aft er – t h e fa cilit y), is
essen t ial for t h e con t in ue d pr od uct ion a ct ivit y of Rot em Isr ael. I n F ebr uary 2020, t h e Min istry
of En er gy n ot ified of it s in t en t ion n ot t o ren ew t he oil sha le ext ract ion per mit d u e t o the
en viron me n t al effects of t h e fa cilit y, whose oper at ion is b ase d on ou t d a t ed t e ch nology. The
Compan y is a ct ively wor kin g in lin e wit h t h e Min ist ry of En erg y's in st r u ction s t o r epla ce the
facilit y wit h a n at u r al g as st e am b oile r. A s t h e replacement proje ct is complex , an d in lig h t of
t he d elays resu lt in g from t h e Coronavirus cr isis, t h e Compa ny appr oach ed t he Min ist r y of
En ergy wit h a requ est t o ext end t h e fa cilit y's pr od uct ion permit , from May 2021 u n t il t he end
of 2022, so t h at t h e fa cilit y can be u sed un til t h e com plet ion of t h e pr oject .
• Fin d in g e con omically fe asib le altern atives t o t he con tin ued min in g of ph osph at e rock in I srael
– A ccor d in g t o t h e C ompa ny's assessmen t of econ omic ph osph at e r eserves in t h e exist ing
min in g are as, t h e e st imated use ful life of Rot em's ph osph at e rock re serve s, wh ich a re esse ntial
for some prod u ct ion lin es, is limit e d t o on ly a few yea rs. A s d escr ib e d a bove , t h e Compan y is
workin g t o ob t ain per mit s an d appr ovals wh ich will pr ovid e an econ omic alte rnative for future
min in g of ph osph at e rock in I srael.
Th e Compa ny is con t in u in g it s discu ssion s wit h th e re leva nt au t h or ities, in t er a lia du e to t he
COVI D- 19 pand e mic an d t he b usin e ss u n certainty, u n t il t h e requ ir ed a pprovals an d permit s are
gran t ed. Addit ion ally, t h e Compan y incr ease d it s effor ts to a ccele rate the d iscussion s wit h th e State
of I sr ael on ma kin g d ecision s reg ardin g fu ture ph osph ate rock sou r ces, in order to secu re lon g-term
cer t ain t y for Rot e m I srae l. Th e Company e st imat e s t ha t it is more likely t h an not t h at t h e said
approvals, permit s and fu ture ph osph ate rock sou r ces will be g ra nt ed within a t ime fra me which will
not mat e ria lly impact t h e Compa ny's r esults. Never th eless, t h ere is no cert ain ty as to t h e r ece ipt of
su ch approvals, pe rmit s a nd fu tu re ph osph at e rock sou rces and/ or t he d ate of t h eir r ece ipt . Failure
to ob t ain t h ese approva ls, per mit s an d fu t u re ph osphat e r ock resou rces, or a sig n ifican t d e la y in
receivin g t h em ca n lea d to a mat eria l impa ct on t h e Company's b u sin ess, fin an cial posit ion and
resu lt s of oper at ion s.
As at Dece mb e r 31, 2020, Rot e m employs more t h an 1,400 people, an d t he overall b ook valu e of
it s propert y, pla nt and e quipme nt a mou n ts t o a bou t $727 million .
O u r ope rat ions are su bject to a crisis in t he fin ancia l mar ket s
Th e I CL Grou p is a mu lt in at ion al Company a nd it s fin ancia l result s a re affect ed by g lob al econ omic
t ren d s, cha ng es in t he t erms of t rade a nd fin ancin g and fluct uation s of cu r rency exchan ge rates. A
crisis in t h e fin ancia l markets cou ld cause a reduct ion in th e in tern at iona l sou rce s of credit available
for t he pu r pose of fin an cin g b usin ess operation s. T he impact of su ch a crisis mig ht be expressed in
t erms of availab ilit y of cr ed it to us an d ou r cust ome rs, as well as t he pr ice of cre d it. In addit ion, the
volat ilit y a nd u n certa in ty in t he Eu rope an Un ion affect ou r activit ies in th is ma rket.
T h e u ncert ain ty s u rroun din g t he p rop ose d w ithdrawal of t he U n ited Kin gdom from t he Eu rope an
U n ion may mate rially a n d ad versely affect ou r b usin ess
Th er e is con sid e rab le u ncertaint y con ce rn ing t h e t erms of t h e wit h d rawal of t he UK from t he
Eu ropean Un ion , re fer red to as “Br exit”. T he Unit ed Kin gdom officially left t he Eu ropean Un ion on
J an u ary 31, 2020, wh ile t he t ransit ion al per iod en d e d on Decemb er 31, 2020. The movemen t of
good s b et ween t he UK and t he remain in g memb er st a t es of t he Eu rope an Un ion is su b ject to
ad d it ion al in spect ion s and d ocu men ta tion ch ecks, le ad in g to possib le d elays at port s of en t r y and
d epart u re. Chang es to t h e t ra ding relation ship b et ween t he UK an d t h e Eu r opean Union could
27 ICL Group Limited
resu lt in in cr ease d cost of good s import e d in t o an d export ed from t h e UK a nd may d ecrease the
profit ab ilit y of ou r UK an d ot h er ope ration s.
B rexit cou ld lead to leg al un certainly an d pot en tially d ive rg en t nation al laws and regula tion s. More
b road ly, it is a lso u n clear wh at financial, t rade , leg al a nd employme n t implicat ion s t he wit hd raw of
t he UK from th e Eu ropean Un ion wou ld have and h ow t h e wit h d ra wal wou ld a ffect u s. Ad ve rse
con se qu e nces su ch as re duced con su mer spen ding , d eter ioration in economic con d it ions, volat ility
in excha nge ra tes, an d proh ib itive laws an d reg u lation s cou ld mat e rially a nd ad versely affect our
b u sin ess, fin an cial sit ua tion and r esu lts of oper at ion .
As a m in ing an d in d ustrial che mica ls C ompa ny, we are inhe rentl y, an d by t h e n atur e of ou r activit y,
e x p ose d to h azard s rela tin g to m ateria ls, p r ocesses, p r odu ction and m in ing
Alt h ou g h we t ake pr eca u t ion s to enh an ce t h e safet y of ou r ope rat ion s an d min imize t h e risk of
d isr u pt ion s, we are su b ject to h azards in h ere nt in ch emical man ufactur ing and the related st orage
an d t ra n sport at ion of raw mat e ria ls, prod u ct s an d wa st e. T he se ha zar ds in clu d e e xplosion s, fire s,
me ch an ical fa ilu re s, r emed iation complicat ion s, ch emical spills an d d isch arg e s or relea ses of t oxic
or h az ard ou s su b st a nces. Du rin g ou r min in g ope rat ion s, par t icu la rly u nd erg rou nd min in g ,
ad d it ion al h azards may occu r , su ch as h ig h levels of t emperatu re requirin g prope r ven tilation of the
min e, hig h leve ls of d u st wh ich n e ga t ively a ffect t h e min in g oper at ion, flood in g of t he min e and
ot h er s. These ha zard s can ca u se se ve re d a ma ge to or d est ru ction of prope rt y an d e qu ipment,
en viron me nt al d a mage , per son al in ju ry a nd loss of life an d may re su lt in su spension of operat ion
an d t h e imposit ion of civil or cr iminal pe na lt ies.
Ou r man u fa ct u rin g facilit ies con t a in soph ist ica t ed manu fact urin g equ ipme nt . In t he eve n t of a
ma jor d isr u pt ion in t he ope rat ion s of an y of t h is e qu ipment , we may n ot be ab le to resu me
ma nu fact u rin g ope rat ion s for an ext en d ed pe riod of t ime. The occu rr en ce of mat e ria l opera t ing
prob lems at ou r facilit ie s ma y h ave a n a dverse an d even mat erial effect on us, d u rin g an d a fter the
period of su ch opera t ion al d ifficu lties, and expose us to sig n ifican t lia b ilities a nd cost s, d ependent
on t h e con t in ued ope rat ion of ou r prod u ction facilit ies. For e xample , a malfu n ct ion in t h e operation
of th e d r ed g er as part of th e salt h arve st in g act ivit y in DSW , d esig ned to main t ain a fixed b rine
volu me at Pon d 5, cou ld harm, an d even mat eria lly so, t h e pr od u ct ion ca pacit y of ext r acted
min era ls, and t here by adversely an d mat erially affect ou r operat ions.
For fu rt h er in format ion, see “I t em 4 – I n format ion on t h e Compan y — B. B u sin ess O verview —
Reg u lat ory a nd En vir on me n tal, Healt h an d Safe t y Ma t t er s” an d Not e 18 to ou r A u d it ed Fin ancial
St at emen ts.
A ccid en ts occurrin g d urin g ou r indust ria l a nd min ing oper at ions a n d fa ilu re to e n sure t he safet y of
w o r kers a nd pr ocesses, cou ld a d ve rsely a ffect ou r b u sine ss
Va riou s occu pat ion al haza rd s are in h eren t in ou r in d u st r ial an d min in g oper at ion s. Th u s, ou r
operat ion s re qu ire t akin g special pr ecau t ion ar y me asu re s to main t ain a sa fe and healt h y work
en viron me nt . To e nsu re t h e sa fety of wor kers a n d ot h ers in t h e Compa ny's facilit ies, t h e Company
is su b ject to st rict occu pa t ion al h ea lt h an d safet y st an d ard s, pr escr ib ed by local, n at ion al and
in t er n ation a l laws, r eg u la tion s and st anda rds. A d dit ionally, we are e xposed to ope rat ion al risks
associa t ed wit h in d u st rial or en g in eering a ct ivit ies, su ch as main t en an ce prob lems or equ ipment
failu res.
Failu re in implemen t at ion or d e viation from ou r sa fety me asu re s an d st andard s, or failu re to pr event
or appr opriat e ly r espon d to a safet y- re lated in cid ent , or ot h er opera t ion al risks may resu lt in
person n el in ju ries or fata lities, prod uction sh utdown s, d isru ption of ope rat ions an d sign ifica nt legal
28 ICL Group Limited
an d fin an cial lia b ilit ie s. T he occu rren ce of mat erial safet y in cid e nt s at ou r facilit ies cou ld h ave a
ma t erial ad verse effect on u s, a nd we may be expose d to su bst an tial lia bilit ies an d cost s un der such
circu mst a nces.
For fu rt h er in format ion, see “I t em 4 – I n format ion on t h e Compan y — B. B u sin ess O verview —
Reg u lat ory a nd En vir onmen tal, Healt h a nd Safety Ma tt er s“ .
As a min ing and in d ustrial chem icals Company , we a re e xposed to variou s legislat ive and lice nsin g
r e st ricti ons in t he are as of e nv iron mental p rotection an d s a fet y. Related complia nce costs an d
l i ab il ities ma y a d versely a ffect th e result s of ou r o peration s
As a min in g an d in dust rial ch emica ls Company, we are sig nificantly a ffecte d by th e leg al provisions
an d licen sin g reg ime in t he ar eas of en vir on men ta l pr ot ection an d sa fety. Rece nt years h ave b een
ch ara ct e riz ed by a su b st an tial in crease in t h e st ring en cy and e nforcemen t of le g al provision s a nd
reg u lat ory r equ ir emen ts in t hese ar eas; th e cost of a d ju st men t to an d complia nce wit h su ch
reg u lat ory cha nge s, in clu d in g t h e t ech n olog ical complexit y of su ch a d ju st men t, as well as
compliance wit h st and ardiz ation , h ave all sh own a sig nifica nt u pwa rd tre nd.
Le gisla t ive ch an g es ar ou n d th e world may prohib it or rest rict u se of ou r prod u ct s, d u e to
en viron me nt al pr ot e ction, h ea lth or safet y con sid e ration s. St andards a d opt ed in t h e fu t ure may
affect us an d ch an g e ou r met h ods of ope rat ion . Fu rt h ermore , some of ou r licen ses, in clu d ing
b u sin ess license s and min ing license s, a re for fixed periods a nd mu st be ren ewed from t ime to t ime.
Ren ewal of su ch pe rmit s is not ce rt a in an d ma y be mad e con t in ge nt on ad d ition al con d ition s and
sig n ifican t cost s. Difficu lt ies in ob t ain in g su ch permit s cou ld h ave an a d verse effect on ou r
operat ion s, b u sin e ss and resu lts of oper ation s. F or exa mple, in I srael, emission permit s are rece ived
u n d er t he Isr aeli Clean A ir Law. In or d er to comply wit h t h e emission permit s re ceived in con n ect ion
wit h some of ou r ope rat ion s in I srae l, we are re qu ired to ma ke sig nifica nt ca pit al in ve st me nt over
t he ne xt few ye ars. For fu r t he r in format ion , se e "Secu r in g t h e fu t ur e of t h e ph osph at e min ing
operat ion s at Rot em I srael de pends on ob tainin g several approva ls a nd permit s fr om th e aut horities
in Isr ael” ab ove, “Item 4 – In format ion on t h e Compa ny — B. B u sin ess O ve rview —Re g u lator y and
En viron me nt al, Healt h a nd Sa fet y Ma t ters” a nd “B. B u sine ss Overview —B usin ess Licen se s and Other
Permit s”.
C u rrent a nd f u ture l aws an d regu lation s reg ardin g c lima te cha ng e an d g re enh ouse g as (GHG)
e m i ssion s, as w e ll as t he p h ysical i m pacts of c l imate c h ang e, m a y a f fect ou r ope rat ions an d
b u sine sses
Over th e past severa l years, climat e ch an ge and GHG emission s ha ve b een of in cr easin g con cern
world wid e. In a d d it ion to leg islat ive, r eg u la t ory, b u sin ess a nd ma rket impact s relat e d to clima t e
ch an g e, su ch as cu rren t and fut ure legislation and regu lat ion r egar ding GHG e mission s, t h ere may
be sig n ifica n t physica l e ffe ct s of climat e ch an g e in clu d in g ch an ge s in t h e weat her pat tern s, such
as, wat e r sh ort ag es or ch ange s in wate r qu ality, ch an gin g sea a nd t emperat ure levels, in cr eases in
st orm in t en sit ies, as well as ch an g es in availab ilit y of n at u ral re sou rces an d d a mag e t o facilit ie s or
equ ipmen t .
Acu t e and / or ch ron ic ph ysica l risks to ou r in st a llat ion s cou ld pot e nt ia lly re d u ce I CL's prod u ct ion
capacit ies. Clima t e cha nge is e xpected to in crease the fr equ en cy an d likelih ood of e xtreme weather
even t s su ch as flood s. I CL’s Dead Sea facilit ies, for exa mple, are loca ted in an ar ea t hat h as already
b een impa ct e d by severe flood s in t h e past . A not her ( less likely) r isk cou ld be rising se a le ve ls t hat
cou ld d amag e se veral of IC L sit es which are in proximit y of t h e ocea n . Su ch ext re me flood s a nd/or
risin g sea le ve ls cou ld cau se sig n ifican t pr opert y d amag es and loss of pr ofit s. Ph ysica l climat e
ch an g e r isks cou ld also in volve u pst re am raw mat erial su pply an d / or d ownstream d ist rib ution . For
29 ICL Group Limited
in st an ce, t h e I CL Lu d wig sh afen sit e is loca t ed on t h e b a nk of t h e Rh in e river in Ge rman y. F reight
b oa t s car ry Phosph at e rocks in t o t h e sit e an d carry prod u ce d phospha t e fert ilizers to cu st omer s.
Howe ve r, in d r y se ason s, t h e river le ve l cou ld be lower ed to a poin t n ot a llowin g t he se fr eig ht b oats
to t ra n spor t t h e raw mat e rials/ prod ucts, an d climat e cha nge in cre ases t h e pot entia l frequ en cy of
su ch d ry period s. T he pot e n t ial impa ct is t he ad d ed cost of t ra nspor t ing t h ese raw
ma t erials/ prod ucts via r oad , in fre igh t t ru cks.
Reg u lat ory-related climat e risks cou ld ca u se ad d it ion al cost s to t h e Company, t h rou g h e me rg ing
car b on t axes or mand a t or y cap- an d -trad e emission t rad in g sch emes. Th ese t axes/schemes have
b ecome more likely sin ce t he 2015 g lob al clima t e Pa ris a ccord . Cu r rently, t his risk impact s t h re e of
ICL Eu r ope's sit es ( I CL Ib eria Su ria an d Salle nt, an d I CL B ou lb y) wh ich are in clu d ed in t h e EU- ETS
car b on t r ad e pr og ra m. Un t il n ow, t h ese sit es were allocat ed su fficie nt EUA e mission cred its to a void
t he n eed for pu rchasin g ext erna l EUA's. However, it is st ill u n clear h ow mu ch EUA's will be fre ely
alloca t ed in ph ase 4 of t h e EU- ET S ( or in ICL B ou lb y's case - in t he u pcomin g local replacement
t rad in g sch eme, followin g Br exit ). In a d d it ion, in 2017, Ch in a also in it iat ed a n at ion al emission
t rad in g sch eme. Y PH J V, in Ch in a, is on e of t h e Compa ny's la rg est prod u ct ion sit es and prod uces
GHG emission s ( d irect ly an d in directly). For n ow, t his t radin g scheme d oes not inclu de the bu siness
se ct or re le vant to th is sit e. Howe ve r, t h e plan cou ld pot en t ially expa n d to ad d it ion al b u sin ess
se ct ors in t he fu t ur e. T here h as n ot been an in dica tion of u pcomin g ca rbon ta xes/trad ing sch emes
in I sr ael or t h e US state s wher e I CL oper ate s, but this opt ion cou ld b ecome viable in th e fut ur e, with
even fu r t h er con cerns r eg ardin g climat e ch ange. T he pot ential impact for t h ese r isks cou ld be the
need to pu rch ase ext e rn al ca rb on cred it s t h rou g h t he specific prog rams an d / or n ew C ape x
expen ses for red u ction engin es for t h e sit e.
Climat e ch an g e also cau se s ma rket risks. I CL is a prod u cer of fe rt ilizers for t h e g lob a l a gricu lt ural
in d u st r y. One of t h e main e ffe ct s of climat e ch an g e is e xpe ct ed to be an in creased fr equ ency of
ext reme we at h er even ts, wh ich impact t h e a gr icu ltu ral in d ust ry. St orms, lon g per iod s of d rou g ht,
flood s an d ext reme t empe rature chan ge can affect cr op qu a lit y an d qu a n tity, resu ltin g pot en tially
in d ecre ased fer tilize r u sage. If these a ffect r eg ion s wh er e I CL is a sig nifica nt fe rtiliz er supplier , and
t he d eman d for fe rtilizers d rops, lCL mig h t n eed to re du ce it s pr ice s, t he reby re ducin g it s profit s, or
ot h er wise lose sales.
Th e pot e nt ial impact of climat e cha n ge an d associat e d laws a nd r eg ulation s on t h e Compan y's
operat ion s an d bu sin ess, an d th ose of ou r cu st omers a nd su ppliers is u n cert a in. The cost of
ad ju st men t to a nd compliance wit h leg islat ive a n d reg u lat ory ch an ges r eg ar din g climat e cha nge
an d GHG emission s, a nd ad ju st men ts to t h e physical impact s of clima t e cha nge , cou ld mat erially
an d ad ver se ly a ffect ou r b u sin ess, fin an cial sit u at ion and resu lt s of opera t ion . Apar t from
impleme nt in g ph ysical measu res to d eal wit h e xt reme wea t he r con d it ion s, I CL ha s acqu ired
in su ra nce to prot ect itself from exposu r e to n atu ra l d isasters.
For fu rt h er in format ion , se e “ It e m 4 - I n for mat ion on t h e Compan y— B . B u sin ess Overview—
Reg u lat ory a nd En vir onmen tal, Healt h a nd Safety Ma tt er s”.
D u e to t he nature of our Co mpa ny, we are exposed to ad ministrative and legal proceedin gs, b oth civil
an d crimin a l, in clu din g as a result of alle ged envir on mental con ta mination cause d by cer tain of
o u r facilit ies
From t ime to t ime we are exposed to a d min ist rative and lega l proce edin gs, b ot h civil an d crimin al,
in clu d in g as a r esu lt of alleg ed en vir on me n tal con t amin ation cau sed by cert ain of ou r fa cilit ies. It
sh ou ld be not ed , in t h at r eg ard, t hat t he Company may be exposed to crimin al proce ed in gs, fines
an d sig n ifican t impairmen t of t he opera t ion of ou r facilit ie s as a resu lt of failin g to mee t t he
requ iremen t s of ou r emission s permit s in clu d in g t h e provision s of th e Israeli Cle an A ir Law, a nd
30 ICL Group Limited
part icu la rly, r eg ar d ing t h e scope of cu rre n t an d fu t u re re qu irement s as pre scrib ed by t h e I srae li
Min ist ry of En viron me n t al Pr ot ection re spectin g t h e implemen t a tion of t h e Law’s provision s at the
Compan y’s pla nt s in Rot em I srae l, as well as compliance wit h t he timeframes for implemen t a tion of
su ch requ iremen t s. In ad dit ion , from t ime to t ime examin at ion s an d in ve st ig at ion s are con d ucted
by en forcemen t auth orities.
Fu rt h ermore , from t ime to t ime we are expose d to claims alle gin g ph ysical or propert y d amag e,
wh ich may cau se us fin an cial h arm.
In ad d it ion , some of t h e man u fact uring or mar ketin g a ct ivit ies ( an d somet ime s t ra nsportation and
st orag e as well) en t a il safe t y risks th at we at t empt to min imize b u t are n ot ab le to e limin at e . In
va riou s cou n t ries, in clu d ing Isr ael an d t h e Un it ed St at es, leg isla t ion exist s t ha t ca n impose lia b ility
on us irr espect ive of ou r a ct u al in t e nt or n eglig ence . Ot her laws impose lia b ilit y on d efen dants
join t ly an d sever ally, an d somet imes ret roact ively, an d t h erefore can ca u se us to be liab le for
act ivit ie s execu te d join t ly wit h ot he rs and at t ime s solely by ot hers. We may also be foun d liable for
claims r ela t ed to land t reatme nt where min ing opera tion s an d ot h er act ivities were con duct ed , even
aft e r su ch activit ies have ceased .
In ad d it ion , over t he past se veral year s, t h ere h as b een an u pward t rend in t h e filin g of claims
t og et he r wit h a requ e st for t h eir certification as class and d erivative a ct ion s. Du e to t h e n at ure of
su ch act ion s, t h ese claims may be for ver y h igh a mou n t s an d t h e cost s of d efen d ing ag ain st such
act ion s ma y be su b st a ntial, even if t h e claims are wit hou t mer it from t h e ou t set . In a d d it ion, our
in su ra nce policies in clu d e cover ag e limit at ion s, are r est rict ed to ce rt ain ca u ses of act ion an d may
not cover cla ims re lat in g to ce rt ain t ypes of d amage s, su ch as in tang ible d amag es, e t c.
For in format ion respect in g leg al proce ed in gs an d act ion s, see Not e 18 to ou r A u d it e d Fin an cial
St at emen ts a n d “It em 8 - Fin an cial I n format ion — A. Con solid at ed St at eme nts and O t her Fin ancial
In format ion — Leg al Proce edin gs”.
We are exp ose d to t he r isk of th ird -par ty an d pr od uct l ia bilit y claims
We are a lso expose d to risk of liab ilit y r elat ed to d amage ca u sed to t hir d pa rties by ou r oper ations
or by ou r prod u ct s. We h ave t h ird -par ty liab ilit y in su rance for d a mage s cau sed by ou r ope rat ions
an d for prod u ct liab ilit y. However , t here is no ce rt ain ty t ha t t h is in sur ance will fu lly cover all d a mage
for su ch liab ilit y. Moreover, sa le of d efective pr od ucts by us mig ht le ad to a re call of prod ucts by us
or by ou r cu st ome rs who h ad u se d ou r prod uct s. In add ition , th e sale of d e fect ive pr odu cts, as well
as d amage ca u se d to th ird partie s by ou r activit ies or ou r prod uct s may h arm ou r pu blic ima ge and
repu t at ion an d, as a resu lt , ma t erially an d ad ver se ly a ffect ou r b u siness, fin an cial sit u ation and
resu lt s of oper at ion .
P r od uct re call s or oth er liabilit y claims as a r esu lt of food safe ty and food- borne illn ess conce rns cou ld
m a t e rially and ad versely affect us
We d e ve lop an d prod u ce fu n ction al food in gredients an d ph osph ate add itives for t he food in d ustry.
Sellin g ingr edie nt s an d addit ives t hat will be u sed in prod ucts sold for huma n consu mption in volves
in h ere nt le g al a nd ot h er risks, in clu d in g prod u ct con t amin ation , spoila ge, prod u ct t ampe ring,
alle rg en s, or ot her ad u lt e rat ion. We cou ld d ecid e t o, or be requ ire d t o, recall pr od u ct s d u e to
su spect ed or con firmed prod u ct con t amin ation , ad u ltera tion , misb r an d ing , t a mper ing , or ot h er
d eficiencie s. Pr od u ct re calls or market wit h d rawals cou ld r esu lt in sig n ifican t losses du e to t h eir
cost s, t h e d e st ruction of prod u ct in ven tory, an d lost sales d u e to t h e u na vailabilit y of t he prod uct
for a period of t ime .
31 ICL Group Limited
B eca u se food sa fet y issu es cou ld be experie nced at t he sou rce or by food su pplie rs or d ist rib u tors,
food safet y cou ld , in pa rt , be ou t of ou r con t rol. Reg ar d less of t h e sou rce or cau se, any r eport of
food - b orn e illn ess or ot her food safe ty issu es such as food t ampe ring or con tamin at ion of prod ucts
t hat con t ain ou r in gred ien ts or a d d it ives cou ld ad ve rsely impact ou r re pu t a t ion, h in d er ing our
ab ilit y to ren ew con t ra cts on favor ab le t erms or to ob t ain n ew b u siness, an d ha ve a n ega tive impact
on ou r sa les. Even in st a nces of food -b orn e illn e ss, food t amperin g or con t amin at ion of prod u cts
t hat do n ot con t ain ou r in g red ients or a d d it ives cou ld resu lt in n e gat ive pu b licit y a nd cou ld
neg at ively impact ou r sa le s.
We may also su ffer losses if ou r prod u ct s or ope rat ion s violat e applicab le laws or reg u lat ion s, or if
ou r prod u ct s cause inju r y, illn ess, or d eath . A sign ifica nt prod uct liab ility or ot her leg al ju dg ment or
a relat e d re gu la tory e nfor cement act ion a ga in st u s, or a sig nifica n t prod u ct re call, ma y mat erially
an d ad ve rsely affect ou r r eputa tion and pr ofit a bilit y. A ward s of d amages, set tle me nt a mou n ts and
fee s an d expen se s resu ltin g from su ch claims an d t h e pu b lic relation s implicat ion s of any su ch claims
cou ld h ave an adverse effect on ou r bu siness. T he availab ility a n d pr ice of in su rance to cover claims
for d amag es are sub ject to ma rket forces t hat we do n ot con trol, an d su ch in suran ce may n ot cover
all th e cost s of su ch cla ims an d wou ld n ot cover d amag e to ou r re pu t a t ion . More over , even if a
prod u ct liab ilit y or fra u d claim is u n su ccessfu l, ha s no merit , or is n ot pu rsu ed , t he negative pu blicity
su rrou n d ing assertion s a gainst ou r prod ucts or pr ocesses cou ld mat erially an d adversely affect our
b u sin ess, fin an cial con dit ion a nd r esult s of opera tion s.
O u r in suran ce p olicies ma y n ot be su fficient to cover a ll actu al losse s t hat we may in cur in t h e fu tu re
We main t ain , amon g ot h ers, prope rt y, en vir on me n t al, b u sin ess in t erru ption , ca su alt y and
ma lpract ice in su ra nce policies. However , we are n ot fu lly in su red ag a inst a ll pot ent ial ha zar ds and
risks in cid ent al to ou r busin ess, in clu din g to d amage s which may be cau sed to us by th e n eglig ence
of ou r e mployee s. We are su b ject to variou s self- re ten tion s an d d eductib les u nd er t hese in su rance
policies. As a r esu lt of ma rket con d it ion s, ou r loss exper ience a nd ot h er fact ors, ou r pre miu ms,
se lf-r et ention s an d ded u ctib les for in su rance policies can in cr ease su b st an t ially an d , in some
in st an ces, cer t ain in su ran ce ma y b e come u nava ilab le or availab le on ly for re d u ced amou n ts of
cove rag e. In a d d it ion , sig n ifican t ly in crea sed cost s cou ld lead us to d e cid e to re d u ce , or possib ly
eliminat e, coverag e. As a r esu lt , a d isru pt ion of t he opera t ion s at on e of ou r key fa cilit ie s or a
sig n ifican t casu alt y cou ld h ave a mat e rial ad ve rse effect on ou r fin an cial con d it ion a nd resu lt s of
operat ion s. Fu rt h ermore, ou r in su rance may n ot fu lly cove r ou r e xpense s relat ed to claims and
lawsu it s t h at may be filed a g ain st u s, or expen ses rela ted to leg islation t ha t is b ein g promot ed and
en act ed wit h ad ve rse effect on u s. In ad d it ion , it is possib le t h at t he re are r isks t h at we d id n ot
id e nt ify an d are t hus not cover ed by t he insu rance policies acqu ired by th e Compa ny.
32 ICL Group Limited
Risks Relat ed to th e Company’s Operations in Israel and /or to the Compa ny being an I srae li Compa ny
D u e to ou r l ocat ion in I sr ael and /or b ein g an Isr aeli Company, our operation s may be exposed to war
or a ct s of t error . In a d d ition , we are e xposed to r isks of t error ist a ct s, war an d g over nmental
i n st abilit y in the regi ons ou t side Israel wh ere we oper at e
W ar, act s of t error a n d \ or g over nme ntal in st abilit y in t h e re g ion s wh ere we oper at e are likely to
neg at ive ly impa ct u s. This impact ma y ma nife st it se lf in prod u ct ion d elays, d ist rib ution d e lays, loss
of propert y, in ju ry to e mployees, a nd in creased in su rance premiu ms. In addit ion, ou r pla nts may be
t arg e t s for t errorist acts d ue to th e ch emicals t he y stor e. We do n ot h ave prope rt y insu ra nce ag ainst
war or a ct s of t error, oth er th an compensa tion from th e St ate of I srael pu rsuant to I sr aeli law, which
cove rs on ly ph ysical prope rt y d a ma ge , wit hou t accoun tin g for reinst at eme nt value s.
It is n ot ed t h at sin ce t he con struction of ou r in it ia l facilit ies in t h e 1950s, we h ave ne ver exper ienced
ma t erial b u sin ess in t er ru ption s as a resu lt of war or acts of t error, b ut we ca n provid e no assu rance
t hat we will n ot be su bject to a ny su ch in te rrupt ions in the fu tu re .
Ou r compu t e r an d commu n icat ion s n et works, an d pr od u ct ion t ech nolog ies con st it u te a basic
plat form for ope rat ion al con t inuity an d are a lso pot en t ial t a rgets for act s of t err or. Pot en tia l cyber
t hreat s can cau se d amag e to syst ems and plan ts, d ata loss, soft ware vu lne rabilit y and exte rn al and
in t er n al access to se nsit ive an d con fid ent ial in format ion . We have implemen t ed a pla n for
sa feg u a rdin g an d b a ckin g up t h e in format ion syst e ms. The act ivit ies in clu d e se parat ion of ou r
in format ion n et wor ks from t h e compu t e rize d process syst ems, physical prot ect ion of t h e compu ter
rooms an d t er min als and t rainin g of e mployee s. Howeve r, t h ere is no assu ra nce t hat t he Company
will su ccessfu lly a ccomplish it s g oals.
We c on d uct o p erat ions in I srael a nd th er efore o u r b u siness, fin an cial c o n dit ion an d re su lts of
o p e r at ions m ay be materially and adve rsely affecte d by politica l, econ omic an d military in stab ility
in I sr ael a nd it s r egion
Ou r h ead qu arters, some of ou r operat ion s, an d some of ou r min in g fa cilit ies are loca t ed in Isr ael
an d man y of ou r ke y e mployee s, d ire ct ors a nd officers are resid en ts of Isr ael. A ccordingly, polit ical,
econ omic and se cu rit y con d it ion s in I sr ael an d t h e su rr ou n d in g reg ion may d irect ly affe ct ou r
b u sin ess. Sin ce t h e est a b lish ment of Isr ael in 1948, a nu mb e r of armed con flict s h ave t a ken pla ce
b et ween I sra el an d it s Arab n eig hb or s, Hamas ( an Islamist milit ia a n d polit ica l g rou p in t h e Ga za
St rip) an d Hezb olla h ( an I slamist milit ia an d polit ical g rou p in Le b an on ). A ny h ost ilit ies in volvin g
Isr ael or t h e in t err uption or cu r t ailment of t rad e wit hin Isr ael or b et we en I sr ael an d it s t rading
part n ers cou ld mat eria lly an d ad ve rsely affect ou r b u sin ess, finan cial con d it ion an d resu lt s of
operat ion s and cou ld a lso make it more d ifficu lt for us to ra ise capit a l. Recen t polit ical u prisin g s,
social u n re st an d violen ce in variou s cou n tries in t h e Mid dle East a nd Nort h A frica, in clu d ing I srael’s
neig h b ors Egypt a nd Syria, are affectin g t he polit ical st ab ility of t h ose cou nt ries. T his in stabilit y may
lead to d et erioration of t he polit ical re lat ionsh ips t h at exist between Israe l and t hese coun tries and
ha s r aise d con cer ns reg ar d in g se cu rit y in t h e re g ion a n d t h e pot e n t ial for armed con flict . In
ad d it ion , Ir an ha s t hr eat en ed to at t ack Isra el an d is wid ely b elie ve d to be d e ve lopin g n u clear
wea pon s.
In ad d it ion , t h e assessmen t is t ha t Iran h as a st r on g in flu en ce amon g par ties h ost ile to I srael in a reas
t hat n eigh bor Israe l, su ch as the Syr ian gover nme nt , Hamas in Gaza an d Hez bollah in Le banon. Any
armed con flict s, t error ist act ivities or polit ical inst abilit y in the r eg ion cou ld materially an d adve rsely
affect ou r b u sin ess, finan cial con d it ion an d resu lt s of ope rat ion s. In a d d it ion , t he polit ical and
se cu rit y sit u at ion in Israel may r esu lt in pa rt ies wit h wh om we ha ve a greemen ts in volving
performan ce in I srael claimin g th at th ey are n ot oblig ate d to comply wit h t h eir u nd ertaking s under
33 ICL Group Limited
t hose ag r eemen ts pu rsu ant to force majeu r e provisions in su ch a gr eements. In ad d ition , b ecause
we are an Isr aeli Compan y, ou r sa les may be su b ject to econ omic b oycot t s or ot h er san ct ion s on
ou r prod u ct s.
O u r ope rat ion s may be d isru pted as a resu lt of t he ob lig at ion of I sr aeli citizens to perform milit ary
r e serve service
Ma ny I sra eli cit ize ns are ob ligated to per for m on e mon t h, a nd in some cases more, of an n u al milit ary
rese rve se rvice u n t il t h e ag e of 45 ( or old er, for reser vist s wit h certain occu pat ions) an d , in t he event
of a milit ar y con flict , ma y be called to act ive d u t y. A lt h oug h pe riod s of sig nifica n t call- u ps of milit ary
rese rvist s wh ich occu rr ed in t h e past in respon se to t errorist activit ies ha ve h ad no significan t impact
on ou r opera t ion s, it is possib le t h at milit ary rese rve d u t y call-ups will occu r in t h e fu t u re, which
mig ht d isrupt ou r ope ration s.
It may be d ifficult to en for ce a U.S. ju d gment a gain st us a nd ou r d irectors a nd officer s, in Israel or th e
U n it ed Sta tes, or to ser ve proce ss on ou r directors a nd o fficers
We are in corpor at ed u nd er I sraeli law. Ma ny of ou r d ir ect ors an d exe cu tive officers r esid e ou t side
t he Unit ed St at e s, an d most of ou r asse t s are locat e d ou t sid e t h e Un it e d St at es. Th ere fore, a
ju d g men t ob tained in t h e Un it ed Sta tes a gain st us or man y of ou r d ire ct ors a nd execu tive officers,
in clu d in g on e b a sed on t he civil liab ilit y provisions of t h e U.S. fed e ral secu rit ies laws, may n ot be
collect ib le in t h e Un it ed St ates an d ma y n ot be enforced by an Isr aeli cou rt. It also ma y be d ifficult
for an in vest or to effect se rvice of pr ocess on t h ese pe rson s in t he Un ited St ates or to a sse rt claims
u n d er t he U.S. secu rit ie s laws in orig ina l a ction s in st ituted in Isr ael.
T h e righ ts and re sponsibi lities as a s h arehold er are g over ned by I sraeli law wh ich may d iffe r in some
r e spects fr o m t he righ ts and res pons ibilit ies of sh areho lde rs of U.S. com pan ies
We are in corpor at ed u nd er Isr aeli la w. Th e rig ht s an d re spon sibilit ies of t he hold e rs of ou r ordinary
sh ares are g overn ed by ou r A rticle s of A ssocia t ion and Israeli la w. Th ese rig hts an d respon sib ilities
d iffer in some respect s from t h e rig h t s an d respon sib ilit ies of sh are hold ers in t ypical U.S.
corporat ion s. In part icu la r, a shareholder of an Isr aeli Compa n y h as a du t y to a ct in g ood faith
t oward t h e Compan y an d ot her sh arehold e rs an d to refrain from a b u sin g it s power in t h e Compa ny,
in clu d in g , a mon g ot her things, in vot in g at the gene ral mee ting of sh ar ehold ers on ma tte rs su ch as
amen d men t s to a compa ny’s a rt icles of a ssociat ion , in cr eases in a compan y’s au t horized sh are
capit al, me rg ers an d a cqu isition s an d in terested pa rty t ransa ction s re quiring sh arehold er a pproval.
In ad d it ion , a sh are hold er wh o knows t h at it posse sse s t h e power to d e t ermin e t h e ou t come of a
sh areh old er vot e or to appoin t or pr even t t h e appoin t me nt of a d ire ct or or executive office r in the
Compan y h as a d u t y of fairne ss towa rd th e Compa ny. There is limit e d case law a va ilab le to assist us
in u n d er st an ding th e implica t ion s of t hese provision s t h at govern shareholders’ a ct ion s.
Th ese provision s may be in t erpre t ed to impose ad d it ion al ob lig ation s a nd lia b ilit ie s on h old ers of
ou r ord in ar y sh ares t h at are not t ypically impose d on sh ar eh olders of U.S. corpor at ion s.
In lig ht of t h e Compan y’s list in g for t r ad in g on a st ock exch an g e in t h e Un it ed St at es, and
con sid erin g t h e fact t ha t ou r pare n t Compan y is su b ject on ly to t h e I sr aeli secu rit ie s law, we are
su b je ct , in cert ain aspects, to b ot h I sra eli law an d U.S. law, a fact wh ich may cau se us to fa ce b oth
report in g an d leg al con flict s.
34 ICL Group Limited
In recen t years we have se en a s ig nifi can t rise in t he f ilin g of c la ss actions in I sr ael ag ain st pu blic
C o m pan ies, in cluding d erivative act ions a gainst t h e Compa ny, its exe cut ives a nd B oard memb ers
In recen t years we h ave seen a sig n ifica nt rise in t he filin g of class a ct ion s and d er ivative actions in
Isr ael ag ain st compan ie s, e xecu tive s and B oard memb e rs. W hile t he vast major it y of su ch claims are
d ismisse d , compan ie s like us are for ced to in cr easin g ly in ve st resou rces, in clu d in g mon et ary
expen ses a nd in vest men t of mana geme nt a tt ention d ue to t h ese cla ims. Th is st at e of affairs cou ld
ad ver se ly affect t h e willin gn e ss of ou r e xecu t ives an d Boar d me mb e rs to make d ecision s wh ich
cou ld h ave b en efitted ou r b usin ess oper ation s. Su ch le gal action s cou ld also be taken wit h r espect
to t h e valid it y or r eason ab len ess of t he d ecision s of ou r B oar d of Dire ct ors.
Risks Relat ed to Our O rdinary Shares
We have on e key sha reh older wh o is ou r con trolling sha reholder. Th is con trollin g sharehold er may
i n f luence the m aking of d ecisions wit h wh ich ot he r sh are ho lders m ay d isagree
As at Decemb er 31, 2020, t he Isr ael Corpor at ion Lt d . ( “Isra el Corp.”) h old s t h e con t rollin g in t erest
in t h e Company.
Th e in t ere st s of Isr ael Corporat ion may d iffer from t h e in t erest s of ot h er sh ar eh old er s. I sra el
Cor porat ion exe rcises con t r ol ove r ou r operat ion s a nd b u sin ess st r at eg y a n d h as su fficient vot ing
power to con t rol ma n y mat t ers r equ ir ing a pprova l by ou r sh are hold ers, in clu din g:
• The composit ion of ou r B oard of Direct ors ( ot h er t h an ext e rnal d ire ctors, as d escr ib e d u n der
“It em 6 - Dire ct ors, Se n ior Man a gement a nd Employees— C. B oard Practices— Ext ern al Dire ct ors”);
• Me rg er s, a cqu isit ion s, d ivestit ur es or ot h er b usin ess comb in a tion s;
• Fu t u r e issu an ces of or d in ary sh ares or ot he r securities;
• Ame nd ment s to ou r A rt icles of A ssocia t ion , exclu d in g provision s of t he Art icle s of A ssociat ion
t hat we re dete rmin e d by virt ue of t he Specia l St at e Sh are; an d
• Divid en d d ist ribu tion policy.
In ad d it ion , t h is con ce n t ration of own ersh ip ma y d e lay, pr even t or d et er a cha n ge in con t rol, or
d eprive t h e in vestor of a possib le pre miu m for h is ord inary sh ares as part of a sa le of ou r Company.
More over , as a re su lt of t he Company’s con t r ol st ru ct ure , ou r shares may be su b ject to low
t rad ab ility, which may h inder th e sale a nd/or e xercise of ou r sh ares. F u rthe rmor e, I sr ael Corp. may
con d u ct mat eria l t ran sact ion s in ou r sh ar es, su ch as it s exist in g mar gin loans t h at are se cu red by
pled g es of I CL sh ar es, an d/or in their or gan iza tion al structu re, th at we will n ot be able to in flu ence
b u t t h at may h ave a materia l a d verse effect on ou r sh are price .
T h e e xiste nce of a Specia l St at e Share g ives t he State of I sra el veto power ove r tr ansfers of ce rta in
a s se t s and sh ar es ab ove cert ain th re sh olds, a nd m a y h ave an anti-takeo ver effect
Th e St at e of I srael hold s a Specia l St at e Sh are in ou r Compan y and in some of ou r Isra eli su b sid iar ies.
Th e Specia l St at e Share e nt it les t h e St at e of I srae l, amon g ot h er t h in gs, to r est rict t h e t ra nsfer of
cer t ain asset s and some acqu isit ion s of sh are s by a n y person th at wou ld become a h old e r of
specified amou n t s of ou r sh ar e capit a l. B ecau se t he Specia l St ate Sh are rest r icts t h e ab ilit y of a
sh areh old er to g ain con t rol of ou r Compa ny, t h e exist ence of t h e Specia l St at e Sh ar e may h ave an
an t i-t akeover effe ct a nd t h er efore d epre ss t h e price of ou r ord in ar y sh ar es. F u rt h ermore, t he
exist en ce of t h e Specia l St at e Share may pre ve nt us from realizin g an d d evelopin g b u sin e ss
opport u n it ies t ha t we may come across. To t he b est of t h e Compa ny’s kn owledg e, d u rin g t he second
ha lf of 2018, an in t er -ministe rial t eam was se t u p, h eaded by t he Min ist ry of Fin an ce, wh ose pu rpose
35 ICL Group Limited
is, amon g ot he r t h in g s, to re gula te t he aut hor ity an d su pervision in respect of t he Special St at e of
Isr ael Sh ar e, as well as r ed u ce t h e regu lat ory b u rde n. In J anu ar y 2019, t h e wor k of t h is t e am wa s
pu t on h old u n t il fu rt h er n ot ice d u e to th e d issolu t ion of t he Kn esse t an d la ck of per man ent
Gove rn me n t . As at t h e d a t e of t he r epor t , t h e Compa ny is u na b le to est imat e t h e implicat ion s of
t his pr ocess ove r t h e Compa ny, if an y, b u t it is possib le t hat t he in tr oduct ion of an a d dit ion al a rray
of reg u lat ory provision s, cou ple d wit h st rict en forcemen t , may in cr ease t h e u ncer t aint y in t he
ma na g emen t of compa n y operation s r elat ing to n at ural resou r ces in I srael a n d may h ave a material
ad ver se effect on ou r b usin ess, ou r fin ancia l con d ition and r esu lts of operat ions.
T h e mar ket pri ce of o u r o rdin ar y sh ar es is su bject to flu ctua tion , wh ich could result in su b stantia l
l o s ses f or ou r in ve stor s
Th e st ock ma rket in g en er al an d t h e market price of ou r ord in ary sh ar es, in par t icula r, are su bject
to flu ct u at ion , and ch anges in ou r sh ar e price may occu r u n rela ted to ou r ope ratin g pe rformance.
Th e mar ket price of ou r ord in ar y shares on t h e T ASE or NYSE ha s flu ct u at ed in t h e past , an d we
expect it will con t in u e to do so. T h e marke t price of our ord in ar y shares is an d will be su b ject to
se ve ral fact ors, in clu d ing :
• Expir at ion or t e rmin ation of lice nse s an d/or con cession s;
• Gen e ral st ock ma rket con dition s;
• De cision s by g ove rn me n t al entit ies t h at a ffe ct u s;
• Variat ion s in ou r an d ou r compet it ors’ result s of operation s;
• Ch an g es in earn ing s e stimat es or re commen dation s by securities a nalyst s; a nd
• Gen e ral market con d it ion s an d ot he r fact ors, in clu d in g fact or s unr elat ed to ou r ope rat ing
performan ce .
Th ese fact ors a nd a n y corr espon d in g pr ice flu ct u a tion s may mat e ria lly an d ad versely affect the
ma rket pr ice of ou r ord in ary sh ar es and re sult in su bstant ial losses for ou r in ve st ors.
If e qu ity r esea rch an alyst s issu e u n fav ora ble c omme ntary or cease pu blish ing repor ts ab ou t ou r
o r d in ary sh ares, t he price of ou r ord inary sh ares c ould d eclin e
Th e t r ad in g ma rket for ou r or d in ary sh are s r elie s in pa rt on t h e research an d r eport s t hat e qu ity
rese arch a n alyst s pu blish abou t us a nd ou r bu siness. T he price of ou r or din ary sh ar es cou ld de cline
if on e or more se cu rit ies a na lyst s d owng r ad e ou r ord in ar y sha res or if t hose ana lyst s issu e ot h er
u n favor ab le commen ta ry or ce ase pu blishin g r eports ab out us or ou r b usin ess.
Y o u m ay be d ilu ted by t he fu ture issu an ce of add ition al or din ary sh are s, among ot her rea son s, for
p u rposes of ca rrying ou t fut ure acquisition s, fin ancing needs, and a lso as a resu lt of ou r ince nt ive
a n d c ompen sati on p la ns
As at t he d at e of t h is A n n u al Report , we h ave a pproximat ely 180 million ILS 1 par va lu e
( appr oxima t ely $56 million ) sh ares a u t h orize d b u t u n issu ed . We ma y ch oose to r aise su b st an tial
equ it y capit a l in th e fu tur e in order : to acqu ire or inve st in busin esses, prod uct s or t echnolog ies and
ot h er st rategic relation ships a nd to fin ance un an ticipa ted workin g capit al requ irement s in order to
respon d to compet it ive pre ssu r es. T he issu an ce of an y ad d it ional or d ina ry sh ares in t h e fu t ure, or
an y secu r it ies t hat are exe rcisable for or con ve rt ib le in t o ou r ord in ar y sha res, will h ave a d ilu t ive
effect on ou r sh are hold er s as a con sequ en ce of t h e redu ction in th e percentage own ership.
36 ICL Group Limited
For example, as at t h e d a t e of t h e repor t , t here are a b ou t 27 million ou t st and ing opt ion s for ou r
ord in ar y sh ar es t hat wer e issu ed u n d er ou r in cen t ive and compe nsa t ion pla n . For fu rt her
in forma t ion , se e It em 6 - Directors, Se nior Mana gement and Employees— E. Sh are Ownership.
We ma y not be a b le to m a int ain ou r d ivid en d pa y men t
Th e Company's d ivid en d d istribu tion policy is t h at t he Company’s d ividend d istribut ion rate will be
up to 50% of t h e ann u a l a d just ed n et profit . In ad d ition , d ivid en ds will be pa id as d eclared by the
B oar d of Dir ect ors a nd may be d iscon t in u ed at a ny t ime. A ll d ecision s reg ard in g d ivid end
d ist r ib u tion s are mad e by t h e Board of Dire ct ors, wh ich con sid ers va riou s fa ct ors in clu d in g our
profit s, in vest men t plans, fin ancia l posit ion an d addit iona l factors as it de ems appr opriate. Dividend
paymen t s are n ot g u ara nteed a nd ou r B oa rd of Dir ect ors may d e cide, in it s exclu sive d iscretion, at
an y t ime a nd for wh atever re ason, n ot to pay divid en ds, to redu ce th e rate of divid en ds paid , to pay
a spe cial d ivid end , to mod ify t h e d ivide nd payou t policy or to ad opt a sh ar e b uyb ack pr og ram.
O u r ordin ar y shares are t raded on d iffere nt markets wh ich may re sult in price va riat ions
Ou r ord in ary sh ar es h ave b e en t rad ed on t h e T ASE sin ce 1992 and h ave b een list ed on t h e NY SE
sin ce Sept emb er 2014. T rad in g in ou r ord in ar y sh ares on t h ese mar ket s occu rs in d iffe rent
cu rr en cies ( U.S. d olla rs on t he NYSE and ILS on t h e T A SE) an d t akes pla ce at d iffere nt t imes ( resu lting
from d iffere nt t ime z on es, d iffe rent t r ading d ays and d iffe rent pu blic holid a ys in t h e Un it ed States
an d I sr ael). T h e tr ading prices of ou r ord in ary sh ares on t hese t wo markets may d iffer d ue to t h ese
an d ot he r fa ct ors. A n y d ecr ease in t h e price of ou r ord in ar y sh ar es on on e of t h ese markets could
cau se a d ecrease in t he t radin g price of ou r ord inar y shares on t h e ot h er market .
As a f ore ig n pr ivate issu er , we are pe rmit ted to follow cer tain h ome cou nt ry corporate g overn an ce
p r act ices in st ea d of appl icab le SEC an d NY SE requir ements, which may resu lt in le ss protection
t han is affor d ed to in ve stor s u n der rule s ap plicable to do mestic i ssuers
As a foreig n privat e issu er, we are permit ted to follow cert ain h ome cou nt ry corporate g overn ance
pract ice s in st e ad of t hose ot h erwise re qu ire d by t h e NY SE for d ome st ic issu ers. F or in st an ce , we
ha ve e lect ed to follow h ome cou n t ry pra ct ices in I sra el wit h re spect t o, amon g ot he r t h in g s,
composit ion an d fu n ction of t he A udit and F ina nce Commit tee and ot h er commit t ees of ou r B oard
of Direct ors a n d ce rta in g ene ral corpor ate g ove rnance matte rs. In addit ion , in certain in st an ces we
will follow ou r h ome cou n t ry law, in st ea d of NYSE ru les applicab le to d omestic issu e rs, wh ich requ ire
t hat we ob t ain sh are hold er appr oval for cert ain d ilutive even ts, su ch as an issu ance tha t will r esult
in a ch an g e of con t rol of ou r Compa ny, cert ain t ransa ction s ot her t ha n a pu b lic offerin g in volving
issu ances of a 20% or mor e in t er est in ou r Compa ny a n d cert ain acqu isition s of t h e st ock or assets
of an ot her compa ny. Followin g ou r home cou n t ry corpor at e g overna nce pr act ices as opposed to
t he requ irements th at wou ld ot herwise apply to a U.S. compan y listed on the NYSE may provid e less
prot ect ion t h an is affor d ed to in vest ors u n de r t he NYSE r ules applica b le to d ome st ic issu e rs.
In ad d it ion, as a fore ign privat e issu e r, we are exe mpt from t he rules a nd re gulation s u nde r the U.S.
Secu rit ie s Exchan ge A ct of 1934, as amen d ed ( th e “Excha n ge A ct”), re la t ed to t he fu rnish ing and
con t en t of proxy st at e ment s an d t he requ ir emen ts of Reg u lat ion FD ( Fa ir Disclosu re ), an d ou r
d ir ect ors, office rs a nd prin cipa l sh arehold ers are exe mpt fr om t h e report ing a nd sh ort -swin g pr ofit
recover y pr ovision s of Sect ion 16 of t he Exch an g e A ct . In add ition , we are n ot r equir ed u n der the
Exch ang e Act to file a nnual, qu a rt erly and cur rent re ports a n d fin an cial state me nts wit h the SEC as
fre qu ent ly or as pr ompt ly as d omest ic compan ie s wh ose secu rit ies are re g ist ered u nd er the
Exch ang e Act .
37 ICL Group Limited
T h e Compa ny h as a history of qu arterly flu ctua tion s in the resu lts of it s ope rations d ue to the sea sonal
n a t u re of s ome of it s prod ucts a n d it s d epen den ce on th e commodit ies ma rkets. We expect t hese
f l u ct uation s to con tin ue. Flu ctuation s in t he r esult s of ou r o pe rati ons ma y d isappoint in vest ors
a n d result in a d eclin e in o u r sh are pr ice
We ha ve experien ced , and expect to con tin ue to exper ien ce, flu ctu at ions in ou r qu ar terly results of
operat ion s. Ou r sales h ave h ist orica lly, an d le ss sig n ifica n t ly so over t he last t h re e ye ars, b een
st ron ge r in t he secon d and th ird qu arters of e ach yea r. Th is is d u e to t he mix of pr od u ct s we sell in
t hose qu art ers, as well as t h e mix of sales in d iffere n t cou n tr ies. I f, for an y re ason , ou r re ven ues in
t he secon d and third qu a rt ers a re below seasonal n orms, we may n ot be able to r ecover t hese sales
in su b sequ en t qu a rte rs an d ou r an n ual r esu lt s of oper at ion s may n ot meet expe ct at ion s. If t his
occu rs, t h e mar ket price of ou r ordin ary sh are s cou ld decline.
38 ICL Group Limited
Item 4 – INFORMATION ON THE COMPANY
A. HISTORY AND DEVELOPMENT OF THE COMPANY
Ou r leg al n ame is I CL Grou p Lt d . ( formerly I srael Chemicals Lt d .) an d ou r comme rcial n ame is I CL.
We are a pu b lic Compan y a nd operat e as a limit e d liab ilit y C ompa ny u n d e r t he laws of I srael. Our
reg ist er ed headqu arters is locat ed at Mille nnium Towe r, 23 A ran ha Street, P.O. B ox 20245, Tel A viv
61202, Isr ael. T h e t eleph on e n u mb er at ou r reg ist e red office is +972- 3-684-4400. O u r web site
ad d r ess is www.icl- g rou p.com. T h e re feren ce to ou r web sit e is in t en d e d to be an in act ive t extual
refere nce a nd t he in for ma tion on , or accessib le t hr oug h, ou r we b site is n ot in t e nded to be part of
t his A n nu a l Repor t.
ICL was est a b lish ed in I srael in 1968 as a g ove rn me nt- owned a n d - operat ed Company in Isr ael and
operat es as a limit ed liab ilit y Compa ny u n d e r t h e laws of Isr ael. In 1975, t he sh ar es of ce rt ain
companies ( in clu d in g , amon g ot h ers, ICL Dead Sea, ICL Rot em, Dea d Sea B romin e, B romine
Compou n d s and T ami) were t r an sferred to I CL. In 1992, followin g a d ecision of t h e I sr aeli
governmen t to priva t iz e I CL, t he St at e pu b lish ed it s t ender pr ospect us, 20% of t h e Compa ny's sh ares
wer e sold to t he pu b lic and it s sh ares we re r eg istered for t r adin g on t h e T el- Aviv St ock Excha nge.
Prior to ou r pu b lic sh are issu an ce, a Special St a t e Sh ar e in ou r C ompa ny a nd ou r main I sra eli
su b sid iar ies was issu ed to t he St a te of Isr ael ( for fu r th er d etails r eg ar din g t h e t er ms of t h e Special
St at e Sh ar e, see “I t em 10 - A d d it ion al I n for ma t ion— B. Memor an d u m, A rt icles of Associat ion and
Spe cial St at e Sh ar e”). In 1995, t h e St at e of Isr ael sold it s con t rollin g in t er est in t he Compa ny
( repre se ntin g approxima t ely 24.9% of ou r sh are s) to I srae l Corpor at ion Lt d ., a pu b licly t r aded
Compan y on t h e T A SE (ILCO ), wh ich was con trolle d at t ha t time by th e Eisen berg family. A ma jority
of t h e or d in ary sh ares h eld by t he st at e of Isr ael were sold d ur ing the followin g years. In 2000, the
St at e of I sra el cea sed to be a st akeh old er in t erms of h old in g an y of ou r ord in ar y sha res, b u t it
ret a in ed t h e Specia l St ate Sh are. In 1999, t h e Ofer Grou p a cqu ir ed th e Eisen b erg family’s sh ares in
Isr ael Corpor at ion . In Sept emb er 2014, we list ed ou r sh are s on t h e New York St ock Exch an ge, and
t hey are cu rrent ly t raded in T el Aviv an d in New Y ork.
As of De cemb e r 31, 2020, Isr ael Corpor at ion Lt d . h old s approxima t ely 44.9% of ou r ou t st a nding
ord in ar y sh ar es and appr oximate ly 45.85% of t h e sh arehold ers' vot ing rights.
Th e followin g is a list of sig nifica n t acqu isition s, d ivestitu res and join t ventures ove r t he last several
ye ars:
• In J an u ary 2021, th e C ompa ny comple t ed the acquisit ion of Ag ro Fe rtilaqu a Pa rt icipa ções S.A.,
on e of Br azil's lead in g specia lt y pla n t n ut rit ion compa nies, for a con sid era tion of $122 million
( b efore d e duct ion of F ertilaqu a's n et d eb t of $40 million ) .
• In May 2020, t h e Compa ny comple t ed t he sale of Hag esü d In t e rspice Gewü r zwe rke Gmb H,
in clu d in g related real-e state a sse ts, to Solin a C orporat e SA S. T he sa le 's con sid eration is a bout
$35 million , of wh ich ab ou t $9 million repre se n t a con t in ge nt con sid erat ion. The con t ingent
con sid erat ion will be receive d su bject to mee t ing a specific sales t a rg et for a su b se quent pe riod
of 12 mon t h s, e nd in g on J une 30, 2021.
• In F eb ru ary 2020, t he Company complet ed t he a cqu isit ion of Growe rs Hold ings, In c., an
in n ovat or in t h e field of pr ocess and data-drive n farmin g . F or further in formation se e "Item 5 –
Ope rat in g an d F in ancia l Review an d Prospe ct s – C. Research a n d De velopmen t , Pa t ents and
Lice nse s, et c. – Rese arch an d Developmen t".
39 ICL Group Limited
• In Ma rch 2018, t he Compan y complet e d th e sale t ransaction of t he fir e safety and oil ad dit ives
b u sin esse s, for a t ot a l con sid eration of $1,010 million, of which $953 million was in cash and
$57 million in t h e form of a lon g - t erm loan to a su b sidiar y of t he b uyer.
• In 2017, t h e Compa ny comple t ed t he sale of it s h old ing s in IDE T echnolog ies Lt d., con st ituting
50% of I DE’s sh are capit al.
For in format ion ab out ou r prin cipal capital expendit ures a nd divestit ures du rin g t he last th ree fiscal
ye ars, see “I t em 5 - Ope rat in g an d Fin an cial Re view an d Prospect s— B. Liqu id it y an d Ca pit al
Resou rces— Pr in cipal Capit al Expen dit ures an d Divest itu res”.
B. BUSINESS OVERVIEW
Compan y O ve rview
ICL Grou p Lt d . is a lead in g g loba l specia lty min erals a nd che mica ls Company t ha t cr eates impa ctful
solu t ion s for h u man ity’s su sta ina bilit y cha lleng es in glob al food , a gricult ure, a nd ind ustr ial markets.
ICL lever ag es it s u niqu e br omin e, pot ash and ph osph ate r esources, it s profe ssional employees, and
it s st ron g focu s on R& D a nd t echn olog ical in n ovat ion to d r ive g rowt h a cross it s en d markets. Our
operat ion s are org an ized u n d er fou r se g ment s: I n d ustr ial Pr od u cts ( B romin e), Pot ash , Phosph ate
Solu t ion s a nd I n nova t ive Ag Solu tion s.
Ou r prin cipal a sse t s in clu de :
• Access to on e of t h e world ’s riche st , lon g est-life and lowest -cost sou rces of pot a sh a nd b romine
( t h e Dead Sea).
• Pot a sh min e a n d proce ssin g facilit ies in Spain . T he Company is in t h e proce ss of con solid ating
it s pot a sh ope rat ion s in Spain in t o on e sit e.
• B romin e compou n d s proce ssin g fa cilit ies located in I srael, t he Nethe rland s and Ch in a.
• A u n iqu e in t egr at ed ph osphat e valu e chain , from ph osph ate r ock min es in Isr ael and in China
to ou r valu e -a dde d d ownst ream prod uct s in I srae l, Europe , th e Un ited Sta tes, B ra zil and China.
Ou r specialt y ph ospha t es se rve t h e food ind u st ry by provid in g t extu re an d st a b ility solu t ions
to t h e mea t , meat alt erna tive s, pou ltry, sea food , dairy a nd ba ker y mar ket s an d many in du strial
ma rket s su ch as met al t r eat me nt, wat er t re at ment , ora l care, ca rb onat ed d rin ks, asphalt
mod ificat ion , pa in t s and coa tings a n d mor e.
• Polysu lph at e® resou rces in t he Unit ed Kin gd om.
• Prod u ct ion of t a ilor - made, h igh ly e ffe ctive specialty fer tilizers offe rin g b ot h impr oved va lue to
t he gr ower a nd essen t ial n u t rition for pla nt d evelopmen t , opt imiza t ion of crop yie ld s and
red u ced environ men tal impa ct .
• A focu se d an d h ighly experie nced t eam of t echn ical exper ts d eve lopin g produ ction proce sses,
new a pplica t ion s, formu la t ion s and pr od ucts for ou r ag ricu ltural and in d ustrial ma rket s.
• St ron g cr op n u t rit ion sales and ma rketin g in fr astru ctur e, which opt imizes d ist r ib ution ch annels
of commod it y, specia lt y an d semi- specia lt y fe rt ilize rs by achievin g commer cial excellence,
in cr easin g efficie ncy of it s g lob a l ope rat ions and b ette r lever ag ing reg ion -specific kn owledge,
ag ron omic and R& D capabilit ie s, log ist ical a sse ts and cust omer re lation ships.
40 ICL Group Limited
• Rese arch a n d De ve lopmen t : Lever ag ing it s proximit y to t h e g lob a lly le ad in g h ig h -tech and
ag ri- t ech e co-system in Israel, as well as vast ag ron omy and che mist ry knowledg e accumulated
over decad es, I CL h as d eveloped an ext e nsive glob al R& D in frast r u cture, wit h 250
kn owled ge ab le an d h ig h ly exper ienced e mployee s an d 20 R& D ce nt ers a rou n d t he glob al,
yield in g 750 gr an t ed pat ents in 250 pat ent families. I CL's R&D su pport s t h e d e ve lopmen t of
new, innovat ive prod u cts, applicat ion s an d formu la tion s for ea ch of t he Compan y's ope rating
se g ment s, t h rou g h in t ern al research, employee id eat ion an d collab ora t ive rese arch with
ext ern al t hird par ties.
• An e xt en sive g lob al log ist ics a nd d istribu tion n etwork wit h oper at ions in ove r 30 cou n t ries.
In t h e yea r en d e d Decemb er 31, 2020, we g ene rated t ot al sales of $5,043 million , ope rat in g in come
of $202 million , ad ju st ed opera t in g in come of $509 million , n et in come a t t rib ut able to t he
sh areh old er s of t he Compa ny of $11 million an d ad ju st ed n et in come a t t rib u ta ble to t he
sh areh old er s of t h e Compan y of $258 million . See "I t em 5 – Ope rat in g an d Fin an cial Re view and
Prospect s – A. Opera t in g Results – Resu lt s of O per ation s".
Sales of t h e Ind u st rial Prod u ct s se g ment a mou n t ed to $1,255 million an d oper at in g profit
at t r ib ut ab le to t h e seg men t a mou n ted to $303 million , sales of t h e Pot ash seg men t amou n ted to
$1,346 million an d oper at in g profit at trib utable to t he segment amou nt ed to $120 million , sa le s of
t he Phosph at e Solu t ion s segment a mou n ted to $1,948 million an d oper at ing pr ofit a t t rib utable to
t he seg men t a mou nt ed to $66 million , and sa le s of t h e I nn ovative Ag Solu tion s segme n t amounted
to $731 million an d ope rat ing profit attr ibut ab le to t he se g men t amou nt ed to $40 million .
For a b r eakd own of sales an d a g eog raph ic ma rket by seg men t s, se e “I t em 5 - Ope rat in g and
Fin a ncia l Review an d Prospect s— A. O peratin g Resu lts– Segme nt I nfor ma tion ”.
Ma rket s and I ndustries
G e n eral
ICL's in t e grat ed b u sin ess mod e l is st ru ct u red arou n d t h re e min er als – Bromin e pot a sh and
ph osph at e. T h ese min erals are t h e main raw ma t erials for most of th e valu e -a d ded d own st ream
prod u ct s in t he Compa ny’s port folio. T he Compan y’s ope ration s are organ ized u nde r four repor ting
se g ment s: I n d ustr ial Pr od ucts ( B romin e), Pot ash, Phosph ate Solu t ion s and I nn ova tive Ag Solu tions
( IA S), wit h t h ree of t he fou r segmen ts repr esent ing a spe cific valu e ch ain. In t he first th ree segme nts,
ICL b e nefit s fr om a lead ership posit ion : eit her in te rms of mar ket sh are or cost compe t it iven ess.
Th e In d u st rial Prod u ct s seg me n t primar ily oper at es t he b r omine va lu e chain , wh ich in clu d es
elemen t al b r omin e an d b romin e compou nd s for var iou s in d u st rial applica t ion s, as well as se ve ral
complemen t ar y b u sin esses, main ly ph osphorou s b a sed flame ret ar d ants an d a d d ition al Dea d Sea
min era ls for t h e ph arma, food , oil & g as a nd de-icin g in d ustr ies.
Th e Pot ash Seg men t opera t es t h e Company’s pot ash va lu e ch ain a n d in clu d e s primarily pot ash
fer t iliz ers, as we ll as Polysu lph at e ® - based fer t ilizer s. T h is seg me n t also pr od u ces and mar kets
ma gn e siu m - a b yprod u ct of pot ash prod uction .
Th e Ph osph at e Solu t ion s segmen t is most ly b ase d on ICL's phospha t e valu e cha in . It in clu d es
specia lt y phosph at e salt s an d acid s for variou s in d u st r ial applicat ion s, as well as commod it y
ph osph at es wh ich are u sed most ly as fertilizers.
41 ICL Group Limited
Th e fou rt h segmen t , I A S, cu rre ntly in clu d es t he specia lt y fe rt ilize rs b u sin e ss. I CL is focu se d on
expan d in g a n d st r en g th en ing it s I n novat ive Ag Solu t ion s offerin g s, by maximiz in g it s exist ing
capab ilit ies an d agronomic e xper t ise . In ad dition , t he Compa ny wou ld like to e xpand and dive rsify
glob ally t hr ou gh M& A, su ch as th e J an uary 2021 acqu isition of Fertilá qu a, a B ra zilian specialty crop
nu t rit ion compa ny.
I n d ust rial M a rke ts
ICL’s I n d u st rial Prod u cts segmen t an d I CL's spe cialt y ph osph at e s b u sin ess serve va riou s in d u st rial
ma rket s.
In d u st rial Pr od ucts
B romin e
is a me mb e r of t he halog en family an d is fou n d n atu ra lly in se awa ter, u n derg rou nd brine
d eposit s and ot h er wa t er r eser voir s, su ch as t he Dea d Se a. B romin e con cen tra tion a n d t he method
of ext r act ion va ries d epen din g u pon t he n at u re of it s sou r ce. T h e lowe r th e con cen t r at ion of
b romin e in t he b rin es, t h e more d ifficu lt a nd expen sive it is to ext ract. T he De ad Sea, wh ich spans
b et ween I srael an d J ord an , is t h e world ’s pre mier sou rce of b romin e, and accou n t s for ab ou t h alf
of t h e g lob al su pply. Th e Dea d Sea is t h e most compet it ive sou rce of b romin e as it h as t h e h ig hest
con cen t r ation . A s a r esu lt, t he least amou n t of wa ter mu st be extracted and evapor ate d to prod uce
b romin e, which min imize s en ergy cost s.
42 ICL Group Limited
ICL's b romin e solu t ion s are emb ed d ed in n u merou s prod u ct s, makin g con su mer g ood s sa fer a nd
in d u st r ial prod u ction more efficien t a nd su st ain ab le. T he la rg est comme rcial u se of bromin e is in
flame re t ard an ts, wh ich are u se d by t h e electronics a nd compon ent s, a u tomot ive , b u ild ing and
con st r u ct ion , fu rnitu re, a nd t extiles en d-mar ket s. B romin e and it s d er ivat ives are also u sed in various
ot h er in d u st ries, in clu d in g ru b ber pr od u ct ion , oil an d g as d rillin g , wat er pu r ificat ion , an d in t he
ph armaceu t ica l and food in d ust ries.
De mand for t h e prod u cts man u fact ured by ICL's I n du str ial Prod u cts seg ment is d r iven by popu lat ion
growt h , in creased st and ards of livin g , hig her en viron mental a nd sa fet y a war eness an d in cre ased
focu s on cost effect ive in d u st rial prod u ct ion . In creased re gu lat ion and en vir on men ta l aware ness
also dr ive d emand for polymer ic a n d react ive b romin e an d ph osphoru s-based flame re t ard ants,
wh ich are con sid ere d mor e en vir on men t ally frie n d ly. I CL e st imat e s b romin e d eman d is r elat ively
st ab le an d fin ds mar ket g rowt h is primar ily lin ked to g lob al popu lat ion g rowt h.
On t h e su pply sid e, Ch in ese pr od u cers have sig nifica ntly d e creased t he ir bromin e prod uction over
t he pa st few ye ars d u e to resour ce d eple tion , in cre ased en vironme n tal-r elated regu lat ory pressure
an d t h e red uce d availab ility of la n d for b r omin e prod u ct ion . Th is, comb in ed wit h a short age of
econ omically viab le b r omine re sou r ces g lob ally, h as re su lted in price in cr ease s d ue to t ig ht su pply
an d d emand.
Specia lt y Ph osphat e s
ICL’s specialt y phospha t es b u sin ess is cen t er ed arou n d t h e Compan y's vert ical in t eg r at ion in to
ph osph at e rock a nd fer t ilizer -g rade phosph oric a cid , a lso kn own as g re en ph osph or ic acid , which
goes t h rou g h a ch emical process to b ecome pu rified ph osphoric acid, also r efe rred to as wh ite
ph osph oric acid ( W PA). As part of it s valu e -a d d pr oposit ion , I CL pr od u ces a nd markets pu rified acids
an d ph osph at e salts in ad dit ion to commod it y ph ospha t es.
In t he food in d u st r y, ph osph at e salt s are u sed as fu nct ion al food ing re d ients an d ph osph ate
ad d it ive s, provid in g text u re a nd st a b ilit y solu t ion s for t h e proce sse d meat , pou lt ry & se afood
in d u st r ies, meat altern at ives, d air y, b everage an d b aked g ood s. On t he in du strial sid e, I CL's specialty
ph osph at es are fou n d in wa ter a nd meta l t r eatment su pplies, clean ing a nd con struction mat erials,
cola b everag es, or al ca re, pa in ts a nd coatin gs, and more.
As par t of it s food spe cialt ie s b u sin ess, I CL d eveloped it s pr opriet a ry ROVITA RIS® a lt erna tive pr ot ein
t echn olog y for the me at alt ernatives market. By u sin g ROVI TARIS® t echnolog y, food man u facturers
can crea t e pla nt- ba sed mea t altern at ives, which a re virtually in dist ing uishab le from t heir t radit ional
me at cou n t erpa rts an d are a ller ge n fr ee.
Accord in g to ICL's est imat es, t h e Company ha s a lead in g posit ion in specia lt y ph osph at es in Eu rope,
Nor t h A me rica a n d La t in A merica wit h appr oxima t ely 24% market sh are in t ot a l. De mand for
pu rified ph osph oric acid - a key raw ma t erial for wat er solu b le fert iliz ers - is expect ed to con t inue
to g row, d riven by ra pid growt h in fru it & vege t ab le con su mpt ion an d ch an g ing a gricu ltural
prod u ct ion syst ems. Similarly, ph osph at e salts u se d in proce sse d mea ts, ch ee ses an d b akin g g oods,
ha ve seen st r on g con su mpt ion g rowth in de velopin g cou n tr ies.
Con su mer d eman d for d ifferen t food pr od u ct s has chan ged d ramat ically over t h e last sever al
d ecad es, d r iven by in creased income per capit a, d emog raph ic sh ift s an d lifest yle cha nges. Lon ger
workin g hou rs, ch ang ing family st ru cture s, in cre ased aware ness of n u trit ion and he alth issu es and
access to a b road e r variet y of food pr od u ct s, h ave resu lt ed in gr owin g d eman d for more
sophist icat ed , prot ein - en rich ed, u n pr oce ssed ( “clean la b el”) an d n on -a llerg en ic ( “free fr om”) food
prod u ct s wit h lon ge r sh elf lives an d improve d flavor , t e xt u re an d appearance. An in cr easin gly
lon g er su pply ch ain an d con su mer awa reness of food wa st e also d r ives t h e d eman d for lon ger
43 ICL Group Limited
sh elf- life an d food st ab ilit y. T he se t ren d s d rive lon g -t erm d eman d for food ad d it ive s, su ch as
ph osph at e d erivat ives a nd ph osph at e an d pr ot ein formu la tion s for t h e processe d me at , b ake ry,
d airy an d b everages in dust ries.
A g ri cultu re Ma rkets
Fert ilizers
ICL's pot ash & ph osph at e commod it y, Fe rt ilize rplu S an d spe cialt y fe rt ilizers bu sin esses se rve
ag ricu lt u re mar ket s worldwid e.
Fer t iliz ers se rve an impor t ant role in g lob al agricu lture by pr ovid in g vit al n utrients t h at help in cre ase
b ot h t h e yield and th e qua lity of crops. Nit rog en , phosph oru s an d pot assiu m ( N, P an d K) con st itute
t he t h ree ma jor nu trien ts requ ired for pla nt growt h. T here are no artificia l su bstit utes for pot assium
an d ph osph or ou s. A lt houg h t he se n ut rie nt s are na tu ra lly fou nd in soil, t h ey are d e pleted over time
by farmin g , wh ich cou ld le ad to d eclin in g crop yie ld s a nd lan d prod u ct ivit y. To replen ish t hese
nu t rien ts, fa rmers mu st a pply fertilizers.
Each of t hese t h re e n u tr ien ts pla ys a d iffere nt role in pla nt d evelopmen t an d h elps crops a ch ieve
t heir growt h pot e ntial. Pot assiu m a nd ph osph or us a re vit al for ph ysiolog ical processes of t h e plant,
in clu d in g st ren gt he nin g cer eal st alks, st imu lat in g root d e ve lopmen t , leaf an d fr u it h ealt h , and
accelerat ing t h e growt h rat e of crops. Pot assiu m also e nh ances a pla nt ’s ab ilit y to wit hst and
d rou g ht an d cold , improve s t he efficien t u se of nit rog e n an d ot her n u tr ien ts n ecessar y for pla nt
d evelopmen t , and impr oves t he d u rab ilit y of a g ricu lt u ral prod u cts in st ora g e an d t ran spor tation,
t hereb y prolon g ing th e sh elf life of prod u cts.
In t h e sh ort t erm, d emand for fe rt ilizers is volat ile a nd season al, an d is a ffect ed by fact ors su ch as
wea t h er in t h e world ’s ke y agr icu lt ural g rowin g reg ion s, flu ct u a t ion s in plant in g ma in crops,
ag ricu lt u ral in pu t cost s, ag ricu lt ural prod u ct prices a n d d evelopmen t s in b iot ech n olog y. Some of
t hese fa ct ors are in flu ence d by su b sid ie s an d lin es of cred it g ran ted to farme rs or to prod u ce rs of
ag ricu lt u re in pu t s in va riou s cou n t ries, an d by en vir on men t al r eg ulation s. In ad d ition , cu rrency
excha ng e rates, leg islation and in tern at ion al t rad e policies h ave an impact on t h e su pply, d emand
an d level of con su mpt ion of fer t ilizers world wide. Ne ve rtheless, t he common per ception is t hat the
policy of most cou nt rie s is to ensu r e an ord erly an d h ig h-qua lity su pply of food to t h e popu la t ion
an d to t h is e nd , to e ncoura ge ag ricu ltu ral produ ction . T he refor e, ICL e xpects th e lon g -t er m g rowth
t ren d of t h e fertilizers marke t to be maint ain ed .
Glob a l fert iliz er d emand is also d riven by t he su pply/ d emand b ala nce in g rains an d ot h er agriculture
prod u ct s ma rket s, which impact s t heir prices. Su pply of ag ricu lt u r e prod u ct s is in flu en ced by
wea t h er, pla n ted ar eas an d in pu t u sage , wh ile d ema nd is pr imar ily in flu enced by popu lat ion growth
an d d iet a ry ch ang es in t he d evelopin g world:
Population and Income Growth per Capita.
Hist or ically, g rowt h in fer tilizer con su mpt ion g lob ally has
b een closely cor relat e d wit h growth in t h e world ’s popu lation , wh ich is e xpect ed to rea ch 7.6 b illion
in 2020 an d 9.1 b illion by 2050, accor d in g to t he FA O ( Food an d A g ricu ltu re Orga niz ation of the
UN). Cu rren tly, d e ve lope d cou n tries u se fertilizer s mor e in tensive ly t han developin g cou n trie s and,
t herefore, pr od u ce crops at mu ch hig her yie ld s. Econ omic g rowt h in emer g in g market s su pports
food d e ma nd an d t h us fert ilizer u se. In ad dition , growt h in in come per capit a in d evelopin g markets
resu lt s in a sh ift to more prot ein -rich diets th rou gh hig her meat con sumpt ion , wh ich requ ires larger
qu a nt it ies of g ra in for t he ir g rowt h, t hu s lea din g to an in creased d emand for se eds u se d in a nimal
fee d . A ccor d in g t o est imat es pu b lish ed by t h e I MF ( Intern at ion al Mon et ary F u nd), GDP per capita
44 ICL Group Limited
in emer g in g market s an d d evelopin g econ omies is expect ed to g row by 6.3% and 5.0% in 2021 and
2022, respect ively.
Declining Arable Land per Capita.
As t he wor ld ’s popu lat ion g rows, ma in ly in cit ies, farmlan d per
capit a d e cre ases an d mor e food prod u ct ion is r equ ir ed from each acre of far mlan d . T his, in t u rn,
requ ires in cr ease d yie ld per plan t ed area. A ccord in g to t h e FAO, t h e a mou n t of arab le lan d per
capit a is expect ed to d ecrease fr om 0.22 h ect are s per per son to 0.18 h ect ares per per son b et ween
2020 an d 2050. Effect ive ly, n ew a rab le lan d is a va ilab le on ly in limit e d qu a nt it ies, an d is
con cen t r ate d main ly in B razil. Therefore, t h e on ly viab le pat h to in crease cr op pr od u ction is t h rough
a yie ld in crease in d evelopin g cou ntr ie s, main ly in Ch ina , I nd ia, Ru ssia, A frica an d Cent ral A merica,
by opt imizin g t h e u se of fe rt ilizers ( especia lly improvin g t h e b ala nce in t h e u se of pot a sh , wh ich is
u n d eru tilized versu s t h e u se of nit rog e n fert iliz ers), t og et he r wit h wa t er a va ilab ilit y a nd b etter
se ed s. Accord in g to t h e FA O, world crop prod u ct ion will in crea se by 18.1% b et ween 2020 and
2050, wh ile pra ct ica lly all of t h e g rowt h is expect ed to be at trib uted to in crease in yie lds.
Grain St ock-to-Use Ratio
. As illu strated by the cha rt below, st artin g from t h e ye ar 2000 a nd unt il the
2012/ 3 ag ricu lt u r e se ason , pressu re on food d eman d an d u n favorable wea ther in t he ma in g rowing
areas re su lt e d in low levels of t he g rain st ock- to-use ratio (a met ric in d ex of t h e level of carryover
st ock). Sin ce t h en , se veral yea rs of favorable weath er led to a trend of in crea sing yields, re sulting in
an in crease in t h e grain st ock- to- use r at io. An in cr ease in t h e g rain st ock- to-u se rat io ge n era lly
in d icat es t h at g rain pr ices may d e clin e ( due to h igher g ra in supply) an d vice versa.
Du r in g 2020 soyb ea n, corn and wh eat price s in crea se d by 31.2% , 12.3% an d 18.5% respect ively,
wh ile rice price d ecreased by 3.5% . T hese price increases occu rred durin g t he COVID-19 pan de mic,
lead in g cou n t ries to have in cr eased con cerns rega rd ing food se cu rity for t h eir people, wh ile in
Chin a t h is was b oost ed by a recovery from t h e A frica n swin e fever. Good agr icultu ra l fu ndamentals
su ppor t ed t his, ma in ly in B raz il, e xpr essed as h ig h b ar t er rat ios, lea d in g to a re cord h igh soyb ean
export , b u t also in I n d ia and in t h e US. It sh ou ld be note d t h at d ur in g t h e mid d le of t h is yea r rice
price s ju mped to t h eir hig he st levels in t he la st t we lve ye ars followin g prod u ction r edu ction in some
sou t h A sia n cou n t ries, lea d in g t h em to b a n it s export . W A SDE re port pu b lish ed by t h e USDA in
Feb r u ary 2021 fu rt h er su ppor t t h e ab ove, while sh owin g a d e cre ase in t he expect ed r at io of t he
glob al in ven t ories of g rain s to an n u al con su mpt ion , to 29.3% for t h e 2020/ 21 agr icu lt u re ye ar,
compar ed to 30.4% for t h e 2019/ 20 a g ricult ure yea r, and 30.6% for t he 2018/ 19 a gricult ure yea r.
45 ICL Group Limited
S p e cialty Agr icult ure
Spe cialt y fe rt ilize r mar ket s are g rowin g fast er t h an t he mar kets for con vention al fertilizers an d are
est ima t ed to be growin g at a CA GR of 5% to 7% from 2020 to 2025, depen d in g on t he ma rket
se g ment ( Lu clnte l, 2021). F armer s u se specialty fertilizer s t hat are cu stomized to mee t t h e n eeds of
specific crops, soil t ypes a nd climat es, to achieve a mor e efficie nt an d e ffect ive fertilizat ion and to
ma ximiz e yie ld a nd qu a lit y. Th e specialt y fer t ilizer s allow mor e pr ecise a pplica t ion of th e crit ical
fou n d a t ion s for d e ve lopmen t of t h e plan t ( ph osph or u s acid , pot assiu m an d nit r og en ) and
micr o- n u t rient s. Specia lt y fe rt ilize rs are g ene rally u sed for specialt y cr ops ( su ch as fru it s a nd
ve get ab les, greenhou ses an d h or t icultu re ) b u t are also e xpa nd in g in t o u sa ge for large r specialty
fie ld crops. In crea se in t he d eman d for food is expect ed to d rive an in crease in t he u se of specia lty
fer t iliz ers. T hese fertilizer s in clude, amon g oth ers, en hanced efficie ncy fertilizers su ch as con trolled
relea se fe rt ilize rs ( CRF), wh ich a llow for precision in the release of n u trien ts ove r time, an d d elayed
or slow r elease fert ilizers ( SRF), wh ich allow for a very slow r elease of nu t rient s ( n itrogen and
pot assiu m on ly), liqu id fert iliz ers in t egr ate d in ir rig ation syst e ms a nd in h erbicid es and fu lly water
solu b le fert ilize rs, which are most common ly u sed for fert iliz at ion by mea n s of d r ip irrig ation syst ems
an d foliar spr ayin g .
Th e e xpect ed ma rke t g rowth is su pport ed by t h e followin g g lob a l trends:
Th e n ee d for an in crease in yield and crop qu a lit y
En h an ced Efficie nt F ertilizer s, which in clud e con tr olle d r elease fer tilize rs ( CRF), in crease th e qu ality
an d yie ld of crops t h rou g h a mor e efficie n t cr op u pt a ke of t h e n u trients. Man y spe cialt y- fer tilizers
fie ld t rials in specific g r owin g reg ion s h ave already d emonstrated t he b en efit s of u sin g ne w fertilizer
t echn olog ie s. T h e En hanced Efficiency Fe rtilize rs cate gor y is ra pid ly g rowin g g lob ally.
Regu la t ory pr essu re and envir onme n tal tr ends
En viron me nt al re gu lation s impose r est rict ion s on th e level of n u t r ient u sag e. Th is resu lt s in a
movemen t t oward s more efficient n utrient solu tion s, su ch as Cont rolle d Rele ase Fertilizers ( CRFs) or
W at er Solu b le Fertilizers.
Chin a’s Ze ro Growt h F ert ilizers 2020 is on e exa mple of su ch a re g u lation . In or d er to a ch ie ve the
goal of a zer o in cre ase in fert ilizer con su mpt ion by 2020, Ch in a is promot in g new fert iliz at ion
t echn olog ie s in clu d in g con t rolled relea se fert ilizers an d fe rt ig at ion, among ot h er in it iat ives.
Anot h er e xample is t h e EU Nit rat e Direct ive , wh ich se ts a limit on t h e amou n t of n it ra tes fou nd in
t he wa t er su pply. Specialt y Fertiliz ers, su ch as CRFs, ca n opt imize t h e availabilit y of n it rogen to the
crop, t h ereby r edu cing nit rate levels.
New Gr ower Pr act ice s
Growe r pr act ices have a su b st ant ial impa ct on t h e g rowt h of t he Spe cialt y Fert ilizer s ma rket.
Fer t ig ation u sa ge is g rowin g sin ce applyin g fertilizers via fertigat ion syst ems is mu ch mor e efficient
wh en u sing specialt y fe rt ilizers, t h u s in cr easin g t h e d eman d for solu b le fer t ilizer s su ch as W at e r-
Solu b le NPKs.
Th e on g oin g impr ovement s in agricult ur al t echn olog y h ave result ed in an in cre ase in t he u sag e of
d rip irr ig at ion an d an in crease in d ema nd for liqu id and wa t er -solu ble fe rtilizers.
All of th e ab ove are expect ed to con t rib u t e to a h ig h er lon g -t erm d e mand for spe cialt y fert ilizer
solu t ion s.
46 ICL Group Limited
ICL's Competitive Strengths
ICL at t rib utes it s b usin ess st r en gth to t he followin g compe t itive adva ntag es:
• U n iqu e por tfol io of min era l a sse ts. ICL b en efit s from acce ss to t h e De ad Sea - on e of t h e world’s
rich est , lon g est - life an d lowe st - cost resou rces of pot a sh and b romin e. ICL’s access to t h ese
resou rces is b ased on an exclu sive con ce ssion from t h e St ate of I srae l for ext raction of min erals
from t he De ad Se a. ICL also h old s licen ses to min e pot ash an d sa lt s from un d er g rou nd min es
wit h vast resou rces in Spain . I CL is t he on ly g lob a l prod u cer of polyh alit e, a min er al u se d as
fer t iliz er a nd con sist ing pot assiu m, Su lphur, ca lcium a nd mag nesium. In a ddit ion , I CL h as a ccess
to ph ospha t e r ock in t h e Ne g ev Desert b ased on min in g licen ses from t h e St ate of I srae l a nd it
hold s a lice nse for min in g ph osphat es in Chin a. A cce ss to t h ese asset s provid es I CL wit h a
con sist en t , r eliab le su pply of raw mat e ria ls, allowin g for large scale -prod u ction a nd su ppor ting
ICL’s in t eg ra ted valu e ch ain of spe cia lt y, valu e a dded prod uct s.
D e ad S ea in I sr ael: I CL’s pot ash an d b romin e prod uct ion facilit ies at t he Dead Sea enjoy lower
prod u ct ion cost s compa red to min ing pot ash fr om u n derg rou nd d eposit s or extract ing bromine
from le ss con cen t rat ed sou rces. This is at t r ib u ted to t h e hig h con cen t ration a nd virt u a lly
u n limit ed su pply of min erals in t he De ad Se a an d to t h e u n iqu e solar e va porat ion prod u ct ion
proce ss wh ich is less e ne rg y int en sive. F u rt hermore, t h e Dead Sea ’s h ot a nd d ry clima t e a llows
ICL to st ore ou t doors ve ry la rge a mou nts of pot a sh (exceedin g annu al pr od uct ion) at a low cost.
Th is a d van t age en a b les ICL to ope rat e it s pot ash facilit ie s at fu ll prod u ct ion ca pacit y d espite
period ic flu ct u ation s in d e mand , a nd to rea ct fast er in per iod s of h igher d emand. In ad d ition,
ICL b e nefit s from lower t ran spor tation an d log ist ics costs compa red to it s compe tit ors and faster
t ime to mar ket d u e to t h e g eog raphic proximit y of it s facilit ie s in I srae l to se aport s an d d u e to
Isr ael’s g eog raph ic posit ion in g vis-à -vis it s main ge og raph ical mar ket s (e specia lly t he
fast -g rowin g markets of In d ia, Ch ina an d B ra zil). W hile I CL b en efit s from t h ese a d va n t ag es, it
in cu r s in fr ast ructu re -r elated cost s in con n ect ion wit h h arvest in g salt fr om Pon d 5. F or fu r t her
in format ion , see “I t em 4 - I n format ion on t h e Compan y— D. Propert y, Pla nt a n d Equ ipmen t—
Min er al Ext r act ion and Min in g Opera tion s”.
U n it ed K ing dom and Spa in min eral a sse ts: In ad dition to it s ope rat ion s in Israel, ICL min e s pot ash
in Spain an d Polysu lph at e in t h e Un it ed Kin gd om. Th e g eog ra ph ical proximit y to Eu rope, t he
primary mar ket of t h ese asse t s, pr ovid es I CL wit h log ist ica l a d va n t ag es r eflect ed in lower
t ran spor t ation cost s, fa st er t ime-to-mar ket and h igher net -ba ck price s. In Spain , I CL is prog ressing
wit h it s proje ct to con solid a te th e t wo exist ing min es a nd proce ssing facilitie s in t o on e complex
wh ich ope rat e s a ramp in st ead of a sh aft , t h u s aimin g to in cre ase t h e mine’s capacit y a nd
con t rib u tin g to lower cost s. Th e excavat ion of t h e acce ss r amp wa s complet ed in t he fou rth
qu a rt e r of 2020, an d full ope ration s are expect ed to comme nce d uring the first half of 2021. The
proje ct a lso con sist s of expan d in g t h e ab ove-men tion ed proce ssin g facilit y’s capacit y, log ist ics
ad ju st men ts a nd improvemen t s as well as t he const r u ct ion of a n ew t er min al in t h e Port of
B arcelon a wh ich was complet e d in ea rly 2020. In t h e UK, t h e Company is rampin g up t he
prod u ct ion of Polysu lph at e,
a u n iqu e min e ral con t ain in g fou r n u t rien ts ( pot assiu m, su lphur,
calciu m an d mag n esiu m) which can be u sed as a na t u ral fert ilizer an d provid e s a ve ry cost -
effect ive solu t ion , as it s pr od u ction d oes n ot requ ire che mica l proce ssin g.
I n t egrat ed p h osphat e va lu e ch ain : I CL’s access to ph osph at e r ock in t h e Neg ev Dese rt an d in
Chin a is t h e fou n d at ion for t h e Company's sizea b le d own st re am, fu lly b ackwar d in t e grated
specia lt y ph osph at e b u sin e ss. I CL min es an d processe s ph osph ate rock fr om t h ree ope n -pit mines
in t h e Ne gev De sert u nde r min in g licenses from t he St ate of Isr ael and from an ope n -pit mine in
Ha ikou ( Ch in a), u sin g con ve ntion a l me th ods, u n de r a ph ospha te min in g lice nse th at was issued
in J u ly 2015 by t h e Division of Land and Resou r ces of t h e Y un nan d istrict in Chin a. A majority of
47 ICL Group Limited
t he ph osph at e rock prod u ced is u sed in t ernally to ma nu fact ure phospha t e fer t iliz ers, fert ilizer-
grad e an d pu re ph osphoric acid , wit h t h e b a lan ce b e in g sold to t h ird par t ies. I CL’s ph osph ate
asset s are t h e b a se for it s va st an d d ive rsifie d specialt y ph osphat es prod u ct port folio u sed in
in d u st r ial a pplica t ion s as well as food a d dit ives and specialty fertilizers, ad din g a d dit iona l va lue
to th e commod it y bu sin ess wh ile red u cin g I CL’s exposu r e to t h e volat ilit y in t he commod it y
ma rket s. See “I t em 3 - Ke y I n formation — D. Risk Fa ct ors— Our min e rals extract ion ope ration s are
d epen d ent on concession s, licen ses an d per mits g rant ed to us by t he respe ct ive g ove rnments in
t he cou n t ries in wh ich we opera te”.
• D i v ers ificat ion in to hig her va lue -added specialty pr odu cts le veragin g ICL’s in tegrated b usin ess
m o d e l . ICL’s in t egr ate d prod u ction proce sses are b ased on a syn er gist ic va lu e ch ain th at a llows
it to b ot h efficie ntly con ver t raw materials in to va lu e -added d own str eam prod ucts a nd to u tilize
t he by-prod u ct s. For e xa mple, in phospha t es, I CL ut iliz es it s b ackwar d in t eg rat ion to prod u ce
specia lt y ph osph at es u sed in t he food in d ustry and for in du strial applicat ion s. Th ese b usin esses
b en efit from h ighe r g rowth rates, h ig h er mar g ins a nd lower volat ilit y compare d to commod ity
ph osph at es. In ad d it ion, as a by- prod u ct of t h e pot ash prod uction at t he Dead Se a, ICL g enerates
b rin es wit h t he h ig he st b romin e con ce n tra tion g lob a lly. ICL’s b r omin e -b ased prod u cts serve
va riou s in d u st ries su ch as t he elect ron ics, con st ruct ion, oil an d g as a nd automot ive in du stries.
• Le ad ing p osit ions in m arkets w it h h igh e ntry b a rrier s. I CL ob t ains le ad ership posit ion s in man y
of t h e ke y mar ket s in wh ich it operat es. It is t he clear lea der in t he bromin e mar ket, with 40% of
ma rket ca pacit y, a b ou t t h ird of prod u ction as well as most of t h e excess capacit y in t he market.
In t h e pot ash mar ket t h e Dead Sea oper ations h as le adin g compe t it ive posit ion s a nd according
to CRU, t h e Dead Sea is amon g the most compe t it ive pot ash suppliers to Ch ina, I ndia and Brazil.
ICL a lso has t h e lar ge st mar ket sh are in spe cialty ph ospha t es in t h e comb in ed markets of North
Amer ica, Eu r ope a nd La t in A merica a nd is t h e sole prod u ce r of Polysu lph at e® . I CL ha s leadership
posit ion s in ad d it ion a l prod u ct lin e s su ch as ph osph orou s-b ased flame r et ard an ts, PK fert ilizers
in Eu r ope and solu b le ph osph ate -based fe rt ilizers.
Most of IC L’s b u sin esses rely on n atural resour ces th at are scarce a nd con centra ted in th e hands
of a few market par t icipan t s. I CL’s exclu sive con cession s, in t elle ct u al propert y ( u n ique
kn owled ge , t ech n olog ies an d pat en t s for variou s pr od u ct s an d applicat ion s), world -wide
ma rket in g and d ist r ib ution n e t work a nd h ig h in d u st ry st a rt -up cost s for n ew mar ket en t rants
ad d fu rt her sig nifica nt b arriers to ent ry.
• S t rat eg ical ly loca ted produ ct ion an d l og istics a sse ts. IC L b en e fit s from t h e proximit y of it s
facilit ies, b ot h in Isr ael and Eu rope , to d eveloped econ omies ( W est er n Eu r ope) an d e mer g ing
ma rket s ( su ch as China, In dia and B ra zil). F or e xa mple, in I srael, I CL sh ips from t wo seaport s: The
Port of A sh d od ( wit h access to Eu rope an d Sou t h A merica) and t he Port of Eilat ( wit h access to
Asia, A frica an d O cea nia). As a re su lt of t h eir g eog ra phical posit ion s, access to t h ese t wo ports
provid e s ICL wit h t wo d ist in ct ive ad va nt ages ve rsu s it s compet it ors: ( 1) it h as lower plant
gat e-to-por t, ocean freig ht , an d t r an sportation cost s from por t s to t ar get marke ts, wh ich lower
it s overa ll cost st ru cture; an d (2) it has fast er time to mar kets du e to its proximit y to e nd- ma rkets,
allowin g it to oppor t u n ist ica lly fill sh or t lea d - t ime ord e rs, st ren gth en ing it s posit ion wit h it s
cu st ome rs. In ad d it ion , IC L is t h e sole prod u cer wit h t h e ab ilit y to t ra nsport pot ash and
ph osph at es from t h e same port ( wh ich it does in Isr ael). I CL’s sales are b a la nced b et ween
emerg in g markets ( approxima tely 40% of 2020 sales) an d d eveloped economie s ( appr oximately
60% of 2020 sa les).
48 ICL Group Limited
• S t rong ca sh g en era tion an d clo sel y mon itore d capital allocati on appr oach. Con tin uou s focus on
cash g en erat ion, opt imizat ion of t he capit al expen d it ur es ( CA PEX) an d wor kin g capit al as well
as t h e implemen t at ion of efficien cy measure s ena bled t he Company to g e ne rate opera tin g cash
flow of $804 million in 2020, a d ecr ease of 19% compar ed to 2019. De spit e t h e year- over- year
d eclin e re lat ed to COVID- 19 a n d lowe r commod it ies price s, t h ese cash flows we re u sed in
accor d an ce wit h t he Compa ny’s st rict appr oach in con n ect ion wit h allot men t of equ it y, whe reby
t he Compan y exa min es, on an on g oin g b asis, t he work pla n a nd it s in vest me nt s. I CL's ca pit al
alloca t ion approach b alances between d rivin g it s lon g -te rm valu e crea tion throu gh in vest ments
in it s g rowt h , pr ovid in g a solid d ivid e nd yie ld while aimin g to main t ain an in ve st me nt g rade
rat in g ( at le ast BB B- by S& P an d Fitch). On F ebr uary 12, 2020, t he Compan y’s B oard of Dire ctors
resolve d to ext e nd t he C ompa ny's d ivid en d policy of a payou t ra t io of up to 50% of an n ual
ad ju st ed n et in come, u n til fu rthe r not ice. In respect to 2020 a d just ed ne t in come , t h e C ompany
d ecla red t ot a l d ivid end s in th e amou n t of $129 million , re flect in g a d ivid end yield ra t e of
approxima t ely 2.7% ( b ase d on t h e average sh ar e pr ice for t he ye ar). See “I t em 8 - Fin an cial
In format ion — A. Con solid ate d Sta tements and Ot he r Fin an cial I nformation — Divid en d policy” .
• P r o fession al e xpe rt ise a n d c u lture of c ol lab ora tion a nd d e term ination . ICL’s operat ion s a re
ma na g ed by an in t e rn at iona l ma na g emen t t eam wit h ext en sive in d u st ry exper ience. ICL
d evelops lea d ers wit h st r on g exper ie nce in t heir field s in ord er to d r ive chan ge and in novat ion
wit h in t h e Company. I CL focu ses on n u rt u ring an d empowe rin g t alent t hroug h a glob al pla t form
of qu alifica t ion , colla b oration an d commu n ication th at rein forces in n ovation .
Ou r St rategy
ICL st r at eg y is to be a le ad er an d crea te lon g t e rm g rowth it s b u sine sses, leveragin g it s ( i) u n ique
asset s ( ii) st r at egic loca t ion s ( iii) kn ow- how b ase in ag ron omy, ch emist r y an d cu st omer
requ iremen t s, a nd ( iv) it s access to a le ad in g in n ovat ion an d t echn olog y eco syst em in Isr ael.
Id e n t ified g rowth en gin es in clude :
Crop Nu t rit ion – con solid at ion of asset s to b u ild g lob a l lead er ship, provid in g e sse ntia l solu t ion s and
en ab lin g farmers to in crea se yield s and feed t h e world . Growt h is d r iven by in n ovat ion and
su ppor t ed by t he in creasin g d eman d for org an ic fert iliz ers, micro n u t r ients an d b io st imu lan ts,
focu sin g on g rowin g mar kets, in cr easin g capa city, an d M& A .
Food – capit alizin g on t he a lt e rn at ive prot ein mar ket pot en t ial, focu s on food t ech n olog ies and
in n ovat ion , in cr easin g ca pacit y for food gr ad e solu t ion s; g rowt h to be achieved b ot h orga nica lly
an d by M& A .
B romin e – St rengthenin g I CL’s glob al le ade rsh ip in the bromin e mar ket; Capit alizin g on ne w market
opport u n it ies, Sh ift in g to lon g - t erm b r omin e compou n d s prod u ct ion con t ract s. In a d d it ion,
expan d in g it s R& D and b u sin ess d evelopmen t a ct ivit ies for n ew an d su st ain able b romine
applicat ion s.
ICL’s in t eg ra ted b u siness mod el is b a se d on it s u n iqu e a cce ss to essentia l min erals t hat su pport its
specia lt y d own st ream activit ies – wit h t he focu s on cr op n u t rit ion, food an d ot her in d ust rial mar kets.
Ou r mod e l crea t es sig n ifican t oper at ion al syn er gies, which d erive from t h e comb inat ion of ou r
at t r active asset s a nd b road valu e-add ed solu t ion s. Over t he yea rs, we ha ve d eve lope d a b a lanced
port folio t h at can su pport lon g-term st a bilit y and g rowt h.
ICL's “B u sin ess Cu lt u re of Le ad ership” st rategy, is focu se d on e nh ancin g ma rket lead ersh ip acr oss
it s th ree core mineral valu e cha in s of br omin e, pot ash an d ph osph at e , as well as r ealizin g the
growt h pot en t ial of Inn ovat ive Ag Solu t ion s. To alig n th e or gan iza t ion wit h t his st ra t eg y, I CL
49 ICL Group Limited
operat es t hr ou g h fou r b u sin ess d ivision s: In d u st r ial Prod u ct s ( b romin e), Pot ash , Ph ospha te
Solu t ion s a nd I n nova t ive Ag Solu tion s.
In or d er to d rive in t er n al commer cial syn er gies and opt imize t h e d ist rib u tion ch an n els of
commod it y, specia lt y an d semi-specialt y fe rt ilizers, a n d in ord er to b e t t er rea lize t h e g rowth
pot en t ial of ou r cr op n u t r it ion b u sin ess, in 2020, I CL con solid at ed it s crop n u t r it ion sa le s a nd
ma rket in g in fra structure , cr eatin g a u n ifie d comme rcial plat form facin g t he agricult ure en d- markets.
Th is n e w operat in g mod el, wh ich is man age d on a r eg ion al b asis, se rves to achieve commercial
excellen ce, in crea se t h e efficien cy of ou r g lob al opera t ion s an d b et t er leverag e r eg ion -spe cific
kn owled ge , ag ron omic a nd R& D capab ilitie s, log ist ica l assets, a n d cu stomer rela tion sh ips
I n d ust rial Prod ucts
ICL’s g lob al lead e rsh ip in t h e b romin e in d u st ry is d rive n by it s focu s on d e live rin g valu e to it s
cu st ome rs ra t her t h an in cre asin g volu me . I CL is ab le to g en erate mor e va lu e by lever ag in g its
u n iqu e asse t s an d kn ow-h ow, as we ll as t arg eted in n ova t ion , for t he d e ve lopmen t of n ew
applicat ion s, su ch as n ew b r omin e an d ph osph oru s- b ased flame re t ard ants, mag n esia a n d sa lt
prod u ct s, as well as ot h er solu t ion s. I CL con t in ue s to leverage it s u n ique log ist ical ad va nt ag es and
u n par alle led experie nce rela ted to t he sa fety a n d environ me ntal aspects of it s b r omin e b usin ess.
P o t ash
ICL lever ag es it s well-posit ion ed a nd u niqu e pota sh assets, as well as it s log istical advant ag es, to be
amon g t h e t h ree most compe t it ive su pplier s in it s ke y t a rg et ma rket s, in clu din g Brazil, Eu rope , In dia,
Sou t h -East A sia an d China. I CL’s cost compe t itiven ess is d rive n by it s lower log ist ics cost s d u e to its
facilit ies’ proximit y to port s and cu st ome rs, as well as by con t in u ou s opt imiza t ion of it s pot ash
prod u ct ion pr oce sses at ICL De ad Se a an d ICL Ib eria, red u cin g cost s an d in crea sin g efficie ntly
u t ilizin g it s capacit y pot en t ial. At ICL B ou lb y, t he Compa ny focu ses on con t in u ou s r amp- up the
prod u ct ion of Polysu lph at e, a n d d evelopmen t of t h e market for t his u n iqu e fertilizer, in which I CL
is t he world 's first a n d sole su pplier. I CL also st r ive to opt imiz e syn erg ies of pr od u cin g Mag n esium
wit h it s pot a sh a nd b romin e ope ration s at t he Dead Se a.
P h os phate Solu tion s
ICL is a g lob al lead er in pr ovid in g ph osph at e- based solu tion s to t he In dust ria l, Food an d A griculture
en d - ma rkets. ICL’s st r at eg y is to con t in u e to ou t g row t he se market s by in cr easin g ly focu sin g on
specia lt y phosph at e solu t ion s an d fu rt h er promot in g commer cial e xcelle n ce a nd valu e -b ased
prod u ct posit ion in g , wh ile en h an cin g cu st omer relat ion sh ips, and Le verag in g on it s b ackward
in t eg r ation in to t h e ph ospha te re sou rces of I CL Rot em in I srael a n d YPH in China. I CL con tin ues to
opt imize it s prod u ct ion ca pab ilit ies to su pport g r owt h a nd ma rg in expan sion of it s specia lt y
ph osph at e prod u ct s and solu t ion s.
I n n o vat ive Ag Solu tion s
ICL is st rivin g to crea t e g lob a l le ad ership for In n ova t ive Ag solu t ion s by e nha ncing it s g lob al
posit ion s in it s core ma rket s of Specia lt y Ag ricu lt ure, O rn amen t al Hort icu lt u re, T u rf and
La nd scapin g , t arg etin g h igh g rowth markets su ch as Lat in A merica, I nd ia an d Ch ina. By le veraging
it s u n iqu e R& D ca pab ilit ie s, as well as see kin g M& A oppor t u n it ies, ICL is workin g to expan d it s b road
prod u ct port folio of Con t rolled Relea se Fer t iliz ers ( CRF), W at er Solu b le Fe rt ilizers ( W SF), Liqu id
Fer t iliz ers, Slow Rele ase F ertilizer s ( SRF) an d St raig ht s ( MAP/MKP/ Pe kacid), to create g rowt h. ICL is
also d e ve lopin g a se rvice port folio focu se d on cre at in g g lob al and re gional A g ro- profe ssion al b a sed
solu t ion s, le ve rag in g dig ital innovat ion.
50 ICL Group Limited
As par t of th e Compa ny's st r at egy to g row it s crop n u t r it ion b u sin esse s or gan ically a nd t hr ough
M& A , in J anu a ry 2021, I CL complet e d t h e acqu isit ion of A g ro F ert iláqu a Part icipaçõe s S.A .
( "Fert iláqu a"), on e of B r azil's lea d in g specialt y plan t n u t rit ion compan ie s, for an amou n t of $122
million , ( b e for e de d u ct ion of Fe rt ila qu a 's net de b t of $40 million ). I CL expect s to leve rage
Fer t iláqu a's st ron g ma rke t prese nce an d d ist rib ution capabilit ie s to in crease t he sa les of it s org anic
fer t iliz ers, con t rolle d -rele ased fer tilize rs an d ot he r specialty plan t n utr ition pr od ucts to th e B ra zilian
ma rket , on e of t h e world 's fast est growin g ag ricu lt u re mar ket s. Fer t iláqu a also expan d s ICL's
specia lt y crop n u t r it ion pr od uct por tfolio wit h complet e pla nt life -cycle solu tion s for pla n t n utr ition
& st imu la t ion , soil r evit a lizat ion , seed t reat ment an d pla n t healt h u t ilized across all ke y B ra zilian
crops, inclu d in g soyb ean s, corn , su garca ne, cot ton , coffee, fr u its an d veget able s.
C u ltu re
ICL fost ers a “B u sin ess Cu lt ure of Lea d ership”, which focu se s on b u sin ess lea d ership, by cr eating a
lead in g a nd su st ain ab le work e n viron me nt, wit h st ron g commit men t to all st akehold ers. Cu lture at
ICL, mean s pla cin g sa fet y as t h e Company’s t op pr iorit y and ma kin g every effort and in vest ment to
ach ieve t op-t ier safet y resu lts. Cu ltu re at ICL, also mea n s opera ting wit h a clear commit me nt to the
en viron me nt , even b eyon d regula tor y compliance. I CL st r ives to be an “Employe r of Choice” by
st ren g t henin g t h e Compan y’s valu e proposit ion to e mployees an d by promot in g I CL’s cor e valu es.
ICL also fost e rs an in n ovation - drive n cult ure t ha t le ve rages it s te chn olog y a nd kn ow-how, to b etter
se rve it s cu st omers an d in cre ase t heir loya lt y. To en sure we live up to ou r va lu es, cult ure at ICL a lso
me an s accou n t a bilit y, t ranspar en cy a nd top-tie r corporate g over nance.
I n n o vat ion
As part of it s st ra t eg ic focu s to en h an ce cu st ome r valu e t h roug h leverag ing in n ovat ion, ICL is
d evelopin g a se rvice port folio focu se d on cr eat in g g lob al an d r eg ion al A gro-profession al b ased
solu t ion s, leverag ing d ig it al in n ovat ion . In Feb ruary 2020, ICL acqu ired Gr owe rs Hold in gs, I nc.
( 'Growe rs'), an in novator in the field of pr ocess and d ata-drive n far min g, as I CL fu rt her enh ances its
d ig it al service offerin g s an d accelerates it s glob al d evelopmen t road map. The Grower s plat form
collect s an d st ru ct ures ma nual an d mach in e -g enerat ed far m d a t a, in st an t ly cr eat in g ag ile and
ret u rn -focu sed pla ns for plan t in g , fe rt ilization a nd pu r ch asin g d ecision s t h at can be st re amed to
far m machin er y for effor t le ss on- field a pplica tion .
ICL's st r on g commit men t to fost er an in n ovation -driven cu ltu re is also reflect ed by t h e est ablishment
of an in t er na l in n ovation a cce le rator , aime d to opt ima lly lever ag e t he e xper ien ce, knowled ge and
in g en u it y of it s appr oximat e ly ~11,000 employees wor ld wid e , while pr ovid in g th em wit h t he
st ru ct u re, su pport a n d r esou rces to review an d ma t erialize t h eir id eas to me an in g fu l b u sin ess
impa ct . Sin ce t h e prog ram wa s lau n che d in J an uary 2020, ICL employees su b mit t ed over 1,400
id e as, of which over 400 b e came a ct u al proje ct s and 150 of which were alrea dy complet ed, which
is expe ct ed to con tr ibu te to fu t ure profit s.
C a p ital Structu re
ICL’s g rowt h init iat ives will be su pport e d by ou r st ron g fin an cial posit ion . I CL is focu se d on
ma in t ain in g it s solid capit al st ru ct ure an d g en eratin g fu n ds for fu t u re g r owt h, by main t ain in g its
fin a ncia l lever ag e at in vestment g rad e le ve ls and improvin g t he mat urit y profile , opt imizin g capital
expen d it u re s an d workin g ca pit al, an d implemen t ing cost e fficiencie s.
51 ICL Group Limited
Seg men t Information
ICL is a lea d in g mu lt in ation al Compa ny t hat operat es main ly in t h e areas of fertilize rs and specialty
ch emicals, t h rou gh fou r segmen ts – Ind ustr ial Pr od uct s, Pot ash , Ph osph ate Solu tion s a n d I nnovative
Ag Solu t ion s.
I n d ust rial Prod ucts Seg me nt
Th e Ind u st rial Pr od u ct s se gmen t pr od u ces b romin e ou t of a solu t ion t h at par t of t h e pot ash
prod u ct ion proce ss in Sod om, I sr ael, a s well as b romin e -base d compou n ds. I n dust rial Pr odu cts uses
most of t h e b romin e it pr od u ces for se lf - pr od u ction of b r omin e compou n d s at it s prod u ct ion sites
in Isr ael, t he Ne t herlan ds an d Ch ina . I n a d dition , t he In dust ria l Produ cts seg men t prod uces several
ma gn e sia, calciu m car b on at e an d sa lt prod u ct s. I n d u st rial Pr od u ct s is also e ng a ged in t he
prod u ct ion a nd ma rketin g of ph osph or ou s -ba sed prod ucts.
In 2020, t h e t ot al sales of t h e In dust ria l Produ cts segme nt tot ale d $1,255 million ( in clu d ing sales to
ot h er se g ments), con st itut ing a pproximately 25% of I CL’s t otal sales, a d ecr ease of 5% compar ed to
2019. The se gment 's oper at in g profit t ot aled $303 million , con st it u t in g appr oxima t ely 60% of t he
t ot a l ope rat in g profit att rib utable to t he seg ment s, a d ecrea se of 10% compar ed to 2019. For fu rt her
in format ion see “It e m 5 - O per at in g an d Fin an cial Revie w a nd Prospect s— A. Ope rat in g Re su lts—
Resu lt s of Operat ion s”.
52 ICL Group Limited
P r od ucts
In d u st ria l Prod ucts focu se s on t hr ee main sub-b usin ess lines:
F l ame r e tard an ts – b r omin e, ph osphoru s a nd mag n esiu m- b ase d flame re t ard an ts are used in
elect ron ics, b u ild in g an d con st ru ct ion , au t omot ive, t ext ile an d fu r nish in g applicat ion s. Flame
ret a rd an ts are ad ded to pla st ics, t e xt iles a n d ot he r comb u st ible mat erials to pre ve nt or in hib it fire
or flames a nd to preve n t th e spread of fire .
I n d ust rial s o lu tion s – ele me nt al b romin e, b romin e compou n d s an d ph osph oru s compou n d s a re
u sed in a n u mb er of in d u st r ie s world wid e , su ch as: r u b b er, ph armaceuticals, elect ricity, ag ro and
polyest e r ( in prod u ct ion of plast ic fa b rics an d b ot t les). Clea r b rin e flu ids are u se d for b a lancing
pressu re in t h e oil a nd g as d rillin g in d u st ry. Br omine -b ased b iocid es u sed for t re atin g in d ust rial
wat er .
S p e cialty m inera ls – – spe cialt y min era ls in clu d e mag n esia, Calciu m C arb on ate an d salt pr od u cts.
Th e main a pplica t ion s of mag n esia prod u cts a re Su pple mentals an d pha rma, oil and fu el a dd itives,
cat alyst s a nd man y ot he r sma ll applicat ion s. F or t h e ca lciu m car b on at e t he main a pplica t ion s a re
Su pplemen t als a n d ph arma . The salts in clu de sod iu m ch lor ide , mag nesiu m ch loride a nd KCl wh ich
are main ly u sed for t h e food in d u st ry, d eicin g ( Mg Cl 2) an d variou s in d u stria l applica t ion s. Du e to
t he u niqu eness and h igh qu alit y/pu rit y of ou r prod ucts, most of ou r sales are t o n ich e markets.
Th e followin g t ab le se t s for t h t he prin cipal pr od uct s of t h e I nd ustrial Produ cts se gment, as well as
t heir primar y a pplicat ion s a nd en d-ma rket s:
S u b -bu siness l ine
P r od uct
P r imar y A ppl icat ions
P r imar y En d- Mar kets
F l ame r eta rd an ts
Bromine-,
Phosphorus- and
magnesium-Based
Flame Retardants
Plastic, building materials and
textile production
Electronics, automotive ,
building and construction,
furniture and textiles
In d ust rial solu tion s
Elemental Bromine
Chemical reagent
Tire manufacturing,
pharmaceuticals and agro
Phosphorus-Based
Industrial
Compounds
Fire resistant fluids in turbines &
power generation hydraulic
systems and phosphorus-base d
inorganic intermediates
Power plants and agro
Organic Bromine
Compounds
Insecticides, solvents for chemical
synthesis and chemical
intermediates
Pharmaceuticals and agro
Clear Brines
Oil and gas drillings
Oil and gas
Merquel
Mercury emission control
Emission control in
coal-fired power plants
Bromine-Based
Biocides
Water treatment and disinfection
Swimming pools, coolin g
towers, paper plants and
oil and gas drillings
S p e cialty m inerals
Magnesia Products
Pharma and Su pple me nt als,
transformer steel, catalysts, fuel
and oil additives.
Su pplemen t als,
multivitamins, transformer
steel, automotive rubber
and plastic, health care
Calciu m Car b onate
Su pplemen t als and pharma
Su pplemen t als and
pharma
Solid MgCl2, KCl
Deicing, food, oil drilling, pharma
Deicing, sodiu m
replacement, KCl for
drugs. multivitamins, oil
drilling companies, small
industrial niche markets
53 ICL Group Limited
In d u st ria l Prod u cts also d evelops in n ovat ive prod u ct s an d n ew applicat ion s for exist in g prod u cts.
Th e n ew prod u ct s in t rod u ced in r ece nt ye ars in clu d e, amon g ot he rs, F R122P (a polyme ric
b romin e -b a se d flame retardan t u sed in in su la tion mat e rial in t h e con st r uction in d ustr y), T exFRon
®
4002 (a polymeric fla me r et ard an t prod uct for t e xtile s), b romin e compou n d s for ene rgy st orage (a
wid e r an g e of pr od u ct s u sed in b romin e- ba sed flow b att eries), Ver iQu e l™R100 (a ph osph orus-b ased
rea ct ive flame r et ar d ant for r ig id polyisocyan u rat e an d polyu re t han e spr ay foam), ou r in n ovat ive
B romoqu e l ( repla ced t he ammon ia a nd ot he r che mica ls as more flexib le and effective t reat ment in
case of b r omin e leakag e), Ver iQuel F series (fle xib le a ph osph or us-based active flame ret arda nts for
flexib le polyu r et h an e), Ca reMa g D (a n ew n at u ral raw mat erial for d e od orants), PolyQu el® P100
( polymer ic ph osph oru s- b ased flame re t ard an t for h ig h en d epoxy prin t ed cir cu it b oa rd s) and
Phosphoru s A cid of 80%, wh ich e n ab les cu stome rs to improve prod u ctivit y a nd yie ld.
P r od ucti on
Th e I n d ustrial Prod ucts segment's major ma nu factu rin g fa cilit ies are locat ed in I sra el (prod uction of
b romin e, bromin e compou n d s, mag n esia and salt s pr od u ct s), t he Ne t he rlan ds ( b romine
compou n d s), German y ( ph osph oru s compou n d s), F ran ce ( mag nesia an d calciu m carbon ate b a sed
prod u ct s), t h e Un ited St ate s ( ph osph oru s compou n ds) a nd Ch ina ( br omin e compou n d s).
Th e I n d ust ria l Pr odu cts seg men t's prin cipa l manu factu rin g plan ts a nd ma rke ting companies are set
for t h in t h e map b elow:
In 2020, I CL prod u ced a pproximat ely 170 t h ou sa nd t on nes of elemen t al b r omin e ou t of pot e nt ial
an n u al ma ximu m prod u ct ion ca pacit y of appr oximat e ly 280 t h ou sa n d t onn es. A pproximat ely 73%
of t h e elemental b romin e prod uced is u sed in t erna lly for t h e prod uction of b romin e compou n ds.
For se ve ral mont hs d u rin g 2020, I CL's b r omin e produ cts prod uction were n ega tive ly impact ed as a
resu lt of lower d e ma nd for several applica t ions a nd markets d ue to t h e CO VI D-19 pandemic.
Aft er sig n in g several st r at eg ic lon g -t erm ag re emen ts in 2019, main ly in A sia , du r in g 2020 I CL
con t in u ed to in crease capacity for seve ral major b romin e compou n d s. Some are in the fin al st ages
an d ot he rs h ave a lre ad y st a rte d comme rcializat ion, in clu d ing comme n cin g prod u ction at ou r new
TB B A plan t in Neot Hovav sit e. Moreover, I CL fu rt h er in crea sed it s b romin e isot an k fle et to mee t
in cr ease d marke t n eeds.
54 ICL Group Limited
LY G plan t is a small sit e prod u cin g on e pr od u ct locat ed at J ia ng su provin ce in Ch in a. Th e C hin ese
au t h or it ies are con sid erin g to relocat e I CL's LYG pla n t from t h e cu rre nt in d ustr ia l par k to an ot h er
ch emical park. T his is a common pr oced u re in Ch ina which is cu rrently u n der examin ation.
C o m petit ion
ICL I n d u st rial Pr odu cts is t he world 's large st man ufacturer of eleme ntal b romin e. B ased on in t ernal
est ima t es, I CL a nd it s t wo main compet it ors, A lb emar le and Lanxess, accou n ted for t h e major it y of
t he world wid e pr od u ct ion of b romin e in 2020. C hin ese a n d I nd ia n pr od uction accou nt ed for most
of th e re main d er of t h e g lob al pr od u ct ion from variou s d iffer en t sou rces, in clu d ing , from b rine
prod u ce d fr om we lls, seawat e r an d d esalin ization plan t s. Ch in ese su pply is d e cre asin g main ly due
to con t in u ed de pletion of b rin e we lls, alon g wit h stricter en for cement of regula tion s in recent years
reg ard in g sa fety an d ecolog y in t h e ch emical in d u stry by t he Chin ese a u th orit ies. Du e to t h ese
t ren d s, favorab le con d it ion s h ave d eveloped in th e Ch in ese b romin e a nd b romin e compou n ds
ma rket .
La nxe ss an d A lb e ma rle prod u ce b romin e pr imarily from u n d ergrou nd b r ine sou rces in t he United
St at es. Alb emarle also has a join t vent ure wit h a J orda nia n compa ny for t he prod uction of b romine
an d b romin e compou nd s wh ich is locat ed on th e Jordanian sid e of t he De ad Sea sh arin g t he same
sou rce of raw ma t erials wit h I CL. Lan xe ss pu rchases b romin e and some ot h er b romin e compounds
from t he In d u strial Prod ucts segment u n der a lon g -term con tr act.
Th e main b arrie r to en t ry in t o th e br omin e a nd b r omin e compou n d mar ket is access to an
econ omically viab le sou rce of b romin e h avin g a su fficien t ly h ig h con cen t ra tion . In a d d it ion , the
b romin e b u sin ess re qu ire s a comple x log ist ics syst e m, in clu d in g specia l con t ain ers ( isot anks) for
t ran spor t in g t he b romin e. The n eed for t he log istics syst em is a b a rrier to en try of compet it ors into
t he g lob al b r omin e trad e.
In t he phosphoru s- b ased flame ret a rd an ts mar ket , compet it ion is main ly from Chin ese
ma nu fact u rers ope rat ing in t h e local ma rket an d in ma rket s ou tsid e Ch in a, ma in ly Eu rope an d the
Unit ed St at e s. The C hin ese man u fact ure rs h ave access to a sou rce of h ig h - qu a lity, low-cost
ph osph oru s, which improves t he ir capacit y to compet e in t h is mar ket . However, sever al limit a tions
from t he Chin ese a u t hor ities affect ed t he prod u ction a nd t h e compe t it ive posit ion of t h e Ch in ese
ph osph oru s- b ased flame r eta rd an ts pr od ucers.
Th e se gmen t bene fits from t h e followin g compe t itive adva ntag es:
Th e Dead Sea ope rat ion s offe r t h e world ’s h ig h est b romin e con ce nt ration , while t h e ICL b romine
compou n d s facilit y in Ne ot Hovav, I srae l, is t he b ig g est in t h e world . A s a resu lt , t h e seg ment's
relat ively low prod u ct ion cost of element al b romin e g ives it a compe tit ive ad va ntage . A n addit ional
compet it ive ad vant a ge is d e rive d from I CL’s complex log ist ic syst em, which in clu d e s isot a n ks fleet,
wh ich is t he larg est in t h e world . I n ad dition , t he segmen t ha s a wid espr ead worldwid e ma rke ting,
sa le s an d su pply chain n et work a nd a r an g e of h ig h -qu alit y prod u cts, comb in e d wit h a t ech nical
su ppor t syst em t hat wor ks closely wit h cu st ome rs, provid in g a g ood compet it ive posit ion in it s
t arg e t mar kets.
55 ICL Group Limited
R a w Materials and Su ppl iers
Th e prin cipa l raw mat erials use d by th e I ndu str ial Prod ucts segment for th e ma n ufact ure of the end
prod u ct s are b r omin e, ch lorin e, ph osph or u s an d ma g ne sia. T he prod u ct ion pr oce ss also u ses
sig n ifican t amou n t s of wat e r an d e nerg y. Th e Company prod u ces a sig nifica nt port ion of it s raw
ma t erials t h rou g h t he Dea d Sea min era ls e xt ract ion operation s. F or fu r t her in for ma tion on t he
ext ract ion opera t ion s, se e “I t em 4 - I n for ma t ion on t he Compa ny— D. Propert y, Plan t and
Equ ipmen t — Min eral Ext raction an d Min in g O perat ions”.
B romin e is prod u ced from t he e n d b rin es ( sa lt solu t ion s) t h at are a by- prod u ct of t he pr oce ss of
prod u ct ion of pot a sh . T h e b rin e is pu mped in t o ICL Ind u st rial Prod uct s’ plan t in Sod om, wh ere
b romin e is prod u ced in an oxid at ion pr oce ss u sin g chlorin e and st eam.
Chlorin e is prod u ced by elect rolysis of sod iu m chlorid e an d as a by-pr od u ct of t h e met a l magn esium
prod u ct ion process of De ad Sea Mag n esiu m Lt d . ( “Dea d Se a Mag n esium”). Th e e lect rolysis facility
an d t h e mag n esiu m plant are locat ed next to t h e b r omin e facilit y in Sod om. T h e sod iu m ch loride
u sed in t he electrolysis proce ss is also a by- prod u ct of t h e pot ash prod uction in Sod om.
In d u st ria l Prod uct s’ u ses e lemental b r omin e to ma n u factu re b r omin e compou n d s at it s facilit ie s in
Isr ael, t he Net h er la nd s, an d Ch in a. Th e re st of t h e b r omin e is sold to t h ir d pa rt ies. Most b r omine
compou n d s are manu fact u red by a ch emical process in volvin g b romin e t og et h er wit h a r an g e of
ot h er raw mat e rials, of wh ich t h e larg e st are B isph en ol A, wh ich is u sed to man u fa ct u re the
b romin e -b a se d flame re t ardan t TB B A . Fu r t hermore, t he In d u str ia l Prod u cts seg men t pu rcha ses
ma ny ot h er raw mat e rials t hat are re qu ired for prod u ction of it s variou s pr odu cts.
Th e followin g is a g ra ph ic re pre sent ation of t h e produ ction proce ss.
Elemen t al ph osph oru s (P
4
) is prod u ce d in a roa st in g process from ore s or ig in a t in g, main ly in Central
Asia ( Kazakh st an), t h e Un it ed St at e s an d Ch in a. T he In d u strial Prod u cts seg men t u se s elemen tal
ph osph oru s to pr od u ce phosph oru s compou n d s at it s fact or ies ( ma in ly ph osph or ou s-b a sed flame
ret a rd an ts). T h e b asic ph osphoru s compou n d , PO Cl
3
, is man u fact ur ed in a chemical process t hat
comb in es ph osphoru s, chlorin e and oxyg en . T he re action of t h is compou n d wit h a var ie ty of ot her
raw mat erials ( su ch as propylen e oxid e) creates t he comme rcial ph osph orus compou n d s.
56 ICL Group Limited
Followin g is a g raph ic r epr esentation of t h e prod uct ion proce ss:
In d u st ria l Prod uct s u ses mag n esiu m chlorid e to ma nu factu re mag n esia prod u cts and Mg Cl
2
flakes
an d pe llet s at it s fa cilit ie s in I sr ael. In ad d it ion, Th e I n du str ial Prod u cts seg ment u ses KCl from t he
Pot a sh seg men t to man ufacture pu re a nd in dustr ia l g rade s of KCl.
Followin g is a g raph ic r epr esentation of t h e prod uct ion proce ss:
In d u st ria l Pr od u ct s ma in t ain s raw-ma ter ial in ven t ories in qu ant it ies t h at t ake in t o a ccou n t t he
proje ct ed le ve l of pr od u ct ion b ased on con su mpt ion , su pply d a tes, d ista nce from t h e su pplier , and
ot h er opera t ion al and log ist ical con sid eration s.
As part of ICL's st ra t egy to in cre ase it s en erg y con su mpt ion from re n ewa b le en ergy sou rces,
in st allat ion of PV pa n els b e g an in I srael d u rin g 2020.
57 ICL Group Limited
S a le s, Marketin g an d Di stribut ion
In d u st ria l Pr od u cts’ prin cipa l mar ket s are t h e Un it ed St a tes, west e rn Eu rope, Chin a, J apa n, and
Ta iwan . I n d ust ria l Pr od ucts sells it s prod u ct s primarily t hroug h a n etwork of mar ket ing compa nies,
wh ile a smalle r pa rt of sa le s is con d u ct ed t h rou gh ag ents and d ist rib utors t hr oughou t t h e world.
Commission s are paid to a ge nt s as is cu stoma ry in th e sector. A pproximat ely h alf of ou r sa les in the
In d u st ria l Prod u cts seg men t are con d u cted via lon g - t erm agr eements wit h an in it ia l t er m of on e
ye ar or mor e. Ne ve rt h eless, t h e I n dust rial Prod ucts segment also sell it pr od u ct s via cu rren t orders
close to t he d at e of su pply.
In d u st ria l Prod u cts’ policy is to ma in t ain ad equ ate in ve ntory levels, wh ich varies from pr od u ct to
prod u ct , in or d er to en sure ord erly supply to cu stomers in lig ht of t he cust ome rs’ d ist an ce from the
prod u ct ion cent e rs an d t h eir d e ma nd for in ven t or y availa b ilit y, wh ile opt imizin g t h e in ven t ory
st orag e cost s. Therefor e, portion s of finish ed pr odu ct in ven tories are held in stor age facilit ies in the
d est in at ion cou n tries.
In d u st ria l Pr od uct s e xt en ds credit t erms to it s cu st omers accor d in g to it s cred it policy. Sales are
gen era lly cover ed by t rade cred it risk in su r ance or by let t ers of cred it from b a nks wit h h ig h cre dit
rat in g s.
S e ason ality
In d u st rial Prod u cts’ ope rat ion s are n ot ch ar act erize d by sea son al flu ct u at ions. However , sa les of
some of it s prod u ct s flu ctuate b et ween t he var iou s season s. A gricultu ral prod ucts a re cha racterized
by re la t ively hig h sa le s in t h e secon d an d th ird qu art e rs. Biocid e s for swimmin g pools are
ch ara ct e riz ed by r elatively lower sales in th e fou rth qu arter . Mg Cl
2
for de-icin g are ch aract er ized by
relat ively h ig h er sa les in t h e first and fou r t h qu ar t ers. The a ggr eg ate impact of t h ese d iver se
se ason al d iffer en ces on t h e Ind ustr ial Pr oduct s se gme n t is n ot sig nifica nt.
N a t ural Resources Tax in Isr ael
Th e Law for T axa t ion of Profit s from Na t u ral Re sou r ces in Isr ael en t e red in t o effect on J a nu a ry 1,
2016, wit h respect to t h e B romin e opera t ion . For fu r th er in formation , see Note 15 to ou r A u d ited
Fin a ncia l St at ement s.
P o t ash Seg me nt
Th e Pot ash Seg me nt produ ces and sells main ly pot ash , sa lt , Polysu lph ate® , mag nesium a nd excess
elect ricit y. Pot a sh is prod u ced in Isr ael an d Spain , u sin g an e va porat ion proce ss to ext r act pot ash
from t he De ad Sea in I sra el and con vent ional min in g from an u nd er groun d min e in Spa in. In its ICL
B ou lb y min e in t h e UK, th e Compan y pr od u ces Polysu lpha t e® , wh ich is composed of su lph u r,
pot ash , calciu m an d mag n esiu m. T he Compa n y's F ert ilize rplu S pr od u ct lin e is b a se d ma in ly on
Polysu lph at e® . T he Seg men t also in clu d es ma gn e siu m act ivit y u n d er wh ich it prod u ces, markets
an d sells pu re ma g ne siu m a nd mag nesium a lloys, an d prod u ce s ch lorine a nd sylvin it e. In ad dition,
t he Seg men t sells sa lt th at is produ ced in its pot ash a nd Polysu lph ate® u nderg rou nd min es in Spain
an d t he UK. The Company h as a power plan t in Sod om, wh ich su pplie s electricity to ICL compa nies
in I sr ael ( e lect ricit y surplu s is sold to external cust omers) an d stea m to all facilities in the Sodom sit e.
58 ICL Group Limited
In 2020, t h e t ot al sales of t he Pot ash Seg men t wer e $1,346 million ( in clu d in g sa le s to ot h er
se g ment s), con st it ut ing appr oximat ely 27% of ICL's t ot a l sales, a d ecr ease of 10% compar ed to 2019.
Th e Seg me n t 's oper at in g pr ofit t ot aled $120 million , con st it u t in g appr oximat ely 24% of t h e t ot al
operat in g profit at t rib u ta ble to t h e Seg me nt s, a d e cre ase of 58% compa red to 2019. For fu r t her
in format ion , see “It em 5 - Oper at in g an d Fin ancial Revie w and Prospect s— A. O perat in g Re su lts—
Resu lt s of Operat ion s”.
P o t ash
P r od ucts
Pot a sh is t h e common n ame for pot assiu m ch loride , which is t he most common sou r ce of pot assium
for plan t s and on e of t he t hr ee e sse nt ia l n u trien ts for plan t d evelopmen t , a ssist s in prot ect ion of
plan t s fr om disease s an d d a magin g ag ents, helps t h em to ad apt to d iffe ren t weat he r con d it ions,
reg u lat es pla n t wat er level, st ren gt hens t h e plant st ems an d st rengthens t h e plan t's abilit y to ab sorb
nou rish in g su b st ances. I CL se lls pot ash for d irect a pplicat ion as a fe rt ilizer an d to compou n d
fer t iliz er man u factu re rs.
P r od ucti on
Pot a sh is pr od u ced from t he Dea d Sea and from u n d e rgrou nd min es in Spain . The pot a sh
prod u ct ion process in Isr ael is b a sed on ext r act in g carnallit e. The ca rnallit e, wh ich is a compou n d
of pot assiu m chlorid e an d magn esiu m chlor id e mixe d wit h t a b le salt , pre cipit at e s in some of t he
larg est sola r eva porat ion pon d s in t he world , wh ich con t ain b r ines d rawn from t h e Dead Sea. The
car n allit e is t r an sfer red to t he plan t s wh ere a ch emical and ph ysical proce ss b r eaks d own t he
car n allit e cryst al in t o pot ash u sin g t wo d ist in ct pa rallel t ech nolog ies, cold cr yst a llizat ion an d hot
leach . Pot a sh prod u ct ion in Spain is ca rried ou t in u n dergr ou nd min es ext ract ing sylvin it e , a mixt ure
of pot ash ( KCl) a nd sa lt ( NaCl) wit h var yin g pot ash con ce n t ration s. T he pot ash is separ at ed fr om
t he salt by a flot at ion pr ocess in t h e prod uct ion plan t s sit uat ed nea r t he min e s.
Th e prin cipa l prod u ct ion fa cilit ies of t h e Pot ash b usin ess in clude it s plan ts in I srae l a nd Spain .
Th e man u facturing plants, d istr ibu tion cen ters and marke ting compan ies of t he Pota sh b usiness are
se t fort h in t h e map b elow:
59 ICL Group Limited
In 2020, t h e Pot ash b u sin ess prod u ce d appr oximat ely 4.5 million tonne s of pot ash . T h e pot e nt ial
an n u al pr od u ction capacit y of pot ash aft er comple t ion of t h e Spain min e expan sion will be ab out
5 million t on n es. Th e pot e n t ial prod u ct ion capa cit y of ou r var iou s plan t s is base d on t h e h ou r ly
ou t pu t of t h e plant s, mu lt iplie d by pot en tial h ou r s of ope rat ion pe r yea r. Th is calcu lation a ssu mes
con t in u ou s prod u ct ion over t h e year , 24 h ou rs a da y, ot h er t h an a few d a ys for an n u al pla nned
ma in t en ance an d renovation s. Act ua l pr od u ction is usu a lly lowe r t h an t he pot ent ial pr od u ction
capacit y d u e to u n plan n ed d own t ime, special main t en ance opera t ion s, non - availa b ility of raw
ma t erials, market con dit ion s, and un expect ed eve nts ( e.g . t he effect of COVI D-19 d uring 2020).
Prod u ct ion - relat ed developmen ts t hroug hou t t he Potash bu siness:
Isr ael
Followin g I CL's Dead Sea facilit ies u pg ra d e in t h e fou rt h qu ar t er of 2019, I CL Dea d Sea reached
recor d pot ash prod u ction for t he full yea r 2020.
Th e prod u ct ion re cord was a ch ieved , d espit e t h e impa ct of t h e COVI D-19 pan d emic d u ring 2020,
sin ce ou r man u fa ct u r ing facilit ies in Isr ael were d ee med to be e sse nt ial b u sin esses by t he
governmen t au th orities, wh ich en abled t heir con t inu ed opera tion at fu ll prod u ct ion le ve ls. The
Compan y con t inu ou sly and pr oactively h as b een a ctin g to ove rcome the ch allen ges imposed by the
COVI D- 19 pand e mic by ma kin g n ecessary ad ju st me nts to t h e work e n viron me nt to allow social
d ist a ncin g , in cludin g a chan ge of t he sh ift patter n to 12/12 h ou rs, workin g in capsu les, mon itoring
COVI D- 19 in fect ion rates and ot her h ealth a nd safety mea su res to r educe th e risk of in fe ction .
Spa in
Pot a sh prod u ct ion in 2020 was in flu en ced by t wo major aspect s – COVI D-19 a nd it s e ffect a nd our
d ecision to d iscon t in u e t he min ing activit ies in t he Sallent sit e (Vilafr un s min e ).
COVI D 19 - O u r man u fa ct u rin g facilit ie s in Spain were d ee me d to be essen t ial b u sin esses by t he
loca l g ove rn me nt auth or ities. Ne ve rth eless, in or der to comply wit h th e local au thor ities' gu idelines
an d to en su re t h e well- be in g of ou r employe es at t h e Su ria sit e, pot ash produ ction was sh ut d own
for t hr ee weeks from t he en d of Ma rch 2020 ( t h e Vacu u m salt pr od u ct ion con t in ued d u rin g t hat
period ). In t he se con d qu ar t er of 2020, t h e Pot ash prod u ct ion operation s g r adually r et urned to
normal rat es.
Sallen t sit e - As par t of t h e Company's st rat eg ic d ecision to con cent rate it s prod uction in t h e Suria
sit e ( Cab a na sses min e) by discon tin uin g th e min in g a ctivit ies at the Sallen t sit e ( Vilafrun s min e), the
Compan y exped it e d t he sit e con solid ation proce ss, wh ich was orig in ally sch ed u le d for 2021, d u r ing
t he secon d h alf of 2020, T his d ecision is expect ed to allow t he Compan y to speed up d evelopment
in Su ria, a nd to improve it s cost per t on n e in fu t u re pe riod s. However, for t he sh ort t e rm, we are
in cu r rin g hig h er ope rating cost s pe r t onn e d ue to t he overall d ecrea se d prod uction in Spain . In this
fra mewor k, t h e d esig nation of t he Sa llent site was ch anged, so as of t h e en d of t h e se cond qu arter
of 2020 t h e pot ash prod u ction was st opped .
Ramp project - As part of t he con solid a t ion proce ss, t h e Company is b u ild in g an access t u n n el to
t he Cab a nasses min e (Ramp pr oject ).
Th e e xcava t ion of t he ra mp con n ectin g t he Cab an asses mine with th e Su ria pla n t wa s completed in
De cemb er 2020, followin g a d e lay r ela ted to CO VI D-19. Fu ll operation s a re e xpecte d to commence
in t h e first ha lf of 2021.
60 ICL Group Limited
Plant s - T he pr oject is expect ed to in crease t he min e’s capa cit y – expected ann ua l run r ate to reach
approxima t ely 1 million t on n es by t h e en d of 2021, while lowe rin g cost pe r t on ne , a n d to reach a
level of up to ab ou t 1.3 million t on n es per ye ar in t he fu t u re , followin g complet ion of a d d it ional
nece ssa ry ad ju stme nt s in th e surface prod uction facilit ies.
Salt - ICL con st ruct ed a vacu u m sa lt ma n u fact uring facilit y at it s min in g sit e in Su ria, wh ich
commen ced operat ion s in t he t hird qu art er of 2018.
Du r in g t he con st r u ct ion of t h e plan t , in 2015, A kzoNob el Ind u st rial Ch emicals B .V. ( cu rr en tly:
Nob ian ) an d I CL Ib eria sig ned a par t nersh ip a greement for t h e mar ket in g of h ig h -qu ality vacuum
sa lt an d pu re pot ash . Hig h pu rit y vacuu m salt is u se d in a variety of applicat ions in variou s in d ust ries,
su ch as t h e che mica ls in d u st ry ( for in st ance in e le ctr ochemica l compa nies), t h e leat her an d t e xtile
in d u st r ies, t he food and feed in dust rie s, an d for wate r tr eatment a pplication s.
Th is part n ership ag re emen t provid e d a spe cific d ead lin e (J u ly 1, 2018) by wh ich a cert ain
precon d it ion h ad to be fulfilled. Sin ce such precon dition s were n ot me t by th e agr eed d eadlin e, the
Compan y formally in formed Nob ian t h at th e ag r eemen t shou ld be con sid er ed a u t omat ica lly
t ermin at ed on ce t ha t d ead line pa sse d . T h e Company con t inu ed to su pply salt to Nob ia n u n til J uly
2020 accord in g to t h e su pply a greements. Nob ian challen ge d t he au tomat ic t ermin ation of the
ag reeme n t. In A u g ust 2018, Nob ian commen ce d an arb it ration proce ed ing u n de r t h e a greement
b et ween th e partie s. To t he be st of t h e Compan y's knowled ge, th e arbit ration a war d is expected to
be r ece ived d u rin g t he fir st qu ar t er of 2021. For fu rt he r in format ion reg ard ing t he arb it ration
proce ed in g, se e Not e 18 to ou r A ud ite d F inancial St atemen ts.
Collect or - As par t of t h e pot ash pr od u ct ion process, t h ere is pr od u ct ion of Salt as a by-prod u ct,
wh ich is t rea t ed u sin g a collect or t h at t r anspor ts it from t h e Compan y's sit es to t h e sea. In view of
t he ob solesce n ce of t h e cu rre nt fa cilit y, b etwe en I CL sit e a n d A b rera ( located ar ou nd 50 km from
ou r sit e an d 40 km fr om B arcelon a), t h e Gen er alt at de Cat alun ya will con st ru ct a n ew collect or ,
wh ich will se cu re t h e fu tu re operation s of t h e Company's prod uction sit e s, will en ab le an in crease
in capa cit y an d impr ove t he exist ing sa lt t reat ment of IC L. In Feb ruary 2021, th e ACA , Catalan W ater
Age ncy, a pproved t he n ew collector ag reement which is to be sig n ed wit h t he Compan y.
Tr amer - Du rin g t he fir st qu ar ter of 2020, t he ope rat ion of a new facilit y in t he B a rce lon a port
commen ced , allowin g th e Compan y to sig n ifican t ly in crease it s an n u al load in g capacit y ( b oth
Pot a sh an d Salt ).
61 ICL Group Limited
C o m petit ion
Th e pot ash ma rke t is ch ar act erized by a re la t ively small n u mb e r of ma nufact ure rs, some of wh ich
export join t ly. Se e “I t em 3 - Ke y I n format ion — D. Risk Fact ors— Ou r ope rat ion s an d sales are exposed
to volat ilit y in t h e supply a nd deman d, me rgers of key prod ucers\ custome rs\su ppliers, expansion of
prod u ct ion capacit y and compe t it ion from some of t h e world ’s larg e st ch emical an d min in g
compan ies”. T he ab ilit y to compe t e in t he pot ash market is d epen de nt main ly on prod u ct ion costs
an d log ist ic capab ilit ies. Mor eove r, t he re are hig h en t ry b arriers for n ew player s d u e to t he
sig n ifican t in ve st me nt a nd leng th of t ime requ ired to est ab lish pot ash oper ation s. In ad dition , t his
in d u st r y r equires appropriate con cession s an d pr oximit y of pr od u ction facilit ies to t he min es.
Th e cu rr en t sig n ifican t compet it ors of I CL in t he in te rn at ional t rad e of t h e pot a sh mar ket are Nu trien
( Can ad a), Uralka li ( Ru ssia), Mosa ic ( USA ), B e laru skali ( Belarus), K+S ( Ge rman y, Cana da), QSL ( C hina),
APC ( Jord a n), Eu roC he m ( Russia) a nd SQM ( Chile).
Th e Company b e lieves it s pot ash b usin ess b e nefits from t h e followin g compet it ive a dvant ag es:
• The r elat ively low averag e cost of pot ash pr od u ct ion at t h e Dea d Sea , u sin g t h e su n as a solar
en ergy sou rce in t he evaporation proce ss.
• Log ist ical ad van t a ges d u e to it s g eog raph ical locat ion , access to n ea rb y port s in Isr ael and
Eu rope an d r ela t ive proximit y to it s cu st ome rs, wh ich are reflect ed in par t icu larly compet it ive
ma rin e an d ove rlan d shippin g cost s and d elive ry t imes.
• Climat e ad va ntage s d ue to t he h ot and dry clima t e of t h e Dead Se a t hat en able t he Company to
st ore, at very low cost , a larg e qu ant it y of pot ash in an open area t h ere b y allowin g it to
con st a n t ly prod u ce at Sod om at fu ll ca pa cit y, in d epe n d en t of flu ct u a t ion s in g lob a l pot a sh
d eman d .
• Ou r min e in Spain is on e of t he la st min es in W este rn Eu rope , creating log ist ics a dvant ag es in
su pply to cu st omer s in Eu rope.
62 ICL Group Limited
R a w Materials and Su ppl iers
Th e Pot ash Segmen t prod u ces pot ash in I srae l an d Spa in . Pot ash d oes n ot re qu ire ad d it ional
ch emical con version to be u sed as a pla nt -nu tr ien t fe rtilizer.
Th e ot h er primary u t ilit ies u se d by I CL in ord e r to su pport t he pot ash prod u ct ion are n atu ral g as,
elect ricit y, in d ust rial wat er and n eutra lization ma t erials.
S a le s, Marketin g an d Di stribut ion
Th e primary mar ket s of t h e Pot ash b u sin e ss are B ra zil, Ch in a , I n d ia , Eu rope a nd USA. T he Pot ash
Seg men t se lls it s fer t ilizer prod u ct s primarily via a net work of ICL sales offices, as we ll as sales
t hrou g h age nts t h rou gh out t h e world .
Most of t h e pot a sh sales are n ot mad e by mean s of con t ract s or lon g -t e rm ord ers b u t, r at her,
t hrou g h current or der s proximat e to th e su pply d a te ( exce pt for a nnu al ag reements with customers
in I nd ia an d Chin a). A ccord ing ly, t he Potash Se gme nt does n ot have a sig nifica n t orders' b acklog.
In t h e In dia n and Ch inese marke ts, it is cu stomar y to carry on protr acted n eg otiation s reg ar ding the
pot ash con t ra ct s, par t of wh ich wit h commercial en t it ies re lat ed to t he g ove rn men t s of t hose
cou n t ries. In ot h er market s, pot a sh is u su a lly impor t ed by a larg er n u mb er of cu st omers. In t hese
ma rket s, t h e Compa ny h as t rade rela tion s wit h most of t h e major cu stomers.
The pr ices of pot ash are determin ed in ne got iat ion s between the man ufact ure rs an d t he customers
an d are a ffect ed ma in ly by t he r elat ion sh ip b e t we en market d emand, availa b le su pply and t he
ou t st a ndin g in ventories a mon g suppliers a nd custome rs, as well as t he ident ity of t he customer and
t he t imin g of t h e t r an saction . Price s for re lat ively lon g - te rm con t ract s are n ot n ece ssa rily id en tical
to t h e “SPOT” price s ( current/casual sale t ransaction s).
In De cemb e r 2018, ICL sig n ed , for t h e first t ime, a five- year pot ash su pply ag r eemen t wit h In dian
Pot a sh Limit ed ( "IPL"), In d ia's lar ge st import er of pot ash . A ccor d in g to t h e ag re emen t, I CL is
expect ed to su pply I PL wit h 600 t hou san d t on n es per ye ar in 2019 a nd 2020, in cr easin g to 650
t hou san d tonne s pe r year in 2021- 2023 (in clud ing option al qu an titie s). Prices will be d et ermined in
accor d an ce wit h t he prevailin g ma rket pr ices in I n dia at t h e r ele van t d ate of su pply. In May 2020,
ICL sig n ed pot ash su pply con t r act s wit h Ch in ese cu st omers an d In d ian Pot ash Limit ed ( I PL).
Pu rsu an t to t h ese con t ract s, by t he en d of 2020, I CL su pplie d 926 t hou san d t on nes of pot ash at a
price of $70/ t on n e b elow t h e pre viou s con t ra cts to it s Ch in e se cu stomer s, an d 600 t hou sand t onnes
of pot ash to I PL at a price of $50/ t on n e b e low t h e previou s con t ract . The price s are in lin e wit h
ma rket con t ract price s in Ch ina and India .
For fu rt he r in formation ab out recen t ag re emen ts, se e I t em 5 – "Ope rat in g an d Fin an cial Review and
Prospect s, T ren d s A ffectin g Pot a sh Seg men t " to ou r 20F r eport.
Th e Pot ash Seg men t g r ant s cr ed it t er ms to it s clie nt s accor d in g to cu st omary pra ct ices in t heir
loca t ion s. Th e Seg me nt 's credit sa le s are g enerally cover ed by trade credit risk in su rance or by let ters
of cr ed it from b an ks wit h h ig h credit ra tin gs.
Th e Pot ash b usin ess t ranspor t s pot ash from Isr ael and from Spa in :
From Isra el to cu st omers over seas by sh ips ( main ly in b u lk) t h at it lease s in t h e market , wh ich are
load e d by u sin g d esig na ted facilit ies in t h e por t of A sh d od on t h e Med it erra nean Se a an d por t of
Eilat on t h e Red Se a.
63 ICL Group Limited
From Spa in to loca l cost u mer s by t r u cks and over se as by sh ips, u sin g t h e d esig n ate d facilit ies for
b u lk load in g at th e n ew port in B arcelon a (Spain). In Israe l, sh ort mine -to-por t dista nces and sh orter
sh ipping rou t es to emerg in g ma rke t s g r an t s t h e Pot a sh bu sin ess a sig nifica n t an d a u n ique
ad van t a ge ove r it s ma in compe t it ors. For in format ion regardin g t h e n ew d esigna ted fa cilit y in the
B arcelon a port , see “I t em 4 – In format ion on t h e Company— D. Propert y, Plan t a nd Equ ipme nt—
Log ist ics".
S e ason ality
Th e se ason al n at ure of d eman d for t h e Pot ash b u siness’s prod u ct s g ives rise g enerally to qu arterly
sa le s flu ct u at ions, as sales levels in t he secon d and th ird qu arters are g ene rally h ig her t han sa les in
t he fir st a n d fou r t h qu ar t ers. In recen t ye ars, d u e to var iou s in flu ences on t he t imin g of sa les,
primarily pr ice flu ct u at ions an d th e effects of n egot iat ions in Ch ina and Ind ia , as well as ch anges in
t he t imin g of fert ilize r impor t s to B ra zil, t he effect s of se ason alit y e xplain ed ab ove h ave b e en
red u ced compar ed to pa st pe riod s.
N a t ural Resources Tax
Th e Law for T axa t ion of Profit s from Na t u ral Re sou r ces in Isr ael en t e red in t o effect on J a nu a ry 1,
2017, wit h r espect to th e Pot ash operat ion s at t he ICL De ad Se a. For fu r t he r in for mat ion , see
Not e 15 to ou r A u d it ed Fin an cial St atements.
A d d iti onal prod ucts
Th e Pot ash Seg me nt prod uces and sells a d dition al prod ucts, t h e Fertiliz erpluS prod u ct lin e (ma inly
Polysu lph at e® ), mag n esiu m- b ased prod u ct s, salt prod u ce d in u n d e rg rou nd min es in t h e UK and
Spa in , vacu u m sa lt prod u ce d in Spain , e lectricity su rplus prod u ced in I srael a n d ot hers.
F e rtilizerp luS
Fer t iliz erplu S is I CL's premiu m fertilizers lin e, b ased main ly on polyh alite (market ed by th e Company
as Polysu lph at e ®) a n d ot h er pr od u ct s. Fert ilizer plu S prod ucts, which in clu de d ifferent compou nds
of ph osph or u s, su lphu r , pot assiu m, mag n esiu m and calciu m, are t ailore d for variou s t ype s of soil
an d wid e ra ng e of crops, in t en d ed to en h an ce crop va lu e by impr oving yield s an d in cre asing
fer t iliz er u pt ake. I CL prod u ces an d ma rke ts it s Fer tilizerplu S prod ucts t h rou gh bot h t h e Pot ash and
t he Phosph at e Solu tions Seg ments. Se e b elow a list of prod u ct s t hat are in clud ed in t he Fer tilizerpluS
lin e.
Polyhalit e is a min eral t ha t is exclu sively min ed by ICL t h rou g h th e Pot ash Seg men t in a n
u n d erg rou nd min e in t h e UK ( ICL B ou lb y), an d is ma rket ed u nd er t he b ran d n ame Polysu lphate®.
Polysu lph at e ® is u se d in it s n at ural form as a fu lly solu b le an d n at ural fertilizer , wh ich is also u sed
for orga nic a gricu lt u re , an d as a raw mat e ria l for prod u ct ion of fert iliz ers. Polysu lph at e ® is
compose d of su lphu r ( SO
3
48%), pot ash (K
2
O 14% ), calciu m ( CaO 17%) an d magne sium ( Mg O 6%),
wh ich are essen t ial compon en t s for impr ovement of cr ops an d agr icu lt ural prod ucts. Polysu lphate®
is t he b asis for man y of t he Compan y's Fe rtilizerpluS prod uct s.
Th e Company se es Polysu lph ate ® as a u niqu e prod uct for ICL, syn erg istic wit h the Compan y’s other
raw ma t erials for t he pu r pose of d eve lopin g d own st ream prod u cts. In ord e r to d evelop d ownst ream
prod u ct s, t he Compan y is expan d in g t h e Polysu lpha t e® mar ket by mea n s of, amon g ot h er t h ings,
d evelopmen t of a wid e va rie t y of in n ovative Polysu lph ate ®- based pr od u ct s.
In 2020, I CL's t ot al sales of Fert ilizerplu S product s amoun ted to $88.2 million ( in clu d ing sales of the
Pot a sh an d t he Phosphate Solu tion s Seg me nts), con st itu tin g 1.7% of I CL's t ot al sales.
64 ICL Group Limited
Th e Company b e lieves t hat t h e Fe rtilizerplu S prod uct lin e b e nefits from t he followin g compe t it ive
ad van t a ge s:
• Cu rr en tly, ICL is t h e sole prod u cer of Polysu lph ate ® wor ld wid e.
• The a b ilit y to in cre ase prod uction at a rela tive ly low ca pit al expen dit ure.
• The Polysu lpha t e ® an d Polysu lpha t e®- base d fe rt ilizer s, cu st omized to mee t t he n eed s of
d iffer en t crops an d soil t ypes, maximize yie ld a n d allow more pre cise and e fficient a pplica t ion s.
• Polysu lph at e ® con t r ib ut es to a n d follows t he main ma rket t ren d s in t he fie ld s of in creased
nu t rien t-u se efficien cy, low ca rb on foot prin t and or ganic fertilizers.
Followin g are seve ral examples of Polysu lph at e ® -based pr od ucts an d a dd ition al prod u cts t h at are
in clu d e d in t he F ertilizer pluS lin e:
• Pot ash plu S – a compresse d mixt u r e of Polysu lphat e ® an d pot a sh . The prod u ct in clu d es
pot assiu m, su lphu r , calciu m a n d magn esiu m an d is mar ket ed by t h e Pot a sh Se g men t . I CL
con t in u ed th e g r owth trend of Pot ash pluS t h rou gh out 2020 and plan s to con t in ue this t rend in
2021.
• PKplu S – a u n iqu e comb in ation of phosph at e, pot a sh an d Polysu lpha te ® . In 2020, t h e Company,
t hrou g h t h e Ph osph at e Solu t ion s Se g ment, in crea se d PKplu S sales and plan s to con t in u e with
t his t re n d in 2021.
• NPKplu S- a uniqu e comb in at ion of Nit rog en, ph ospha t e, pot ash and Polysu lph at e®. This product
in clu d e s all 6 macro n u t rients in on e g ra nu le
• NovaPh os – en su res an effect ive su pply of slow-rele ase ph osphoru s, calciu m, mag n esiu m and
micr on u t rien ts for crops, spe cifically t ailore d for u se in acidic soil.
• NPS – a n it r og en -ph osphat e fer tilizer compou n d ed wit h su lphu r , wh ich provid e s exce pt ional
effect iven ess for t h e e nh ancemen t of a wid e r an g e of crops t hr ou g h t h e comb in a tion of t h ese
t hree n u trien ts in on e produ ct.
• PK+Micron u t rien ts – a t a ilor -mad e fert ilizer , wit h precise micr on u t rient composit ion for t he
specific t ype of cr op.
In 2020, t h e Compan y prod u ced a pproximat ely 709 t h ou san d t on n es of Polysu lphat e ® . The
prod u ct ion of Polysu lph at e ® in th e UK is in t he ramp-up st a g es an d is expect ed to r each fu ll
prod u ct ion ca pacit y t oward s th e e nd of 2023. T he cu rrent an nu al pot en tial prod uction capacity of
Polysu lph at e ® is a b ove 1 million t onne s. T he pot entia l prod u ction capacity is b ased on t h e h ourly
ou t pu t of t h e plant s, mu lt iplie d by pot en tial h ou r s of ope rat ion pe r yea r. Th is calcu lation a ssu mes
con t in u ou s pr od u ct ion over t h e ye ar, 24 hou rs a d ay, ot h er t h an a few d ays for pla n ned
ma in t en ance an d renovation s. Act ual pr od u ction is usu a lly lowe r t h an t he pot ent ial pr od u ction
capacit y d u e to u n expect ed b r eakdown s, spe cial ma in t ena nce oper at ions, n on -a va ilabilit y of raw
ma t erials a nd ma rket con dition s.
Ou r man u fact u rin g facilit ies in t h e UK we re de emed to be esse nt ial bu sin esses by t he local
governmen t aut hor ities. Ne ve rthe less, in ord er to comply wit h t h e local au t horities' g uidelin es and
to en su re t h e well- b eing of ou r e mployee s, t oward s t he e nd of March 2020, t he Polysu lphate®
min in g act ivit ies in t h e UK we re red u ced. Aft er a period of pa rt ial operat ion s, prod u ction opera tions
wer e at n or mal ra t es sin ce t he end of t h e se cond qu arter of 2020.
In ad d it ion , d uring 2020 t h ere we re some ad dition al prod uction in te rrupt ion s ca used by a fire in a
con veyor b e lt , a sizer failu re an d an elect ricit y failure.
65 ICL Group Limited
ICL's Bou lb y min e, locat ed in Nort h Yorksh ire in t he UK is t h e sole pr od u cer of Polysu lph ate®
world wid e. However , accor d in g to e xt ernal report s, a n ew pot en t ial prod u cer h old s a con ce ssion
to d e ve lop a polyh alit e mine, wit h a capa cit y of up to 20 million t on n es per year, in t h e same a rea
of t h e B ou lb y min e. A ccord ing to t h e pu blic r eports, aft e r fa ilin g to raise th e fu nd s requ ired for the
complet ion of t h is d evelopmen t , an d as it s cash resou rces wer e qu ickly d eple t ing , t his prod uce r was
acqu ired in Mar ch 2020, by Ang loA mer ica n Plc, wit h fu rt he r commit men t to in vest $300 million a
ye ar for t h e first t wo year s, in t h e d evelopmen t of t h e proje ct . Re cen tly it wa s a nnou n ced t hat an
ad d it ion al $200 million will be in ve st ed in t he project in 2021. If t h e d evelopmen t of t he new mine
ma t erializes, I CL will cease to be t he sole prod u ce r of Polysu lph at e ® an d mig ht n ot be t he market
lead er in t er ms of prod u ct ion t h rou g hpu t, wh ich is in con sist e n t wit h t h e Compa ny's st rat e g y to
ob t a in lead ersh ip posit ion s in all it s a ct ivit ie s. I CL con t in u ou sly mon it ors t he compet it ive
en viron me nt and will con t inue to seek ways to a dher e wit h its st ra tegy. F or further information , see
“It em 3 – Key Infor mat ion – D. Risk Fa ct ors – Sales of ou r fe rt ilize r pr od u cts are su b je ct to the
con d it ion s in t h e agr icult ural in d ustr y.
M a g n esiu m
Th e Pot ash Se g ment in clu de s ma g nesium prod u ction , oper ate d by Dead Sea Mag nesium Lt d ., wh ich
is t he se con d la rg est ma gnesium prod u cer in t he we st ern world after t he US mag ne sium prod u cer
“US Mag n esiu m LLC”. T he ma gn e siu m b u sin ess prod u ce s, ma rket s an d se lls pu r e mag n esiu m and
ma gn e siu m alloys, as well as d ry ca rn allit e, ch lorine and sylvin it e.
Ma gne siu m is con sid ere d as t h e lig h t est st r u ct ural met a l. On e of t he main ch ara ct eristics of
ma gn e siu m is a h ig h er st r en gt h-to-weight rat io compar ed wit h ot h er me t als – main ly st e el and
alu min u m. Th e main u ses of mag n esiu m are in t he followin g in d u str ial sect ors: t h e alu min um sect or,
st eel sect or , an d t h e ca st in g sect or of part s ma d e of mag n esiu m alloys ( ma in ly for u se s in t he
au t omot ive in d u stry).
Prod u ct ion of mag ne siu m is b ased on t he car na llit e g at hered from t he Dead Sea an d a cquired from
ICL Dead Sea. Du rin g t h e elect rolysis proce ss, t h e mag n esiu m ch lor id e presen t in t h e carn allit e is
se pa rat e d into met al ma gnesiu m a n d ch lorine g as.
In 2020, th e Pot ash Se gmen t prod u ced approxima t ely 18.3 th ou sa n d t on n es of mag n esiu m. The
cu rr en t ann ual pot en tia l prod uction capacit y of t h e mag n esiu m fa cilit ie s is 24 t h ou sa nd t on nes of
me t al mag n esiu m. T he a ct u a l qu an t it y of t h e mag n esiu m pr od u ced d epen d s on t he d eman d for
ch lorin e ( u se d in t he product ion of b romin e ) and , therefore, it is possib le that t he actu al prod uction
will be lower t h an t he produ ction capacity.
Ad d it ion a l fact ors t ha t can re d u ce t he a ct u a l prod u ct ion are u n expect ed b re akdown s, special
ma in t en ance opera t ion s, non - availa bilit y of raw mat e rials and mar ket con d it ion s. The pot en t ial
prod u ct ion ca pacit y of ou r var iou s plant s is b ased on the h ou rly ou t pu t of t he pla nts, mu lt iplied by
pot en t ial h ou rs of oper at ion per year. Th is calcu lat ion assu mes con t in u ous prod u ction over the
ye ar, 24 h ou rs a d ay.
In ord er to improve efficien cy, t he Compan y agr eed on a n ew Collect ive La b or ag reeme n t d u ring
2020, wh ich in clu d e s t he e arly retir emen t of 34 employees.
66 ICL Group Limited
P h os phate S olu tion s Se gme n t
Th e Ph osph at e Solu t ions Seg me nt ( he reinafter – t he Segment ) is b ased on a ph ospha te valu e chain
wh ich u se s ph osph at e commod it y prod u ct s, su ch as phospha t e rock and fer tilizer -g rade ph osph oric
acid ( “ green ph osph or ic acid ”), to prod uce specialty pr od u cts wit h hig h er added valu e. T he Se gment
also pr od u ces an d market s phospha t e -based fer t ilizers. T h e st ra t eg y of t h e Seg men t is to be a
lead in g provid e r of value -a dde d specialty solu t ions b a sed on phosph ate for t he ind ustrial, food and
ag ricu lt u re mar ket s.
Phospha t e Solu t ion s: B ackward Int eg ra ted Valu e Chain
In 2020, tot al sa le s of th e Ph ospha t e Solu t ion s Se gme nt we re $1,948 million (in clu d in g sales to
ot h er se g ments), con st itu ting a pproximately 39% of I CL's t otal sales, a d ecr ease of 2% compared to
2019. Tot a l sales of Phosph at e Specia lt ies, in 2020, we re $1,135 million , refle ct in g an in cre ase of
2% compared to 2019. T ot al sales of Phosph ate Commod ities, in 2020, we re $813 million , re fle cting
a d ecrea se of 7% compa red to 2019. Seg men t ope rat in g profit t ot aled to $66 million , con st it u t ing
approxima t ely 13% of t h e t ot al ope rat in g profit at t r ib utable to t h e Se g ment s, a d ecrea se of 34%
compar ed to 2019. Th e ope rat in g profit of Ph osph at e Specia lt ies, in 2020, t ot aled to $117 million ,
reflect in g an in crease of 15% compa red to 2019. T h e oper at in g loss of Phosph at e Commod it ie s in
2020, t ot aled to $51 million , $49 million lowe r t h an t h e $2 million opera t in g loss in 2019. For fu r t her
in format ion , see “It em 5 - Oper at in g an d Fin ancial Revie w and Prospect s— A. O perat in g Re su lts—
Resu lt s of Operat ion s”.
P r od ucts
Th e Ph osph at e Solu tion s Seg me nt prod uces a varie ty of prod u cts b ased on it s b ackwar d in teg rated
va lu e cha in .
Phospha t e rock con t ain s ph osph oru s, on e of t he t hr ee essent ial n u t rient s for pla nt d e ve lopment,
wh ich d irect ly con t rib u te s to a wid e ra n ge of ph ysiolog ica l pr ocesses in a pla n t , in clu d ing
prod u ct ion of su g ars ( in clu d in g st arch), ph ot osyn t hesis an d e ne rg y t ran sfer. Phosphorus
st ren g t hens plan t st ems, st imu la t es root d e velopme nt , pr omot es flower format ion and accelerates
crop d e ve lopmen t . Ph ospha t e rock can b e u tilized t o pr od uce phosphoric a cid an d ca n b e sold as a
raw mat erial t o ot h er fe rt ilizer prod u cers. I CL's ph osph ate rock is min ed an d processe d from open
pit min es an d u n d erg oe s a b en eficiation proce ss, aft er which h ig h -g ra de mu lti- pu rpose phosphate
prod u ct s a re cr eat ed.
67 ICL Group Limited
Gre en ph osph oric acid is pr od u ced by u sin g b en eficiated rock an d su lphuric acid (pr od uced by the
Seg men t u sin g su lphu r acqu ired from t h ird pa rt ies). Most of t h e g ree n ph osphoric acid is u sed t o
prod u ce ph osph at e - ba sed fert ilizer s an d pu re ph osphor ic acid , an d in some cases , is sold t o ext ernal
cost u me rs.
Phospha t e fe rtilize rs are produ ced b y u sing gree n ph osph oric a cid or sulphu ric acid, d epending on
t he fert iliz er t ype. T h e Se gment man u factures va riou s t ype s of fe rt ilize rs ( PK prod u ct s, GSSP, GT SP
an d ot h er s) for d iffe rent uses.
Th e Seg me n t man u factures pu r ified ph osph or ic acid b y pu rifyin g g ree n ph osph oric acid . Pu r ified
ph osph oric acid an d g re en ph osphoric acid a re u sed t o manu fact ure d own st rea m prod u ct s with
hig h ad d ed va lu e , su ch as, ph osph at e salt s a n d a cid s for a wid e ra ng e of food an d in d u st r ial
applicat ion s. Ph osph at e salts and acid s are use d in va riou s in dust rial end market s, such as oral care,
clean in g pr od u cts, pa in t s and coat ing s, wa t er t reat men t, a sph alt mod ificat ion , con st ruct ion, metal
t rea t men t a nd more. T h e Seg men t 's pr od u ct s for t h e food in d u st ry in clu d e fu n ct ion al food
in g red ien ts an d ph osph at e a d d itive s, which provid e t ext u r e a nd st ab ilit y solu t ion s for pr ocessed
me at , me at alt e rnative s, pou lt ry, se afood , d airy, b everage and b aked g oods.
In ad d it ion , t he Segment supplies pu rified ph osph oric acid t o t he I nnova t ive Ag Solu tion s Se gment
( IA S) an d a lso pr od u ces milk prot ein s an d wh ey prote in s for t he food in gr ed ien ts in du stry.
Th e Se gmen t own s pr opriet a ry t ech nolog y t h at su pport s t he prod u ct ion of allerg e n -free plant-
b ased food s, ca lled ROVI TA RIS®. Recen tly, t h e ROVI TARIS® prod u ct port folio h as b e en adapted to
fu rt h er meet con su me r d emand an d st ren gth en I CL’s foot prin t in t h e fast-growing plant- based meat
alt erna tive market. In 2020, ICL b e ga n t h e con st ruction of a plan t prot ein fib er pr od uct ion u n it at
it s Ca ron d e let, Missou ri fa cilit y.
More over , t h e Ph osph ate Solut ions Seg men t, t ogeth er with the Potash an d IAS Segment s, produces
an d market s Fert ilizerplu S prod ucts. Fe rt ilizerplu S is I CL's pr emiu m fert iliz ers line, b ased ma in ly on
polyh alit e ( market e d by t h e Compan y as Polysu lph at e ® ) an d ot h er prod u ct s. For fu rt her
in format ion , see “It em 4 - In formation on t he Compan y— B. B usin ess Overview— Pot ash Se gment”.
P r od ucti on
Th e Ph osph at e Solu tion s Se g ment h as a d e velope d prod uction se t up t h at in clude s ph osph ate rock
min in g , alon g wit h prod u ct ion an d pu r ch ase of d iffere nt grades of ph osph or ic acid , a nd pr od u ction
of spe cialt ie s pr od u ct s and commod it ie s in differ en t facilitie s aroun d t he world .
Phospha t e r ock is min ed a nd proce sse d fr om open pit min es t h at are locat ed in t h e Neg e v Desert
in Isr ael and in Yu n n an pr ovin ce in Ch in a. T he Phosph at e Solu t ion s Se g ment prod u ces su lph u ric
acid , green ph osphoric acid an d ph ospha t e fert ilizers at it s facilit ies in Israel an d in Ch in a. T he
Seg men t a lso oper at es facilit ies to pr od u ce phosph ate fertilizers in t he Netherlands a nd Ger many,
as we ll as animal- fee d addit ive s in T urkey. T he Seg me nt's specialty pr od ucts are man ufactur ed in its
facilit ies in Ge rman y, Un ited Sta tes, I srae l, B ra zil, Ch in a, UK, A rgentin a and Aust ralia . Th ese facilities
en ab le t h e Segmen t to prod u ce cu st omer- spe cific solu t ions t h at me et t he re qu ireme nt of d iffe rent
ma rket s. A d d it ion ally, t he Seg men t pr od u ces milk an d wh ey pr ot ein s for th e food in g red ients
in d u st r y in it s facilit y in A ustria.
68 ICL Group Limited
Th e Ph osphat e Solu t ion s Seg men t 's prin cipa l manu fact u ring plan t s, d ist rib u tion cen t er s and
ma rket in g compa nies are se t forth in th e map b elow:
Th e cu rrent ann ual pot ential prod uct ion capacit y is as follows: approxima t ely 6.7 million t on n es of
ph osph at e rock, approximat ely 2.7 million t onnes of ph osph ate fertiliz ers, a pproximat ely 1.3 million
t on n es of g ree n ph osph oric acid , approximat ely 415 t hou san d t on nes of pu rified ph osph or ic acid
an d appr oximat ely 385 t h ou sand t on nes of ph osph at e salt s. T h e pot e nt ia l prod u ction capacit y of
t he va riou s pla n t s is b ase d on t h e h ou r ly ou t pu t of t h e pla nt s mu lt iplied by t h e pot e nt ial h ou rs of
operat ion per year. Th is calcu lat ion assu mes con t in uou s prod uction over t h e yea r, 24 hou rs per d ay,
ot h er t han a fe w days for pla nned main ten ance and renovation s. A ctual produ ction is usu ally lower
t han pot en t ia l prod u ct ion ca pacit y, d u e to special ma in t ena nce operat ion s, availa b ilit y of raw
ma t erials, market con dit ion s, and un plann ed downtime.
69 ICL Group Limited
In 2020, Th e Ph osphat e Solu t ion s Se gment prod u ced approxima t ely 4,625 t h ou sa n d t on n es of
en rich ed ph osph at e rock, 1,176 t housa nd ton nes of gre en phosphoric acid, 2,168 t h ou san d tonnes
of ph osph at e fert iliz ers, 306 t hou san d t on n es of pu rified ph osph oric acid ( as Ph osph orus
Pen t oxid e), 279 t h ou sand t on nes of ph osph at e salt s and 74 t h ou san d t onn es of food mu lt i- b len ds.
Prod u ct ion - relat ed developmen ts t hroug hou t t he Se gme nt :
Isr ael
In ord er to act ively a d d ress g lob a l market volat ilit y, t h e con t inu in g econ omic an d bu sin ess
u n cer t ainty an d to mit ig ate the implicat ion s of t h e COVI D-19 spre ad an d it s impact on t h e Se gment's
resu lt s, sever al efficie ncy in it iat ives a nd measu res were in it iated in 2020, wh ich in clu d ed , among
ot h er t hin gs, t h e d iscon tinu at ion of t h e produ ction a nd sale of ph osph at e rock in Rot em I srae l. For
fu rt h er in formation see Not e 1 to ou r A u d it ed Fin ancial St ate me nt s. In ad dit ion, in Rot em A mfert
Isr ael, d espit e the very cha lleng ing year, prod uct ion r ecord s were ach ieved in certain pr oduct lines,
su ch as, wh it e ph osphoric acid ( 171,000 t on n es) a nd Spe cialt y Fertiliz ers, ( 70,000 t on nes), in clu ding
60,000 t on nes of MKP and 10,300 t on nes of Pe kasead ).
Chin a
YPH, t h e join t ven t ur e in Chin a ( h er ein aft er – YPH JV), impr oves t he compet it iveness and fle xibility
of ICL’s ph osphat e a ct ivit ies, as a resu lt of access to ph osph at e rock wit h ext e nsive r eserves. The
join t man u fact u rin g pla t form in clu des act ivities over t he ent ire valu e ch ain . T he pe rforman ce of Y PH
JV con t in u ed to impr ove in 2020.
In De cemb er 2019, I CL lau n che d it s n ew food - g rad e ph osph oric acid plant in Y PH J V. Th e plant
con t in u es t o ramp-u p in a t esting mod e a nd will ad d u p t o 70 t h ousan d t onn es of food g ra d e acid
prod u ct ion capacit y, on ce fu lly ramped -u p. T h e plan t is d e sig n at ed t o prod u ce commercia l food -
grad e acid qu ant itie s by t h e e nd of t h e first h alf of 2021. T he n ew plan t is expect ed t o st re ngthen
ICL's phosph at e spe cialt ie s opera t ion s an d ena ble a d dition al d iver sificat ion in t o h ig h er valu e -added
prod u ct s.
Amer icas
In 2020, t h e Compan y carr ie d ou t fu rt he r pr od u ct ion opt imiza t ion s followin g t h e con t in ued
rea llocat ion of prod u ct ion from Mexico to San Jose d os Campos ( B ra zil) an d Caron d elet ( US),
in it ia t ed in 2019.
Eu rope
B ot h fer t ilizer facilities in Eur ope, ICL Ger man y Lu dwigsh afen an d ICL The Nethe rlan ds, su ccessfu lly
in cr ease d t he utilization of Polysu lph ate ® wit hin a new ran ge of PK prod ucts, wh ich ar e part of the
Fer t iliz erplu S prod u ct lin e. For fu rt her in for mat ion , see “ Item 4 - I n for ma t ion on t h e Compa ny— B.
B u sin ess Over view— Pot ash Seg men t”.
As par t of t h e Company's stra teg y to d ivest low syn erg y busin esses and non -core busin ess activit ies,
t he Compa n y d ivest e d Ha gesü d Int erspice Gewü rzwerke Gmb H, a pr od u cer of pre miu m spice
b le nd s, in clu d in g re lat ed real-est at e a sset s, d u rin g t h e secon d qu art er of 2020. F or fu rt her
in format ion , see Not e 8 to ou r A u dit ed Financia l St at ement s.
70 ICL Group Limited
C o m petit ion
Th e compet it ive ch ar act erist ics of t h e Seg me n t vary accor d in g to t he t ype of pr od u ct s it
ma nu fact u res and th e markets in wh ich th ey are sold .
Th e commod it y phospha t es market is ext reme ly compet it ive , an d t h e compet it or s in clu de
mu lt i- nat ion al compa nies a n d g ove rn men t -own ed compan ies. Man y pr od u cers ope rat e in t h is
ma rket an d t he main compe tit ive factor is price . T h e ab ility to compe t e in t he market is d ependent,
ma in ly, on raw mat erial cost s, prod u ct ion cost s an d log ist ics. For t he se reasons, compan ie s located
in proximit y to sou rces of raw mat erials, port s, a nd cu st omers, b e nefit from compe t it ive ad van ta ges.
A ke y fact or in t h e area of raw mat e rials ( in a d dition to ph osph at e rock) is t h e acce ssib ilit y to and
t he price of su lph u r and a mmon ia , which are r equ ir ed to man u fa ct u re t h e main ph ospha te
fer t iliz ers. A d d ition al fact ors t hat a ffect compet it ion to a ce rt ain ext en t in clu de prod u ct qu a lity,
ran g e of pr od u ct s, se rvice, an d th e capab ilit y to d e ve lop n ew prod u ct s t hat provid e u nique
solu t ion s.
Phospha t e mines a nd produ ction facilit ies ar e loca ted in ma ny cou ntries, in cluding Morocco, which
possesses t h e world ’s la rg est ph osph at e r ock reserve s, Ch in a, A lg er ia, Syria, B r azil, Sou t h A fr ica ,
Sau d i A rab ia, J ordan, Eg ypt , A ust ralia , t he Un ited St at es, Ru ssia, Peru, T u nisia , Le b anon , Isr ael and
ot h er s. The major par t of t h e min ed ph osphat e rock is u sed b y t h eir man u factu re rs, in clu d ing I CL,
ma in ly for prod u ct ion of d own st re am ph ospha t e fer t iliz ers (ver t ically in t e gr ate d compan ies),
in clu d in g T riple Su perphosphat e ( TSP).
Th e ma in ph osph at e fe rt ilizer s prod u cers, wh o compet e wit h ICL in t he g lob al T SP ma rket , are:
Office Ch ér ifien d es Phosphat es ( OCP, from Morocco), Mosaic ( US), Gr ou pe Ch imiqu e Tu n isien
( GCT ), Gru po F ert in al ( Mexico), A gropolych im, ( B ulg aria), Leb an on Che mica l Compan y, El Nasr Co
for I n t ermed iat e Ch emicals ( NCI C, from Eg ypt ) and va riou s Chinese pr od ucers.
Th e Ph osph at e Solu t ion s Se g ment h as a glob al lead in g posit ion in t he pu rified ph osph or ic acid
ma rket , b a sed on its in - hou se techn olog y and it s down strea m prod ucts, as we ll a s in th e food -grade
ph osph at e s a nd d airy prot ein s ma rke t s. Th e Se gme nt 's compet it ors are larg e an d mid - sized
in t er n ation a l companies, servin g t h e ch emical an d food in d u strie s, wh ich ca rry on ma n u factu ring
an d ma rket in g activit ies in various cou n tries, as we ll as loca l compa nies servin g local ma rke t s.
Th e pr imar y compet it ors of t h e Seg me n t , in t he che mica l an d food field s, a re Ch emische F abrik
B u d en heim KG, Inn oph os In c., Pr ayon S.A , Nu t rien , A dit hya B irla, Haifa Ch emica ls Lt d., FO SFA and
va riou s Ch in ese prod u cers.
Sig n ificant compet it ors e xist in t he d airy pr ot ein field , in clu d in g Ba yr ische Milch in d u strie, A rla,
Fon t e rra , A lpa vit a nd AVH. C ompe t it iven ess is prima rily d et ermin ed by prod u ct qu alit y, acce ss to
raw mat erials, su pply ch ain ca pab ilit ies an d t echnical kn ow- how.
Th e Ph osph at e Solu tion s Se gme n t b en efit s from t he followin g compe t itive ad van tages:
• An in t eg r ated valu e chain u se s t he ph osph at e rock min ed in Isr ael ( I CL Rot em), as we ll as in
Chin a ( Y PH J V) for t h e prod u ct ion of it s g ree n ph osph oric acid , wh ich se rves main ly as a raw
ma t erial for t h e product ion of t h e Segmen t's pr od uct s an d for the prod uct ion of ICL's In nova t ive
Ag Solu t ion s prod u cts.
• Log ist ical ad va nt ages d ue to t h e Se gment's g eograph ical loca t ion and d ive rsification , pr oximity
to por t s in I srae l a nd Eu rope an d r elat ive proximit y to it s cu stomers.
71 ICL Group Limited
• ICL is a g lob al fert ilizer prod ucer t h at can comb ine pot a sh a n d ph osph ate fertilizer s in the same
sh ipmen t , which e na b le s it to se rvice smaller cu st omers, part icu larly in B raz il an d t h e Un ited
St at es.
• The Seg men t en joys a compe t it ive a d va n t ag e in specia lt y ph osphat es d erivin g fr om prod uct
fea t u res, qu alit y, service , t e chnical a pplica t ion su pport , a g lob a l manufactur ing foot prin t and a
ve ry b road prod u ct lin e.
• YPH JV provid es an in t e gr ative ph osph ate plat for m in Ch in a , wit h b et ter access to t h e Ch inese
ma rket . In add ition , th e Se gment enjoys a compe t it ive cost adva nt ag e in its phosph ate a ctivities,
d u e to a cce ss to low- cost phosph a te r ock wit h lon g- term rese rves.
R a w Materials and Su ppl iers
Th e Ph osph at e Solu t ion s Se gmen t prod u ces most of t he raw mat e ria ls it u se s to prod u ce it s
commod it ies an d specialt ies prod u cts.
Th e Se gmen t prod u ces ph osph at e rock as t he primary raw mat e rial for it s ba ckward in t eg rated
va lu e chain , comme n cing from min in g of ph osph ate r ock, t hr ou gh prod uction of g reen ph osphoric
acid a nd up to t he produ ction of ph osph at e-based fertiliz ers, pu rified ph osph oric acid an d specialty
ph osph at es.
Th e primary raw mat erials a cqu ired from e xt ern al sou r ces are, main ly, su lph u r, a mmon ia, d ifferent
grad e s of pu rified ph osph oric acid, sod a ash , caust ic sod a an d pot assiu m h ydroxid e.
For fu rt h er informa t ion r egardin g su lph ur prices d urin g 2020, se e “Ite m 5 - Opera ting an d Financial
Review an d Prospect s— A. O per at ing Re sults— T rends A ffe cting Phosph ate Solu tion s Seg men t”.
For t he d air y pr ot ein b u sin ess, secu ring org anic qu a lit y raw ma t erials ( wh ole milk, skimmed milk
an d wh ey) is a key elemen t of t h e ope rat ion s. In ord er to se cu re t he su pply, t h ere are lon g t erm
ag reeme n ts in place wit h all major su ppliers, which a re valid for t he n ext 1–3 ye ars.
Th e Ph osph at e Solu t ion s Seg men t main t ain s in ven t ories of su lph u r, ph osph at e rock, g reen
ph osph oric acid an d ot h er raw mat erials in qu an t it ies t h at con sid er t h e project ed le vel of
prod u ct ion b ased on con su mpt ion charact erist ics, su pply t ime lin e, d ist a nce from su pplie rs and
ot h er log ist ical con sid e ration s.
S a le s, Marketin g an d Di stribut ion
Th e Ph osph at e Solu t ions Seg men t se lls an d markets it s pr od ucts world wide. Th e pr imary markets of
ph osph at e commod it ies prod u ct s are Eu rope, Chin a, B ra zil, Isr ael, t he Un it ed St at es an d T u rkey.
Phospha t e specia lt ies prod u cts are primarily market ed to in d ust ria l, food an d commer cial cu st omers
in Eu rope, Th e U.K, Nort h A me rica, A sia , A u st ralia a nd Sou t h A merica. Th e mar ket in g n et work is
b ased , main ly, on a market in g an d sa les org a niza tion and , to a le sse r ext ent, on ext erna l d ist rib utors
an d sales age nts.
Th e Seg me n t ext e n d s cr ed it t er ms to it s cu st omers, accord in g to t h e cu st omary pract ice in t h eir
loca t ion s. T h e Segmen t 's sa le s are g en e rally covere d by t rad e cred it r isk in su rance or by le t t ers of
cre d it from b an ks wit h h ig h credit ratin gs.
Most of t h e Se g ment 's sales do n ot t ake place accord in g to lon g - t er m ord e rs or con t racts b u t are
reg u lar ly ord e red close to t h e t ime of su pply. T herefore, t he re is no sig n ificant orde rs' b acklog.
72 ICL Group Limited
Th e Seg me n t t ranspor t s its pr od ucts from Isr ael to cust ome rs ove rsea s by sh ips ( mainly in b ulk) that
it lea se s in t h e g loba l ma rine tr an sportation market, wh ich are loaded by u sin g d esig na ted facilities
in t h e port s of A sh d od on t h e Med it errane an Sea an d Eilat on t h e Red Sea. T he Seg men t also has
specia l port facilit ies for b u lk load in g in A mst e rd am ( t h e Net he rlan ds) an d Lu d wig sh afen
( Germa n y). YPH JV sells most of it s prod u ct s in Chin a a nd is prepar in g to provid e a logist ical solu t ion
for marin e sh ippin g ou t sid e Chin a, wh en it will be requ ired.
Th e prices of ph osph at e - b ased fert ilizers are d etermin ed in negot iation s b et ween t he man ufacturers
an d t h e cu stome rs an d are affecte d mainly by th e rela tion sh ip between the market d ema nd and the
availa b le su pply, as well as t h e id en tity of t h e customer a nd th e per iod of t he agreement . Prices for
relat ively lon g - t erm con t ra cts are n ot n ece ssa rily t h e same as spot price s ( cu rr en t/casua l sales
t ran sa ct ions).
Most sales of ph osph at e specia lt ies pr od uct s are made u nder a greements wit h te rms of on e or t wo
ye ars, or t hr ou g h “spot ” or d ers, pla ced close to t h e d at e of su pply. For t he se pr od u ct s, t here are
fra mewor k ag r eemen ts wit h specific cust omers exist, t hroug h which t he customer may purchase up
to t h e maximu m ag re ed qu a ntit ie s of prod uct s du rin g t he t erm.
For pu rpose s of e ffect ive market ing and sellin g of ma ny of t h e Se gment's prod ucts, especia lly food
prod u ct s, t ech nica l sa les a nd applica t ions, pe rson n el wor k close ly wit h cu st omers in ord er to t a ilor
t he pr od u ct s to t h eir n eeds.
Th e se gmen t ma in t ain s ad equate in ven tories of phospha t e specia lt ies prod u ct s to en su r e or d erly
su pply to cu st ome rs, con sid er in g t he cu stome rs’ d ist an ce from t h e man u fa cturing locat ion s and
t heir d emand for inve n tor y availabilit y, in con ju nction wit h opt imization of in ventory st orag e costs.
Th er efore , some of t h e fin ish ed prod uct in ventories are st ore d in th e de stin at ion cou n tries.
S e ason ality
Th e se ason al n at u r e of d eman d for ph ospha t e commod it ies prod u ct s is usu ally ch ara ct e riz ed by
hig h er sales in t h e secon d a nd t hird qu arters t h an sa les in t h e first a nd fou rt h qu ar ter s. In r ecent
ye ars, d u e to var iou s in flu en ces on t he t imin g of sales, primar ily price flu ct u a t ion s, t h e effects of
se ason alit y h ave b een r educe d compa red to past per iods.
Th e t arg et mar ket s of ph ospha t e specia lt ies prod u ct s are n ot ch ara ct eriz ed by sig n ificant
se ason alit y. However, t h e fou rt h qu ar ter of t h e year is relat ively weak d u e to t h e h olid ay sea son
an d cu st omers’ d est ockin g t owards t h e end of t he year .
N a t ural Resources Tax
Th e Law for T axa t ion of Profit s from Na t u ral Re sou r ces in Isr ael en t e red in t o effect on J a nu a ry 1,
2016, wh ich respect to Ph osph at e operat ion at Rot e m I srae l. For fu rt h er in formation , see Not e 15
to ou r A u d it ed Finan cia l St atemen ts.
73 ICL Group Limited
I n n o vat ive Ag Solu tion s Se gmen t
Th e I n n ovat ive Ag Solu t ion s Seg men t a ims to ach ie ve g lob al lea der ship in specia lt y fert iliz er ma rkets
by e nhancin g it s g lob a l posit ions in it s core market s of specialt y ag ricu lt ur e, orna me ntal
hort icu lt u re, t urf a nd lan d scapin g , t arg etin g h ig h -g rowt h ma rkets su ch as B razil, I nd ia an d Ch ina,
by le ve rag in g it s u niqu e R& D capa b ilit ie s, va st ag ron omic e xperie nce, g lob a l foot pr in t , b a ckward
in t eg r ation to pot ash a nd ph osph at e an d che mist ry kn ow-how, as well as see kin g M& A
opport u n it ies. I CL is workin g to expan d it s b r oad pr od u ct por t folio of con t rolled re lea se fertilizers
( CRF), wat er solu b le fertilizers (W SF), liqu id fe rtilize rs a nd st raight s (MKP/ MAP/ PeKa cid).
Th e I n n ovat ive Ag Solu t ion s segment d e ve lops, man u factures, mar ket s and sells fert iliz ers t hat are
b ased pr imarily on n it rogen, pot ash (pot assiu m ch loride ) a nd ph osph at e. It prod uces wate r soluble
specia lt y fe rt ilize rs in B elg iu m, liqu id fert iliz ers a nd solu b le fer t ilizer s in Israel an d Spain , and
con t rolled - relea se fert ilizer s in t h e Net h er land s an d t h e Un it e d St at es. I CL's spe cia lt y fert ilizers
b u sin ess market s it s prod ucts world wide , ma in ly in Eu rope, A sia, Nor th A merica, B ra zil and Israel.
In 2020, sales of t h e I nnovative Ag Solu tions segmen t tot aled $731 million ( in clu din g sales to other
se g ment s), con st itu ting approxima t ely 14% of ICL's tot al sa les, an incre ase of 2% compa red to 2019.
Th e se gmen t 's opera t in g profit t ot aled $40 million , con st it u t in g 8% of th e t ot al operat in g pr ofit
at t r ib ut ab le to th e se gments, an incr ease of $19 million compared to 2019. For fu rthe r information,
se e “I t em 5 - Ope rat in g an d Fin an cial Re view an d Prospect s— A. O perat in g Resu lt s— Re su lt s of
Ope rat ion s”.
Spe cialt y fe rt ilize rs offe r improved va lu e to t he g rower compare d to t h e u se of ot he r fe rt ilize rs as
t hey are more e fficien t , maximize yield an d qu alit y an d re qu ire lowe r la b or cost s. T he followin g
pyra mid pre se nt s t he d iffere n t fer t iliz er prod u ct lin es – t h e hig h -valu e prod u ct s are u su a lly
accompan ie d by a h ig h er price pe r t on ne . I CL's I nnovat ive Ag Solu tion s seg ment prod uces most of
t he hig h valu e produ cts, except for pot assiu m n itr at e an d calciu m n itrat e.
74 ICL Group Limited
Th e Specia lt y F ertilizer s b usin ess ope rates in 2 main markets:
S p e cialty Agr icult ure
Th is ma rket in clu d es h igh -value ag ricu ltural crops su ch as fr u its an d ve g et ables. En h anced efficiency
fer t iliz ers are u se d an d applied ma in ly to t he se crops. Th e u se of specia lt y fert iliz ers in row cr ops
su ch as su g ar can e, corn a nd wh eat can also be b eneficial – su b ject to clima t e an d soil con d it ions.
On e of t he main market s for ICL is r elat ed to th e d rip irrig ation /fe rtig ation ma rket, wh ich is g rowing
as t h e u se of d r ip ir rig at ion syst e ms is in cr easin g across t h e g lob e, ma in ly in e merg in g mar kets, such
as Ch in a a n d Ind ia. T h e u se of en hanced efficie ncy fe rtiliz ers su ch as controlled rele ase fertilizers is
growin g d u e to t h eir en vir on men t al a n d econ omic ad vant a ges, alt h ou g h su ch g rowt h is st ill
d epen d ent on t h e price levels of cr ops an d raw-ma t erial pr ices ( e .g ., u rea, pot a ssiu m a nd
ph osph oru s).
T u rf & O rnamental ( T& O)
Orn amen t al Hort icult ure
Th e O rn amen ta l Hort icult ure mar ket con sist s of growers of ou t d oor orna me ntal pla n ts ( n ur se ries)
an d pot an d be dd ing plant s (g re en hou ses). T h e growe rs requir e hig h qu a lity fertilization prog rams
to g row plan t s at t h e qu alit y le ve l requ ire d by t h e g ard en cent ers, DIY ( Do-It-You rself) ou t le ts and
ret a il ch ain s. Th e I A S seg ment h as a large specia lized sales force, ad visin g g rowers on t he opt imal
nu t rit ion of plan ts. I CL ha s a spe cialized dist rib ut or n et wor k in t he Orna ment al Hor ticu ltur e market.
ICL's main prod u ct lin es for th is ma rket are CRFs ( con t rolle d re lease fe rt ilizers) an d W SFs ( water
solu b le fe rt ilize rs) wit h well- kn own b ra nd n ames su ch as Osmocot e, Pe t ers & Un ive rsol. In spe cific
ma rket s, su ch as Nort h A merica an d t h e UK, a r an g e of u niqu e pla n t pr ot ect ion prod u ct s is also
in clu d e d in t h e proposals for g rowin g healt h y plan t s. In t h e UK, I CL is a lead in g g r owin g med ia
su pplier pr ovid in g a complet e solu t ion for t h e orn amental g rowers.
Tu r f & La nd scape
Th e profe ssion a l t u rf mar ket in clu des t h e followin g u ser g rou ps: g olf cou rse s g ree n kee pers, sport
fie ld g r ou n d s men , la nd scape rs, con tract ors & lawn service
Th ese grou ps d e man d hig h-qu a lity in pu t s to se cu re st ron g, hig h -qu alit y t urf. T he u sers requ ire an
in t eg r ate d a pproach for keepin g t h e t u r f st ron g an d main t ain in g it s h ealt h , wit h ou t cre at ing an
en viron me nt t h at is con d u cive to t h e d e ve lopmen t of d isease. T he re is an en vir on men t al n eed to
limit t h e in pu t s a nd , t he refore, an in te grated approach of u n ique, h ig h- quality pr od u cts is n eeded.
Th e most impor t an t in pu ts are con trolle d r elease and slow re lea se fertilizers, g rass seeds a nd plant
prot ect ion prod u cts. ICL offe rs all th ree pr odu ct lin es in an integr ate d prog ram. I CL h as a dedicated
an d experienced t eam of u n iqu e profe ssion al grass e xper t s, a lon g wit h a d ist rib u t ion net work
se rvin g it s key mar ket s, main ly in Eu rope an d A sia.
75 ICL Group Limited
P r od ucts
Spe cialt y fe rt ilize rs are h igh ly effect ive fertilizer s th at allow more pre cise fe edin g of plan t s for t heir
ma jor n u t rien ts n e eds ( n itr ogen, ph osph orou s a nd pot assiu m) as we ll as secon d ar y n u t rient s and
micr on u t rien ts. T he se fertilizers allow efficie nt fertilizin g t hr ou gh specia l applicat ion s amon g ot h ers,
t hrou g h d rip irr ig ation syst ems an d foliar spra yin g , a n d he lp g rowe rs ob t ain hig her yield s and
qu a lit y. T h ese fe rt ilize rs in clu d e, amon g ot he rs, con t r olle d re lea se fe rt ilizers ( CRF ), slow re le ase
fer t iliz ers ( SRF ), solu b le fe rtiliz ers a nd liqu id fe rtilize rs as follows:
• Con t r olle d - release fert ilizers ( CRF) allow accu ra t e relea se of n u t rients ove r t ime . CRFs ha ve a
specia l coat in g t h at a llows prolon g ed release of n u t r ient s over sever al wee ks an d up to 18
mon t hs - compa red to re g ula r fe rt ilizers t ha t d issolve in t he soil an d are immed iately available
b u t t h ere fore le ach partia lly in t h e soil. ICL I nnovative Ag Solu t ions h as le ad ing g lob al b rand-
name prod u ct s su ch as, Osmocot e , A g rob le n an d Ag r ocot e. O smocot e is t h e most u sed
con t rolled - relea se fe rt ilizer by orna me nt al g rowe rs world wide . Th e b rand is kn own to d eliver
hig h qu a lit y or n amenta l plan ts d ue to it s con sistent release of n u tr ien ts an d u niqu e pa tterned
an d pr og ra mmed rele ase t echnolog ies. I CL con tin ues to in vest in new t ech nolog ie s, as well as
fie ld t rials to t est an d con firm t h e h igh r elia b ility of it s prod uct s. During th e past few years, ICL
d eveloped several n ew t echnolog ies su ch as t he “Dua l Coating Te chn ology” (which opt imizes
t he r elease t o or na me nt al plan t s) an d t h e “E-Ma x Release T echnolog y” (a n ew coa t ing
t echn olog y wit h impr oved release ch ara cteristics, main ly for u r ea). Fu rt h ermore , ICL is also
se lling slow- relea se fert ilizers ( SRF) wh ich , d u e to t h eir low solu b ilit y and hyd r olysis, rele ase
nu t rien ts slowly ( g en erally up to a period of t wo mon ths). Main ma rkets for these fertilizers are
in t h e T u rf a nd A me nity markets.
• Solu b le fert iliz ers, which are fu lly wa t er-solub le, an d fu lly-solu ble NPK compou n d fer tilizer s, are
common ly u sed for fer t iliz at ion t hr oug h d rip irrig ation syst ems to opt imiz e fe rt ilize r e fficiency
in t h e root zon e to maximize yie ld s. T he se fu lly solu b le fer t iliz ers are some t imes also u se d for
foliar a pplica t ion s. ICL's well- kn own b ran d s for fert ig at ion are Pet ers, Un iversol, Agr olu t ion,
NovaNPK an d Novacid . I CL d evelops spe cific formu lat ion s for d iffe ren t a pplica t ion s and
circu mst a nces. T he re are specific formu lat ion s for specific crops, g ree nh ouses an d /or open
fie ld s, as well as for d iffer en t wat er types.
• ICL is also sellin g ‘St ra ig h t fert iliz ers’ wh ich are cryst allin e, free -flowin g an d hig h pu rity
ph osph oru s solu b le fe rt ilizers su ch as MKP, MA P an d Pe Kacid . Key b ra n d s are NovaPeak &
NovaMA P. PeKacid is t he on ly solid hig hly acid ifyin g, wat e r solu b le fert ig at ion pr od u ct that
con t ains b ot h phosph oru s a nd pot assiu m. T h e prod u ct is id eal for spe cific wa t er con d it ions
wh ere an a cid ifyin g e ffect is requ ired, as well as for kee pin g t he d rippin g lin es clean .
• Liqu id fert ilizers are u sed for in t en sive ag ricu lture , a nd are in t egrat ed in ir rig a t ion syst ems
( ma in ly d rip syst e ms). Th e prod u ct lin e in clu de s most ly t ailor -made formu lation s d e sig ned for
specific soil & wa t er/ climate con dition s an d crop n e eds.
• Peat , a g rowin g med iu m for variou s crops, wh er e g en erally con t r olle d -release fer tilizers and
plan t - pr ot e ction pr od u cts are mixe d in. Specific for mu lat ion s of g rowin g med ia are d esigned
for specific pla n t ne ed s, su ch as g re en house b ed din g plan t s a nd ou t d oor n u rser ie s. A we ll-
kn own ICL b r an d is t he “Levin gton” b rand . I nclu sion of g rowin g med ia prod ucts in t h e por t folio
in t h e UK allows I CL to offer an effect ive t otal solu tion to it s cu stomer s.
76 ICL Group Limited
• W at er con ser va tion an d soil con d it ion in g prod u cts are n ew prod u ct lin es d eveloped by I CL's
IA S se gmen t . W at er con ser vat ion prod u ct s are u sed in pr ofession al t u r f to keep wat e r in t he
root - zon e. Ke y br an d s are H2F lo an d H2Pr o. The se prod u ct s sig n ifican t ly red uce irrig ation
requ iremen t s. T his n ew t ech nolog y is also u sed in agr icultu re to allow b ett er water a va ilab ility
arou n d t h e r oot -zon e of t h e cr ops.
P r od ucti on
ICL Inn ovat ive Ag Solu t ion s’ prin cipal pr od u ct ion fa cilit ie s in clu d e it s plant s in Isra el ( spe cia l
compou n d fert iliz ers, liqu id fer t ilizer s an d solu b le fert iliz ers), Spain ( liqu id fer t iliz ers, and solu b le
NPK fert ilizers), t he Un it ed Kin g d om ( prod ucts for wat er con se rvation an d peat in corporated in
growin g med ia), Ch in a (compou n d specialt y fe rt ilizers an d solu b le fe rt ilizer s), t h e Net h erlands
( con t rolled -re lease fert iliz er s a nd fert ilizer b lends), B elg ium ( solu b le NPK fer t ilizer s) and t h e Un ited
St at es ( con tr olle d-release fe rt ilizers).
ICL I n novat ive Ag Solu t ion s’ main man u fa cturing pla n ts an d mar ketin g compan ies are set for th in
t he ma p b e low:
ICL Inn ovat ive Ag Solu t ion s’ a nn ual pot entia l prod u ction capacit y is a pproximat ely 300 t hou sand
t on n es of solu b le fer t ilizers, 450 t hou san d t on n es of liqu id fert ilizer s, 125 t h ou sa nd t on nes of
con t rolled relea se fert iliz ers a nd 400 t h ou san d m3 of growin g med ia. The pot en t ial pr od u ction
capacit y of ou r variou s pla nt s is b ased on t h e h ou r ly ou t pu t of t he plan t s, mu lt iplied by pot e n t ial
hou rs of ope rat ion pe r yea r. Th is ca lcu lat ion assu mes con t in uou s prod uction over t h e yea r, 24 hours
a d ay, ot her t ha n a fe w d a ys for plan n ed ma in t en an ce an d renovation s. A ct ual pr od uct ion is u su a lly
lowe r t ha n pot en t ial pr od u ct ion ca pacit y, d u e to u n pla nn e d d ownt ime, spe cial main t en ance
operat ion s, la ck of availab ilit y of raw ma t erials, market con dit ion s and season alit y in d ema n d.
77 ICL Group Limited
C o m petit ion
Th e Specia lt y Fert ilize rs’ mar ket size is est imat ed at appr oxima t ely $13 b illion pe r ye ar g lob a lly,
accou n t in g for abou t 4% of t h e t ota l fe rtilizers mar ket. Accord ing to t h e Compan y's estima t ion, the
ma rket size is g rowin g at an ave rag e ra te of ab out 4%- 6% per ye ar.
Th e Specia lt y Fe rt ilize rs market is d iversified , wit h a fe w g lob al companies a nd man y small to
me d iu m- siz e local prod u cers. T he ma rke t ope rat es main ly on a loca l b asis an d most pr od u cers se ll
t heir prod u ct s in n ea rb y t e rrit ories r at her t han g lob ally. I CL’s spe cia lt y fer t iliz ers b u sin ess may be
con sid ered on e of t h e larg e st glob al playe rs in t h e spe cia lt y fert iliz ers mar ket , wit h prod u ct ion
plan t s in I sra el, Ne t herlands, B elgiu m, Spain , t he UK, t h e USA and China.
Th e Ca pex n eed ed for n ew prod u ction capacit ies is n ot con sid e red sig n ificant compared to the
commod it y fert iliz ers mar ket . Neve rt heless, in ord e r for a new player to en t e r t h is ma rke t , with
d iffer en t prod u ct g rou ps, ext e nsive kn owled g e is n ee d ed , bot h of che mica l prod u ct ion and
ag ron omical kn ow-h ow, as well as cu st omer su ppor t ca pabilit ies.
B esid e s IC L, ot he r compa nies g lobally act ive in t h e specialt y fert ilizers mar ket are : SQ M, Ya ra, Haifa
an d Compo. Ot he r compa nies su ch as Nu t rien a nd Koch (USA ), Compass Min era ls ( USA & B r azil)
an d Kin g en ta (Ch ina ) are mor e re gion al pla ye rs.
ICL specialt y fert ilizers b usin ess b ene fits fr om t h e followin g compe t it ive a dvant ag es:
• A st ron g , e fficien t a nd in t eg ra t ed su pply ch ain wit h in- hou se access to h ig h qu alit y raw
ma t erials, su ch as ph ospha t e an d pot ash , wh ich is b a se d on an ext en sive pr od uct port folio and
mu lt i- locat ion pr od u ction .
• Uniqu e R& D an d pr od u ct d evelopmen t capab ilit ies, cre at in g a st ron g plat form for fu ture
growt h in con t rolle d -release fert ilizers, fe rtig at ion, foliar solu b le fe rtilize rs, en h an ced nutrients,
wat er efficien cy a n d innovat ive ne xt g ene ration prod ucts.
• Ad d ed valu e prod u ct ion proce ss t echn olog y – cu st om- made formu lat ion s to meet ou r
cu st ome rs’ u n iqu e n eeds.
• Hig hly skilled g lob a l a gron omic sa le s t e am provid in g pr ofe ssion al ad vice , con su lt at ion and
d ist r ib u tor loyalt y.
• Fu ll prod u ct port folio ( on e-st op sh op).
• ICL’s well- kn own and leadin g b ra nd s.
R a w Materia ls and Su ppl iers
Th e primary raw mat e rials acqu ire d fr om ext ern al sou rces are main ly KNO3, SOP, ammon ia, NPK
gran u les, Ure a, KO H a nd coat ing materials.
In n ova t ive Ag Solu t ion s e nd eavors to h old in ven t ories, of t he a b ove raw mat erials, in qu an t it ies
t hat con sid er t h e project ed leve l of pr od u ct ion , b ased on consu mpt ion ch aract eristics, su pply
t imelin es, d ist an ce from su ppliers and ot he r log ist ical con sideration s.
78 ICL Group Limited
S a le s, Marketin g an d Di stribut ion
Th e primary market s of t h e Specialt y F ert iliz ers b u sin ess lin e are Eu rope, part icu larly Spa in , Isr ael,
USA , I n d ia an d Ch in a, UK, A u st ralia an d Brazil. Th e Spe cia lt y Fer tilizers b u siness lin e sells it s fert ilizer
prod u ct s pr imar ily via a n et work of it s own sa les office s as well as d ist r ib u ters t h roug hou t t he world.
In g ene ral, t h e b u sin ess mod el re lies on b ran d -name , pre miu m specia lt y prod u ct s which are
ma rket ed by a st r on g ag ron omist sales n et work at t h e end u se r le ve l, wh ile sales are in voiced
t hrou g h d istribu tor -pa rtners t hat d istr ibu te t he prod ucts. The t ech nica l sa les force emph asiz es the
ag ron omic a d va nt ages of t he spe cia lt y prod u cts to t h e en d u se rs ( farmer s, gr owers of con t ain er ized
plan t s, g olf cou rse s, e t c.) an d pr ovid es a dvice to and t rain ing of d ist rib utor sales re presentatives.
Most of t h e specialt y fert ilize rs b u siness sa les are n ot mad e by means of con t ract s or lon g -term
ord ers b u t , rat her, t hrou gh cu rrent ord e rs mad e close to t h e su pply d at e. Accord ing ly, t here is no
sig n ifican t ord e rs’ b a cklog.
Prices are d e t ermin ed via n egot iat ions b e t wee n I CL a nd it s cu st omer s an d are affect ed ma in ly by
t he relat ion sh ip b et ween mar ket d eman d a nd t he b u sin ess prod u ct ion cost , as well as by t he
id e nt it y of t h e cust omer an d t er ms of t h e agr eement.
ICL I n novat ive Ag Solu tion s gr ants credit t er ms to its cu stome rs accord ing to cu stoma ry practices in
t heir respect ive loca t ion s. ICL I nnovat ive Ag Solu t ion s cred it sales are g en erally covered by t rade
cre d it risk in su ra nce or by le tters of cr edit from b an ks wit h h ig h credit ratin gs.
S e ason ality
Th e st r on ger sales season for Specialt y Fertilizers is t he first ha lf of th e year. T he use an d application
of t h e fert ilizers is r elated to t he main g rowin g season s of th e specialty crops a rou nd t he glob e. The
ma in fact ors impact in g se ason alit y are g eogra phical loca t ion , type of crop, pr od u ct and ma rket.
As an exa mple , some spe cialt y pr od u ct s, su ch as solu b le fer t iliz ers in t h e Or name ntal Hort iculture
ma rket are sold and applie d t h rou gh out t he ent ire year wit h limit ed sea son ality, wh er eas con t rolled
relea se fer t ilizer s are sold d u rin g t he pot t ing se ason of con t ain er n u r sery st ock and pot plan t s
( b efore spr in g time ).
Du e to t he COVI D-19 pan de mic, which caused world wide lockd owns, fert ilizer sea son in 2020 was
post pon ed from March -Ma y to Ma y-Sept emb er .
Ad d itional Activities
B u sin ess act ivit ies which in clude, among ot her t hin gs, I CL’s in n ova tive ar m, promot in g in n ova tion,
d evelopin g n ew prod u cts and services, as well as, d ig it al pla t for ms an d t e chnolog ical solu t ion s for
far mers an d a gr on omist s. T his cat eg or y in clu d e s Growers, an in n ova t ive Compa ny in th e field of
ag ricu lt u ral d ata processin g an d an alysis t ha t wa s a cqu ired , in 2020, as part of th e Compa ny's
st rat eg y to accelerate a nd expand it s d ig ital pla tform.
For fu rt h er in format ion please se e "I t em 5 – Ope rat in g and F in an cial Revie w and Prospect s – C.
Rese arch a n d De velopme nt, Pat en ts a nd Licenses, e t c. – Rese arch an d De ve lopmen t".
79 ICL Group Limited
Cor porate Responsibility, Sustainability and Don ations
ICL applies an overall policy of corpor at e respon sib ilit y a nd su st ainab ilit y t ha t see ks to in t e grate
social, econ omic a nd e n viron me nt al con sid era tion s in to ou r bu siness a ctivit ies. T his policy in clu des
respon sib le man ag e ment and con t inu ous improvemen t in all su st ain ab ilit y aspe ct s: red ucin g all
t ypes of e nviron me nt al impact ; r espon sib le u se of n at u r al an d la nd resou rces; climat e ch ange
mit ig at ion ; promot in g a circu la r economy; su st ainable produ cts and solu t ions; prod u ct stewar dship
t hrou g h out t he e n tir e prod u ct life cycle ; h ealt h an d safe t y; fair an d d iverse employment ; b u siness
et h ics; su st a in able procu reme nt ; commu n ity en g ag emen t, socia l con t rib ution a nd volu n te ering by
employe es; t ran spar en cy a nd ethical b eha vior .
Th e Company is con t in u ou sly r ecog n ize d for it s lead ersh ip posit ion in ESG/ Su stainabilit y practices,
ma nife st ed in ICL's con sist e nt hig h scores an d ran kin g s in var iou s in t ern ational su st ain ability
in d exes, su ch as B loomb erg, F TSE, C DP, Maala, EcoVa d is a nd ot he rs.
In 2020, ICL's Corpor at e Respon sib ilit y pr act ices we re ad a pt e d as a respon se to t h e d ifferent
ch alle nge s b rou gh t ab out by t he COVI D-19 pan de mic. Th ese in clud ed va riou s e nd ea vors to su pport
t he Compan y's employees an d t h eir fa milies t hr ou g h t he con d it ions forced by COVI D-19, helping
wit h u r g en t arisin g n eed s in t h e d iffer ent commu n it ies wh ere t h e Compan y oper at es, assist ing
governmen t s an d hospit a ls wit h me d ical su pplies, an d a ct ion s t ake n to su ppor t t h e Compan y's
su pplier s an d cu st omers.
For fu rt h er d et ails on ou r pract ice s an d pe rforman ce in a ll su st ainab ilit y aspect s ( in clud ing the
COVI D- 19 re sponse ), see “ICL Corporat e Respon sib ilit y Re port 2019” in ou r cu rrent report on Form
6-K (File no. 001-13742) fu rn ish ed to t h e SEC on Au g u st 12, 2020. In ad d it ion , t h e Cor porate
Respon sib ilit y web - re port ( wh ich con st it utes t h e afor emen tion ed report ), is pu b licly a vailab le on
ICL's web sit e at www.icl- g rou p.com. Neit he r su ch cu rren t r eport on Form 6- K n or ou r we b sit e are
in corporat ed by re fer en ce in t o t his A nnu al Repor t , and the refere nce to ou r web site is in t e nded to
be an inact ive t e xt ual reference a nd t h e in for ma t ion on , or accessib le t h roug h, ou r web sit e is n ot
in t en d e d to be a part of t his an nu al report.
ICL h as a policy of in volvement an d in vestme nt in socie t y an d t he commu n it y, wh ich was formu lated
an d appr oved by it s B oa rd of Dire ct ors in 2001 an d re vised in 2014 an d 2020. In accord ance with
t he Compan y's policy, each a ct ivit y a nd d on ation are reviewed by t h e r ele va nt a u t hor ized par ties
accor d in g to t h e t ype a nd amou nt of t h e don ation .
ICL focu se s it s effort s wit h in t he commu n it ies from which it s employe es come fr om an d in wh ich it
operat esl. ICL's main act ivit ies focu s on commu n it ies in I srael's sou t h ern re g ion , su ch a s: Dimon a ,
Yer u ch am, B eer Sh eva, an d t h e B edou in se t tlements in t h e area. I CL focu ses it s act ivit ies, main ly,
arou n d life su st ena nce (e .g., t he society, econ omy, an d e nviron me nt ), e du cation an d e xcellence of
st u d en ts in t h e scien ces ( wit h empha sis on ch emist r y), st re ngt he nin g local commu n it ies t h rough
social proje ct s a imed at b en efitin g loca l r esid en ts an d su pport ing u nder privile ge d an d spe cia l n eeds
popu lat ion s.
I C L's assist an ce t o t he h ealt hcare syst em s aga inst the COVID 19
In 2020, I CL d on at e d over I LS 1.5 million ( ab ou t $4 50 t h ousand ) t o t h e st rugg le against C OVID-19
in I sra el, in clu d in g I LS 350 t h ou sa n d ( a b ou t $10 0 th ou sa n d ) for pu rch asin g food parcels and
vou ch er s for n eed y popu la t ion s, I LS 750 t h ou san d ( abou t $2 20 t h ou sa nd) t o t he Sor oka Med ical
Cen t er in B e’er She va , and ILS 150 t h ou san d ( ab out $ 50 t h ou san d) for a n ew r espiratory facility for
t he Sheb a – Te l Ha shomer Med ical Cen t e r in Ra mat Gan . Fu r t h ermore, IC L played a ke y role in a
join t operat ion wit h t h e I sra eli Gove rn me n t a nd I srae l’s nat ion a l A irlin es El A l, t o procu r e a
80 ICL Group Limited
sig n ifican t qu an t ity of e sse nt ial me d ical e qu ipmen t – in clu d in g masks, t est swab s a n d per son al
prot ect ive g ea r and t o t ran sfer t he m t o I srael b y 11 a ircraft . ICL provid ed sig nificant su pport to the
Isr aeli Gover nme nt in th is e ffort , th an ks to it s activit ies and bu siness con nection s in China and to its
procu r emen t capa b ilities, in clu d ing exper ience operat in g in t h e variou s provin ces of Ch in a. The
Compan y was comme nd ed b y t he I sra eli Government for t h e real-t ime h ar nessin g a nd th e efficient
assist an ce it pr ovid e d t he cou ntr y d uring t he crisis. In add ition , I CL t ook ad vantage of it s e xt en sive
expert ise an d kn owle d g e of pr ocu remen t in t h e Chin ese marke t an d su ccessfu lly pu rchased, in
coord in at ion wit h t h e Isr aeli Min ist r y of Healt h , CO VI D - 19 t est swab s for I LS 250 t hou san d ( about
$75 t hou san d ). T h e Compan y a lso d on at ed med ical prot ective g ear t o t he B arzilai Med ical Center
in A sh ke lon and t o Isr aeli HMOs .
In ad d it ion, I CL h as est ab lished t he “Th inkin g Doin g dur ing COVID-19” foru m, in colla boration with
mu n icipa l a u t horit ies a n d local resid en t s, wit h t h e aim of su pport in g Neg ev commu n it ies, and
employe d it to promot e social in it ia t ives wit h t h e pu rpose of impr ovin g t h e qu alit y of life and
en cou ra gin g commu n it y solid arit y d uring t hese ch alle ngin g t ime s. T he Compan y also t ook pa rt in
nat ion - wid e proje ct s su ch as “St ron g d u rin g COVID- 19” – su pport in g small b u sin esses, an d the
“Solid ar it y F u nd” project, aimed at assist ing thou sa nds of pe ople in n ee d of aid d ue to t he e ffects of
t he COVI D-19 pan de mic.
Fu rt h ermore , I CL assist in ot he r regions of t he wor ld whe re it opera t es. F or example, i n t he e arly
st ag es of t h e crisis ( e arly 2020), I CL d on at ed t o h ospit als in Chin a ( in it s are as of oper at ion)
prot ect ive g ea r wort h $50,000. T he Compa ny also d on at e d prot ective g ear t o h ealth care services
in it s ot h er reg ion s of oper at ion, in clu din g in Spai n , Ger ma ny, an d B razil.
D e ad Sea V isitor Ce nt er
Th e Compa ny is in a pr ocess t o est a b lish t he De ad Se a Visit or Ce nter. T h e Visit or Cen te r is sche d uled
t o open t o t h e pu b lic d u rin g 2021 ( su bje ct t o COVI D -19 re striction s). Th e Visit or Center focu ses on
t hree main t opics: t h e u n iqu e g eolog ical con d ition s t ha t le d t o t h e format ion of t h e Dead Sea, the
hist ory of fou n d in g t he I srae li Pot ash Compa ny, and the pr esent activit ies of ICL .
In ad d it ion , ICL su pport s t h e on goin g a ct ivit ies of “A Password for Each St u d e n t” in I srae l, an
in it ia t ive t hat provid e s b asic an d compr eh en sive solu tion s for the ed ucation al syst em, fr om t h e u ser,
t hrou g h th e classroom, school, an d e d u cation al syst em, compr isin g a compu t e rized commu n it y for
t he r esid en t s of t h e area. ICL’s su pport pr ovid es 15,000 st u d en t s in t h e Neg ev wit h d ig it al
accessib ilit y, t u t orial a ssist ance an d a cce ssib ility to know-h ow, le arn in g processes an d orga niza tion,
as well as an ongoin g con t a ct b e tween a ll pr og ra m u se rs, wh erever t h ey are loca t ed . I CL's b oard
has appr oved a t h ree - ye ar commit men t for t h e years 2018- 2020. T ot a l a nn u a l d on ation is NI S 3.5
million . In ad d it ion for 2021, t h e b oard ha s approved ad d it ion al d on ation in t h e a mou n t of NI S 3
million . Th e ch air ma n of t h is pr oject is Mr. Eh u d An g el who ser ve s as cha ir man for no con sid eration.
Mr . Eh u d A n g el in d ire ctly h old s XT Hold in gs I n c., wh ich is a st a keh old er in Mille nniu m I nvest ment
Elad Lt d ., wh ich is t h e con t rollin g sh areh old er of IC, ou r par en t Compa ny.
ICL’s d on at ion s in 2020 amou n t ed to a pproximat ely $9.4 million ( in clu d ing t he a mou nt in vested in
t he Visit or Cen t er). In ad dit ion , d ur in g 2020, I CL con t r ib u ted, at t h e Compan y's expen se , a b out
9,650 hou rs of volu n t e er wor k of it s employees. This amou nt d oes n ot in clu d e 9,120 hou rs of
volu n t eer work a ft er workin g h ou r s, which was en cou ra ged, or ganiz ed, and log ist ically facilit ated
by ICL.
81 ICL Group Limited
Reg u latory an d Environmen tal, Health and Safety Matters
ICL is a min ing and ch emical Compan y, an d as su ch it is su b ject to variou s comple x an d st rict
en viron me nt al requ iremen ts u n der in t e rnation al and loca l laws, re gu lat ions a nd permit s in e ve ry
cou n t ry it oper at es in . In order for ICL to oper ate an d sell it s prod ucts, all of t he Compa ny's act ivities
an d processes, in clu d in g min eral ext r act ion , prod u ct ion , d ist rib u tion , market in g an d u se of
prod u ct s, mu st comply wit h t he se en vir on mental r equ irement s. Th ese requ irements in clu d e, among
ot h er : pr od u ct requ ire me nts, liqu id an d solid wast e d isch ar ge, climat e ch an g e an d a ir qu alit y,
en ergy issu es, la nd recla ma t ion , h azar dou s su b st an ces an d ot hers. Fu r t hermore, t he Compan y is
requ ired to hold ce rta in e nviron me ntal permit s and lice nses, su ch as air emission , wast e d ischarge
permit s and ot h er s, t h at aim to prot ect t h e h ealt h and safet y of h u man s a nd t h e en vir on ment. In
ord er to con t in u e it s oper at ion s, I CL mu st comply wit h t he requ iremen ts and con d ition s of t he se
permit s and lice nse s and to reme dy any discrepan cies in case of d eviation s from su ch requir ements
an d con d it ion s.
B eyon d t h e exist in g en viron me ntal r eg ulation s, wh ich may evolve over t ime an d b ecome more
st rin ge n t, ICL may be su bje ct to n e w en vironme ntal regu lation s. New re gu lation s and amend ments
can be challe ngin g a nd pr esent u ncertain ties r eg ar ding t he Compa ny's abilit y to comply wit h them
an d re gard ing the ext en t of t h e capit al a n d oper atin g cost s t ha t may be impose d on t he Company.
Complyin g wit h su ch requ iremen t s ma y requ ire t h e ad ju st men t of t h e Compa n y's facilit ies,
prod u ct ion processe s an d ope rat ion s. In ad d ition , t h ese pot en tia l n e w re qu ireme nts may r equ ire
t he Compa n y to ob t a in n ew per mit s an d lice n se s for it s con t in u e d operation s. The Company is
closely mon it ors t he d evelopmen t of any e nviron me n tal r equirements a nd evalua tes t he pot ential
impa ct on it s ope rat ion s.
As a major prod u ce r of fert ilizers and ch emicals, I CL is respon sible for man ufactur in g pr od ucts that
are par t of everyd ay life. Some of I CL's pr od u ct s, if n ot mana ged prope rly, are pot e n t ially h ar mful
to t h e en viron ment an d to t h e h ealt h an d safe t y of t h ose who are e xposed to t h em d u rin g t heir
prod u ct ion , t ra nsporta tion , st ora ge or u se. This applie s also to efflu en t s, air e mission s an d wa ste
t hat are g en erat ed d u r in g pr od u ct ion of some of t h e prod u ct s. T he se su b st an ces ca n cau se
pollu t ion t hat n ecessit ate s reme diation , clea n up or ot h er respon sive action s. I CL's exist ing pr od ucts
u n d erg o an evalua tion proce ss at ever y st ag e in t heir prod uct ion proce ss a n d su pply ch ain and the
Compan y ma kes an on g oin g an d con sist e n t assessmen t of t h e risks of it s n ew prod u ct s pr ior to
en t er in g t he m in to commerce. ICL in ve sts resou rce s to d evelop su fficien t information a nd d at a with
respect to it s pr od u ct s, in ord er to crea t e a fu ll cha ract erization of th eir safet y feat u re s with
refere nce to h u man h ealt h h azard s an d e n viron me ntal t hrea ts an d t akes a ct ion s to incre ase its
posit ive impact an d min imize a ny n eg a tive impact s.
In ord er to pr even t pot e nt ial occu pat ion al hazar d s t h at mig h t occu r d u rin g t h e Compan y's
operat ion s, an d to en su r e a safe an d h ealt h y work e nviron me nt , ICL seeks to comply wit h st r ict
occu pat ion al sa fet y a nd healt h st an da rd s prescribe d by loca l a nd intern ational laws a nd sta ndards.
Th e h ea lt h of employe es is checke d re g u larly, a nd all r equ ir ed an d a gr eed u pon safety e qu ipment
is pr ovid e d to ou r employee s. ICL con d u ct s re g ula r mon it orin g of en vir on men ta l an d hyg iene issues
in t h e occu pat ion al work areas, as r equ ired by regulation s an d Compan y's proce dures. In ad dition,
ICL in ve st s ext e nsive resou r ces in trainin g and men torin g, as well as oth er safet y measu re s, in order
to con t in u ally impr ove occu pat ion al safet y a nd he alt h an d preve n t accid ents. I CL is con t in u ing to
en h an ce it s pr oce d u re s an d me asu re s a n d a ims to be a lea d er in safet y an d environ men tal
performan ce .
In ad d it ion to reg ula tory demands, ICL is a dopt in g su sta ina bilit y fr ameworks as a means to in cre ase
it s posit ive impa ct . Th e Compa ny is u sin g SDGs ( Su st a in ab le Developmen t Goals) as a fra me wor k
for d evelopmen t of n ew pr od u cts and service s.
82 ICL Group Limited
Th e Company is makin g an e ffort to en h an ce circu lar econ omy, b ot h in t e rn ally an d wit h pa rtners
ou t sid e of t he org a niza t ion . It is also r eport in g on issu es re gard in g su st ainabilit y in a se par ate,
d ed ica t ed repor t, u sing t he GRI (Glob al Report in g I nit iat ive ) Stand ards.
ICL h as recen t ly pu b lish ed it s st ain ab ilit y vision for 2030. It st at e s a mb it iou s g oals, in clu d ing
red u cin g GHG emission , in crea sin g t he u se of ren e wab le en ergy, in cre asin g cir cu lar e conomy,
in cr easin g th e n u mb e r of su ppliers wit h su st a in a b ilit y assessmen t s, in crea sin g th e pe rson a l
en viron me nt al respon sib ility of ou r e mployee s, a ch ievin g an d main t aining lead e rsh ip posit ion s in
su st ain ab ilit y/ESG report in g a n d r an kin gs, in crea sin g t ra nspar en cy a n d ope n d ia log u e wit h
en viron me nt al or gan iza t ions, con t rib u tin g to commu n it y in it ia t ives a n nu a lly, a n d in cr easing
employe e volu n t e erin g .
Th e Company r ou t in ely in vest s in capit a l proje ct s in t he are as of en vir on men ta l pr ot ection , h ealth
an d safe t y, an d also in cu r s cu rren t cost s in con n ect ion wit h t he se issu e s. In 2020, I CL in ve sted
approxima t ely $103 million on en vironmen t a l ma t t ers, of which appr oximat ely $41 million wer e
capit al proje ct s in prope rt y, plan t an d e qu ipment an d appr oxima t ely $62 million we re cu r rent
expen ses. I CL in vest s con t in u ou sly aimin g to re d uce it s impact on t h e environmen t. O ver t he n ext
few year s, t h e Compa ny in t end s to in vest sig n ificant capit al in ord er to re d uce it s air e mission s, t reat
ha zar d ou s materia ls a nd reduce negative e nviron mental impact . These in clude in vest me nts n eeded
to comply wit h t h e Isr aeli Clean A ir A ct, to comply wit h Eu r opean regu lat ions a nd wit h ot her local
en viron me nt al permit s. F or fu rt h er in format ion , se e “I t em 3 - Key Informat ion — D. Risk Fact or s—
Secu rin g t he fu t u re of t h e phospha t e min in g operat ion s at Rot em d epe n d s on ob t ain in g several
approvals an d permit s fr om t h e au t h orities in Isr ael”. The Company e st imat e s t h at in 2021, it will
spen d a pproximat ely $134 million on environ me nt al prot ection mat t ers, of which appr oximat ely
$54 million will be capit a l project s in prope rt y, plan t an d equ ipmen t , while appr oximat ely
$80 million on cu rre nt expen ses.
For fu rt h er in format ion, see “ It em 3 - Key I n for ma t ion — D. Risk Fa ct ors— As a minin g and in dust rial
ch emicals Compan y, we are in h er en tly, an d by t he na t u re of ou r a ct ivit y, expose d to h aza rds
relat in g to ma t erials, pr ocesses, pr od u ction a nd min in g “ an d “Item 3 - Key In format ion — D. Risk
Fact or s— A ccid ents occu rrin g du rin g ou r ind ustrial an d min in g oper at ions an d failur e to e nsure the
sa fet y of workers a nd proce sses, cou ld adve rsely a ffect ou r b usin ess”.
For fu rt h er d eta ils on re gu lat ory, environ me ntal, h ea lt h an d sa fet y mat t e rs, se e “ICL Corpor ate
Respon sib ilit y Report 2019” ( we b - repor t) on I CL's web sit e at www.icl- g rou p.com. The r efe rence to
ou r web sit e is in t en d ed to be an inact ive t e xt u al re fer en ce an d t h e in format ion on, or accessib le
t hrou g h , ou r we b site is n ot in tended to be pa rt of t his A n nu al Report .
L i m it a tion s, Re gu la tion a nd Re g istr at ion of ou r Product s
As a g lob al che mica l Compan y, ICL is su b ject to mu lt iple ru le s an d regu lation s in t he area of pr od uct
sa fet y. I CL e n su r es t h at t he ch emica l su b st ances it pr od u ces a nd sells are h an d le d in a ccord ance
wit h a ll su ch ru les an d r eg u la tion s t h rou gh out t he ir life cycle . Su ch ru les and reg ulation s, among
ot h er t hin gs, impose limit a t ion s on t h e u se of spe cific su b st a n ces an d prod ucts, re qu ire to r eg ister
an d lab el some of ou r prod u ct s an d mor e. ICL con t inu ou sly mon it or s t h ese ru les a nd reg ula tions
an d t akes th e n e cessa ry operation al measu res to en sure t ha t it remains in material complian ce with
t hem.
83 ICL Group Limited
N e w Eu ropea n Fert ilizer Produ ct Regu lat ion
On e of t h e fut ure reg ula tory cha ng es that mig ht impact our product s is the new European Fertilizer
Prod u ct Reg u lation ( FPR formally kn own as NFR), wh ich was en t er ed in t o force in 2019, wit h t he
applicat ion d at e of Ju ly 2022. T he FPR covers a b r oad scope of mat erials, in clu d in g all t ype s of
fer t iliz ers, limin g mat eria ls, biost imu la nt s, g rowin g me d ia , soil improve rs, in h ib it ors a nd ot h er
b le nd s of t h ese mat e rials. T h e n ew r eg u la t ion requ ire s fer t ilizer prod u cers to mon it or n ew
con t amin at in g ele me nt s in fe rt iliz er pr od u ct s, a n d for t h is pu rpose, ad d it ion al an alyt ical and
mon it orin g me t hod s will be in corporat ed to comply. In a d d it ion , pu rsu ant to FPR, fe rt ilizer
prod u ce rs will h ave to d emon st r at e t he abilit y to t rack t h eir pr od ucts to e nsu re the qu alit y t hereof
in t h e pr od u ct ion and su pply cha in . Th e lab ellin g of fe rt ilizer prod u ct s will n eed to ch an g e, and
con for mit y assessmen t me t hod olog ies will n eed to be upd ated. More over , ne w toler an ces levels for
fer t iliz er con t a min an ts are in clu de d in t h e F PR. On e focu s area is t h e level of cad miu m for ph osphate
con t ainin g fe rtilize rs. In ad dit ion, t h e FPR in clu d e s ve ry ch allen gin g b iod egrad at ion requ irements
for t he polymer coat in g s on con t rolled re lea se fe rt ilize rs. If t h ese requ irement s are n ot met u n t il
J u ly 2026, it won't be possib le to sell con t r olle d relea se fer tilizer s u sin g t od ay's coat in gs as CE
fer t iliz ers a nd th e impact on IC L cou ld be con sid erab le. I CL is active ly u nd ertaking steps to ad just to
t hese n ew regu lation s for all relevan t prod ucts.
L i m it a tion s on t he use of specific ch emicals u sed as flame r etardant s, b iocides an d ot her u ses
B elow are d e t ails r eg ard in g t h e main pr oceed in g s kn own to t h e Company as of th e d a t e of t his
Ann u al Re port :
• Eu ropean Ecod esig n E- Displa y regula tion pu b lish ed by t he Eu r opean Commission in De cember
2019, is aimin g to b an t he use of halog en ated flame r et ar dants in e lect ron ic display e nclosures
an d st an d s b eg inn ing in mid - 2021. T his is t h e first -time chemicals have b e en re gu lated under
t his re gu lation an d wa s ju stified as a mean s to improve pla st ics recyclin g.
We b elie ve t h e reg ula tion con flicts wit h ot h er EU re gula tory proce sse s, RoHS an d REACH, and
is n ot ta kin g in t o con sid erat ion t he cu rr en t pr act ices of EU plast ics re cyclin g. BSEF (The
In t e rn ation al B romin e Cou n cil) h as filed a lawsu it ag ain st t h e Eu ropea n Commission , a sking
t he EU cou rt to r emove t he b an . The r ulin g is e xpe ct ed d urin g t h e secon d half of 2021.
• Te t rab romob isph enol A (T B BPA or TBBA ) flame re t ard an t, is u n d er r evie w as pa rt of t he
Chemicals Reg u lation in Europe (REAC H). The result s of th e r eview are e xpe cte d in 2021. TBBA
is a lso b ein g r evie wed u n d er t h e Eu r opean Directive on t he Rest r ict ion of t h e u se of cert ain
Ha zar d ou s Su bsta nces in electrical and electron ic equ ipment (RoHS). T he dr aft assessment was
pu b lishe d on Decemb er 2019 an d in clu d es a proposal to r est rict TB B A for it s ad d it ive u ses in
plast ics for EE&E ( Elect ric a nd Ele ct ron ic Equ ipmen t ). We ( as BSEF) e xpressed ou r ser iou s
con cer n at th e scien t ific b a sis for t h e assessmen t und ertake n in t h is d r aft . T he Eu ropean
Commission will review an d make it s fin al d ecision, likely d u rin g 2022.
Ad d it ion a lly, in Novemb er 2020, a pr oposal by Norway for th e classifica t ion of T B BA as a
car cin og en cat eg ory 1B was mad e pu b lic and open for a con su lt at ion period u n til t he end of
J an u ary 2021. IC L re viewed t he d ossier wit h it s scien t ific e xpe rt s and for ma lly respond ed to
t he con su lt a tion in collab oration wit h B SEF.
84 ICL Group Limited
• Ammon iu m B romid e: Swed e n h as filed a d ossie r su pport in g proposed classifica t ion as
reprod u ct ive t oxin cat e gory 1B u n d er t h e Classifica t ion , La b ellin g & Packag in g ( C LP) EU
Reg u lat ion. In O ct ob er 2020, t he r isk assessmen t commit t ee ( RA C) of ECHA provid e d an
opin ion t h at t h e classifica tion is war ranted. T h e fin al d ecision , e xpe ct ed by e nd of 2021- early
2022, will be mad e by t h e Eu ropea n Commission . A d e cision on t h e fu rt her u se of ammon ium
b romid e as a b iocid e will be t aken by t he B PC ( Biocid al Prod uct s Commit te e) d u rin g 2021.
• Ad d it ion a l specific pr odu cts of th e I nd ustrial Produ cts se gme nt ar e in the pr ocess of evalu ation
u n d er t h e Chemical Regu lat ion in t he EU ( REA CH). For some pr od u ct s, t here are d raft or final
d ecision s by ECHA to per for m more st u d ies, a pr ocess th at will ta ke a few ye ars u n t il the
evalu at ion is complet e d . Ot h er prod u cts are in t h e process of evalu at ion u n de r t h e B iocides
Prod u ct s Reg ulation ( BPR).
C h e mica ls Re gu la tion a nd Reg istration
E u rope
REA CH - is a re gulat ion set t ing up a fr amework for Reg ist r at ion , Evalu at ion, A u t horizat ion and
rest r ict ion of Che mica ls in t h e Eu ropea n Un ion , which b ecame e ffect ive as of J u n e 2007 an d is
b ein g implemen t e d u n d er t h e aut hority of t h e ECHA ( Eu r opean C he micals Age ncy). T he REA CH
cove rs ch emicals n ot re gu lat ed un der ot her specific regulation s in t he EU ( e.g . pe sticid es, b iocides,
food , ph ar ma , e t c.).
All I CL seg men t s are implemen t in g REA CH a n d are reg ist ering t heir che mica ls as requ ired by la w.
ICL h as su b mit ted application s for regist ra tion s for all th e ch emica ls r elevan t for its bu sinesse s in EU
( pr od u ct ion and sa le ). As at t he d ate of t h is A n nu al Report , t he re a re sever al su bst an ces which are
u n d er evalu ation by t h e A ut horities ( ECHA an d a Memb er St a te), some of wh ich h ave b e en listed
as Su b st an ces of Ve ry Hig h C oncern ( SVHCs), which may re su lt in var iou s reg ulatory restrict ion s.
Apar t from very sig n ifican t cost s of REA CH implement at ion and d evelopmen t of n ew d at a in su pport
of REA CH re gist rat ion s, t h ere is a r isk of r emoval of cert ain su b st an ces from t he EU ma rket s or
proh ib it ion of cer t ain u ses of a su b st an ce in t h e EU. However, t h is may en ab le t he Compan y to
in t rod u ce n ewly de ve loped su b st an ces as alt er n atives to su b st a n ces in prod u ct s t h at will be
rest r ict ed or re moved from u se in t he EU mar ket s. ICL is closely mon it orin g th e re gulat ory
d evelopmen t s, world wid e , in ord er to be re ady on t ime wit h altern at ives.
For fu rt h er d et ails, see “ It e m 4 - I n format ion on t h e Compa ny— B. B u sin e ss O ve rview—Reg ulatory
an d En viron me ntal, Health a nd Safet y Matt er s — Limit a t ion s on t he Use of Specific Ch emicals Used
as Flame Ret ard ants, B iocid es and Other Use s”.
CLP r eg u la t ion (Classifica tion , Labelin g and Packa gin g of su b stances a nd mixt ures) - CLP is an other
import an t reg ulation in the EU, wh ere an out come of a severe classificat ion may h ave an impa ct on
a spe cific pr od u ct 's market in t he EU and even lead to addit ion al implicat ion s ou t side of Eu r ope.
Th e UK h as officially left t h e EU in J an u ar y 31, 2020 en t ering th e t ran sition pe riod wh ich en ded in
De cemb er 31, 2020, at t h e en d of wh ich t h e ch emicals import e d or manu fact u red in t he UK will
ha ve to be reg u lat e d by a n ew UK ch emical legislat ion . Not all th e d et ails of t h e UK ch emical
reg u lat ion are clear yet, and ICL is closely mon it or in g the B rexit d evelopmen ts, a nd t akes n ecessary
act ion s, su ch as appoin t in g a local On ly Repre sen tative bod y, to allow smoot h ope ration u nder the
UK reg ime.
85 ICL Group Limited
U S A
Th e T oxic Su b st an ce s Con t rol Act of 1976 ( TSCA ), wh ich was reformed in 2016, ad d resse s the
prod u ct ion , import a t ion , u se, an d d isposa l of specific ch emicals in t h e USA. T he TSCA is
ad min ist er ed by t h e US Environ me nt al Pr ot e ction A gency ( EPA ), which reg ulate s t he in t rod uction
of new a n d exist ing chemicals. Un d er TSCA , cert ain su b stances are prior it ized by EPA for it s r isk
assessmen t . EPA pu b lish es pr oject ed t imelines for pr iorit iz ed su b stances an d t he r isk eva lu ation
proce ss. Some I CL prod u ct s, su ch as TBBA is u nd er t he TSCA e valu at ion. For more d e tails, se e “Item
4 - I n for ma t ion on t h e Compan y— B. B u sin ess O ve rvie w—Regu lat ory an d En viron men tal, Hea lth and
Safet y Mat t ers — Limit at ion s on t h e Use of Spe cific Ch emica ls Used as Flame Re t ar d ant s, B iocides
an d Ot h er Uses”. ICL is closely mon it orin g t h ese pu b lica t ion s wh ich mig ht e n t ail reg u la t ory
d ecision s on rest r ict ion s in ord e r to be ready wit h commen t s a nd infor mation , su ch as h azard and
exposu re d a t a on I CL pr od ucts.
A s ia
In ad d it ion to t he REA CH re qu iremen ts in EU, ot h er cou n t ries, in clu d ing Sou t h Kor ea, T u rke y and
EA EU ( Eu rasian Econ omic Un ion ), h ave a d opt ed or in t h e proce ss of ad opt ion of simila r re st rict ive
reg u lat ion s to REA CH, which may affe ct ou r abilit y to man u fact ure a nd sell cer t ain prod u cts in t h ese
cou n t ries in t h e fu tu re.
In J an u ary 2019 a me ndme n ts to Sou t h Korea 's version of REA CH ( known as K- REACH) ent ered into
for ce. I CL ha s complet ed on t ime t he not ificat ion process u n d er K- REA CH, wh ich is a pr e- requ isite
for t he fu ll r eg ist ration ( pre- regist ration ph ase), and it allows I CL t h e con tin uation of sales in South
Kore a d u r in g t h e t r an sition al per iod , pr ior to reg istra tion . I CL is g et tin g pr epa red for t h e regist r ation
st ag e st a rtin g in 2021 a nd pe r t he sche dule d efin ed by K-REA CH le gislation .
In J u ne 2017, T urkey's version of REACH, KKDIK Regu lat ion , was pu b lished. A ccordin g to t h e KKDIK
Reg u lat ion, chemicals ab ove 1 t on n e per yea r, t h at are impor t ed a n d /or man u factu red in T u rkey,
need to be n ot ified by Decembe r 31, 2020, followed by su b sequ ent full re gistr ation s by December
31, 2023. I CL h as n ot ified regarding all it s relevant sub sta nce s by t h e appoin t ed Tu rkish Loca l O nly
Repre se n t ative on t ime .
Eu ra sia REA CH requ ire s compan ies, man u facturing or import in g su b st an ces an d mixt u re s in t o the
EA EU ( Eu rasian Econ omic Un ion ) cou n t ries ( Russia, A rmen ia, B elarus, Ka zakhst an an d Kyr gyzstan)
at a ny t on n ag es to r eg ister t hese su bst an ces a nd mixt u r es. A lt hou gh t he r equ irement to n ot ify of
an y su ch su b st an ces is on a volu n t ar y b asis, it is impor t an t for I CL to pa rt icipa t e in t his process in
ord er to e nsu re t hat it s r elevant su bst an ces will be list ed in t he EAEU in vent ory. I CL is pa rt icipa ting
in t h e in ven t ory b u ild - up pr ocess an d su b mit t ed re le vant su b stances for in clu sion by t h e Ru ssian
au t h or it ies.
I s r ael
Followin g t h e en t rance of I sr ael to t he OEC D memb e rsh ip in 2010, Israel's Min ist ry of En vir on mental
Prot ect ion ( MoEP) has pu blish ed a draft law to esta blish a na tion al inven tory of industr ia l chemicals
an d set ou t processe s for risk assessmen t an d man ag eme nt of ch emicals in Isr ael. Th e Min ist ry has
proposed t hat t h e law will e n t er in t o force on March 1, 2023, b u t it will g ive man u fact u rers and
import ers u n t il Sept emb er 1, 2024 to reg ist e r ch emicals. I CL is a ct ively in volved , via th e I n d u stry
Associat ion , in pr ovid in g in pu t s r eg arding t he proposed law. O n ce t his n ew r egu lat ion en ters into
for ce, an impa ct on I CL, import e rs an d man u fact urers in Isr ael can be expect ed , in clu din g h ig her
cost s an d complex ad min ist ra tive processe s.
86 ICL Group Limited
C l i mate Cha ng e an d Green hou se Ga s Emi ssion s
Climat e ch an g e is of in cr easin g con cer n to g overn ment s, n on -g overn mental org an izat ions,
in vest ors a nd t he general pu blic. In creasin g regu lat ion of g re en hou se g ases ( “GHGs”) cou ld impact
ICL’s operat ion s by r equ ir in g ch an g es to it s prod u ct ion pr ocesses or in cr easin g raw-mat erial,
en ergy, pr od u ct ion an d t ran sport ation cost s. As su ch, climat e ch an g e con sid era t ion s mu st be
in clu d e d in t h e st rategy of compan ie s su ch as ICL, as all climat e -relat e d risks an d opport u n ities
( ph ysical, reg u lat ory, mar ket , a nd ot hers) mu st be man aged . The Compan y h as alre ad y in ve sted in
t ran sit ion in g to re newab le en er gy ( extern ally- supplied e le ctr icity) in most of it s Eu ropea n sit es.
ICL is st rivin g to b ecome a lead er in r ed u ct ion of emission s, in g ene ral, an d GHG emission s in
part icu la r. Th er efore , t he Company h as set a t ar get of red u cin g 25% of t h e b ase ye ar 2008
emission s, by 2022. I CL’s re d u ct ion effort s in clu de a st r ate gic fu e l conver sion of it s main plan t s to
nat u ra l g as, u t ilizat ion of n ew t echn olog ie s to red uce prod uct ion emission s an d compr eh en sive
en ergy efficien cy in it iat ives. Th e comb in ed r esu lt of t h ese e fforts pr esent ed a 24% reduction in the
GHG emissions of ICL b e t ween 2008 a nd 2019. It sh ou ld be noted t hat exclud ing ICL’s a cqu isition
of YPH J V, t h e Compa ny ha s a lread y su rpa sse d it ’s 25% r educt ion t a rg et .
In ad d it ion to I CL’s orig in al GHG r ed u ct ion t a rget, t h e Compan y h as t a ken u pon it self to a ch ieve
new g oals in clu d in g increasing ren ewable en er gy u sa ge by 20% year-on-yea r u nt il 2030, re d ucing
by 45% t h e Company's overall Scope 1+2+3 emission s by 2030 ( u sin g 2008 as it s b ase year) and
red u cin g I CL’s GHG e mission by 3% year - on-yea r from 2019 on wa rd s.
Th e t ot a l ICL g loba l GHG emission s for 2019 are 3,194,309 t onne s CO
2
e (Scope 1- 2,496,315 t onnes
CO
2
e, Scope 2- 612,199 ton n es CO
2
e, Scope 3- 85,794 t on n es CO
2
e). T he 2020 e mission s will be
fin a lized aft er t h e pu b lication of t his an n u al report. Th e Company cu rr ently expect s a d ecr ease in
t ot a l e mission s in 2020, d u e to t h e r eg u la r ope rat ion of t h e n ew Sod om power pla nt , su pplyin g le ss-
car b on in t en se e lect ricit y to I CL's sit es in I srael a n d t he volu n t ary t ransition of several I CL sit es in
Eu rope to 100% ren ewab le e xt erna lly- supplied e lect ricity. To fu rt he r red uce GHG e mission s, t he
Compan y plan s to con vert ad d ition al I CL sit es to r en ewable electricity in t h e comin g years. ICL is
est ab lish in g Ph ot o Volt a ic ( PV) capacit y ( e lect ricity from solar ) in appr opriat e an d a va ilab le a reas
wit h in I CL sit es. I CL in t en ds to prod uce clean electricity from PV by u tilizin g exist ing ICL's resou rces
su ch as: g rou n d, parking areas, roofs- t op, water reservoirs covering , etc. The targ et PV capa city will
be 30MW H by 2025 a nd 100 MW H by 2030.
In ad d it ion , I CL promot e s t h e d e velopmen t of n ew prod u cts t hat re du ce GHG e mission s an d up to
now h as a na lyze d t he carb on foot pr in t of over 60 of it s prod u ct s.
ICL ann u a lly report s its e mission s d at a a nd its e fforts in the clima te chang e field to t he CDP (Ca rbon
Disclosu re Pr oject ), a n on -profit lead in g org aniza tion in t h e GHG emission s re port in g field . For its
2020 r eport , I CL h as re ceived a g en eral CDP ra nking of "A-", which makes t h e Compa ny on e of the
lead er s amon g all Isr ael- ba se d compa nies an d t ied for b e st amon g g lob al fer tilizer prod u cers. T his
ach ievemen t recog n iz es I CL's a d va n ced climat e ch an g e man a ge me nt pra ct ices a nd su ccessful
en d ea vors to r ed uce GHG emissions. O u r 2020 CDP r eport is pu b licly ava ilab le on ICL's web site at
www.icl- g rou p.com. Th e r eferen ce to ou r we b sit e is in t e n d ed to be an in act ive t e xt u al refer ence
an d t h e information on , or accessible th rou gh, ou r websit e is n ot in tend ed to be part of th is Annual
Repor t .
For a d d it ion al in forma t ion reg a rd ing I CL's clima t e ch an g e r elat ed risk man age ment a nd GHG
emission s, see “I t em 3 - Ke y I n format ion— D. Risk Fact ors— Current a nd fu tu re la ws an d regulations
reg ard in g climat e chan ge a nd g ree nhou se g as ( GHG) emission s, as well as t h e ph ysical impact s of
climat e cha ng e , may affect ou r ope rat ions and b usin esses”.
87 ICL Group Limited
E u rope an Plan f or T rade in GHG Em issions
Th e Eu ropean Union , as a party t hat sig ned t he Kyot o Pr otocol ( t he framewor k tr eaty of t h e Un ited
Nat ion s for d ea lin g wit h climat e ch an g es), h as ag re ed on a man d a t or y t arge t for re d u cing the
emission s of greenh ouse g a se s ( GHG). Th e main t ool for a ch ievin g t h e red uction t a rg ets is t h e EU
Emission s T rad in g Sche me ( “ETS”), wh ich wa s launched in J an u ary 2005. In t h e first an d se cond
ph ases of t h e ET S, t h e Eu r opean cou n tries ag reed t hat ever y in d ustrial Compa ny t ha t emit s GHGs
ab ove t h e ag re ed min imu m t h resh old is re qu ired to re port it s emission s an d to limit t hem to t he
grad u a lly d ecreasin g per iod ic qu ot a . In ad d it ion , compa nies were allowed to re alize a mon et ary
gain or b en e fit by t r adin g an d se llin g u nused emission permit s ( or ‘car b on allowan ce s’). T he t hird
ph ase of t he ETS commen ce d in J an u a ry 2013 a nd en d ed on Decemb er 31, 2020. T his ph ase
in clu d e s a fu r t her d ecr ease in t he free allocat ion of ca rb on allowan ces to all in d u strial compa nies.
Th re e of ICL's sit es in Eu rope ( B ou lb y in t h e UK, a n d Su ria a nd Sa llen t b oth in Spain ) are cu rrently
part icipan t s in t he ETS, an d t h erefore receive an nu al carb on allowan ces ( "EUA's") a n d are t hen
ob ligat ed to emit up to t he ann ua l allowa nces an d/ or pu rchase ext ra EUA's. Un u sed allocat ed EUA's
can be sold . ICL's part icipat in g sit es h ave applied to be in clu d ed in Ph ase IV of t h e EU ETS ( 2021
an d on ward s). However, in 2021 we expect t he re to be some ch an ges as ICL B oulb y left t he EU ETS
at t he en d of 2020 d u e to t h e B r exit pr ocess. The UK will be implemen t in g it s own Emission s T rad ing
Sch eme ( UK ET S), which is expect ed to be similar in me t hod olog y to t h e EU- ET S. Ad d it ion a lly,
followin g t h e con solid at ion proce ss in ICL Iberia , as product ion at t he Sallent site was discon tinued,
t he sit e will cease to be a par t of t he EU ETS. I CL con tin ues to closely mon it or the developments and
emission alloca t ion policies of t h e ET S an d is taking t h em in t o a ccou n t wh en
est ab lish in g /pu rchasin g n ew sit es in Eu rope a nd wh en con sid erin g pot e ntia l sig n ificant expan sions
of exist in g sit es.
A i r Qu alit y
Th rou g h ICL's prod uction processes, pollu t ants are emit te d, wh ich cou ld be h armfu l to people or to
t he en vir on men t , if t hey we re to be emit t ed in t o t h e en viron ment in con ce nt ration s or amou n ts
exceed in g t h e permit t e d le ve ls. Th e mat eria ls emit t ed are, main ly, in or ga n ic compou n d s a nd
part icle s an d a minorit y of volat ile or gan ic compou n d s. Th e Compa ny reg u lar ly a nd con t in uou sly
me asu re s t h e emission of t h ese pollu t an ts in order to mon it or and loca t e u ncon trolled e mission s, in
accor d an ce wit h t h e provision s of t h e law an d t he con dit ions set forth in th e bu sine ss lice nses and
emission permit s. Th e Compan y is ad van cin g e xecu tion of proje ct s to r ed u ce emission s in t o the
at mosph ere in a ccord a nce wit h th e terms of t h e emission pe rmit s.
I s rael
Th e I sraeli Clea n A ir Law – A ir Emission Per mit s
In Isr ael, air emission s from ma jor in d u st rial oper at ion specifically id ent ified in t h e Clea n A ir Law
( herein after - t he Law) are r eg ulate d un der t he Law. T he Law aims to impr ove air qua lit y, to pre vent
an d re d u ce air pollu t ion by implement in g b ot h proh ib it ions an d ob lig at ions, to prot ect t he h ealth
an d qu a lit y of life of hu ma n b eings a nd t he en viron me nt. T he La w ad d r esses, emission sou rces
( in clu d in g t h e Compan y’s pla nt s) an d is in t en d ed to serve as a pla t form for implemen t in g t he
reg u lat ory principle s cu rren tly in pla ce in th e Eu ropean Un ion ( EU), spe cifically t h e principles of the
IED ( T he In d u strial Emission s Direct ive) t h at was ad opt ed by t h e EU. The La w applies to a ll ICL's
plan t s and prod u ction in Isr ael.
In or d er for an emission sou r ce id en t ified unde r t h e Law as an “Emission Sou rce Su b ject Licen sing
Requ irement s” wit h in t h e mean in g of t h e Law to oper at e, , it mu st ob t ain an air emission pe rmit
issu ed by t h e Min ist ry of En viron men t al Pr ot e ct ion ( MoEP). T h e air emission per mit in clu d es
88 ICL Group Limited
provision s r eg ar d in g t h e applicat ion of t he B est A vaila b le T echnolog y ( B A T), as well as provisions
wit h r espe ct to mon it orin g , con t r ol an d report in g to t h e MoEP. Th e Compa ny is t a kin g st e ps to
impleme nt a pla n to a d d re ss t he requ ireme nts of t h e air emission permit s in coord in ation wit h the
MoEP. The Compa ny is also t a kin g st e ps to implemen t a pla n to a ddr ess the require ments of t he air
emission per mit s in coor d in at ion wit h t h e MoEP. As of t he d at e of t h is A n n u al Re port , all ICL’s plan ts
in Isr ael t h at fall und er t h e d efin it ion of Emission Sou rce Su b ject Licen sin g Requ irements h ave
receive d air e mission pe rmit s. In case of d e viation s from t h e e mission permit s con dition s a nd failure
to reme d y su ch d eviation s, t he Company mig ht be su bject to ad min istrat ive en forcement measures
an d in some case s e ve n to a crimin al lia b ility. In addit ion, certain restrict ion s on our operat ions and
sig n ifican t ca pit al in vest me nt s mig h t be imposed on u s. ICL has invest e d sig n ifican t ly an d will
con t in u e to do so over t he ne xt fe w years, to comply wit h emission pe rmit s gr ante d u nder the Law.
As a re su lt , some of I CL’s ma in air emission s h ave a lre ad y d ecreased con sid erably, and fu rther
red u ct ion s a re e xpecte d in t he u pcomin g years.
Over t h e n ext few years, th e Company will in itiate ad dition al measu res a nd in ve st sign ifica nt capital
in ord er to comply wit h t h e emission pe rmit s.
Air qu alit y at ICL's pla nts in I srael
IC L Rot em
( Rot em)
- In Sept emb er 2016, plan t s at t h e Rot em sit e r ece ived an emission permit
pu rsu a nt to th e Law. T he Compa ny is st rivin g to implemen t th e requ ireme nts of th e per mit, t hrough
a mu lt i- year plan which in clud es sever al sig n ificant r edu ction proje cts.
In 2017, t he Compan y filed an appe al for cha ng ing 46 permit tasks. T he MoEP ag re ed to change 43
of t h em an d a revised permit was re ceived in J uly 2018.
In 2018, t h e Compa ny con d ucted t wo risk asse ssments by extern al experts regardin g t he possib ility
to exe cu t e all th e clean air tasks requ ired by th e emission pe rmit as pe r th eir approved time lin e. The
risk assessmen t s focu sed on the t echnical and sa fety con sid e ration s arisin g from imple me nt ation of
a la rg e n u mb er of proje ct s in pa ralle l, in an in d u st rial sit e. T he assessment s in dicate d t h at t here is
no oper at ion al feasib ilit y to implemen t t h e fu ll r equ ir emen ts of th e pe rmit wit h in t h e d e fined
t imelin e, an d accord in gly t h e Company is u n ab le to mee t t he t imelin e set in t h e cu r rent pe rmit. In
2019, followin g d iscu ssion s wit h t h e MoEP, t h e MoEP in formed t h e Compan y t ha t d u rin g t he cou rse
of d iscu ssion s to re new Rot em I srae l's e mission pe rmit , wh ich cu r ren tly rema in s u n ch ange d, t hey
will con sid er t h e safet y con st rain t s, t h e comple xit y a nd mu lt iplicit y of project s, as well a s t he
Compan y's dilig en ce to comply wit h t he pre se n t permit con d it ion s an d t h eir sch ed u les, while
prior it izin g pr oject s wit h sig n ifican t en viron mental impa ct . The Compa ny provid ed t he MoEP with
it s u pd at e d projects' ou tlin e, sch edu le an d complet ion st at us.
In lig h t of b u sin ess u n cer tain ty an d t h e COVID- 19 pa ndemic, t h e Compan y con t in ued it s d iscu ssions
wit h t he MoEP reg ardin g t h e t imin g an d scope of e xe cu t in g t h e in vest men ts, in clu din g t h e impact
of t h e u ncert ainty su r rou n din g Rot e m I sra el's a ct ivit y ( wh ich also impa ct ed by t h e u ncer t ainty
arou n d B ar ir field ), as far as t he imple ment a t ion of lon g - t erm proje ct s is con cern ed . In Dece mber
2020, t h e Compan y su b mit t ed to t h e MoEP an applicat ion to u pd at e t he cu rrent emission pe rmit,
in clu d in g u pd a t ed sch ed u les for pr oject s' execu t ion in accor d an ce wit h t h eir en vironmen tal
sig n ifican ce . In respon se, in De cemb e r 2020, a su mma ry le t t er was received from t h e MoEP
reg ard in g a prin ciple ou t line t h at in cludes, a mon g ot h er t hin gs, post pon in g t he execution of cer t ain
proje ct s b e yon d t h e cu rrent per mit period, wh ich is to expire in Sept emb er 2023, an d a d emand to
complet e cert ain project s wit h in t h e permit period . Th e Compan y con t in ues to h old d iscu ssion s with
t he MoEP r eg ard in g priorit iz in g t h e proje ct s' exe cu t ion an d re ach in g u n d erstand ing s wit hin the
fra mewor k of t h e cu r rent emission pe rmit .
89 ICL Group Limited
Unt il Decemb er 2020, t h e Company h ad comple t ed 70 of t he 194 specific t asks re qu ired by t he
Cle an A ir per mit .
Du r in g t h e yea rs 2017- 2019, ICL Rot em wa s su mmoned to se ve ral ad min ist r at ive h earings in t he
MoEP, in con n ect ion wit h a llege d violat ions of it s emission permit . Nevert heless, I CL Rote m is a cting
to a d d ress t h e a b ove -men t ioned d evia t ion s, as part of t h e mu lti-year plan , in clu d in g t he
impleme nt at ion of t h e pr ovision s of t h e Law, in accord an ce wit h discu ssion s wit h th e MoEP
reg ard in g t he implemen ta tion of t he Law.
Du r in g t h e years 2018 ,2019 and 2020, b ot h su lphu ric acid plan ts in Rotem re placed an d upg raded
t heir cat alyst syst ems in order to reduce SO
2
e mission s, by ove r 30% . T hese upg rades ha ve re duced
over all SO
2
e mission s at Rot em by 50%. In a ddit ion and to fu rthe r red uce e mission s, in 2019 t he site
cove red 4 green a cid st or ag e pools a nd 5 I soa mYl A lcohol recovery lin es were con n ect ed in t he
W PA pla nt . T h e sit e h as in st a lled , in recen t yea rs, on- fen ce mon it oring syst ems t h at repor t on-line
paramet e rs to t he en vir on men t al au t horit ies. Th e mon it orin g syst e ms re ceived I SO 17025
cer t ificat ion in Oct ob e r 2020. In ad d it ion , t h e Emmission Permit h as se t ne w ru les r eg ard in g the
liqu id wast e mana geme nt and ad dition al GHG e mission s, wh ich are rela ted to some of t he requ ired
new air emission s me asu re s. In 2019- 2020, to meet t he se ch alleng es, Rot em oper at ed 6 pilot s
in volvin g n ew t echnolog ies to mee t th e r equ irements.
IC L Dead Sea ( DSW )
- Th e sit e operat e s t h ree a ir qu alit y mon it orin g st at ion s t h at were r en ewed
d u rin g 2019. Th e d at a are con t in u ou sly mea su r ed a nd au t omat ically t r an smit t ed to th e MoEP
( Min ist ry of En vir on men t Prote ction) a nd are a ccessib le to t he gene ral pu blic. In 2018, t he n ew NG-
b ased a nd h ig hly efficie n t CHP ( comb in ed heat a nd power ) plan t in Sod om b ecame fu lly
operat ion al. T he plant now su pplies most of t he elect ricit y to all IC L's sit es in Isr ael and st ea m to the
prod u ct ion plan t s at Sod om sit e. T h e hig h e fficien cy of t h e new plan t an d it s b oiler s h ave
sig n ifican t ly red uced the sit e 's Nit rogen O xid e emission s ( d espit e th e sig n ifican t in cre ase in n atural
gas comb u st ion in t he new plan t, wit h th e t r an sition to self-prod uced electricit y).
IC L Dead Sea Magnesiu m ( DSM)
- The sit e prod uces main ly in or gan ic emission s. Exh au st st acks are
mon it ore d in a ccord ance wit h t he ter ms of t h e emission pe rmit issu ed to t h e Compa ny. Some h ave
on- lin e mon it orin g analyzers t ha t sen d d at a to t he environ me ntal aut horities.
In or d er to ad he re to t he emission st a n d ards d e fin ed by t h e MoEP, t h e sit e has in it iat ed a major
proje ct to r ed u ce the PM ( Particulate Matter) e mission s from t he main st ack. T he pr oject is e xpected
to be complet e d in t he comin g yea rs.
IC L Neot Hovav
– T h e sit e ope rat es ad vanced monit orin g an d det ect ion met h od s to id en t ify
ma lfu n ct ion s an d applie s IED met h od olog ies wh ich provid e g u id an ce re g ard in g all of t he
t echn iqu e s for preven tin g and mon itoring e mission s in to t he envir on ment. Invest men ts were made
to improve r ecyclin g an d recovery a nd re duce emission s of solven t s and ot he r org an ic materia ls via
act ivat e d carbon syst ems. The sit e a lso in st alled cat alytic oxid izin g t ech nolog ies t ha t re d uce VOC
( volat ile org an ic compou n d s) emission s a n d complies wit h ad vanced va lu e s. A b sorpt ion syst ems
ru n in t he sit e's in orga nic prod u ct ion syst ems. F ilt er s a ct ively preven t pa rt icu lat e ma t t er ( PM)
emission s fr om t h e solid s’ ha nd lin g syst e ms. Sea lin g of d iffu sed emission s in t h e load in g and
u n load in g areas was ma d e. On g oin g work is b e in g exe cu t ed for t h e LDAR ( Le ak Det ect ion and
Repair) pr og ra m – con t rol an d t r eat ment of fu g it ive e mission s wit h t he assist an ce of a n e xt ernal
compan y. Th e sit e ope rat es wit h fu ll cooperation an d commu n ication wit h a u thor it ies. T here were
no complain t s or h earing s for violation of envir on men ta l la w or b usin ess licen se con dition s in 2020.
90 ICL Group Limited
IC L Pe riclase
– Th e sit e in st alled a ne w air emission s t rea t me nt device for t h e Ma gne sia
ma nu fact u rin g process. T he t ech n olog y is workin g pr operly an d e na b le s t h e sit e to meet t he air
emission s per mit re qu ire ments. In 2020, a n e w pr oject to re du ce particu la te mat ter (PM) emissions
from g ravel pile h as b e gu n.
IC L Haifa ( Fe rt ilizers & Ch emica ls)
- Sin ce t he sit e h as con vert ed to n atura l g as ( fr om h eavy fu e l oil)
emission s of NOx, SOx an d PM were sig n ifican t ly red uced . In ord er to comply wit h it s emission
permit , t he sit e h as also in st alled a syst em to red u ce a mmon ia from t h e A mmon iu m Nit rate
prod u ct ion plant . Th e sit e is also in st allin g a ne w t r eatme nt equ ipmen t in it s Nit ric Acid plan t , aimed
to red u ce NOx a nd N
2
O emission s.
E u rope
In Eu rope , e mission s are reg u lat ed u n der t h e EU I ED – I n d u str ial Emission Direct ive. Pre ventive
me asu re s an d Be st Availab le T echn olog y ( B AT ) are applied . T h ese re g ula tion s are t ra nsla t ed to
nat ion al leg islat ion . Emission limit va lu es for re leva nt su b st an ces are in clu d ed as par t of t he
au t h or it y a pprova ls. There are ru les gu ar an tee in g prot ect ion of air, soil a nd wat e r. In Eu rope ,
relevant emission s con t rol is con d u ct ed by a u t horit y in spe ction , t h roug h in d e pendent t echnical
su per visory associat ion s an d by self- in spect ion . ICL plan t s are su b ject to t h e Eu rope an SEVESO
d ir ect ive a nd con d uct r egu lar sa fety in spection s a nd pr epare reports.
Relevant pot en t ial sou rces for emission s are regist ered a nd con trolled also by t h e a u t horities on a
reg u lar b asis. If requ ired , on- lin e- mon it orin g syst e ms are in st a lled . In a d d it ion , in vest men t s were
ma d e in t he in sta llat ion an d upg radin g of filt er , separ ation an d absorption syst ems in order to keep
t he air emission limit s.
Air qu alit y at ICL's pla nts in Eu rope
IC L B ou lb y
– T h e sit e's air e mission s are pe rmit ted un de r t he En vironment al Per mitt ing Regulations
( En g la nd and W ales) 2010 ( as a mend ed) a nd regu lat ed by t he Local A u t hor ity an d t he En viron ment
Age ncy. As requ ired wit h in t h ese per mit s, t h e emission sou rces are mon it or ed b oth per iod ically and
con t in u ou sly, a nd resu lts are r eported as requir ed by th e r eg ulator s.
IC L I b eria (Suria an d Sallent)
- Th e sit e s' a ir emission s are permit ted und er th e Environment al I mpact
Assessmen t approved by t h e Gen eralit at de Catalun ya. In 2007, t h e sit es ad opted I SO 14001:2004,
an d in 2017 ad opt ed ISO 14001:2015, which was re ne wed in 2019, b ot h are par t of t h e I SO 14001
glob al st an d a rd t h at se t s ou t t h e crit er ia for an en viron me nt al man age me nt syst em. Mor eove r, in
ord er to ha ve a su st a in ab le st ra tegy b ase d on en viron me nt, social and fin an cial, t h ese sit es measure
t he car b on foot prin t a ccord in g to t h e st an d ard I SO 14064-1:2012, t h at d efin es principles and
requ iremen t s at th e Company's level for qu an t ificat ion an d re port in g of GHG emission s a nd
remova ls, base d on The Gree nh ou se Gas Prot ocol. Official an d in t er na l emission mon it or in g is
con d u ct ed periodically accordin g to t he permit s. The site s operate in complian ce with their permit s.
IC L F ra n ce Scor a
- Th e sit e operat e s accor d ing to t h e work permit g iven by t h e French a ut horities
( DREA L). Re cen t reg ula tor y in spection s ha ve examin ed th e sit e's coolin g towe rs an d have found no
d evia t ion s.
91 ICL Group Limited
IC L The Net herla n ds Te rn e uzen
- Recen t mon it orin g of emission leve ls were wit h in t h e permit
requ iremen t s. Du rin g 2020, t h e sit e se nt an applica t ion for re newal of t he oper at ing per mit . The
applicat ion is expect ed to be ad d ressed by t h e re le va nt local au t horit ies in 2021, an d t h e cu rrent
permit is valid u n t il t h e n ew permit will be received . Local en vironme ntal a uth or itie s h ave u pdated
t he SVHC list , an d for t h e materia ls list ed t he re will be a n ee d for min imiza tion . T h e sit e is st u dying
t he issu e re g ard ing Ch romiu m 6 t h at appe ars in t he upd at ed list , in ord e r to ad a pt to t he new
requ iremen t s.
IPT is in t he proce ss of ren ewin g t he en viron me ntal per mit of t h e sit e. Du r in g t h is pr oce ss, I PT
performed a g ap an alysis in accor dance wit h t he Dut ch e nviron me ntal la ws an d reg ula tion s. I PT is
workin g t og e t he r with t he Dut ch g overn me nt to fu lfil t he r elevan t g aps.
IC L PS Heerlen
– T h e Neth erlands - T he sit e in He erlen is a Seveso cla ssified sit e d ue to t he products
wh ich are st or ed t h ere . T h is me an s BAT ( B est availab le t ech n iqu es) will be applied whe rever
en viron me nt al impact is possib le . Pr ocess air emission s ( d u st an d e xhaust air) are complian t wit h
Du t ch legislat ion s, b ein g mon it ored and con t rolle d by t h ird part ies an d au thorit ies.
He at emission s ( via t h e pr ocess air emission s) h ave b e en re d uced over man y yea rs by re- usin g the
en ergy for proce ss he at in g. The most re cen t in ve st men t uses u sin g t h e h eat e mission s for
gen era tin g cooled pr oce ss air and to g en er ate h ot water for he ating office s.
IC L Ger man y B it t er feld and Ladenbu rg
- In Germany e mission s are re gula ted u nd er t he EU I ED and
t he relat e d Ge rman emission law. Pr even t ive mea su r es and B est A va ilab le Te ch n olog y ( B A T ) are
applie d . Emission limit valu es for releva nt su b stance s are in clu de d as par t of t h e aut hority approvals.
Th e sit es h old ope rat ion al permit s b a sed on t he “German Emission Con t rol A ct ”. Emission
mon it orin g is con d u ct e d per iod ically accord in g to t h e pe rmit s. Most of th e mon it ored emission
poin t s are equ ipped wit h emission con t rol d evices. Mon it orin g report s h ave con sist en t ly sh owed
t hat t he cor respond in g g u id elin e levels are met at ever y e mission poin t . In ad d it ion , t h e sit es
reg u lar ly pe rform fu nct ion al t est s of emission con t rol d evices in place, to id en t ify possib le
ma lfu n ct ion s in it s pr od u ct ion u n it s, as lega lly re qu ire d . We are opera t in g a nd comply wit h limit
va lu es. A ll re qu e st ed con trols an d d ocu men tation s a re in place.
IC L Prolact al
- In A u str ia , e mission s are regu lat ed u n der t h e EU IED an d t h e related emission A u strian
law. Pr even t ive measu r es and B est A vaila b le T echn olog y ( B AT ) are applied . Emission limit valu es,
espe cially for d u st emission s, are inclu d ed as par t of t he aut hority a pprovals. Th e requir ed con trols
an d d ocu ment at ions are in place . In ad dition , in Au stria, t he r eg ulation of food produ cts falls under
Eu ropean F ood laws wh ich, amon g ot he rs, in clu d e hyg ien e reg u lat ions, as well as Eu rope an
reg u lat ion s respectin g or g an ic pr od uct s. At t he d ate of t h is A n n u al Re port , we are in complian ce
wit h t he releva nt r egu lat ion.
92 ICL Group Limited
A m erica s
Air e mission s in t he A mer icas are man ag ed t hroug h operatin g per mit s issu ed by t he re leva nt a gency
respon sib le for each in d ivid u al sit e. In t h e Un it ed St a tes, a ir permits are issu ed u nd er t he auth ority
of t h e US EPA’s Clea n A ir A ct. In Br azil, air emission s are managed un de r t he site ’s operation license
issu ed by t h e Sa o Paulo St ate e nviron me nt al a gen cy – CETESB.
Air pollu t ion con t rol equ ipme n t is employed t hr ou g h ou t t h e r eg ion to ensu r e t h at I CL’s fa cilit ies
comply wit h th e emission paramet e rs est a blish ed by t h e re g u lator s. Con t inued ma in t enance of
pollu t ion con t r ol equ ipmen t and impr ovemen t of con t rol e fficien cies is t h e focu s.
Air qu alit y at ICL's pla nts in t he A mericas
IC L US La wr en ce, Caron delet a nd Ha mmon d
– A ir emission s in t h e A mericas are man aged t hrough
operat in g per mit s issu ed by t he rele van t a gen cy r espon sible for each in d ividu al sit e. In t he Un ited
St at es, air permit s are issu ed u n der t he auth or ity of t he US EPA’s Clea n A ir A ct.
Equ ipmen t is e mployed to en su re t h at we comply wit h t h e emission pa rameters est ab lishe d by the
reg u lat ors. Re le van t e mission s an d air pollu t ion con tr ols are in pla ce.
IC L B r az il
- In t h e sta te of Sao Pau lo, whe re th e t wo I CL plan t s (Sao J ose d os Ca mpos a n d Cajat i) in
Sou t h A merica are locat ed , t h e cont rol of t he emission s is mad e by CET ESB , wh ich is t he st ate
en viron me nt al age ncy, t hr ou gh t h e proce ss of gran t ing t h e operat ion lice nse . A ccor d in g to t he
lice nse requ irements, t h e pla n t s ha ve a Mon it orin g Plan for A t mosph eric Emissions an d t h e r esults
of th e chimn ey samplin g are pre se n t ed to CET ESB , wit h t h e compa rat ive r eport s of t h e previou s
mon it orin g .
IC L US Gallipolis Fe rry Plan t
– T h e sit e oper at es u n d er b ot h a W est Virg in ia Reg ulation 13 Per mit,
an d a Fe d eral US Tit le V permit . T h e fa cilit y ope rat es in complian ce wit h it s per mit t ed limit s an d is
u n d erg oing a ‘fu git ive emission s’ reevalu ation proje ct , d e sig nated to spot focu s areas for fu git ive
emission e limin at ion . Th is proje ct ha s determin ed th at the site may not need to con tin ue in th e Title
V Prog ram a nd th e sit e is a pplyin g to exit t his regu lat ion.
C h in a
IC L Chin a YPH
JV - T he 3C plan t is t e st ed on ce e ve ry six mont hs by t h e Cent e r for En viron me ntal
Prot ect ion re gardin g g a s e mission s. Th e sit e h as a d apt ed it s fa cilit ies by me an s of in st allat ion of 7
on- lin e syst ems of mon it or in g g as e mission s in ord er to comply wit h local regu lat ion s and re gulatory
sch emes. A ll YPH JV sit es are in complian ce wit h all t he re levan t laws a nd re gula tion s.
IC L Ch in a LYG
- T he sit e st r ict ly imple me nt s t he Me asu re s for Pollu t a n t Disch ar g e Per mit t ing
Ad min ist r ation ( for t ria l implemen tation ) and oth er environmen ta l pr otection laws an d r eg ulations,
con t rollin g t h e emission con ce nt rat ion s of correspon d in g pollu t a nt s from in or gan ic emission
sou rces, meet in g emission st and ards. On lin e mon it oring syst ems an d on poin t VOC ( vola t ile organic
compou n d ) e mission sou r ces are in st alle d in t he sit e's perimete r, accord ing to r equir ements of the
reg u lat ory a u th or ities. LDA R t ech nolog y ( lea kage d etection a nd repair) was ad opt ed to repair or
replace t h e leakag e poin t s for exce edin g t h e st an da rd ever y ye ar, so as to red u ce le akage e mission s.
IC L Ch in a SB CL
- t h e sit e h as set up an alkali liqu id en vir on men t al scru b b in g t ower, a solid
en viron me nt al scrubb ing t ower an d bag filt er syst ems in a ccord an ce wit h regulatory requireme n ts.
93 ICL Group Limited
E n e rgy
T h e Europe an Energy Efficiency D irective ( EED)
Th e lat est En e rg y Efficiency Direct ive of t h e Eu r opean Un ion came in t o effect in Decemb er 2012.
Th e r equ ir ement s in t he Energy Efficien cy Directive mu st be imple me nt ed by compa nies operating
in th e Eu rope an Un ion . Th e En er gy Efficien cy Direct ive provid es a join t framewor k to ad vance
en ergy efficien cy in th e Eu rope an Union in order to a ch ieve t he European Un ion’s e nergy g oals by
2020. These g oals in clu d e t he redu ct ion of GHG emission s by 20% compa red wit h t h e levels in 1990,
an in crease in t h e rat e of con su mpt ion of rene wab le en er gy sou r ces to 20% of th e t ot al en e rgy
con su mpt ion a nd an improvemen t in e ne rgy efficien cy by 20% . A ccor d in gly, all cou n t r ies t hat are
me mb e rs of t h e Eu r opean Un ion are require d to in crease t he e fficiency of t h eir en erg y con su mption
in all st ag es of t h e en e rgy ch ain — con version , t ranspor t ation a nd fin al use. I CL h as d eveloped and
ad opt e d st rategies an d proce d ures at a ll it s Eu rope an plan t s to comply wit h t he loca l in t er pretations
of t h e Direct ive.
N a t ural Gas
Sin ce 2010, I CL h as b een u n d ertakin g a st r at egic t ra nsition to in crea sin g ly u se n at u r al g as ( NG)
in st ea d of ‘heavy’ fossil fu els ( fu el oil, d iese l and n apht ha) to power it s la rg est prod uction plants in
Isr ael. T h e t ransit ion is n ow n ea r complet ion , an d 95% ( 40/ 42) of I CL Isr ael’s ma in
en ergy-con suming in st allation s were con verted to NG. Cu rre ntly, over 90% of t h e t ota l remot e fuel
con su mpt ion of I CL Glob a l facilit ies is d er ived from NG ( compa red to on ly a b ou t 25% pre-t r an sition).
Th is t ransit ion ha s sig n ificant ly reduced e mission s of air pollu t an t s ( su ch as NO x an d PM) in t h e area
su rrou n d ing I CL facilit ies, impr oved t h e qu ality of ou r prod u ct s, redu ced main te na nce expenses and
ha s led to a sig n ifican t mon etary sa vin gs du e to th e t ransit ion away from t h e u se of more e xpensive
fu els. Th e t r an sition wa s also on e of t he main GHG r ed uction engin es taken by th e Company, as NG
is less carb on - in t en se t h an ’he avy’ fossil fu e ls. In ad d ition , t he employme nt of new, mor e efficie nt
NG-b ased CHP pla nt s effectively re duces ICL's d epend en cy on the pu rchase of mor e ca rb on- intense
ext ern al electricity.
For fu rt h er in formation , in clu din g d etails of t h e specific NG pu r ch asin g agr eement s u ndert aken by
t he Compan y, see Not e 18 to ou r A u dit ed Financia l St at emen ts.
L i q u id, Solid W ast e a nd Lan d Con ta min ati on
Du r in g t h e prod uct ion proce sse s at IC L’s facilit ies, in d u strial liqu id and solid wast es are prod uced.
St orag e , t ra n sport ation , reuse a nd d isposa l of wast e are gen er ally r eg u la ted by g ove rn me ntal
au t h or it ies in every cou nt ry we oper at e in . W ast ewater qu alit y and qua ntit y mu st comply wit h local
reg u lat ion s an d wit h per mit s at relevant sit e s. T he variou s pr od u ct ion sit es h ave ad a pt e d t heir
t rea t men t syst ems to t he stand ards applica b le to t hem. The Compan y t racks and ma n ages its waste
an d t ake s va riou s st eps to re d u ce, to id en t ify and to ma ximize pot en t ial reuse a n d recyclin g of
relevant wa st e. Most of t h e wa ste is eit h er d ire ctly t reated by I CL or t reated by an e xtern al ce rtified
ve nd or, wit h wh om t h e d isposal me t hod is d ir ect ly con firmed . In case of d ifficu lt ies in reu se or
d isposa l of wast e g en erate d in ou r facilit ies, in t erruption s or prod uct ion st oppag e mig h t occur and
sig n ifican t cost s might be imposed on us. For further in formation , see “I tem 3 - Key I n for mation— D.
Risk Fact or s— Ou r ab ilit y to oper at e a nd / or expan d ou r pr od u ct ion a n d opera t in g fa cilit ie s
world wid e is d epen d ent on ou r re ceipt of, an d complian ce wit h , permit s issu ed by govern mental
au t h or it ies. A d ecision by a g over nment au th or ity to de n y an y of ou r per mit applica t ion s may impa ir
t he Compan y’s b u sin ess and it s ope rat ions”.
94 ICL Group Limited
For t he pa st few ye ars, I CL h as b e en en g agin g in Cir cu lar Econ omy. Du rin g 2020, t he pr og re ss of
Cir cu lar Econ omy project s was t racked , a n d va riou s in it iatives were promot e d . Pr ojects across the
glob e in clu d e u sin g ICL's by-prod u ct s as raw mat e rials in ot her in d u st ries as we ll as in ot h er I CL
b u sin ess u n it s. ICL's fa cilit ie s are a lso u sin g by-pr od u ct s of ot her in d u stries as par t of th eir raw
ma t erials, su ch as se wag e slu dge ash for fe rtilizer produ ction .
Cu rren t proje ct s a nd pilot proje ct s in clude:
• Usin g sewag e slu d ge ash for fertilize r produ ction .
• Salt by- prod u ct u t iliz ation . As part of ou r n ormal ope rat ion s, we are d isposin g 2.6 M cu b ic me t ers
of salt fr om t h e pot a sh produ ction plants, ( excludin g t he salt ha rvest ing proje ct), we are looking
for alt erna tive ar eas to st ore it in proximit y to t he are as whe re the salt is prod uced. T he salt wall
ob st a cle is b ein g b u ilt alon g t h e b order b et wee n I sr ael and J ordan an d will provid e us wit h a
close area to st or e salt ( 1.2 M cu b ic met ers) wh ile su pport in g IDF n ee d s. A pproxima t ely 1
kilome t er of t h e sa lt wall was alre ady b u ilt.
• The ESK pr oject is collect in g A PCr ( A ir Polu t ion Con t r ol re sid u e) ash es fr om Wast e to En ergy
plan t s cast in g it in to b locks an d u sin g t he blocks as min e su pport ma t erials replacin g wood and
st eel.
• Ma g iK - Cr eat in g valu e from by-prod u cts. A n ew pr od u ct was d eveloped an d market ed from a
by-prod u ct s st ream t h at is creat ed as part of mag n esiu m's produ ction proce ss.
I s rael
Liqu id an d solid wast e an d ot h er e mission s are reg u lat e d u n d e r mu lt iple reg u lat ions. T he
Compan y’s plan t s in Isr ael implemen t wast e mon it orin g an d ma n agement measu res. Each plan t is
requ ired to in form t h e a u th orities on t h e a mou nt of wa st e an d t re at men t me t h od for every wa ste
st rea m u n d e r t h e Isr ael’s PRT R re gu lat ion. W ast ewat er r eg ulation s, in clu din g efflu en t limit s, are
reg u lat ed by th e Min ist ry of En vironmental Protection and part ly by loca l a u thor it ies.
As pa rt of t h e con d it ion s for receivin g an in t e grated en vironme ntal lice nse , t he Compa ny's plants
in Isr ael have con d u cted hist orica l lan d con t amin ation su rve ys an d su b mitt ed t h em t o t h e Min istry
of En vir on men t al Protection .
Liqu id a n d solid wast e t reatment and lan d con t amin ation at I CL's plan ts in Isr ael
IC L Rot em
( Rot em)
– T he sit e is implemen t in g a ma st er pla n for wast ewat e r t r eat men t wit h the
prin cipa l g oal of red u cin g efflu ent qu a n t it ies. T his is d on e by con ver t in g some efflu en t s in to
prod u ct s, wast e wat er recyclin g , red u cin g wat er con su mpt ion , t re at men t/n eu tralization of
wast ewa t er and restor ation of t he wa st ewa ter pon d s. T h e pla n now in clu d e s add ition al wast ewater
st rea ms, creat ed by th e a ir e mission pu rification proce sse s, require d by th e Isra eli Clean A ir Law.
Th e wa st ewat er t reatme n t was d iscu sse d wit h t h e MoEP as part of t h e d iscu ssion s of all Rot e m
En viron men t al project s
. Du rin g t h ose d iscu ssions it was agr ee wit h th e MoEP t h at Rot e m will
con st r u ct a n eu t ralization plan t for Rot em's wast ewat er. In a d d ition , Rot em con t in u es to d e ve lop
an d pla n recyclin g project of wa st e solu t ion s t hat are mor e en viron ment frien dly a nd fit to "recycling
econ omy" me t hod olog y.
95 ICL Group Limited
As par t of t h e liqu id an d solid wast e t r eatment, Rot em sit e is t r eat ing t he g ypsu m wast e by ponds
an d st orag e. In 2018, Pon d 5 b e came opera t ional a n d- in Oct ober 2020, t h e con st ruction an d use
permit s for pon d 5 wer e ext e n d ed u ntil Dece mb e r 31, 2021. Th e Compan y st art ed recla ma tion
plan n in g for g ypsu m pon d s 1 throu gh 4 that were used by Rot em in th e pa st. In 2019, the Re gional
Plann in g A u t horit y, aft er con sid erin g a ll en viron me n t al aspect s, d ecid e d t h at lon g t erm g ypsum
st orag e will be set on t he we st e rn sid e of road 258. T he Compan y is workin g wit h t he relevant
au t h or it ies to ob t a in all t he requ ired pe rmit s, for th e con t in u ed ope rat ion of t he g ypsu m pon d s
b eyond 2021 an d for t h e con t in ued pilin g of g ypsu m, in accord a n ce wit h t he requir ements set by
law an d / or in st ruction s of t h e Plan nin g and B uild ing Commit t e e.
Gypsu m th at is crea t ed in t h e d ry part of th e prod u ct ion proce sse s, is most ly st ored in a la rge
gypsu m st or ag e pile , in proximit y to t h e sit e. Fu t u re e xpansion s of t he st or ag e pile wou ld n eed to
be posit ion ed on n ew prot ect ive in frast ru ctur e, accord in g to cu r ren t reg u lator y requ irements.
Anot h er require men t is t h e est ablishmen t of re st or ation met hod ologies for t h ese la rge st orag e piles.
Th e sit e is makin g ad just ments to comply wit h t h ese r equ ir emen ts and is st rivin g to fin d alt er native
u ses for t h e g ypsu m wit h ext erna l in du stry par t ners.
In 2017, I CL Rot e m e xperie nced an e nvironme nt al a ccid ent in wh ich appr oximat ely 100,000 cu b ic
me t ers of acid ic ph osph og ypsu m liqu id were r ele ased int o t h e su rroun din g en viron men t, as a r esult
of a b r each in t h e n umb er 3 d et ainment pon d . T he liqu id e ntered t he ne arby A sh alim Cre ek (Nahal
Ash alim), wh ich flows t h rou g h an area desig nated as a nat ur e re serve . To t h e best of t h e Company's
kn owled ge , as at t h e report in g d ate, t h e crimin al in ve st ig ation of t h e event is st ill u n d erway. The
Compan y is t akin g in t en sive act ion to rest ore t he Cree k, in fu ll cooper at ion wit h t h e re levant
au t h or it ies. Followin g t he in cid en t, t h e I NPA ( Israel Nat ure an d Parks A ut hority) closed t he n ature
rese rve to t h e pu b lic. Du rin g 2018- 2019, ra in y sea son t h e Cr eek flowed vig orou sly wit h ra infall on
se ve ral occasion s. Fin d in gs of t h e mon it orin g prog ram ( operated by t he I sraeli au th orit ie s) in dicated
t hat PH levels in t h e water holes h ave r etu rn ed to n ormal levels, an d impr ovemen t in ch emical and
b iolog ical para me t ers ha s con t in u ed . Non et h eless, in d ica t ion s of t h e in cid en t ’s impa ct are st ill
presen t a lon g t he Creek, a nd t h e environ men tal impact con t inu es to be exa min ed by t he aut hor ities
in 2020. I CL con d u ct e d a r isk a sse ssment process a lon g th e Cr eek, wit h lea ding expert s in t his field.
Th e a sse ssment was me an t to a ssu re that t he Creek’s h ikin g t rails can be reopen ed a nd do not pose
risks to t h e ret u r ning h ikers h ea lt h, pen d in g appr oval of reope n in g by t he n ece ssa ry aut horities.
Th e a sse ssment wa s comple t ed in la t e 2019 an d t h e re su lts we re prese n ted to t h e au thor itie s. A ll
risk levels we re fou n d to be accept ab le, a nd in J u ne 2020, aft e r receivin g approva l fr om t he
au t h or it ies, the A sh alim Cre ek was reopen ed for hiker s. For further in formation , see Not e 18 to our
Aud it ed Fin ancia l Statements.
Th e sit e h as also complet e d t h e implemen t a t ion of a mu lt i-ye ar mast e r plan to pr even t g round
pollu t ion by fu e ls or oils.
IC L Dead Sea ( DSW)
-
Efflu en ts are d irected to the Dead Sea accordin g to t he requ ire ments list ed in
t he relevant permit , issu ed by t h e Min ist r y of Environ me ntal Protection (valid up to 2024).
Salt wast e is t r an sferred to a large salt open air d epot , in proximit y of t he sit e . T he ope n -a ir d epot's
d imen sion s ( he ig h t an d a rea ) are limit ed by st atu ary require men ts. T he sit e is e xamin in g alt er natives
for sa lt st ora ge/ tr eatme nt.
In ad d it ion , h istor ical cr ud e oil con t amin ation h as b een fou nd n ear t he ope ration al sa lt d epot . The
sit e h as su b mit t ed a plan to t h e Min ist ry of En vir on men ta l Prot ect ion for t reatment at t h e sit e and
is a wait in g t he Min ist r y's in st ruction s. Fu rthermore, a g rou n d wa ter st u dy in I CL De ad Sea’s old
power st at ion 's con tamin at ed fuel ta nk fa rm sh owe d no grou ndwa ter con tamin at ion; h owever, soil
reh ab ilit ation is expected in t he fut ure. T he sit e is cu rren tly establish in g a n ew pet rol/ die se l st ation
96 ICL Group Limited
for local ve hicle s. A t r eat me nt plan will be u n d er t aken for t h e soil at t h e old (an d soon to be
d ecommission ed ) g as st at ion .
IC L Neot Hovav
- T he sit e ope rat es a de sig n at ed in st a llation for in d e pendent t reatment of t he
sa n it ary efflu ent s. T he t rea ted wast e wat er is se nt as an in pu t fee d in t o t h e coolin g t owers. In
ad d it ion , an in sta llat ion was con st ru ct ed for treatin g in du strial wast ewater, in accor dance with the
requ ire ment s of t he plant’s b usin ess license s. T h e t reat men t of t he in du strial wa st ewate r in cludes a
t ran smission syst em, a ph ysicoch emical u nit , an d a MB R ( Memb ra ne B io React or ) u n it . T h e sit e’s
t rea t ed wast ewa t er flows in t o eva porat ion pon d s, which we re built in 2013 accor d in g to US
st an d ar ds, in clu d in g ad van ced mon it orin g for lea kag e a nd a ir emission s. In ad d it ion , t h e sit e
operat es a special au t horize d labor atory for mon it oring and analyzing wast ewater qu alit y.
Pu rsu an t to t h e requ iremen ts of t h e Minist ry of En viron men tal Pr ot e ction , in t he comin g yea rs the
sit e is requ ired to tr eat t he exist in g ha zardou s wa st e ( h istor ical). Th is wast e is st or ed in a d e sig nated
d efin ed area on t he sit e 's pr emises, in coord in at ion wit h t h e Min ist r y of Environ me ntal Pr ote ction.
Some of t he cu rren tly prod u ced wast e is a lso st ill st ored in t h is area. T h e t re at men t is par t ly
con d u ct ed t h roug h a comb u st ion facilit y ( B romin e Recover y Un it ), wh ich r ecover s h yd r o- bromine
acid . A d d it ion al wast e qu a nt it ies are b e in g se n t to e xt erna l d esignat ed t reat men t. F or fu r t her
in format ion , see Not e 17 to ou r A u dit ed Financia l St at ement s.
IC L Periclase
- Th e sit e ha s a valid permit for dischargin g b rin e in to t h e Dea d Sea ( valid up to 2022).
Th e sit e h as est a blish ed a thickenin g and filt ra tion facility to t reat wa st ewa ter.
Th e sit e is workin g to re d u ce hist oric Magn esia wast e, st ored in a d e sig n at e d wast e area, a nd to
reu se it for t h e b ene fit of a circu la r e conomy. Th e Compa ny is examin in g t he u se of t h e r est of t his
hist oric wast e as part of t he produ ction processes at I CL Rot em. In add ition , a pilot pr oject is b eing
con d u ct ed to t est t he viabilit y of u sing this wa ste to fill sin kh oles in t he Dead Sea region.
IC L Haifa ( Fe rt ilizers & Chemicals)
– T he wa stewat er of t he sit e's facilit ies is flowin g in to t he Kishon
Rive r, accor d in g to t h e permit issu ed by t he MoEP. In or d er to comply wit h t h e st and ards covering
t rea t men t of th e wast ewater, t he site in coordin at ion wit h t he MoEP, is con d ucting a proje ct to d rill
to t h e u n d erg rou nd water zone in ord er to cha nn el t h e t r eated wa st ewa ter in t o t he u nd erground
wat er. T he pr oject is in ad van ced sta ges and is expect ed to be complet e d d urin g 2021.
Gypsu m pile, t h at wa s cre ate d as a by-product in t he prod uction proce ss of phosph oric a cid at the
90’s, st ore d in t h e sit e. The sit e is workin g in coord ination wit h t he MoEP an d ta kin g t he n ecessary
act ion s accor d in g to t he regu lat ory requ ire men ts u nder the b u sin ess licen se an d t he poison s pe rmit
issu ed to t h e sit e .
E u rope
Liqu id a n d solid wast e an d emission s are regu lated u n de r t he Eu ropean I ED – In d u strial Emission
Dire ct ive . Th e Compa ny implemen t s wast e mon it or in g and man age me nt mea sures, a nd is ob lig ated
to in form t h e au t horities of t h e resu lt s. W ast ewat er r eg u la tion s, in clu d in g efflu en t limit s, are
reg u lat ed by st a t es an d par t ly by commu nit ies. ICL h as provision s re ga rd in g t h e avoid ance of
pollu t ion a n d con d it ions for asse ssin g complia n ce wit h t he emission limit va lu es.
W ast ewat e r is pa rt ly pre t rea ted an d se nt to mu n icipa lit ie s an d t h ir d par t ie s for fin al t re at ment
b efore d ischarg ing or is at levels th at it can be disch ar ged to sur face wate rs wit hou t treatme nt. The
prod u ct ion processe s, in ge n eral, are n ot g en e ratin g sig n ifican t volu me s of dire ct solid wast e. In
case solid wa st e n ee d s to be d ispose d of, th e requ ire d d ocu men t ation an d a pprova ls und er the
Eu ropean r eg ulation s are fu lfille d .
97 ICL Group Limited
Liqu id a n d solid wast e t reatment and lan d con t amin ation at I CL's plan ts in Eu rope
IC L Bou lb y
- A ll wast ewa t er le avin g t h e sit e is per mit t ed by t h e En vir on men t Ag en cy. Th e sit e's
wast ewa t er con sist s of e xt ract ed sea wat e r, min e b rin e, ga t h ered su rface rain water, an d water
t rea t ed on t h e on-sit e sewag e plan t . Mu lt iple par amet e r limit s are imposed upon t h e sit e by t he
wast ewa t er pe rmit , an d no complia n ce b rea ch es h ave occu rred sin ce t h e t r ansit ion to prod u cing
Polysu lph at e® . Followin g t h e t r an sition to Polysu lpha te ®, t h e amou n t of wast ewat er was re duced
con sid erab ly.
IC L I b eria
- In Spain , a mu lt i-ye ar prog ram is u n d e rwa y to re st ore t he lar ge salt piles while payin g
close a t t en t ion to t he issu e of wast e wat er d ra in ag e an d slu d g e t rea tment. In Feb rua ry 2021, t he
ACA, Ca t alan W at er Ag en cy, appr oved th e n ew colle ct or a g reeme nt, which is to be sig ned with the
Compan y. Th e n ew collect or is an in fra st ru ctur e r equ ir ed for t h e re moval of b rin e wat er t h at will
be u se d for re st or at ion as well as for prod u ct ion . For further in format ion re g ardin g t he rest or ation
plan in Spain , see Not e 18 to ou r A u d it ed Financial Stat eme nt s.
ICL Ib eria h as su ccessfu lly pa sse d t he au d it for t h e cert ifica t ion of t he UNE 22470 an d 22480
st an d ar ds, wh ich accred it t he Compan y as a su st a inable min in g Compan y. T he re is a lso a prog ram
on n on - min in g wast e man age ment to valorize and r ed u ce ICL Ib e ria’s wast e. It is d on e in
accor d an ce to local an d Eu ropean wa ste mana gement reg ulation s.
IC L Ger man y B it t erfe ld
- Th ere are t h ree in d e pend en t d ra in ag e syst ems on t he sit e , t ra nsport ing
( separa t ely) ru n- off wate r fr om n on - hazardou s areas; san itary wa st e wate r wh ich is r ou t ed dire ctly
to th e ch emica l par k’s wast e wat e r t re atment ( W WT) plan t ; an d in d ustrial wast ewater from the
prod u ct ion pr oce sses t h at is r ou t e d to t h e sit e 's pre -t reat ment facilit y. Pr e- t re atment con sist s of
he at in g an d h yd rolysis, aft e r which , t h ese e fflu ent s are a lso st arred to t he ch emical park’s waste
wat er t r eat men t ( W W T) plan t . Th e d isch ar ge to t he WWT is r eg u la ted by a d esig n at ed per mit (in
t erms of qu an t it y and qua lit y of wast ewate r). T h e sit e also oper ate s a spe cial auth or ize d lab ora tory
for mon it orin g an d a nalyz in g wastewa ter qu ality.
Th e sit e's wa st es are h an d led accor d in g to oper at in g proced u re s requ ired by t h e ISO 14001
st an d ar d. Most of t h e hazar d ous wa st e relevan t to t he sit e are re sid u e s g en era t ed du ring
ph osph oru s t rich lorid e prod u ction a nd e xhau sted act ivated carbon ( for off ga s pu rificat ion and
prod u ct clea nin g). A ce rtified compa ny h as b een con t racted for waste d isposa l.
IC L F ra n ce Scor a
- T he sit e fu lfils it s commit ments accordin g to th e work pe rmit given by th e F rench
au t h or it ies ( DREAL). Rece nt regu lat ory in spect ion s of wa st e wat er have sh own no d eviat ion s from
t he per mit requ iremen t s. T h e permit was mod ified by t he a u t horit ies in Oct ob er 2018. The
mod ificat ion s con ce rn t h e qu an tity an d qu ality of t h e ou t pu t wast e water fr om t h e sit e, wh ich are
in complian ce wit h t h e u pd ated r equ ir ement s.
IC L T h e Net h erlands Tern eu zen -
t he site's waste water out put is wit hin th e per mit requ irement. For
fu rt h er in format ion on IPT’s en vironmen tal per mit re newa l, please see th e rele va nt par ag ra ph u nder
t he ‘A ir qu alit y at I CL's pla n ts in Eu rope’ sect ion .
IC L PS Heerlen – T he Netherlan ds
- du e to th e re-use of process wate r, t here a re no water e missions
( n o sig nifica nt wa ste wate r).
Reg ard in g solid / liqu id waste: whe re possib le, t h e various wast e st re ams are separat ed to make them
availa b le for reu se, re cyclin g and h en ce avoid landfill.
IC L Ger man y Lad enb u rg
- Du e to ph osphat e pollu t ion in t he su b soil of th e sit e, t he ph osphate
con cen t r ation is mon it or ed at several we lls an d re port e d re gu larly to t he au t h orities. T here is no
98 ICL Group Limited
ma t erial risk relat ed to t h e g rou n d wat er mon it orin g a nd no ad d it ion al en vironmen tal impact or
cost s are e xpe ct ed .
IC L Prola ct al
- Liqu id an d solid wa st e t re at men t is ou t sou r ced to ent it led d isposal companies. T he
amou n t s of each wast e t ype are mon it or ed as d e ma nded. Sin ce e nd of 2020 Prolact al is ope rat ing
it s own wa st e wat er treatment plan t as an ind ire ct disch arg er. All releva nt issues a re commu nicated
an d ag reed wit h t he local auth orit ies inclu din g th e mu n icipal wast e water t re atment plan t. No land
con t amin at ion was d et ected at Prolact al.
A m erica s
Th e liqu id an d solid wast es in t he A mer icas sit es are ma nag ed u n d e r cou n t ry a n d st at e specific
reg u lat ory r equ irements. In t h e US, solid an d h az ardou s wast e s are r egu lat ed u n d er t he US EPA ’s
Resou rce Con servat ion an d Recovery Act . In B r azil, wast e is man age d u n d er t h e sit e’s opera t ion
lice nse issu e d by t h e Sa o Paulo St a te en vironmen tal age ncy – CETESB .
ICL follows a qu a lificat ion proce ss for wast e ven d ors, which a ssist s in en su rin g t h at waste is prope rly
profile d , t rea t me nt st a ndard s are followe d , a n d d isposa l proce sses mee t reg u lat ory requ ireme nts.
W ast ewat e r is ma na g ed t h rou g h sit e in d u st rial d isch arge per mit s th at are man ag e d t hrough
fed e ral, st ate or local ag en cies. W astewate r trea tment is main ly focu se d on chemical treatme nt. The
wast ewa t er treatme nt syst ems are main tained on a regu lar b asis.
Liqu id a n d solid wast e t reatment and lan d con t amin ation at I CL's plan ts in t h e A me ricas
IC L US Gallipolis Ferry -
T h e sit e operat e s u nd er a Nat ion al Pollu t ant Disch arge Elimin ation System
( NPDES) Permit . The NPDES Permit re gulat es wat er d isch arge fr om poin t sou rces and is ren ewed
every 5 yea rs. T he n ext ren ewa l is in Feb r uary 2022. Th e sit e ope rates a la rg e W ast ewate r T re at ment
Plant ( W W TP). T h e NPDES permit a llows t h e sit e to d isch ar ge proce ss wast ewa ter, san it ary wastes,
coolin g wa t er, g rou n d wa ter, and n on - process area st ormwa t er. Disch ar ge limit at ion s are
con t in u ally d ecreasin g, which puts a str ain on the tr eatmen t capabilit ies for some para me ters b eing
t rea t ed wit h in t he cu rren t W W TP. T h erefore, t he sit e is in t h e process of inst a llin g n ew t ech nology
to t h e cu rre nt t r eatme nt proce sse s.
Th e sit e h as b ee n very act ive in pu rsu in g re cycling in it iat ives, which h elpe d achieve a land fill to
recyclin g rat io of 50%. A d d it ion ally, t he facilit y ha s en t er ed in t o a Volu n t ary Remed iat ion
Agr eemen t ( VRA ) wit h t h e former owne r of t h e fa cilit y, an d t he We st Virg in ia Depar t me nt of
En viron me nt al Prot ect ion ( W VDEP). Per t he a greemen t, sa mplin g of va riou s med ia, in clu d ing
su rfa ce wat er , se d imen t, su b su rface soils, a nd g rou n d wat er were con d ucted t h roug hou t t he site.
Th e n ega t ively impact ed med ia were id en tified and mappe d . Th e mappe d areas ha ve e it he r b een
remed ia t ed or are current ly in t he process of re me dia tion . T hese r emedial a ct ivities, h ave in cluded,
cappin g cer t ain areas th rou g hout t h e facilit y, as we ll as t h e in st a llat ion an d operat ion of a
grou n d water re cove ry an d t re at men t syst em. Th is syst em is allowin g t he Lig ht -Non -A queous Phase
Liqu id ( LNAPL) t h at is floa t ing on t op of t he grou ndwater to be r ecovered . Per the sales ag ree ment,
t hese act ivit ies are b eing fin an ced by t h e former prope rt y own er. Th is pr oject is in it s fin al st ag es
an d sh ou ld con clu de in 2021.
99 ICL Group Limited
C h in a
IC L Chin a YPH
– YPH JV is in complian ce wit h a ll t h e laws a n d reg u lation s in Chin a. Du ring 2020,
t he C ompa ny su cce ssfu lly complet e d it s pla n of wa st e re d u ct ion in st ru cted by t he law and
reg u lat ion s. T h e h azardou s wast es prod u ced by YPH JV h ave b e en st rict ly con t rolle d , t ransferred
an d d isposed t hrou gh qua lified ent erprises. In addit ion , most of YPH JV's h aza rd ous su bst an ces are
u t ilized as raw mat erials and can a lso be fou nd as fin ishe d prod uct s.
W he re r equ ire d, reg ist rat ions for t he st orag e, h an d lin g and t ransport ation of t h ese ma t erials are
acqu ired an d main tain ed. A ct ion plan s an d me asur emen ts are su ccessfu lly d on e in ord er to reduce
t he likelihood of relea se s of h az ard ous ma t erials.
Ann u al lan d examin at ions are con duct ed in a ccordance wit h t he regula tory requir ements.
In or d er to comply wit h t h e local re gu lation s, YPH has in st alled syst ems for removal of wast e water
an d d iversion th ere of from clea n wat e r sou r ces, in clu d in g t ransferrin g ph osphog ypsu m wat er
( wh ich is cre at ed as a by- prod u ct of t h e prod u ct ion processe s) in t o d esig na t ed pon d s for fu r t her
t rea t men t.
In 2020, t h e Company in it iat ed a pr oject of e xpansion of t h e g ypsu m a nd float ation pon d s, wh ich
is in fu ll coord in at ion wit h t he loca l a u t horities, while ob t ainin g all nece ssa ry permit s re qu ired by
t he cou n t ry r egu lat ion s. T h e pr oject 's complet ion is expect ed d ur ing 2021, a n d is g oin g to e n able
YPH JV to u se t he expen de d a rea of t he pon d s in th e comin g ye ars.
IC L Chin a SB CL
- Th e sit es' d isch ar ge wast ewater an d t h e HCL solu t ion from FR-1410 prod u ct ion,
are d e livere d (by ag r eemen t) to an ext ern al ind u st rial b u sin ess par t n er, wh ich u ses it as raw
ma t erials for b r omin e prod u ct ion .
IC L Ch ina LYG
– Du rin g t he r ecen t years, t h e sit e's sewag e st ation was u pg r ad ed, sig n ificantly
impr ovin g t h e efficien cy of wast ewa t er t rea tmen t, and t estin g in st r u me nts for it s ch aract er istic
pollu t ant s la b or atory were pu r chase d, so as to en h an ce t he sit e's a b ilit y to d et ect wat er pollu tants
an d en su re t h e st an d a rd d ischa rge of sewag e. In ad d it ion, t h e sit e set up a r ainwat e r re t ention
pon d in a ccord an ce wit h t he en vironment al r equ ireme nt s an d complet e d it s open ch an ne l d rainage
proje ct for rain wat er.
Th e sit e oper at es u nd er t he requ ir emen ts of t h e loca l cit y ecolog ical e nviron me nt d epar t ment,
amon g ot h er requ iremen t s. In lin e wit h t he se requ iremen ts, t h e sit e carr ied ou t improvemen t
proje ct s for g a s wast e collect ion , sewag e t r eat ment st at ion s a n d it s h aza rd ou s solid wa ste
war eh ou se s. In 2020, t h e sit e t ran sferr ed an d d isposed of 4 t on n es of ha zar d ous solid wa st e . T h is
follows t he su ccessfu l complet ion of a wast e re duction plan re queste d by t he g ove rn men t.
100 ICL Group Limited
H a za rd ous Su bst ances
I s rael
As par t of ICL’s opera t ion s, it prod u ces, st or es, t ran spor t s, an d u ses mat e rials t h at are d efin ed as
ha zar d ou s mat erials accord in g to t he Isra eli Hazard ou s Su b st ances Law, 1993. Han d lin g su ch
su b st an ce s requ ires a special per mit ( "poison s permit ") t ha t is re newed a nn ually. A ll I CL compan ies
ha ve a poison s per mit as re qu ire d by law a nd t he y opera te a ccording to t h e specia l con d it ions
d efin ed in t h ese pe rmit s. Lea kage or loss of con t rol of t h ese ma t erials cou ld cau se an en viron mental
in cid ent an d cau se d a mage to people a nd / or to t h e en viron ment . ICL t a kes mea su r es to pre vent
su ch occu rr en ce s, a nd, at t he sa me t ime, it pr epa res for su ch occu rrences by me an s of e me rg ency
t eams and appropriat e e qu ipment for d ealin g wit h t hese types of event s.
E u rope
Some of t he su b stances u sed in ICL’s fa cilities in Eu rope ( such as ra w materia ls, e tc.) a re con sidered
t o b e ha zard ou s su b stances. Requ ir ed approva ls an d reg istration s for t h ese su b stances ar e acqu ired
an d ma in t ain ed . Relevan t safet y measu r es an d pr oced u res for st ora g e an d h an d lin g a re
impleme nt ed an d main ta ined. I n a dd ition to t hese measu res, on ly qu alified suppliers a nd tran sport
compan ies ar e u sed , a n d qu a lification and tr ain in g of employees ar e con du cted on a reg ular b a sis.
All r equ ireme n t s b a sed on t h e GHS ( Glob ally Ha rmon ized Syst e m of Cla ssifica t ion , Lab e llin g and
Packag in g of Ch emicals) a re acquir ed and maint ain ed .
A m erica s
Ha zard ou s su b st an ces are u t ilized at ICL’s facilit ies in Americas as raw mat e ria ls a nd can also be
fou n d as fin ish ed prod u ct s. W h er e re qu ire d , reg ist ra tion s for t h e st ora ge , han d lin g and
t ran spor t ation of t h ese mat e ria ls are a cqu ir ed an d main t ain ed . Mea su res are t a ken to r ed u ce the
likelihood of relea se s of hazar d ou s mat erials by way of su pplier an d tran sport er qu alificat ion,
t rain ing of employees, con t ractors and ve n dor s on t he prope r h an dlin g of t hese mat erials.
C h in a
Ha zard ou s su bst an ces are u tilized at ICL's facilitie s in Ch ina as r aw mat erials and can also be found
as fin ish ed pr od u ct s. W here r equ ir ed, r eg istrat ion s for t he st orag e, h an dlin g an d t ransport at ion of
t hese mat erials are acqu ired and main t ain ed . Me asure s are t ake n to re d uce the like lih ood of re leases
of ha zar d ous ma t erials by way of su pplier and t ran spor t er qu alifica t ion , t rainin g of employe es,
con t ract or s an d ve nd or s on the proper h and ling of t he se ma teria ls.
101 ICL Group Limited
B u sin ess Licenses and Other Pe rmits
ICL is proact ive in it s appr oach to complyin g wit h b u sin ess licen ses an d pe rmit s a nd h as set
qu a nt it a tive t argets for complian ce . Ou r sit es in Israel h ave va lid t oxic su b stan ce per mit s u nder the
Isr aeli Ha zard ous Ma t eria ls Law, 1993. These per mit s were issu e d by t he Min ist ry of En vir on mental
Prot ect ion for a period of on e ye ar. Renewal of t hese permit s is performed on an on goin g b asis. The
t oxic su b st an ces permit in clu d es con d ition s a nd r equiremen ts b e in g man age d by t h e Company at
on g oin g oper at ion .
In ad d it ion , ou r sit es in I sr ael ob ta in valid b usin ess license s accord ing to t he B u sin ess Licen sin g Law,
1968.
In d u st ria l Pr od u cts pla n t in Neot Hovav d ischarg es in d u st ria l wast e water in t o t he evaporat ion
pon d s in accord a nce wit h t he re quireme n ts of t h e plant’s b u siness license.
Periclase plant in Mish or Rot em h as a valid pe rmit for d isch ar gin g b rin e in to t h e Dead Se a ( valid up
to 2022).
ICL Haifa h as a valid pe rmit for d isch ar g in g in d ustr ia l wast ewater in t o t h e Kish on Rive r. IC L Haifa
hold s a pe rmission to d rill to t h e u n d e rg rou nd wa t er in ord er to cha nnel t h e t reated wast ewater
in t o t h e u n derg rou nd water, a solu t ion wh ich is acce pt ed by t h e au thorit ies.
ICL Dead Sea h as a valid pe rmit for d isch ar g in g in d ustr ial wast ewater in t o t h e Dea d Se a ( valid up
to 2024) u n d e r t he I sra eli Pr evention of Sea Pollu t ion from La nd-B ased Sou rces Law, 1988.
In ad d it ion , in r egard s wit h t he I sra eli Cou rt's d e cision to pa rt ially a cce pt A TD's pet ition , according
to wh ich , commen cin g 2020, DSW 's wat er pu mpin g a ct ivit y mu st be re g u lat ed by mea ns of the
prod u ct ion licen se as d efin ed in t h e W ater Law an d n ot t h rou gh t he W ater A u th ority's d irective –
se e Not e 18 to ou r A u d it ed F ina ncial St atemen ts.
Th e compan ie s also h old emission s permit s u n d er t h e I srae li Clea n A ir Law, 2008.
As part of t he prod u ct ion pr ocess in YPH J V, t h e Compan y b u ild s and ope rat es pon d s t hat
accu mu lat e phosphog ypsu m flu id cr eat e d in t h e pr od u ct ion pr ocesses. For fu r t he r in format ion
relat in g t h e pon d s’ per mit s for con st ru ct ion a nd operation , se e Not e 18 to ou r A u d it ed Fin ancial
St at emen ts a n d “I tem 3 - Ke y I n formation — D. Risk Fa ct ors”.
In t h e Net he rland s th e fe rtilizers sit e opera tes un der t he Dutch Radia tion Prot ect ion Decree , due to
t he emission of solid part icu lat es con ta inin g n atural occu rr ing rad ioactivity ( NORM).
ICL oper at es in accor d an ce wit h con d it ion s se t ou t in t h e licen ses an d per mit s. If t h ere is a ny
d iscrepan cy in r espe ct of th e re qu ire ments of t h ese con d it ion s, t h e Company a ct s to re me d y t he
d iscrepan cy in coord in ation wit h t he Min ist ry of En viron me n tal Prot ect ion.
102 ICL Group Limited
Cyb ersecurity
Ou r Glob al IT t eam han d les t h e ope rat ion al cyb ersecurity policies a nd mea su res r eg ar din g the
Grou p’s g lob al in fra st ructu res, in collab oration wit h th e plan ts' engin ee rin g an d con trol u nit s.
ICL’s cyb er secu r it y st r ateg y re side s on t hr ee fu nda ment al pillar s: (a) plan t s and oper at iona l secu rity,
(b) crit ical asset s & d at a prot ection , an d ( c) fr au d pr even tion . For each pillar , t he re is a prog ram t hat
se eks to red u ce t h e risks id en t ified . A ll t h ese prog rams are per iod ically reviewed by in t er nal
governa nce st ru ctur es to assess t h eir effective impact on t he Gr ou p’s risks. For the pu rpose of cr it ical
plan t s prot ect ion , we cont in u ou sly coope rat e wit h t h e Nat ion al Cyb er Dire ct orat e - t h e Nat ion al
CERT , t h e Min ist ry of En er gy a nd t h e Min ist ry of En viron me ntal Pr otection in Isra el.
As cyb e rat tacks e volve a nd b ecome more sophist ica t ed , t h e Gr ou p ha s h ad to st r en g t hen it s
preve n t ion an d mon it oriza tion effort s. As par t of su ch e fforts, I CL rou tin ely re views, rein forces and
t est s it s secu r it y proce sse s an d pr oced u re s t h rou gh simu lat ion exe rcises in th e areas of ph ysical
se cu rit y a nd cyb er secu rit y. Th e ou t come of su ch exercises is an import a nt par t of a feed back process
d esig ned to improve t h e Grou p’s cyb erse cur ity st ra tegie s.
As par t of ou r on g oin g effor t s to st re n gt he n ou r cyb e r d e fen ses, we con d u ct ed a compr eh en sive
Cyb er Mat u rit y su rvey in 2019 in cooperat ion wit h a lead in g in t ern ation al con su lt ing firm, wh ich
was also r evalid at ed in 2020. We also con d u ct ed a risk assessmen t of ou r sen sit ive IT syst e ms in
cooper at ion wit h seve ral lead in g I sraeli a nd in te rnation al compan ies in t h e field of cyb er d efense.
Th e Grou p a lso t est s it s con t in u it y pla n s in or d er to impr ove d isast e r re cove ry in in st an ces where
an in cid en t or vu lnerabilit y t hr eatens t he con t inuit y of one or several crit ica l proce sse s, services or
plat forms.
Ot h er lines of a ct ion a lso in clu d e t he adequa te t rainin g of ICL's man agemen t me mb ers in t h e area
of secu rit y an d in cid en t mana gement. Period ically ICL carr ies ou t simu lat ion exercises in ord e r to
raise t h e level of aware ne ss and pre paredness of cert ain key person nel. We main tain cyb erse curity
an d fr au d in su rance policies. T he se in su r an ce policies are su b ject to ce rta in loss limit s, d ed u ctions
an d exclu sion s an d we ca n provid e no assu ra nce t h at a ll losses r elat ed to a cyb e rsecurity or fraud
in cid ent will be cover ed u n d er ou r policie s. See “I t em 3 - Ke y I n for mat ion — D. Risk Fact or s—
Sig n ificant d isruption s in our, or ou r service pr ovid ers’, in formation technolog y syst ems or br eaches
of ou r , or ou r ser vice pr ovid ers’, in format ion secu rit y syst ems cou ld a d verse ly affect ou r b usin ess”.
103 ICL Group Limited
W a t er W ells Prod ucti on Permits
Th e wat e r su pply to ICL Dea d Sea is e xecu t ed via a pproximat e ly 40 d rillin g s, most of wh ich are
loca t ed wit h in t he con cession area. Se ven d rillin g s - t he Ein O far im d rillin g s - are locat ed ou t side
t he con cession area, an d I CL Dead Sea is t h er efore requ ired to sig n , from t ime to t ime, le ase
con t ract s for limit ed periods wit h the Isr ael Lan d Aut hor ity ( ILA).
Th e con t ract s r en ewal pr ocess is len g t h y an d I CL De ad Se a h as b een workin g for several yea rs to
ren ew t h e con tr act s, which e xpire d in 2016.
In ad d it ion , ea ch n ew d rillin g requ ires a d rillin g lice nse issu e d by t h e W at er A u thority, and at the
b eg in n in g of every year t h e W at er A u t hority issu es I CL De ad Se a wit h a wat er pr od u ction license
t hat d efin es t h e pr od u ction capacity of ea ch d rillin g. T h ere is no g u ar an tee t ha t t h e W a ter Auth ority
will issu e I CL Dea d Sea a wat e r pr od u ct ion lice n se or t h at t h e W ater A u thority will a me nd t he
prod u ct ion licen se if ICL Dead Sea exceed t he prod uction capacity for su ch d rillin g .
In 2017, t h e I sraeli W ater La w was amend ed, accor din g to which sa lin e wate r of th e kin d prod uced
by Dead Sea pla n t s in t h e Compan y's wat er d rillin g is ch arge d wit h wa t er fees. A ccord in g ly, the
Compan y re ceived a ch ar ge from t h e W ate r Aut hority in th e amou nt of $31 million for wate r d rawn
from all it s d rillings, in clu d ing in t h e con ce ssion ar ea b et ween t h e years 2018-2020. Th e Company
su b mit t e d it s appe al to t h e W at e r Author it y, ob ject ing to t h e ch arg es re lat ing to wat e r d rilling
wit h in t h e con ce ssion area, wh ich con st it u t e ab ou t 65% of t he t ot a l cha rg e . It is t h e Compa ny's
view, t ha t su ch ch ar ges sh ould not a pply to water d rillin g with in the De ad Sea con cession a rea , for
va riou s re ason s, most n ot a b ly t h e provision s of t he Con cession Law. The Company b e lieves it is
more likely t h an n ot t hat th e charge s will n ot apply to the water drillin g with in th e con ce ssion area.
Th e Company h as a su fficient provision in it s books, in imma t erial amou nts, for t he drillin g of water
ou t sid e t h e con cession area .
In Nove mb e r 2020, t he W at e r A uthority an n oun ced t h at as par t of t h e licen se renewa l for 2021 and
fu rt h er , t he Gover n ment A u th or ity Direct or in t end s to exa min e t h e possib ilit y of cha ng in g the
d efin it ion of De ad Sea Works from "Su pplier - Producer" to "Con su me r- Prod ucer ", t he main implicat ion
of wh ich is a rise of up to d ou b le t h e fu t ure wat er rates. T h e Compan y h as e xpre ssed it s ob jection
to ch an g in g t h e d e fin ition in a h ear in g proced ure an d is workin g wit h t h e re le va nt auth orit ies to
keep t h e cu rren t d e finit ion in t he licen se as is. T h e W at er Au thority' respon se relating to t he h earing
ha s not yet b e en r eceived .
104 ICL Group Limited
C. ORGANIZATIONAL STRUCTURE
* A list of ou r main su b sid iar ie s, in clu d in g n ame a nd cou n t r y of in corporat ion or r esid en ce is
provid e d in an exh ib it to ou r F orm 20- F file d wit h t he U.S. Secu rities Exch ang e Commission , wh ich
can be fou n d at www.sec.g ov.
105 ICL Group Limited
D. PROPERTY, PLANT AND EQUIPMENT
Th e Company ope rat es prod uct ion facilit ies in it s worldwid e loca tion s, in clu ding t he followin g :
• Isr ael: u n d er th e Isr aeli De ad Sea Con cession Law, 1961, as amen ded in 1986 ( the “Con ce ssion
La w”), we h ave lea se rig h t s u n t il March 31, 2030 for t h e salt and car na llit e pon d s, pu mping
facilit ies an d prod u ction s plan t s at Sod om. We h ave ot h er prod uction facilit ie s in I srael, situated
on lan d wit h a lon g t e rm le ase, in clu din g t he plan ts Oron and Zin at Mishor Rot e m of Ph osphate
Solu t ion s se gme nt ( t h e lease a g reement of Oron plan t in und e r an ext e nsion proce ss sin ce
2017), prod u ct ion fa cilit ies at Naot Hovav of In d u st r ial Pr od ucts segmen t ( lea se d u n til 2024-
2048), as we ll as prod u ct ion , st or age a nd t ranspor t at ion fa cilit ies tog ether wit h che micals and
research lab oratories at Kiryat A ta t ha t b e lon g to In novat ive Ag Solu t ion s segment ( lea sed until
2046-2049). We also u se war eh ou se, load in g an d u n loadin g sit es at t he A shdod an d Eilat ports
( le ased u n til 2030).
• Eu rope:
Ger ma ny: t h e prod u ct ion plan t s of Ph osph at e Solu t ion s segmen t are at Lu d wig shafen,
La d en b u rg . T he prod u ction plant s of In d u st rial Prod u cts seg men t are at B it t erfeld. A ll t he
plan t s, b esid es Lu d wigsh afen, are own ed by t h e Compa ny.
Th e Ne t he rlands: t h e prod u ction plan ts of I nd ustrial Pr odu cts seg ment at Terne uzen are owned
by t h e Compan y. A facilit y of Ph osph at e Solu t ion s seg men t in A mst erd am h eld u n der a lease
u n t il 2040 an d a prod u ct ion fa cilit y in t h e sou t hern Net herla nd s is loca t ed on lan d t h at is pa rtly
owned by t h e Compa ny a n d pa rtly h eld u nd er a lon g -term lea se .
Spa in : t h e con ce ssion s at t he pot ash and sa lt min es are h eld un der t he con cession agr eements
d escrib ed b e low. T he pot ash a nd sa lt prod u ct ion pla nts, an d t h e ware hou ses, as well as t he
load in g an d un load in g facilit ie s of t h e Pot ash seg me n t at Cat alon ia, are own ed by t he
Compan y. In n ovat ive Ag Solu t ion s se gment also own s a liqu id fert ilizer an d solu b le fer t ilizer
prod u ct ion pla nt in Tot ana, own s a n ot her plant for mixin g solid fert ilizers in Los Pat oh os and
ha s a con cession in Cart agena port un til 2024.
Th e Un it ed Kin g dom: t h e r ig hts to t he polyh alite a nd salt min es are held u nd er the con ce ssion
ag reeme n ts d escr ibe d b elow. T h e polyhalit e an d sa lt pr od uction plant s and t he ware hou ses of
t he Pot ash seg men t in Cleveland are own ed by t h e Compan y. Th e wa reh ou ses and b u lk
load in g an d un load in g facilit ie s at t h e port are le ased u n t il 2034. T hree pea t moor s of
In n ova t ive Ag Solu t ion s se gment are owned by t h e Compan y, in ad d it ion to own in g a pla nt
for prod u cin g g rowin g med ia in Scot lan d. I nn ovative Ag Solu t ion s seg men t also own s a plant
in Daven t ry for pr od ucin g wa ter conser vat ion an d liqu id pla nt n ut rit ion prod uct s along with a
fer t iliz er b le nd ing sit e in Ru gb y.
B elg iu m: I n n ovat ive Ag Solu t ion s seg men t own s a prod u ct ion facilit y in Grob b e ndon k for
prod u cin g wat er solu b le fertilizers.
Aust r ia: t h e dairy pr ot ein pr od u ct ion plan t of Ph ospha t e Solu t ion s seg men t at Ha rt berg
( Prola ct al) is own ed by t he Compa ny.
• Nor t h a nd Sou t h A merica:
Unit ed St at es: t he produ ction plants of I n dust ria l Prod ucts segment in West Virg inia are mainly
owned by t h e Compa ny. T he pr od u ction plan ts of Ph ospha t e Solu tion s se gment in Lawrence,
106 ICL Group Limited
Ka nsa s a n d St . Lou is, Missou r i a re own ed by th e Compan y. T he prod uction plan ts of I nnova tive
Ag Solu t ion s seg men t in Sou th Ca rolin a are operated u nder le ases e nd ing in 2025.
B razil: t he pr od u ct ion pla nt s of Phosph at e Solu t ion s seg ment at Sao J ose d os Campos and
Cajat i are le ased by t he Compan y.
• Asia:
Chin a – ph ospha t e rock min in g righ ts in Haikou Min e are de rive d from min in g lice n ses that are
d escrib ed b elow. T h e plan ts of Y PH JV are own ed by t h e Compan y, some of t h em are located
on lan d t h at is owned by t he Compa ny, while some are sit ua ted on lea sed land.
Th e followin g t ab le se t s for th cert ain add ition al in format ion re garding ICL’s prin cipa l properties as
at Decemb er 31, 2020:
Property Type
Loca tion
Siz e (square feet)
Products
Own ed/Leased
Plant
Mishor Rotem,
Israel
27,094,510
Phosphate
Solutions products
Owned on leased land
Plant
Mishor Rotem,
Israel
10,763,910
Industrial
Products products
Owned on leased land
Plant
Neot Hovav, Israel
9,601,591
Industrial
Products
products
Owned on leased land
Plant
Zin, Israel
8,484,123
Phosphate
Solutions products
Owned on leased land
Plant
Kiryat Ata, Israel
6,888,903
Innovative Ag
Solutions products
Leased
Plant
Oron, Israel
4,413,348 (not
including
phosphate
reserve)
Phosphate
Solutions products
Owned on leased land
Plant
Sodom, Israel
13,099,679 (not
including ponds
and Magnesium
factory)
Potash products
Owned on leased land
Plant
4,088,800
Magnesium
products (Potash
segment)
Owned on leased land
Plant
2,326,060
Industrial
Products products
Owned on leased land
Conveyor belt
1,970,333
Transportation
facility for Potash
Owned on leased land
Pumping station
920,314
Pumping station
for Potash
segment
Owned on leased land
Plant
667,362
Industrial
Products products
Owned on leased land
Power plant
645,856
Power and steam
production for
Potash segment
Owned on leased land
Warehouse and
loading facility
Ashdod, Israel
664,133
Warehouse for
Potash and
Phosphate
Solutions products
Leased
Headquarters
Beer Sheva, Israel
191,598
Company
headquarters
Owned and leased
107 ICL Group Limited
Plant
Mishor Rotem,
Israel
430,355
Phosphate
Solutions products
Owned on leased land
Warehouse and
loading facility
Eilat, Israel
152,557
Warehouse for
Potash and
Phosphate
Solutions products
Leased
Headquarters
Tel Aviv, Israel
21,797
Company
headquarters
Leased
Plant
Catalonia, Spain
48,491,416
Mines,
manufacturing
facilities and
warehouses for
Potash
Owned
Port/warehouse
Catalonia, Spain
866,407
Potash and salt
products
Owned on leased land
Plant
Totana, Spain
2,210,261
Innovative Ag
Solutions products
Owned
Plant
Cartagena, Spain
209,853
Innovative Ag
Solutions
products
Owned
Warehouse and
loading facility
Cartagena, Spain
184,342
Storage for
Innovative Ag
Solutions products
Leased
Plant
Jiaxing, China
828,017
Industrial
Products products
Owned on leased land
Plant
Shandong, China
692,045
Industrial
Products products
Owned on leased land
Plant
Kunming, Yunnan,
China
458,394
Production Plant
of Phosphate
Solutions
Owned on leased land
Plant
Lian Yungang,
China
358,793
Industrial
Products products
Owned on leased land
Headquarters
Shanghai, China
8,224
Company
headquarters
Leased
Plant
Kunming, Yunnan,
China
290,420
Phosphate
Solutions products
Owned on leased land
Pumping station
Kunming, Yunnan,
China
2,231
A pumping
station for
Phosphate
Solutions
Owned on leased land
Peat Moor
Nutberry and
Douglas Water,
United Kingdom
17,760,451
Peat mine -
Innovative Ag
Solutions
Owned
Plant
Cleveland, United
Kingdom
13,239,609
Polysulphate
products (Potash
segment)
Owned
Warehouse and
loading facility
Cleveland, United
Kingdom
2,357,296
Polysulphate
products (Potash
segment)
Leased
Peat Moor
Creca, United
Kingdom
4,305,564
Peat mine -
Innovative Ag
Solutions
Owned
Plant
Nutberry, United
Kingdom
322,917
Innovative Ag
Solutions products
Owned
Plant
Daventry, United
Kingdom
81,539
Innovative Ag
solutions products
Owned and leased
108 ICL Group Limited
Plant
Terneuzen, the
Netherlands
1,206,527
Industrial
Products products
Owned
Plant &
warehouse
Lawford Heath,
Rugby
45,000
Innovative Ag
solutions products
Leased
Plant
Heerlen, the
Netherlands
481,802
Innovative Ag
solutions products
Owned and leased
Plant
Amsterdam, the
Netherlands
349,827
Phosphate
Solutions products
and logistics
center
Owned on leased land
European
Headquarters
Amsterdam, the
Netherlands
59,055
European
Company
headquarters
Leased
Plant
Gallipolis Ferry,
West Virginia,
United States
1,742,400
Industrial
Products products
Owned
Plant
Lawrence, Kansas,
United States
179,689
Phosphate
Solutions products
Owned
Plant
Carondelet,
Missouri, United
States
172,361
Phosphate
Solutions products
Owned
Plant
North Charleston,
South Carolina,
United States
100,000
Innovative Ag
solutions products
Leased
Plant
Summerville, South
Carolina, United
States
40,000
Innovative Ag
solutions products
Leased
US headquarters
St. Louis, Missouri,
United States
45,595
US Company
headquarters
Leased
Plant
Ludwigshafen,
Germany
2,534,319
Phosphate
Solutions products
and Infrastructure
Leased
Plant
Ladenburg,
Germany
1,569,764
Phosphate
Solutions products
Owned
Plant
Bitterfeld,
Germany
514,031
Industrial
Products products
Owned
Plant
Cajati, Brazil
413,959
Phosphate
Solutions products
Owned
Plant
Sao Jose dos
Campos, Brazil
Phosphate plant:
137,573 Blending
plant: 80,729
Phosphate
Solutions products
Owned on (free of
charge) leased land
Plant
Belgium
128,693
Innovative Ag
solutions products
Owned
Plant
Calais, France
546,290
Industrial
Products products
Owned
Plant
Bandırma, Turkey
375,187
Phosphate
Solutions products
Owned
Plant
Hartberg, Austria
692,937
Phosphate
Solutions products
Owned
Plant
Heatherton,
Australia
64,583
Phosphate
Solutions products
Leased
109 ICL Group Limited
Min er al Extraction and Mining Operations
ICL’s min in g act ivit ies are d epen d ent on con ce ssion s, au t h orizat ions a nd permit s g ra n t ed by t he
governmen t s of t h e cou n tries in wh ich t he min es are locate d.
In con sid e rat ion of t h e con ce ssion s, ICL pays royalt ies an d t a xes to t he g over nments of I sr ael, Ch ina,
UK and Spa in . B elow are t h e royalt ies a mou nts paid wit h respe ct to 2020, 2019 an d 2018:
Isr ael
Ou t of Israel
To tal
Year Ended December 31,
$ m illions
NIS millions
$ m illions
2020
75
257
2
77
2019*
82
295
3
85
2018*
71
255
4
75
* In 2019 an d 2018, t he Compan y paid ad d it ion a l a mou n t s of $20 million an d $62 million ,
respect ively, re ga rd in g royalt ie s in Isr ael relat in g to prior per iod s. F or fu r t her in for ma t ion
reg ard in g royalties, see Not e 18 to ou r A udit ed F inancia l St at ement s.
Followin g is a d escr ipt ion of t h e mat erial properties from which I CL extract s min erals and con ducts
min in g . F or fur t he r in format ion reg a rd ing t he t ot a l cost of t h e Compan y’s propert y, plan t and
equ ipmen t a nd its in ta ng ible asset s (in cludin g con cession an d min in g righ ts) see Note 10 a nd Note
11, respect ively, to ou r A u dit ed Financia l St at ement s.
T h e Dead Se a
Th e con cen t ration of t he min er als e xt ra ct ed from t h e Dead Sea ( in clu d in g pot a sh a nd b romid e ),
con st it u t ing th e raw mat erials for prod uct ion, is on t he rise d ue to th e hyd rolog ica l deficit t he Dead
Sea h as b e en exper iencing du rin g t he past 40 yea rs.
ICL’s e xt ract ion of min e rals fr om t he Dead Sea be gins wit h an evaporation proce ss facilit ated by the
hot and d ry de se rt climat e of t he Dead Se a reg ion , which is t he lowest poin t on t he earth ’s surface.
Du e to t he hyd r olog ical d eficit, t h e se a is d e clin ing at t h e ra te of ove r 1 met e r pe r yea r an d is n ow
ab ou t 435 met e rs b elow sea le ve l. As a re su lt of t he sa id d e clin e, t he Dead Sea is d ivid e d in t o two
part s: t he n at u ral Nort he rn B asin , an d t h e Sou t hern B asin on t he b asis of wh ich d ams were in st a lled
an d ar t ificial evapor ation pon ds were con structed.
Th e prod u ct ion process b eg ins wit h t h e pu mpin g of b rin e fr om t he Nort h ern Basin int o t he
evapor at ion pon d s in t h e Sou t h ern B a sin (a d ist an ce of ab ou t 12 kilomet ers) via t h e Compa ny’s
pu mpin g st at ion s. In 2020, ICL pu mped appr oxima t ely 455 million cu b ic met e rs of wat er from t he
Nor t he rn B asin in t o t h e evaporation pon d s, of t h is qu an t ity, approximat e ly 295 million cu b ic met e rs
of b rin e were rech an n ele d in t o t h e Nort h ern B asin of t h e Dead Sea at t he e n d of t h e proce ss. In
2020, t h e Compan y prod u ce d from t h e De ad Sea approximately 3.96 million t on n es of pot ash , 173
t hou san d t onn es of b r omin e, 18.5 t h ou san d t on nes of met al mag n esium, 125 t h ou san d t on nes of
sa lt a nd 110 t housa nd ton nes of solid mag n esium ch lor id e .
Du e to t he con st ant d ecline in wa ter level ( ann ual average of 1.1 met ers which h as b e en recorded
in recen t years), on ce every few yea rs, we are r equ ired to r esit u ate t h e pu mpin g st a t ion d rawing
wat er fr om t h e n or t h ern b asin. T h e en d of life of t h e prese nt pu mpin g st a tion P- 88 is expect ed in
t he b eg in nin g of 2022. As a resu lt , in 2017, DSW sig n ed ag re emen ts wit h several execu t ion and
in fr ast ru ctur e compa nie s, for con str uction of a n ew pumping station (h er einafter - the P-9 Pu mping
St at ion ), for a t ot al amou n t of $180 million ( ou t of t he t ot a l proje ct cost of ab ou t $220 million ). In
ear ly 2020, d u e to t h e CO VI D-19 pan d emic, t h e pu mps su pplie r issu e d a "Force Majeu r e" not ice
110 ICL Group Limited
resu lt in g in a d elay of t h e pu mpin g st at ion ’s complet ion , wh ich was expect ed in t he first h alf of
2021. In Novemb er 2020, an exper t on b eh alf of t h e su pplier arrive d at sit e a nd t he Compa ny st arted
assemb lin g t h e pu mps. Th e P- 9 pu mpin g st at ion is e xpect ed to st ar t commission in g in t h e first
qu a rt er of 2021 and to commen ce oper at ion du rin g t he secon d h alf of 2021.
Never t he le ss, t h e Compan y expect s no impa ct on it s ope ration s d ue to t h e cu rrent se a wa t er level,
wh ich will allow t h e con t inued ope ration of our exist in g pumpin g station (P-88) u ntil t he begin ning
of 2022. For fu rt h er in format ion re ga rdin g t h e P- 9 Pu mpin g St a t ion , se e Not e 18 to ou r Aud ited
Fin a ncia l St at ement s.
In Ma rch 2020, t h e W at e r Au t hority gr an te d t h e Compan y a pr od u ct ion licen se for 2020 t hat
in clu d e s provision s wh ich are n ot sig nifica ntly d iffer ent from t he W at er A uth orit y's dir ect ive, under
wh ich t h e Compa ny ope rat ed . In accord a nce wit h t h e W ater A u thorit y's d ire ctives, t he Company
will operat e a ccord in g to t h is license u n t il t h e d a t e t h e n ew pr od u ct ion licen se for 2021 will be
receive d , wh ich is expe ct e d by J u n e 2021. As par t of t h e prod u ct ion licen se re newal pr ocess, the
Compan y is hold in g d iscu ssion s wit h t h e W a t er A u th orit y in ord er to set t le t he exist ing d ispu tes,
amon g ot her t h in gs, r elat ing to t h e possib ilit y of ch an g in g t he d efinit ion of Dead Sea W orks from
"Su pplier - Prod u cer " to "Con su mer- Produ cer ".
Th e e va porat ion pon d s e xt end over an area of approximat ely 150 squ are kilomet e rs a nd are d ivided
in t o t wo su b - syst ems – an array of pon d s for precipit at ing sa lt ( min eral wast e from t h e prod uction
proce ss), an d a ser ies of pon d s for pre cipit at in g carn allite ( t he t arge t min e ral con st it u tin g a raw
ma t erial for prod u ct ion of pot ash ).
Th e salt pon d kn own as Pon d 5 is t he lar g est pon d in th e ser ies of pon d s, h avin g an area of
approxima t ely 80 squ a re kilomet ers. Pon d 5 wa s b u ilt d u r in g t h e 1960s by con st ru ct ion of a la rge
d am, wh ere in t h e cente r of t h e dyke su rrou ndin g it a par tit ion ( se paration clay core) was in stalled
for se alin g an d pre ve ntion of pot en t ial lea kage of solu t ion s. T h is d a m d e marks t h e Sou t he rn b asin
of t h e Dead Sea on t he I sraeli sid e and allowed t he con tin ued exist en ce of t h e Sou th er n B asin due
to t h e syst em of pu mpin g st a t ion s an d flowin g ch an nels t ha t are oper ate d as par t of t he in dust rial
operat ion al syst em of t h e evaporat ion pon d s. In ord er to con t in u e an d oper at e Pon d 5, t h e d yke
was r aised se ve ral t imes d u r in g t h e la st 50 ye ars. In 2013, I CL De ad Sea complet ed t h e cu t off pr oject
t hat aimed to min imiz e the seepag e fr om t he Northern pon d. As pa rt of the proje ct sheet piles were
in ser t ed up to t he d e pth of 33 met e rs to t h e g rou nd a lon g t he len gth of 18.6 km. T he evapor at ion
proce sse s g ive rise to con cen t r ation of t h e b rin es a nd t h e sin kin g of t h e salt to t he floor of t h e pon d.
Th e r emain in g b rin es are rich in pot ash , magn esiu m an d b romid e. T hese b r in es are pu mped in to
t he syst e ms of ot h er pon d s, an d as a resu lt of t he con t in u ed e va porat ion , t he "Carn allite"
pre cipit at es. Carn allit e is t he raw mat erial u sed for prod u ct ion of pot ash , met al mag n esiu m and
ch lorin e. Th e Ca rn allit e is ha rvest e d by float in g b arge s an d is sen t , as slu r ry, to ou r prod u ct ion
plan t s. The b r in e from t h e end of t h e Ca rnallite pon d s is u se d as a raw mat e ria l in t h e pr od u ction
of b romin e a nd magnesium ch lor id e.
Th e rise of t he wat e r leve l of Pon d 5
-
Th e min era ls from t he Dead Sea are ext racted by way of sola r evapor at ion , wh ereb y salt precipitates
on t o t he b ed of Pon d 5 ( h er ein afte r – t h e Pon d ), loca t ed in on e of t he sit e s of Dead Sea Works
( herein after – DSW ). T h e precipit at ed sa lt cr eat es a la ye r on th e Pon d b ed wit h a volu me of
approxima t ely 16 million cu b ic met ers per year. Th e process of prod u ct ion of t h e raw mat erial
requ ires t ha t a fixed b rin e volu me is pre served in t h e Pon d. Failu re to main t ain a con st ant volume
of solu t ion s in t he Pon d wou ld resu lt in a red u ct ion in prod u ct ion ca pacity. To t his en d , up to the
en d of 2021, t he raisin g of t h e solu t ion s' leve l of t he Pon d will con t in u e accord in g to t h e r ate at
wh ich t he pon d floor rise s, while per for min g t h e sa lt h ar ve st, in it iate d in t h e fou rth qu a rt er of 2020.
111 ICL Group Limited
Th e solu t ion s' level ma ximu m heig h t ( 15.1) is expect ed to be r eached by t he en d of 2021. From
2022 on wa rd s, t h e solu t ions' volu me in t h e Pon d will be prese rved on ly by way of harvest in g the
sa lt .
Raisin g t h e wa t er level of t h e Pon d a b ove a cert a in level ma y cau se st r u ct u ral d amag e to t he
fou n d a t ion s and t h e h ot el b u ild ing s sit u at ed close to t h e wat e r’s ed ge, to t h e set tlement of Neve
Zoh ar a n d to ot h er in fr astr uct ure locat ed alon g t he west ern sh orelin e of t h e Pon d . Up to t h e end
of 2020, in ord e r to ensu r e t h at t h e Pon d wa ter le ve l d oes n ot exceed t h e maximu m h eig ht ( 15.1),
t he Govern ment of Isr ael, t hr ou g h t h e Dead Sea Pr eser va t ion Gove rn men t Compa ny Lt d .,
impleme nt ed a project for con st ru ct ion of coast lin e d efen ses, t og et h er wit h DSW ( who fin an ced
39.5% of t he project 's cost ), as par t of which t h e d yke alon g t h e west ern b ea chfr on t of t h e Pond,
acr oss fr om t h e h ot els, is r aised , t og ether wit h a syst em for lowerin g su bterranean wa ter .
Th e con st ruct ion work wit h respect to t h e h ot els' coast lin es is complet e and at pre se n t , t he Dead
Sea Pr eser va t ion Gover n men t Compa ny Lt d. is carrying out elevation work in t he int ermedia te area
b et ween t he t wo h ot el complexes. T h e Pon d level will be ma in t ain ed as part of t h e perma nent
solu t ion ( t he salt h arvesting pr oject ) d escrib ed b elow, wh ich sh ou ld provid e a d e fen se u ntil t h e end
of t h e cu r ren t con ce ssion pe riod in 2030.
In or d er to provid e a perman e nt solu t ion for r isin g of t h e water le vel in t h e Pon d, t h e Sa lt Ha rvesting
Project wa s est ab lished . T he proje ct provid e s a solu t ion in t h e form of ha rvest in g of t h e salt fr om
t his pon d an d t r an sferrin g it to t h e Nort h ern B asin of t he De ad Se a, an d as a r esu lt , st ab ilizin g of
t he wa t er there in at a fixe d le vel.
In t his con t ext , in 2012, an ag re emen t was sig n ed wit h t h e Government of Isr ael, r eg ar d ing
"Execu t ion an d F un ding of th e Dead Se a Prot ect ion Pr oject and Increase of th e Roya lt ies Pa id to the
St at e" ( here inafter – t h e Salt Harvest ing Pr oject) wh ich pu rpose is to provid e a permane n t solu tion
for r aisin g t he wat e r le ve l in t h e Pon d an d st ab ilizin g of t h e wa t er t h er ein at a fixed level by
ha rvest in g of t he salt from t h is pon d a n d t ransferrin g it to t h e Nort he rn B asin of th e Dead Sea .
Accord in g to t h e ag reeme nt, t h e plan n ing an d exe cu tion of t h e Salt Harvest in g Proje ct will be
performed by DSW . In ad d it ion, t h e agr eement st ipu la t es t h at st arting from J anu a ry 1, 2017, t he
wat er leve l in t h e pon d will not rise ab ove 15.1 met e rs. Never t h ele ss, in t h e even t of a mat e rial
d evia t ion fr om t he pr oject 's t ime t ab les, wit h ou t t h e Company h avin g violat ed it s ob lig at ion s, the
Compan y will be per mit t ed to re qu est raisin g of t he wa ter le ve l a b ove the le ve l st a ted above .
Th e Company will b ear 80% an d t h e st a te of Isr ael will b e ar 20% of t h e cost of t h e Salt Har ve sting
Project . Howe ve r, t h e St at e's sh are will n ot e xceed NI S 1.4 b illion .
In 2017, DSW sig n ed an agr eement, t h e cost of wh ich for ICL is $280 million , for t h e exe cu t ion of
t he first st ag e of t h e Salt Harvest in g Proje ct , wit h a con t ract ing Compan y, Hollan d Sh allow Seas
Dr ed g in g Lt d ., wh ich in clu d es, a mon g ot h er t hin g s, t h e con st ruction of a specia l d re d g er t h at is
d esig ned to e xecu te th e salt h arvestin g.
The en g in ee rin g an d oper ation a l pre parat ions an d t h e ext e nsive in fra structu re works t h at have
b een u n d e rway d u r in g t h e past few yea rs wa s complet ed . Oper at ion s commen ce d in Decemb er
2020.
For fu rt h er in formation regard ing t he coastlin e d efenses and t h e Salt Harvesting Project, see Note
18 to ou r Au d it ed Fin an cial St at e ment s an d “It em 3 - Key I nfor mat ion — D. Risk F act ors— T he
accu mu lat ion of sa lt at t h e b ot t om of t he salt Pon d 5, t he cen t r al evaporat ion pon d in ou r sola r
evapor at ion pon d syst em u se d to ext ract min erals fr om t h e Dead Sea , requ ire s t h e wat er level of
t he pon d to be con st a ntly ra ised in ord er to main t ain t he pr od u ct ion capacity of ext racted min erals”.
112 ICL Group Limited
Th e re ce d ing leve l of t he Dead Sea
- Is not to be con fused wit h t he r ise of t he water leve l in Pond 5
d iscu ssed a b ove. T h ese t wo se emin g ly con t r adict ory ph enomen a are occu rring simu lt an eou sly, as
Pon d 5 is locat ed in t h e Sou th er n B asin on a d ifferen t plan e t ha n t h e main b ody of t h e sea lying to
it s n or t h , n ecessit at ing a spe cial pu mpin g st at ion to con stantly fe ed the pon d with wat er. Wh ile the
b rin e le ve l of Pon d 5 is r isin g d u e to th e accu mu lat ion of salt on it s floor an d t h e con t in u ous
pu mpin g of b rin e fr om t h e Nort hern B asin of t he Dea d Se a, th e wate r level of t h e Nort hern Basin is
reced in g . As a re su lt of t he d eclin e of t h e Dea d Sea level, sin kh oles a ppear . T h e appe ara nce of
sin kh oles in t he De ad Sea area is in creasin g over t h e years. Most of th e sin kh oles d e ve lop in t he
Nor t he rn Basin of t h e Se a, wh ere t here is lit t le oper at ion by ICL Dead Sea. However, t he
d evelopmen t of sin kh oles in a reas whe re ICL Dead Sea facilit ie s exist can cau se sig n ifican t d amage.
In recen t ye ars t he re ha s b een a st ea dy d e ve lopmen t of sin khole s in t he area of t h e feed ing ch an nel,
t hrou g h which water is pu mpe d from t h e Northern B asin to th e Sou th er n B asin . I CL Dead Sea takes
act ion s to mon it or t he d evelopmen t of t h ese sin kh oles a nd to fill t h em wh en t hey appe ar.
Ad d it ion a l e ffe ct of t h e d e clin e of t h e Dead Sea level is t h e erosion of A rava st r eam, wh ich flows
alon g t h e in ternation al border b et wee n I srael an d Jordan. T his e rosion cou ld endang er th e stability
of t h e east e rn d ykes in t h e fu t u re in t h e array of sa lt and carna llit e pon d s. Th e Compan y is
en d ea vorin g to an alyze t he mat ter an d to find solu t ions for preven t ing or ret ardin g t h is occu rren ce
in t h e lon g t er m. The Company is carryin g on on g oin g mon it orin g and a ct in g on sit e in ord er to
prot ect t h e dykes. As part of t hese e ffort s, a research was commen ce d, wh ich is d esig ne d to g ather
in format ion for the d et ailed pla n nin g of a proje ct to pre ve nt t h e con t inu ed er osion of t h e st re am.
Th e r esea rch ph ase was comple t ed d u rin g 2020. Prior to commen cin g t h e project , ob t a in ing
permit s from t h e aut horities is requ ired, d ue to it s engin eering comple xit y, proximit y to t h e b order,
soil inst a b ilit y an d environ mental se nsitivit y of t he e ntire a rea. I n sofar as it is d ecided to commence
wit h t he proje ct , t he Compa ny e stima t es t ha t it s complet ion is like ly to t a ke seve ral yea rs.
For fu rt h er infor mation , see “Item 3 - Key In formation — D. Risk Fa ct ors— T h e re ceding water level in
t he Nor t hern B asin of t he De ad Se a, may requ ire capit al an d / or ope rat ion al expen ses in or d er to
en ab le t h e con t inu ation of t h e Compa ny's operation s in t he Dead Sea”.
Th e Company h as b e en oper at ing , sin ce 2018, a n ew cog en eration power st at ion in Sod om, I srael.
Th e n ew powe r st at ion su pplies e le ct ricit y a nd st eam requ ired to su pport t h e pr od u ct ion of I CL's
plan t s at t he Sod om sit e an d sells it s su rplu s elect ricit y to ot h er I CL compa nies a nd e xt ernal
cu st ome rs via t h e n ation al g rid in Isr ael. The new power sta tion h as a capacity of a b out 330 tonnes
of st eam per hou r and abou t 230 MW h. T he Company ope rates the ne w power station concu rrently
wit h t he for me r power st a t ion , wh ich will con t in u e ope rat in g on a limit ed b asis as "h ot b ack- u p".
Du e to it s fu ll n at u ral g as operat ion, hig h efficiency an d adva nced pollu t ion r edu ction t echnolog ies,
t he n ew pla n t also allows for sig n ifican t r edu ction s in dir ect air emission s an d is expected to reduce
ICL's g re en h ouse g as emission s. F or fu rt h er in formation regard ing t he n ew powe r st ation an d the
se t t lemen t ag re emen t wit h A b en goa, t he former con t ra ctor of t h e n ew power station , se e Note 18
to ou r A u d ited Fin ancia l Statemen ts and “It em 3 - Ke y In formation — D. Risk Fact ors— Our operations
cou ld be a d ve rsely a ffect ed by price in cr eases or short a ges wit h re spect to wat er, ene rg y an d our
prin cipa l raw mat erials, as well as by in crea se s in t ranspor t ation cost s”.
113 ICL Group Limited
T h e Ne gev Desert
ICL cu rre nt ly ope rates lar ge su rface ph osph at e min in g sit es at Oron an d Rot em, wh ich are located
at t h e sou t hern pa rt of th e State of I sr ael in t he Nege v r egion . Zin min ing a ctivit y was discon tinued
in 2020.
Each of t h e said field s in Isr ael h as a similar laye red st ru ct ur e and g eolog ical composit ion , wit h the
ph osph at e pre se rved as relat ively th in layers a lon g t h e marg in s an d wit h in th e axes of t wo
nort h east to sou t hwest t rendin g asymme t rical syn clin es ( basin s or t rou gh- sha ped fold s). Or on and
Rot em lie wit h in a sin g le syn clin e locat e d n ort hwest of t he Zin synclin e. T he t h ree d eposit s h ave
b een proved over e xt en sive d istances in t erms of le n gt h ( Rot em 10 kilomet ers, Oron 16 kilomet ers
an d Zin 22 kilomet ers) an d wid t h (4 kilomet ers ea ch ). T he Campan ia n ( Upper Cre t aceou s period)
ph osph at e r ock d eposit s of I srael are part of t h e Me d it e rran ean ph osph at e b elt ext en din g from
Tu r key, t h rou g h J or d an an d Isr ae l, an d west wa rd t h rou g h Eg ypt , Tunisia an d Morocco. T he
Compan y b eg an ope rat ion s at Oron in t h e 1950s an d at Rot em and Zin in t h e 1970s. T hese sit es
are a cce ssib le by road a nd rail. See “I te m 4 - In format ion on t he Compan y— D. Prope rt y, Plan t and
Equ ipmen t — Con cession s a n d Min in g Rights”.
Th e met hod of min in g in t h e Ne gev is by t h e con ven t ion al open pit met h od , u sin g d rillin g and
b la st in g , hyd raulic e xcavator s an d rig id du mp t ru cks or dozers wit h rippers for ove rbu rde n re moval
an d fr on t - end load ers and t ru cks for min in g ph osph at e . Each min e sit e h as var yin g n u mb ers and
t hicknesses of over- b u rd en , in ter-bu rde n an d ph osph at e rock laye rs, so t h at t he size of th e min ing
equ ipmen t is con formed to th e min ing sit es an d t h e ope rat in g requ irement s. In all th e min es,
st rippin g of t h e wast e ma t erial a nd min in g of t h e ph ospha te are pe rformed by en tirely convent ional
me t hod s. T he Compa ny is commit t e d to con t inu ing t he rest oration wor k, as it h as b een so far, in all
it s min es.
Phospha t e rock from t h e Rot em min e is t r an spor t ed by t ru ck to a n earb y b ene ficia tion plant at
Mish or Rot em. In a d d it ion , on t his sit e , I CL ope rat e t wo su lph u ric acid plant s, t h ree g reen
ph osph oric acid plan t s, a wh it e phosph oric a cid plan t , t h re e su perphosph ate plan ts, t wo g ra nular
fer t iliz er pla n t s, MKP pla nt an d an oil sh ale b u r nin g plan t for prod u ct ion of elect ricit y an d st eam.
ICL also has b e n eficiat ion pla n t s at b ot h O ron a nd Zin ( wh ich d iscon t inue d it s oper at ion in 2020).
Th e prod u ct of t h e proce ss is a h ig h -g ra de, mu lt i-pur pose phosph at e prod u ct, an d from 2021, all
prod u ct ion will be u se d to prod u ce ph osph oric a cid and fertilize rs.
Th e pla nt at Mish or Rot em is powe red primarily by elect ricit y g en er ated by t he C ompa ny at its
su lphu ric acid plan t s a nd by oil sh ale t ha t t he Compa ny min es at Mish or Rot em. A n y su rplu s power
is sold to Isr ael Elect ric Compa ny. A ll t he power u tilized by th e Or on and Zin b e neficiat ion plan ts is
pu rch ased from t h e n ation al g rid in Isr ael.
For fu rt h er in format ion an d d escript ion of cert ain risks relat in g to ou r min in g oper at ion at the
Neg ev Desert , see Not e 18 to ou r A u d it ed Fin ancial St ate men ts a nd “I tem 3 - Ke y I n for ma t ion — D.
Risk Fact ors”, respe ct ively.
114 ICL Group Limited
Th e followin g t ab le sets fort h th e amou nt of ou r tot al min e pr od uction of raw ore at th e Compan y’s
min es in t he Neg ev ( an d t h e relevan t g rad e) su pplied to ou r ben eficiat ion plan t s, for t h e three years
en d ed De cembe r 31, 2020, 2019 an d 2018:
Year Ended December 31,
2 0 20
2 0 19
2 0 18
Million s of t on n es prod u ced
6
7
8
Gra d e (%
P
2
O
5
before/ after beneficiation )
2 6/3 2
26/32
26/32
Th e followin g t ab le se t s for t h t he approxima t e amou n t s of prod u ct pr od u ced aft er proce ssin g by
ou r ope rat ion s in t h e Ne g ev Desert, for t he three year s ended De cemb e r 31, 2020, 2019 an d 2018:
Year Ended December 31,
2 0 20
2 0 19
2 0 18
thousands of
to nnes
thousands of
to nnes
thousands of
to nnes
Phospha t e Rock
3 , 0 90
2,807
3,550
Gre en Ph osphoric A cid
5 44
567
560
Fer t iliz ers
9 20
1,033
988
W hit e Ph osph oric A cid
1 71
134
162
Spe cialt y Fe rt ilize rs
70
66
70
S p a in
Th e Company's pot ash min ing ope rat ion s in Spain are car ried ou t by I CL I b eria (a wholly- own ed
su b sid iar y of t he Compan y) an d t he ma rine transpor t ation perfor med t hr ou gh Tr afico de Mercancias
(a wh olly-own ed su b sid iary of I CL I b eria). There are t wo u n dergr oun d pot ash min es t h at make up
ICL Ib eria’s comple x: Ca b an asses an d Vilafr u n s. As part of t h e Compan y's st ra t egic d e cision to
con cen t r ate it s prod uction at t he Su ria sit e (Cabanasses min e) an d, a ccord ing ly, t o d iscon tinu e the
min in g act ivit ies at t h e Salle nt sit e ( Vilafr un s min e), at t h e en d of t h e fir st ha lf of 2020, t h e Compan y
accelerat ed I CL Iberia 's sit e con solid at ion pr oce ss, wh ich was or ig in ally sche d uled for 2021. In t his
fra mewor k, t h e Pot ash prod u ct ion at th e Sa llen t sit e wa s d iscon tin ued as of J u ne 2020. As a result,
t he C ompa ny ope rat e s on ly at t h e Ca b an asses min e, which is locat ed in t h e t own of Su ria,
approxima t ely 12 kilomet e rs n or t h of t he district capita l of Man resa in the Carde ner rive r valley. The
Vilafr u n s min e, wh ich cu r ren tly is in act ive, is locat ed n ear t h e t own of B alsar en y, approxima t ely 13
km east of Su r ia, in t h e Llob r eg at river valley. Th e previou sly d efined Su ria min e is b ein g close d .
Pot a sh in Su ria was fir st d iscover ed in 1912 a nd it s comme rcial d e ve lopmen t b eg a n in 1920. I CL
pu rch ased it s t hr ee Spa nish min es in 1998. Pot ash of la t e Eocen e ag e occu r s in t h e nort he ast corner
of t h e Eb ro Evaporit e B asin wh ich lies alon g th e sou t he rn flank of t he Pyr en ees. Sylvin it e a nd
Carna llit e are fou nd t oward s t h e t op of t h e Ca rd on a Halit e at va ryin g de pt h s as a resu lt of
d eformat ion s associat e d wit h t he Pyr en ean fold and t hrust belt.
Th e Ca b an asses min e is loca t ed in t he provin ce of Ba rce lon a an d is a pproximat ely 730 to 1000
me t ers b e low g rou n d . T he min e h as t wo acce ss poin t s and t he min in g is by a mod ified r oom and
pillar me t hod . T he min e sit e is se rved by roads/ ra ilways an d is n e ar major h ig hways.
115 ICL Group Limited
Ext ract ion of pot ash from u n d er gr ou nd min e s in Spain is ca rried ou t by min in g sylvin it e (a mixt ure
of pot a sh a nd salt fou nd in va ryin g potash concent ration s). T he pot ash is separate d from t he sa lt at
t he pr od u ct ion plan ts n ea r t he mine.
Up to J u n e 2020, t he Compan y oper at ed t wo min er al pr ocessin g plan ts – on e in Su ria and on e in
Sallen t . Cu rr en tly, t h e Sallen t mineral proce ssin g plan t is closed . T h e min er al pr ocessin g in clu d es
cru sh in g, g rin din g, d eslimin g , frot h flot ation , d ryin g an d compa ct in g. In t h e Su ria plan t t h ere is a
proce ss for cryst allizat ion of vacu u m salt an d pu re pot ash . The power u t ilized by ou r Span ish min ing
operat ion s is pu rchased from t hird- party electric compan ies.
ICL own s all t he la nd s on wh ich th e Spanish su rface fa cilities are locat ed. T h e Span ish g overnment
owns all t h e u n d erg rou nd min in g r ig h t s an d has g ran t ed ICL con cession s to con d u ct min ing
operat ion s u n d er t he lan d. Se e “It em 4 - In format ion on t h e Compan y— D. Pr opert y, Plan t and
Equ ipmen t — Con cession s a n d Min in g Rights” an d Note 18 to ou r A u dited Fin ancial Statements.
Accord in g to t h e said con solid at ion plan , t h e an n u al prod u ction capacit y of pot ash in Spain is
expect ed to be a bout 1 million t on nes in 2021 a nd to reach a level of up to ab out 1.3 million t onnes
in t h e fu t u re, after complet ion of ad dit ional n ecessar y adju stme nt s at t he produ ction facilitie s.
Th e followin g t ab le sets fort h, the quantit ies an d g rade s of th e pot ash ore e xtra cted from t he mines
an d pr ocessed in the plant s in Spain , for t he thr ee ye ars e nd ed Decemb er 31, 2020, 2019 a nd 2018:
Year Ended December 31,
2 0 20*
2 0 19
2 0 18
S a l len t
Ore processed (in millions of tonnes)
1
1
2
Grade (% KCl)
2 2%
23%
23%
S u ria
Ore processed (in millions of tonnes)
2
3
2
Grade (% KCl)
2 5%
24%
25%
T o t al
Ore processed (in millions of tonnes)
3
4
4
* Pot a sh was ext racted u nt il t he end of t h e second qu arte r of 2020.
116 ICL Group Limited
U n it ed Kin gdo m
ICL’s min in g opera t ion s in th e Un it ed Kin gd om are con d u ct ed by it s wh olly owne d su b sid iar y,
ICL B ou lb y. I CL’s min e proce ssin g an d ma nu fact urin g pla n t are loca t ed approxima t ely 340
kilome t ers nort h of Lon don and approximat ely 40 kilomet e rs east of Mid d lesb rou gh , Eng lan d in the
Nor t h York Moor s Nat ion al Park.
ICL’s min in g opera t ion s in t h e Un it e d Kin g dom are ma in ly con d u ct ed u nd er t he Nort h Sea at a
d ept h of ab ou t 1,400 met ers b elow t he su rfa ce. T he oper at ions are curren tly con du cted as far as 8
kilome t ers offshore su b ject to min in g leases an d min era l e xtract ion licen ses describ ed below, wh ile
t he min ed min era l proce ssin g ope ration s are main ly b e in g d one on t h e su rface on lan d own ed by
ICL. See “ It e m 4 - I n format ion on t h e Compa ny— D. Prope rt y, Plan t and Equ ipme nt — Con cessions
an d Min in g Rig h ts”.
ICL’s B ou lb y min in g oper ation s are sit uated close to t he west ern limit s of polyh alit e, pot ash an d salt
d eposit ion in t h e Zechstein B asin ext en din g in lan d in the Unit ed Kin g dom and below the Nor t h Sea
in t o Germa ny. T he polyh alit e se am is of t h e Per mian Eva porit e Series a nd is overla in by some 800
me t ers to 1,300 met ers of you n g er se d iment a ry r ocks. T he polyh a lit e sea m a verag es 4 met ers in
min eab le t h ickn ess b u t va ries fr om ze ro to more t h an 11 met ers in t h ickn ess. T he access in t o t he
polyh alit e b ed e st ab lishe d in 2010 fr om on e of it s ma in sa lt road ways. As d escr ib e d b elow,
Polysu lph at e® prod u ct ion at ICL h as in cr ease d in rece nt ye ars an d is n ow t h e focu s of min in g
act ivit ie s at I CL B ou lby as it cease d pot a sh prod uction in 2018 d u e to fu lly d eple ted r eser ve s.
Th e B ou lb y min e is a ccessed by t wo vert ical sh afts. One sh aft h oist s Polysu lph ate® an d salt and the
ot h er provid es man - rid ing an d se rvice a cce ss. Min in g is by con tin uou s min ing with sh utt le ca rs and
by a mod ified room and pillar me th od. T h e min e ha s b een d esig nated as a “g assy” min e, con taining
me t ha n e an d Hyd rog en Su lph id e g ase s. Su pply of t he elect ricit y to t h e min in g oper at ion s in t he
B ou lb y min e is ma in ly t h rou g h electricity pu r ch ased on t h e open mar ket fr om t h e n ation al e lectr icity
Compan y. Th er e is also a power plan t on t he sit e t hat con ve rts g a s in to electricit y a nd supplements
t he elect ricity su pply requ ire d for exe cution of t h e min in g a nd proce ssin g oper at ions.
Th e proce ssin g pla nt for Polysu lph at e® u ses simple cr u shin g an d scre en ing pr ocesses to prod uce
st an d ar d an d g ranu lar prod u ct s in appr oxima t ely 50:50 ra t io. Resea rch is cu rren tly u n d er way
reg ard in g me t hod s to fu rt h er e n ha nce t he st an d ard pr od u ct s t h rou gh compact ion , g ra nu lation,
b le nd in g and micron ut rient add ition wh ich, in comb in ation , is ant icipated to deliver high valu e new
fer t iliz er prod u cts in to t h e market. In a dd ition , t he former pot ash processin g pla nt wa s mod ified in
t he secon d qu art er of 2018, a nd sect ion s of t h e d ryin g an d compa ct in g circu it we re ad ju ste d for
t he pr od u ct ion of Pot ash plu S, a compa ct ed ble nd of Pot ash St an dard (SMOP) an d Poly St and ard.
Th e Company cease d ext ractin g pot a sh at it s ICL B ou lb y min e at t h e en d of t h e secon d qu arter of
2018, d u e to fu lly d eplet ed r eserve s an d sh ift ed to t h e prod u ct ion of Polysu lphat e® . In 2018, we
ext ract e d 1 million t on nes of pot ash or e at a g rade of 35% ( KCI) and 9% in solu ble.
117 ICL Group Limited
Th e followin g t ab le se t s for t h , t h e qu an tit ies of t h e polyhalit e or e ext ract ed fr om t h e min e in t he
Unit ed Kin g dom, for t h e t hr ee yea rs en ded De cemb e r 31, 2020, 2019 an d 2018:
Year Ended December 31,
2 0 20
2 0 19
2 0 18
Polyhalite Ore (millions of tonnes)
0 . 7
0.6
0.4
ICL is a ct in g to expan d t h e Polysu lph ate® market by mea n s of, amon g ot h er t hin gs, d evelopment
of a wid e r an g e of in n ova t ive Polysu lph at e® -b ased prod u cts. In 2020, ICL prod u ced ab ou t 709
t hou san d tonne s of Polysu lph at e® .
C h in a
YPH J V, a join t ven ture with Yunna n Phosph ate Ch emicals Grou p Corporation Lt d. (“YTH”), ope rates
an open - pit min in g sit e na me d Ha ikou ( t he "Haikou min e") t h at is locat e d alon g sid e t h e Haikou
Town , in t h e X isha n d istrict, pr oximat e to t he cit y of Ku nmin g . Y PH JV h old s two ph osph ate min ing
lice nse s t h at were issu ed in Ju ly 2015, by t he Division of La nd and Resou rces of t h e Yun nan d istr ict
in Ch in a: ( 1) a min in g lice nse for t h e Haikou Min e in which t h e Company r u ns it s operat ion s a nd
wh ich is va lid up to J an u a ry 2043, a nd (2) a min in g licen se for th e B aitacun Min e, wh ich e xpired in
Novemb e r 2018.T h e B ait acu n is loca t ed se ve ral kilome t ers from t h e Haikou min e, wherein t he
min in g act ivit ies h ave n ot yet comme n ced. In ord e r to prese rve t he r ig hts for t h e B aita cun min ing
lice nse an d fa cilit at e it s renewal in 2021, t he Compan y paid an a d van ce in an immat e rial amount.
Th e Company is e xamin in g t h e feasib ilit y of re newin g t h e B ait acu n con ce ssion , a n d will base it s
d ecision , amon g ot h er t h in g s, on t h e ph osph at e re se rves soil su rve y resu lt s a nd on t he
u n d erst an ding to be achie ve d wit h th e a u thorit ies.
T h e access to Haikou min e is by means of a n et work of road s, as well as an a cce ssib le r ail n etwork
t hat lin ks to t he state rail lin es. Con sid ering th e cu rr ent oper ation s at th e Haikou min e, th e average
prod u ct ion ca pacit y of Y PH JV is approximat ely 2.2 million t on n es per year.
Th e Haikou min e has b een in ope rat ion sin ce 1966 and t he con cession area is spre ad over 9.6
squ a re kilomet e rs.
Th e Haikou min e is d ivid ed in t o fou r a rea s. The ph osph at e sou rces in areas 1 an d 2 ha ve b een
almost fu lly d eple t ed. The min ing in are a 3 b e gan in 2015 an d the min in g activities in ar ea 4 st arted
at t h e end of 2017.
Th e ph osphat e d e posit s at b oth mines are pa rt of an ext ensive marin e se d iment ary b asin in which
t he ph osph at e is sit u a t ed in t wo laye rs – an u pper laye r an d a lower layer . T h e t h ickn ess of t he
u pper laye r varies from 2.5 to 11 met e rs and is abou t 7.6 met ers on a ve rage , wh ere as t he thickness
of th e lower layer va rie s from 2 to 9 met ers a nd is ab ou t 6.1 met ers on a ve rag e. T h e min in g is
execu t ed b ase d on laye rs an d qu a lity t h er eof. Each laye r h as 3 qu alit y categories: Grade I ( hig hest
grad e ) > 30% P
2
O
5
, Gr ade II- 24%- 30% P
2
O
5
a nd Grade III- 15%-24% P
2
O
5
. St r u cturally, t h e Haikou
min e is mod e rat e ly comple x, wh ich r equ ir es precision min in g t h at is accomplish ed t hroug h u se of
relat ively small min in g t ools. T h e phospha t e is cover ed by hard r ock layers t h at re qu ire b la st ing,
except for t h e u ppe r g rou nd level, wh ich is removed a nd u sed for re clamation of t h e min ed ar eas.
Th e ph osphat e laye rs are a lso part ially h ar d an d requ ire b lastin g.
Th e ph osphat e is low org an ic t ype, and as su ch it is su it able for phosph oric a cid pr odu ction .
Th e min in g in t he Haikou Min e is via open min in g u sin g con ve ntion al meth ods by means of d r illing
an d b last in g, hyd raulic excavators, min in g t r ucks and tract ors for min in g ph osph ate s.
118 ICL Group Limited
In t h e first st a ge: min ing of t h e upper g roun d le ve l is b e in g st r ippe d an d st or ed or spread ou t over
min ed areas for pu rpose s of r eclamation . In t he se cond sta ge: d rillin g , b last ing a nd st rippin g of the
u pper overb u rd en level is exe cu t ed. In t h e t h ir d st ag e: min in g of t he ph osph at e is per formed by
d rillin g a nd b la stin g of ever y la ye r separ ate ly ( betwe en wh ich an in terb urden la ye r exists h aving a
t hickness of 11 met ers, which is a lso drille d, b last ed an d stripped) and the phosph at e is t hen loaded
on t ruck and b ein g t ra nsport ed to t h e b en eficiation pla n ts.
B ased on t h e pat che s' a ppear an ce of t h e med iu m an d hig h -gr ade ph osph at e, t h e min in g is
performed t hrou g h u se of small min in g t ools, t ru cks wit h a capacit y of 40 t on n es a nd excavat ors
ha vin g a b u cket ca pacity of 3 to 6 cu b ic met ers.
Close to t h e Haikou min e, t h ere are t wo b en eficia tion plan ts: flot at ion an d scru bb ing. T he se facilities
are accessib le by road s, an d t he scru bbin g plan t is accessib le by road s a nd t rain . T he ou t put of t h ese
facilit ies is d esig na ted for t h e prod u ction plan t s of acid s a nd fer t iliz ers, locat e d seve ral kilomet ers
from t he Haikou min e, wh ich in clu d e fou r su lphu ric acid fact ories, t h ree g reen ph osph oric acid
fact or ies, on e fact ory for man u fact u re of t echn ica l g r ad e whit e ph osph oric acid , on e fa ct ory for
ma nu fact u re of food grad e wh it e ph osph oric acid a nd an ad d it ion al six fe rt ilizer fa ct ories. T hese
fact or ies are power ed by elect ricit y g en erated from t he su lphu r ic acid prod uct ion proce ss as well
as from t h e n at ion al power n e t work. Th ese facilit ies h ave b e en con t in u ou sly d eveloped and
ma in t ain ed for t h e last 40 yea rs an d are in a g ood con d it ion . Th e a cce ss to t h e pr od u ct ion sit e is
also by road an d t rain.
Th e followin g t ab le se t s for t h t he amou n t of ou r t ot al min e prod u ct ion of raw ore at t he Ha ikou
min e (a nd t he r elevan t g r ad e) su pplied to ou r b en eficiat ion plant s, for th e t h ree ye ars ended
De cemb er 31, 2020, 2019 an d 2018:
Year Ended December 31,
2 0 20
2 0 19
2 0 18
Million s of t on n es prod u ced
2 . 4
2.15
2.15
Gra d e (%
P
2
O
5
before/ after beneficiation )
2 0 .99/28 .69
20.7/28.98
20.7/28.98
Th e followin g t ab le se t s for t h t he approxima t e a mou n t s of prod u ct prod u ced aft er proce ssing by
ou r ope rat ion s at t he Haikou min e, for t h e t hr ee ye ars e nded Dece mber 31, 2020, 2019 a nd 2018:
Year Ended December 31,
2 0 20
2 0 19
2 0 18
thousands of
to nnes
thousands of
to nnes
thousands of
to nnes
Phospha t e Rock *
2 , 0 44
1,946
1,725
Gre en Ph osphoric A cid
6 3 2
637
635
Fer t iliz ers
5 8 4
516
584
W hit e Ph osph oric A cid ( TG)
71
64
65
Spe cialt y Fe rt ilize rs
55
46
48
* in clu d in g Enr iched & Grin din g Rock
119 ICL Group Limited
Con cessions and Mining Rig hts
I s rael
I C L Dead Sea Lt d. Con cession - D SW
Pu rsu an t to t h e I sr aeli Dead Sea Con ce ssion La w, 1961 ( h ere in after – t h e Con cession Law), as
amen d ed in 1986, and the con cession d eed a tta ched as an add en dum to t he Con cession Law, DSW
was g ra nt ed a con cession to u t iliz e t h e resou r ces of t h e Dead Sea a n d to lea se t h e lan d re qu ired
for it s pla nt s in Sod om for a per iod en d in g on March 31, 2030, a ccompa nied by a pr iorit y rig h t to
receive t h e con ce ssion aft er it s e xpiration , sh ou ld t h e Government d ecid e to offe r a ne w con ce ssion.
In accord ance wit h se ct ion 24 (a ) of t h e Su pplemen t t o t he Con ce ssion Law, it is st at ed , a mong
ot h er t h in gs, t hat a t t h e en d of t he con cession per iod all t he tang ible assets at t he con cession area
will b e t r an sfer red t o t h e governme nt, in excha n ge of t h eir amortize d re placemen t valu e – t h e value
of t h e a sse t s as if t h ey a re pu rcha sed as n ew at t h e e nd of t he con cession period , less t h eir t e ch nical
d eprecia t ion b ased on t h eir ma in te na nce con d ition a nd th e u n ique charact eristics of t h e De ad Sea
are a. Pu r su a n t t o sect ion 24 ( b ) of t h e Su pple ment t o t h e Con cession La w, it is st a t ed t hat capital
in vest men t s mad e 10 year s b efore t he concession en ds ( i.e. A pril 2020) t o t h e en d of t h e con ce s sion
period re qu ire a prior con se nt of t h e Gover nment, u nless t he y can b e fu lly d educted for t ax pu rposes
b efore t h e e nd of t h e con ce ssion period . However , t he Government's con sent t o a ny fu n damental
in vest men t t h at may b e n ecessary for t he prope r oper at io n of t h e pla nt , will n ot b e u n reason ably
d elayed or su spen d ed . I n Mar ch 2020, a work proced u re was sig n ed b et ween t h e Company and
t he I sra eli Governmen t for t h e pu rpose of imple me nt in g se ction 24( b). For fu rt he r in formation see
Not e 18 t o ou r A u d it ed Finan cial St atemen ts.
In con sid e rat ion of t h e con ce ssion , DSW pays r oyalt ies a n d le ase ren ta ls to t he Gover nment of I sr ael
an d is su b ject to t he La w for T axa tion of Profit s from Nat u ral Resou rces, on t op of t h e re gu lar in come
t ax.
For fu rt h er in formation regardin g I CL Dea d Se a royalt ies, t ax, r en tals and ot her mat ter s, see Notes
15 a nd 18 to ou r A u dit ed F in an cial Statemen ts and “Item 3 - Key I nformation — D. Risk Fa ct ors— Our
min era ls e xt ract ion ope rat ion s are d ependent on con ce ssion s, license s an d permit s g ra nt ed to us
by t h e re spect ive g overn men ts in t he cou nt rie s wh er ein t hey are locat ed ”.
R o t em A m fert Lt d. Con cession ("Rot em Israel")
Rot em Israel has b een min in g ph osphat es in t he Neg ev in I sr ael for more t han sixt y year s. T he
min in g is con d u ct e d in accord a nce wit h ph ospha t e minin g con cession s, which are g ran t ed fr om
t ime to t ime by t he Min ist er of En erg y un der t he Min es Or din an ce, by th e Su pervisor of Min es in his
Office ( h ere ina fter – t h e Su pervisor ), as well as t he min ing auth oriz ation s issu ed by t he Israel Lands
Aut horit y ( h erein afte r – t h e Au t h orit y). T h e con cession s r elat e to qu arr ie s ( ph osph at e rock),
wh ere as t h e auth or iza tion s cover u se of la nd as active min in g ar eas.
M i n ing Concessi ons a n d Lease Ag reements
Rot em h as t h e followin g t wo min in g con cession s:
1. Rot em Field ( in clu d ing th e Hatrurim Field ) – va lid up to t he end of 2021;
2. Zafir Field ( O ron -Zin) – valid up to t h e en d of 2021;
Th e O ron con ce ssion was first g ranted in 1952. The Zin con cession was first gra nted in 1970 as part
of t h e Or on con cession an d t he join t con cession was su b sequ en tly r en amed Za fir. T h e Zafir
120 ICL Group Limited
con cession ( con sist in g of b ot h t h e Oron an d Zin sit e s) was re newe d ever y 3 ye ars, and in 1995 it
was g ran t ed for 10 years and t hereafter , in 2002, it was g ranted up to 2021. Th e Rot e m con cession
was first g r an t ed in 1970 and , similar to t he Zafir con ce ssion , it was gran t ed in 1995 for 10 year s
an d in 2002 it was g ran t e d up to 2021. In 2011, t h e Su per visor expan d e d t h e Rot e m con cession's
area, by join in g t h e Hat ru rim sit e to t h e area of t h is con ce ssion . Th e mat ter wa s transfe rre d to the
Isr ael Lan d s A u t hority in ord er to t r eat t h e expan sion of t h e per missib le min in g area to t he Rotem
fie ld , in a ccord an ce wit h e xpan sion of t he con cession are a.
Du r in g t h e fou rt h qu a rt er of 2020, as part of t he Compan y's act ion s to ext e n d the va lid it y of t he
sa id min in g con cession s an d ob t ain t he n e cessary appr ovals, posit ive r ecomme nd at ion s were
receive d from t h e Min ist ry of En er gy, t h e Commit t ee for Red u cin g Con cen t r ation an d t he
Compet it ion A u t h orit y, to e xt en d t h e licen ses for an add ition al per iod of t h ree years. In De cember
2020, t h e Min ist er of En er g y a pproache d t h e Ch airman of t he Finan ce C ommit t e e in t he Kn esset
requ est in g that th e Commit t ee g ran t fin al approval to t h e sa id extension .
Rot em h as t wo le ase agr eemen ts in effect u n til 2024 an d 2041 a n d a n a dd ition al lease a gree ment
of t h e Or on plan t , wh ich t h e Compan y h as b een workin g t o ext en d since 2017, b y exe rcisin g the
ext ension opt ion provid e d in th e agr eement .
M i n ing Royalt ies
As part of t h e t erms of t h e con cession s in r espect of min in g of ph osph ate, Rot em is requ ired t o pay
t he St at e of I srae l royalties b ased on a calcu lation a s st ipulate d in t he I sraeli Min e s Or dinance.
In J an u ary 2016, in lig ht of a legislat ive amen d men t for t he implemen t a t ion of th e Sh esh in ski
Commit t ee's recommend at ion s, t he r oyalties' r at e was in creased from 2% t o 5% of t h e valu e of the
qu a rried mat e rial. A ccord in g t o t h e amen dme nt, t he Su pervisor h as t he opt ion t o colle ct royalt ies
at a h ig h er ra t e, if h e d ecid ed t o g ran t a min in g rig ht in a compe t it ive process whe rein on e of the
se le ct ion in d ice s is t h e roya lty r ate .
P l an nin g an d B uild ing
Th e min ing an d qu a rryin g a ct ivit ies requ ire a zon in g approval of t he sit e ba se d on a pla n in
accor d an ce wit h th e I sr aeli Plan nin g and B uild ing Law, 1965. T hese plans ar e u pd ate d, a s n eeded,
from t ime t o t ime. As at t h e d at e of t h is repor t , t h er e are variou s requ est s at d iffere nt st a g es of
d elib e ration s pendin g b e fore t he pla n nin g aut horities .
In 2016, t he Dist rict B oard for t h e Sou t hern Dist rict appr oved a d et aile d sit e plan for minin g
ph osph at e in t he Zin - Oron a rea . This plan , wh ich covers an ar ea of ab ou t 350 squ a re kilomet e rs,
will per mit t h e con t in u ed min in g of ph osph at e locat e d in t h e Zin valle y and in t he O ron valley for
a per iod of 25 years or u p t o exh au st ion of t h e raw mat erial – wh ich ever occu rs fir st , wit h the
possib ilit y for ext e n sion ( un der t he a ut hority of t h e Dist rict Plan nin g B oa rd ) .
In ad d it ion , t h e Compan y is wor kin g to promot e t h e pla n for min in g ph osph at es at Barir field , which
is locat ed in t h e sou t hern par t of t h e Sou t h Zoha r d e posit in th e Neg ev Desert.
Und er t h e t erms of t he con cession s an d in or d er to con t inue to h old t h e con ce ssion rig hts, Rotem
Isr ael is requ ired to comply wit h ad d it ion a l r eport in g r equ irements, in a d d it ion to t h e pa yment of
roya lt ies.
ICL has lon g - t erm le ases cover in g all t h e lan d on wh ich it s Israe li facilit ie s are locat ed , a n d it
operat es u n d er minin g con cession s an d lice nse s g ran ted to it by t h e I sraeli Min ist e r of En ergy and
by t h e I LA .
121 ICL Group Limited
For fu rt h er in formation regardin g Rot em I srael's r oyalt ies, t ax, plan n in g an d b uild ing procee dings,
leases and ot h er ma t t ers, an d for d e scription of ce rt ain risks r ela t in g to Rot e m I srael's con ce ssion,
se e Not e 18 to ou r A u d it ed Fin an cial St at eme nts and “ Item 3 - Key I nfor mat ion — D. Risk Fact ors”,
respect ively.
S p a in
A su b sid iary in Spain ( he rein after – I CL I b er ia) was g ran t e d minin g rig ht s b ased on leg isla t ion of
Spa in ’s Governmen t fr om 1973 an d t h e re gu lat ions accompan yin g t h is leg isla t ion . Fu rth er to the
legislat ion , as st a t ed , the Government of t h e Catalon ia region pu blish ed spe cial min in g regula tions
wh ere b y I CL I b eria received in divid u al licen ses for ea ch of t he 126 d iffere nt sit es t h at are rele vant
to t h e cu rre nt an d possib le fu t u re min in g activit ies. Some of t h e licen ses are valid up to 2037 and
t he rest are effect ive up to 2067. T h e con cession for t h e "Reserva Cat alan a", an ad d itional site
wh ere in min in g h as n ot yet b een comme n ced , expired in 2012. Th e Compa ny is act in g in
cooperat ion wit h t h e Span ish Govern ment to ob ta in a r enewal of t h e conce ssion . A ccording to the
Spa n ish au t h or itie s, t h e con ce ssion per iod is va lid un t il a fin al d ecision is mad e r eg ard in g the
ren ewal.
Th e con cession s cover a t ot a l area of 42,489 h ect ar es in t h e pr ovince of Barcelon a a nd 26,809
he ct ares in the provin ce of Lerida. As part of a ren ewal pr ocess, t h e Compan y is r equ ired to prepare
an d pr esen t a b asic t ech nical r eport d escrib ing t he in tended u se of t h e min es. As re qu ired by la w,
t he con cessions are requ ired to be re newed prior to t h e expirat ion d ate. If a con cession expir es, a
b id d in g process will be in it iat ed. I CL I b eria applie s in a d va nce for t h e r enewal of min in g concessions
an d u n t il n ow, had no d ifficult ies in ren ewin g t he m.
U n it ed Kin gdo m
U n it ed Kin gdo m M inin g Con cession – ICL B oulb y
Th e min in g rig h t s of a su b sid ia ry in t he Un it ed Kin g d om ( h ereinaft er – I CL B ou lb y), are b a sed on
approxima t ely 114 min in g lease s an d lice nses for e xt ra ct in g variou s min er als, in a d d it ion t o
nu mer ou s easemen t s an d rig ht s of way from privat e own ers of lan d u nd er wh ich I CL B ou lby
operat es, an d min ing rig ht s un der th e Nort h Se a g ran ted by t he Br itish Crown (Crown Est ate s). The
lease rig ht s wit h t he Cr own Est at es, in clu d e pr ovision s to e xplor e an d exploit all t a rg et ed and
kn own Polysu lphat e min e ral resou rces of in t e rest t o ICL B ou lby. T he sa id min eral lea se s cove r a t otal
are a of ab ou t 720 squ ar e kilome t ers ( onsh or e le ases t otalin g a roun d 90 squ are kilomet ers and the
offshore lea ses from t he Cr own Est a t es coverin g a roun d 630 squ are kilomet ers). A s at t h e d ate of
t his repor t , all t he lea se per iod s, licen ses, easemen t s an d rig ht s of wa y ar e effect ive, some up t o
2022 an d ot he rs up t o 2038.
Th e Company is a ct in g to re new the rights nece ssary for the min ing oper ation which expire in 2022
or alt e rn atively will se ek t o ob tain own ership of t h ese righ ts. T he Company b elieves, it is more likely
t han n ot , t ha t it will ob t ain re newa l or own ersh ip of a ll t h e needed r ig hts .
Hist orically, t h e re ne wal of le ases h as n ot b ee n prob lemat ic, a nd t h e Compan y is con fid e nt in the
ren ewal of all la nd a n d min eral le ases as requ ired an d will receive a ll g overn men t appr ovals a nd
permit s n ecessar y for exploit in g all t a rg eted min er al resou rces.
ICL B ou lb y h as a pre feren tial rig ht to r en ew some of it s lea se s as it h as t h e Plan n in g Pe rmission to
ext ract min erals. T h ere is no compe t it ive b iddin g pr ocess.
Th e ent it ies in volved in r en ewin g or ob t a in in g n ew leases are I CL B ou lb y, loca l solicit or s and
in d ivid u a l lan d own e rs who own t h e min eral rig h t s, as d escrib ed ab ove. T he par t icu lar con d itions
122 ICL Group Limited
t hat mu st be met in ord er to r eta in t he lea ses are pa yme nt of an n ua l fe es to t h e lan down ers and a
roya lt y paymen t for min e rals e xt racted fr om t h e prope rty to t h e Crown Estates.
Th e cu rren t pla nnin g permit , releva nt to min eral exploit at ion , pr ocessin g a nd la nd u sage , is valid
up to 2023. Sin ce t h e renewal of t he permit in volves lon g proce sse s, t he Company h as sub mitted in
2020 an applicat ion for ren ewa l of it s plan n in g permit for a fu r t h er t wenty- five years to t h e North
Yor k Moors Na t ion al Par k A u thorit y.
U n it ed Kin gdo m Con cess ion - E verr is
A UK su b sid iary wh ich is a part of t he In n ova t ive Ag Solu t ion s se gmen t ( h erein after –
Everris Limit ed ), h as peat min es in t h e UK ( Cre ca, Nu t b erry an d Dou g las W a ter). Pea t is u sed as a
compon e nt to prod u ce profe ssional g rowin g med ia. A ll sit es are own ed by Eve rris Limit ed . T he
cu rr en t extraction permit s ar e g ra nt ed by th e local auth or itie s and are rene wed aft er examin ing the
ren ewal applica t ion s. The e xt raction permit s are g ra nted up to t h e en d of 2024 for Nu t b erry and
Dou g la s W at er and 2037 for Creca.
C h in a
YPH JV h old s t wo ph osphat e min in g licen ses th at were issu ed in Ju ly 2015, by t h e Division of Land
an d Re sou rces of t he Yunn an dist rict in China: (1) a min in g licen se for the Haikou Min e (h ere ina fter
– Ha ikou ) in which t h e Compan y r un s it s ope ration s a nd wh ich is valid up to Janu ar y 2043, an d (2)
a min ing license for t he B ait acun Mine, which e xpired in Novemb er 2018. In ord er to pre se rve the
rig ht s for t h e B ait acu n min in g lice n se an d facilit ate it s re ne wal in 2021, t h e Compa ny paid an
ad van ce in an immat erial amou n t . T h e Compan y is exa min in g t h e fea sib ilit y of re n ewin g the
B ait acu n con cession , an d will b a se it s d e cision , a mon g ot h er t h in gs, on ph osphat e r eser ve s soil
su rvey re su lt s a nd on t he u nder stan din g to be a ch ie ved wit h t he a uth orities.
W it h respect to t h e min in g rig ht s, in accor d ance wit h Ch ina "Nat ur al Re sou rces T ax Law", YPH JV
will pay royalt ies of 8% on th e sellin g price base d on th e market pr ice of t h e rock prior to it s
proce ssin g .
In 2016, Y PC issu ed a st at emen t wh ereb y in 2010 YPC en t er ed int o ag reeme nt s wit h t h e local
au t h or it y of J in n in g Cou n t y, Yu n n an Provin ce an d J in n in g Lin d u Min in g De ve lopmen t and
Con st ru ct ion Co. Lt d . ( he rein after - Lin d u Compan y), accord in g t o which Lin d u Compa ny is
permit t e d t o min e up t o t wo million t on n es of ph osph ate rock fr om a ce rtain ar ea mea suring 0.414
squ a re kilome t ers wit h in t h e ar ea of t h e Ha ikou min e ( h ere in after – t h e Daqin g A rea ) an d t o se ll
su ch ph osphat e rock t o an y t hir d pa rty in it s own d iscr etion .
YPC h as u n d ertaken th at YPH JV’s min in g rig ht in t he Haikou min e will n ot be adverse ly affected by
t he ab ove- men tion ed arr an g ement s. I t was d e cid ed t hat YPH shou ld con d u ct fu rt her
commu n icat ions wit h YPC and Lin du Compan y, for t h e pu rpose of pr ot e ctin g it s leg al rig ht s and to
u rg e t h e par t ies t o re ach a fair, ju st , a n d r eason ab le solu t ion t o t h is issu e, as soon as possib le.
Con sid er in g t he a bove , ICL d id n ot in clu de t his a rea a s par t of YPH J V's r eserve s.
For fu rt h er in format ion rega rd ing ou r con ce ssion s in Ch in a in clu d ing roya lt ies, min in g licen ses,
rig ht s a nd ot her matte rs, an d for d escription of ce rta in risks relat ing to ou r ope ration s in Chin a, see
Not e 18 to ou r A u d it ed Fin an cial St a t ements an d “I t em 3 - Key In format ion — D. Risk Fa ct ors”,
respect ively.
123 ICL Group Limited
Rese rves
Th e Company b elie ve s it ha s a b r oad an d h ig h - qu a lity min er al re se rves b ase d u e to it s
st rat eg ically-located min es an d fa cilities. “Reser ve s” are defined by SEC I nd ustry Guid e 7 as th at part
of a mineral d e posit t ha t cou ld be econ omically an d leg ally e xt ract ed or prod u ced at t h e t ime of
t he rese rves d eterminat ion . I ndu stry Gu ide 7 d ivid es r eser ves b etwe en “proven ( me asur ed) r eser ves”
an d “prob ab le ( in dicated ) r eserves,” which are d efin ed as follows:
• Proven (mea su r ed) reserves. Re se rves for wh ich ( 1) qu an t it y is compu t e d from in format ion
receive d from explorat ion s, ch an n els, wells an d d rillin g s; grade an d /or qu ality are compu ted
from t h e re su lts of d etailed samplin g an d (2) t he sites for inspe ction , sa mplin g an d me asu re ment
are spaced so close ly to e ach ot h er so t ha t t h e g eolog ic ch ar act er is we ll d efin ed so t h e size,
sh ape, d e pt h an d min eral con t en t of re serves can be r eliab ly d et er min ed.
• Prob ab le ( in d ica t ed) reserve s. Rese rves for which qu a n t it y an d g ra d e an d / or qu alit y are
compu t ed fr om in format ion simila r to t hat u sed for proven ( measur ed) reserves, b ut th e sit es for
su rvey, sa mplin g , an d measu r emen t are fu rt her a par t or are ot h erwise less efficient ly spaced.
Th e d egr ee of assu ra nce, alt h ou g h lower t han t ha t for pr oven ( mea su red ) r eserves, is h igh
en ou g h to assu me con tin uity b e tween poin ts of ob servation .
ICL ca t eg or ize s it s reserves in a ccord an ce wit h t h ese SEC Ind u stry Gu id e 7 d efin it ion s, as st ated
ab ove . T h e qu a nt it y, n atu re of t he min era l r eserves an d est imate of t he r eser ves at each of the
Compan y’s prope rt ies are est imat ed by it s in te rnal g eolog ist s and min ing eng ineer s.
In Oct ob er 2018, t h e SEC a d opt ed a fin a l ru le t h at will repla ce SEC I nd u st ry Gu id e 7 wit h n ew
d isclosu re requ ire men ts t h at are mor e closely alig n ed wit h cu rrent in d ust ry a nd g lob al re gula tory
pract ice s an d st a ndar ds. Commen cin g wit h ou r an nu al repor t for t h e fisca l ye ar en d e d December
31, 2021, we will comply wit h t h ese new d isclosu re require me nts. Upon implemen tation of the new
me t hod olog y as part of t h e ad opt ion of t he se n ew d isclosu r e re qu ire ments, we will present
in format ion re spect ing resou rce and r eserve estimates which may d iffer mat erially from t he reserve
est ima t es prese nted h istor ically a nd in t his A n nual Re port un der t he e xistin g SEC ru les.
Isr ael
Th e followin g tab le se t s for t h in format ion rega rd in g ou r est imat e s of ou r phospha t e r eserves in
Isr ael as of De cemb er 31, 2020:
Category
W hite
Pho sphate
Low
Or ganic
Pho sphate
High
Or ganic
Pho sphate
Bituminous
Pho sphate
R ec overable
R es erves
Average
Gr ade
(m illions of tonnes)
( %P
2
O
5
)
Rotem
Proven
-
9
-
9
2 6%
Zin
Proven
-
12
15
3
30
2 5%
Oron
Proven
10
3 . 5
-
1 3 .5
2 3%
Tot al (Proven) (1)
10
25
15
3
53
( 1) Amou n t s may n ot a d d up d u e to rou ndin g.
124 ICL Group Limited
In d et e rmin ing t hese reserves, a cu t - off g rad e of 20% to 25% P
2
O
5
was applied , d e pen d ing on the
proce ssin g cha ract eristics of t he ph osph at e r ock an d t he exist ing pr oce sses. T he cu t-off grade d iffers
for each min e in accor d an ce wit h t he b eneficia t ion proce ss an d en richment capacit y: a cu t- off g rade
of 20% P
2
O
5
a nd lowe r was applied at Oron , aft er it h as b een pr oven that th e r equ ired qu alit y can
be r eached , a cu t -off g rade of 23% P
2
O
5
was applied at Zin , a nd a cu t -off g rade of 25% P
2
O
5
was
applie d at Rot e m. Th e cu t -off g ra d e for Or on is lowe r b ecau se I CL Rot e m h as t h e appr opriate
b en eficiat ion process for ph osph ate rock wit h limest on e, wh ich cha racterizes t he white ph osphate
an d , t herefore, t h e b en eficiation proce ss, t h rou gh t h e flot ation pr ocess, is ext r emely efficien t . The
cu t - off g rad e for the Rot em mine is h ig he r b e cau se t h e b eneficiation process t h ere has a limit ed
grin d in g an d flot at ion syst e m, an d on ly med iu m to h ig h gr ad e ph osphate can be fed ( which is
appropr iat e for t h e existin g reserves at Rot em). T he cut -off g rade for Zin is slig h tly hig her t han that
of Or on b ecau se of t h e prese nce of ma rl an d clay th at r ed u ces t h e efficien cy of th e enr ichment
proce ss. For pu r poses of d et ermin in g t he cu t - off grad e , ut iliza t ion an d qu an t it ie s par amet ers
accou n t was t a ken of t h e g eolog y fact or s ( con t in uity, st ru ctur e), min in g met hod , min in g d ilu tion,
plan t u t ilization , techn ical feasibilit y, ope ratin g cost s, an d h istor ical an d cu rren t produ ct prices. The
paramet e rs e mployed in t he calcu lat ion are as follows: on-sit e t on n es ( mu lt iplyin g area by laye r
t hickn ess an d ph osph at e d en sit y); recover able t on n es ( t onn es of min eral wh ich ca n be min ed ,
t akin g in t o accou n t min in g d ilu tion ); min e able t onn es ( recoverable t on nes from which t h e t onnes
prod u ce d are d ed u cte d); st ripping r at io ( t he qu a n tit y of wast e r emoved per t on n e of ph osphate
rock min ed ); plan n ed d ilu tion ; cost pe r t on ne for min in g ( t ypica lly rela ted to t r ansport d istance to
b en eficiat ion pla nt); cost per t on ne in clud ing reclamation ; an d u nplan ne d d ilu tion (5% u nplanned
d ilu t ion is t a ken in t o accou n t b ased on t h e d at a from t h e minin g in an d t h e d at a from t he
prob lemat ic areas). I CL Rot em’s yearly min in g plan is not de termin ed by th e minimu m cu t-off g rade,
an d flu ct u at ions in commod it y price s rar ely affect it s cu t-off g rade .
Th e cu t - off g rade calculation s come fr om h ist orical yie ld d at a a n d ICL Rot e m’s h istorical e xperie nce
wit h min in g , an d are ad equ at ely ca lcu lat ed an d mod e lled by it s geologist s, ope rat ion en g in eers
an d econ omist s. T he calcu lat ion t a kes t he ore g r ade in-sit u, con verts it in t o ext r acted ore with ICL
Rot em min ing met hod a nd est imate s t he pla nt yield d epen ding on t he g rade . Econ omic mod e lling
t hen gives t h e cu t- off fig ur es cu r rently u sed by I CL Rot em.
Th e proven re serves ab ove t h e cu t - off grade were ob t ain e d fr om t h e calcu la t ed on-site r esou rces
con sid erin g t h e min in g me t hod , t h e rat e of min in g d ilu t ion , a nd in- plan t recover y, b a se d on I CL
Rot em’s h ist orica l d ata. In orde r to con vert t he r esou rce s in to reserves, a ccou nt is take n, separa tely,
of t h e minin g d ilut ion rate, min in g met hod an d th e g eolog ical con dit ions, in clu din g, historica l yield
d at a , an d are b ased on t h e previou s five yea rs’ exper ien ce. The min in g dilu t ion rat e in t he
Compan y's min es in I sra el’s sou t h er n region is 2.5% an d t a kes in t o a ccou n t t h e con t in uit y of t he
layers an d t h e ge olog ical st ruct ure. Th e qu antit y an d g rade of t h e calcu lat ed re se rves are t hose that
are e xpect ed to be t ra n sferr ed to t he pr oce ssin g pla n t an d are su b ject to recovery in d ices in t he
u t ilizat ion plan t . Th e u pd at e d u t iliza tion in t h e pla nt va rie s b et ween t h e sit es as it con sist s of
hist orica l yield d at a , which is cu rre ntly 45% for Oron , 46% for Rot e m, an d 40- 46% for Zin . T h ese
d iffer en ces in metallu rg ical r ecovery rates are d ue to d iffe rences in the b en eficiat ion process at the
d iffer en t min es. Proven r eser ve s have b een e xplor ed by b orehole in tersection s typica lly at 50 to 70
me t ers in t ervals. Ea ch of t h e t hree pla n t s at t h e min e s h as b een d eveloped over t he past few
d ecad es for t h e opt imu m u pg radin g of t h e ph osph ate rock to con ce n trat e or e con t ain ing t ypica lly
31% to 32% P
2
O
5
. Th e con version rat io for most of t h e phosph at e layer s is 1.8 ton n es for every
1 cu b ic met e r, wh er e a con version ra tio of 2.0 t on n es per cu b ic met er is u sed for ha rd, calcar eous
b ed s. The se factors are u sed on t he b asis of lon g experie nce a nd are con sid ered to be r eason ab le.
125 ICL Group Limited
Th e Company con t in u es to check t he ad a pt ation of variou s pot en t ial t ypes of ph osph at e rock for
t he pr od u ct ion of ph osph oric acid a nd it s d own st r eam prod u cts as par t of an effort to u t ilize and
in cr ease exist in g ph osph ate reserves. In 2021, t he Compan y will fu rt her an alyze addit ional t ypes of
ph osph at e in clu d in g: R& D, pilot s, plant t estin g a ct ivit ies an d ot her econ omic fea sib ilit y assessmen ts.
In calcu lat in g t h e cu t- off g rade and rese rves, an a ve rag e of t he pr eviou s thr ee years’ mar ket pr ices
an d oper at in g cost s was u sed as part of t he calcula tion s to e nsu re e con omic fe asibilit y.
Th e t h ree- year aver ag e FOB A shdod mar ket prices u sed to ca lculate ou r re serves in t he Nege v as of
De cemb er 31, 2020 are as follows: $646 pe r t on ne P
2
O
5
for g ree n ph osph or ic acid , $1,322 pe r t onne
for W PA , $1,210 per t on n e for MKP, a nd $140 per t on n e for GSSP.
In calcu lat in g t h e reserve s, an aver ag e of t h e previou s t h re e yea rs’ cu rre ncy exch ang e rat es was
u sed to e nsu r e econ omic fea sib ilit y. Th e t h re e- year averag e cu r rency con ve rsat ion ra t es u sed to
calcu lat e ou r re serves in th e Ne ge v as at Decemb er 31, 2020 are as follows NI S 3.53 pe r $1.00,
$1.15 pe r €1.00 an d $1.30 per £1.00.
In 2019, a d d it ion al areas in Rot e m min e have b een d efin ed as low org an ic con t en t , as well as
rea sse ssment of t he over b u rd e n rat io in some areas in t he min e. In ad d it ion , at Oron min e mor e
precise min in g wa s u t iliz ed . Pot en t ial area in T amar fie ld ( part of Rot e m min e) is b ein g e xamined
for su it ab le min in g method t hat cou ld resu lt in fu tu re addit ion s to t h e Compa ny r eserves.
Rot em min e:
Th e life of t he min e at Rot em is appr oximat e ly 4.5 yea rs b ased on r eserves of 9 million t on n es of
low org an ic/ low mag n esiu m ph ospha t e ( g iven t he cu rren t an n u al min in g volu me ). The
low- org an ic, low-ma gn e siu m phosph at es are su it able for phosphoric acid prod u ct ion . Th e annual
averag e pr od u ct ion ( min in g ) rat e for t h e low-org anic/ low-mag ne siu m ph osph at e at Rot em is
1.9 million t onne s pe r year .
Oron min e:
Th e life of t h e min e at Or on is appr oximat ely 3 yea rs b ase d on a reserve of 10 million t on n es and
an averag e produ ction of 2.8 million t on nes pe r yea r of wh it e phosph ate (g iven t he current annual
min in g volu me).
Zin min e:
In or d er to a ctively ad dre ss g lob al market volat ility, t h e con tin uin g t rend of econ omic an d bu siness
u n cer t ainty an d to mit ig ate the implicat ion s of t h e COVI D-19 spre ad an d it s impact on t h e Se gment's
resu lt s, se ve ral efficie n cy in it iat ives an d mea su res were in it iat ed in 2020, wh ich in clu d e, among
ot h er t hin g s, t he d iscon tin uat ion of t h e prod u ction a nd sale of t h e ph osph at e rock act ivit y at Zin
plan t in 2020.
Cu rren tly, we are g en eratin g su fficient rock prod u ction from ot h er min es an d as su ch, we are not
provid in g a life of t h e min e e st imat e for Zin . Neve rt h eless, Zin rese rve can be u se d as par t of t he
fu t u re raw ma teria ls for MGA prod u ction at Rot em I srae l a nd for ot h er d ownstre am prod ucts.
Th e C ompa ny b elie ve s t h at it h as all t h e gover nme nt approvals an d permit s n ecessar y for it s re se rves
in I sr ael.
126 ICL Group Limited
S p a in
Th e followin g t ab le se t s for t h ou r est imat ed pot ash re serves for ou r Span ish min in g ope rat ions as
of De cemb er 31, 2020:
M ine
R es erve Category
M illions of tonnes
Average Grade (% KCl)
Cab a na sses
Prove n
28
26%
Prob ab le
60
27%
Tot al Proven an d Prob able
88
27%
Vilafr u n s
Prove n
-
0%
Prob ab le
-
0%
Tot al Proven an d Prob able
-
0%
Tot al( 1)
Prove n a n d Prob ab le
88
27%
( 1) r ou n d ed amou nts.
In d et e rminin g t h ese reserves, a cu t -off g r ad e of pot a sh ore con tain ing 20% KCl was a pplied at the
Cab a na sses min e.
Th e pa ramet ers u se d in d et e rmin in g th e cu t -off g ra d e con sid ere d th e g eolog y ( con t in uity,
st ru ct u re), min in g met hod , min in g d ilu t ion , plant u t ilizat ion , t ech n ical fe asib ilit y, operat in g costs
an d h ist orica l an d cu rrent pr od uct pr ice s. T h e paramete rs employed in t he calcula tion are as follows:
a compu t er ize d g eolog ical b lock mod el usin g t h e d rillin g d at a from t h e u n d ergrou nd d rilling
campaig n is d evelope d ; t he u n d er grou nd d rillin g wor ks are carried ou t on t he regu lar b asis. The
KCI g rad e is in t er pola ted u sin g in ver se d istance meth od ( ID2). Zon es t ha t are pot entia lly min eable
are d e fin ed . Mod ifyin g Fact ors b ased on h ist or ic d at a for “Dilu t ion ”, “St owin g ” and “Min ing
Recover y”, “cu t - off g rade”(20% KCl), et c. are applied . A ll t h is d at a is pr ovid ed to t h e Min e Plan ning
De pt . to d efin e spat ially t h e min e plan nin g of a cce ss t u n nels to all g eolog ical an d min eable b locks
an d t h en minin g fleet activit y sched ulin g, to plan t he Life-Of-Min e.
Th e cu t - off g r ad e calcu lation s come from h ist orica l yield d a ta and I CL I b eria’s historica l experience
wit h minin g , ad equ at ely ca lcu la t ed a n d mod elled by it s g eolog ist s, ope rat ion e n gin ee rs and
econ omist s. Th e calcu la t ion t akes t h e ore gr ad e on - sit e, con vert s it in t o ext r acted or e b ased on
ICL I b er ia’s min in g met hod a nd est imates t he plan t yield d e pendin g on t h e g r ad e. Furt her an alysis
by econ omic mod els d e t ermin es t he cut -off g rad e figures curr en tly in u se.
Th e proven an d prob ab le rese rves ab ove t he cu t- off g rad e were ob t ain ed t akin g in t o accou n t the
min in g me t hod , min in g re cove ry, min in g dilu t ion , se lect ive min in g , g eolog ica l con d it ion s and
in- plan t r ecovery, b a se d on I CL I b er ia ’s hist orical d at a. T he min in g r ecovery a n d d ilu t ion fact ors,
wh ich are requ ired in t h e con version of resou rces to reserve s t ake in to accou n t t he par ticular min ing
me t hod a nd t he g eolog ical con d ition s in t he min e, an d con sist of h ist orica l yield data b ased on 20
ye ars of oper at ion s at t h e min e s an d th e min in g recovery r ange s from appr oxima t ely 25% to
60% by ICL I b er ia’s “ room an d pillar” mod ifie d la you t . T he rese rve qu an t ity ( in t onne s) a nd g rade
are qu ot ed as t h ose t h at are e xpe ct ed to be d elive red to t h e t r eat ment pla nt an d are su b ject to
me t allu r gical re cove ry fa ctors. Met a llur gical re cove ry factor s con sist of h ist orical yield d at a a n d are
b ased on t h e previou s t en years’ exper ience an d cu rre nt r ecoveries are 87% KCl for t h e Su ria plant
( wh ich is ad jacen t to t h e Cab an asses min e) T h e proven rese rves h ave be en d et ermin ed fr om
in format ion fr om d rillin gs, u sin g d ist a nces of 80 to 150 me t er in t er va ls, b et wee n sample poin t s
wh ile prob ab le r eser ve s have b een explore d by b or eh oles at sample in te rvals of up to 1,300 met ers.
Th e fin al prod u ct is we ll over 95.5% KCl to avoid qu a lit y losses.
127 ICL Group Limited
In calcu lat in g t h e cu t- off g rade and rese rves, an a ve rag e of t he pr eviou s thr ee years’ mar ket pr ices
an d operat in g cost s wa s u sed as part of t h e ca lcu lat ion s to e nsu r e econ omic fea sib ilit y. The
t hree -year a verag e ma rke t pr ice u sed to calcu lat e ou r re serves for pot ash per t on n e of prod u ct in
Spa in is €240 per t on n e as of Dece mb e r 31, 2020.
In calcu lat in g t he r eserves, an a ve rage of t he previou s t h ree year s’ cu r ren cy con ve rsion r at es was
u sed as part of th e ca lcu lat ion s to en su re econ omic feasib ilit y. Th e t hree-yea r aver age cu rrency
con versat ion rate u sed to ca lcula te ou r rese rves is €0.85 per d olla r as of Dece mb e r 31, 2020.
Th e Su ria pla nt t rea ted or e min ed fr om t h e Ca ban asse s min e for all of 2020 an d ore from Vilafr uns
on ly up to t h e second quart er of 2020, As of Dece mber 31,2020, the Su ria plant only t re ats ore from
Cab a na sses min e. Th e Su r ia plan t h as a cu rre nt ca pacit y to pr od u ce a pproximat ely 800 t h ou sand
t on n es per a nnu m of pot ash , b u t it is expect ed to reach a capacit y of 1 million t on n es by t he end
of t h e year 2021.
Followin g th e closu re of Vilafr u n s min e we carrie d ou t an ext en sive d rillin g ca mpaig n , wh ich
d elin eat ed ad d ition al min er al resou rces wh ich wer e con ve rt ed to Reser ve s by d e t aile d mine
en g in ee ring and plann ing .
Th e Company h old s t h e re le va nt con cession s an d au thorization n ecessa ries to e xploit ou r re serves
in Spain .
U n it ed Kin gdo m
In t h e Compan y’s min e in t h e Un ited Kin g dom ( I CL B oulb y), we b e lieve t here are siz able r esou rces
for t h e pu rpose of con t inu ed prod u ct ion of Polysu lph at e®, t h e sale of wh ich in commer cia l
qu a nt it ies b eg an in 2012. In 2020, I CL pr od uced a bou t 709 t hou sand t on ne s of Polysu lphate® and
sold ab ou t 543 t hou san d t on n es, for t h e t ot al amou n t of ab ou t $95 million ( in clu d in g sa les of
Polysu lph at e® d ownst r eam prod u cts). T h e Compan y is t r ackin g t h is in it iative an d will ob t a in and
provid e rese rve in format ion in accord an ce wit h t he SEC Gu ide 7 ru les whe n t h is prod uct b e comes
sig n ifican t for the Compan y’s top lin e sa les. As at t h e d a t e of t h is A n n ual Report , ou r Polysu lphate®
prod u ct ion at t h e I CL B ou lb y min e h as g en erated ab ou t $95 million in sa les an d cu rre n t ly is n ot
con sid ered ma t erial to t he Compan y’s opera t ion s or fin an cial resu lts. A ccor d in gly, t h e Compa ny has
not prese nt ed reserve in formation for Polysu lph ate® at ICL B ou lby.
Th e Company b e lieves t hat it will ob t ain t h e re newa l of all g overn men t 's le ases a nd lice nse s t hat
are n ecessary for t h e r eser ve s in t he Unit ed Kin gdom.
128 ICL Group Limited
C h in a
Ha ikou min e h as 51 million t on n es ( aft er d ed uction of 5%: losses 3% an d d ilu t ion 2% ) of proven
rese rves of ph osph at e rock which locat e d in 4 separ at ed b locks ( b locks 1- 4). T h e an n u al average
prod u ct ion capacit y is a rou n d 2.2 million t on n es ( in 2020 2.4 million t on n es we re min e d ). The
proven rese rves are su fficien t for almost 23 year s at su ch rat e. Anot h er 4.2 million t on n es of
ph osph at e is placed in se ve ral piles ar ou n d t h e min e a n d t his re se rve will be fe d to t h e flot at ion
plan t in t he n ext few ye ars.
Th e followin g t ab le set s for t h ou r e st imat e d ph osph at e r eser ve s at t h e Ha ikou Min e as of
De cemb er 31, 2020:
Category
Low Organic
Pho sphate
Average Grade
(m illions of tonnes)
)
5
O
2
(% P
Block 1
Proven
2
2 1%
Block 2
Proven
5
2 1%
Block 3
Proven
28
2 2%
Block 4
Proven
16
2 2%
Total (Proven)
51
Th e a ve rag e qu alit y of t h e ph ospha t e is a rou n d 21.4% P
2
O
5
, an d is d ivid ed in t o 3 g rad es: Grade I
( hig h est g ra de) > 30% P
2
O
5
, Gr ade II- 24-30% P
2
O
5
an d Grade I II- 15- 24% P
2
O
5
. A roun d 20% of the
ph osph at e ha s > 27% P
2
O
5
an d is u su a lly b ene ficia t ed in t h e scru b b in g facilit y or in t he flot a t ion
plan t or in t h e g rin ding fa cility.
In d et er min in g t hese reserves, a cu t - off gr ade of 15% P
2
O
5
was a pplied in accor d an ce wit h the
flot a t ion ab ilit y to pr od u ce u sab le con cen t rat e rock ( 28.5% P
2
O
5
), which is th e aver ag e qu ality
requ ired to pr od u ce ph osphoric acid in t h e Yu nn an region . In practice, t h e Haikou min e is a b le to
proce ss a nd use a ll t he ph ospha t e t h at exist s in t h e d eposit . Th e ph ospha t e layers’ b or ders are
ph ysically well d e fined , also h as very low P
2
O
5
con tent ( usually aroun d 5%), an d the minin g pr ocess
d oe s n ot leave a ny u n min ed ph osph at e b ehind.
Th e t h re e- ye ar a ve rag e ma rket price s u se d to calcu lat e ou r re se rves at t he Ha ikou min e as of
De cemb er 31, 2020 are as follows: $394 per t on n e for g ree n ph osph oric acid ( MGA ), $749 per
t on n e for whit e ph osphoric acid ( W PA ), $981 per t on ne for MKP, $208 per t on n e for GTSP, $278
per t on ne for NPS, $239 pe r t on ne for MA P 55% and $538 per t on ne for MA P 73%.
In calcu lat in g t h e reserve s, an aver ag e of t h e previou s t h re e yea rs’ cu rre ncy exch ang e rat es was
u sed to e nsu r e econ omic fea sib ilit y. Th e t h re e- year averag e cu r rency con ve rsat ion ra t es u sed to
calcu lat e ou r re serve s as at Dece mber 31, 2020 are as follows: 6.81 RMB per $1.00.
Th e life of t h e mine at Haikou is appr oxima t ely 23 ye ars, b ase d on re se rves of 51 million ton nes
( g iven th e an n u al averag e prod u ct ion (min in g ) capa cit y of arou n d 2.2 million t on nes); The
ph osph at e from Ha ikou min e is su it a b le for phosph oric a cid pr odu ction .
B ased on t he C ompa ny's knowled ge, we h ave a ll g over nment 's appr ovals an d permit s t h at are
nece ssa ry for ou r re serves in Chin a.
129 ICL Group Limited
Log ist ics
I s rael
Th e pot ash pr od uced at IC L’s Dea d Se a fa cilit ies is t ransport ed by mean s of a con veyor belt th at was
b u ilt over 18 kilomet e rs to t he r ailh ead located at Tzefa in Mish or Rot em, and from t here the ou tput
is t ran spor t ed to t h e Ash d od port an d by tru ck, main ly to t h e Eila t port . Me t al ma gne siu m is
t ran spor t ed by mea ns of con t a iners th at are load ed on trucks from t he Compan y's sit e in Sod om to
t he railh ead at t h e T zefa sit e. T he rea ft er , t he Compa ny t r an sport s t h e con t a in er s to t he
Ha ifa / Ash d od port s by me ans of t ra in .
Most of I CL’s prod u ct s, wh et h er in solid or liqu id st at e , are t ran sport ed in b u lk from Rot em, Oron
an d Zin by roa d an d rail to eit h er t h e A sh d od port or by road to t h e Eilat por t . F rom Eilat , ICL’s
prod u ct s are t ra nsporte d by sh ip to ma rke ts in th e Fa r Ea st , and from A sh dod , t hey are tran sported
by sh ip to Eu r ope and Sou t h Amer ica.
W it h in t h e Rot em sit e, t h ere is a r ail load in g facilit y t h at t ypically loa d s up to 30 wag on s for ea ch
d elivery. A ppr oxima t ely 1.7 million t on n es of prod u ct s pe r ye ar are t ranspor ted by rail from t he
Rot em an d Zin to A sh d od . A b ou t 130 t hou san d t on nes of prod u ct s are t ransport ed by road from
Rot em an d Zin to t h e port of Eilat .
ICL T ovala is respon sib le for t ran spor t in g ph osph at e r ock from t h e Or on a nd Zin processin g facilit ies
in road -g oin g r ig id t rucks a nd t railers. Each t railer has a payload of 40 t on n es. A pproximat ely 350
t hou san d t onn es are t ran sported fr om Zin to Rot e m for fu rt h er pr oce ssin g , an d ab out 850 t hou sand
t on n es are t ranspor t ed from t he Or on min e by t ru ck for addit ion al proce ssin g.
From Ash d od port , approximat ely 650 t h ou sa nd t on n es of su lph u r are t ran sporte d to Rot em each
ye ar. Su lphur ar rive s at th e port of A sh dod fr om overseas, where it is load ed in to r oad -goin g trucks
an d t ra n sport ed to t h e Compan y’s su lphu r d ispa t ch 5 kilomet e rs away. At t h e d epot , it is load ed
in t o rail car s a n d t hen t ransport ed to Rot em. The port of A sh d od is locat e d on t h e Med it erranean
coast , appr oximat ely 40 kilomet e rs sou t h of T el Aviv an d appr oxima t ely 120 kilomet e rs n ort h west
of t h e Rot em sit e a nd t he T zefa sit e. The port of Eilat is locat ed in t h e fa r sou th of Isr ael on t he Red
Sea coa st . It is approxima t ely 180 kilomet e rs d u e sou t h of Rot e m an d a b ou t 200 kilomet ers from
Sod om an d is a ccessib le by road . Shipme nts exit ing th e Eilat port a re to t h e F ar East , wh er eas sa les
to Eu r ope a nd t h e U.S. exit fr om t he A sh d od port . Sa le s of fer t ilizer s an d pot a sh from Rot em and
t he De ad Sea are n ot sh ipped from th e Haifa por t sin ce it h as no in frast r u cture for loa d in g b u lk
prod u ct s an d the cost of over lan d t ran sport is mor e expen sive t ha n t ran sport to A shd od.
130 ICL Group Limited
S p a in
ICL I b er ia t r an sports t h e excavat ed ore from t h e min e s to t h e prod u ct ion plan t s an d t h e fin al
prod u ct s, pot ash an d salt , from t h e pla nt an d t he min es to it s cu st omers by t r u cks to t h e local
ma rket , a nd to t he por t to t h e ove rsea s ma rkets.
Th e e xcava t ed Ore is t aken b y 25- ton ne road ha u lag e t r ucks from Cab ana sse s min e to Su ria plant.
Th e Ore excavat e d in t h e Vilafru n s min e, b efore t he cessat ion of pr od u ct ion in mid 2020, was
t ran spor t ed a con veyor b elt fr om th e min e to b ot h Su r ia & Sallen t pla n t s. T h e fin al prod u ct wa s
t ran sferr ed d ir ect ly to t he cust ome r by t ru ck or t ra in t h rou gh the port .
A d e sig n at ed railway lin e is u se d for t h e t ran sport of pot ash fr om t h e min es to t he B arcelon a port.
Most of I CL I b er ia 's shipme nts are mad e via a t e rmin al it own s at t h e port of B ar ce lon a ( Trafico de
Me rca n cia s – T ra me r). I CL I b er ia owns a nd main t ain s appr oximat ely 1.5 kilome t ers of st an d ard
gau g e railwa y at Sur ia pla nt th at conn ect to t he r eg ional r ail n etwork. Un til n ow, up to t hr ee trains
leave on a d a ily b asis wit h a t ota l payloa d ca pacit y of 800 t on nes, spr ead ou t ove r abou t 21 freight
car s. Du rin g 2019, I CL I b er ia sig n ed, a n ew fre ig ht r ail t ranspor t ag reement wit h F GC ( Ferroca rrils
Gen eralit at de Cat a lu nya) which is e xpect ed to in crea se t h e capa cit y of t h e r ail t ra nspor t . In the
comin g ye ars, it is expect ed to in crease to 24 freig ht cars, 1,000 ton nes and up to seven daily trains.
Th e r ail rou t e for pot a sh tran sport from Su ria to th e t ermin al in t he por t of Barcelon a in clu des a r ail
rou t e of ab ou t 80 kilomet e rs. T he prod uction site (Su ria) h as on e ra il load ou t syst e m for t he rail to
port t ran sport syst e ms. T he t rain t ra ct ion e ngin e an d pa rt of t he b u lk freig h t ca r rollin g st ock is
operat ed by t he own er an d opera tor F GC (Fer rocar rils de la Ge n era litat de Catalun ya).
A t r u ck flee t wit h towin g equ ipment havin g 25- 27 ton ne s capacity ea ch is u se d to t ransport the salt
from t he min e. Up to 120 t r u cks of salt per d a y are d ispa tched from t h e min e to t h e port .
ICL I b er ia own s and operat es it s own port facilit ies, which con sist of b u lk pot ash a nd salt st or age
facilit ies, compr ised of fre ig h t - car an d rail-truck con veyor u n loadin g facilit ie s an d prod uct st orage
war eh ou se s.
As par t of t h e pla n for in cre asin g I CL I be ria's produ ction capacit y, an u pg ra de is b eing made to the
log ist ica l in fr ast r u cture at t h e Su ria Sit e a nd in t he Cabanasse s min e ( ent rance r amps in t o t he min e),
t he fact or ie s an d t h e Compan y's b e rt h in t h e B ar celon a por t , in su ch a man n er t h at will permit
prod u ct ion , t ra nsport an d e xport of ab out 2.3 million t on ne s of pot ash an d sa lt per ye ar.
Th e n ew facilit ies at th e port of Barcelon a are man age d by I CL I b er ia’s su b sid iary Tr amer and
comprise an area of 866,407 squ are feet divid e d in to t h ree zon es.
131 ICL Group Limited
U n it ed Kin gdo m
Th e Bou lb y min e in t he Un it ed Kin g d om is con n ect ed by a n et work of road s ru n n in g over
11 kilomet ers sou t h ward fr om t he min e en t r an ce, as well as a n et work of u n d erg rou nd roads
ext end in g 17.5 kilomet e rs from t h e min e entra nce in t h e d ire ction of t h e Nort h Sea . A pproxima tely
80 kilome t ers of un d ergroun d t u nn els are st ill ope n to su pport pr esen t prod u ct ion. T he min e h as
easy access to t h e n at ion al road a nd t rain t ra nsport ation rou t es. T he min e re ceives g ood qu a lit y
d rin kin g wat er and a sta ble su pply of elect ricity.
Pu rsu an t to ag r eemen ts wit h t he Nort h Yorksh ire Nat ion al Parks Au t h orit y, t h e t ot al t ran sport
movemen t s by me an s of t h e n et work of road s to a nd from sit e to sit e are limit ed to a ma ximu m of
150 t hou san d ton nes per year and a maximu m of 66 road wag ons pe r d ay ( no r oad moveme nts are
allowe d on Su n d a ys or pu b lic h olid ays). T his limit at ion is n ot expect ed to in t erfere wit h t h e fu ture
prod u ct ion of ICL B ou lb y in lig h t of it s commit me n t to main t ain t he rail lin k to Teesdock. ICL B ou lby's
road s an d t rain s are in fu ll complia nce wit h all t he requ irement s.
Th e ra il load -ou t pr od u ct s are t ran spor t ed on an I CL B ou lb y- own ed rail lin e which ext e nds
approxima t ely eig h t kilomet ers from t he min e ent rance to a ju nction with the n at ion al rail network,
an d fr om t h ere t he prod u cts con tin ue to T eesport , Mid d lesb rou gh , via t h e Ne twork Rail Compan y,
t he own er an d oper ator of t h e main rail lin e.
Eight t rain s pe r d ay transpor t Polysu lphate®, Pot ashplu S a nd rock- salt to t h e Teesd ock. Most of the
Polysu lph at e® ou t pu t is u sed as a compon ent of ag ricu lt ur al fert iliz ers, whe re volu mes are exported
by sea from t h e T eesd ock sea port to cu stomer s ove rseas an d in t he UK.
Rock- salt is t a ken by t rain to Teesd ock an d t ranspor t ed by sh ip or t ru cks to local UK a u t horities for
de-icin g road s.
ICL B ou lb y lea se s an d ope rat e s t hree prin cipa l st ora ge and load in g facilit ies: t h e T eesd ock fa cility,
wh ich is locat ed on t he Te es River , and t wo ad d it iona l st or age facilit ies t hat are con n ect ed to the
ma in ra il lin e – Cob ra an d A yrton W orks in Mid d lesbroug h.
C h in a
YPH JV h old s t h e Haikou min e , seve ral fa ctories for product ion of va riou s t ypes of fert ilizers located
close to t h e Haikou min e an d t wo plan t s for prod u ct ion of d ownst rea m prod u ct s – on e locat ed
close to t h e Haikou min e an d t h e fer t ilizers fact ory an d t h e ot h er in proximit y to t h e Ku n ming
airport .
Most of th e t r an sport ed raw mat e rials fr om t h e Haikou min e to t h e acid fact or ies is execu t ed via
pipe lin e ( slu rr y), wh er eas a small pa rt of t he raw rock is t ran sported by t rucks.
Most of t h e ou t pu t s are sold to th e loca l mar ket in Nort h Ch in a an d are t ran spor t ed from t he
fer t iliz ers' factor y d ir ectly to t he cu stome rs, by train or ma rine sh ipmen t, main ly from t wo e xit ports
( B eiha i a nd Fan gch en gang), while a small pa rt of t he ou tput sold is t r an sported to cu stomers in the
Yu n n an re g ion . T he me n t ion ed port s are also u se d for import in g su lph u r, in t h e a mou n t of 600
t hou san d tonne s pe r year.
Item 4A – UNRESOLVED STAFF COMMENTS
Not A pplicab le.
132 ICL Group Limited
Item 5 – OPERATING AND FINANCIAL REVIEW AND
PROSPECTS
A. OPERATING RESULTS
Prin cipal Fa ctors Affecting Our Results of Operations and Financial Condition
We are a mu lt in at ion al compan y, t h e fin an cial resu lt s of wh ich are affect e d by cha ng e s in the
d eman d for b a sic a gricu lt u ral prod u cts, glob al econ omic t ren ds, chan g es in t er ms of t rad e and
fin a ncin g , an d flu ct uation s in cu rrency excha ng e r at es. In t h e e xecu tion of ou r b u sin ess st r at egy,
we t ake st e ps to a dapt ou r marketing and product ion policie s to evolvin g g lobal mar ket cond itions,
impr ove cash flows, diversify sou rces of fin an ce, st r en g then ou r finan cial posit ion and to opt imize
efficien cy an d min imize cost s.
Th e followin g t ab le se t s for t h t he t otal Gover nmen t T akes ( GT) t he Compa ny h ad paid to t he State
of Isr ael in 2020, 2019 an d 2018:
Year Ended December 31,
$ m illions
N IS millions
2020
346
1,192
2019
425
1,514
2018
416
1,495
Th e Govern ment T akes in clu de, amon g ot he rs, pa yment s relating to t axes, r oyalt ies, lease s, d ividend
wit h hold in g t ax, pa yr oll t axes a nd socia l secu rit y.
In 2020 an d 2019, appr oxima t ely 5% of ou r r even u e d erived from Isr aeli sales a nd approxima t ely
48% and 47%, re spectively, of ou r sales revenue was de rive d from prod uct ion a ctivit ies taking place
ou t sid e Israel. Th ere is no sin gle cu st ome r on wh ich we are ma t erially d ependent , or t hat a ccounted
for more t ha n 10% of t he Compan y’s t ot al sales reve nu e in 2020.
T r e nds affectin g ou r oper ating expense s
En ergy expen ses accou nt ed for a pproximat ely 7% an d 8% of ou r t ot al operatin g cost s in 2020 and
2019, respect ively, a year- ove r- year decrease of appr oxima t ely 7%. Ele ctr icity expen ses in 2020 and
2019 amou n t e d to $113 million a nd $126 million , respect ively, comprisin g 36% an d 37%,
respect ively, of t h e t ot al e ne rg y expen ses. Na t u ral g as expen ses in 2020 a n d 2019 a mou n t ed to
$139 million and $147 million , respect ively, comprising 44% and 43%, respect ive ly, of t h e t ot al
en ergy expen ses. Oil a nd oil pr od ucts expenses in 2020 and 2019 amou nt ed to $15 million an d $19
million , respect ive ly, compr isin g 5% a nd 6%, re spect ively, of t h e t otal en ergy e xpen ses.
ICL is on e of t he lar g est n at u ral g as consu mer s in Isr ael an d h as b een u n d erta kin g a st r at egic
t ran sit ion to in cre asin g ly u se nat u ral g as to powe r it s la rg est prod u ct ion plan t s in I srae l. This
t ran sit ion of I CL’s fa cilit ies h as sig n ifica n t ly r ed u ced emission s of air pollu t an t s in t he a rea
su rrou n d ing I CL facilit ies, improved t h e qu ality of t h e ou t pu t, re du ced main te na nce expen ses and
ha s led to a sig n ifican t mon etary sa vin gs du e to th e t ransit ion from t he use of mor e expensive fuels.
For fu rt he r in format ion , in clu d in g d et ails of t he specific n at u ra l g as pu rch asin g ag re ements
u n d ertake n by t h e Compan y, se e Not e 18 to ou r A u d it ed Fin an cial St at eme nts an d “I t em 4 -
In format ion on t h e Compa ny— B. B u sin ess O verview—Reg u latory a n d En vir on me n tal, Healt h and
Safet y Mat t ers — Energy”.
133 ICL Group Limited
Mar in e t r an sport a tion expen ses in 2020 an d 2019 were appr oximat ely 5% of ou r t ot al oper at ing
cost s, a nd a mou n t ed to appr oximat ely $213 million a nd $233 million , re spect ively. T he decrease is
primarily at t r ib u ted in a d ecr ease in marin e tran sportation prices.
Ou r fin an cial st a t emen t s are prese nted in U.S. dollar s. Most of ou r sa les are in U.S. dollar s, e ve n
t hou g h a port ion of ou r sa les is in ot her currencies, main ly eur os. Part of ou r ope ratin g expen ses in
Isr ael are d en omin at ed in NIS an d , con sequ en t ly, d e valu ation of t h e aver ag e NI S e xch an g e rate
ag ain st t he U.S. d ollar has a posit ive impact on ou r profit ab ility, wh ile appre ciation has the opposite
effect . Devalu at ion of t h e a verage excha ng e r ate of t h e e uro aga inst t he U.S. d ollar h as a n ega tive
impa ct on ou r pr ofit ab ilit y, while appr eciat ion has t he opposit e impact . On t he ot h er h an d,
d evalu at ion of t he eu ro a ga in st t h e U.S. d olla r improves t h e compe t it ive ab ilit y of ou r su b sid iar ies
wh ose fu n ct ional cu r rency is t h e eu ro, compar ed wit h compet it ors wh ose fun ction al cu rren cy is the
U.S. dollar . In 2020, t he Compan y's ope rat ion al resu lt s were n e gat ively impact ed ma in ly by t he
u pward reva lu at ion of t h e shekel aga in st t h e d ollar d u rin g t h e yea r, par t ly offse t by t h e u pwa rd
revalu at ion of t h e euro ag ainst t h e d olla r an d t he devalu at ion of t h e B ra zilian r eal again st t h e d ollar.
For fu rt h er infor mat ion , see “Item 5 – Oper atin g and Financia l Review an d Prospect s— A. O perating
Resu lt s— Resu lt s of O per ation s”.
We he d g e part of ou r exposu re to t he risks d escrib ed ab ove, which in clu de exposu r e to sa les and
operat in g expen ses t ha t are not d en omin at ed in ou r fu n ction al cu rre ncy, main ly opera t in g expenses
d en omin at ed in NIS a n d ot h er cu r rencies t h at are n ot t h e fu nction al cu rren cy of ou r su b sid iaries,
an d exposu re to ma rin e t ran spor t ation prices a n d en ergy price s. O u r man ag ement d e termin e the
ext ent of ou r h ed gin g a ct ivit ies, b a se d on t heir est imation of ou r sales a nd opera tin g expen ses, as
well as t h eir expect at ions of t h e d eve lopmen ts in t he ma rkets in which we ope rat e . See “I te m 11 -
Qu an t it at ive an d Q u alit at ive Disclosu res ab out Market Risk— Risk Ma n ag emen t”.
T r e nds A ffectin g ou r se gments
In ad d ition to th e trends d escribe d b elow, d urin g 2020, t he COVID-19 pan demic h as be en affecting
t he Compan y's b u sin esses.
In Ma rch 2020, t he W orld Hea lt h Or gan iza tion d eclared t h e coron aviru s ( COVID- 19) a pan d emic
an d re commen d ed cont ain ment a nd mitig ation measu res worldwid e. Sin ce then , the pa ndemic has
con t in u ed to spr ead across t h e g lob e at var yin g r at es a nd h as in t rod uce d sig n ifica nt b u sine ss and
econ omic u n ce rt ain ty an d vola t ilit y to g lob al market s. Accordin gly, t here h as b e en a sig n ificant
d eclin e in g lob al econ omic act ivit y, pa rt ially d u e to pre ve nt at ive on g oin g mea sures t aken by va rious
governmen t a l or ganization s arou nd th e wor ld .
Give n t he se con d ition s, we h ave con tin ued to t ake measures to e nsu re th e healt h and sa fety of our
employe es in all of ou r facilit ies an d offices, ou r su pplier s, ou r b u sin ess part ne rs an d t he
commu n it ies in wh ich we oper at e, to main t ain t he leve l of operat ions t hr ou g h ou t ou r var ious
facilit ies arou n d t h e wor ld , an d to min imiz e t h e pot e nt ial impa ct on ou r b u sin ess. Su ch measu res
in clu d e , a mon g ot h ers, mod ificat ion of work met hod s to a llow requ ired socia l d ist an cin g, su ch as
red u ct ion of t he numb er of e mployee s in ea ch sh ift , wor kin g in smalle r g rou ps ( "capsu le s"),
provid in g h yg ien e mat erials and prot ect ive equ ipmen t , a nd mon it or in g CO VI D-19 in fect ion rates
amon g ou r e mployee s. In a d d it ion , we h ave mod ified some of ou r work pra ct ices to en ab le our
employe es to accomplish cr it ica l t asks in ne w ways, leve rag in g in n ovat ion an d priorit iz ing
resou rces. We h ave implemen ted commu nica tion techn olog ies to ma in ta in wor k rout ines, e na bling
ou r e mployee s to en gag e wit h ea ch ot h er, as well as wit h ou r b u sin ess par t n ers, t h rou gh d ig ital
plat forms a nd ot h er remot e a ccess t ools.
134 ICL Group Limited
Du r in g 2020, most of t h e Compan y’s man u fact u rin g facilit ies in I sra el a nd arou n d t h e world
con t in u ed to oper ate un distu rbe d a n d h ave been dee me d to be essen tial bu sine sse s by most of the
relevant loca l g ove rn men t a u t hor ities. In I sra el, facilit ies con t in u ed to oper at e at fu ll prod u ct ion
levels, wit h I CL Dead Se a achievin g an ann ua l record level of pot ash prod uction de spit e operat ional
ch alle nge s pre sen t ed by CO VI D- 19. Th is followed th e upgr ad e of th ese facilit ies in t h e fou rth
qu a rt er of 2019 and was d e spit e t h e challenges rela ted to t h e COVID- 19 pan de mic, which we are
con t in u ou sly a n d proact ively workin g to ove rcome. In ord e r to comply wit h t he loca l au t horit ies'
gu id elines and to ensu r e t h e well- b eing of ou r employees, at t h e en d of Mar ch 2020, t he Compan y's
pot ash min in g opera t ion s in Spain we re tempora rily h alt ed for a pproximately t hr ee weeks, and the
Compan y's Polysu lph at e ® min in g a ct ivit ies in t h e UK were also cu rt a iled. In t h e UK, the Compa ny
ha s grad u ally r amped product ion b a ck up a nd n orma l r ate s have b ee n ma in ta ined sin ce th e end of
t he secon d qu ar ter. In Spain, prod uction in th e Su ria sit e (Cab an asses min e) g ra dua lly ra mped back
up to n or ma l capacit y, wh ile t he Sallen t pot a sh sit e ( Vila fru n s min e) was closed as of Ju n e 2020,
followin g th e acceler at ion of t h e plan to con solid at e IC L I b eria sit es. In ad d it ion , some of ou r
ext ern al con tractor s d ecla red "For ce Ma jeure", wh ich led to a delay in few of ou r project s, in clu ding
t he con st r u ct ion of t he new ra mp in Spain an d t he P- 9 pu mpin g st at ion in t he Dead Sea . The
fin a ncia l impa ct d u e to t he delays of t hese pr oject s is n ot expected to be materia l to t he Company's
b u sin ess. F or fu r th er in formation , see “Item 4 - I nformation on th e Compan y— B. Bu siness Overview
— Seg me n t Information — Pot ash Se gme nt ”.
Th e emerg en ce of th e COVI D-19 pan d e mic h ad a n ega t ive impa ct on t he C ompa ny’s b u sin ess
performan ce in 2020, as re ve n u es d ecreased, primarily d u e to lowe r de mand for some of ou r
In d u st ria l Prod ucts seg men t pr od u ct s, su ch as clea r b rin e flu ids, as a r esu lt of a sig n ifican t d e cline
in oil price s an d d eman d, an d certain flame r et ar dants, d u e to lowe r activit y in t he aut omot ive and
elect ron ics in d u stries. In a ddit ion, ou r ope ratin g results we re ne gatively impact ed, pr imarily d ue to
lowe r prod u ct ion in Eu r ope an d ot he r oper at ion al cost s re lat ed to t h e CO VI D-19 pa n d emic.
Never t he le ss, t h is impact wa s par tly mit ig ate d by efficiency in it iat ives a nd ot he r mea su res in itiated
by t h e Compan y.
Towa rd t h e en d of 2020, the In d ust rial Prod ucts se gment h ad sh own a r ecovery in most en d mar kets
( clea r b rin e fluid s u nlikely to fu lly recover in 2021).
As t h e u lt ima t e impact of t h e pa n demic on t he g lob al econ omy st ill r emain s u nclear, t he Company
an t icipat es it will h ave a con t in uing impact on resu lts for t h e n ext fe w qu arters, in clu din g b ut not
limit e d t o, affect in g reve n ues a nd opera t ing in come - d u e to t h e d e clin e in g lob al d e ma nd in the
en d market s for some pr od u ct s - as well as h ealt h an d sa fet y rest riction s an d me asu re s affecting
operat ion s.
As a r esu lt of un ce rt ain e n viron me nt b r ou gh t ab ou t by t h e COVI D-19 pan d emic, we ha ve t aken
act ion s to fu rt her enhan ce ou r fin ancial profile an d fle xib ilit y, in clud ing issu ance of series G b onds
in I sr ael, sig n in g a COVI D Corpor ate Fin an cing Facilit y ag re emen t (CCFF) with the B an k of Eng land,
sig n in g a new se cu rit ization a g ree ment wit h t h re e in t ernation al b a nks a nd e xt en din g se rie s F
b on d s. As at De cemb er, 31 2020, t he Company h ad appr oximat ely $1.4 b illion in cash , deposits and
u n u t iliz ed cre dit fa cilit ies. Given ou r fin an cial posit ion , we expect to be able to ma in t ain a d equate
liqu id it y, as we man ag e t hroug h t he cur rent challen gin g g lobal economic en viron ment. We be lieve
ou r a va ilab le liqu id it y in clu ding ca sh , deposit s a nd u nut ilized credit facilit ies, an d capit a l r esou rces
are a d equ at e to fu n d ou r ope rat ion s an d t h at t he pa nd emic is n ot e xpect ed to h ave an a d ve rse
effect on ou r a b ilit y to comply wit h ou r fin an cial coven a nt s. In a d d it ion , we con t in u e to close ly
mon it or our ca pit al expen d it ur es a nd t he pot en t ial impact s of COVI D-19 an d will t a ke fu r t her
act ion s, as appropriat e , in or d er to e nhan ce ou r fin an cial flexibilit y. F or fu r ther in forma tion , please
se e “I t em 5 – Oper at in g an d F in an cial Review an d Prospects— B. Liqu id ity an d Capit al Resou rces”.
135 ICL Group Limited
At t h is st age , t h e Compa ny con t in u es to r espon d to t h e evolvin g b u sin ess en vironment , to ad just
to t h e cha ng in g econ omy a nd to t ake t he appr opriat e me asu re s to fu r t he r enh an ce ope rat ional
efficien cy, in clu d in g implement in g cross- se gmen t cost sa vin g in it iat ives an d maximiz in g it s
in t eg r ate d b usin ess mod el, versa tile prod uction capabilit ies a nd world wide log ist ics a nd ma rketing
arr ays. T he Compan y is u na b le to accu rat ely asse ss t h e fu ll fu t u re impa ct of CO VI D- 19 on it s
operat ion s, d u e t o, a mon g ot he r fa ct ors, t he heig ht en ed volat ilit y in g lob a l markets, t he u ncert ainty
reg ard in g t h e d u rat ion of t h e pan d emic, t h e ext en t of it s impa ct on t h e market s in which the
Compan y oper at es, a nd ad dition al cou nterme asures t ha t g ove rn me nts a nd ce ntral b anks ma y t ake.
T r e nds A ffectin g Ind ustr ial Pr oduct s se gme nt
Th e operat ion s of ICL's In d u st rial Prod u cts are lar g ely a ffect ed by t he level of act ivit y in t he
elect ron ics, con st ruction , au tomot ive , oil d r illin g , fur nit ure, ph arma ceutica l, a gro, t e xtile an d water
t rea t men t market s. In 2020, ab ou t 45% of t h e wor ld wid e u se of b romin e was for flame ret ard ants,
ab ou t 20% was for clea r b rin e flu id s an d t he rest was for in t er me d ia tes, in d u st rial u ses, wa ter
t rea t men t a nd oth er u ses.
In 2020, I CL sold approximat ely 211 t h ou sa nd t onn es of B romin e compou n d s ( 14% lowe r compa red
to 2019), 80 t hou san d t on n es of Ph osph or u s compou n d s ( 7% h ig h er compare d to 2019), 42
t hou san d t on n es of Ma gn e sia and Calciu m prod u ct s ( 6% h ig h er compare d to 2019) an d 321
t hou san d tonne s of Dead Sea Sa lt s (11% lower compared to 2019).
Th e se gmen t 's b usin e ss per for ma nce wa s n egat ively impa ct e d by t h e CO VID- 19 pan demic, ma in ly
in t h e secon d an d t hird qu a rt ers of 2020, primarily d u e to lower d emand for clear b rin e flu id s, as a
resu lt of a sig nifica n t d eclin e in oil prices an d d e ma nd, an d cert ain flame retardants, d u e to lower
in d u st r ial activit ies. T owards t he e nd of t h e t hir d qu arter, a re cove ry in se ve ral in du str ies, in clu ding
elect ron ics an d b uild ing and con st ruction , result ed in h igher d ema n d and sa le s volu me s of cert ain
flame ret ar d ants. In a dd ition , t owa rd s the en d of t h e yea r, t h e au tomot ive in d ustry b eg an to show
sig n s of recovery, while t h e oil an d g as in du str y is n ot likely to r ecover in 2021.
B elow are t h e t r en ds of t h e b usin ess lin e ma in a ct ivitie s -
F l ame r e t ard an ts: T he t rend of pressu re e xert e d by “g re en ” or ga n iza t ion s in t h e area of
en viron me nt al prot ection to r ed u ce t h e u se of b romin e -b ased flame r et ar d an ts is con t in u in g. On
t he ot h er h an d , d evelopmen t an d commer cializat ion of n ew su st ain ab le polymer ic or react ive
b romin e -b a se d flame retar dant s alon g wit h n ew fire sa fet y r eg ulation s in d evelopin g cou nt ries are
se rvin g to in crease th e u se of t h ese prod ucts.
2020 was ch ar act e rized by mixed t re nd s. In t he first qu art er t he d e ma nd for b r omin e -based flame
ret a rd an ts ( B FRs) we re at t he sa me le vel of t h e first qu art er of 2019. In t h e se cond an d t hir d qu arters
t he d eman d for prin t ed circu it b oar ds, elect ronic, au t omot ive an d t extile d ecr ease d d u e to the
COVI D- 19 pand e mic. In th e fou rt h qu ar t er t he re was some r ecover y in t he d eman d of t he se
applicat ion s alon g wit h h ig h d emand in t he b uild ing & con st ru ction ind ustr y wh ich led to in crease
in I CL's sa les of B FRs compare d to t h e fou rth qu art er of 2019.
De mand for I CL's ph osphoru s-base d flame r et arda nts in t he first qu a rter was high d ue to closu re of
ch emical pla nt s in Ch in a as a resu lt of t h e COVI D-19 sit u at ion. In t h e secon d qu art er t he C hin ese
prod u ce rs st a rt ed to resu me prod u ct ion alon g wit h lower d eman d for b u ild in g & con st ru ction
in d u st r y r esu lt ed in lower sales. Sin ce t he thir d qu art er t he d eman d recovere d an d su pply
con st r ain t s from Chin ese prod u cers led to in cre ase in I CL's sales aft er t h e Ch in ese reg u lat ory
au t h or it ies r equ ir ing t h e sh u t down a nd relocat ion of few prod u ct ion fa cilit ies locat ed in d en sity
popu lat ion ar eas.
136 ICL Group Limited
E l e mental b ro min e: A ft er reaching re cor d hig h price leve ls in th e first h alf of 2019, ele me ntal
b romin e price s in Ch in a mod erat ely soft e ned u ntil mid - 2020 b ut remained at a rela tive ly h igh level.
Sin ce t h en , th e bromin e price in Ch ina incr ease d a nd reached a new re cor d du e to h ig her resou rces
t axes imposed by t h e Ch in ese govern men t , re la t ively lower b romin e pr od u ct ion by sever al
prod u ce rs a nd favorab le RMB / USD e xch an g e rat e. T he pr od u ct ion level of loca l Ch in ese
ma nu fact u rers con t inu ed to d eclin e, su pport e d main ly by re sour ce depletion . Pr ices in Eu rope and
USA remain ed st able.
C l ea r brine fluid s: The d emand for clea r b r in e flu ids for t h e oil an d g as d r illin g market , in t h e first
qu a rt er of 2020, was h ig h d u e to sh or t ag e of mat erial in t he ma rket. Sin ce t h en , as t h e CO VI D-19
pand e mic evolved , t h ere wa s a sh ar p d e clin e in t he d eman d for oil & g as for tran sport at ion and
in d u st r y, which led to sh ar p d eclin e in d rillin g a ct ivit ies a nd r esu lt ed in a sig nifica nt d ecrease in
d eman d a nd sales of clea r b rin e fluid s.
B i o cides: Du ring 2020, we lost Fuzzicid e busin ess to compe t it ion in the pa per application main ly in
Nor t h A me rica a nd faced re d u ction in th e de mand in Eu rope t hat had affect ed t h e b u sin ess
neg at ive ly. In t he in dust rial b romin ate d b iocid es we se e min or redu ction of t he d eman d compared
to 2019.
I n or ganic b ro mides: T he d emand for mer cu ry e mission con t rol in t he US d e cre ased d u e to low
nat u ra l g as pr ices, n ew ren ewab le sou rces, ret ire me nts of old coal powe r pla nt s a nd lower
elect ricit y con su mpt ion d ue to t he COVID-19 pandemic. T he d emand in the PTA ma rke t mod e rately
d ecrea se d d u ring t h e fir st ha lf of 2020 d u e to t h e CO VI D-19 pan d emic implicat ion s on pr ivet
con su mpt ion . Du r in g t h e secon d h alf of 2020 t h e de ma nd ha s r ecovered . Th e d eman d for
in t er me d ia tes for ot her in dust rie s re main ed st ab le.
P h os phor us- ba se d in du strial c omp oun ds: lower d eman d for a viat ion sect or and for flu id s to power
plan t s as t he y post pon e t h eir main te na nce sh utdown to 2021 d u e to t he COVID-19 pan de mic.
M a g n esia and C alcium Produ cts: Th e d e man d for mag n esia a nd Calciu m pr od u ct s showe d an
in cr ease d u e to in cre ased g lob al d e mand for min era l su pplemen t s. On t h e ot h er h an d, we sa w a
slig ht red u ction in demand for in dust rial applica t ion s d ue to COVI D-19 pan demic.
Solid MgCl
2
: 2020 wa s ch ara ct e riz ed by a mild win t e r in t he eastern pa rts of USA , wh ich n e ga tively
impa ct e d t h e sales of Mg Cl
2
to d e icing compa red to last year .
Pu re a nd packed KCl: T he re was a d ecre ase in t he sales for t echnica l g rad e KCl for th e oil drilling
ma rket wh ich was part ially offset by hig her sales of a n ew prod u ct la u nch ed t h is yea r for animal
fee d wit h GMP+ cert ificat ion . The d e ma nd for pu r e KCl remain ed st a b le, d espit e r elatively h igh
compet it ion .
137 ICL Group Limited
T r e nds A ffectin g Pot ash Segmen t
Du r in g 2020, soyb ea n, corn an d wh ea t price s in cr eased b y 31.2% , 12.3% an d 18.5% r espe ct ively,
wh ile rice price d e cre ased b y 3.5% . T hese pr ice increases occu rred dur in g t he COVI D -19 pan demic,
lead in g cou n t ries t o have in cr eased con cerns re ga rd ing food se cu r it y for t h eir people, wh ile in
Chin a t h is was b oost ed b y a recover y from t h e A frica n swin e fe ver. Good agricultu ral fu ndamentals
su ppor t ed t h is, ma in ly in B razil, expresse d a s h igh b art er r at ios, le ad in g t o a re cord h ig h soyb ean
export , b u t also in I n d ia a n d in t h e US. I t sh ou ld b e n oted t h at d urin g t h e mid d le of t h is year r ice
price s ju mpe d t o t h eir h ig h est leve ls in t he last t welve yea rs followin g prod u ction redu ction in some
sou t h A sian cou n tr ies, le ad ing th em t o b an it s expor t .
W ASDE r eport pu b lish ed b y t he USDA in F ebr uary 2021 fu rt he r su pport t he ab ove, wh ile sh owing
a d ecrease in t he expe ct ed ratio of t h e g lob al in ve ntor ie s of g ra in s t o a nnu al con su mpt ion , t o 29.3%
for t h e 2020/ 21 ag r icu lt ure yea r, compare d t o 30.4% for t h e 2019/ 20 ag ricu lt ure yea r, and 30.6%
for t h e 2018/ 19 ag ricu ltu re yea r.
Glob a l pot ash ma rket - aver ag e prices and import s:
Average prices
2020
2019
VS 2019
Granular potash - Brazil
CFR spot
($ per tonne)
2 38
3 30
(28%)
Granular potash - Northwest Europe
CIF spot/contract
(€ per tonne)
2 44
2 85
(14%)
Standard potash -Southeast Asia
CFR spot
($ per tonne)
2 45
2 94
(17%)
Pot ash imports
To Brazil
million tonnes
1 1 .0
1 0 .2
7.8%
To China
million tonnes
8 . 7
9 . 1
(4%)
To India
million tonnes
4 . 1
4 . 1
-
Sou r ces: CRU ( Fe rtilizer W eek Hist orical Pr ice: J anuary 2021), FA I, B razil a nd Chin ese cu stoms d ata.
On J a nuary 29, 2021 B PC an n ou nced an agreement for t h e sale of 800 t hou sand ton nes of pot ash
in In d ia at a price of $ 247 per t on n e, $ 17 ab ove t h e pr ice con clu de d in t he previou s con t ra ct .
On F eb ruary 10, 2021 B PC an n ou n ced it r eached a n ag r eement wit h it s cu st omers in Ch ina, for a
new pot a sh su pply con t ra ct a t a pr ice of $ 247 per t on ne (C FR) for 2021, similar t o t he pr ice a greed
t o in I n d ia . This price r eflects a $27/ t in crea se on th e pr eviou s con t ract pr ice of $220 cfr .
Followin g t he a nn ou n cement , sever al lar ge prod u ce rs expr essed t h eir disappoin t me nt , n ot ing
pricin g d oes n ot r eflect cu r rent ma rke t con dit ion s in most g lob al pot ash ma rkets.
W hile pot a sh pr ices in most spot mar ket s re ma in ed st a ble t o slig h t ly u p t oward s t h e en d of 2020
on t he r eg u la r en d -of-th e- season lowe r d eman d , t h e US mar ket h as b een on a b u llish r u n; aft er
price s b ot t ome d ou t in A u g ust 2020, t h ey ra llie d in t he se con d h alf of t h e ye ar a nd ope n ed 2021
at ab ou t $270- 275 per t on n e FOB NO LA . Pr ices con t inu ed to climb t h roug h J anu ary and February
2021 on limit ed su pply – d u e t o se cond h alf 2019 su pply cu r t ailmen t mad e by NA prod u ce rs - and
st ron g d e ma nd . Market sent iment remain s b u llis h a he ad of spr in g on e xpe ct at ion s t h at improved
far mer e con omics a nd a t tra ctive crop pr ices will fu rt her b oost demand . Potash pr ices across the US
con t in u ed t he ir u pwa rd t r en d, r each ing a le ve l of $335 - 345 pe r t on n e d u rin g mid -Febru ar y, after
Nor t h A merican prod ucers ra ised offers in e arly February.
138 ICL Group Limited
Ma gne siu m g lob al en d mar ket d emand con tin ued t o sh ow sig n s of recover y, followin g t h e n eg ative
impa ct of CO VI D- 19 in pre viou s qu art ers, main ly from t he a u t omot ive sect or, a n d improvin g
d eman d fr om t he a lumin um pa cka ging in du stry.
T r e nds A ffectin g Phosphat e S olut ions Segment
Phospha t e specialt ies sales amou n t ed t o $1,135 million in 2020 a pproximat ely 2% hig her t h an 2019
ma in ly d u e t o st ron g sa les of d a iry prot ein b u sin ess, h ig he r sales of food gra d e ph osph at e s and
pu rified ph osph oric acid .
Sales of ph osph at e commod it ies amou n t e d to $813 million in 2020, a pproximat ely 7% lower t h an
2019, most ly d u e to sig n ifican t ly lower ma rket price s, which was part ly offse t by hig her sales
volu me s. A sig n ifica n t year -over -ye ar d ecrease in avera g e sellin g price s of ph osph at e fer t iliz ers,
part ly offse t by lower raw mat erials cost s and hig her sa le s volu me s, led to an oper ating loss of $51
million in 2020, compare d to ope rat in g loss of $2 million in 2019
Glob a l ph ospha t e specia lt ies a n d commod it ies ma rket s we re not sig nifican tly d isrupt ed du rin g the
fu ll yea r of 2020, d espit e t he logist ica l an d ope rat ional r est riction s imposed in certain cou nt ries due
to t h e on goin g spre ad of t h e CO VI D-19 pan d emic. I CL’s rob u st a nd d iversified cu stomer port folio
an d t h e wid e geog raph ic rea ch of it s ph osph at e specia lt ies b u sin esses - cou pled wit h st r ong
d eman d for food pr od u ct s - pr even t ed a mat e ria l impa ct fr om t h e pan d e mic on t h e se g ment's
b u sin ess per forman ce.
Revenu e s of ph osphat e sa lt s in cr eased in 2020 compare d to last yea r, most ly d riven by food g rade
ph osph at es. Lowe r sales volu mes of in d u st rial salt s in Eu rope an d Nort h A me rica, were offset by
hig h er sales volu mes of food g rad e phosph at es in Eu rope, Sou t h A merica and e me rg ing markets,
part ly d u e to a COVI D-19- re lated sh ift of sales from t h e food ser vice to the ret ail se ct or. T he d ecrease
in sales of in d u st rial salt s, was t h e resu lt of slowd own s in var iou s key in d u st r ies, main ly met a l
t rea t men t a n d in st it ution al cle an in g, an d was only pa rt ly offset by in crea sed sa les volu mes to t he
d en t al h yg iene in dustry in C hina.
Pu rified ph osphoric acid ( W PA) re ve nu e s in cre ased yea r- over- year d ue to h igher sales volu mes in
Chin a to t he met al t r eatme nt in du stry, as well as n ew d eman d fr om t h e EV b at tery market . Re venues
in Eu r ope also in crea se d , ma in ly d riven by h ig he r d e mand an d st rong sales volu mes to se ve ral key
cu st ome rs. Market price s for food g rade W PA in Eu rope slig htly d ecreased year-ove r-year, due to a
compet it ive b u sin ess en viron me nt . T h e n ew W PA pla n t in C hin a con t in u es to ramp- up an d is
sch ed u led to prod u ce comme rcial pu rified acid towar d t he e nd of t he fir st h alf of 2021.
De spit e th e n eg at ive impa ct of t h e CO VI D-19 pa n d emic on g lob al da iry prot ein ma rket s, the
Compan y’s dairy pr ot e in reven u e s in 2020 sig n ifica n t ly in cr eased ye ar -over-year, main ly d u e to
st ron g sa les from th e n ew g oat milk powd e rs b u sin ess a nd impr oved or gan ic cow milk sales. ICL
con t in u es to focu s on e xpand in g it s g lob a l lea d ersh ip posit ion in t he org anic cow an d goat
in g red ien ts market s for h igh -e nd application s.
ICL is expan d ing it s ma nufact u ring ca pacit y an d R& D su pport capab ilit ies for it s ROVI TA RIS®
alt erna tive prot ein tech nolog y for t h e me at alt ern atives market . For t h is pu r pose, ICL in vest s
approxima t ely $18 million in a n ew pr od u ct ion pla nt.
As par t of t h e Company's stra teg y to d ivest low syn erg y busin esses and non -core busin ess activit ies,
d u rin g t he se con d qu art er of 2020, I CL d ivest ed Hag esü d In t e rspice Gewü rzwerke Gmb H, a
prod u ce r of pr emiu m spice b len d s, in clu ding rela ted real- esta te assets. F or fu rthe r in format ion, see
Not e 8 to ou r A u d it ed Fin an cial St ate men ts.
139 ICL Group Limited
Phospha t e fer t iliz ers pr ices con t in u ed t heir d own ward t rajectory in t he b e g in ning of 2020, b ut
grad u a lly b egan t o re cove r t owar ds t he e nd of t he fir st half of t h e ye ar, su ppor t ed by st rong d e mand
an d good weat he r con d it ions in In d ia, as well as st ron g d eman d in Br azil. Prices of ph osp h ate
fer t iliz ers b egan t o sh arply in cre ase in t h e U.S., followin g Mosaic’s pe t it ion t o t h e US In t e rn at ional
Tr ad e Commission ( ITC) on J une 26, 2020 t o impose cou n t ervailin g d ut ies on import s of Ph osph ate
fer t iliz ers fr om Morocco an d Ru ssia. On Feb rua ry 9, 2021 t h e U.S. Depart me nt of Comme rce ( DoC)
an n ou n ce d it s final determin ation , settin g cou nter vailin g duties rates of 19.97% , 9.19% a nd 47.05%
on ph osph at e fe rt ilizers impor t s from OCP, Ph osA gro and Eu roCh em, re spectively. Fin al d ecision by
t he IT C is e xpe ct ed b y Mar ch 25, 2021. I f t h e I TC a grees wit h t he DoC fin d in gs, cou n te rvailin g d uties
will b e imposed e ffect ive A pril 1, 2021.
Prices of ph osph at e fert ilizer s con t in u ed t o in crea se t owa rd s t h e en d of th e ye ar, d riven b y a
con t in u ou s in crease in g ra ins’ price s, d ue t o st ron g d eman d an d lower grains’ in ven tories g lob a lly.
Amon g t h e fact or s d rivin g t he st ron g d emand for g rains, a re g lob al conc erns for food secu rit y,
fu eled b y COVI D-19, an d Chin a’s nee d to fee d it s h og h erd , r ecovering fast from t h e losses in flicted
b y A fr ican swin e fe ve r in 2019.
OCP ( Mor occo) con clu d ed its phosph oric acid su pply con tra cts to India for the first qu arter of 202 1
at $795/ t on n e ( CFR 100% P
2
O
5
), a $106/ t on ne in cr ease compare d t o t h e pre viou s qu ar ter. The
accu mu lat ed price incr ease of $205/ ton ne since the fir st qu arter of 2020 r eflects th e posit ive g lobal
se n t imen t in t he ph osph ate commod it y ma rket.
Th e n or ma lization a greeme nt between I srae l and t he Un ited A rab Emira tes has opene d comme rcial
an d econ omic opport u n it ies for b ot h cou n t rie s. ICL sig n ed it s first con t ra ct t o b u y 35 t h ou sand
t on n es of su lph u r from A b u Dh ab i Na t ion al Oil Compan y, in ord er t o a d d a su pply s ou rce for t he
pu rch ase of Su lph u r an d t o le ve rag e it s relat ively low t ran sport at ion cost s compa red t o d elive ries
from Ru ssia, Can ad a or Kaz akh stan.
Glob al phosph at e commod it ies mar ket - average pr ices:
$ p e r t onn e
2020
2019
VS 2 0 19
DA P
CFR I n d ia Spot
331
361
(8 )%
TSP
CFR B ra zil Spot
251
311
(1 9 )%
SSP
CPT B ra zil in la nd
18-20% P
2
O
5
Spot
177
224
(2 1 )%
Su lph u r
B u lk FOB A d n oc
mon t h ly con t ra ct
60
88
(3 2 )%
Sou r ce: CRU ( Fer tilizer W ee k Hist orica l Pr ices, J an uary 2021).
140 ICL Group Limited
T r e nds affectin g I nn ovative Ag S olu tion s segmen t
In n ova t ive Ag Solu t ion s segment is act ive in t wo ma in mar ket s: ag ricu lt u re a nd t ur f & orn a mental
ma rket s. T h e spe cialt y fer t ilizer s b u sin e ss is ch aract e rized by hig h er efficien cy r esu lt in g in h ig her
price s an d lower qu an t ities compare d to t he tr adition al commod it y fe rtiliz ers.
Tr ad it ion al commod it y prod u cers con tin ue to expand in to t h e specia lt y fertilizers markets, offe ring
specia lized , h ig he r valu e a nd price pr od u cts. Con solid at ion is an ot he r g lob al t re nd , ch aracterized
by merg ers of larg e fe rt ilizer su pplie rs as well as acqu isit ion of small specia lt y fert ilizer pla ye rs by
t he la rg e in pu t playe rs.
Spe cialt y A g ricu lt ur e mar kets:
Th e specia lt y agr icu lt ure ma rkets inclu de a ll open field crops ( rice , maize, pot a t oes et c.), orchards
an d g reenh ouse s.
ICL's offerin g for t h e spe cialt y ag ricu lt u re se ct or in clu d es t hr ee main pr od u ct g rou ps: ( 1) Solu b le
fer t iliz ers, which in clu d es wat e r- solu b le st ra ig h t s ( su ch as MKP, MA P an d PeKacid ), and
wat er -solu b le NPK; ( 2) con t rolled release fert ilizer s (CRF), a nd; ( 3) liqu id NPKs.
Spe cialty a g ricu lt ure mar kets are con stantly g rowin g, d rive n by t he g lobal popu la t ion growth , lack
of ara b le land a nd r eg u lat ion s. New reg u lat ion s, b ot h local an d n at ion al, requ ir e limit in g the
amou n t of fert iliz ers a pplied , t h u s in cr easin g t he u sa g e of e fficien t fert iliz er a pplica t ion s. An
example for su ch re gulation can be fou n d in limit in g t h e n it rog en u sage in Ch in a, and con trolling
t he n it r og en lea ch in g in some cou n t ries in Eu r ope. De ma nd g rowt h is sig nifica nt in Ch in a, In d ia
an d B razil wh ile in Eu rope g r owth is more mod e rate.
Du r in g 2020, sales volu mes of specialt y ag ricu lt u r e prod u ct s in cr ease d , su pport ed by st a b le
d eman d , as t h e C OVID-19 pan de mic h ad no major in flu en ce on specialt y fertilizer s demand and by
t he appr eciat ion of t he eu ro ag a inst t h e US d ollar . Sellin g pr ice s were lower compare d to 2019 in
most prod u ct lin es, d riven by lower raw ma t erials price s, alt hou gh towa rds t he en d of t h e year we
wit n essed an in crease in raw mat erials price s, which h as con tin ued in to t h e first qu ar ter of 2021.
Sales volu mes to t h e st r aig ht fertilize rs mar ket improve d d ur ing t h e year, main ly of MKP, su pported
by in crea sed prod uction capacity an d d isrupt ions in Chin ese prod uction .
Th e compe t it ive lan d scape in th e solu b le fe rt ilizer ma rket con t in u es to d e ve lop, wit h commod it y
player s, su ch as Eu roch em, O CP an d B elarou skali st re ngt henin g t he ir posit ion in t h e specialty markets
wit h a fu ll ran g e offer of wat e r- solu ble MA P, wat e r solu b le NPK an d NOP. The re h as b ee n a very
sig n ifican t in cre ase of ca pacit y of W SNPK b lend ing in Ch ina e ncourag ed by t he g ove rn me nt policy to
impr ove fe rt ilize r applica t ion efficien cy a nd r ed u ce t ot al fe rt ilizer con su mpt ion, as W SNPK is seen as
more efficien t t h an t ra dit ional commod it y fer t ilizer s. Compou n d NPK prod u cers are se archin g for a new
growt h en g ine, also fu elin g t he g rowt h of W SNPK capacit y.
Th e CRF market s are g rowin g across t he g lobe, in Ch ina – which sh ows t h e h ig hest g rowth alongside
in cr ease d prod u ction capa cit y ( main ly from Kin g en t a an d Moit h), as we ll as in t h e US, alt h ou gh the
ma in ca pacit y in crea se ca n be fou n d in t h e lower qu alit y CRF t ype ( e.g . Pu rsell in Alab ama). Tr ia ls show
t he econ omic a nd e n viron me nt al b e ne fits of t he u se of CRF, b u t a mu ch wid e r ad opt ion of CRF by
growers is hin d er ed by it s pr ice premium ove r t r ad ition al fertilizer s.
141 ICL Group Limited
Tu r f an d Ornamental Hor ticu ltu re
Tu r f an d Lan dscape
Th e T u rf a n d La nd scape market is t h e mar ket for profession al t u rf ( i.e. g olf & sport field s) a nd the
land scape & lawn se rvice mar ket .
De mand for specialt y fert ilizers in th ese ma rkets in 2020 was ch ar acter ize d by a n ormal sta rt of the
Spr in g in Eu rope . However , in A pril t h e CO VI D-19 pan d emic n eg at ively impact ed t he T u rf &
La nd scape b u sin ess, as spor t s field s an d g olf cou r se s close d in many cou n t rie s, wh ich in t urn, limited
t he n u mb e r of applica t ion s of g ranu lar fertilizers a nd ot her in pu ts d urin g t he second qu arter.
Th e se con d ha lf of t h e yea r was ch aracteriz ed by a r ecovery mod e in t h e market, as sport and golf
reopen ed , wh ile d eman d varied by cou n t ry d u e to t h e d iffe ren ces of t h e impact of CO VI D-19
pand e mic.
Th e Lan d scape ma rket con t in u ed to g row in Eu rope sin ce more con su mer s u se profe ssion al
land scapers. Many con su mers st ayed at h ome d ue to COVI D-19 pand emic an d seeked professional
su ppor t from land scapers to maintain or rene w their gardens.
Th er e is a t r en d of con solid ation in t he d istribu tion cha nnels in t h e T u rf & Lan dscape marke t.
Orn amen t al Hort icult ure
Th e O rn amen t al Hort icu lt ure ma rke t in clu des con t ainer n u rse ry g rowe rs, pot-plan t s an d b ed ding
plan t s.
Orn amen t al h ort icult ure mar kets su ffered a d own tu rn in Ma rch-May 2020, main ly d u e to t h e ea rly
sprin g an d t he n eg at ive impact of t h e CO VI D-19 pand emic. Howe ve r, t owards t he en d of t h e se cond
qu a rt er an d on wa rd s, t h e orn a ment al h ort icu lture sect or e xpe rie n ced a re cove ry su pport e d by
in cr ease d d ema nd for specialt y fertilizers, su ch as con tr olle d-release an d wa ter- solu ble fertilizers, as
well as t he re-ope n in g of gard e n cen te rs. This le d to g rower s exper iencin g a r ob u st sa le s se ason
t hrou g h out the wh olesa le and retail markets.
As par t of th e Compa ny's st r at egy to g row it s crop n u t r it ion b u sin esse s or gan ically a nd t hr ough
M& A , in J anu a ry 2021, I CL complet e d t h e acqu isit ion of A g ro F ert iláqu a Part icipaçõe s S.A .
( "Fert iláqu a"), on e of B r azil's lea d in g specialt y plan t n u t rit ion compan ies, for an a mou n t of $122
million , ( b e for e de d u ct ion of Fe rt ila qu a 's net de b t of $40 million ). I CL expect s to leve rage
Fer t iláqu a's st ron g ma rke t prese nce an d d ist rib ution capabilit ie s to in crease t he sa les of it s org anic
fer t iliz ers, con t rolle d -rele ased fertilizers a nd ot her specia lty plan t n utr ition pr od ucts to th e B razilian
ma rket , on e of t h e world 's fast est growin g ag ricu lt u re mar ket s. Fer t iláqu a also expan d s ICL's
specia lt y crop n u t r it ion pr od uct por tfolio wit h complet e pla nt life -cycle solu tion s for plan t n utr ition
& st imu la t ion , soil r evit a lizat ion , seed t reat ment an d pla n t healt h u t ilized a cross all key B r azilian
crops, inclu d in g soyb ean s, corn , su garca ne, cot ton , coffee, fr u its an d veget able s.
Expect ed Expenses for Equ ity Compen sation Plans
B ased on t h e exist in g g rants u n de r t h e 2014 Equ it y Compen sa t ion Plan , t he expected expen se for
t he pe riod s en d ed Decemb er 31, 2021, Dece mb e r 31, 2022 an d Decemb er 31, 2023 is
approxima t ely $5.4 million , $1.8 million , an d $0.9 million , r espe ct ively.
For a d escript ion of t he 2014 Equ it y Compen sat ion Plan and ad dit ion al in formation ab out t h e grants
ma d e u n d er t he 2014 Equ it y Compen sation Plan, see Not e 19 to ou r A ud ite d Fin an cial St atemen ts.
142 ICL Group Limited
Ad ju stmen ts t o re ported ope ratin g and net income (Non -GAAP financial measure s)
We d isclose in t his A nnu al Report n on -IFRS financia l measures t itled adju sted operatin g in come and
ad ju st ed n et in come at t rib ut able to t he C ompa ny’s sharehold ers. O u r man age me nt u se s a d ju sted
operat in g in come an d adju ste d n et in come a t trib uta ble to the Compan y’s sh areh olde rs to facilitate
operat in g per for mance comparisons from per iod to period . We ca lcu lat e ou r ad ju ste d opera t ing
in come by a d ju st in g ou r operat ing in come to ad d cert ain it e ms, as set fort h in t he r econ cilia t ion
t ab le b e low. Certain of t hese ite ms may recur. We ca lcula te our adju sted ne t in come attribu table to
t he Compan y’s sh are hold er s by a d ju st in g ou r ne t income at t r ib u table to t h e Company’s
sh areh old er s to ad d certain it ems, as se t fort h in t he recon ciliation table b elow, exclu d ing the t otal
t ax impact of su ch ad ju st ments and ad justme nts attr ibu table to t h e n on -con trollin g in ter est s.
You sh ou ld n ot view adju st ed oper at in g in come or ad ju st ed ne t in come at t rib u table to t he
Compan y’s sharehold ers as a su b st it ute for opera t in g in come or n et in come at t rib utable to the
Compan y’s sha reh old e rs d et er min ed in accord ance wit h IFRS, an d you sh ou ld n ot e t h at ou r
d efin it ion s of a d ju st e d ope rat in g in come a nd ad ju st ed n et in come at t ribu tab le to t h e Compan y’s
sh areh old er s may d iffer from t h ose u se d by ot h er compa nies. A d d it ion ally, ot h er compan ies ma y
u se ot her mea su r es to e va lu at e t h eir performan ce, which may r ed u ce t h e u sefu lne ss of ou r n on -
IF RS fin an cial mea su r es as t ools for compa rison . However, we b elieve a d ju st e d ope rat in g in come
an d ad ju ste d n et in come att rib utable to t he Compa ny’s sharehold ers pr ovid e use ful in for ma tion to
b ot h ma n ag emen t an d in vest ors by exclu d in g cert ain it ems t hat ma na gement b elieves are n ot
in d icat ive of ou r on goin g opera t ion s. Ou r man a gement u ses t h ese n on - IF RS mea sures to e valuate
t he Compan y's b u siness stra teg ies an d man ag eme nt's performance. We be lieve th at t he se non -IFRS
me asu re s provid e u sefu l in for ma t ion to in ve st ors b ecau se t h ey improve t h e compa rab ilit y of ou r
fin a ncia l r esu lt s b et wee n period s a nd provid e for g reat e r t ranspa ren cy of key measu res u sed to
evalu at e ou r performan ce.
Th e t ab le b e low r econ ciles t ot al ad ju st ed opera t in g income a nd t ot a l ad ju st ed net in come
at t r ib ut ab le to t he sh arehold ers of t h e Company, to t h e compara b le I FRS me asur es:
For the Year Ended December 31,
2020
2019
2018
US$ millions
O p er atin g in come
202
756
1,519
Capital gain (1)
-
-
(841)
Impairment of assets, provision for site closure and restoration
costs (2)
2 29
(3)
37
Provision for early retirement (3)
78
-
7
Provision for legal proceedings (4)
-
7
31
T o t al a dju stments to operat ing i n co me
307
4
(766)
A d just ed oper atin g in co me
509
760
753
N e t in come att rib utable t o t he sh areh old er s of t h e
C o m pan y
11
475
1,240
Total adjustments to operating income
3 07
4
(766)
Adjustments to finance expenses (5)
-
-
10
Tot al t ax impact of t h e ab ove operat ing in come
(6 0 )
-
(7)
T o t al a dju sted net in come - sharehold ers of t h e Co mpa ny
258
479
477
143 ICL Group Limited
( 1)
Capit al g ain relat in g t o sale of b u sin esse s an d g a in from con solid a t ion a n d d econ solid ation
of b u sin esse s in 2018, capit a l g ain from t he sale of t he Fire Safet y a n d Oil Ad d it ives ( P
2
S
5
)
b u sin esse s.
( 2)
Impairment in valu e , writ e d own of a sset s, reversal of impairme n t loss, provision for pr ior
period s wa st e r emoval, provision for asset s ret ireme nt ob lig at ion ( A RO) a n d sit e r estoration
an d closu re cost s. I n 2018, writ e -off of Rovit a’s a ssets followin g its d ivestmen t, write -off of an
in t an g ib le a sset regar din g a specific R& D project re lat ed t o I CL’s ph osph at e -ba sed pr oducts
an d a n in cre ase of t he pr ovision for t h e closu r e a n d restor ation of Sallen t sit e. In 2019, due
t o a n ag reeme n t for t he sale of a sset s, a part ial re versal of impairment loss relat ed t o assets
in German y, which was in curred in 2015, an incr ease of the pr ovision for th e remova l of prior
period s wa st e in b romin e prod u ct ion fa cilit ie s in I sra el and an in cr ease of t h e provision for
t h e closu r e a nd rest orat ion of Salle n t sit e. I n 2020, an impairme n t and writ e -off of cer t ain
asse t s in Isra el ( Rot em A mfer t Isr ae l), related t o con t in u ed low ph osph at e prices an d the
d iscon t in u a tion of the u n profitable prod uct ion and sa le of t h e ph osph at e rock act ivit y , wh ich
also resu lt ed in an in crease in th e pr ovision for asset s r et irement ob lig a tion ( ARO) a s we ll as
an in cr ease in facilit ies rest or ation cost s. A lso reflect s an impairment of asse t s an d an in crease
in t h e provision for t h e closu r e a nd r est oration of Sallen t sit e (Vila fruns) in Spain ( I CL I be ria).
See also – Not es 12 an d 18 t o ou r Au d ite d Fin ancial St atemen ts .
( 3)
Provision for early ret irement and d ismissa l of employe es in accord an ce wit h th e Compan y’s
compr eh ensive g lob al efficiency plan in it s prod u ct ion facilit ies t h rou g h out t he g rou p. I n
2018, provision re la t in g t o t h e Compan y’s facilit y in t he Unit ed Kin gd om ( ICL B oulb y) due to
t h e t r an sit ion t o sole prod u ct ion of Polysu lph at e® . In 2020, an in cre ase in t h e provision
relat ed t o t he h eadcou nt re duction pla n , which was impleme n t ed as par t of t h e Compa n y’s
efficiency in it iat ive s an d me asu res, primar ily t h roug h a n e ar ly retir ement pla n for t h e I sraeli
prod u ct ion fa cilit ies ( Rot em A mfert I srael, B romin e Compou n d s an d Dead Sea Ma g n esium).
See also – Not e 16 t o ou r A u d it ed Fina ncial St at emen ts .
( 4)
Provision for leg a l proceed in g s. I n 2018, a n in crease of a provision in con n e ct ion wit h the
royalt ies’ ar b it ration in I srael relating t o prior per iod s, part ly
offset b y a VA T refu n d r elated
t o prior period s in B razil ( 2002-2015). In 2019, an in crease of th e provision in con n ect ion
wit h t h e fin alization of th e royaltie s’ arb itration in Isr ae l relatin g to prior per iod s, partly offset
b y a d ecrease in t h e provision relat in g t o leg a l cla im in Spain . See also – Not e 18 t o our
Au d it e d Fin ancial Statements .
( 5)
In t er est and lin ka g e e xpe n ses. In 2018, in cr ea se of provision relat ed t o t h e royalt ies’
arb it ration in I srael.
144 ICL Group Limited
Resu lt s of Ope rations
We pre sen t a discussion in th e period -to- pe riod comparison s of the prima ry dr ivers of ch ang e in the
Compan y’s resu lt s of oper at ion s. T his d iscu ssion is b ase d in part on ma n ag emen t ’s b est est imates
of t h e impact of t he ma in t re nd s on it s b usin esses. We have b ase d t h e followin g d iscu ssion on our
fin a ncia l st at emen ts. You shou ld read su ch discu ssion t oge th er wit h ou r fin ancial st atements.
We ha ve elect ed to omit d iscu ssion on t h e earlie st of t h e t h re e yea rs covered by t h e con solid ated
fin a ncia l st at eme nt s pr esent ed. Re fer to I t em 5 - Oper at in g a n d Finan cial Review an d Prospects
loca t ed in ou r F orm 20- F for t h e fiscal ye ar e nd ed December 31, 2019, file d on March 5, 2020, for
refere nce to d iscu ssion of t h e fiscal ye ar en ded Dece mb er 31, 2018, t h e ea rlie st of t h e t h re e fiscal
ye ars pre se nt ed.
Y e ar En d ed De cemb er 31, 2 020 Co mpared t o Year En ded Decemb er 3 1, 201 9
Set fort h b e low are ou r result s of operation s for t he ye ars e nded Dece mber 31, 2020 and 2019.
F o r the Years Ended
D e c ember 3 1,
%
I n c rease
( D ec rease)
2 02 0
2 0 19
$ m illio ns
$ m illions
Sales
5 , 0 43
5,271
(4)%
Cost of sales
3 ,553
3,454
3%
Gross profit
1 , 4 90
1,817
(18)%
Selling, transport and marketing expenses
7 66
767
(0)%
General and administrative expenses
2 32
254
(9)%
Research and development expenses
54
50
8%
Other expenses
2 56
30
753%
Ot h er in come
(2 0)
(40)
(50)%
Ope rating income
2 02
756
(73)%
F i n ance expense s, n et
158
129
22%
Sh are in e arn ing s of e qu ity- account ed in vest ees
5
1
400%
In come before income taxes
49
628
(92)%
Provision for in come t axes
25
147
(83)%
N e t in come
24
481
(95)%
Net income attributable to the shareholders of the
Company
11
475
(98)%
Ear nings per share attributable to the shareholders of
t he Company:
Basic earnings per share (in dollars)
0 . 0 1
0.37
(97)%
Diluted earnings per share (in dollars)
0 . 0 1
0.37
(97)%
145 ICL Group Limited
Resu lt s of operations for the year 2020
S a les
E xpenses
O p eratin g
i n c om e
$ m illio ns
YT D 2019 figures
5 , 2 71
( 4 ,5 15)
7 5 6
Total adjustments YTD 2019*
-
4
4
Ad justed YTD 2019 figures
5 , 2 71
( 4 ,5 11)
7 6 0
Quantity
117
(47)
70
Price
(376)
-
(376)
Exchange rates
31
(51)
(20)
Raw materials
-
87
87
Energy
-
(1)
(1)
Transportation
-
17
17
Operating and other expenses
-
(2 8 )
(2 8 )
Ad justed YTD 2020 figures
5 , 0 43
( 4 ,5 34)
5 0 9
Total adjustments YTD 2020*
-
(3 0 7 )
(30 7 )
YT D 2020 figures
5 , 0 43
( 4 ,8 41)
2 0 2
* See "A d ju st ments to r eported ope ra tin g and n et in come ( Non -GA AP)" above .
- Sa le s – T h e Compan y's sales d e cre ased by $228 million compar ed to 2019. T h e d e cre ase was
primarily re lat ed to a $56 d ecr ease in t he averag e r ealized pr ice per t on ne of pot a sh , compa red
to t h e same per iod last year, as well as th e d own ward price a dju stment wit h re spect to certain
qu a nt it ies of pot a sh sold d u rin g 2019, in lin e wit h t h e pot a sh su pply con t racts in Ch ina and a
d ecrea se in t he se lling prices of ph osph at e commod it ie s prod u ct s ( see 'price ' a b ove). In
ad d it ion , a decrease was record ed in sa les volu mes of b romin e-b a se d in d u strial solu t ions,
ma in ly d u e to a d ecrease in glob al d emand re la ted to t h e COVI D-19 pan d emic ( see 'qu antity'
ab ove ).
The d ecrea se wa s par t ly offse t by an in cr ease in sales volu mes of pot ash , mainly d u e to I CL
De ad Se a prod u ct ion recor d in 2020 a n d lowe r pr od u ct ion in 2019 d u e to a t h re e-week shut
d own for a fa cilit y u pg rad e in t h e fou rt h qu ar t er of 2019, most of ICL phospha t e specialt ies
prod u ct s, ph osph at e fert iliz ers, specialt y agr icu lt u re prod u cts an d ph osph or u s- b ase d flame
ret a rd an ts ( se e 'qu an tity' a b ove).
Exchan ge ra te flu ct uation s h ad a posit ive impact on sales, prima rily d u e to t he a ppreciation of
t he avera ge excha n ge r at e of t he eu ro ag ain st t h e d ollar, wh ich in cr ease d reve nu es ( see
'excha ng e rat e' above).
- Cost of sa les – T he cost of sales increased by $99 million compa red to 2019. Th e increase was
primarily re lat ed to an in cr ease in t h e sales volu me s of pot ash , most of I CL ph osph ate
specia lt ies prod u ct s, ph osph at e fert iliz ers, specia lt y a gr icu lt ure pr od u ct s and
ph osph or u s- b ased flame retard an ts (see 'qu an tity' above), cou pled with the effect of exchange
rat e s flu ct u a t ion s, ma in ly from t he appr eciat ion of t h e a verag e e xch an ge rat e of t he I sra eli
sh eke l a nd t he eu ro ag ainst t he d ollar , which in cr ease d ope ration al cost s ( se e ‘Exch ang e rate’
ab ove ), as well as h ig h er operat in g cost s, main ly d u e to cost s re lat ed to t h e CO VI D-19
pand e mic an d lower pot ash pr odu ction in Spain (se e 'Oper at ing a nd ot h er expense s' above).
The in cr ease wa s par t ly offse t ma in ly by lower price s of su lph u r con su med d uring t he period,
a d ecrea se in th e pr ices of variou s raw mat e rials u sed for pr od u ct s in th e I nnovat ive Ag
Solu t ion s se g ment ( see 'Raw Mat erials' a bove ) a nd by th e d evalua tion of t h e ave rage exchange
146 ICL Group Limited
rat e of t h e B ra zilian real ag ain st t he d ollar , which con tr ibu ted to t h e opera tion al cost -savings
( see ‘Exch an g e rate’ a bove ).
- Se lling a nd ma rket ing – Sellin g a nd market ing expense s d ecreased by $1 million compa red to
2019, as lower ma rin e and in lan d t ran sporta tion cost s ( see ‘T ransport at ion’ ab ove) were mostly
offset by an in cre ase in sales volu mes ( see 'Quantit y' a bove ).
- Gen era l an d ad min ist r at ive – Gen eral an d ad min ist rative expen ses d ecreased by $22 million
compar ed to 2019. T he Company cont in u ed to d ecr ease th e low leve l of g en er al and
ad min ist ra t ive expen ses followin g t he e fficien cy me asures implemen t ed in recent years.
- Research and Deve lopmen t – Resea rch a n d d evelopmen t expe nses increased by $4 million
compar ed to 2019, ma in ly d u e to t h e acqu isit ion of Gr owe rs Hold ings I n c., as part of t he
Compan y's g oa l to fu rt h er expan d and a ccelera te it s d igit al pla t form.
- Ot he r expen ses, n et – Ot h er expen ses, n et, incr ease d by $246 million compa red to 2019. The
increa se wa s primarily d ue to h igher e xpense s re lated to impairmen t of assets, e arly ret irement
of employees an d sit e closu r e an d rest or at ion cost s ( see ‘A d ju st me nts to report e d ope rating
an d n et in come – Non - GA A P fin an cial measu r es’ ab ove). Th e incre ase was par t ly offse t by
act u arial g ains and cost -savin g init iat ives (see 'Ope rat ing a nd ot h er expense s' above).
B elow is a g eog raph ical b reakd own of ou r sa les by cu st omer loca t ion :
Year Ended December 31,
2 0 20
2 0 19
$ m illions
$ m illions
Eu rope
1 , 8 22
1,885
Asia
1 , 4 32
1,423
Nor t h A merica
8 5 9
910
Sou t h A merica
5 1 7
668
Rest of t h e world
4 1 3
385
Tot al
5 , 0 43
5 ,2 7 1
Eu rope – Th e d e cre ase in sales pr imarily relat es to a d e cre ase in t he sellin g price s of ph osph ate
fer t iliz ers a nd pot ash , as well as a d ecrea se in sa les volu mes of clea r b rin e fluid s. T he d ecrease was
part ly offse t by h ig h er sales volu mes of pot a sh , ph osph or u s- ba sed flame retard an ts an d a cids.
Asia – T he in cr ease in sa les primarily relat es to an in crea se in sa les volu mes of pot ash , ph osph ate
fer t iliz ers an d da iry prot ein s. T he in crease was par t ly offse t by a d ecr ease in t he sellin g price s pot ash,
ph osph at e fer t ilizers an d g ree n ph osph oric acid .
Nor t h A merica – T he d ecrease in sales prima rily rela t es to a d e crease in sa les volu mes of b r omin e -
b ased in d u strial solu t ion s an d mag n esium, part ly offse t by an in crease in sales volu mes of pot ash
an d ph osph or ou s-b ased flame retard an ts.
Sou t h A merica – T he d ecrea se in sales prima rily r elat es to a de crease in th e sellin g prices of pot a sh,
a d ecrea se in se llin g price s a n d sa le s volu me s of ph osph at e fert ilizers, t og eth er wit h a d e cre ase in
sa le s volu mes of clea r b rin e flu ids.
Rest of t h e world – The in crea se in sales primar ily relat e s to an in crease in sales volu mes of d airy
prot ein s.
147 ICL Group Limited
Fin a ncing expenses, net
Th e n et fin an cin g expen ses in 2020 a mou n t ed to $158 million, compared wit h $129 million la st
ye ar – an in crea se of $29 million .
Th e cha ng e d erives main ly from a n in crease of $38 million in n et h ed gin g t ransa ction s r esults. T his
in cr ease was pr imarily d u e t o t h e con tin ued weakening of t h e d ollar ag ainst t h e I sr aeli sh ekel and
a sig n ifica n t d e cre ase in e nerg y prices d u rin g 2020. A n a d d it ion al in cr ease in t h e a mou n t of $7
million , was in cu rr ed as a re sult of t he cha ng e in employees b en efit s and lea ses (I FRS 16) exchange
rat e d iffere nces.
On t he ot h er h an d , in t erest expen ses d ecreased b y $16 million , main ly d u e t o a d ecr ease in t he
expen ses rela t in g t o e mployee b e nefits and a d ecrease in the averag e in t erest r at e.
Ta x e xpenses
Ta x expe nse s in t h e ye ar en d e d Dece mb er 31, 2020 a nd Decemb er 31, 2019 amou n t ed to $25
million a nd $147 million , respect ively, refle ct in g an effect ive t ax ra t e of a b ou t 51% an d 23% ,
respect ively. T he C ompa ny’s h igh effective t ax rate in t he curre nt year is ma in ly du e t o the deferre d
t ax effect from t h e sig n ifican t impairmen t losse s and r ecog n it ion of provision s, r elat ed t o t h e ICL
Rot em e fficien cy pla n, wh ich is su b ject t o a b ene ficia ry t ax ra te ( 7.5% ) and t he a ppreciat ion of the
Isr aeli sh eke l ag a in st t he dollar .
148 ICL Group Limited
Seg men t Information
Seg men t 's r even u e, expen se s an d resu lt s in clu d e in t er -se gme nt t ransfers, wh ich are b ased on
t ran sa ct ions' price s in t h e ord in ar y cou rse of b u sin ess. T his b ein g alig ne d wit h t he r eport s t hat are
reg u lar ly re viewed by t h e Ch ief Oper at ing Decision Maker. T he in t er - se g ment tra n sfers are
eliminat ed as par t of t he fin ancia l st ate me nt s' con solid ation process.
Resu lt s of operations for the year 2020 – I ndustrial products segmen t
2 0 20
2 0 19
$ m illions
$ m illions
S e g me nt Sa les
1 , 2 55
1,318
Sales to e xt erna l cu stome rs
1 , 2 42
1,307
Sales to in t er nal cu stomer s
13
11
S e g me nt Profit
3 0 3
338
D e precia tion a nd amortizat ion
77
67
C a p ital expendit ures*
84
74
B elow is a g eog raph ical b reakd own of ou r sa les to e xt er na l cu stomers, by cu stomer loca tion :
Year Ended December 31,
2 0 20
2 0 19
$ m illions
$ m illions
Eu rope
4 5 8
469
Asia
4 0 5
399
Nor t h A merica
2 9 6
351
Sou t h A merica
40
55
Rest of t h e world
43
33
Tot al
1 , 2 42
1 ,3 0 7
149 ICL Group Limited
S a les
E xpenses
O p eratin g
i n c om e
$ m illio ns
YT D 2019 figures
1 , 3 18
( 9 8 0)
3 3 8
Quantity
(73)
33
(40)
Price
4
-
4
Exchange rates
6
(12)
(6)
Raw materials
-
(2)
(2)
Energy
-
2
2
Transportation
-
(2)
(2)
Operating and other expenses
-
9
9
YT D 2020 figures
1 , 2 55
( 9 5 2)
3 0 3
- Qu a nt it y – T he n egative impact on t he se gment’s ope ratin g in come was pr imar ily related to a
d ecrea se in t he quant ities sold of b romin e- based in d ustrial solu tion s, ma in ly d ue to a d ecrease
in g lob al d e mand as a resu lt of t h e CO VID- 19 pa ndemic. T his was pa rt ly offset by an in crease
in sales volu mes of ph osph or u s- b ased flame r eta rda nt s.
- Price – T he posit ive impact on t h e seg men t ’s operat in g in come wa s primar ily relat ed to an
in cr ease in t h e sellin g prices of specia lt y min erals.
- Exch an g e ra t e – Th e u n fa vorable impact on t h e seg me n t’s oper atin g in come wa s primarily
relat ed to t he appr eciat ion of t h e ave rage e xch an ge rate of t h e I srae li sh eke l ag ainst t he d ollar,
wh ich in creased oper ation al cost s. This was pa rt ly offset by to t h e a pprecia tion of t he average
excha ng e ra te of t h e e u ro ag ainst t he d ollar, wh ich contribut ed to the seg me nt's revenu e more
t han it in creased ope ration al cost s.
- Oper at in g a n d ot he r expen ses – Th e posit ive impact on t h e se gment's ope ratin g in come was
primarily relat ed to a ct ua rial g ains as well as lowe r pa ymen t of royalt ies, d u e to t h e d e crease
in sales volu mes.
150 ICL Group Limited
Resu lt s of operations for the year 2020 - Potash segment
2 0 20
2 0 19
$ m illions
$ m illions
S e g me nt Sa les
1 , 3 46
1,494
Pot a sh sa les to e xt erna l cu stome rs
9 7 9
1,081
Pot a sh sa les to in t er nal cu stomer s
95
100
Ot h er a nd eliminat ions*
2 7 2
313
G r o ss Profit
4 7 2
643
S e g me nt Profit
1 2 0
289
D e precia tion a nd amortizat ion
1 6 6
149
C a p ital expendit ures* *
2 9 6
478
A v er ag e r ealized p r ice ( in $)* **
2 3 0
286
* Ma in ly in clu d es Polysu lph at e pr od u ced in UK, sa lt prod u ce d in u n d e rgroun d min e s in UK and
Spa in , mag n esiu m- b ased prod u cts a nd sales of elect ricity prod uced in I srael.
** Pot ash a verage realize d price (d ollar per ton ne) is calculated by divid ing tot al pot ash re venue by
t ot a l sa les’ qu ant it ies. T he d iffer en ce b et ween FOB price an d averag e r ealized price is main ly
ma rin e t ranspor tation cost s.
B elow is a g eog raph ical b reakd own of our sales to ext erna l cu stomers, by cu stomer loca tion :
Year Ended December 31,
2 0 20
2 0 19
$ m illions
$ m illions
Asia
4 3 1
469
Eu rope
3 5 4
357
Sou t h A merica
2 3 0
327
Nor t h A merica
86
93
Rest of t h e world
82
84
Tot al
1 , 1 83
1 ,3 3 0
151 ICL Group Limited
S a les
E xpenses
O p eratin g
i n c om e
$ m illio ns
$ m illio ns
$ m illio ns
YT D 2019 figures
1 , 4 94
( 1 ,2 05)
2 8 9
Quantity
110
(8)
102
Price
(263)
-
(263)
Exchange rates
5
(14)
(9)
Energy
-
(1)
(1)
Transportation
-
15
15
Operating and other expenses
-
(1 3 )
(1 3 )
YT D 2020 figures
1 , 3 46
( 1 ,2 26)
1 2 0
- Qu a nt it y – T he posit ive impact on th e se gment ’s operat in g in come was pr imar ily relat ed to
favorab le sit e mix, as t h e in crease in sa les volu me s of pot ash from ICL Dead Sea, du e to all-time
an n u al prod u ction record an d t h e fa cilit y sh u t-d own for u pg rade in t h e fou rt h qu a rte r of 2019,
more t ha n offse t lower sa les volu mes of pot ash from I CL I beria due to t he closu re of th e Sa llent
sit e , as well as a d ecrease in sa le s of lower -mar gin prod ucts.
- Price – T he neg at ive impa ct on t he se gment’s oper at ing in come was primarily relat ed to a
d ecrea se of $56 in t h e a ve rag e re alized price pe r t on ne of pot ash compa red to the sa me pe riod
last ye ar, as well as t h e d ownward price ad ju stment wit h r espe ct to ce rt ain qu ant ities of pot ash
sold d u rin g 2019, in lin e wit h t he pot a sh su pply con t ract s in Chin a.
- Exch an g e r ate – The n eg ative impa ct on the segme nt ’s ope ratin g in come was primarily related
to t h e apprecia t ion of t h e averag e e xch an ge rate of t h e Isr aeli sh ekel a nd t he B rit ish pound
ag ain st t h e d olla r, wh ich in crea se d opera tion al cost s. T h is was part ly offse t by t he appr eciation
of t h e a ve rag e exchan ge rate of t h e euro ag ainst the d ollar , which con tr ibu ted to t he segment's
revenu e more t h an it in cr ease d ope ration al cost s.
- T ran spor t ation – T he posit ive impa ct on t he segme nt’s ope ratin g in come was pr imar ily related
to a d e cre ase in ma rin e an d in land t ran sportation cost s.
- Oper at in g a nd ot her expen ses – T h e n eg at ive impa ct on th e seg ment 's oper atin g in come was
primarily d u e t o CO VI D-19-rela ted oper at ing cost s, lower pr od u ct ion in Spain an d hig her
d eprecia t ion . T his wa s par t ly offse t by in cre ased prod uct ion at I CL De ad Se a an d a re d u ction
in ce rt ain cost s as a r esu lt of t he implemen t a t ion of efficie ncy in it iatives an d mea su res by the
se g ment .
152 ICL Group Limited
Pot a sh – Production an d Sales
Thousands of Tonnes
2 0 20
2 0 19
Prod u ct ion
4 , 5 27
4,159
Tot al sales ( in clu d ing in ter na l sales)
4 , 6 66
4,130
Closin g in ve n t ory
2 7 5
414
− Pr od u ct ion – Pot a sh pr od u ct ion in 2020 wa s 368 t h ou san d t on n es hig h er t ha n in t he
corre spon d in g per iod last yea r. A nn ual re cord hig h prod uction at I CL Dead Sea was pa rt ially
offset by lower prod u ct ion in ICL I b er ia, main ly d u e to ope ration al ch alle nges related to CO VID-
19 a nd t h e closu re of Sa llen t sit e .
− Sa le s – T h e qu a nt ity of pot ash sold in 2020 was 536 th ou sa nd t on ne s hig her t h an in the
corre spon d in g per iod last yea r, primarily d u e to an in crease in pot ash sales to Ch in a, In d ia,
B razil an d US.
Resu lt s of operations for the year 2020 – Phospha te Solutions segment
2 0 20
2 0 19
$ m illions
$ m illions
Seg ment Sales
1 , 9 48
1,980
Sales to external customers
1 , 8 71
1,901
Sales to internal customers
77
79
Seg ment Profit
66
100
De preciation and amortization
2 1 0
177
Capital expenditures*
2 7 5
326
B elow is a g eog raph ical b reakd own of ou r sa les to e xt er na l cu stomers, by cu stomer loca tion :
Year Ended December 31,
2 0 20
2 0 19
$ m illions
$ m illions
Eu rope
6 5 1
698
Asia
4 6 8
437
Nor t h A merica
3 7 1
370
Sou t h A merica
2 2 7
263
Rest of t h e world
1 5 4
133
Tot al
1 , 8 71
1 ,9 0 1
153 ICL Group Limited
S a les
E xpenses
O p eratin g
i n c om e
$ m illio ns
YT D 2019 figures
1 , 9 80
( 1 ,8 80)
1 0 0
Quantity
63
(56)
7
Price
(110)
-
(110)
Exchange rates
15
(14)
1
Raw materials
-
70
70
Energy
-
(2)
(2)
Transportation
-
3
3
Operating and other expenses
-
(3 )
(3 )
YT D 2020 figures
1 , 9 48
( 1 ,8 82)
66
- Qu a nt it y – T he posit ive impa ct on t h e Se gmen t ’s oper at in g in come was primarily relat ed to
in cr ease d sa le s volu me s of hig h er-marg in ph osph at e specialt y prod u ct s, ma in ly acid s,
ph osph at e -b ased food ad ditive s an d d airy prot ein s, as well as an incre ase in th e sales volu mes
of phosph at e fert iliz ers. T h is was part ly offse t by t he d ivestitu re of t h e Hag esu d b usin ess d uring
t he secon d qu art er of 2020, as well as lowe r sales volu mes of phospha t e r ock.
- Price – T he n e ga t ive impa ct on t h e seg men t 's ope rat in g in come wa s primarily r elat ed to
a sig n ifican t d ecrea se in t he sellin g price s of phosph at e commod it ies produ cts.
- Exch an g e r ate – T h e posit ive impact on t h e segme nt ’s operat ing in come wa s primarily related
to t h e d e valu at ion of t h e average exchange rate of t h e Brazilian r eal again st t he dollar, which
d ecrea se d operat ion al cost s. A d d it ion ally, t h e apprecia t ion of t he aver ag e exch an ge r at e of
t he eu ro an d t he C hinese yu an ag ain st t he d ollar con tribu ted to t he se gment's r evenu e more
t han it in creased oper at iona l cost s. T h e ab ove t r en d was part ly offse t by t h e a pprecia t ion of
t he aver age e xchang e rate of t h e I sraeli sh ekel again st th e d ollar, which in crease d opera tional
cost s.
- Raw mat erials – T he posit ive impa ct of raw ma t erial price s on t he segment ’s oper at ing income
was primarily relat ed to lower pr ices of su lphu r con sumed d uring t he period .
154 ICL Group Limited
Resu lt s of operations for the year 2020 – I nnovative A g Solutions segment
2 0 20
2019
$ m illions
$ m illions
Seg ment Sales
7 3 1
717
Sales to external customers
7 1 5
699
Sales to internal customers
16
18
Seg ment Profit
40
21
De preciation and amortization
25
21
Capital expenditures*
20
30
B elow is a g eog raph ical b reakd own of ou r sa les to e xt er na l cu stomers, by cu stomer loca tion :
Year Ended December 31,
2 0 20
2019
$ m illions
$ m illions
Eu rope
3 3 2
332
Asia
1 2 6
118
Nor t h A merica
1 0 3
95
Sou t h A merica
21
23
Rest of t h e world
1 3 3
131
Tot al
7 1 5
699
155 ICL Group Limited
S a les
E xpenses
O p eratin g
i n c om e
$ m illio ns
YT D 2019 figures
7 17
( 6 9 6)
21
Quantity
15
(11)
4
Price
(8)
-
(8)
Exchange rates
7
(6)
1
Raw materials
-
19
19
Energy
-
-
-
Transportation
-
-
-
Operating and other expenses
-
3
3
YT D 2020 figures
7 3 1
( 6 9 1)
40
- Qu a nt it y – T he posit ive impa ct on t he segment's operat ing in come wa s primarily re lated to an
in cr ease in sales volu me s of specialt y ag ricu lt u r e prod u ct s, main ly in Eu r ope an d North
Amer ica.
- Price – T he neg at ive impa ct on t he se gment's oper at ing in come was primar ily relat e d to a
d ecrea se in t he se lling prices of specia lt y a g ricultu re prod ucts, main ly liqu id fe rtilize rs.
- Exch an g e r ate – T h e posit ive impact on t h e segme nt ’s operat ing in come wa s primarily related
to t h e appr eciation of t h e a verage excha ng e r ate of t he eu ro a nd th e I sraeli sh ekel ag ainst the
d ollar, which con t rib uted to t he se g men t's reve n ue more than it in cre ased ope rationa l cost s.
- Raw mat erials – T he posit ive impa ct on t he seg men t 's ope rat ing in come wa s primarily related
to lower cost s of commod it y fert ilizer s an d a mmon ia .
156 ICL Group Limited
B. LIQUIDITY AND CAPITAL RESOURCES
O v e rview
As at Decemb er 31, 2020, ICL h ad a b alan ce of $314 million in ca sh, ca sh e qu ivalen t s,
sh ort - t erm in ve st me nts a n d d eposit s. I n a d d ition , t h e Compa ny h as an u n u tilize d lon g -term cr edit
facilit ies of $1,100 million an d a secu rit iza tion ag reement in t h e amou n t of $300 million , of wh ich
t he C ompa ny h as u t ilized approxima t ely $183 million of t h e fa cilit y’s fra me wor k.
Fu rt h ermore , th e Compa ny's net fin an cial liabilit ies were $2,418 million , in clu d ing $2,053 million of
lon g -t erm d ebt ( e xclud ing cu rrent ma t urities) an d sh or t-term d ebt of $679 million ( in clu d in g cu rrent
ma t u rit ie s of lon g -ter m d eb t). T he lon g -term d e bt con sist s of d eben ture s of $1,687 million t og ether
wit h loan s from fin an cial in st it u tion s and lease liab ilit ies of $366 million , wh ile t h e sh ort - term debt
con sist s of sh or t - t erm loan s from fin an cial in st it u t ion s a nd lea se lia b ilit ie s of $473 million and
d eb e ntu re s of $206 million . For in forma t ion a bou t th e currencies in which t he Company's lia b ilities
are d e nomin ated an d t heir in terest r at es, see Not e 13 t o ou r A udit ed Financia l St at emen ts.
Th e Company aim t o secu re sou rces of fin an cin g for it s operatin g a ct ivitie s and in vestme nts, while
d iver sifyin g t h e sou rces of fin an cin g a mon g var iou s fin an cial in st ru me nts, a n d b e tween loca l and
in t er n ation a l fin ancing ent ities. The Company's sou rce s of fin an cing are sh ort and lon g -t erm loans
from b a nks ( main ly in t ern ation al b a nks) an d in stit ution al e n tit ies in I sra el, d eb e ntu re s issu ed to
in st it u t ion al in vest ors in Isr ael an d t he Un ited St ates, an d secu rit ization of cu st omer receiva bles. The
Compan y u t iliz e t h e va riou s fin an cing facilit ie s accordin g to ou r cash flow requ ireme nt s, alt erna tive
cost s a nd mar ket con dit ion s.
ICL's ma n ag emen t b elieves t h at it s sou r ces of liqu id it y an d capit al r esou rce s, in clu din g working
capit al, are ad e qu ate for it s cu rren t r equ ir ement s and b usin ess operat ion s and sh ou ld b e ad equate
t o sat isfy it s an t icipat ed wor kin g -capit al r equ irement s d urin g t h e n ext t welve mon t h s, alon g with
it s ca pit al expen d it ur es an d ot h er curr en t corpor ate ne eds.
Dist rib u t ions of d ivid e nd s t o ICL from it s su b sid iar ies an d t ra nsfers of fu n d s t h rou g h ce rt ain
cou n t ries ma y u n der certain circu msta nces resu lt in the crea tion of tax liabilit ie s. However, t axation
on d ivid en d d istr ibut ion s an d fu nds t ra nsfer s have not had a nd are not expect ed t o h ave a material
impa ct on t h e Compa n y's ab ilit y t o me et it s cash ob ligation s.
Th e Company’s prima ry con t ract u al ob lig at ions con sist of commit men t s t o pu rchase ra w ma t erials
an d en erg y in t he ord in ary cou rse as we ll as ag re emen t s t o secu re it s g as su pply ne ed s. F or
in format ion a b ou t t h e Compa n y's con t ract ual ob lig ation s, see Not e 18 t o ou r Au d it e d Fin ancial
St at emen ts.
157 ICL Group Limited
C r edit Facil itie s
In Sept emb er 2020, t h e Compa ny sig n ed a n ew secu rit iz ation ag re emen t wit h t h ree int ern at ional
b an ks for a commit t e d amou n t of $300 million a n d an ad d it ion al u n commit t ed a mou n t of $100
million , mat u ring in Se pt e mb e r 2025, t ha t replace s t he pr eviou s secu rit izat ion ag re ement in t he
amou n t of $350 million , wh ich mat u r ed in Septe mber 2020. T he n ew se cur itiza tion agreement has
similar t erms as t he previou s ag r eement . As at Dece mber 31, 2020, ICL h ad u t ilize d appr oximat ely
$183 million of t he facilit y’s fra me work.
In ad d it ion , I CL h as lon g -term cr edit facilit ie s of $1,100 million ( not in clu d in g t he CCF F ag reement
wit h t he B an k of Eng lan d described below), which was u nu tiliz ed as at De cemb e r 31, 2020. Further
to Not e 13 to t h e an n u al fin a ncia l st a t emen ts, in con n ect ion to t h e ter min at ion d at e of t he
Compan y's lon g -t erm cr ed it facilit y, in Oct ob er 2020, most len d e rs d ecid ed to ext end t he cre dit
facilit y ma t u rit y re gard ing th e amou n t of $900 million , by an ad d it ion al year, u ntil March 2025.
In Ma rch 2020, t he Unit ed Kin gdom Her Ma jesty's T rea sury (HMT ) a nd the B an k of En gland le nding
facilit y, lau n che d t he COVI D Corpor ate Financin g Facility ( CCFF). The facilit y is d esig ned to su pport
liqu id it y among lar ger firms, h elpin g t h em to br id g e cor on aviru s d isrupt ion to t h eir ca sh flows
t hrou g h t h e pu rcha se of short -t erm d eb t in t h e form of commercia l paper . On J u ly 2, 2020, t he
Compan y en t ered in t o a CCFF ag re emen t wit h t h e B an k of En g lan d , accord in g to wh ich , the
Compa ny h as elig ib ilit y to wit h d raw up to £300 million ( ab ou t $410 million ), b earin g an an n ual
in t er est r at e of SO NIA + 0.6% . As at t h e re port in g d ate, t h e Compa ny ha s wit h d rawn £50 million
( ab ou t $68 million ) wit h a mat u rit y d at e of Ma y 18, 2021.
D e b en tur es
Followin g t h e issu ance of serie s G debentu re s in I srae l on J an ua ry 2, 2020, t he Compan y completed
an expan sion of t h e se rie s G de bentur es offe rin g in Israel on Ma y 18, 2020. The agg re gate principal
amou n t of t h e Se ries G d e b entu res after th e expan sion amou nt s to NI S 766 million ( approxima t ely
$238 million ). T h e principal of t h e ser ies G d eb en tur es sh all be paya ble in t hirteen con secu tive but
u n equ al an nua l payment s, to be paid on Decemb er 30 of e ach of th e years 2022 t hroug h 2034. The
se ries G d e b en tu res carry an an nua l cou pon of 2.4% to be paid in se mian nu al in st allmen ts on June
30 an d Decemb er 30 of ea ch year, commen cin g J u n e 30, 2020. On Ma y 14, 2020 t h e ser ies G
d eb e ntu re s we re rate d as "ilA A" by t he Standar d & Poor's Maalot r at ing ag en cy. Th e in terest rate on
t he series G de b en t ures will in cr ease by 0.25% a b ove t h e b a se in t er est r at e for any ra t in g level
d ecrea se st ar ting at a r at ing of "ilA " a nd rea ch ing a maximu m cu mu lat ive in t erest rate in cre ase of
1% u pon re ach in g a ra ting of "ilB BB".
On De cemb e r 3, 2020, t he Compan y complet e d an ext e nsion of t h e issu an ce of Ser ies F b on d s to
be r epaid in 2038 at a par valu e of $ 93.1 million , b ear in g an nu al in t e rest of 6.375% in e xch ange
for an amou n t of a pproximat ely $120 million . The a d d it ion al n ot e s will be part of t h e same se rie s
as t h e previou sly issu ed $600 million ag g regate prin cipa l a mou nt of I CL’s 6.375% senior un secured
not es d u e 2038. T h e ad d it ion al n ot es will h ave t e rms id e nt ica l to t h e in it ia l n ot e s, e xcept with
respect to t he d at e of issu an ce, t h e issu e price , t he in it ial in t ere st a ccr ual d a te an d t he in it ial in t erest
paymen t d at e, and t he ad d it ion al n ot es and t he in it ia l n ot es will be t reat e d as a sin g le class of
se cu rit ies u n de r t h e in de nt ure g ove rnin g t he n otes.
158 ICL Group Limited
R a t ing s and fin an cial covena nt s
S& P
On J u n e 29, 2020, t he cr ed it r at ing age ncy S& P reaffirmed t he Compa ny's in te rnation al cre d it ra ting
'B BB -' wit h st ab le ou t look. T he cr ed it ra t in g age ncy S& P Ma'alot r eaffir me d t h e Company's cre dit
rat in g 'ilA A ' wit h stable ou tlook.
Fit ch Rat in g s
On J u n e 23, 2020, F it ch Rat in gs revised t h e ou t look of t he Compan y's Lon g - Te rm Issu e r Defa ult
Rat in g to st ab le from posit ive an d affirmed t he Lon g -T erm Issu e r De fau lt Rat in g at 'B B B -'. The
revision of t h e ou t look was du e to a d e cre ase in pot ash an d ph osph at e price s comb in ed with
red u ced d emand for in d u st rial solu t ion s. T h e re vision of t he ou t look from posit ive to st a b le d oes
not con st it u te a d ecrea se in the Compan y's credit ratin g.
Fin a ncia l Coven an ts
For a de script ion of mat erial fin ancia l cove n an t s in t h e Compan y’s loan a g reemen ts a nd any
pot en t ial r isk rela t in g t o complian ce wit h t h em, cre d it facilit ie s, sale of re ceivab les u n der
se cu rit izat ion t ran sact ion an d in format ion on mat erial loan s a nd d e b en t ur es ou t st anding as at
De cemb er 31, 2020, see Note 13 t o ou r A u d it ed Fin ancial St atement s .
S o u rces and Uses of Ca sh
Th e followin g t ab le se ts fort h ou r ca sh flows for t h e per iod s indicated:
Year Ended December 31,
2 0 20
2 0 19
$ m illions
$ m illions
Net cash provid e d by opera tin g activit ies
8 0 4
992
Net cash u sed in in vestin g a ct ivities
( 5 8 3)
(525)
Net cash u sed in fin ancin g activit ies
( 1 0 5)
(490)
Ope rat in g A ctivit ies
Cash flows pr ovid e d by opera t in g a ctivit ies are a significa nt sou rce of liqu id it y for t he Compa ny. In
2020, t he cash flows from oper at in g act ivit ie s amou n t ed to $804 million , compar ed wit h $992
million last yea r. Th e cash flows provid ed by oper atin g a ct ivities in 2020 was impact ed ma in ly by a
d ecrea se in t h e sellin g prices of pot ash an d ph osphat e commod it y pr od u cts a nd a d e cre ase in the
qu a nt it ies of b r omin e -based prod ucts sold , as a resu lt of t h e CO VI D-19 pan d emic, which lea d to a
lowe r n et in come . Th is d ecrea se was partly offse t by lower t ax paymen ts compare d to last yea r.
In vest in g A ctivit ies
Net cash u sed in in vest ing activit ies in 2020 in cre ased to $583 million , compare d wit h $525 million
last ye ar, main ly d ue to t he hig he r a mou nt paid for the purcha se of propert y, plant , an d equipment,
an d fr om an a cqu isit ion of a su b sid iary for $27 million in t h e cu rre nt year. This in crea se was partly
offset by proce ed s rece ived fr om t h e d ive stmen t of a su b sidiary for $26 million .
159 ICL Group Limited
Fin a ncin g A ctivit ies
Net cash u sed in fin an cin g act ivities in 2020 amou n t ed to $105 million , compared wit h $490 million
last ye ar. T his d ecrease is ma inly d ue to lowe r re payments ( ne t from r ece ipt) of lon g -term an d sh ort-
t erm loa n s, which wa s par t ly offse t by cash proce ed s from t ra n sa ction s in d e riva t ives for h ed g ing
in t h e amou n t of $24 million , alon g wit h lower d ivid e nd payment s in th e cu rre nt ye ar.
P r in cipal C apita l E xpendit ures a nd Di vest itures
ICL h ad cash ca pit al expen d it ures of $626 million an d $576 million for t h e yea rs en d e d December
31, 2020 a n d 2019, re spect ively. T he se capit al expen d it ur es comprise of in vest men t s in fixed and
in t an g ib le a sse ts.
ICL’S pr in cipal ca pit al e xpend it u res over t h e last t h re e yea rs h ave con sist ed of work on t h e following
ma in pr oject s:
N e w pu mpin g st ation (P- 9) in S odom . Du e to t he r ecedin g wat er level in t he Nor t he rn basin of the
De ad Se a, t he wa t er line is re ced in g from t h e cu rre nt pu mpin g st at ion an d con st ruct ion of a n ew
pu mpin g st at ion is t h erefore n ece ssa ry. T he n ew pu mpin g st at ion will se rve as t h e main b rin e in t ake
st at ion for pu mpin g b rin e from t he De ad Sea to t he coast al t ra nsmission syst e m. T he project con sists
of a sea b ase for t h e pu mps, a b r id g e to t he sh or e, a sh or e b ase, d elivery pipes an d an open canal.
Th e P- 9 pu mpin g st a tion is e xpe ct ed to st art commission in g d u rin g t he first qu a rte r of 2021 and to
commen ce ope rat ion d u ring th e se con d h alf of 2021.
R a i sing th e coastal d ykes of th e evapor at ion p ond 5 (th e Pon d) at t he Dead Sea . T he ob ject ive of
t he pr oject is to prot ect from st ructu ra l d amage to t h e fou nd ation s a nd th e h otel bu ildin gs sit uated
close to t he wat er’s edge, to t he set tlement of Neve Zoh ar an d to ot her infr ast ru cture located along
t he west e rn sh or elin e of t h e Pon d. T he pr oject is implemen t ed by t he Government of I sr ael, t h rough
t he De ad Sea Pr eserva tion Govern ment Compa ny Lt d., t og ethe r wit h DSW ( who fin anced 39.5% of
t he pr oject 's cost ). T he con st r u ction work wit h r espect to t h e h ot e ls' coast lin e is comple t e an d at
presen t , t h e Dead Se a Preservat ion Govern me nt Compa ny Lt d. is carryin g out elevation work in the
in t er me d ia te are a be twe en t he two h ot e l complexes. The solu tion s' level maximu m he ig ht ( 15.1) is
expect ed to be re ached by t he end of 2021. From 2022 on wa rd s, t he solu tion s' volu me in th e Pond
will be pre se rved on ly by way of h ar ve st in g t h e salt , as part of th e perman e nt solu t ion ( t h e salt
ha rvest in g pr oject), which sh ould pr ovid e a defen se un til t he end of t he cu rren t con ce ssion pe riod
in 2030.
S a lt harvesting in th e De ad Se a. A proje ct a imin g to provid e a pe rman en t solu t ion for ra isin g the
wat er level in Pon d 5 an d st a b ilizin g of t h e wat er t her ein at a fixed level by h ar ve st ing of t h e salt
from t h is pon d a n d t r an sferrin g it to t h e Nort h ern B a sin of t h e De ad Se a. A ccor d in g to t he
ag reeme n t, t h e plann in g and exe cu tion of t he Salt Harvest in g Project will be perfor med by DSW .
Th e Company will b ear 80% an d t h e st a te of Isr ael will b e ar 20% of t h e cost of t h e Salt Har ve sting
Project . Howe ve r, t h e St at e's sh are will n ot exceed NIS 1.4 b illion . T he salt d re d g er, as par t of t he
Salt Harve st in g Project, commenced oper at ion in t h e fou rth qu art er of 2020.
C o n so lidation of pr odu ct ion site s a nd expan din g l ogist ic capacities in Spain. Th e Compan y is in the
proce ss of con solid a t in g t he act ivit ies of ICL I b eria in t o on e sit e by mean s of expan d in g t h e Su ria
prod u ct ion sit e (wh ich in clud es a min e an d a plant) an d th e d iscont inu ation of t he min ing act ivities
at t h e Sallen t sit e , which t ook place in J u n e 2020. Th e proje ct s in clu de t he b uild ing of a n ew port
load in g b ay facilit y at B ar celon a , wh ich was complet ed d u rin g 2020, an access t u n n el to con n ect
t he min e to t h e su rface plan t s by con veyor b elt s ( ra mp pr oject ), wh ich is e xpect ed to b ecome
operat ion al d u r in g t he fir st half of 2021, as we ll as an u pg ra d e of t h e min e's su r roun din g log ist ics
160 ICL Group Limited
in fr ast ru ctur es. Complet ion of t he r amp project is expe ct e d to in cr ease t he min e's prod u ct ion
capacit y up to appr oxima t ely 1 million t on nes per ye ar, wh ilst in th e futu re, after t he complet ion of
ad d it ion al n ecessar y log ist ics ad ju st men ts, it is expect ed to in crea se ca pacit y by up to ab ou t 1.3
million t on nes per yea r.
N e w product ion ca pacity of T BB A in Neot Hovav. Facin g in cr easin g d e ma nd fr om t h e au tomot ive
an d t elecommu n ica tion ma rket s, t h e Compan y is workin g to in cre ase it s prod u ct ion capacit y of
TB B A ( T etr abromob isph enol A ), a b r omin a t ed flame ret ar dan t, in clu d ing comme n cin g pr od u ction
at t h e n ew plan t at ou r Neot Hovav sit e. The prod uct's main target market is China.
In 2020, t he main capit al in vest ment s ( CA PEX ) in clu de d t h e con st ruct ion of th e Ne w Pu mping
St at ion (P-9) in t he Nor t he rn b a sin of t h e Dead Sea , t h e con solid at ion of t he pot ash prod u ct ion
capacit y in Spa in ( min e, log ist ics a n d port ), t he n ew T B B A capacit y e xpan sion in Neot Hovav, t he
Salt Harvest in g Project in t h e eva porat ion pon d s at Sod om, th e n ew prod u ct ion fa cilit y of W h ite
Phosphoric A cid as part of ICL par t nersh ip in Chin a ( Y PH J V) an d Clean Air A ct related pr ojects in
Isr ael.
In 2021, t h e Compan y pla ns to complet e it s prod u ct ion con solid at ion an d capacit y e xpansion in
Spa in , to comme nce ope rat ion of t he New Pu mping Station (P- 9), to b uild a n ew pon d h ar ve ster in
Sod om, to est a b lish a n ew Food Fib er Prot ein plant in t h e US a nd con t in ue to in vest in Clean A ir
Act re lat ed proje ct s in Isr ael.
Th e Company fin an ces it s capit al expen d it u res fr om cash flows from opera t ion s an d from cred it
facilit ies.
Crit ical Accoun tin g Policies and Estimates
Th e prepar at ion of fin a ncia l st a t emen ts in con for mit y wit h IF RS re qu ire s mana geme nt to make
ju d g men t s, est imat es and assu mpt ions t h at affect t h e applica t ion of accou n t in g policies a n d t he
report ed amou n t s of a sse t s, liab ilit ies, in come a nd expen ses. A ct u al resu lt s may d iffer fr om t h ese
est ima t es.
Th e evalu at ion of accou n t in g est imat e s u se d in t he prepa rat ion of IC L’s Fin an cial St at ements
requ ires t he Compan y's man ag emen t to make assu mpt ion s r eg ard in g laws in t e rpr eta tion s, which
apply to t h e C ompa ny, cir cu mst an ces an d even t s in volvin g con sid era b le u n cer t aint y. The
Compan y's ma nag emen t pr epare s t h e est imates b a se d on past experience, var iou s fa ct s, ext e rnal
circu mst a nces, an d reason ab le assu mpt ion s relat in g to t he per t in en t circu mst a nces of each
est ima t e. Est imat e s an d u n d er lyin g assu mpt ion s are re viewed on an on g oin g b asis. Revisions to
accou n t in g est imates are re cog nize d in t h e pe riod in wh ich t h e est imat e s are revised a n d in an y
fu t u re pe riod s a ffecte d.
Not e 2 to ou r Au d it ed Fin ancial St at eme n ts con t ain s a t ab le t h at se t s for t h in format ion ab out
assu mpt ions ma d e by ICL wit h re spect to t he futu re a nd oth er r eason s for u ncertain ty r egarding to
est ima t es t h at h ave a sig n ifican t risk of re su lt in g in a mat erial ad ju st ment to ca rryin g amou n t s of
asset s a nd liab ilit ies in th e n ext fin ancia l ye ar.
161 ICL Group Limited
C. RESEARCH AND DEVELOPMENT, PATENTS AND LICENSES, ETC.
Rese arch an d deve lopment
ICL’s R& D and I n n ovation ( RD&I) act ivit ies are part of it s g lob al st rategic plan an d in clu de pr oduct,
for mu lat ion , an d process d evelopmen t s. Th e a ct ivit ies in clu d e b ot h in t ern a l research and
collab ora t ive re se arch wit h u n iversit ies, in st it u tes, a nd st art-u ps. I CL’s RD& I is aimed t oward s t he
presen t an d fu t ure market an d cu st omer n eeds in ad d it ion to id en t ifyin g n ew u se s for it s core
min era ls a nd d erivatives. O u r core RD&I act ivitie s su pport each of ou r bu sine ss se gme nts, wh ile the
lon g er- t erm st r at egic project s, d ig it a l pla t for ms, an d t echnolog ical solu t ion s for fa rmers and
ag ron omist s are coor d in at ed at t he corporat e leve l.
Fie ld s of RD& I in clu d e:
N e xt G en er at ion F ertilization : nu trient u se efficie ncy, b iod eg radable coat in g s; nu trient sen sing;
growt h en h an cers; n itrog en fixa tion .
F o od T e chnolog y: text u re improvemen t , st ab iliz at ion , salt red u ct ion , she lf-life ext en sion and
alt erna tive pr ot e ins.
E - m obil ity/Su stainabilit y: en ergy st ora ge; h ydrogen ca rrier s for fu el cells; lit h iu m b at tery recyclin g.
N o v el M aterials: flame r eta rda nt s; pa in ts & coatings ad dit ives; b iocid e s.
C i rcu lar e con omy: wast e to Prod uct; re cyclin g; e fficiency improvemen t .
I n d ust ry 4 . 0: IOT in man u fa ct u ring , safe t y an d en vir on men t ; ma ch in e lea rn in g a n d a rt ificial
in t ellig e nce for man ufactur ing opt imization a nd pr od u ct developmen t.
D i g ital A gricultu re :
ICL’s d ig it al plat form con t in u es to evolve in it s mission to in t eg ra te mu lt iple pre cision - ag
t echn olog ie s (sen sors, imag ery, a nd ot h ers) wit h ad d it ion al agr on omica l r esea rch da t a from
mu lt iple par t n ers.
Th e d ig it al t echn olog y d eveloped by ICL d ig est d ata from mu lt iple sou rces, au tomat ically ag gregate,
st an d ar dize an d e nrich it t hu s creatin g on e harmon ize d ata la ke with st ron g A L/ML en g ines. T hose
powerfu l en g in es e na b le ICL to d e ploy a d va n ced d at a -driven solu t ion s t h at d r ive real t ime
ag ron omic d ecision s makin g like in cre asin g crop yield s an d fa rme r's profit ab ilit y. An in cr easing
nu mb e r of glob al part ners are join in g I CL’s r evolu tion ary d ig ita l plat form in clu din g lead ing g lobal
aca d emic in st it u t ion s and mu lt in at ion al ag ricu lt u re compa nies solid ifyin g t h is st r on g d ig it al
fou n d a t ion wit h h ig h qu ality and h ig hly a ct iona ble agr on omic d ata.
Th e ad d it ion of Gr owers Hold in gs, Inc. ( “Growers”), a US-b a sed soft ware an d d at a A n alyt ics
Compan y acqu ired by I CL in 2020 ad d e d an ot h er layer to I CL’s d ig it al plat for m wit h it s ad va nced
solu t ion s to en h an ce decision -makin g capab ilit ie s for far me rs, ag ron omist s, an d ot h er a gro-
profession a ls by creat in g easily ad a ptable and e xecu tab le d ata-driven recommendat ion s.
Th ose effor t s comb in ed en ab le I CL to leve rage it s d igit al plat for m an d d a ta driven solu t ion s to create
an ag ro- pr ofe ssion al commu n it y t h at en ables sh arin g of in for ma t ion & kn owled ge b et ween all
part ie s: g rowers a nd a g ro-profe ssionals, d ealers, ret aile rs and food prod u cers to ext ract t h e most
va lu e from a gricu lt ure.
162 ICL Group Limited
B e low are the m a in areas of t he R&D act ivities by seg ments:
In d u st ria l Prod ucts
• New fla me ret ard ants for prin t ed wire b oard s: Developmen t of n ew ph osph oru s- b ased
solu t ion s for PW B a ccord in g to n ew e me rg in g d e mand s from t h e ma rket , for e xa mple,
Polyqu e l® P100. This is a polymer ic ph osphoru s- b ased flame- re t ardant act ive e st er cu ring
ag en t for epoxy lamin at es wit h su perior pe rforman ce which is in t he ma rket d evelopment
st ag e.
• Flame re t ard an ts for polyu re t han es: d eve lopmen t of new ph osph oru s- b ased solu t ion s and
in t eg r ate d phosphoru s/ bromin e solu t ion s as fla me r et ar d ants for t h e polyu r et h an e market
( flexib le an d r ig id foam). for exa mple: t h e Ver iQu e l™ F series, n ew flexib le phosph oru s-based
act ive fla me r et ar d ant for flexib le polyu re t han e b e in g la u n ch ed to t h e mar ket a nd
Ve riQu el™R100, n ew react ive phosph oru s-b ased flame r et ard an t for r ig id in su lation foams in
b u ild in g an d con str uction mar kets.
• En ergy st ora ge: con t in ued d evelopmen t of b romin e -b ased en ergy st ora ge solu t ion s for Br-
B at t er y compan ies, u sing d iverse compou n ds.
• B iocid es: con t in u ed d eve lopmen t of new mat erials for wa t er t r eat me nt an d pre vent ion of
b iofilm in in d u st ria l wat e r- coolin g syst ems an d pu lp & pa per plan t s. Promot ion of t he
B act e sper se t ech nolog y for pu lp& paper, Re ve rse O smosis memb r an es & coolin g t owers.
• Phosphoru s- b ased prod u cts: d evelopmen t of n ew ph osph oru s- b ased solu t ion s for h yd raulic
flu id s.
• Ma gne sia -b ased pr od u cts: d evelopmen t of for mu lat ions to fu lfill u n me t n eed s in t h e markets
su ch as elimin at in g alu min um sa lt in d eod or an ts, for example , CareMag D, wh ich is a lr eady in
t he market wit h one le ad ing in t er nation al compan y an d a not h er in t he proce ss of b eing
lau nch ed . Th is prod u ct won t he b r on ze med al for in n ovat ion in t h e la st In‑ Cosme t ics
In t e rn ation al con ference, or zin c oxid e replacemen t in se ve ral con su mer pr od ucts.
• Ad d it ion a l prod u cts were d eveloped for b a b y car e applica t ion s ( CareMag B) an d a cosmet ic
face mask ( CareMag M).
• Use of a rt ificial in t ellig en ce for id en t ifyin g n ew a pplica t ion s for b r omin e a n d b r omine
d erivat ives.
• Su pport of prod u ct ion : improvin g prod u ct qu a lit y, prod u ct ion cost , en er gy-saving , recycling,
an d wa st e t r eatme nt . Ch angin g and impr ovin g proce sse s wh ile u sin g t h e prin ciples of g reen
ch emist r y.
• Imple ment in g a n ew mod ified process for T B BA produ ction .
• Tr ou b lesh oot in g a nd equ ipme n t ma in t en an ce cycle impr ovemen t u sin g b et ter con st ru ction
ma t erials pre vent ing accelerated corr osion , wear an d t ear, an d e qu ipmen t adapta tion .
Th e t ot a l I ndust ria l Pr odu cts seg men t’s R& D expenses in 2020 were a bou t $19 million .
163 ICL Group Limited
Pot a sh
• Act ivit ies of e fficien cy a n d syn er g y mea su res in ord er to in cre ase pot ash prod u ct ion and
red u cin g cost per t on ne at t he pot a sh an d mag ne sium plan t s in Sod om.
• Ad vancemen t of research r eg ard ing e n viron me nt al prot ect ion , in clu d in g d evelopmen t of
me t hod s for t r eatin g a nd red ucin g e ffluent s.
• Ana lysis of alt er native met h od s for in creasin g t he prod u ct ion ca pacit y of carn allit e at the
evapor at ion pon d s.
• Imple ment a t ion of t he R& D d epar t me nt re commen d a t ion s d esig n ed to clear b ot t len ecks,
focu sed on t h e flot ation an d crystalizin g a rea s, wit h t h e pu rpose of in cr easing th e pr od u ction
capacit y in IC L I b er ia .
• Pot a sh plu S – opt imiza t ion of t h e compact ion proce ss paramet e rs, deve lopmen t at I FDC
( In t e rn at ion al Fe rt ilizer Developmen t Ce nter), and in creasin g pr od uct ion capacit y.
• Gra nu lar Polysu lph at e® – opt imizat ion of t h e process on t wo a spect s: ou t pu t a nd qu ality, as
well as t h e implemen t at ion of a n ew or gan ic coatin g.
Th e t ot a l Pot ash se gment's R& D expense s in 2020 were abou t $5.3 million .
Phospha t e Solu t ion s
• Th e seg men t con t in ues to ch eck t h e ad apt at ion of va riou s pot en t ia l t ypes of ph osph at e rock
for t he pr od u ct ion of phosph oric acid a nd it s d own strea m pr od u cts as pa rt of an effort to ut ilize
an d in cre ase exist in g ph osph at e re se rves. In 2021, t h e Compa ny will fu r t he r a nalyze a d d itional
t ypes of phospha t e in clu d in g R& D, pilot s, pla n t t est in g act ivit ies, an d ot her econ omic fea sib ility
assessmen t s.
• Rese arch r eg ar d in g e nviron me nt al pr ot e ct ion , in clu d in g t h e d evelopmen t of me t h od s for
t rea t in g an d r educin g effluent s a nd application s for Ph osph og ypsum u ses.
• In t e gr ation of se con d ary sou rce Ph osph ate t e ch nolog ies ( circular econ omy) - imme d ia t e u ses
in th e pr od u ct ion facilit ie s in Eu r ope an d d e ve lopmen t of fu t u r e sou r ces for ou r fer t ilizer
prod u ct s.
• De ve lopmen t of fert iliz ers wit h h ig he r agronomic n u trient efficie ncy ( NUE).
• De ve lopmen t of a n ew PK fert iliz er t ha t is fu lly wat er solu b le.
• R& D Food Specia lt ies su ppor t ed fu rth er growth in t he t radit ion al mar kets an d applicat ion areas
of Me at / Pou ltry/Seafood ( MPS), Dairy, an d B akery by expan d in g t h e foot prin t in emer ging
ma rket s.
• Con t in u ed d ive rsification of pr od u ct por t folio for meat su b stit utes. In t his con t ext, ICL further
d eveloped an d in t e nsified it s ROVITA RI S® alt ernative prot ein t echn olog y R& D resou rces in
t hree a rea s: a ne w cont inuou s proce ss to prod uce veg an prote in fib ers was d eve lope d and will
be implemen t e d in a d edicated plant in t he US in 2021. T his prod uct is su ited for te nd er , white
me at imit at ion s for ch icke n a n d fish replacemen t s; t h e e mu lsion t e ch nolog y was su ccessfu lly
t ran sit ion ed fr om veg etar ian to ve g an to e mu late h otd ogs, cold cu t s, et c. Th e a war d- winning
164 ICL Group Limited
t echn olog y for ROVITA RIS® textur ed prote ins was fu rth er improve d in t erms of qu alit y to d rive
glob al roll- ou t ou t side t he US.
• A d ed icat ed F ron t -En d In n ovat ion g rou p wa s fou n d ed , focu sin g on t h e id en t ificat ion of
b rea kt h rou gh in g red ients in colla b or at ion wit h b ig d at a specialist s t o id ent ify upcoming
t echn olog ie s.
Th e t ot a l Ph osph ate Solu tion s segmen t's R&D e xpenses in 2020 were ab out $8 million .
In n ova t ive Ag Solu tion s
Th e I n n ovat ive Ag Solu t ion s se gment will promot e in n ovat ion an d d e ve lopmen t of n ew prod u cts
an d ser vice s.
Ma in R& D t ar g ets:
• Improve me nt of t h e prod u ct port folio wit h n ew pr od u ct formu la t ion s; Main ly t a ilored
for mu lat ion s to cu st omer d eman d.
• De ve lopmen t of con t rolled re lease NPK fertilizers wit h a qu icker fu lly d egr ada ble coat ing .
• De ve lopmen t of applicat ion s for wat er con servat ion an d improvin g availab ilit y of fer t iliz ers
arou n d t h e r oot .
• In it ia t ion an d d evelopmen t of n ew t e ch n olog ies to in crease nu trien t u se efficien cy a n d plant
growt h
Th e t ot a l I nnovative Ag Solu tion s segmen t’s R& D expense s in 2020 were a bou t $10 million .
Cir cu lar Econ omy
For t he pa st few ye ars, I CL ha s b een e ng ag ing in th e Cir cu lar Econ omy. Du ring 2020, t h e prog ress
of Circu la r Econ omy project s wa s t racked and variou s init iat ives wer e promot ed. Proje cts a cross the
glob e in clu d e u sin g ICL's by-prod u ct s as raw mat e ria ls in ot h er in d u st ries as well as in ot h er I CL
b u sin ess u n it s. ICL's fa cilit ie s are a lso u sin g by-pr od u ct s of ot her in d u stries as par t of th eir raw
ma t erials.
Cu rren t proje ct s a nd pilot proje ct s in clude:
• Usin g sewag e slu d ge a sh for fertilizer pr odu ction .
• Salt by-prod u ct u tilization . As part of ou r n ormal oper at ion s, we are d isposin g 2.6 M cu b ic
me t ers of sa lt from t h e pot a sh prod u ct ion pla nt s, ( e xclu d ing t h e salt h ar ve st ing project ), we
are lookin g for alt er native areas to st ore it close to t h e areas wh ere t h e sa lt is prod u ced. The
sa lt wall ob st a cle is b ein g b u ilt a lon g t h e b orde r b e t ween I sra el an d J or dan an d will provide
us wit h a close area to st ore salt ( 1.2 M cu b ic met er s) wh ile su ppor t in g I DF n ee d s.
Appr oximat ely 1 kilomet e r of t h e salt wall was alre ady b u ilt.
• Th e ESK project is collect in g A PCr ( A ir Pollu tion Con t rol r esid u e) ash es from W ast e to Energy
plan t s cast in g them in to b locks a nd u sin g th e b locks as min e su pport materials replacing wood
an d st ee l.
• Ma giK - Cr eat in g valu e from by- prod ucts. A n ew prod uct was d e ve lope d a nd ma rke ted from a
by-pr od u ct s st ream t h at is cr eat ed as part of ma gnesiu m's produ ction proce ss.
165 ICL Group Limited
In t e llectual property
Th e Compan y b e lieves t h at it s in t ellect ual prope rt y is cr u cial for prot ect in g a nd d evelopin g its
b u sin ess a ct ivit ies. I CL has abou t 750 g ranted pa t en ts in variou s cou ntr ies.
ICL also h as over 3,000 reg ist ered tra demar ks world wide , in clud ing in ter-a lia:
• Fyrol® - a b ra nd n ame for a ran ge of ph osphoru s- con tainin g flame ret ardants t ar geting fle xible
an d rig id polyu reth an e foam a pplica t ion s.
• J oh a® - a glob al tr ad emar k for d airy spe cialt ie s, wh ich spe cializ es in emu lsifyin g salt s for
proce sse d ch ee se.
• Me rqu el® - a lin e of in org an ic b romin ated salts wh ich ca n be u se d to con t rol mer cu ry emissions
from coal power plan t s.
• Osmocot e® - a lea d in g b r and in t he area of cont rolled re leased fe rtiliz ers wh ich u se s in novative
t echn olog ie s an d is u sed g lobally by con ta in er n urse ry st ocks, pot- pla n t g rowe rs and mor e.
• Pet er s® - a b r an d of wat er solu b le fer t iliz ers, spe cifically d esig ne d for b ed d in g -, pot- and
con t ainer n ur se ry pla nts.
• Ta ri® - a b r an d in t he me at in d u stry as well as in t h e ar t isan b u sin ess which focu se s on t he
prod u ct ion an d pr ocessin g of meat pr od u cts wit h fu nction al add itive s, spices a nd flavors.
• B rifisol® - a g lob al b ran d in th e meat and seafood in du str ies, wh ich con cen trate s in impr oving
t ext u r e by a dd ing cr yopr otectant for froz en food pr od ucts su ch as mea t, sh rimp, fish filets and
more .
• Rovit a ris® - a b r and name for pla n t-b ase d mea t alte rn at ives th at are virtually in dist ing uishable
from t heir t rad ition al meat cou nterpa rts.
We do n ot b elieve t ha t th e loss of an y sin g le or grou p of rela ted pa tents or t rad ema rks wou ld have
a ma t erial e ffect on ou r ope rat ions or ou r fin ancial r esults.
166 ICL Group Limited
D. TREND INFORMATION
Tr en d in format ion is in clu d ed t hrou ghou t t h e ot h er sect ion s of “I t em 5 - Oper at in g an d F in ancial
Review an d Prospect s— A. O per at ing Re sult s”. In ad dit ion, t h e flu ctua tion s in t he oper atin g r esults
ma y con t in u e in t he u pcomin g qu ar t ers. Specific ma t erial d r iver s of t h ese t r en ds are id en tified in
t he d iscu ssion ab ove wit h r espe ct to t he yea rs ended Dece mber 31, 2020 an d 2019. Season ality of
ou r b u sin ess is in clu d ed in “It em 4 - I n formation on t he Compan y— B. B u siness Overview”.
E. OFF-BALANCE SHEET ARRANGEMENTS
As of Decemb er 31, 2020, we ha d no mat eria l off-b alan ce sh ee t ar rang eme nts, ot h er t han the
amou n t s d e scrib ed in Not e 13G ( 2) an d Not e 18A (5) to ou r A udit ed Financia l St at emen ts.
F. CONTRACTUAL OBLIGATIONS
For in format ion ab out th e Compa ny's cont ra ctual ob lig ation s, see Not e 18 to ou r A ud ited Financial
St at emen ts.
G. SAFE HARBOR
St at emen ts in It em 5 of t h is Ann u al Report on F orm 20- F t h at are n ot st atemen ts of h ist or ica l fact,
con st it u t e "forwar d -lookin g st atements". Se e "forward- lookin g st a t ement s" of t his A nn ual Report.
Th e Company is r elyin g on t h e sa fe har bor provid ed in Section 27A of t h e securities A ct of 1933, as
amen d ed , a n d Sect ion 21E of t h e secu rit ies Exch an g e A ct of 1934, as amen d e d , in makin g su ch
for ward - lookin g st a temen ts.
167 ICL Group Limited
Item 6 – DIRECTORS, SENIOR MANAGEMENT AND
EMPLOYEES
A. DIRECTORS AND OFFICERS
Th e followin g t ab le list s t he n a mes a nd a g es of ou r d ire ct ors as at March 1, 2021. T h e ma ilin g
ad d r ess of ou r d ire ct ors is c/ o I CL Grou p Lt d ., 23 A ran ha St re et , Mille nniu m Towe r, T el Aviv,
6120201, Isr ael.
N ame
Age
Commencement date as director
Yoav Doppelt
(
52
December 2018 and as Chairman of the Board since July 2019
Aviad Kaufman
50
March 2014
Avisar Paz
64
April 2001
Lior Reitblatt
63
November 2017
Nadav Kaplan
75
August 2018
Ovadia Eli
76
August 2011
Reem Aminoach
59
March 2017
Ruth Ralbag
60
January 2018
Sagi Kabla
44
February 2016
Tzipi Ozer Armon
54
January 2020
Dr . Nad a v Kaplan an d Ms. Ru t h Ralb ag are “e xt ern al d irect ors” pu rsu a nt to t h e I sraeli Compan ies
La w, 5759-1999 ( t he “Compan ies La w”).
Mr . Lior Reit b lat t an d Ms. Tzipi Ozer Armon qu a lify as "in d epen d en t d ire ctor s" pu r su a nt to t he
Compan ie s Law.
Mses. Ru t h Ralb a g and T zipi Oz er Armon , Messr s. Na d av Kapla n , Reem A min oach and Lior Reit blatt
are in d epen d en t d irect or s u n d er t h e ru les applica b le to U.S. compan ies list ed on t h e NYSE.
Me ssr s. Yoav Doppe lt , Avisar Paz, Aviad Kau fma n, Sag i Kab la an d Ovad ia Eli are n ot con sid ered
in d epen d e nt d ir ect ors u n d er su ch ru les by virt u e of t h e posit ion s t h ey h old wit h ou r con t rolling
sh areh old er or in t he Compan y; t h ese d irect ors a re a lso n ot con sid ered in d epend en t d ir ector s u nder
Isr aeli la w d u e to t h eir r elation sh ip wit h ou r con trollin g sh areh older or wit h t he Compa ny.
For fu rt h er d etails se e “I tem 6 - Dire ct ors, Se nior Man age me nt an d Employee s — C. B oa rd Practices
— Ext er na l Dire ct ors”.
168 ICL Group Limited
Y o av Dop pelt. Mr . Doppelt ser ve s as t h e Chief Exe cu tive Office r of I sr ael Corp. Pre viou sly Mr. Doppe lt
se rved as t h e Ch ie f Exe cu t ive Officer of Kenon Hold ings Lt d ., a g lob a l Company ( NYSE: KEN), and
Execu t ive Ch airman of IC Powe r Lt d., a power g en era tion Compa ny, from Mar ch 2014 to Sept ember
2017. Prior t he ret o, Mr. Doppe lt was t h e fou n d er an d Chief Execu tive Officer of t h e O fer Grou p’s
privat e e qu it y fu n d wh er e he was in volved in nu me rou s in vest men t s in t he privat e equ it y and
t echn olog y sect ors. Mr. Doppelt h as served as t h e Ch ief Exe cu t ive Officer of XT In vest ments
( formerly kn own as XT Capit a l a n d Ofe r Hi-Te ch ) sin ce 2001. Mr. Doppelt h as act ive ly led se veral
pu b lic offe rin gs of equ it y an d d e b t offe rin gs in t h e US an d Eu rope , a nd h as ext ensive oper at ional
an d g lob al b u sin ess exper ience wit h g rowt h compa n ies. Mr. Doppelt a lso se rves as Ch airman of
OPC En er gy Lt d . ( T A SE: OPC) as well as a d ir ect or of Zim In t e g rat ed Sh ippin g Services Lt d . Mr.
Doppelt h old s a BA d egr ee in Econ omics a nd Ma nag ement fr om t h e T ech nion – I sra el I n st itute of
Te ch nolog y, an d an MB A d eg ree fr om Haifa Un ive rsity.
A v ia d Ka u fman. Mr. Ka u fman ser ve s as t he Ch ief Execu t ive Officer of Qu an t um Pacific ( UK) LLP,
ch airman of t h e b oar d of Isr ael Corpor at ion Lt d ., a b oard memb er of Ke non Hold in gs Lt d ., and ot her
privat e compan ies, each of wh ich may be associa t ed wit h t h e same u lt imat e b eneficia ry, Mr. Idan
Ofe r. Pr eviou sly, Mr . Ka u fman serve d as chief fin an cial office r of Qu an t u m Pacific ( UK) LLP ( 2008-
2017). Mr . Kau fman se rved as d ir ect or of in t ern a tion al t a xation an d h eld var iou s sen ior corporate
fin a nce roles at Amd ocs Lt d . (2002- 2007). Pr eviou sly, Mr. Kau fman h eld va riou s con su lt ancy
posit ion s wit h KPMG. Mr. Ka u fman is a ce rt ified pu b lic accou n t ant an d hold s a BA d eg r ee in
Accou n t in g a n d Econ omics from t h e Heb r ew Un iversit y of J erusa lem ( wit h hon or s), an d an MBA
d eg re e major in g in Fin ance fr om T el A viv Universit y.
A v i sar Paz . Mr. Pa z ser ve d as th e Ch airman of th e B oard of Direct ors of O.P.C . En er g y Lt d . u n t il
J an u ary 3, 2021. Pre viou sly, Mr. Paz se rved as t he Ch ief Exe cu tive O ffice r of Isr ael Corpor at ion and
prior to t h at , as t h e Ch ief Fin ancia l O ffice r of Isr ael Corpor ation . Mr . Paz receive d a B .A . d e g ree in
Econ omics and A ccou n t in g from Tel- A viv Universit y a nd is a cer t ified pu b lic a ccou n t an t in Isr ael
( CPA ).
L i o r Reitb lat t. Mr. Re it b lat t serve d as Chief Exe cu t ive Officer an d Ch airman of t h e B oard of Su per-
Pha rm ( I sr ael) Lt d. Mr. Reit bla tt ha s also previou sly served, a mon g ot her t hin gs, as Ch air man of the
B oar d of Life St yle Lt d . a nd me mb e r of t h e b oar d of Office Depot Israel Lt d . Mr. Reit b latt is a cert ified
pu b lic accou n t an t, a n d hold s a BA d eg re e in Accou n t in g an d Econ omics fr om Te l A viv University
an d an MB A d egree from t he Un ive rsit y of California, B erkeley.
N a d av Kap lan . Dr. Kapla n se rved u nt il r ecen tly as t he ch air ma n of t he b oa rd of ORAN Safe ty Glass
( 2008-2020). In ad d it ion , Dr. Kaplan ser ve d as ch airman of t h e b oard of 11 in d u st r ial compan ies
an d wa s a lso a b oar d me mb e r of fou r I sraeli pu b lic companies. Dr. Kapla n h eld th e milit a ry ra nk of
Colonel ( res.), serve d as a comb at navig at or in regu lar and rese rve service (1964-1997). Pr ior to his
ret ireme nt ( 1986), Dr. Kaplan was t h e h ea d of t h e Plan nin g Division of I A F. Dr. Kapla n hold s a BA
d eg re e in Econ omics a nd B u sin ess Ad min ist ra tion from B ar I la n Un iversit y, a MSc. d e gree in
Ma nag emen t from Ma ssach u setts In stit ute of T echnolog y ( M.I.T ) and Ph .D from Haifa Un ive rsity in
Me mory St u d ie s.
O v a d ia E li. Mr. Eli ser ve s as t he Cha irman of th e B oa rd of Oil Refin er ies Lt d . Mr. Eli se rved as
Chair ma n of th e B oa rd of t h e I sr ael A ir port s A u t h ority, Isr ael Milit ary I n d u stry ( I .M.I ), Sh ma nim
B esisyim Ha ifa Lt d . an d I.C.P.I. Mr. Eli se rved as a memb er of t he Boar d of Direct ors of Salt In dust ries
Isr ael Lt d ., Sha are i Ribit Ltd ., Zim I nt eg rated Shippin g Services Lt d. and OPC Rote m Lt d. Mr . Eli holds
a BA d eg re e in e d uca tion al cou n selin g an d b ible st udies from Haifa Un iversit y and is a g ra duate of
t he Lifsh it z T eachers Colleg e in Je rusalem.
169 ICL Group Limited
R e em A min oa ch. Mr . A min oa ch cu rr en tly serves as d ir ect or of Isr ael A erospa ce In d ust ries. Un til
recen t ly, Mr . A min oach se rved as t h e fou n din g part ner of t h e accou n ting firm Sh t ainmetz Amin oach
& Co. In his milit a ry ser vice , Mr . A min oach , B r ig ad ier g en er al, served as a memb er of t he Gene ral
St aff Foru m of t h e I DF , Head of B u d ge ts at t h e Min ist ry of Defense , fin a ncia l ad visor to t he IDF Chief
of St a ff an d Hea d of t he IDF B u d g et Division . Previou sly, Mr. Amin oach served as d ire ct or at Ofer
In vest ments Lt d . an d as d irect or a n d Chair ma n of t h e A u d it Commit t ee at Zim Lt d ., of th e I srael
Cor porat ion g rou p. Mr. A min oa ch also serve d as a memb e r of t he B oa rd of Gover nors of Had assah
Me d ical Cent e r. Mr. A min oa ch is a cer t ified pu b lic accou ntant , an d h old s a BA d eg re e in Accou n ting
an d Econ omics, T el- A viv Un iversit y (a cad emic hon ors, Dea n 's h on or list ) an d MB A d eg ree in
b u sin ess a d min ist ration , T el-A viv Un iversit y.
R u th R albag. Ms. Ru t h Ralb ag se rves as t h e Ch ief Fin an cial O ffice r of Clalit Hea lt h Services, and
previou sly se rved as Ch ie f Fin an cial Officer of t he Sh aar e Ze d ek Me dical Ce nter in J erusalem ( 2011-
2020), Depu t y Dir ect or of Med ical Fin an ce at t he T el A viv Sou rasky ( I chilov) Med ica l Cen t er ( 2009-
2011), Hea d of t he Hospit al A d min ist ra tion an d Depu ty Dir ect or Gene ral of Pla n nin g , B ud get and
Pricin g at t h e Min ist ry of Hea lt h ( 2004-2009), VP a nd Hea d of Commer cial an d Re t ail B anking
Division at FIB I ( 2001-2003). Ms. Ralb ag a lso served , a mon g ot he r t hin gs, as act in g Ch airper son of
t he b oa rd of d irect or s of F IB I Mort gages Lt d . for a period of fou r yea rs, act in g Ch airper son of the
b oa rd of d ir ector s of A t zma u t Mortgag e B ank Lt d. for a period of fou r yea rs, a d irect or of Sa rel Ltd.,
a Dire ct or of A RA M Provid ent Fun d and an extern al d ir ector at Ha chsh arat HaY ishu v In suran ce Ltd.,
Golf & Co. Grou p Lt d . an d Ha lman A ld u bi I n vest me nt Hou se Lt d . Ms. Ralb a g pre sently se rves, among
ot h er t h in gs, as an ext ern al d ir ect or at M. Aviv Const r u ction I n du strie s. Ms. Ra lb a g hold s a BA degree
in econ omics a nd b u sin ess ad min ist r ation an d an MB A d e g ree in pu b lic policy, b ot h from t he
He b rew Un iversit y of J eru salem.
S a g i K abla . Mr. Kab la is t h e Ch ief F in an cial O fficer of I sra el Cor porat ion sin ce Decemb er 2015. Mr .
Ka b la se rves as d irect or in B azan Grou p an d pre viou sly ser ve d as Sen ior Execu t ive of Bu sin ess
De ve lopment , St rat eg y an d IR in Isr ael Corporat ion . Prior to join in g I srael C orp. Mr . Ka b la held
va riou s man age ment role s in KPMG Corporat e Fin an ce an d M& A. Mr. Kab la h old s an MB A d egree
( Fin an ce) from CO MA S, B .A. d eg re e in Econ omics a n d A ccou n t in g from B ar- Ilan Un iversit y a nd is
qu a lified as a ce rt ified pu blic a ccou ntant ( I srael).
T z ip i Ozer- Armon . Ms. Oze r- A rmon serve s as t h e Ch ief Execu t ive Officer of Lu men is Lt d . B efore
join in g Lu men is, Ms. Oze r- Armon h ead ed t h e J apan ese ma rke t act ivit ie s of T eva Ph ar maceu tical
In d u st rie s Lt d . an d ser ve d as Se n ior Vice Pr esid en t of Sa les a nd Ma rke t in g at San Disk. Pre viou sly,
Ms. Oze r- A rmon also se rved as VP & Gen eral Ma n ag er at MSyst e ms. In a d d it ion to ICL, Ms. Oz er-
Armon is a d ir ect or at t h e St rau ss Grou p Lt d ., It amar Med ical Lt d ., Ramb a m Med Te ch , I sra el’s
Nat ion a l Tech nolog ical In novat ion A u th ority’s Commission an d T el-Aviv Un iversit y. Ms. Ozer- Armon
hold s a BA d eg re e mag n a cu m laud e in Econ omics an d an MB A d egr ee majorin g in Fin an ce and
Ma rket in g fr om Tel-Aviv University a nd sh e is an A MP g ra dua te of t h e Har vard B u sine ss Sch ool.
170 ICL Group Limited
Th e followin g t ab le list s t he na me s, ag es a nd posit ion s of ou r Exe cu t ive O fficers ( wh o are n ot
d ir ect ors) as at Mar ch 1, 2021. T h e ad d ress for send in g n ot ices is c/ o ICL Gr ou p Lt d ., 23 A ranha
St re et , Millen iu m T ower , T el A viv, 6120201, Isr ael.
N ame
Age
Po sition
Raviv Zoller
57
President & Chief Executive Officer
Amir Meshulam
(1)
44
Senior Vice President, Global Internal Auditor
Anantha N. Desikan
52
Executive Vice President, ICL Chief Innovation and
Technology Officer
Anat Tal-Ktalav
52
President, ICL Industrial Products Division
Eli Amon
55
Executive Vice President, ICL Innovative Ag Solutions Division
Ilana Fahima
55
Executive Vice President, Chief People Officer
Kobi Altman
53
Chief Financial Officer
Lilach Geva-Harel
44
Executive Vice President, Global General Counsel
Miri Mishor
57
Senior Vice President, Global Information Technology
Nitzan Moshe
53
Executive Vice President, ICL Global Operations
Noam Goldstein
60
President, ICL Potash Division
Ofer Lifshitz
62
President, ICL Phosphate Solutions Division
( 1) See C. Boar d Pra ct ices – I ntern al A u dit or.
R a v iv Zo lle r. Mr. Zoller h as served as I CL's Pr esid en t and Ch ief Execu tive Officer sin ce Ma y 14, 2018.
Prior to join in g I CL, from 2008, Mr. Zoller se rved as t he Ch ief Exe cu t ive O fficer of I .D.I . Insu r ance
Compan y Lt d . ( “B it u ach Yash ir ”), wh ich is list ed on t he T A SE. In 1999, Mr. Zoller fou n d ed Ness
Te ch nolog ies I n c., which b e gan t r adin g on NASDA Q in 2004 an d ser ve d as it s Pre side n t a nd Chief
Execu t ive Officer u n t il 2007. Mr. Zolle r volu n t arily ser ve d u n t il Oct ob er 2019 as chair ma n of t he
Et h iopian Na t ion al Proje ct ( ENP), a non- profit org a niza tion , sin ce 2012. Mr. Zolle r hold s a B.A .
d eg re e in Econ omics an d A ccou n t in g from T el A viv Un ive rsit y, an d is a qu a lified cer t ified pu b lic
accou n t a nt.
A n anth a N. Desikan . Dr. A nanth a Desikan was appoin t ed Chie f I nn ovation & T echnolog y O fficer of
ICL in Novemb er 2018 an d was promot ed to EVP as of Nove mb e r 1, 2019. Dr . Desikan join ed ICL in
2007 and prior to t his role h as served in sen ior commercia l a nd t ech n olog y ma nagement roles
in clu d in g Senior Vice Pr esid ent of I CL Ind u strial Prod ucts’ F lame Ret ard an ts b usin ess ( 2014-2018),
Presid en t , ICL-IP A me rica (2013- 2015) and VP Glob al Ph osph orou s R& D ( 2007-2013). Prior to join ing
ICL in 2007, Dr. Desikan h eld tech nolog y man age me nt role s at Su pre st a an d A kzo Nob el. Mr.
De sika n h old s a Ph .D a nd M.S d e gree in Ch emical En g ineering fr om Clarkson Un ive rsity, Pot sd am,
New York, an d a B .S. d egr ee in C he mica l En gin ee ring fr om Coimb at ore I nst it u te of Tech nolog y,
Ma d ras Un iversit y, I ndia .
A n at Ta l-Kt alav. Mrs. A nat T al-Ktalav ser ve s as presid ent of ICL´ s I n d u strial Prod u ct s Division sin ce
Augu st 2018. Mr s. Ta l- Kt alav join ed I CL in 1995 a nd se rved in va riou s lead in g posit ion s in the
In d u st ria l Pr od u ct s b u sin e ss se gmen t , in clu d in g Market in g Direct or of Fla me Ret a rd ants, Vice
Presid en t for I ndu strial Solu t ions ( Br omin e and Compou n ds B u siness Lin e), Deput y to t h e Pr esident
of IC L I nd u strial prod u cts, an d as t he Execu tive Vice Pr esid ent of I CL In d u strial Pr od u cts. Mrs. Ta l-
Kt a la v h old s a d e gree in chemica l eng ineer ing from B en Gu r ion Un ive rsit y.
171 ICL Group Limited
E l i A mon . Mr . A mon ser ve s as EVP, ICL I n novat ive Ag Solu t ion s Division sin ce Fe b ru ary 2017. Mr.
Amon join ed I CL in 1994 an d se rved in var iou s le ad er ship posit ion s in clu d in g Execu t ive Vice
Presid en t for sales Market in g & Log ist ics I CL Fer t ilizers, Vice Pre sid e n t for Sale s IC L Fert ilize rs, and
Vice Presid en t B ulk Log ist ics ICL Fertilizers. Mr. Amon h old s a B .A . degre e in Econ omics & B u siness,
an d MB A d e g ree, b ot h from B en Gu rion University.
I l a n a Fa hima. Ms. I la n a Fahima serves as EVP, Ch ief Pe ople Office r, sin ce Novemb er 2018. Prior to
join in g I CL, Ms. Fa hima se rved as Vice Pr esident HR for Glob al Qu alit y and Head of Isra el HR at Teva
Pha rmaceu tica l Ind ust ries Lt d . B efor e join in g T eva, Ms. Fa hima h eld sever al posit ion s at Ma cca b i
He alt h Services, a mon g t h em Region al HR Dire ct or and Region al Se rvice Manag er. Ms. Fa hima holds
a BA d eg ree in Social W ork and an MB A degr ee in Healt h C are Ma nagemen t, b oth from B en Gu rion
Universit y.
K o b i A ltma n. Mr. A lt man se rves as I CL CFO sin ce 2015. Mr . A lt man pre viou sly h eld se veral sen ior
posit ion s at T eva Ph ar ma ceutical Indu str ies Lt d . (2006- 2015) ( T ASE & NY SE: T EVA) a nd A md ocs Ltd
( 1999-2006) ( NYSE:DO X ). Mr. A lt ma n is a Ce rt ified Pu blic A ccou ntant in I srael and hold s a BA degree
in Accou n t in g an d Econ omics fr om B ar I la n Un ive rsit y an d an MA d e gr ee in Econ omics from B ar
Ilan Un ive rsit y.
L i l ach Geva- Hare l. Mr s. Geva- Harel se rves as EVP, I CL's Glob al Gene ral Cou n sel sin ce Feb ru a ry 1,
2019. Prior to join in g I CL, from 2009, Mr s. Ge va - Harel ser ve d as Sen ior De pu ty to th e Chief Exe cu tive
Office r and He ad of In vest me nts Hou se 's Head qua rt ers of Psag ot I n vest ment Hou se Lt d., as well as
t he g en eral le ga l cou n sel. Mrs. Geva -Har el was pre viou sly a Part n er in t h e Merge r & A cqu isit ions
De par t me n t at Gr oss, Klein h en dler, Hod a k, Halevy, Gr een berg & Co Law Offices ( GKH). Mrs. Ge va -
Ha rel h old s an LLB degr ee and an LLM d eg re e, b oth from B ar Ilan University a nd is a member of the
Isr ael B ar .
M i r i M ish or. Mrs. Mish or se rves as SVP, I CL Informat ion T ech n olog y sin ce 2014. Mrs. Mish or join e d
ICL in 1986 an d serve d in va riou s posit ion s, in clu d in g CIO of ICL Ind u st rial Prod uct s an d Vice
Presid en t In formation Syst e ms of ICL Fert ilizer s. Mrs. Mish or h old s a B .Sc. d eg ree in Ma t he ma t ics
an d Compu t er Scie nce a nd a M.Sc. d egr ee in I nd ustrial Man ag eme nt from B en Gu rion Un iversit y.
N i t zan M oshe. Mr. Mosh e was appointed Exe cut ive Vice Pre side nt, I CL O peration s in O ctobe r 2019.
From 2014 to t h e presen t , Mr . Mosh e h as served as Sen ior Vice Pre sid e nt, Ope rat ion s of ICL
In d u st ria l Prod u cts. Pr ior to t h at , Mr. Mosh e h eld a nu mb er of sen ior posit ion s at Rot em Amfe rt
Neg ev, Lt d ., in clu din g VP of it s Acid s & Fertilize rs Division , He ad of Procu rement a nd Con tract s, and
Ma nag er of Rot em’s Su lfu r ic Acid Pla nt . Nit za n hold s a MB A d e g ree an d B Sc d eg ree in Ch emical
En g in ee ring, b oth from B en Gu rion Un iver sity, I srae l.
N o a m Gold stein. Mr. Noam Gold st ein serve s as Pr esid en t of I CL´ s Pot ash Division sin ce Au g ust 2018.
Mr . Gold st ein join ed ICL in 1986 an d se rved in var iou s posit ion s in t h e Pot ash b u siness Division ,
in clu d in g Vice Pre sid en t of B u sine ss De ve lopment, CFO in Eu rope, Vice Pr esid en t of I n frastructure,
Sen ior Vice Pr esid en t Oper at ion s at ICL Dead Sea, an d Exe cu t ive Vice Pre sid e nt Pot a sh and
Ma gne siu m. Mr. Gold st ein h old s a B .A. d eg ree in Econ omics a n d B usin ess Ad min istrat ion fr om the
He b rew Un iversit y of J er u sa le m a n d a M.A . d eg re e in Econ omics from B en Gu rion Un iversit y. Mr.
Gold st e in is a lso a g ra d u ate of t he Hesche l Su stainabilit y Lea dersh ip Fe llowship Prog ram.
172 ICL Group Limited
O f er L ifsh itz . Mr. Lifsh it z se rves as Pre sid ent of ICL´ s Ph osph at e Solu t ions Division sin ce A u g ust
2018. Mr . Lifsh it z join ed I CL in 1996 a nd se rved in va riou s sen ior lead er sh ip posit ion s in clu d ing
Execu t ive Vice Presid en t of I CL In dust rial Product s, Senior Vice Presid en t of Glob al Proce sse s and as
t he Compan y’s In t egrat ion Mana ger, Executive Vice Presid en t for Specia l Project s, an d u nt il r ecen tly,
Presid en t of I CL Essen tia l Min erals Division. Mr. Lifshit z h old s a B .A d eg re e in Econ omics and a M.A
d eg re e in I nd ustrial Mana gement , bot h from B en Gurion University.
F a m ily Relation shi ps
Th er e are no family r ela t ion ships b et ween an y memb e rs of ou r execu t ive mana g emen t an d our
d ir ect ors.
A r ran ge ments f or E lection of D ire ctors an d Memb ers of Mana gement
Th er e are no arr an g emen ts or u n d e rst an ding s wit h major sh ar eh old er s, cu st ome rs, su pplier s or
ot h er s pu rsu a nt to which a ny of ou r exe cu tive ma nagement or ou r d irect ors were elect ed .
B. COMPENSATION
Dire ct ors Compen sat ion : Un d e r t h e Compan ies Law, t h e compe nsa t ion of d irect or s g en era lly
requ ires t he a pprova l of t he HR & Compensa t ion Commit t ee, t he Boar d of Dir ect ors a n d t he
sh areh old er s, in t h at order. T h e appr oval of t h e HR & Compe nsa t ion Commit t ee and t h e B oa rd of
Dire ct ors mu st be in accord a nce wit h t h e Company’s compen sa t ion policy. In special cir cu mst an ces,
t he HR & Compensa t ion Commit t ee an d B oard of Direct or s may approve a compe nsa t ion
arr an g ement t hat is incon sistent wit h t he C ompa ny’s compen sation policy, pr ovid ed th at they have
con sid ered t h e same con sid er ation s an d mat ters requ ired for t he approval of a compe n sa t ion policy
in accord a nce wit h t he Companies La w, an d t he a pprova l of t h e Compan y’s sh areh olde rs is by the
Spe cial Ma jorit y for Compen sa t ion , as d e scrib ed in ”I t em 7 - Ma jor Sh areh old ers an d Relat ed (and
In t e rested) Part y Tr an sact ions – B. Relat e d ( an d I nt ere sted) Part y T ran sact ions – Approva l of
Dire ct ors a nd Officer C ompe nsa tion ”.
Gen erally, sh ar eh older appr oval is n ot re qu ire d for d ire ctor compen sation payable in cash ( annual
an d pa rt icipa tion fee s) up to t he maximum amou n ts set forth in regula tion s promu lg at ed u nder the
Compan ie s Law g over nin g t h e compe nsa t ion of ext e rn al d ire ct ors ( t h e “Compe nsa t ion
Reg u lat ions”). The Compe nsa t ion Reg u la t ion s set min imu m a n d maximu m amou n t s of cash
compen sat ion ( a n a nn ual fee and par ticipa tion fees), d epend ing on t he amou n t of t h e Compan y’s
sh areh old er s’ e qu it y, or a lt e rn atively cash an d / or equ it y compensa t ion may be pa id at a cert ain
rat io to th e compen sat ion paid to ot h er d ire ctors wh o are not con tr ollin g sh arehold ers or employed
t hereb y and who are n ot e mployed by t he C ompa ny ( collective ly, "Ot her Dir ector s"), referre d to as
‘re lat ive cash compe nsa t ion’.
Dire ct ors wh o are officers or d ir ect ors of Isr ael Cor p. ( exclu d in g ou r Exe cu t ive Ch airman of the
B oar d , Mr . Yoav Doppelt wh o ha s a se par at e compen sat ion ar ran ge ment, as d e t aile d b elow), do
not re ceive cash compen sat ion for t h eir services as d ire ctor s. I n stead, su ch fees are in cluded in the
an n u al ma na g emen t fees we pay to Isr ael Cor p. pu rsu an t to ou r a g ree men t wit h it . T he
ma na g emen t fees t h at we re paid to Isr ael Cor p. d u rin g 2020, e ffect ive as of J an u ar y 1, 2018,
followin g th e a pprova l of th e sha reh old e rs on April 24, 2018, in clu d e d , a mon g ot h er t h in g s, a ll
compen sat ion compon en t s, in e quit y (or t he econ omic b enefit th er eof) and in cash, for t he services
of Compan y d ire ct ors who are officer hold ers of I sra el Cor p., e xclu din g Mr. Doppelt .
173 ICL Group Limited
Accord in g to approva l of ou r sh are hold ers at t he 2015 A n nua l Gen er al Meetin g held on December
23, 2015, u n t il J an u ary 9, 2021, we paid ou r n on - exe cu tive d irector s ( in clu din g ext e rn al d ire ctors
wit h in t he mean in g of t he Compa nies La w), wh o serve d from t ime to time , re la t ive cash
compen sat ion in accor d an ce wit h t he Compe n sa tion Reg ulation s, which con sist ed of an a nn ual fee,
wh ich in 2020 was in t h e amou n t of NIS 365,000 ( appr oximat ely $113,500) a nd per mee t ing
at t e ndance fees in an amou n t equ al to t h e minimu m pe r meetin g fee paya ble to e xt erna l d irectors
of compan ies of ICL’s sh ar eh old er ’s equ ity pu rsu an t to t h e Compen sation Reg ulation s, as ad ju sted
from t ime to t ime, wh ich in 2020 was NI S 2,390 ( e quivalent to appr oximat ely $740) pe r meetin g for
d ir ect ors who do not mee t t he qu alificat ions of an expert d ir ect or in accor d an ce wit h t he
Compen sat ion Reg u lat ions an d NIS 3,180 ( e qu ivalen t to appr oximat ely $990) per mee t in g for
d ir ect ors wh o mee t t h e qu alificat ion s of an e xpe rt d ire ct or in a ccord ance wit h t h e Compen sa tion
Reg u lat ions. At t he requ est of ou r d ire ct ors, in view of th e impact of t he COVI D-19 pan d emic on
t he ma rke t and econ omy, an d d ue to t he ir pe rson al commit men t an d se nse of r espon sibilit y for our
su ppor t e ffort s t owa rd s ou r employe es a nd t h e commu n it ies in which we opera t e, th e non -
execu t ive d irectors' annu al an d per mee t in g fee s were volu n t ar ily re d uced by 10% d u rin g t h e six-
mon t h per iod of May- Oct ob e r 2020. F or d e t ails r eg ardin g t h e equ ity- ba se d compe nsa tion we paid
to ou r n on - exe cu tive d irect ors on an a nnu al b asis u n t il 2021, se e t h e Equ it y- B ased ( LT I) Gr ants to
B oar d Memb er s t ab le an d a ccompa nies n otes b elow.
Effect ive as of Jan u ary 9, 2021, t he compen sat ion of ou r e xt erna l d irect ors a n d all ot h er non -
execu t ive d irectors t ha t are en titled to compensat ion for th eir service in such capa cit y, was r educed
to t h e fixed a n nual an d per mee t ing compen sation a mou nt s payable to e xpert d irector s u n der the
Compen sat ion Regu lat ion s, replacin g t he "re lative compensa t ion ” mod el t h at was pr eviou sly paid
to ou r d ire ct or s. A ccord in g to t h e d e t ermin ation of ou r Compensa t ion Commit t e e a nd B oar d of
Dire ct ors, t h is n ew compensa t ion mod el ( i.e ., accord in g to t h e Compe nsa tion Reg ulation s) applies
to all of ou r d ire ct ors, as may serve from t ime to t ime, exclu d in g d irect ors who are office h old ers
( wit h in t h e mea n ing of t he Compa nies La w) of I srae l Corp.
Th e Company a lso covers an d / or reimb u rses it s d irect or s for expen ses ( in clu ding t rave l e xpenses)
in cu r red in con n ection wit h mee t in gs of t h e B oa rd of Direct ors a nd it s commit t e es or performing
ot h er se rvices for t h e Compan y in t he ir capacit y as d irect ors, in a ccord an ce wit h t h e Compan y's
Compen sat ion Policy an d t h e Compe n sa t ion Re gula tion s. Ou r B oard Memb er s also b en efit from
d ir ect ors' a nd officers' lia bilit y insu ra nce a nd in demnificat ion and exempt ion arra ng emen ts en tered
in t o wit h t h em. For fu rt he r in format ion , se e “I t em 6 - Dir ect ors, Senior Man ag ement and
Employe es— C. B oard Practice s – Insurance and Indemn ification ”.
Execu t ive Ch air ma n of t h e B oa rd 's Compen sat ion : Mr . Doppe lt 's compensa t ion te rms as ou r
Execu t ive Ch airman of t h e B oa rd were appr oved by HR & Compen sat ion Commit t ee an d B oard of
Dire ct ors on A pril 15, 2019 an d by ou r sh are hold er s at t h e Ext raordin a ry Gen er al Meetin g he ld on
Ma y 29, 2019. Mr. Doppe lt 's compen sat ion t er ms a re in effect for three year s from J u ly 1, 2019, the
d at e of h is ent ry int o office . For further d eta ils re gard ing Mr. Doppe lt 's compen sat ion t e rms, please
se e t h e Se n ior Man a gement Compensa tion - top-five earn er s in 2020 cha pt er b elow.
Ot h er t h an t h e agr eement wit h Mr. Doppelt in his capacit y as Execu t ive Ch airman of t he B oard,
d escrib ed a bove , a nd t he accele ration of equ it y awards u pon t ermin at ion of d ire ctor se rvice under
cer t ain circu mstances, we do n ot h ave any writt en agr eements wit h any cu rre nt d irector pr ovid ing
for b en efit s u pon t he t ermin ation of su ch d ir ector ’s re lation ship wit h u s.
174 ICL Group Limited
Equ it y ( LT I) Gr an ts to B oard Memb ers:
( 1)
Gr ant for Year
Of ferrees
Gr ant Date
Typ e of
E quity
(2)
Dates of Organs'
Approvals
Grant Value (ILS)
per Director
Grant Amount
per Director
E xpiration Date & Vesting Schedule
2020
Each of our
directors who
serve from time
to time
(excluding the
Chairman of the
Board & office
holders of Israel
Corp.)
23.4.2020
Restricted
Shares
HR & Comp.
Committee
3.11.19 & Board
– 4.3.20
Shareholders
(Annual GM) –
23.4.20
310,000
25,389
Ve st ing: 3 equal tranches, upon 12, 24 and 36
months from 1.1.2020 (and from 16.1.20 for
Mrs. Ozer-Armon)
2020
Mr. Yoav
Doppelt,
Executive
Chairman of the
Board
1.7.2019
Options
HR & Comp.
Committee &
Board – 15.4.19
Shareholders
(Extraordinary
GM) – 29.5.19
3 million
2,168,675
Expiration Date: 30.6.2024
Ve st ing: 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
( 1) Th e Equ it y award s are ma de pu rsua nt to t he Compan y’s Equ ity Compensa tion Plan (2014), as a mend ed in J u ne 2016.
( 2) Th e sh ares are sub ject to rest riction pu r suant to Se ct ion 15C of t h e Se cur ities La w.
* For fu rt he r in format ion re g ardin g t he fa ir va lu e of t h e restricted sh are s an d vest ing con dition s t hereof, see Not e 19 to ou r Au d ite d F in an cial Statements.
175 ICL Group Limited
S e n ior Manag emen t Com pen sation
Th e ag g re gate compe nsa tion a mou n t in curred to all of t h e memb er s of ou r senior man ag ement ( Globa l Execu tive Commit t ee – GEC) as of Dece mb e r 31,
2020, wa s a pproximat ely $11 million for t h e yea r 2020. T h is amou n t in clu d e s an a nnual provision for pen sion or ot h er r et ireme nt b en efit s for ou r senior
ma na g emen t of appr oximat e ly $1 million .
At t h e re qu est of ou r man age me nt , in vie w of t h e impact of t h e CO VI D-19 pan demic on t h e mar ket an d e con omy, a n d d ue to t he ir personal commit ment
an d sen se of respon sib ilit y for ou r su pport effort s t oward s ou r e mployee s an d t h e commu n it ies in wh ich we ope rat e , t h e mon t h ly salar ies of ou r se nior
ma na g emen t, in clu d in g ou r Pr esid en t an d Ch ie f Exe cu t ive O fficer, wer e volu n t ar ily re d u ce d by 10% d u rin g t he six- mon t h pe riod of Ma y-O ct ob er 2020
( "Man a ge me nt Volu n t a ry Red u ct ion "). For d et a ils reg a rd ing t he volu n t a ry red u ct ion of 10% d u rin g t he six- mon t h per iod of J u ly-Decemb er in the
ma na g emen t fee s to Isr ael Corp., see "I tem 7 - B. Re lated ( an d Int erest ed ) Pa rty T ransa ction s - Manage me nt Fees to Con trollin g Sharehold er"
Th e followin g t ab le a nd accompanyin g n otes d escr ibe th e compe n sa tion in curred for t he yea r 2020 wit h respect to t he five h ighest earnin g senior officers
of ICL for su ch period .
Details of the Recipient
Pay ments for services
N ame
Po sition
Sc ope of position
Base Salary
(1)
Com pensation
(2)
Bonus (STI)
(3)
E quity based
c o mpensation (LTI)
(4)
To tal
US $ thousands
Raviv Zoller
(5)
President & Chief
Executive Officer
100%
672
997
636
1,738
3,371
Kobi Altman
(6)
Chief Financial
Officer
100%
390
534
349
486
1,369
Ofer Lifshitz
(7)
President of
Phosphate
Solutions Division
100%
338
486
295
428
1,209
Anat Tal-Ktalav
(8)
President of
Industrial
Products Division
100%
276
404
264
428
1,096
Yoav Doppelt
(9)
Executive
Chairman of the
Board of Directors
-
-
-
-
1,041
1,041
176 ICL Group Limited
( 1) Th e an n ua l b ase salar y for th e officer s in the above table reflects t he act ual amou n ts that were
paid followin g t h e Man ageme n t Volu n tary Re d uction .
( 2) Th e salar y it e ms (compen sation ) colu mn set ou t in th e a bove t able in clud es a ll of t he following
compon e nt s: b ase sa lary, cu st omar y socia l be ne fit s, cu st oma ry social an d re la t ed provision s,
Compan y car an d re imb u r semen t of t e le ph on e e xpe nses. The compen sat ion is in a ccord ance
wit h t he Compan y's Compensa tion Policy.
( 3) Th e sh or t -t erm in cent ives ( STI /annu al b on u ses) to officer hold ers for 2020, in clu d in g t h e t op-
five e arn er s in 2020, were appr oved by ou r HR & Compe nsa t ion Commit t e e an d B oard of
Dire ct ors on Feb rua ry 8 and F eb ru ary 17, 2021, re spect ive ly.
( 4) Th e expen se for sh ar e- b ased paymen t compen sat ion is ca lcu lat ed accord ing to I FRS an d is
recog n iz ed in t he Compa ny’s st at eme nt of in come over t he vest ing pe riod of each portion. The
amou n t s r eport ed in t h is colu mn r eprese nt t h e expen se recor ded in t he Compan y’s fin an cial
st at emen ts for t h e ye ar en ded December 31, 2020 wit h respe ct to equ ity- based compe nsation
gran t ed to t he sen ior office r. For d e tails regard ing th e Compa n y's e qu ity compe nsa t ion plans,
se e Not e 19 to ou r A u d it ed F ina ncia l St atemen ts.
( 5) Mr . Zoller’s t erms of employmen t , as a pprove d by ou r a u t horize d org ans, in clu d e: ( a ) annual
b ase salar y of NI S 2.4 million ( approxima t ely $708,000), in d exe d to t h e I srae li Con su mer Price
In d e x ( CPI ). Mr. Zoller's a nnu al b ase sa la ry as of De cemb e r 31, 2020 r ema in ed NI S 2.4 million
( appr oxima t ely $708,000). Mr. Zolle r's mon t h ly b ase sa la ry, as of De cemb e r 31, 2020, wa s
approxima t ely NI S 202,800 ( appr oximat e ly $59,000), h oweve r, d u rin g t he six- mon th period of
Ma y-O ct ob er 2020, Mr. Zolle r's b ase salary was red u ced by 10% in view of th e Man agement
Volu n t ary Red u ct ion ; (b) a nn u a l cash b on u s in a ccord an ce wit h I CL’s b on u s plan and
Compen sat ion Policy. Mr . Zoller ’s T ar get B on u s as per his employmen t ag ree me nt is NI S 2.5
million (a pproximat ely $778,000), wit h t h e maximu m ann u al b on u s t h at can amou nt to NIS
3.75 million ( appr oximat ely $1.17 million ). F or d et ails reg ard ing Mr. Zoller's an n u al b on us in
2020, see t h e A n nu al B on us Compon en t se ct ion b elow; ( c) an a nnu al LTI ( equ ity) g ran t of NIS
4.8 million ( approximat ely $1.34 million ). For det ails re ga rd in g Mr. Zolle r's equ ity
compen sat ion g ra n t s, see Not e 19 to ou r Au d it ed Fin an cial St atement s; ( d) Mr. Zoller is e n t itled
to an a d va n ce n ot ice period of 12 mon t hs in case of ter min at ion by t h e Compa ny ( n ot for
cau se ) a nd is re qu ire d to give t h e Compa n y 6 mon t h s ad va nce n ot ice in case he r esign s. During
su ch a d van ce not ice per iod Mr. Zolle r may be requ ire d to con t in u e workin g for I CL, a nd
t herefore Mr. Zoller wou ld con t inu e to be en title d to a ll of h is compen sat ion t er ms, excluding
an an n u al b on u s in r espe ct of t h e ad va nced n ot ice period an d exclu d ing an equ ity g rant, to
t he ext e nt g rant ed d u ring su ch a d vance n ot ice period ; ( e) in ad dit ion , in case of t ermin ation
of office, Mr. Zolle r will be en t it le d to an ad d it ion al sever an ces equ al to h is last h is last b a se
sa la ry mu lt iplied by t h e n umb er of ye ars t ha t he se rved as ICL’s Pr esid en t & CEO; ( f) Mr. Zoller
is en t it le d to all ot he r cash a nd n on-cash b en efits payab le to ou r sen ior e xecu tive s pu rsuant to
ou r policie s in effect from t ime to t ime, in clu d in g b u t not limit e d t o, pe nsion , st u d y fu nd,
d isa b ilit y in su rance, Compan y car, gross u p, et c., as well as t h e exe mpt ion , in su r an ce and
in d emn ificat ion arrang eme nt s a pplyin g to t h e Compan y’s office hold ers.
177 ICL Group Limited
( 6) Mr . Kob i A lt man se rves as I CL’s Ch ie f Fin an cial O fficer ( CFO) as of A pril 1, 2015. Mr. A lt man ’s
employmen t ag reemen t provid es t h at: ( a ) Mr. A lt man’s b ase sa la ry will be u pd ated t wice a year
accor d in g to t he rise in the Con sume r Price In dex in t he mon ths t hat passe d sin ce the previous
u pd a t e. Mr. A lt man ’s mon t hly b a se sa lar y, as of De cemb er 31, 2020, was appr oximat ely NI S
117,750 ( approxima t ely $34,250) however, d u rin g t he six-mon th period of Ma y-O ctob er 2020,
Mr . A lt ma n's b ase sa lary wa s red u ced by 10% in view of t he Man ag ement Volu n t ary Re d uct ion;
(b) t h e employme n t ag re emen t is for an u n limit e d pe riod a n d ma y be t ermin at e d by eit her
part y at an y t ime by a d va nce writ t en n ot ice; ( c) Mr. A lt man is e n t it led to an ad van ce n ot ice
period of 6 mon t h s; a nd (d) Mr . A lt man is e n t it led to a ll b en efit s cu st omar y in t h e Company,
su ch as reg u lar provision s for pen sion and severance, d isabilit y fund, C ompa ny car .
( 7) Mr . Lifshit z’s employment ag r eement provid es t ha t: ( a) Mr. Lifsh it z’s b ase sa la ry may be updated
t wice a ye ar accord ing to t he r ise in the Con sumer Price In de x in the mon t hs t hat pa sse d since
t he pre viou s u pd at e . Mr. Lifsh it z’s mon t h ly b a se salary, as of Dece mb e r 31, 2020, wa s
approxima t ely NI S 102,060 ( appr oximat e ly $31,700), h owever , d u rin g t he six-mon th period of
Ma y-O ct ob er 2020, Mr. Lifsh it z's b a se salar y was r ed u ced by 10% in view of t he Ma nag ement
Volu n t ary Red u ct ion ; (b) t h e employme nt ag reement is for an u n limit ed pe riod a n d ma y be
t ermin at ed by eit her par ty at any t ime by a d va n ce writ te n n ot ice; ( c) Mr. Lifsh it z is e nt it led to
an ad va nce n ot ice per iod of 3 mon t h s; a nd ( d) Mr . Lifsh it z is en t itled to all b en efits cu st omary
in t h e Company, su ch as r eg u la r pr ovision s for pe nsion an d sever an ce, disab ilit y fu nd,
Compan y ca r.
( 8) Mr s. Tal-Kt a lav’s e mploymen t a g ree ment provid e s t h at : ( a) Mrs. Ta l- Kt alav b a se salar y ma y be
u pd a t ed t wice a year accord in g to t h e rise in t he Con su mer Price I n d ex in t he mon t h s t hat
passed sin ce t h e previou s upd at e. Mr s. Tal-Kt alav mont hly b ase sa lar y, as of Decemb er 31,
2020, wa s a pproximat ely NI S 83,100 ( approxima t ely $25,800). h owever , d u ring t he six- month
period of Ma y- Oct ob er 2020, Mrs. Ta l- Kt alav's b a se salar y was r ed u ced by 10% in view of t he
Ma nag emen t Volu n t a ry Re d u ction ; ( b) t h e employme nt ag r eement is for an u n limit e d period
an d may be termin a t ed by eit he r par ty at an y t ime by ad vance writ ten n otice; ( c) Mrs. T al- Kt alav
is e n t it led to an a d va n ce n ot ice period of 6 mont hs; an d (d) Mr s. Ta l- Kt alav is e nt it led to all
b en efit s cu st omar y in t h e Compan y, su ch as reg u lar provision s for pen sion an d severan ce,
d isa b ilit y fu n d , Compan y car a nd g ross up.
( 9) Mr . Yoav Doppe lt compen sat ion t e rms, as approved by ou r au t horized orga ns, in clu de : ( a) LTI
in t h e form of st ock opt ion s on ly, at t h e valu e of NI S 9 million ( approxima t ely $2.8 million ) for
t he year s 2019-2021 ( NIS 3 million (approximat ely $933,100) per ve st in g an n u m); (b) In t he
even t of t er min ation of Mr . Doppe lt 's t erm of office as Execu tive Ch airman of t he Boa rd h is LTI
gran t s will con t in ue to ve st for a per iod of 12 mon t hs followin g t h e t e rmin ation .
178 ICL Group Limited
T h e An nu al B on us Co mpon ent
Th e Company's Compensa t ion Policy se t s a formu la for t h e calcu la t ion of t h e an n ua l b on us to our
CEO an d Ch airman of t h e Board . Wit h respe ct to ou r ot her officer h old e rs, t he Company's
Compen sat ion Policy provid e s t h at t h e annual b on uses may be ca lcu la ted by me asu ra ble fin ancial
me t rics an d / or measu r able non -fin an cial met r ics, as pre-d e t ermin ed by ou r HR & Compe n sa t ion
Commit t ee a n d B oard of Dire ctors, and/or a qu alitative evalua tion .
On Feb ru ar y 8 an d 17, 2021, ou r HR & Compensa t ion Commit t ee an d B oar d of Direct or s,
respect ively, approve d t h e an n u al b on u ses to ou r office hold ers for 2020, in clu d ing t he t op- five
ear ners in 2020 amon g ICL’s se n ior officer s, in a ccord a n ce wit h t h e Company’s Compensa t ion
Policy.
CEO STI Formu la: A ccor d in g to t he Compen sation Policy, t he Ta rget sh or t t e rm in cent ive plan ( “STI”)
for t he CEO r epr esen t s t he con cept ua l pa you t a mou n t for 100% per for ma nce leve l ( i.e, achieving
100% of a ll t arg e ts) in a g ive n ye ar. T he Ta rget ST I for t he CEO shall n ot exceed 120% of t he CEO'
an n u al b ase salar y. 80% of t h e CEO's ST I t arg et will be mea su red ag ain st performance level of
an n u al measu r ab le fin an cial an d measu r ab le n on -fin an cial g oals set fort h by t h e HR &
Compen sat ion Commit t ee an d t he Board of Dire ctors at the begin nin g of each fiscal yea r, as d e tailed
in t h e Compensa t ion Policy. Ou t of t h e 80% STI t ar get, at least 60% of ST I t a rg et will be measu red
ag ain st fin an cial g oals t h at will be in clu d ed in t h e ann u a l b u dg et. T h e ot her 20% ( or less) of STI
t arg e t will be me asu re d ag a in st ot h er measu r able non - fin an cial g oa ls. Th e ach ievemen t level of
each g oal, wh et her measurable financia l g oals or me asurable n on-fina ncial g oa ls, will be measured
in d epen d e ntly of ot he r g oa ls, accor d in g to t he rat in g sca le se t for t h in the Compen sat ion Policy,
an d t h en t ranslate d to payou t factor s. If eit he r I CL ad just ed ope rat ing in come an d/or ad justed net
in come act u al performan ce will n ot meet t he t h resh old per formance level ( 60% of b u d g et), t h ere
will be no payou t for t h e 80% of ST I that is mea su r ed a gainst measurable fin ancia l a nd me asurable
non - fin a ncia l g oals.
Th e r emain in g 20% of t h e CEO's ST I t a rg et will be measu r ed b a sed on a qu alit at ive evalu ation by
t he HR & compe nsa t ion commit t ee a nd t he B oard of Dire ctors after receivin g a recommen dation of
t he Execu t ive Ch airman of t h e B oard. Th e maximu m pa you t for t h is compon en t ca nnot e xceed the
hig h er of 3 t h ree base mon th ly salarie s or 25% of t ot a l act ual STI payou t.
Th e maximu m ST I payou t for t h e CEO pu rsu an t to t he Compensat ion Policy can n ot exceed, for any
given yea r, t h e lower of 130% of t h e CEO's t a rg et ST I for su ch ye ar or $1.5 million . Mr. Zoller's act u al
t arg e t STI, as d e ter min ed in h is e mployme n t a greeme nt is NI S 2.5 million ( approximately $778,000).
Raviv Zolle r's ST I for 2020: Mr. Zolle r's an n u al ST I for 2020 was calcu lat ed in accord a nce wit h the
CEO STI formu la d escr ib e d a b ove. T he t ot al ST I a ct ual pa you t for Mr. Zoller in 2020 was 81.8% of
his 100% opport u n it y.
Kob i Alt man 's ST I for 2020: Mr . A lt man 's STI payou t for 2020 was NI S 1.12 million (a pproximat ely
$349,000) an d refle ct s a comb in e d pe rforman ce of 79.4% wit h re spect to a ll of h is formu la
compon e nt s. This pa you t was d et ermin ed b ased on I CL’s ad justed n et in come an d oper at ing I ncome
ag ain st b u dg et ( 30% weig ht), ot h er measu rable fin ancial and n on - financia ls g oals ag ain st b udget
( 40% weig ht ) a nd a qu alitative evalua tion of Mr. A lt man 's per for mance d urin g 2020 ( 30% we ig h t).
179 ICL Group Limited
Ofe r Lifsh it z's STI for 2020: Mr. Lifsh it z's ST I payou t for 2020 was NI S 0.95 million (a pproximat ely
$295,000) a nd r eflect s a comb ined perfor mance of 77.6%. This payou t was d et e rmin ed b a se d on
ICL’s ad ju st ed n et in come and opera t in g in come a ga in st b u dg et ( 30% weig ht), ot h er mea su rable
fin a ncia l a n d n on -fin ancials g oals ag ain st b ud get ( 40% we igh t) and a qu alit at ive e valua tion of Mr.
Lifsh it z's perfor mance d uring 2020 ( 30% weigh t).
Mr s. T al- Kt a la v's ST I for 2020: Mr s. T al- Kt a lav's ST I payou t for 2020 was NI S 0.847 million
( appr oxima t ely $264,000) an d r eflect s a comb in ed performan ce of 85% . T h is payou t was
d et e rmin ed b ased on ICL’s adju ste d n et in come an d opera tin g income ag ain st b udg et ( 30% weig ht),
Ot h er mea su rable fin an cial and n on-fina ncia ls g oals ag ainst b ud ge t (40% weigh t) and a qua lita tive
evalu at ion of Mr s. T al-Kt a lav's per formance d urin g 2020 ( 30% weig h t).
Mr . Doppe lt 's compen sat ion t e rms do n ot in clu de an STI compon en t.
C. BOARD PRACTICES
B oar d of Directors
Accord in g to our Articles of A ssociation , we must h ave no less th an se ve n and no more th an twenty
d ir ect ors on ou r B oard of Dir ect ors ( in clu din g ou r ext er nal d ire ctors). Ou r d ir ector s ( oth er th an our
ext ern al d ir ect ors) are t ypica lly elect ed by ou r sh are hold ers at ou r an n u al g en eral mee t in g of
sh areh old er s. Our B oa rd of Director s is also aut horized to a ppoin t d ire ctors in ord er to fill vacancies
or for an y ot h er re ason . Ea ch of ou r d irect or s, ot h er t ha n ou r e xt ernal d irectors, ser ve s from t he
d at e of elect ion or appoin t men t u n t il ou r n ext a n nu al meet in g of sh are hold ers. A ccord in g to our
Art icle s of A ssocia t ion , t h e major it y of ou r B oar d of Direct or s' memb er s mu st be b oth cit izen s and
resid en t s of Isr ael. T h e appr oval of at least a major it y of t he vot in g rig h t s repre se n t ed at a
sh areh old er s’ mee tin g an d vot in g on t h e mat ter is g en erally requ ired to remove an y of ou r d ir ect ors
from office ( ot h er t han e xt er na l d irectors as d et ailed b elow).
As of t h e d a t e of t h is An nu al Report, ou r Boar d of Dire ctors con sists of t en d irector s. In t he eve nt of
equ al vot e s of ou r B oard of Dir ect ors, ou r Ch airman of t he Boa rd h as the rig ht to cast th e de ciding
vot e. Mr. Lior Re it b lat t an d Ms. T zipi Oze r A rmon qu alify as in de pendent d irector s, as d efin ed in the
Compan ie s Law. Boar d me mb e rs Mses. Ru t h Ralb ag and T zipi Ozer A rmon , Messrs. Nad av Kaplan,
Ree m A min oa ch an d Lior Reit b lat t qu a lify as in d epen d e nt d irect ors u n d er t h e r u les a pplica b le to
U.S. compa nies list ed on t h e NYSE. B oa rd memb er s Me ssr s. Yoav Doppe lt , A visa r Paz, A viad
Ka u fman, Sag i Kab la a nd Ova d ia Eli are n ot con sid e red in d epen dent d ir ect ors by vir t u e of t he
posit ion s t h ey h old wit h ou r con t rollin g sha reh old er 's g rou p or wit h th e Compan y. Dr . Nad a v
Ka plan an d Ms. Ru t h Ralb ag se rve as “ext e rn al d ire ctors” a ccording to t h e Compa n ies Law. We do
not h ave ser vice ag re emen ts wit h ou r cu rre nt d irect ors, e xclu d in g ou r Execu t ive Chair man of t he
B oar d , Mr . Yoav Doppe lt .
Ext ernal Directors
As a pu b lic Israeli compan y, we are requ ired by t he Compan ie s Law to have at le ast t wo e xt ernal
d ir ect ors wh o me et ce rt ain in d e pen d e nce crit eria to en su r e t h at t h ey are n ot relat e d to the
Compan y or to ou r con t rollin g sh areh older. Th e d efin ition of an “ext ernal dir ector ” or "ind ependent
d ir ect or" u nd er th e Compan ies Law an d th e d efinition of an “in depen dent d ire ctor” un der the NYSE
ru les are very similar, an d t h u s, we wou ld g en era lly expect a d irect or wh o qu alifie s as on e to also
qu a lify as th e ot h er. However , sin ce t h e d e fin it ion s provid e d in I srae li law and U.S. la w are not
id e nt ical, it is possib le for a d ire ct or to qu alify as on e b u t n ot n ecessarily as t he ot he r.
180 ICL Group Limited
An e xt erna l d ir ect or is requ ired to h ave eit h er fin an cial an d a ccou nt ing e xpertise or profession a l
qu a lificat ion s, as d e fin e d in t h e rele va nt reg ulation s pr omu lg a ted u n der t h e Compan ies Law, a nd
at lea st on e of t he ext e rn al d irectors is r equ ir ed to h ave fin an cial a nd a ccou n t in g exper t ise . Our
ext ern al d irect ors, Ms. Ru t h Ralb ag and Dr . Nadav Kaplan , have fin an cial a nd accou nt ing e xpertise
as d efin ed in t h e Re g u lat ion s. An e xt ern al d ir ect or is en t it le d to re imb u rse me nt of expen ses and
compen sat ion as provid ed in t h e Compen sat ion Reg u lation s pr omu lg ate d u n der t he Compa nies
La w b u t is ot he rwise proh ib it ed from receivin g an y ot h er compen sat ion from u s, d irect ly or
in d irect ly, d u rin g his or h er t erm of office an d for two year s t hereafter .
Und er the Compa n ies Law, ext erna l d ir ect ors mu st be e lecte d at a sh ar ehold e rs’ meet ing by a simple
ma jorit y of t h e vot es cast , pr ovid ed t h at eith er of t h e followin g con d ition s is me t : ( i) su ch major ity
in clu d e s a majorit y of t h e vot e s cast by n on- cont rollin g sh are hold ers and sh ar eh old er s who do not
ha ve a pe rson a l in t er est in t he election ( e xclud ing a person al in t erest t h at d id n ot r esu lt fr om the
sh areh old er ’s relation ship wit h th e con trollin g sh are hold er), exclu ding abste ntion s, or ( ii) t he votes
cast by n on - con t rollin g sh areh olders a nd sharehold ers wh o do not h ave a person al in t erest in the
elect ion opposin g t he e lect ion ( exclu d in g a per son al in t e rest t hat d id not resu lt fr om t he
sh areh old er ’s r ela tion sh ip wit h t h e con t rollin g sh areholder ) d id not excee d 2% of ou r agg r egate
vot in g r ig h t s. Gene rally, ext ern al d ir ector s ma y se rve for up to th ree terms of t h re e yea rs ea ch, and
as a compan y wh ose sh are s are t rad e d on t he NYSE, ou r A u d it an d A ccou n t in g Commit t e e and
B oar d of Dir ect ors ma y n omin at e ext ern al d ire ctors for a d d it ion al t h ree-yea r t erms u n d e r ce rt ain
circu mst a nces for e lect ion by t h e sh arehold e rs by t he sa me majorit y requ ired for elect ion of an
ext ern al d irect or as d escr ibed above. Eve n if an e xt er na l d ir ector is n ot n omin ated by ou r B oard of
Dire ct ors for re elect ion for a secon d or t hird t e rm, an ext e rn al d ir ector ma y be n omin at ed for
ree lect ion for up to t wo ad d it ion al t hree ye ar t erms, by ( i) on e or more sh ar eh old er s h old in g at least
1% of ou r vot in g r ig h t s (provid ed t he e xt erna l d ire ct or is n ot an "affiliat ed or compet ing
sh areh old er ", or a re lat ive of su ch a sh are hold er, at t h e t ime of t he a ppoin t me n t , an d is n ot
"affiliat e d " wit h su ch a sh ar ehold er at t he t ime of t he appoin t ment or wit h in t he two yea rs preceding
t he d at e of appoin t me nt , as su ch t erms are d efin ed in t he Compan ie s Law). In su ch cir cu mstances,
t he reele ction of th e extern al d irector requ ires the appr oval of ou r sha rehold ers by a ma jorit y of the
vot es cast by non - cont rollin g sharehold er s an d sh areh old ers who do n ot h ave a pe rson a l in t er est
in t h e elect ion (exclud ing a pe rson al in terest th at did not resu lt from t he sh arehold er ’s rela tion ship
wit h t he con t rollin g sh ar eh old er an d e xclu d ing a b st en t ion s) an d t h e vot es cast by su ch
sh areh old er s appr oving t h e re elect ion mu st exceed 2% of ou r agg regate vot in g rig ht s; a nd ( ii) the
ext ern al d ir ector him or h erse lf, in which ca se t he ele ct ion by t he sh ar eh olders is by t h e same
ma jorit y requ ired for t h e in it ial elect ion of an ext ern al director , as d escr ib e d ab ove. T he t er m of
office of an ext ern al d irector may be t e rminated prior to e xpira t ion on ly by a sh ar eh old er vot e, by
t he same t h re shold requ ired for e le ction, or by a cou rt , bu t in ea ch ca se on ly if t he extern al d irector
cea ses to meet t h e st atu tory qu alificat ion s for election or if t h e ext erna l d ir ect or b reache s h is duty
of t ru st to u s.
Und er t h e Compa nies La w, each commit t ee of t h e B oard of Dir ect ors t hat exe rcises power of t he
B oar d of Dir ect ors mu st in clu d e at lea st on e ext ern al d ire ct or and a ll ext ern al d ire ct ors mu st be
me mb e rs of t he Compan y’s A u d it Commit t ee a nd Compen sation Commit t ee.
As of t h e d a t e of t h is A n nu al Repor t , we have t wo e xt ern al d irectors: Ms. Ru t h Ra lb ag , wh ose se cond
t hree -year t erm comme n ced on J anu ar y 10, 2021 a nd Dr . Na d av Kaplan , wh ose first t h re e- year term
commen ced on A u g u st 20, 2018.
181 ICL Group Limited
Fin a ncial Experts
Ou r B oa rd of Direct or s ha s r esolved t hat at lea st t hree of it s memb er s mu st h ave fin an cial and
accou n t in g exper tise, as th is t er m is d efin ed in regu lat ion s promulg ated un der t he Compan ies Law.
Ou r B oa rd of Dire ct ors h as fu rt her d etermin ed, b ased on qu alifica tion st a tements d e live red to the
Compan y, t h at eig h t ou t of ou r t e n servin g d irectors mee t t he sa id e xpertise r equirements.
In ad d it ion , ou r B oard of Direct ors h as d e t ermin ed t h at all memb e rs of ou r A u d it an d A ccou nting
Commit t ee are fin an cially lit e rat e for pu rpose s of mee t in g t h e NY SE ru les a nd t ha t Ms. Ralb ag and
Me ssr s. Kaplan a nd Reit b latt are qu a lified to serve as “ Au d it Commit t ee Fin ancia l Expert s” as d e fined
by SEC ru les.
Alt er nate Directors
Ou r A rt icles of Associat ion , con sist en t wit h I srae li law, provid e t hat an y d ir ect or may appoin t
an ot h er person wh o is n ot a d ir ect or or ser vin g as an alt er n ate d ir ector ( or, in t h e ca se of an
alt erna te d ir ect or for a memb er of a commit t e e of t h e B oard of Direct or s, an ot her d irector, provided
t he alt erna te d ir ector d oes n ot se rve as a memb e r of su ch commit t e e) to serve as his alt ernate
d ir ect or, su b ject to t h e appr oval of t he B oar d of Dire ct ors. A per son wh o is n ot qu alified to be
appoin t e d as an in d e pen d e nt d ir ector , pu rsu an t to t he Compan ies Law, may n ot be appoin t e d as
an alt ern ate d irector of an in d epen de nt d ir ector qu alified as su ch u n d er t h e Companies La w. The
t erm of an a lt e rnate dir ect or can be termin ate d at a ny t ime by t he a ppoin tin g d irector or t he Board
of Dire ct ors a nd au t omat ically t e rmin at es u pon t h e t er min at ion of th e t er m of t h e appoin t ing
d ir ect or. An alt e rn ate d irect or h as t h e same rig h ts an d respon sib ilities as a d ire ctor, except for the
rig ht to a ppoin t an alt ern at e d ir ector . No alt ernat e d irector was appoin t ed d uring t he re ported
period.
Ou r B oard Committees
Ou r Boar d of Dire ct ors h as e st ab lishe d t he followin g Commit t ee s, wh ich opera te in accordance with
writ t e n ch art ers or pr oce d u res t ha t set fort h , a mon g ot h er t h in gs, su ch commit t ee ’s st ru ct ure,
ma nn e r of operat ion s, qu alification and membe rship r equ irements, re spon sib ilities an d aut horities,
et c.
A u d it a nd A ccou ntin g Co mmit tee
Und er t h e Compa nies La w, t h e B oard of Dir ect ors of a pu b lic compan y mu st est ab lish an A u dit
Commit t ee. T he A u d it Commit t ee mu st con sist of at le ast t h ree d irect ors who me et cert ain
in d epen d e nce cr it eria and mu st in clu d e all of t h e Compan y’s e xt ern a l d irect ors. T he Ch airman of
t he A u d it Commit t ee is re qu ire d to be an ext e rn al d ir ect or. The r espon sib ilit ie s of an Au dit
Commit t ee u n d e r t h e Compan ies Law in clu d e id e nt ifyin g an d ad d ressin g flaws in th e b u sin e ss
ma na g emen t of t h e Company, r eviewing and a pprovin g in te rest ed pa rt y t ra nsaction s, establish ing
wh ist leb lowe r proced ures, overse ein g t he Compa ny’s in te rnal au dit syst e m a nd t he perfor ma nce of
it s in t e rn al au d it or, an d assessin g t he scope of t h e work an d re commen d in g t h e fees of t he
Compan y’s in d e pen d e nt a ccou n tin g firm. In ad d it ion , t h e A u d it Commit t e e is r equ ir ed to r evie w
an d d et ermin e whet her ce rt ain a ct ion s and t ran saction s wit h a con t rollin g sh are hold er or wit h a
compan y office r are “mat e rial” or “ext ra ordinary” an d wh et he r t he y are n eglig ible accord ing to the
approval proced u res requ ired u n der t he Companies La w and Company proce d ures.
In accor d an ce wit h U.S. law an d t h e NYSE re qu ire me nts, ou r A u d it an d A ccou n tin g Commit t ee is
also respon sib le for t he appoin t ment, compe nsa tion a nd oversigh t of t h e work of ou r in d ependent
au d it or s. In accord a n ce wit h su ch laws an d ru les an d t h e Compan ie s Law an d regu lat ions
promu lg at ed t hereun der, t he Audit and A ccou ntin g Commit t ee is also r espon sib le for assist ing our
182 ICL Group Limited
B oar d of Direct or s in mon it oring ou r fin ancia l st at eme nt s, t he effectiven ess of ou r in t erna l con trols
an d ou r complian ce wit h le gal a n d re gu lat ory requ ire me nt s.
As of t he d at e of t his An nu al Repor t , ou r A u d it an d Accou n t ing Commit t ee con sist s of t h ree
d ir ect ors, composed of ou r t wo e xt erna l d irector s: Ms. Ru t h Ra lb a g ( Chairman ), Dr. Nad a v Kaplan,
an d on e in d epend en t d irector : Mr. Lior Re it b latt. In a dd ition to meetin g t h e requir ements of Isr aeli
law, ou r A u d it an d A ccou n ting Commit t ee also complies wit h t h e requ ire me nts a pplica b le to U.S.
compan ies t ha t are list ed on t h e NY SE an d wit h SEC ru les. A ll memb er s of ou r Au d it an d Accou nting
Commit t ee are a lso in d e pend en t d irectors as su ch t erm is d efin ed in SEC ru les an d t he NYSE list ing
requ iremen t s. Ou r Boar d of Dir ect ors h as d et e rmin ed t h at a ll t he memb e rs of t he Au d it a nd
Accou n t in g Commit t ee are fin an cially lit era te as provid ed in t he NYSE ru les an d t hat Ms. Ralb ag and
Me ssr s. Kaplan and Reit b latt qu alify as “a ud it commit t ee fin ancia l experts” as d efined by SEC r ule s.
H u man Re sour ces an d C o mpensa tion Com mitt ee
Und er t h e Compan ie s Law, t he B oard of Dir ect ors of a pu b lic compa ny mu st est ab lish a
Compen sat ion Commit t ee . T h e Compen sat ion Commit t ee mu st con sist of at lea st t h ree d ir ect ors
wh o meet cer t ain in d e pen dence crit eria and in clu de a ll of t h e Compa ny’s ext ern al d irectors, who
are r equ ired to con st itut e a majority of its me mb ers. T he Chairman of th e Compen sation Committee
mu st be an ext er n al d irector. T he me mb e rs of t h e Compen sat ion Commit t ee are re mu ne rated for
t heir se rvice in a ccord a n ce wit h t h e Compen sa tion Reg ulation s g over ning t h e compen sat ion of
ext ern al d ir ector s. T h e responsibilit ies of a Compen sat ion Commit t ee u n d er t he Companies Law
in clu d e : r ecomme ndin g to th e B oard of Direct ors a policy g ove rn ing th e compe n sa tion of company
officers a nd d ir ect ors b ased on spe cified crit er ia, recommend in g to t he B oar d of Dir ect or s, fr om
t ime to t ime , u pd at es to su ch compe nsa t ion policy an d re viewin g it s implemen t a t ion ; d ecid ing
wh et h er to approve t ransaction s with respect to th e t erms of office and employment of officers and
d ir ect ors wh ich re qu ire a pproval by t h e compen sat ion commit t e e un d er t he C ompa nies La w,
in clu d in g appr ovin g , u nd er certain circu mstances, an exempt ion from sh ar ehold er a pprova l of the
t erms of a can d id ate for ch ief execu t ive officer wh o mee t s cer t ain non - affilia t ion crit er ia , in
accor d an ce wit h t h e provision s of t h e Compan ies La w.
Ou r HR & Compe nsa t ion Commit t e e also ove rsee s t he Compa ny's b on us an d equ ity pla n s, e va lu ation
of t op man ag emen t and employees, su ccession plan nin g and so fort h.
Ou r HR & Compen sat ion Commit t ee consist s of t h re e d ir ect ors, composed of ou r t wo ext ernal
d ir ect ors: Dr. Nad a v Ka plan ( Ch airman ), Ms. Ru t h Ralb ag , an d on e in d epen de nt d ir ect or: Mr. Lior
Reit b lat t . All me mb ers of ou r HR & Compe nsa tion Commit t ee a re also ind epe n den t directors as such
t erm is d e fin ed in t he NYSE list in g requir emen ts an d SEC rule s.
E n v iron ment , Safet y and Pu blic A ffair s Comm ittee
Ou r En viron ment, Sa fet y an d Pub lic Affairs Commit t ee is n ot a statu tor y commit tee, and is d esigned
to assist ou r B oard of Dire ct ors in fu lfillin g it s re spon sib ilit ies wit h respe ct to oversig h t of ou r
en viron me nt , an d sa fet y policies an d prog rams, ou r commu n it y ou t re ach programs an d pu b lic
relat ion s an d advocacy. Ou r En vironment, Safety an d Pu blic A ffairs Commit te e is n ot auth or ized to
exer cise an y powe r of ou r B oar d of Dire ct ors a nd has ad visory au t horit y on ly. Th e commit t ee
con sist s of fou r d ire ctors: Mr. Re em A min oach (Chairman ), Dr . Na dav Kaplan, Mr. Ovadia Eli a nd Mr.
Sag i Kab la.
183 ICL Group Limited
O p er ation s Com mitt ee
Ou r Oper at ion s Commit t ee is n ot a st at u tory commit t ee, a nd is d esig ned to a ssist ou r B oar d of
Dire ct ors in fu lfillin g it s re sponsib ilit ies wit h respect to b u sin ess ope rat ion s an d st r at egy
impleme nt at ion , in clu d in g reviewin g M& A t ransa ction s an d re se arch an d d evelopmen t st rategy.
Ou r Oper at ion s Commit t ee is n ot au t h orized to e xe rcise a ny power of ou r B oa rd of Dire ct ors and
ha s ad visory a u t horit y on ly. The commit t ee con sist s of six d irect or s: Mr . Yoav Doppe lt ( Chair man),
Mr . A visar Paz, Mr. Sagi Kab la, Mr. Ovad ia Eli, Mr . Re em A min oa ch an d Mr. Lior Reit blatt.
F i n ancin g C o mmit tee
Ou r Fin an cin g Commit t ee is n ot a st at u t ory commit t ee, a nd it s pu rpose is to a ssist ou r Boar d of
Dire ct ors in fu lfillin g it s re spon sib ilit ies wit h respe ct to ou r fin an cin g a nd e quit y man a ge men t and
operat ion s, in clu d in g loan s, equ it y offe rin gs, h ed g in g, d eb t an d ot he r fin an cin g ve hicles. Our
Fin a ncin g Commit t e e is n ot a u t h orize d to e xercise an y powe r of ou r Boar d of Direct or s an d h as
advisor y au t h orit y on ly. T h e Fin a ncin g Commit t e e con sist s of fou r d irect ors: Mr. A visar Paz
( Ch airman ), Mr . Sagi Kab la, Mr. A viad Kau fman and Ms. Ru t h Ralb ag .
In t e rnal A uditor
Und er t h e Compa nies La w, t he B oard of Direct or s of a pu b lic compan y is r equ ired to a ppoin t an
In t e rn al A u ditor pu rsua nt to t he r ecomme n d ation of t h e A ud it Commit t ee. T he role of t he In ternal
Aud it or is to e xamin e, a mon g ot he r t hin gs, wh eth er th e Compa ny’s act ions comply wit h applicable
law, C ompa ny proce d u re s and proper b usin ess proced ures. Un der t he Companies La w, t he In ternal
Aud it or may n ot be an in terested pa rt y ( as d efined in t h e Compa nies La w), a d ire ct or or an officer
of t h e Compan y, or a relat ive of a n y of t he for eg oin g , n or ma y t h e I n t ern al A u d it or be t he
Compan y’s in d epen d en t a ud itor or a represe nt at ive t h ere of. O u r I ntern al A u dit or ove rsees t h e work
of variou s in t e rnal aud itor s actin g on h is b e ha lf th rou gh out th e org a nizat ion. As of t h e time of this
Ann u al Re port , ou r I n t ernal A u dit or is Mr. Amir Mesh u lam, a cert ifie d pu b lic a ccou n t ant in Isr ael,
hold s an LLB from t h e Colleg e of Man a gement a nd is a memb er of t he I srae l Bar. Mr. Mesh u lam has
se rved in t h is posit ion sin ce A u gu st 2018.
In su rance and indemnification
Th e A rt icles of A ssociation of t he Compa ny and its I sraeli su bsid iar ies inclu de provision s t hat pe rmit
exempt ion , in d emn ifica t ion a n d in su rance of t h e liab ilit y of office rs, all in a ccord a n ce wit h the
provision s of t h e Companie s Law.
Th e Company, wit h t h e appr oval of HR & Compen sation Commit t ee, t he Board of Dir ector s and the
Gen eral Me et ing of th e sh arehold e rs, g r an ted its office rs a letter of exe mpt ion an d in demn ifica tion,
an d also main t ain s a n in su rance policy coverin g d ire c t ors' an d office rs' liab ilit y. The d irectors' and
officers' liab ilit y insu r an ce an d t h e exe mpt ion an d in d e mn it y u n d e rt akin g d o not apply t o t hose
case s spe cified in Sect ion 263 of th e Compan ie s Law. Th e exe mpt ion relat e s t o d amag e ca u sed
an d / or will b e cau se d, b y t h ose officers as a resu lt of a b r each of t h e du ty of care t o t he Company.
Reg ard in g d ire ct ors wh o are office h old er s of Isr ael Cor p., wh o may se rve from t ime t o t ime , on
J an u ary 5, 2021, t h e sharehold ers' g en eral me eting appr oved t he e xtend t h e pe riod for exe mption
an d in d emn ificat ion en t er ed in t o wit h su ch office h old e rs, for ad d it ion al 9 ye ars, commen cing
Novemb e r 30, 2020, provid e d t ha t t he exemption sh all n ot apply t o liab ilit ies ar isin g in con n ection
wit h a t r ansaction or r esolu tion in which a cont rollin g sharehold e r or an office h older, inclu ding an
office hold er who is ot he r t h an t he office h old er part y t o t he a g ree ment , h as a pe rson a l in t e rest.
Th e a mou n t of t he ind emn ifica tion pa ya ble by t he Compan y un der t h e let ter of in d emn ifica tion, in
ad d it ion to amou n t s receive d from an insu r an ce compan y, if an y, for all of t he officers on a
184 ICL Group Limited
cu mu la t ive b asis, for on e or more of th e event s d eta iled t herein , is limit ed to $300 million . The
in su ra nce is r en ewed an nua lly.
D& O F ramewor k T ransa ction
In Sept emb er 2017, t he Compan y's sh areh olde rs a pprove d a framewor k tran saction which ena bled
t he Compan y to pu rchase, from t ime to time, d irect ors’ an d office r’s liabilit y in suran ce policie s for a
t wo- t ie r covera g e of d irect or s' an d officers' liab ilit y, in clu din g a join t pr imar y t ie r wit h I srael Cor p.,
for a period of th ree ye ars st a rt ing Sept emb er 1, 2017. On Jan u ary 30, 2020, ou r sh arehold ers
approved a n e w t h ree- ye ar framewor k tr ansaction for th e C ompa ny's enga ge me nt in d irectors' and
officer s' liab ilit y in su ran ce policies, st art in g Fe b ruary 1, 2020 ( t h e "New Framework T ran saction ").
Th e in su rance policies u nd er the New Framework T ransa ction sh all in clu de a join t pr imary t ie r with
Isr ael Corp. wit h a join t liab ilit y cap of up to $20 million , an d a se par ate tier covering th e Company
alon e, wit h a lia b ilit y ca p of up to $330 million , wit h a t ot al lia b ilit y limit of up to $350 million for
b ot h t ier s. Our director s and officers a re be neficiar ie s of bot h tiers. Pursuant to t he Ne w Fr amework
Agr eeme n t, t he cost of t h e ann ua l premiu m sh all n ot exceed a cap of $10 million for b ot h tiers. The
d ivision of t h e pre miu m amou n t b etwe en the Compan y and Isr ael Corp. in t h e join t t ier are 80% to
be paid by t h e Compan y a nd 20% by t h e I srael Corp, an d t he HR & Compe nsa t ion Commit t ee and
t he B oard of Dire ct ors h ave t h e a u th or ity to ch an ge , from t ime to t ime, t h e premiu m alloca t ion in
respect of t he join t t ier b etween t he compan ie s, a ccord ing to t he re commen dation of t h e insurers
an d / or b rokers, an d provid ed t h at such ch an ges will n ot e xcee d 25% over t h e e nt ire t ra nsaction
period . De viat ion fr om t hese limit s shall requ ire shareh older approval. In accordan ce wit h the t erms
of t h e New Fra mewor k Tran sa ct ion a nd t he Company's Compe nsa t ion Policy, t h e Compan y's
d ir ect ors’ a n d office rs’ liab ilit y in su ra nce policy for 2020, was appr oved by t he Compa ny's
au t h or ize d org ans, effect ive as of Fe b ru ary 1, 2020. T he 2020 d ire ct ors’ a nd officers’ lia b ilit y
in su ra nce policy inclu d es a lia b ilit y limit of US$165 million for b ot h t ie rs ( compr ised of a limit of
$100 million , wit h an ad d it ion al coverag e Sid e A ( directors an d officers on ly) limit of $65 million ).
Th e Company's d irect ors’ and office rs’ lia b ility in su ran ce policy for 2020 was ext end e d u ntil March
1, 2021, an d t h e Compa ny is in t h e fin al st ag es of re n ewin g t h e Company's d ir ector s’ an d office rs’
liab ilit y in su ran ce policy for 2021, wh ich is e xpect ed to in clu de lower cover age at h igh er cost due
to t h e cu rre nt mar ket for t hese policies.
Ot h er Information
We ha ve n ot eng aged in a ny arrangement s wit h d irect ors provid in g for b en efit s u pon t ermination
of employme nt , wit h t h e followin g except ion s: ( 1) Mr. Yoav Doppelt 's t e rmin at ion ar ran gements
in clu d e con t in u ed ve st in g of LT I g rant s for a per iod of 12 mon t h s followin g t ermin at ion of
employmen t . ( 2) In accor d an ce wit h t he Equ it y Pla n , t h e b oard memb e rs' vest in g of Rest r icted
Sh are s wou ld fu lly accelerat e if t h e h old e r t h ereof ce ases to se rve as a d irect or of t he Compan y,
u n less he ceased to h old office d u e to t h ose cert ain circu mstances r egarding ea rly t ermin ation of
office or imposit ion of en forcemen t measu r es, as se t fort h in se ct ion 231- 232a a nd 233( 2) of t he
Compan ie s Law.
185 ICL Group Limited
Nu mb er of mee t in gs an d aver age at t endan ce r ate of th e me et ings of ICL B oar d of Dir ect ors an d its
perma nent committees
N umber of meetings in
r eported year
Average Attendance
Board of Directors
22
96%
Audit & Accounting Committee
11
97%
HR & Compensation Committee
6
100%
Financing Committee
2
100%
Operations Committee
2
100%
Environment, Safety and Public Affairs Committee
3
100%
D. EMPLOYEES
As at Decemb er 31, 2020, we h ad a workfor ce of 11,744 employees.
B r eakd own of Em ploye es by Segment s
2 02 0
2 01 9
2 01 8
Phospha t e Solu t ion s
4 , 6 01
4,867
4,923
Pot a sh
2 , 4 91
2,541
2,524
In d u st ria l Prod uct
1 , 6 54
948
927
In n ova t ive Ag Solu tion s
9 9 4
1,651
1,606
Glob a l fu nct ion s a nd h ead qua rt ers
1 , 0 92
1 ,0 8 3
1 ,0 6 2
S u b Tota l
1 0 ,832
1 1 ,0 9 0
1 1 ,0 4 2
Te mpor ary e mployee s
9 1 2
1 ,0 2 7
1 ,0 8 3
T o t al emplo yees
1 1 ,744
1 2 ,1 1 7
1 2 ,1 2 5
G e og r aph ic B r eakdown of Emp loyees
2 02 0
2 01 9
2 01 8
Isr ael
4 , 4 01
4,507
4,431
Chin a
2 , 0 48
2,064
2,068
Spa in
8 6 8
892
901
USA
7 1 6
720
707
Ger ma ny
6 9 7
858
856
UK
6 7 0
658
644
Net h er lan ds
5 8 4
584
539
B razil
2 5 9
262
255
Fra nce
1 1 7
119
118
All ot h er
4 7 2
426
523
S u b Tota l
1 0 ,832
1 1 ,0 9 0
1 1 ,0 4 2
Te mpor ary e mployee s
9 1 2
1 ,0 2 7
1 ,0 8 3
T o t al emplo yees
1 1 ,744
1 2 ,1 1 7
1 2 ,1 2 5
186 ICL Group Limited
As at Decemb er 31, 2020, t h e Company’s workforce compr ised of 11,744 employe es, compar ed to
12,117 employees as at Decemb er 31, 2019 – a d ecrea se of 373 employees. Th e sa id d e cre ase
d erives main ly as a resu lt of t h e sale of act ivit ies in ICL Hag esü d , Efficien cy plan in Rot em ( Phosphate
Solu t ion s), ret ire men t a greement in Dea d Se a Ma gne siu m ( Pot ash ) an d a re d u ction in I CL Spa in
( Ib erpot ash ).
For fu rt h er in formation , see Not e 16 to ou r A udit ed F ina ncial St at eme nt s.
E m p l oyment A greements, Colle ctive B arga in ing Ag ree me nts and Temporary E mplo yees
ICL employees in Isr ael are employe d u n d er colle ct ive or pe rson a l e mploymen t a gr eement s. The
collect ive b arga inin g a gree me nt s ar e sign ed for specified t erms and are rene wed from t ime to t ime.
By law, in t h e event t h at a n ew collect ive b arg ain in g ag re ement is n ot sig n ed , t h e t erms of t he
orig in al a gr eemen t are extended for an u nlimit ed pe riod, u nless on e party g ive s n otice to t he other
of it s can cellat ion . As at t h e d ate of t his A n n ual Re port , no n ot ice of can cellat ion h ad b een g iven
for a n y of t h e colle ct ive bargain ing agr eements cu rre nt ly in effect at ICL.
Su b sid ia ries Rot em, Dead Sea Works Lt d . ( “DSW ”) an d Mifa lei T ovala h ave colle ct ive b arg ain ing
ag reeme n ts wit h t e rmin ation d ate s of July 2021, Sept emb er 2022 and De cemb er 2022' r espe ct ively.
Du r in g t he ye ar, su b sid iar ie s De ad Sea Magn esiu m an d B romin e Compou n d s sig n ed collect ive
b arg a in in g ag reeme nts wit h t ermin at ion d at es of De cemb er 31, 2023 a nd Mar ch 31, 2025,
respect ively.
In J an u ary 2020, collect ive lab or agr eemen t wa s sig n ed b e t we en Fert ilizers an d Ch emical
Ma t erials Lt d . ( “FCM”), an d th e FMC W orke rs’ Un ion a nd t he Ne w Ge neral Orga nization of W orkers
in Isr ael ( t h e “Hist ad r ut”), for a pe riod of 5 ye ars, commencin g on J an u ary 1, 2019, t he d at e of
expir at ion of t h e previou s lab or a gr eeme nt.
Sen ior employe es in Isr ael ser vin g in special posit ion s a nd me mb e rs of ma nag ement are employed
u n d er person al ag reements. T he se ag reeme nts are n ot limit e d in t ime and ma y be t e rmin ated with
ad van ce n ot ice of a fe w mon t hs.
A small n u mb er of employe es at ICL’s sit es in I srael are employed by employme n t ag en cies for sh ort
t erms. In a d d it ion , we ha ve con t racte d in I sr ael wit h su bcon tract ors for var iou s ou t sou r cin g services
su ch as secu rit y, packag in g , main t ena nce, cat e rin g, cleanin g a nd ot he r services. In accord an ce with
t he d ecision r ece ived in 2004 by ICL's Boar d of Dire ctors an d its I srae li sub sidiarie s, con tract ors who
employ workers at I CL’s plan t s in Israel are requ ired to g ive t h eir employe es, who are pe rman ently
employe d for I CL, h olid ay g ift s and ot h er be nefits su ch as u niforms a nd meals.
Employe es of I CL’s su b sid iarie s over se as are e mployed accord in g to t he e mploymen t t e rms
preva ilin g in t h e cou n t ries in which t h ey are employed . Most of t he over se as e mployees, primarily
in Chin a, Ger ma ny, t h e Net h er la nd s, t he Un it ed Kin gd om, Spain a nd t h e Un it e d St at es, are
employe d u n d er collect ive agr eement s.
Und er Ch in e se lab or law, it is a man d a t ory require men t for employe rs to e nt er in t o pe rson a l labor
con t ract wit h t h eir employee s. As su ch , t he per ma nen t st aff of YPH JV sha ll be employe d u n der
respect ive pe rson al labor con tracts. Howe ve r, un de r PRC law, employe es h ave the righ t to e stablish
a lab or u n ion to r epr esen t t h eir in terests an d prot ect t heir le gal r ig ht s. YPH JV h as a lab or u n ion.
Th e lab or u n ion may r epr ese nt employe es in n eg ot iat ing wit h t heir e mployer for colle ct ive
ag reeme n ts r eg ard ing remu n er ation , wor kin g h ou rs, wor k safet y, et c. Su ch collect ive ag re ements
are main ly u se d for provid in g a b en chma rk for ce rt ain workin g con dit ion s.
187 ICL Group Limited
P r o motin g D ive rsit y, I nclu sion & B elon ging
ICL con t inues to be commit t ed to d eveloping a d iver se an d in clu sive workfor ce, in clu d in g the
employmen t an d promot ion of equ a lit y in it s facilit ie s arou nd th e glob e.
In J an u ary 2021, t h e Compan y a nnoun ced t h at for t h e t hird st raig ht ye ar it is in clu ded in t he 2021
B loomb er g Gen d e r- Equ alit y In d e x ( GEI ). T he GEI d ist in g u ish es compa n ies commit t ed to policy
d evelopmen t , repr esen t ation an d t r an sparency in report in g an d a d va ncing g en de r equ alit y. The
GEI in clu d e s pu b lic compa nies t h at score ab ove a glob ally est a b lish ed t h re shold , b ased on
t ran spar ency, policies a nd Compan y's prog ress t owards equ al r epresen tation of ge nd er throug hout
t he le ve ls of t h e org an ization . The 2021, GEI in clu d es 380 pu b lic compan ies h eadqu ar tered a cross
44 cou n t r ies an d reg ion s from over 50 in d ust rie s.
In mid - 2020 I CL t ook an ot h er st e p forward wit h t he implement a t ion of a d ive rsit y an d in clu sion
glob al policy & g u id in g prin ciples an d n omin ated Glob al Diver sity, I n clusion a nd B elon gin g officer,
d emon st r at ing th at Diversit y, I nclu sion and B elon gin g at I CL is a jou rne y, n ot a d e stination .
As part of ou r commit men t to pr omot e diversit y a nd in clu sion g lob a l in it iat ives, ed u cation and
min d set ch an g e, I CL join ed Cat a lyst , a g lob a l n on - profit org aniza tion a ssociat ed wit h some of t he
world ’s lead in g compa nies to h elp b u ild wor kplaces t ha t work for women . Cat alyst d rives ch ange
wit h pion ee rin g rese arch , pract ical t ools, a n d prove n solu tion s a ccelerat ing an d adva ncin g women
in t o le ad er ship, su ppor t in g in d ivid u al career growt h , in clu sive lea d ersh ip skill b u ild in g , and
orga nizat ion al cha ng e effor ts.
ICL's Glob al Diver sit y an d in clu sion st ra t egy is ba se d on ext e nsive d a t a an alysis of t h ree major
grou ps ( I CL’s t op man age ment worldwid e called T100, Fir st & secon d-lin e man ag eme nt a nd Total)
provid in g tra nspar ency an d en su rin g in it ia t ives focu s on t h e right t a rg et . An import an t t oken
in d icat in g we t ake ou r mission b ecomin g a t r u e Diver se an d In clusive Company very se riou s. A
Compan y in which all employees feel t h ey b e lon g.
T a lent Develo pme nt an d Lea rnin g
Sh ift s in t he wor ld of work an d in cre asin g wor ker e xpect at ion s are d r ivin g org an izat ion s to
approach Ta len t , Developmen t and Le arn ing in a more in tegr at ed way. Su pport e d by t he ou tcome
of t h e Employer of Ch oice, a Glob al su rvey to mea su re e mployee ’s en g ag ement a n d en ab lement,
ICL in t rod u ced a few in itia tive s d ur ing 2020 in t he ar ea of Le arnin g a nd Developme n t.
M y C ampu s@I CL is t he fir st ph ase of a mod ern Le arn in g an d Developmen t St ra tegy- promot ing
“Lear nin g in t h e flow of Work”. A n up to d at e on e st op sh op for le arn in g opport u nities wh ich all
employe es and ma na g ers can u se to d evelop a nd grow. It an in teractive solu tion wh ich focuses on
t he u ser e xper ie nce as well as b et ter visib ilit y a nd accessib ilit y for all. En ab ling e mployee ’s all over
t he world to t a ke t he ir d evelopmen t in to t heir own h an ds.
Effect ive lea d ersh ip is more e sse n t ial t h an e ve r. W it h I CL L e ade rship mod e l, we emb race t he key
qu a lit ie s an d ca pab ilit ies of an ICL le ad er, d emon st ratin g a nd cu lt ivat ing C a re, Dare , Gr ow, an d
W i n n ing Spir it – wh er ever t he y are a nd wh at ever t h ey d o. T h e mod e l is d esig n ed in t h e sh ape of
ICL’s log o to re flect t h e fact t ha t ou r leader ship mod e l is at t h e he art of wh o we are as a Company.
188 ICL Group Limited
E. SHARE OWNERSHIP
Share-based payments to employees
For in format ion rega rdin g t h e sh are -ba se d paymen t s to t h e Compa ny's employe es in t h e form of
non - market ab le opt ion s an d r est ricted sh are s of t h e Compa ny, and for in format ion re gard ing the
2014 Equ it y Compe nsa t ion Plan and t he g ran ts in prior ye ars mad e u n d er t h e said Plan , see Note
19 to ou r A u d it ed Fin ancial St ate me nts.
For in format ion wit h re spect to sh are own ersh ip of memb ers of ou r Man a ge me nt an d Su per visory
B oar d s an d ou r sen ior ma n ag emen t see “Item 7 - Ma jor Sha reh olders and Relate d ( a nd I n terested)
Part y T ra nsact ions”.
Item 7 – MAJOR SHAREHOLDERS AND RELATED (AND
INTERESTED) PARTY TRANSACTIONS
A. MAJOR SHAREHOLDERS
Th e followin g t ab le pre sen ts, as of Fe b ru ar y 28, 2021 ( u n less ot h erwise not ed b e low), t h e b en eficial
ownersh ip of ou r ord in ar y sh ares by each pe rson wh o is kn own by us to be t he bene ficia l owner of
5% or more of ou r ou t st a nd ing ord inary sh are s an d each of ou r d irectors an d exe cutive officer s. The
d at a pre se n t ed is b ased on in format ion provid e d to us by t he hold ers or d isclosed in pu b lic
reg u lat ory filin gs.
Th e n u mb er of or d in ar y sh ar es b en eficially own ed by ea ch en t it y, person , e xecu t ive office r or
d ir ect or is d et e rmin ed in accord an ce wit h t he ru le s of t h e SEC an d t he in formation is not n ecessar ily
in d icat ive of b en eficial own ership for an y ot h er pu r pose. Un d er su ch ru les, b en eficial own e rsh ip
in clu d e s an y shares over wh ich t he individ u al h as sole or sh ared vot ing power or in ve stment power
as we ll as a ny sh ar es t h at t he in d ividu al h as t h e rig ht to acqu ire wit h in 60 d ays t h rou gh t he e xercise
of an y opt ion , war ran t or ot h er rig h t . Except as ot he rwise in d icated, an d su b ject to a pplicab le
commu n it y pr opert y la ws, t h e pe rson s name d in t h e t able h ave sole vot in g a n d in vestmen t power
wit h r espect to all common sh ar es h eld by t hat person .
189 ICL Group Limited
Unless ot h erwise in d icat ed b elow, t h e ad d ress for each b en eficial own e r is c/ o I CL Grou p Lt d .,
Mille nniu m T ower, 23 A ran h a St reet, P.O. B ox 20245 T el A viv, 6120201, I srae l.
Or dinary Shares
Beneficially Owned
(1)
Sp ecial State
Share
Shareholders
N umber
%
N umber
%
Israel Corporation Ltd.
(2)
587,178,758
45.85%**
-
-
State of Israel
(3)
-
-
1
100%
Yoav Doppelt
10,254
*
-
-
Avisar Paz
8,463
*
-
-
Aviad Kaufman
-
*
-
-
Sagi Kabla
-
*
-
-
Ovadia Eli
77,913
*
-
-
Nadav Kaplan
13,337
*
-
-
Lior Reitblatt
40,292
*
-
-
Reem Aminoach
40,292
*
-
-
Ruth Ralbag
40,292
*
-
-
Tzipi Ozer Armon
8,111
*
-
-
Raviv Zoller
(4)
337,023
*
-
-
Kobi Altman
(5)
1,028,851
*
-
-
Lilach Geva Harel
(6)
422,535
*
-
-
Ilana Fahima
(7)
422,535
*
-
-
Eli Amon
(8)
555,272
*
-
-
Nitzan Moshe
(9)
136,512
*
-
-
Ofer Lifshitz
(10)
1,012,115
*
-
-
Anantha Desikan
(11)
435,613
*
-
-
Noam Goldstein
(12)
765,855
*
-
-
Anat Tal-Ktalav
(13)
858,546
*
-
-
Amir Meshulam
(14)
231,163
*
-
-
Miri Mishor
(15)
296,747
*
-
-
* Less t h an 1%
** F or fu r t her in formation , plea se see section ( 2) b elow.
( 1) Th e percen t age s sh own are b a sed on 1,280,751,147 ord in ary sh ar es issu ed a nd ou t standing
as of F eb ruary 28, 2021 ( aft er e xclu din g sh ares h eld by us or ou r su b sid iar ies). In a ccordance
wit h SEC ru les, b en eficia l own e rsh ip in clu d e s vot in g or in vest men t power wit h r espe ct to
se cu rit ies and in clu d es t he sh ar es issu a b le pu rsu a nt to opt ion s t h at are exer cisa b le within
60 d a ys of t h e d at e of Feb ru ar y 28, 2021. Sh ar es issu a b le pu rsu an t to opt ions are d e emed
ou t st a ndin g for compu t in g t h e percen t ag e of t he per son h old in g su ch opt ion s b u t are n ot
con sid ered ou tst an din g for compu t in g t he percent ag e of any ot h er person .
190 ICL Group Limited
( 2) Isr ael Corp. is a pu b lic compan y list ed for t radin g on the T el A viv Stock Exchang e (T ASE). Based
on t h e in for ma t ion provid ed by I srael Corp., Millen iu m Inve stmen ts Ela d Lt d. ( “Milleniu m”) and
Mr . Id an Ofe r are con sid e red as join t con t rollin g sh areholder s of I sra el Cor p., for pu rposes of
t he Isra eli Secu r it ies Law ( each of Mille niu m an d Mr. I d an Ofer h old sh are s in Isr ael Cor p.
d ir ect ly, an d Mr. Idan O fer serves as a direct or of Millen iu m an d has an in direct in terest in it as
t he b en eficiar y of t h e d iscret ionary t rust t hat h as in d irect con t rol of Millen iu m, as d et ailed
b elow). Millen iu m hold s appr oximat ely 46.94% of t he share capital in I srael Cor p., which h olds
as at Decemb er 31, 2020 appr ox. 45.85% of th e vot in g rig h ts an d issu ed sh are capit a l of the
Compan y. Mille niu m is h eld by Mash at Inve stment s Lt d. ( “Mash at ”) and by XT Invest me nts Ltd.
( “X T I n ve stments”), wit h 80% a nd 20% h old ing rat es in t he issu ed shar e capit al, r espe ctively (It
is not ed t h at Mash at g ranted XT I n ve stments a power of at t orn e y for a fixed pe riod ( wh ich is
ext end able) to vot e a ccording to X T's d iscretion at Ge neral Meetin gs of Millen iu m in re spect of
sh ares con st it u tin g 5% of t h e vot in g rig ht s in Millen iu m). Mash at is wholly own ed by A nsonia
Hold in g s Sin g apore B .V. ( “A n son ia”) which is in corpor at ed in t h e Ne t herlan d s. A n son ia is a
wh olly owne d su b sid iary of J elany Corporation N.V. ( registe red in Cu raçao), which is a wh olly
owned su b sid ia ry of t he Lib e ria n compan y, Cou r t I nve st me nts Lt d. ( “Cou rt ”). Cou r t is wholly
owned by a d iscretion ary t ru st, in which Mr. I d an Ofer is t he beneficiary. XT I nve stment s is fully
he ld by XT Hold in gs Lt d. ( “X T Hold in gs”), a private company whose ord ina ry sh are s are held in
equ al sh are s by Or ona I nvestment s Lt d. ( which is in dire ctly con tr olle d by Mr. Eh ud An gel) and
by Lyn a v Hold in g s Lt d ., a compa n y t hat is con tr olle d by a discr etion ary t ru st in which Mr. Idan
Ofe r is t h e b e ne ficiary. Mr. Eh u d A ng el h old s, amon g ot her th ing s, a special sh ar e th at grants
him, in t er alia, u n de r certain limit ation s an d for ce rt ain issu es, an a ddit ional vot e on th e Board
of Direct ors of XT Hold in gs. In a d d it ion , Kirb y Ent erprises Inc., which is in d ir ect ly h eld by the
sa me t r u st t hat h old s Mash at , in wh ich, as st at ed , Mr . I d an Ofe r is t h e b en eficiary, holds
approxima t ely 0.74% of t he sh ar e capit al of Isr ael Cor p. Fu rt he rmor e, Mr. Id a n O fer h olds
d ir ect ly a pproximat e ly 3.85% of t h e share ca pit al of Isr ael Corp.
Even t h ou g h Israel Corp. h old s less t h an 50% of t h e Company’s ord in ar y sh ar es, it st ill ha s
d ecisive in flu en ce at t h e Gen era l Me et in gs of t he Compan y’s sh arehold ers an d, effect ive ly, it
ha s t h e power to appoin t direct or s an d to exert sig n ifican t in flu e nce wit h r espe ct to t he
composit ion of t h e Compan y’s B oard of Dire ct ors.
As of De cemb e r 31, 2020, 256 million ord in ar y shares ha ve b ee n pled g ed by Isr ael Corpor ation
to secu re cert a in lia b ilit ies, almost ent irely compr ised of marg in loan s wit h an ag g regate
ou t st a ndin g pr in cipal amou n t of $400 million .
( 3) For a d escript ion of t h e d iffere nt vot in g rig h ts h eld by t h e h old e r of t he Special St at e Sha re,
se e “I t em 10 - Ad d it ion al I nformat ion — B. Me morand u m, A rt icles of A ssociat ion an d Specia l
St at e Sh ar e — T he Special St ate Sh are.”
( 4) In clu d e s 80,613 ord in ar y sh ar es an d 256,410 ord in ar y sh ares su b ject to opt ion s t h at are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t h e t able .
( 5) In clu d e s 112,703 or d in ar y sh ar es an d 916,148 ord in ar y sh ar es su b je ct to opt ion s t hat are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t h e t able .
( 6) In clu d e s 422,535 ord in ar y shares su b ject to opt ion s t h at are cu r ren tly e xercisa b le or will be
exer cisab le wit hin 60 d ays of t h e d at e of t h e table.
( 7) In clu d e s 422,535 ord in ar y shares su b ject to opt ion s t h at are cu r ren tly e xercisa b le or will be
exer cisab le wit hin 60 d ays of t h e d at e of t h e table.
191 ICL Group Limited
( 8) In clu d e s 55,018 ord in ar y sh ar es an d 500,254 ord in ar y sh ar es su b je ct to opt ion s t ha t are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t he t a ble .
( 9) In clu d e s 28,536 ord in ar y sh ar es an d 107,976 ord in ar y sh ar es su b je ct to opt ion s t ha t are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t h e t able .
( 10) In clu d e s 110,605 ord in ary sh ar es an d 901,510 ord in ar y sh ar es su b ject to opt ion s t h at are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t h e t able .
( 11) In clu d e s 55,970 or d in ar y sh ar es an d 379,643 ord in ar y sh ares su b ject to opt ion s t h at are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of the d ate of t h e t able.
( 12) In clu d e s 51,900 or d in ar y sh ar es an d 713,955 ord in ary sh ares su b ject to opt ion s t h at are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t h e t able .
( 13) In clu d e s 87,310 or d in ar y sh ar es an d 771,236 ord in ar y sh ares su b ject to opt ion s t h at are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t h e t able .
( 14) In clu d e s 19,123 or d in ar y sh ar es an d 212,040 ord in ar y sh ares su b ject to opt ion s t h at are
cu rr en t ly exe rcisable or will be exercisab le within 60 d ays of t h e d ate of t h e t able .
( 15) In clu d e s 41,937 or d in ar y sh ar es an d 254,810 ord in ar y sh ares su b ject to opt ion s t h at are
cu rr en t ly exe rcisable or will be exercisab le with in 60 d ays of t h e d ate of t h e t able .
Dire ct ors LT I : A ccord in g to sh ar eh olde r approval on April 23, 2020, each of t h e Compa ny's d ir ect ors
( exclu d in g Messrs. Yoav Doppelt , Avia d Ka ufman and Sagi Kab la, who are office rs of ou r con trolling
sh areh old er , Isr ael Corpor at ion Lt d .), were g ran ted an a nn u a l e qu it y- based compe nsa t ion a ward
for 2020, in t h e for m of re st rict ed sh ar es, for no con sid erat ion, wit h a valu e per g rant of NI S 310,000
( appr oxima t ely $96,400), or 25,389 rest rict ed shares, as d et ermin ed a ccording to t he closin g price
of ou r ord in ary sh ares on th e T ASE on A pril 22, 2020 ( being th e t radin g day imme d ia tely preceding
t he g ran t date). Vest in g of t he sh are s will be ove r a period of t h ree yea rs, star ting Jan uary 1, 2020
( an d J an u ar y 16, 2020 for Ms. Oze r- A rmon), in t h ree e qu a l an n u al in st allment s. Th e fore going
awa rd is in accord a n ce wit h t he Compa ny’s Compen sat ion Policy. As of J an u ary 2021, ou r dire ct ors'
compen sat ion mod el no longe r in clu des an LT I compon en t. F or fu rthe r in for ma tion see Not e 23 to
ou r A u d it ed Fin an cial St at eme nt s an d “I tem 6 - Direct or s, Sen ior Ma na g ement an d Employees— E.
Sh are Own e rship”.
CoB LT I: For in format ion re ga rd ing t he e qu ity- ba sed in centive g ra nt to ou r Exe cu t ive Ch airman of
t he Boar d , Mr . Yoav Doppe lt , for 2019-2021, in th e form of opt ion s, approved by t h e Gen eral
Me et in g of sh are hold ers on Ma y 29, 2019, see Not e 19 to ou r A u d it ed Financia l St at eme nt s.
CEO LT I: For in format ion regard ing th e equ ity- ba sed ince nt ive grant to ou r Ch ie f Execu tive Officer,
Mr . Raviv Zoller, for 2019- 2021, in t h e form of opt ion s, a pproved by t h e sh are hold er s on J u ne 27,
2019, see Not e 19 to ou r A u d it ed Financial St at eme nt s.
Execu t ive Officers LT I: For in format ion reg arding t h e equ it y-b ased g rant in t h e form of opt ion s,
gran t ed in A pril 2019 to ou r e xecu t ive office h old er s for t h e yea rs 2019- 2021, see Not e 16 to ou r
Aud it ed Fin ancia l Statements.
192 ICL Group Limited
B. RELATED (AND INTERESTED) PARTY TRANSACTIONS
Appr oval of Relate d (and I nter ested) Party Tran saction s
A p p roval of Related ( and I nter este d) Part y T ransa ctions
Und er t h e Compa nies La w, an in t e rest e d par t y t ra nsa ction may be approved on ly if it is for t he
b en efit of t h e compa ny. A t ra nsa ct ion t hat is n ot an ext r aordin ar y t ran sact ion in which a d ire ctor
or office r h as a person al in t ere st requir es the approval of t h e B oa rd of Dir ector s, u nless t he Articles
of A ssociat ion of t he compan y provid e ot h er wise . Ou r A rt icles of A ssociat ion pr ovid e t h at su ch a
t ran sa ct ion, if it d oes n ot pe rt ain to a d ire ctor’s or office r’s compe n sa t ion t e rms, may be approved
by an y of ou r B oard of Dir ect ors, ou r A u dit a nd Accoun tin g C ommit t ee, a d isin terest ed d ire ctor or
officer or a pe rson a u t horized for t h is pu rpose by ou r B oard of Direct ors. If t h e t r an saction is an
ext raor d in ar y t ransaction , it mu st be a pproved by t he A u d it a nd A ccou n t ing Commit t ee an d the
B oar d of Dire ct ors, an d , u n d er certain circu mstances, by t h e sh are holders of t he C ompa ny. An
“ext r aord inary t ra nsaction ” is a t ra n sact ion ot h er t h an in t he or d in ary cou rse of b u sin ess, ot h er than
on market t e rms or t hat is likely to h ave a mat erial impact on t he compan y’s profit ab ilit y, a sse ts or
liab ilit ies.
Pu rsu an t to t h e Compan ies Law, e xt raord inary t ra nsa ction s wit h a con t rollin g sha reh older and
ext raor d in ar y t ransaction s in wh ich a con t r ollin g sh are hold er h as a person al in t ere st, re qu ire the
approval of t h e Au d it Commit t ee, or t he Compensa t ion Commit t ee if su ch t r an saction is in
con ne ct ion wit h t he te rms of e mploymen t or service wit h t he compa n y, t he Boa rd of Dire ct ors and
t he sh ar eh old ers of t he compan y ( u n le ss a r elief exist s pu rsu a n t to t h e Isr aeli relie f regula tions
con cer nin g relat ed pa rties transa ction s). T he sh are hold er appr oval mu st be by a simple major it y of
all vot es cast , provid ed t h at ( i) su ch majorit y in clu d es a simple majorit y of t h e vot es cast by
sh areh old er s h avin g no per son al in t e rest in t he mat t er ( e xclu d in g ab st e ntion s) or ( ii) t h e t ot al
nu mb e r of vot es of sh are hold er s men tion ed in clau se ( i) ab ove who vot ed ag ain st su ch t ransaction
d oe s n ot exceed 2% of t he tot al vot in g righ ts in t he compa ny
Th e Compan ies Law pr oh ib it s an y d irect or wh o ha s a per son al in t e rest in an ext raord inary
t ran sa ct ion from b e in g presen t at t he d iscu ssion an d vot in g on su ch t r an saction in t h e A u dit
Commit t ee or B oard of Dir ect ors. Not wit h st and ing , a d ire ctor wh o h as a person al in t erest may be
presen t at the meet ing an d vot e on th e mat ter if a majority of t he direct ors or memb ers of t he Audit
Commit t ee ha ve a person al in t ere st in t h e approva l of su ch t ran sact ion. If a major it y of t h e memb ers
of t h e B oa rd of Dire ctors have a person al in t erest in t he tr ansaction , su ch t ransa ction also r equ ires
sh areh old er appr oval.
A p p roval of D irectors a nd Officer Co mpe nsation
Und er t h e Compan ies Law, we are re qu ired to approve, at lea st on ce e ve ry t hr ee yea rs, a
compen sat ion policy wit h r espect to t h e t e rms of e nga geme n t of ou r d ire ct ors and office rs.
Followin g t h e re commend a t ion of ou r HR & Compen sat ion Commit t ee , t he compen sat ion policy
mu st be a pprove d by ou r B oard of Dire ct ors a nd ou r sh areh old er s. T h e sh are hold er a pprova l must
be by a simple majorit y of all vot es cast , pr ovid ed t ha t ( i) su ch majorit y in clu d e s a simple majorit y
of t h e vot e s cast by n on - con t rollin g sh areholder s and sh are holders h avin g no person al in t erest in
t he ma t t er ( exclu din g ab stent ion s) or ( ii) t h e t ot al n u mb er of vot es of sh areh old er s men t ione d in
clau se ( i) ab ove who vot ed aga in st su ch t ran sa ction d oes n ot e xceed 2% of t h e t ot al vot in g r ights
in t h e company, wh ich is referr ed to as th e “Specia l Major it y for Compensa t ion .” In g en era l, the
compen sat ion t e rms of d ire ct ors, t he Ch ief Execu tive Officer a nd an y employee or se rvice provider
wh o is con sid ered a con t rollin g shar eh olde r, as well as a re lat ive of a con tr ollin g sh ar ehold er, must
be a pproved se par at ely by t h e HR & Compen sat ion Commit t ee , t h e B oard of Dire ct ors a nd the
193 ICL Group Limited
Sh are hold ers ( u nle ss a relie f exist s pu r su a n t to t h e Isr aeli Relief Re g u lat ion con cernin g Related
Part ies T ransa ction s). Ge nerally, sh ar eh olde r approva l is n ot requ ired for d ir ect or compe n sa tion
payab le in ca sh up to t h e maximu m amou nt set fort h in t he Compen sation Reg ulation s g ove rning
t he compen sa t ion of ext e rn al d irectors. Gen erally, t h e compe n sa t ion t e rms of officers who re port
d ir ect ly to t h e Ch ief Execu t ive Office r ( who is n ot a dire ct or) requ ire t he approval of t h e HR &
Compen sat ion Commit t ee an d t he B oard of Direct ors, pr ovid ed t ha t t he HR & Compe nsa t ion
Commit t ee may a pprove an amen d ment to an e xist in g a rra nge me nt of su ch an officer if it
d et e rmin es th at th e amen dment is n ot materia l compa red to t h e exist ing te rms of compe nsa t ion.
Th e Company’s C ompe nsa t ion Policy was a pprove d by t he g en era l me eting of ou r sh arehold ers on
J u ne 27, 2019 for a period of t hr ee yea rs
Accord in g to t he Compan ie s Law, a compen sat ion policy for a pe riod exce ed in g th ree ye ars r equ ires
approval by t h e B oard on ce ever y t hree ye ars, b a se d on a r ecomme nd ation of t he Compen sat ion
Commit t ee, as well as appr oval by t he g en era l meetin g of sh areh old ers by t h e Special Majorit y for
Compen sat ion .
Relat ed (and Interested) Party Tra nsactions
R e g ist ration Rig hts Ag re ement
We en t er ed in t o a re gist ra t ion r ig h t s ag reement wit h Isr ael Corpor at ion on Sept emb er 12, 2014.
We ob t ain ed sharehold er approva l of ou r e nt ry in t o t his ag reemen t on Ma y 8, 2014. T his ag reement
provid e s for cu st omary d eman d , pig g yb ack a nd sh elf r egist ra tion rig hts an d provid e s t h at we will
perform va riou s act ion s an d comply wit h va riou s re qu ire me nt s to facilit at e an d promot e su ch
reg ist ra tion s, as well as cover cer t ain expen ses of I srae l Corporat ion in con n ect ion wit h an y su ch
reg ist ra tion .
C o n t rol ling Sh arehold er
As of Dece mb e r 31, 2020, Isr ael Corporat ion h old s appr oximat ely 44.9% of ou r ou t st and ing or dinary
sh ares and a pproximat ely 45.85% of t h e vot in g righ ts of ou r sh arehold ers.
Isr ael Corpor at ion e xercise s con t rol over ou r operat ion s and b u sin ess st r at egy a nd h as su fficient
vot in g power to con t rol ma ny mat t ers r equ ir ing a pprova l by ou r Sh arehold e rs, in clu din g:
• T h e composit ion of ou r B oa rd of Direct or s ( ot her t h an ext e rnal d ire ctors, as d escr ib e d u n der
“It em 6 - Dire ct ors, Se n ior Man a geme nt an d Employe es— C. B oard Practices— Ext ern al Dire ct ors”);
• Me rg ers or ot h er b usin ess comb in ation s;
• Cert a in fu tu re issu an ces of ord in ary sha res or ot h er securities; and
• A men d men t s to ou r A rt icles of A ssocia t ion , exclu d in g pr ovision s of t h e A rt icles of A ssociat ion
t hat we re dete rmin e d by t he Specia l St ate Sh are.
Howe ve r, Isr ael Corpor ation d oe s not e xercise cont rol wit h re spect to ou r compe n sa tion policy and
in t er est ed part y t ra n sa ct ion s, sin ce th ese mu st be appr oved by a major it y of ou r n on - re lated
sh areh old er s.
194 ICL Group Limited
J o in t In suran ce
For in format ion reg ardin g t h e Company's en g ag emen t in a d ire ctors’ an d officers’ liab ilit y in su rance
policy, in clu d in g wit h re spect to t h e join t pr imary t ier wit h I sra el Cor p., se e "I t em 6 – Dire ct ors,
Sen ior Ma nag emen t and Employees – C. B oa rd Pr actices – I n suran ce an d I nde mn ification ."
M a n age me nt F ees to Con tro lling Sh arehold er
We pay ou r paren t compa ny, I srael Cor p., an n ual man ag emen t fe es for man a ge me nt services, which
in clu d e service of b oard me mb e rs a nd on g oin g g en eral con su lt ing se rvices, su ch as profe ssion al,
fin a ncia l, st r ate gic, leg a l an d man ag erial ad vice . Th e par tie s may a gree to expan d t he mana gement
se rvices to a d d it ion al area s.
On A pr il 24, 2018, ou r sh arehold ers appr oved t he r en ewal of t h e ma na gemen t ser vices agree ment
b et ween us and Isr ael Corp. for t he supply of man age men t se rvices, for an an nu al manag emen t fee
of $1 million plu s VA T , which was in effect u n til De cember 31, 2020. At t h e reque st of Isr ael Corp.,
in view of t h e impact of t h e COVI D-19 pa nd emic on t h e ma rke t an d econ omy, an d d u e to it s
person al commit men t an d sen se of re spon sib ilit y for t h e Compa ny's support effor t s t owar d s ou r
employe es and t he commu n ities in which we operate, th e a nnual mana geme nt fee was reduced by
10% d u rin g t h e six-mont h per iod of J u ly- De cemb er 2020. On Novemb er 9, 2020, Nove mb e r 11,
2020 an d J an u ary 5, 2021, ou r A u d it an d A ccou n t in g Commit t ee, Board of Dir ect ors a nd
sh areh old er s, respect ive ly, approve d th e ren ewa l of t h e man ag eme nt services agr eement effective
as of J an u ar y 1, 2021, for an ad d it ion al t e rm of th ree ye ars, expir in g on Dece mb e r 31, 2023.
Accord in g to t he rene wed man ag ement service s agr eement , t he a nnual man agement fee to be paid
to I srael Cor p. for each ca le nd ar ye ar sh all con t inu e to be $1 million plu s VA T , payab le on a mon t hly
b asis. Su ch amou n t in clu d es t h e overa ll valu e of t h e ca sh and equ ity compe nsa t ion for t h e service
of ou r d ire ct ors who are office hold ers of I sra el Corp. ( e xcept for t h e separa t e compe n sa t ion
arr an g ement b e twe en t h e C ompa ny a n d ou r Execu tive Ch airman of t h e B oard , Mr. Yoav Doppe lt ,
as approved by ou r sh are hold ers in May 2019, a n d as ma y be a me nd ed by sh arehold er appr oval
from t ime to t ime). T h e A u d it & A ccou n t ing Commit t e e will con t in u e to an n u ally examin e t he
rea son ab len ess of t he mana ge me nt fees pa id in th e previou s ye ar ag ain st t he man ag emen t services
act u ally provid e d by I srael Corp. to t he Company in t he same ye ar. On February 28, 2021, t he Audit
& A ccou n t in g Commit te e examin ed t h e mana gement services t hat were a ctually r en de red in 2020
ag ain st t h e man age men t fee s paid in th at ye ar and con clude d t ha t t he fees were rea son ab le.
D e p osit agr eeme nt w ith the C ontroll ing sharehold er
For d et ails rega rdin g a d e posit ag reement wit h ou r con tr ollin g sh are hold er , Isr ael Corp., see Note
23 to ou r A u d it ed Fin ancial St ate me nts.
195 ICL Group Limited
R e la t ionsh ips with Other Com pan ies
Gas Pu rch ase A g reeme n t: In De cemb er 2017, we en t ered in t o a ga s pu rcha se ag reemen t with
En erge an PLC (“ Energ ean”), t h e own e r of t h e Karish/ Tanin na tu ra l g as field s in I srael, u nd er which
En erge an will su pply t h e Compan y wit h n at u r al g as at a qu an t it y of up to 13 BCM, at a va lu e of
$1.8 b illion , ove r a period of 15 year s, which will commen ce as of t he d at e of it s oper at ion , to be
u sed in t he opera t ion of t h e Compan y's power plan t in Sod om an d it s ot he r fa cilit ies in Isr ael (the
"A g ree me nt"). T he negot ia tion s of t he A greemen t were con d u cted by ICL join t ly wit h t wo ot h er
Isr aeli compan ie s affiliat ed wit h ou r con t rollin g sh ar ehold er, I srae l Corp.: O il Refin er ies Lt d ., an
Isr aeli compan y pu b lic t rad ed on t he T ASE a nd con tr olle d by Israel C orp. ( “Ba zan”) and OPC Energy
Lt d . (“OPC”), event u ally lea d in g to separ at e fin al ag re emen t s of each of su ch compan ies wit h
En erge an . Th e A gree men t was exa min ed and a pprove d by an independ en t commit t ee, composed
of ext e rn al a nd in d epen dent d ire ct ors of t h e Compan y, by t h e A u d it an d A ccou n tin g Commit tee
an d by t h e B oard of Dir ect ors, in se veral meet in g s. Du e to t h e join t n eg ot ia t ion s wit h B azan and
OPC, t h e A g reeme nt was approve d by ou r sh arehold ers on February 22, 2018, as an ext raordinary
t ran sa ct ion ( as defined in t he Compan ies La w) in which ou r con t rollin g sh areh older has a personal
in t er est , by a specia l majorit y, in accorda nce wit h t he Compa nies Law.
Fu rt h er to Energ ea n's "For ce Ma jeure " an noun cemen t fr om Fe b rua ry 2020, t hat pot e ntia l d elays are
expect ed in t h e su pply of n a t u ral g as d ue to COVID- 19 impa ct s on it s prod uction , in J an uary 2021,
En erge an u pd a t ed t hat t h e g as su pply will be post pon ed u n t il t h e secon d h alf of 2021, as
an n ou n ce d in J u n e 2020, su b ject to in cre asin g t he availab ility of t he releva nt man power n eeded
for it s ope rat ion s. Ot h erwise , t he g as su pply will be fu rt h er post pon ed u n til t h e first qu arter of 2022.
Followin g t h e "For ce Ma jeu r e" n otice , in Oct ober 2020, an ag reemen t was sig n ed wit h, t he owner
of Ta ma r g as fie ld in Isr ael, to su pply n at u r al g as in t h e in t erim pe riod , u n t il fu ll g as su pply is
ma in t ain ed from En er gean , at a price of ab ou t $4 pe r MMB TU ( "the bridg e agr eemen t"). T he bridge
ag reeme n t is in effe ct u n t il J u ly 2022, wit h an e xt en sion opt ion unt il Dece mb e r 31, 2022. If t he
commer cial oper at ion of Ka rish and Tan in rese rvoirs commen ce s before t h e en d of th e b ridge
ag reeme n t, we ca n con su me all t he qu a ntit ies we h ave commit t ed to t hr ough t he agreemen t with
En eg ea n. In case En erge an is u n ab le to su pply t h e ag reed qu antit ies, we are e nt it led to con sume
t hem u n d er the b rid ge ag reeme n t by t he en d of 2022. Du e to th e join t negot iat ions with Ba zan, for
t he sa ke of ca u t ion an d g ood ord e r on ly, a lt h ou g h th e A u d it a n d A ccou n t in g Commit t ee
d et e rmin ed that th e b rid ge ag reeme nt does n ot con stit ute an extraor dinary tra nsaction (as defined
in t he C ompa nies La w), on O ct ob er 14, 2020, t h e b r id g e agr eemen t wa s a pprove d by I CL's
sh areh old er s, by a special major it y. Given t h e ab ove men t ion e d , no sig nifica nt impact is e xpected
on th e Compan y followin g t he sa id d elay. For fu rt he r infor ma tion , se e Not e 18 to ou r A u d ited
Fin a ncia l St at ement s.
Ot h er I mma t erial T ransa ction s in t h e Ordin ary Cou rse of B u siness: Th e Compa ny fu rth er enga ges,
from t ime to t ime, in it s ord in ary cou rse of bu sin ess, in var iou s t ra n sa ct ion s wit h re la t ed pa rt ies,
su ch as pu rcha se of marin e t ra nsport at ions service s, sale of pr od ucts, pu rcha se of raw ma terials for
it s oper at ion s, re ceipt of b an kin g se rvices, et c. We do n ot d e em t h ese t r an sact ions as mat erial for
t he Compan y, t h ey are n ot viewed as u n u sua l in t h eir n a tu re or con d it ions and t hey are all classified
as "ord in ar y" t r ansaction s u nder Isr aeli la w.
196 ICL Group Limited
Th e t a b le b elow set s fort h cert a in in come st at e me nt in format ion wit h respect to b a lan ces of ou r
relat ed party t ra nsaction s.
For the year ended December 31
2020
2019
2018
$ m illions
$ m illions
$ m illions
Sales
3
4
5
Cost of sales
3
8
19
Sellin g , t ra nsport a nd marketin g e xpense s
7
10
7
Fin a ncin g e xpense s ( income), n e t
( 1 )
(1)
3
Gen eral an d a dmin istrat ive expenses
1
1
1
Ma nag emen t fees to t he par en t compa n y
1
1
1
Th e t a b le b elow se t s for th ce rtain balance sheet information wit h respe ct to balances of ou r related
part y t ra nsa ction s
As at December 31
2 0 20
2 0 19
$ m illions
$ m illions
Ot h er cu rre nt asset s
35
27
Ot h er cu rre nt lia bilit ies
2
2
For fu rt h er in format ion reg a rd in g ou r re la t ed par t y t r an saction s, see Not e 23 to ou r A u d ited
Fin a ncia l St at ement s.
Opt ion Plan s
For a d escript ion of t h e O pt ion Plan s se e “I t em 6 - Dir ect ors, Se n ior Mana gement and Employees—
E. Sh are Own e rsh ip”.
C. INTERESTS OF EXPERTS AND COUNSEL
Not A pplicab le.
197 ICL Group Limited
Item 8 – FINANCIAL INFORMATION
A. CONSOLIDATED STATEMENTS AND OTHER FINANCIAL
INFORMATION
Th e fixe d ope rat in g cost s for t h e yea rs en d e d Dece mb e r 31, 2020, 2019 a nd 2018 a mou n t ed to
approxima t ely $2,349 million , $2,316 million an d $2,188 million , respect ively. Th e varia b le
operat in g cost s for t h e years e nded December 31, 2020, 2019 and 2018 amou n t ed to a pproximat ely
$2,492 million , $2,199 million a nd $1,849 million , r espe ct ively.
See “ It e m 18 - F in an cial Statements”.
B u sin ess Concentr ation Law
On De cemb e r 11, 2013, t he Law for En cou ra ge me nt of Compet it ion a n d Red u ct ion of B u sin ess
Con cen t ration , 5774- 2013 ( t h e “B u sin ess Con cen t r ation La w"), was pu b lished , wh ich in clu d es,
amon g ot her t h in gs, provision s r equ ir in g re g ula tors a ut horized to g ran t rig ht s in areas d efined as
essen t ial in fra structu re in I srael, to t ake int o accoun t con sid er at ions for en cou ragin g in du str y-wide
compet it ion an d red ucin g bu siness con cen tration in the overall econ omy prior to g rant ing rights in
pu b lic asset s to privat e en t ities d efin ed as hig h- concentra tion e ntit ies. The B usin ess Con cen tration
La w set s for t h a list of "r ig h t s", in clu d in g au thoriza tion , licen se , con ce ssion or permit an d a con t ract,
an d also in clu d es a list of mat t ers d efin ed as an essen t ial infrast ructu re, in clu din g areas in wh ich
we are e ng a ge d, su ch as qu arrying, min in g , wat er, et c. T he list of h ig h - con cen tr ation en tit ies was
pu b lishe d in a ccordance wit h t he criteria provid ed in th e B usin ess C on cen tra tion La w, an d I CL and
it s main su b sid iar ie s in I sr ael are in clu ded t h er ein , as a for esaid . In ou r e st imation , in clu sion of the
Compan y an d it s main su b sidia rie s in Isra el in t he list of h ig h-concentration e ntit ies is n ot expected
to h ave a sig n ifica n t adverse effect on us and its fin ancial re sult s. However, in lig h t of t h e fr equent
ch an g es in t he reg ula tor y environ me nt in Israel and t he e xistin g u ncert ain ty r egard ing the manner
of g ran t in g rig ht s in nat u ra l r esou r ces in a ma nne r ot he r t h an t hat provid e d in cu r ren t legal
provision s, amon g ot he r t h in gs in r ela t ion to t h e ma nner of g ran ting a con ce ssion for min era ls
ext ract ion from t h e Dead Sea in 2030, as well as in relat ion to t h e g rantin g of ph ospha t e mining
lice nse s, u n d e r t he provision s of t h e I srae li Min in g Ord ina nce, it is possib le t h at ou r estima tion will
prove to be in accu rate.
Pr ice Mon itoring
Th e price s of fer t ilizer - grade phosph oric a cid for local Israe li cu st omers are r eg u lat ed u n d er the
Su pe rvision of Pr ices for Commod it ies an d Services La w 1996. T he qu an t ity of t h ese prod u cts sold
in I sr ael by t he Phosph at e Solu t ions se gment is n ot ma teria l to ICL.
In t h e Un it e d St at es a nd B r azil, import of mag n esiu m an d mag n esium a lloys from Ch in a is su b ject
to ant i- d umpin g d uties imposed in or d er to prot ect t he loca l in d ust ry in t h ese cou n tries, which are
t he ma in market s in wh ich IC L Mag ne sium se lls it s prod u cts.
ICL an d some of it s su b sid iar ie s h ave b e en d ecla red a mon opoly in Isra el in t h e followin g ar eas:
pot ash , ph osph or ic acid , su lph u ric a cid , ammon ia , ch emical fert ilizers, ph osph at e fert ilizers,
ph osph at es, b r omine an d bromin e compou n ds. Du e to t heir h aving b ee n d eclar ed mon opolies, I CL
an d it s su b sid iar ies are su b je ct to limit at ion s set fort h in C ha pt er 4 of t h e Econ omic Compet it ion
La w, 1988 ( former ly, Re st rict ive B u sin ess Practices Law, 1988), most sig n ificant ly it s prohib it ion on
mon opolies aga in st a b u sin g t he ir posit ion s as mon opolies. In 2020 an d 2019 appr oximat ely 5% of
ou r r even u e d e rive d from Isr aeli sales an d , t h ere for e, in ou r est imat ion , a nd wit hou t d erog ating
198 ICL Group Limited
from t he le gal implicat ion s of t he ab ove-men tion ed d eclaration , on t he wh ole, th e sa id d eclar ation
d oe s n ot h ave a mat e rial impact on u s. We also h ave an in t e rn al an tit ru st compliance prog ram in
place.
Le gal Proceedings
T a x Pr oceed ing s
For in format ion re gard ing ou r t ax procee din gs, see Not e 15D to ou r A udit ed Financial St at eme nts.
D e rivative A ction s
1. On Janu a ry 10, 2018, an a pplica t ion for ce rt ificat ion of a d e rivat ive a ct ion was file d by a
sh areh old er of Oil Refinerie s Lt d. (“Ba zan ”) wit h t he Tel A viv- Yafo Dist rict Cou rt , ag ain st former
an d cu r rent boar d memb ers of B azan , OPC En ergy Lt d . OPC Rot em Lt d ., OPC Hadera Ltd. and
t he Compan y, ( h erein aft er, join t ly: t h e “Addit ion al Compa n ies”), a nd ag ain st Isr ael Corpor ation
Lt d ., Mr. Id an Ofer and Mr . Ehud A n gel ( the “Applicat ion ”).
Th e A pplicat ion pert ain s to g as pu r ch ase t ran sact ion s of t he Compa n y, B az an an d OPC,
in clu d in g t he inte rcompa ny aspects t he reof, which in clud e a 2012 transa ction involving Bazan
for t he pu rch ase of n at u ral g as fr om t h e T amar g as field ( the “T amar Tr ansaction ”), as well as
a t ransa ction for t he pu rchase of na t u ral g a s from En er g ea n I srael Limit ed ( t he “En ergean
Tr an sact ion ”). T he Compan y’s e ngagement in t he En er ge an T ran sact ion was approve d by the
gen era l meetin g of ou r sh areh old er s on Fe bru ary 22, 2018.
The applican t argues t h at Bazan sh ould have cert ified th e Ta mar Tran sact ion as a "Con tr olling
Sh are hold er" t ran sa ct ion a nd t hat t he Compan y an d OPC en joyed B aza n's e con omic
ad van t a ge s in t he En erg ean Tran sact ion an d t h us mu st compe n sa t e it . On Aug ust 7, 2018, all
t he d efenda nt s filed their respon ses with t he cour t. On A pril 15, 2019, t h e a pplica nt's response
was filed . A Pre limin ar y h earin g was con ve n ed on Sept emb er 15, 2019. T h e Evid e n t iary
he arin g s con vene d on J u ly 5, 2020, Novemb e r 25, 2020 and J anu a ry 3, 2021 a nd a re
sch ed u led to con t in ue in J u ne and J uly 2021.
In lig ht of t he ear ly st ag e of t h is pr oceed in g , t he ch an ces an d r isks in volved can n ot be
est ima t ed . However , on t he su rface it see ms t ha t t he Company h as g ood d efense a rgu men ts.
2. On J anu a ry 18, 2018 t h e Compa ny h as b e en served an applicat ion file d by a sh areh older (the
"A pplican t ") wit h t h e T el A viv Dist r ict Cou rt , seeking t he C our t’s appr oval to file su it on b e half
of th e Company as a d erivat ive a ct ion a ga in st t h re e cu rre nt an d former officeh old er s of it s
su b sid iar y, Dead Sea W or ks ( “DSW ”) (h ere ina fte r: the “Application ”).
Th e A pplica t ion per t ain s to a ju d g me nt ren d e red in Sept emb er 2017 ( h er ein after: t he
“J u d g me nt ”) in a lawsu it filed by Ma at z - Israel Na tion al Road s Compa ny Lt d. ( “Maatz”) against
DSW, d u e to d a ma ges ca u sed in t h e lat e 1990s an d ea rly 2000s to b r id g es in Isr ael, alleg edly
as a resu lt of pot ash leaks from DSW t ru cks on t he ir way to Eilat port . In Oct ob er 2017 DSW
filed an appeal of t h e J u dg ment wit h t h e Su pr eme Cou rt, and Ma atz filed a cr oss- appe al.
W it h in t h e A pplication , th e C ou rt is r equested to: ( 1) A pprove the requ est for filin g a derivative
act ion ; ( 2) ru le for a d e clara t ive re lief by wh ich t he office hold ers b reached t h eir lawfu l d uties
to t h e Company; a nd ( 3) to a ward compen sat ion in t he a mou nt of I LS 20 million, wh ich is t he
amou n t imposed u pon DSW in t h e said J u dg men t; ( 4) to d e clare t hat t he Compa ny is en t itled
to ad d it ion al mon et ary compen sat ion at t he full amou nt of damages and expense s in curred by
199 ICL Group Limited
it as a re su lt of an y fu t u re la wsu it filed by Maat z wit h respect to d amage s cau sed to ot h er
b rid g es, to t h e ext en t su ch fu ture lawsu it is filed .
Th e Company filed it s A n swer to t he A pplication on J un e 8, 2018 to which t h e A pplican t filed
it s respon se on Sept emb er 12, 2018. T he part ie s ag re ed on a proce d u ral arr an gement an d filed
each it s su mmarie s to cou rt , last filed by t he Applica nt on A pr il 28,2019. On Decemb er 15,
2019 t he Compan y su b mit t e d to cou r t a n ot ice on a med iat ion ag re ement reached b etween
DSW a nd Ma at z e ndin g a ll d ispu tes b e tween t h em to wh ich t he A pplican t filed a r espon se on
De cemb er 16, 2019. On May 21, 2020, t h e Tel A viv Dist rict Cou rt rejected th e a pplicat ion for a
d erivat ive a ct ion .
Ot h er Claims
1. A ccord in g to t h e an n ou n cemen t issu e d by t h e Compan y on May 10, 2017, ICL Eu rope
Coöpe rat ief U.A . ( “ICL Eu r ope”), a su b sid iary of t h e Compa ny, filed a Not ice of A rb it ra tion
ag ain st t h e Fe d eral Democrat ic Repu b lic of Et h iopia ( "Et hiopia") u nd er t h e A g ree me nt of
En cou ra ge me nt a n d Reciproca l Pr ot e ct ion of Invest ment s b et ween t h e Et h iopia an d t he
Kin g d om of t he Net h erla nds ( "th e Et h iopia - Neth erlands B I T"). A t h ree- membe r a rb itration
t rib u n al ( "T ribun al") wa s con st it u t ed u n d er t h e Arb it ration Ru les of t h e Unit ed Nat ions
Commission on I nt ern at ional Tr ade Law ( "UNCIT RAL Ru le s") to h ea r t h e case, wh ich is b eing
ad min ist er ed by t he Perman en t Cou r t of A rb it ra tion locat ed in T h e Hag ue, t he Net herla nds.
Followin g I CL Eu rope's filing of Not ice of Ar b it r ation on May 10, 2017 a nd Et h iopia's
respon se t h eret o on J un e 12, 2017, I CL Eur ope sub mitt ed to the Trib unal on Ju ne 19, 2018,
it s St at emen t of Cla im seekin g compe nsa tion in the amou nt of $181 million plu s in t erest for
d amag e it s claims as a re su lt of Et h iopia 's coer cive , a rb it ra ry, d iscrimin atory an d u nlawful
con d u ct , cu lmin at in g in th e imposit ion wit h ou t le gal b a sis of a pu r port e d t ax on I CL
Eu rope's in d ire ct ly own ed Et h iopia n compan y, A llan a Pot ash Afar Plc, an d Et hiopia's
violat ion of mu lt iple provision s of t h e Et hiopia - Ne t herlan ds B I T, in clu d ing t he r equirements
to accor d fa ir and equ itable treatment to ICL Eur ope's investme nt, to pr ovid e full prot ection
an d secu rit y to IC L Eu r ope's in ve st me nt an d n ot to expropriat e u nlawfully ICL Eu r ope's
in vest men t . Et hiopia su b mit t ed to t h e Tr ib u n al on O ct ob er 19, 2018, it s St at ement of
De fen se a nd O b ject ion s to J u risd ict ion . A mon g ot h er t h in gs, Et h iopia arg u es t ha t ICL
Eu rope failed to make it s invest men t in complian ce wit h Et h iopian law an d t h at t he Tribunal
lacks ju r isd ict ion u n d er t h e Et hiopia -Ne t herland s B IT as a re su lt , t h at t h e cha llen g ed tax
was lawfu l and does n ot provid e a b a sis for pre se nt in g a claim u n d er t he Et hiopia-
Net h er lan ds B IT a nd t hat IC L t ermin ated it s in vest men t for reasons u n re lated to any of the
alle ge d u n lawfu l act s an d omission s of Et h iopia . On Augu st 12, 2019, IC L su b mit t ed its
Reply in su pport of it s claims ag ain st Et hiopia a nd in respon se to which Eth iopia su bmitted
on Novemb er 25, 2019 it s Rejoin d er . Du e to t he emerg en ce of t h e COVID- 19 pand emic the
Tr ib u n al d ecid ed on J un e 19, 2020 t h at t he he aring wou ld proceed in t wo ph ase s, in A u gust
an d De cemb e r 2020, wit h t he fir st ph ase to proce ed by vid eocon fer en ce an d wit h the
examin at ion of Et hiopia’s fact wit n esse s d efe rre d to t he secon d phase of t h e h ear ing. On
Augu st 13, 2020, t h e first ph ase was complet e d an d on Decemb er 8, 2020, t h e second
ph ase was complet e d ( a lso by vid eocon feren ce). It is n ot possib le to pre d ict t h e ou t come
of t h is proce ed ing at th is t ime.
2. In A u g ust 2019, th e Compa ny's subsid ia ries: Rot em Amfe rt Neg ev Lt d., De ad Sea Works Ltd.
an d B romin e Compou n d s Lt d . ( t he “A pplican ts”) filed an a pplica t ion to join t h e Pe t ition (the
"A pplicat ion ") t h at was filed by th e Ma nu factu re rs A ssociation of Isr ael with the B e’e r Sheva
Dist rict Cou r t in Ma y 2019 ( t h e “Pet ition ”), on b e ha lf of it s memb er s' ope rat ion s in the
Ash d od Port in I sra el, in clu d ing t he A pplican ts, a ga inst t he d ecision to appr ove a pla n for
t he con st ru ction of a r esid ential area in pr oximit y to t he Ash dod Port an d facilit ies t hereof
200 ICL Group Limited
( t h e "Plan"). T he Compan y's A pplicat ion was d e nied by t he Cou r t, howe ve r, on November
10, 2019, t h e Cou rt rendered it s r u ling wh er eby it acce pte d t he Petition an d can celled the
d ecision to appr ove t h e Plan . On De cemb e r 23, 2019 t h e Ash d od Mu n icipalit y an d the
Ash d od Local Plan n in g and B uild ing Commit t ee h ave appea le d to t h e Su preme Cou rt (the
"A ppeal"). On Nove mb e r 29, 2020, t h e pa rt ies to t h e A ppeal reache d a set t le ment
ag reeme n t by wh ich th e d ist rict court's rulin g will be r evoke d , t he Plan will t ake e ffect and
t he Lan d A u th orit y u nd er takes n ot to market some of t h e plot s in t h e Plan ( those n e ar the
port ) for r esid e n t ia l pu rposes. T he La nd A u thority h as ke pt th e opt ion for pla nnin g change
of t h ose plot s and in su ch ca se t h e part ies r eser ve all r ig h t s an d claims in r espe ct to su ch
plan n in g chan ge. On t h e same d a y t he Su preme Cou r t g ave effect of a ju d g men t to t he
se t t lemen t ag re ement en tered by th e par t ies.
For in format ion re gard ing sig n ifican t cla ims an d leg al proceedin g, wh ich are pend ing a gain st the
Grou p, se e Not e 18 to ou r A u d it ed Financial St at eme nts.
Divid e n d policy
On Mar ch 6, 2018 ou r B oard of Dir ect ors revisit ed t h e Compan y's d ivid e nd d istr ibut ion policy t hat
was pre viou sly appr oved in May 2016, a n d resolve d t h at in t h e years 2018 and 2019 ou r d ivid end
d ist r ib u tion r ate sha ll con t in ue to con st itu te up to 50% of t he Compan y's a d ju st e d a nnu al n et profit.
On Fe b ru ary 12, 2020, ou r B oard of Dir ect ors resolve d to ext en d t he Compa ny's cu rren t d ividend
policy u n t il fu rt h er n ot ice. A ccord in g to t he e xt en de d policy, divid end s will be d ist r ib u ted at a
payou t ra t io of up to 50% of an nu al ad ju sted n et in come, as e xpect ed at t he d a te of t h e d e cision
reg ard in g t h e d ist rib ution , an d su b ject to a pplica b le la w. In a d d it ion , d ivid en d s will be paid ou t
in asmu ch as d eclar ed by ou r B oard of Dire ctors an d may be discon tin ued at an y time. Such changes
cou ld in clu d e eit her a re d u ct ion in t h e amou n t of t he t arg e ted d ivid e nd , or mod ifica t ion of t he
calcu lat ion formu la.
All d ecision s respe ct in g d ivid end d ist rib ution are made by ou r B oard of Directors, which con siders
a variet y of fa ct ors, in clu d in g ou r profit s, ab ility to pa y ou r d e bt and ob ligation s, in vestme n t pla ns,
fin a ncia l st at e and oth er factors, as applicab le. T he distr ibu tion of a divid end is n ot assur ed a n d our
B oar d of Dire ct ors may d e cid e, at it s sole d iscret ion, at a ny t ime a nd for an y re ason , n ot to dist ribute
a d ivid en d , to re d u ce t he rate t h ere of, to d ist ribu te a specia l d ivid en d , to ch ang e t he d ividend
d ist r ib u tion policy or to ad opt a sh ar e bu y-back plan .
Th e a mou n t of dist rib utable pr ofits as of De cemb er 31, 2020 a mou nte d to $3,492 million . T h e t erms
of cert a in of ou r e xist in g lia b ilities r equir e us to ma in ta in a min imu m level of t h e Compan y’s e quity,
wh ich cou ld rest r ict ou r ab ility to pay d ivid end s in the fu t ure. Se e Not e 13D to ou r A u d ite d Fin ancial
St at emen ts for fu rt h er in format ion re g ardin g cove n an ts in ou r loan ag reeme nts and t he ir impact
on ou r a b ilit y to pa y d ivid en d s. In ad d it ion , t h e d ist ribut ion of d ivid en d s is limit ed by I sr aeli la w,
wh ich per mit s t h e d ist rib ut ion of d ivid end s on ly ou t of d ist rib u ta ble profit s and on ly if t h er e is no
rea son ab le con cern t ha t su ch d ist rib ution will pr even t us from meet in g ou r e xist in g an d fu ture
ob ligat ion s whe n t hey b ecome d u e. Genera lly, d ivid en ds pa id by an I sra eli compan y are su bject to
an Isr aeli wit h h old in g t ax. For a d iscu ssion of cer t ain t ax con sid e rat ion s affect in g divid end
paymen t s, see “It em 10 - A d dition a l I nformation — E. T axat ion ”.
B. SIGNIFICANT CHANGES
To t he b e st of ou r kn owle d g e, no sig n ifican t ch an g es h ave occu rre d sin ce t he d a t e of ou r
con solid a t ed fin ancial st at emen ts.
201 ICL Group Limited
Item 9 – THE OFFER AND LISTING
A.OFFER AND LISTING DETAILS
Not a pplica b le .
B. PLAN OF DISTRIBUTION
Not a pplica b le .
C. MARKETS
Ou r ord in ary sh ares a re list e d on t he NYSE and on th e TA SE u nder t h e symb ol “I CL.”
D. SELLING SHAREHOLDERS
Not a pplica b le .
E. DILUTION
Not a pplica b le .
F. EXPENSES OF THE ISSUE
Not a pplica b le .
Item 10 – ADDITIONAL INFORMATION
A. SHARE CAPITAL
As of Dece mb e r 31, 2020, ou r au t horized sh ar e ca pit al con sist e d of 1,484,999,999 ord in ary sh ares,
par valu e NI S 1 per sh ar e, of which 1,305,140,778 or d in ar y sha res were issu e d an d ou t st an ding
( in clu d in g sh ar es h eld by us or ou r su b sid iaries), an d 1 Specia l St at e Sh are, pa r valu e NI S 1 per sha re,
issu ed a n d ou t stan din g. A ll of ou r ou t standin g sh ares h ave b een lawfully issu ed an d are fu lly paid.
As of De cemb er 31, 2020, 24,589,836 ord in ar y sha res were held by us or ou r su b sid iaries. Sha res
acqu ired by ou r su b sid iaries pr ior to Fe b ru ary 2000 h ave b ot h econ omic r ig h t s an d vot in g r ig hts.
Howe ve r, in a ccord a n ce wit h Israeli law, ord in ary shares issu e d to ou r su bsid iarie s or pu r chased by
ou r su b sid iaries aft er Fe bru ary 2000 h ave e conomic rig hts b ut n ot vot in g r ig h ts. Sh ares h eld by us
ha ve no econ omic rig h t s or vot in g rig ht s. T h erefore, ou t of t h e or d in ar y shares h eld by us or ou r
su b sid iar ies as of De cemb e r 31, 2020, 24,589,836 h ave no vot in g rig ht s.
As of De cemb e r 31, 2020, an ad d it ion al qu antit y of a pproximat ely 27 million or d in ar y sha res were
issu ab le u pon t h e exercise of ou t st a ndin g opt ion s g ran t ed to ou r office rs an d e mployee s at a
weig h t ed a ve rage exercise price of a pproximat ely I LS 16.29 ( a bou t $5.07) per share. T he weighted
averag e exe rcise price of t he ou t st a ndin g vest e d opt ion s is appr oximat ely I LS 13.89 ( ab ou t $4.32)
per sh ar e. For fu rt he r in format ion ab ou t t he issu ance of opt ion s an d rest rict e d sh ar es to office rs
an d sen ior employe es a nd t heir exer cise in 2019-2020, as well as t he issu a nce of rest r ict ed sh ares
to d ire ct ors an d appr oval of t h e issu ance of re st ricte d sh ares to d irect ors, se e Not e 19 to ou r Au d ited
Fin a ncia l St at e ments an d “I t em 6 - Dir ect ors, Se nior Man ag eme nt an d Employee s— E. Sh are
Own e rsh ip”.
202 ICL Group Limited
In 2020, a pproximat ely 1 million opt ion s u n d er ou r equ ity compen sa tion plan s we re e xercised into
approxima t ely 0.1 million ord in ar y sha res. In 2019, a pproximat ely 1 million opt ion s u n d er ou r equity
compen sat ion plan t s were e xe rcised in t o approxima t ely 0.2 million ord in ary sh ares. In 2018,
approxima t ely 0.7 million opt ion s u n d er ou r equ it y compen sat ion plan t s were e xercise d in t o
approxima t ely 0.15 million or d in ar y sha res.
B. MEMORANDUM, ARTICLES OF ASSOCIATION AND SPECIAL STATE SHARE
Ou r sh are hold ers ad opt ed t h e A rt icles of A ssociat ion at t a ch ed as Exhib it 3.2 to ou r re gist ration
st at emen t on F orm F-1 ( File n o. 333- 198711) filed wit h t he SEC on Septemb er 12, 2014.
We in corpor at e by r eferen ce in to t h is A nn ua l Report t he descr iption of ou r A mend ed an d Restated
Art icles of A ssociat ion , wh ich b eca me effective u pon t he closin g of ou r init ial pu b lic offering in the
Unit es St at es and list in g on t h e NYSE, con t ain ed in Exhib it 2.1 of t h is A n n u al Report . Su ch
d escript ion se t s fort h a su mma ry of ce rt ain provision s of ou r Art icles of Associat ion as cu rre nt ly in
effect .
Th e Specia l St at e Share
Th e St at e of I srael hold s a n ont ra nsfera ble Spe cia l Sta te Sh are in I CL in or der to preserve th e St ate’s
vit al in t e rest s. A n y chan ge in t h e provision s of ou r A rt icles of A ssociat ion relat in g to t h e rights
at t a ch ed to th e Spe cial St a t e Sha re re qu ires appr oval from t he St at e of Isr ael. Th e Spe cial St a t e Sh are
gran t s it s h old er t he righ ts d escr ibe d b elow.
Th e sa le or t r an sfer of ma t erial assets of t h e Compa ny or t he g ran t of an y ot h er rig hts in su ch assets,
not in t h e ordin ary cou rse of ou r bu sine ss, wh et her in on e transa ction or in a serie s of t ransa ctions,
sh all be in valid , wit h out the con sen t of t he h older of t h e Spe cial State Sha re, who may oppose such
a t ran sfer of a mat e rial asset on ly if, in it s opin ion , su ch t ra nsfer is likely to h arm on e of t he "vit al
in t er est s of t he St at e" as su ch t erm is de fin ed in t h e A rt icle of Associat ion an d d e scrib ed b elow.
Rest r ict ion s are also imposed on volu n t a ry liqu id at ion , merg e rs an d reorga niza tion s, exclu d ing
cer t ain except ions enume rat ed in ou r A rt icles of A ssociat ion.
In ad d it ion, wit h out the con sen t of t he h older of th e Spe cial St at e Sh are , a ny acquisit ion or h olding
of 14% or more of ou r ou t st a ndin g share capit a l is n ot valid. In ad dition , an y acquisit ion or h olding
of 25% or more of ou r ou t st a nd ing sh are capit al ( in clu din g an in crease of h old in gs to 25%) is n ot
va lid wit h ou t t he con sen t of t he holder of th e Special St at e Sh are, even if in t he past t he consent of
t he hold er of t h e Spe cia l St at e Sha re ha d b ee n ob t ain ed for own e rsh ip of le ss t ha n 25%. Our A rticles
of Associat ion set fort h proce d u res requ ire d to be followe d by a person wh o in t en d s to a cqu ire
sh ares in an amou n t t hat wou ld re qu ire t h e appr oval of t h e h old er of t h e Special St a t e Sh ar es. A
pled g e over sh are s is t reat ed like an acqu isit ion of sh ares. As a con d it ion to vot in g at any
sh areh old er mee t ing , ea ch in t erest ed part y in t h e Compan y, inclu d in g a h old e r of 5% or more of
ou r ou t st and ing sh ares, is re qu ire d to ce rt ify in writ in g t h at t he vot in g power d erived from t he
hold in g of sh ares doe s not requ ire th e appr oval of t he hold er of th e Specia l State Sha re or that such
approval h as b een ob t a ine d.
In ad d it ion to t he ab ove , t he con se n t of t h e h old er of t he Special St at e Sha re is r equ ired for t he
ownersh ip of an y sha res t ha t g rant t h eir h old e r t h e rig ht , a b ility or pract ical pot e n t ial to a ppoin t,
d ir ect ly or in d irectly, 50% or more of ou r d irector s, an d su ch a ppoin tmen ts will n ot be va lid as long
as su ch con sen t h as n ot been ob tain ed.
Th e h old e r of t he Spe cia l St at e Sh ar e h as t h e r ig h t to re ceive in format ion from u s, as provid e d in
ou r A rt icles of A ssociat ion . Ou r A rt icles of A ssociat ion also provid e t hat t h e h old er of t h e Special
203 ICL Group Limited
St at e Sh ar e will u se t his in for mation on ly to e xe rcise it s rig ht s u nd er t he A rt icles of A ssociat ion for
pu rpose s of prot ect ing t he St ate’s vit al in ter est s.
Ou r A rt icles of A ssociat ion also impose a per iod ic re port in g ob lig ation on us for t h e b e nefit of the
hold er of t h e Specia l St ate Sha re, regard ing all a sse t-re lat ed t ran sact ions appr oved by ou r B oard of
Dire ct ors d u rin g t h e t hree mon t h s prior to t h e d ate of t he r eport , a ny cha ng es in sh are capital
ownersh ip an d an y vot in g ag ree me nt s amon g t h e Compan y’s sh arehold ers sig n ed d u rin g t hat
period .
Th e followin g are t h e “St at e’s vit a l in t erests” as d efin ed in ou r A rt icles of A ssociat ion for pu r pose s
of t h e Special St at e Sh are :
▪ To prese rve t h e cha racte r of t h e Compan y and it s su bsid iar ies ICL Dead Sea, I CL Rot em, Dead
Sea B r omin e Compan y, Br omin e Compou n d s an d T ami as Israeli compan ies whose cen t er s of
b u sin ess a n d ma nag ement are in I sra el. In ou r e stimation , t his con d ition is me t .
▪ To mon it or t h e con t rol over min e rals an d n at u ral resou rces, for pu rpose s of th eir efficient
d evelopmen t a n d u t ilizat ion , in clu d in g maximu m u t iliz at ion in Isr ael of t h e resu lt s of
in vest men t s, r esearch an d d evelopmen t.
▪ To preve nt acqu isit ion of a posit ion of influ e nce in t he Compa ny or th e foregoing Isra eli
su b sid iar ies by h ostile e ntit ie s or en tities likely to h ar m t he for eig n and secu rit y int erests of the
St at e of Isr ael.
▪ To preve nt acqu isit ion of a posit ion of influ e nce in t he Compa ny or th e foregoing Isra eli
su b sid iar ies or ma nag emen t of su ch compa nies, wh ere by su ch acqu isition or man ag eme nt may
cre at e a sit u at ion of sig n ifican t con flict s of int ere st like ly to h arm an y of t h e vit al in t e rests
en u me rat ed ab ove.
Fu rt h ermore , ou r h ead qu arters an d t he on g oin g man a ge me nt an d con t rol over ou r bu sin ess
act ivit ie s mu st be in Isr ael. Th e majorit y of t he me mb e rs of ou r B oar d of Dir ect ors must be cit izens
an d re sid ent s of I srael. In g en eral, mee t ing s of ou r B oard of Dire ctors are to t ake place in I sra el.
Ot h er t h an t h e rig h ts en u mer ated a b ove, t h e Specia l St at e Sh are d oe s n ot g ra nt t he h old er any
vot in g or e qu it y rig h ts.
Th e St at e of I sr ael a lso hold s a Special St at e Sha re in t h e followin g I CL su b sid iar ies: I CL Dead Sea,
De ad Se a B romin e Compa ny, I CL Rot em, B romin e Compou nd s, Tami an d Dead Sea Magn esiu m. The
rig ht s g ra n ted by t h ese sh ar es accor din g to t h e A rticles of Associat ion of t h ese su b sid iar ies are
su b st an tially similar to t he rights en umerated above. T he fu ll provision s g overnin g t he rights of the
Spe cial St at e Sh are a ppear in ou r A rt icles of Associat ion an d in t he A r t icles of A ssociat ion of t he
sa id su b sid iar ies an d are availab le for the pu b lic’s review. We r eport to t h e St a t e of Israel on an
on g oin g b asis in a ccord a nce with t he provision s of ou r A rticles of A ssociat ion .
Du r in g t h e secon d h alf of 2018, an in t e r- min istry t e am h as b een est ablishe d, h ea ded by t he Min istry
of Fin an ce , wh ose pu rpose is, a mon g ot h er t hin g s, to r eg u lat e t h e au t hority an d su pervision in
respect of t he Special St at e of I sr ael Sh ar e, as well as re d u ce t he regula tor y b u rd en . In 2019, t he
work of t his t eam was su spen de d u ntil fu rthe r n ot ice d ue to t h e d issolu tion of t he Kn esset an d lack
of pe rman en t Gove rn me nt. As at t h e d a te of t he repor t, t h e Company is u nab le to est imate when
or wh et he r t h e t ea m will r ecomme nce a nd wh at are t he implicat ions of t his proce ss over t he
Compan y, if an y. An ad d it ion al array of reg u lator y provision s ma y in crea se t h e u n cer t aint y in
ma na g in g ou r operat ion s r elat in g to n at u ral r esou r ces in Isr ael an d may h ave a mat e rial ad ve rse
effect on ou r b u sin ess, ou r financial con dit ion an d r esult s of oper ations.
204 ICL Group Limited
C. MATERIAL CONTRACTS
Exce pt as ot h er wise disclosed in th is An nu al Re port, we are n ot cu rren tly, a n d h ave not be en in the
last t wo years, part y to an y ma t erial con t ra ct , ot h er t h an con t racts e nt ered in t o in t he ord in ary
cou rse of b u sin ess.
D. EXCHANGE CONTROLS
Th er e are cu r ren tly no Isr aeli cu r ren cy con t rol rest rict ions on t h e r emit tance of d ivid en ds, in t erest
or ot h er paymen t s wit h r espe ct to ou r ordin ary sh are s to non -reside nts of I sr ael or on the pr oceeds
from t he sa le of t h e sh ares, except for sh areh old er s wh o are su bje cts of cou n t ries t hat are, or h ave
b een , in a st a t e of wa r wit h Israe l.
E. TAXATION
Israeli Tax Considerations
Ta xat ion of compa nies in Israel
For in format ion in re spect of t he t axa t ion of compa n ies in Isr ael, in clu d in g issu es r eg ard in g the
in come t a x rat es, t ax b e nefit s u nder t he Israeli La w for t h e En cou rag ement of Capit al Investme nts,
t he Law for t he En cou ragement of I nd ustr y ( Taxation ) an d t he Law for T axa t ion of Pr ofit s fr om
Nat u r al Resou rces, see Not e 15 to ou r A ud ited Financia l St atemen ts.
Taxa t ion of Investors
Th e followin g are mat erial Isr aeli in come t a x con seque nces to in vestor s of a cqu iring a nd disposing
of ou r ord in ar y sha res. T h at st a t ed d oe s n ot pu rpor t to be a compr eh en sive d escript ion of a ll t he
t ax con sid era t ions t h at ma y be r elevant to a part icula r person’s d e cision to acqu ire a nd /or d ispose
t he or d in ar y shares.
C a p ital Ga ins T ax
Isr aeli la w g en er ally imposes a capit a l g ain s t ax on t he sale of capit al asset s by re sid e nt s of I sra el,
as d efin ed for I sraeli t a x pu r poses, and on t h e sa le of capit al a sse t s loca t ed in Israel, in clu din g shares
of Isr aeli companies, by n on - resid ents of Isr ael, u n less a specific exempt ion is a va ilab le or u n less a
t ax t r eat y b e t ween I sra el an d t h e sh areh old er ’s cou n try of re sid e nce provid e s ot h erwise. T he law
d ist in g u ish es b etween r eal g ain an d in flat ionar y surplu s. The in flation ary su rplu s is a portion of the
t ot a l capit a l g ain t h at is equ iva le nt to t h e in cre ase of t h e rele va nt a sse t ’s pu r ch ase price wh ich is
at t r ib ut ab le to t he in crease in the I sr aeli Con sume r Price I ndex or a fore ign currency exchan ge rate
b et ween t he d ate of pu r ch ase a nd t h e d ate of sale. The real ga in is t h e excess of t he t ot al capital
gain over t h e in fla tion ary su r plu s.
205 ICL Group Limited
I s raeli Reside nts
Gen erally, as of Jan u ary 1, 2012, t he t ax rat e applicab le to capit al g ain s d erived from a sa le of
sh ares, wh et h er list ed on a st ock mar ket or not , is t he regular corpor ate t ax r ate in I srael applicable
for I srae li compan ies ( 23% since 2018) a n d 25% for I srae li in d ivid u a ls, u n le ss su ch in d ivid u al
sh areh old e r is con sid ered a “sig n ifican t sh ar eh older” at an y t ime du r in g t h e 12-mon t h per iod
preced in g su ch sale, in which case t h e t a x rat e will be 30%. A “sig n ifican t sh arehold er ” is d e fined
as on e wh o h old s, d irect ly or in d irectly, in clu d ing t ogeth er wit h ot h ers, at le ast 10% of a ny mea ns
of con t rol in th e compa ny. However, d iffere nt t ax r at es will a pply to d ealer s in secu rit ie s. I sraeli
compan ies are su b je ct to t h e corporate t a x rate on capit al g ain s d erived from t h e sale of list ed
sh ares.
As of J an u ary 1, 2017, in d ivid u als ( b oth for eig n or Isr aeli) t axpayer s h aving t axa ble in come of ab ove
651,600 ( for 2020) in a cert a in t a x ye ar will be su b ject to an ad dition al t ax pa yment at th e r ate 3%
on t h e por t ion of t he ir t axable in come for su ch t ax year th at is in excess of su ch t hresh old . For this
pu rpose , t axab le in come in clu d es in t er a lia t a xa b le ca pit al g ain s from t h e sale of ou r sh ares and
t axab le in come from d ivid en d d istribut ions.
N o n -I sra eli Resident s
Und er t h e d omestic t ax law, n on -Israeli reside nts are g enera lly exe mpt from I srae li ca pital g ains tax
on an y g ain s d erived from t h e sale of sh are s of Isr aeli compa nies pu b licly t ra d ed on a re cog nized
st ock excha n ge out side Isr ael, so lon g as su ch share hold er s did not acquire the ir sha res prior to the
compan y’s in it ial pu b lic offerin g an d t h e g ain s d id n ot d e rive from a pe rman en t est a blish me nt of
su ch sh ar eh old er s in Isr ael. However , sh ar eh olders t h at are n on -Isra eli cor porat ion s will n ot be
en t it le d to su ch exe mption if I sraeli re sidents h old an in te rest of more t h an 25% in su ch n on- Isr aeli
corporat ion or are th e b en eficiarie s or are en titled to 25% or more of t he revenues or profits of such
non - Israeli cor poration , wh ether d irect ly or in d irectly.
In cert ain inst an ces whe re ou r sh arehold e rs may be lia ble to I sraeli tax on th e sale of t h eir ordinary
sh ares, t h e pa yme nt of t h e con sid era t ion may be su b ject to t h e wit h h old in g of Isr aeli t ax at t he
sou rce.
In ad d it ion , pu rsua nt to t h e Con vention b etween t he Gove rn ment of t h e Un it ed St ates of A me rica
an d t h e Israeli g overn ment wit h respect to t axes on in come, as amend e d , or t h e U.S.- Israel Tax
Tr eat y, t h e sale, exchang e or d isposit ion of ord in ary sh ar es by a per son who qu alifies as a r esident
of t h e Un it e d St a t es wit h in t he me an ing of t h e U.S.- Isr ael T ax T rea ty an d who is en t it le d to claim
t he b en efit s a fford ed to su ch per son by t h e U.S.- Isr ael T ax T rea t y g en erally will not be su b je ct to
t he Isr aeli capit al g ain s t ax u nless su ch pe rson hold s, d ire ctly or in d irectly, sh ares representin g 10%
or more of ou r vot in g powe r d u r in g an y part of t he 12- mon t h per iod pre cedin g su ch sale, e xch ange
or disposit ion , su b je ct to par t icu la r con d it ion s, or t he capit a l g a in s from su ch sa le, excha nge or
d isposit ion can be allocat ed to a per mane nt est ab lish men t in I srae l or is con sid ered to b e d er ived
from or sale of I srae li real pr opert y in t er est s for pu r poses of t he U.S.- Isr ael Tax Tr eaty. If a U.S.
in vest or is n ot exe mpt fr om I sr aeli t axe s u n d er t he U.S.- Israel Ta x Tr eaty, su ch U.S. in vest or may be
su b je ct to I sraeli t ax, to th e extent applica b le as described above ; howe ve r, und er th e U.S.- Israel Tax
Tr eat y, su ch per son may be permit t ed to claim a cred it for su ch t axes ag ain st t h e U.S. fed er al in come
t ax imposed wit h respect to su ch sale, exchan ge or disposit ion , su bject to th e limit at ions in t he U.S.
laws applicab le to foreig n t ax credit s. The U.S.- Isr ael T ax Tre aty d oes n ot re la te to U.S. st ate or local
t axes.
206 ICL Group Limited
T a xa tion of D ivid en d Di strib uti ons
I s raeli Reside nts
Isr aeli resid en t in d ivid u als are g en er ally su b ject to I srae li in come t ax on t h e receipt of d ivid ends
paid on ou r ord in ary sh ar es, ot he r t han b on us sh ares ( sh are d ivid en ds). Th e t ax ra t e applica b le to
su ch d ivid en d s is 25% or 30% for a sh arehold er t hat is con sid e red a sig n ificant sharehold er at any
t ime d u r in g t he 12- mon th period pre ced ing su ch d istribu tion . Divid ends pa id fr om in come d erived
from Appr oved En t erpr ises or B e ne fited Enterprises are su bje ct to wit h hold ing at t he rate of 15% .
Divid e n d s pa id from in come d erived from Pr efe rre d Ent erprises are su b ject to wit hh old in g at the
rat e of 20%.
Isr aeli resid en t compan ies are g ene rally exe mpt fr om t ax on t he r eceipt of d ivid en d s paid on ou r
ord in ar y sh ar es (exclu d in g d ivid en d s pa id from in come d er ived from A pproved or B ene fited
En t er prises).
As of J an u ary 1, 2017, in d ivid u als ( b oth for eig n or Isr aeli) t axpayer s h aving t axa ble in come of ab ove
651,600 NIS ( for 2020) in a cert a in t a x ye ar will be su b ject to an add ition al t ax paymen t at t he rate
3% on t h e port ion of t h eir t axable in come for su ch tax year t ha t is in e xcess su ch t hr esh old .
N o n -I sra eli Resident s
Non - resid en ts of I sra el are su b ject to in come t ax on in come a ccru ed or d erived from sou rces in
Isr ael, in clu d in g d ividend s paid by Israeli compan ies. On d istribu tion s of d ivid en ds ot her t han st ock
d ivid en d s, in come t ax ( ge nerally collect ed by me ans of wit h hold ing ) will g enerally apply at the rate
of 25% , or 30% for a sh ar eh old er t hat is con sid e red a sig n ifica nt sh ar ehold er ( as d efine d ab ove) at
an y t ime d u rin g t he 12- mon th pe riod preceding su ch d istribu tion , u n less a d iffere nt ra te is pr ovided
in a t r eat y b et ween Isr ael a nd t he sh arehold e r’s cou n tr y of r esid ence. Divid ends pa id from in come
d erived from A pprove d or B en efit ed En t e rprises are su b ject to wit hh old in g at t h e r ate of 15% , or
4% for B en e fit e d En te rpr ises in t he Ir eland Track. Divid e nd s paid from in come d erived from Preferred
En t er prises will be su b ject to wit hh oldin g at th e ra te of 20% .
Und er t h e U.S.- Isr ael T ax T reaty, t h e maximu m t ax on d ivid ends paid to a h old er of or d in ary sh ares
wh o qu alifies as a re sid ent of t he Unit ed St ates wit h in t h e me an in g of t h e U.S.- Israel T ax T rea ty is
25%. T he t rea t y provid e s for red u ced t ax ra t es on d ivid end s if ( a ) t h e sh are hold er is a U.S.
corporat ion h old in g at least 10% of ou r issu ed vot in g powe r d u rin g t h e pa rt of t h e t ax year t hat
preced es t h e date of pa ymen t of t he d ivid end a nd h eld su ch min imal percent ag e d uring the wh ole
of it s prior t ax year, a nd (b) n ot more t h an 25% of t he Isr aeli compan y’s g ross in come con sist s of
in t er est or d ivid en d s, ot he r t h an d ivid end s or in t er est r ece ived fr om su b sid iary corporat ion s or
corporat ion s 50% or more of t he ou t st and ing vot ing sh ar es of wh ich is own e d by th e Isr aeli
compan y. Th e red u ce d t r eaty ra t e, if applicab le, is 15% in t h e ca se of d ivid en d s paid fr om income
d erived from A pprove d , B enefited or Preferred En terprise or 12.5% ot h erwise.
207 ICL Group Limited
Mat erial U.S. Federal Income Tax Considerations for U.S. Holders
Th e followin g are mat erial U.S. fe d era l in come t ax con sequ en ces to t he U.S. Hold er s d escr ibed
b elow of ownin g an d d isposin g of ou r ord in ary sh ar es, b u t it d oe s not pu r port to be a
compre he nsive d escr ipt ion of all t h e t ax con sid er ation s t ha t may be relevan t to a par t icu la r per son’s
d ecision to h old t h e ord in ary sh ar es. This d iscu ssion applies on ly to a U.S. Hold er t h at h old s t he
ord in ar y sh ar es as ca pit al asse t s for U.S. fed eral in come t ax pu rpose s. In ad d it ion , it d oe s n ot
d escrib e all of t he t ax con sequ en ce s t h at may be relevant in lig ht of a U.S. Hold e r’s pa rt icu lar
circu mst a nces, in clu din g a lt e rn ative min imu m t a x con se qu e nces, an y aspect of t he pr ovision s of t he
In t e rn al Re ve nue Cod e of 1986, as amen d e d ( t he “Cod e”) common ly kn own as t h e Med ica re t ax and
t ax con sequ en ces a pplica ble to U.S. Hold er s su bject to special r ule s, su ch as:
• cert ain fin ancial in st itut ions;
• d ealer s or t raders in secu rit ies that use a mar k-to-market meth od of t a x accou ntin g;
• per son s hold in g ord in ar y sh ar es as pa rt of a “st rad d le ” or in t eg rated t ra nsaction or per sons
en t er in g in t o a con structive sale wit h r espe ct to t he ordin ary sh are s;
• per son s whose fu n ct ion al cu rren cy for U.S. fed era l in come tax pu rposes is n ot t he U.S. d ollar ;
• e nt it ies cla ssified as partn erships for U.S. fed e ral in come tax pu rposes;
• t ax exe mpt e nt itie s, “in divid ual retireme nt accoun ts” or “Rot h I RAs":
• Pe rson s who acqu ire d our ordin ary sh are s pu rsu an t to t h e exe rcise of an employe e stock opt ion
or ot h erwise as compe n sa t ion ;
• per son s t h at own or are d ee me d to own 10% or more of ou r st ock by vot e or valu e; or
• per son s h old in g ou r ord in ar y sha res in con nect ion wit h a t r ade or b u siness con d u ct ed ou tside
of t h e Un it ed St ates.
If an ent it y t h at is classifie d as a part nership for U.S. fed era l in come t ax pu rpose s owns ord in ary
sh ares, t h e U.S. fede ral in come ta x treatme nt of a partn er will g enerally d epend on t he status of the
part n er a n d t h e activit ies of t h e part ne rship. Pa rt nersh ips own in g ord in ar y sh ares and pa rt ners in
su ch pa rt n er ships sh ou ld con su lt t h eir t ax adviser s as to t h e particu lar U.S. fe d eral t ax conse qu ences
of own in g an d d isposin g of t he ordin a ry sh ares.
Th is d iscu ssion is b ased on t h e Cod e, ad min ist r ative pron ou ncements, ju d icial d ecision s, and final
an d pr opose d T rea sury regu lation s, chang es to an y of wh ich su bsequ ent to t he d ate of t his A nnual
Repor t may affect t h e ta x con sequences d escribed h erein.
For pu r poses of t h is d iscu ssion , a “U.S. Hold er ” is a per son who, for U.S. fed e ral in come t ax pu rpose s,
is a b en eficial owne r of or d in ar y shares a nd is:
• a cit ize n or in d ivid u al r esid en t of t h e Un ited St at es;
• a cor porat ion , or ot h er en t ity t a xable as a cor porat ion , creat ed or org anize d in or u n d er t h e laws
of t h e Un it ed St ates, an y st ate t he rein or t h e Dist rict of Colu mb ia; or
• an est a t e or tr ust th e in come of wh ich is su b ject to U.S. fed eral in come t axation reg ardle ss of its
sou rce.
208 ICL Group Limited
U.S. Hold ers sh ou ld con su lt t h eir t ax ad visers con cer nin g t he U.S. fed er al, st ate loca l t a x an d n on-
U.S. con sequ en ces of own in g an d d isposin g of ou r ord in ary sh are s in t h eir par ticu la r circu mst an ces.
Th is d iscu ssion a ssu me s t ha t we are n ot , an d will n ot b ecome, a passive foreig n in vest ment
compan y, as d escrib ed b elow.
T a xa tion of D istr ibu tion s
Dist rib u t ions paid on ou r or d in ary sh ar es, ot h er t ha n cert ain pro rat a d ist r ib u tion s of ord in ary
sh ares, will be t re at ed as d ivid ends to t h e ext en t paid ou t of ou r cu rre nt or accu mu lated ea rnings
an d pr ofit s ( a s d et er min ed u nd er U.S. fed era l in come t a x prin ciples). B ecau se we do n ot ca lcu late
ou r e arn in gs a n d profit s u n d er U.S. fed er al in come t a x prin ciples, it is expe ct e d t h at d ist rib utions
gen era lly will be report e d to U.S. Hold ers as divid en ds. Su bje ct to applicab le limit at ion s, d ividends
paid to cert a in n on -corpor ate U.S. Hold ers may be t a xa b le at t he favora ble t a x r ate s applicab le to
“qu a lified d ivid end in come ”. Non -corporate U.S. Hold ers sh ou ld con sult their tax a dvisers reg arding
t he availab ilit y of t h ese favorab le ra t es on d ivid ends in t h eir pa rticula r cir cu mstances. Divid end s will
not be eligib le for t h e d ivid en ds received d ed uction g ene rally available to U.S. corpor at ion s u nder
t he Cod e. Divid e nd s will gen e rally be in clu d e d in a U.S. Hold er ’s in come on t h e d a t e of receipt.
Divid e n d in come will in clu d e a ny amou n t s wit h held by us in respect of I sraeli t a xes, an d will be
t rea t ed as fore ig n sou rce in come for fore ig n t ax credit pu rposes. If an y d ivid end is pa id in NIS, the
amou n t of d ivid e n d income will be th e d ivid en d’s U.S. d ollar amoun t calculated by refere nce to the
excha ng e rat e in effect on t he d at e of receipt , re g ard less of wh et h er t he paymen t is in fact
con vert ed in t o U.S. d olla rs. If t he d ivid en d is con vert e d in t o U.S. d ollar s on t h e d at e of receipt , a
U.S. Hold er sh ou ld not be requ ired to re cognize for eig n cu rr en cy g ain or loss in respect of the
d ivid en d in come. A U.S. Hold er ma y h ave foreig n cu rre ncy g ain or loss if t he d ivid en d is con verted
in t o U.S. d ollar s aft er th e da te of receipt. Su ch gain or loss wou ld ge ne rally be tre ate d as U.S.-sou rce
ord in ar y in come or loss. Su b je ct to a pplicab le limit ation s, some of wh ich va ry d epen din g u pon the
U.S. Hold er ’s circu mst a n ces, I sraeli t a xe s wit h he ld from d ivid en d s on ou r ord in ar y sha res will be
cre d it a b le again st t he U.S. Hold er’s U.S. fed eral in come t a x liabilit y. T he rule s gover nin g foreign tax
cre d it s are complex, a nd U.S. Hold ers sh ou ld con sult their tax advisers regard ing th e cred itability of
for eig n t a xes in t he ir particu lar circu mstances. In lieu of claimin g a fore ig n t ax credit, U.S. Hold ers
ma y, at t h eir elect ion , d ed u ct foreig n t axes, in clu d in g Isr aeli t axes, in compu t in g t h eir t axa ble
in come, su b je ct to a pplica b le limit a t ion s. An e le ct ion to d ed u ct foreig n t axes in st e ad of claimin g
for eig n t a x credit s applies to a ll for eig n taxes pa id or a ccr ued in t he t axa ble year.
S a le or O ther T axa ble Dis posit ion of Ordin ary Shares
For U.S. fed era l in come t ax pu rpose s, g a in or loss rea lized on t h e sale or ot h er t a xable d isposit ion
of ou r ord in ary sh ar es will be capit a l g ain or loss, and will be lon g t erm capit al g ain or loss if t he
U.S. Hold er h eld t h e ord in ary sh ar es for mor e t h an on e year. The a mou n t of t h e g ain or loss will
equ al t h e d iffe ren ce b et ween t he U.S. Hold er’s tax b asis in t h e or d in ary sh ares disposed of a nd the
amou n t r ealized on t he d isposit ion , in each case as determin ed in U.S. d ollar s. T h is g ain or loss will
gen era lly be U.S. sou rce g ain or loss for for eig n t ax cred it pu r poses. Th e d e d u ct ib ility of ca pit al
losses is su b ject to limit at ion s.
P a ss ive F ore ig n I nvestment Com pan y Ru le s
In g en eral, a non -U.S. corporation will be a “passive fore ign investme nt compa ny” (a “PF IC”) for any
t axab le ye ar if ( i) 75% or mor e of it s g ross in come con sist s of passive in come or ( ii) 50% or more of
t he a ve rag e qu ar t erly valu e of it s asset s con sist s of asset s t h at prod u ce, or are held for t he
prod u ct ion of, passive in come . F or pu rpose s of t h e ab ove ca lcu la tion s, a n on -U.S. corpor ation that
d ir ect ly or in d irectly own s at lea st 25% by va lue of t he sh ar es of a n ot her corporation is t rea ted as if
it held it s proport ion a t e sh ar e of t h e asset s of t he ot h er cor porat ion an d received d irect ly it s
209 ICL Group Limited
proport ion at e sh ar e of t h e in come of t h e ot h er cor porat ion . Pa ssive in come g en era lly in clu des
d ivid en d s, in t erest, r en ts, royalt ie s an d g a ins fr om t ran sa ction s in commod it ies ( ot her t h an ce rtain
act ive b u sin ess g ains from t h e sa les of commod it ie s).
B ased on t h e man n er in wh ich we opera t e ou r b u sin ess, we b elie ve t h at we we re n ot a PFI C for
2020. Howe ve r, b ecau se PF IC stat u s d e pen d s on t h e composit ion an d cha ract er of a compa n y’s
in come a nd asset s an d th e valu e of it s asset s from t ime to t ime, t her e ca n be no assu rance t hat we
will n ot be a PF IC for an y t axable year.
If we were a PF IC for an y taxab le yea r d u rin g wh ich a U.S. Hold e r h eld ord in ar y sh ar es, ga in
recog n iz ed by a U.S. Hold er on a sale or ot h er d isposit ion ( in clu d ing certain pled ges) of t h e ord inary
sh ares wou ld be allocat ed r atab ly over th e U.S. Hold er’s h oldin g period for t he ordin ary sh ares. The
amou n t s a llocat e d to t h e t axa b le year of t h e sale or ot h er d isposit ion an d to a ny yea r b e for e we
b ecame a PFIC wou ld be t a xed as ord in ar y in come. T he amou nt allocate d to e ach ot h er t axab le year
wou ld be su b ject to t a x at t h e h ig he st r ate in effect for in divid u als or cor porat ion s, as appropriate,
for t ha t ta xable year, an d an in tere st cha rg e wou ld be imposed on th e resu ltin g tax liabilit y for each
su ch t axa b le ye ar. Fu rth er , a n y d ist ribu tion in re spect of ord in ar y sh ares in excess of 125% of t he
averag e of t h e an n u al d ist r ibu tion s r eceived by a U.S. Hold er d u rin g t he pr ecedin g t h re e yea rs or
t he U.S. Hold er ’s h old in g period , wh ich ever is sh ort er, wou ld be su b ject to t axat ion in t he sa me
ma nn e r. Certain elect ion s may be availa b le t ha t wou ld resu lt in alt ern ative t reat men ts ( su ch as
ma rk- to-market t reatmen t) of t h e ord in ary sh ar es in t h e case t h at we were a PFIC for any t axable
ye ar.
If we we re a PFIC for an y t a xab le yea r d u rin g which a U.S. Hold er owned ordin ary sh ares, t he U.S.
Hold er g en e rally will be re qu ire d to file ann u al re port s on I n te rn al Re ve nue Service For m 8621. In
ad d it ion , t h e fa vora b le t ax r at es d e scrib ed ab ove wit h re spect to d ivid e nd s pa id to cert ain non -
corporat e U.S. Hold er s wou ld n ot a pply if we were a PFIC for t h e t axable yea r of d ist ribut ion or the
prece d in g t axable ye ar.
I n formation Reportin g and B ackup W ith hold ing
Paymen t s of d ivid e nd s an d sales proce ed s t hat are mad e wit hin t he Un ited St a tes or t hrou gh cer tain
U.S. re lat ed fin an cial in t ermedia ries g en e rally are su b ject to in format ion report in g, an d may be
su b je ct to b a ckup wit hhold ing , u nless ( i) t he U.S. Hold er is a corpor at ion or ot her exe mpt recipient
or ( ii) in t h e case of b acku p wit h hold in g, t he U.S. Hold er pr ovid e s a correct t a xpayer id entification
nu mb e r an d cert ifies t ha t it is n ot su b je ct to b acku p wit h h old in g. B a cku p wit h h old in g is n ot an
ad d it ion al t ax.
Th e a mou n t of a n y b acku p wit hhold in g from a paymen t to a U.S. Hold e r will be a llowed as a credit
ag ain st t h e U.S. Hold er’s U.S. fed era l in come t a x liab ilit y and ma y en t it le it to a refu n d , provided
t hat t h e re quir ed in formation is t imely fu r nish ed to t h e Inter nal Re venu e Service .
Cert ain U.S. Hold ers wh o are in d ivid u als ( or cert a in specified en t it ies) may be requ ired to re port
in format ion re latin g to their owne rship of secu rit ies of n on -U.S. issu er s, su ch as our ord inary sha res,
u n less t h e secu rit ies are h eld in accou n ts at fin ancial in st itu tion s ( in wh ich case t h e accou nts may
be r eport ab le if ma in ta in ed by n on -U.S. fin an cial in st itu tion s). U.S. Hold er s shou ld con su lt t he ir tax
ad visers re g ardin g t he ir repor tin g ob lig ation s wit h re spect to t he or d in ary sh ares
210 ICL Group Limited
F. DIVIDENDS AND PAYING AGENTS
Not a pplica b le .
G. STATEMENT BY EXPERTS
Not a pplica b le .
H. DOCUMENTS ON DISPLAY
In lig h t of t he list in g of ou r ord in ar y shares for t rad e on t he New York St ock Exch an g e ( NYSE) wit hin
t he fra me work of an in it ial pu b lic offerin g exe cu t ed in 2014, we are su b ject to t h e in for ma t ional
requ iremen t s of t h e US Secu r it ies Exch an g e A ct of 1934. A ccord in g ly, we are requ ired to file or
fu rn ish repor t s an d ot her in formation wit h t h e SEC pu rsu an t to t he require men ts applyin g to for eign
issu ers, in clu d in g an nual re ports on F orm 20- F a nd re ports on F orm 6-K. T he SEC main t ains a web site
t hat con t ain s re port s and ot he r in for ma tion a b ou t issu e rs, like u s, t h at file elect ron ically wit h the
SEC. T h e ad d ress of t h at websit e is www.se c.g ov.
I. SUBSIDIARY INFORMATION
Th e Company a nd it s su b sid ia ries do n ot ma in t ain any d ire ct or in d ir ect con nect ion wit h Ir an or
wit h e n emy n at ion s ( as d e fine d in t he I srael Tr ade with t he Enemy Ordin ance - 1939).
Item 11 – QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK
R i s k M ana gemen t
In t h e or d ina ry cou rse of ou r b usiness activit ies, we are exposed to variou s ma rket r isks t ha t are not
at ou r con t rol, in clu d in g flu ct uation s in t h e prices of ce rt ain of ou r prod u ct s an d in pu ts, cu rrency
excha ng e rates, interest rates, ene rg y prices a nd ma rine sh ippin g price s, t h at ma y h ave an adverse
effect on t h e valu e of ou r fin an cial a sse ts an d liab ilit ies, fu t ure ca sh flows an d profit . As a re su lt of
t hese mar ket risks, we cou ld suffe r a loss d u e to adverse change s su ch as th e pr ices of ou r products
or ou r in pu t s, fore ig n exchan ge rat es, in t erest rat es, en ergy price s or mar in e sh ippin g price s.
For fin an cia l a sse t s an d fin ancial lia b ilit ies in cu rren cies t h at are n ot t he fu nction al cu rren cy of our
su b sid iar ies, ou r policy is to t r y and min imize th is exposu re as mu ch as possib le usin g var iou s
he d g in g in strume nt s. We do n ot h edge aga in st some seve rance pay lia b ilit ies, le ase lia b ilit ies ( IFRS
16) or t ax b a lan ces, sin ce t h ey are lon g -t e rm exposu re s. In a d d it ion , we do n ot u se h ed g ing
in st ru me nts to hed g e t h e pr ices of ou r prod u ct s. For h ed g in g ag ain st project ed in come and
expen ses in cu rr en cies t hat are n ot in t he fu nct iona l cu rrency of ou r su b sid iaries, price ch ang es of
en ergy prod u ct s, mar in e sh ippin g cost s an d in t er est ra t es, ou r policy is to hed g e par t of t he
exposu re, as d e scrib ed b elow.
211 ICL Group Limited
We reg u lar ly mon it or t he ext en t of ou r e xposu re for t h e var iou s risks d escrib ed b elow an d we
execu t e h ed g in g a ct ivit ies accor d in g to ou r h ed g in g policy wit h re fer en ce to t h e act u al
d evelopmen t s a n d expectat ions in t h e variou s market s.
We u se fin a ncia l in st ru ments and d er ivatives for h ed gin g pu rpose s on ly. Th ese hed gin g inst ru ments
red u ce ou r exposu re as d escrib ed a b ove. Most of t hese t ran sa ction s do n ot mee t t he he d ging
con d it ion s provid ed in IF RS, an d t herefore t he y are mea su red at fa ir value , a nd ch ange s in t h e fair
va lu e are cha rg ed immed iately to e arnin gs. Th e cou n terpa rties for ou r d e riva tive s t ra nsa ction s are
b an ks or fin an cial in st itu tes. We b elieve t he cred it risk in r espe ct t hereof is small.
For fu rt he r in format ion ab ou t ou r h ed gin g act ivit ies, see Not e 21 to ou r A u d it ed Fin an cial
St at emen ts.
E x chang e Ra te R isk
Th e U.S. d ollar is t he prin cipa l cu rren cy of t h e bu sin ess en viron ment in wh ich most of ou r
su b sid iar ies oper ate . Most of ou r act ivities—sa les, pu rcha se of mat erials, sellin g, ma rket ing expenses
an d fin an cin g expense s, as we ll as t he pu rch ase of prope rt y, plan t and equ ipmen t—ar e exe cuted in
U.S. d ollars, a nd so t h e U.S. d ollar is u sed as the fun ction al cu rrency for measu rement a nd re porting
of t h e Compan y a nd most of ou r su bsid iarie s.
We ha ve several con solid a t ed su b sid iaries, wh ose fu n ct ion al cu rre ncies are t h eir local cu r ren cy—
ma in ly t h e eu ro, t h e Br itish pou n d, t he B razilia n re al, t h e I sraeli sh ekel an d t he C hinese yuan.
Set fort h b e low is a d escript ion of ou r prin cipal exposu res in r espe ct of ch an g es in cu rre ncy
excha ng e rates.
Tr an sact ion s by ou r su b sid iaries in cu rre ncie s t h at are n ot t h eir fu n ct ion al cu rre ncy expose us to
ch an g es in t h e exch an ge rates of t h ose cu rrencies compared wit h t h e fu nction al cu rre ncies of t h ose
compan ies. Measu r emen t of t his t ype of ou r e xposu re is b ased on t h e su rplu s of net in come or
expen ses in each cu rr en cy t h at is n ot the fu nct ional cu rre ncy of t h at compa ny.
Part of t h e cost s of ou r in pu ts in I srael are d en omin at ed and paid in NI S. Thu s, we are exposed to a
st ren g t henin g of t h e NI S exchan ge rat e a ga in st t h e U.S. d olla r ( NI S reva lu a t ion ). T his exposu r e is
similar in su b st an ce to t h e exposu re d escr ibed ab ove for t r an sact ions in for eig n cu rre n cies b u t is
mu ch lar ger t han t he ot her curren cy e xposu res.
Th e r esu lt s for t ax pu rposes for t h e Compa ny an d it s su b sid iarie s operat ing in I sra el are me asured
in NIS. As a re su lt , we are exposed to t he rat e of t he ch an ge in t h e U.S. d ollar e xch an ge rate and
t he me asu re me nt b a se for t ax pu rposes ( t he NIS) in respect of t hese compan ies.
Ou r su b sid iaries have sever an ce pa y liab ilit ies t ha t are d en omin ate d in t h e local cu rren cy, a nd in
Isr ael t h ey are somet ime s also a ffect ed by rises in the CPI. Our su bsidiar ies in I srae l h ave r eser ves to
cove r part of t h ese liabilit ie s. Th e reserves a re denomin ated in NIS a nd affected by the performa nce
of t h e fu nd s in which t he su ms are in vest ed . As a re su lt , we are expose d to ch an ges in t h e e xch ange
rat e s of t h e U.S. d ollar a gainst variou s local cu rren cie s in r espe ct of n et liabilit ie s for severance pay.
For fu rt h er in formation reg ardin g ou r h edg ing policy, see "It em 11 – Qu an t itative an d Qu alitative
Disclosu res a b ou t Market Risk– Risk Man ag ement".
Our su b sid iar ies h ave financia l a ssets a nd liab ilitie s t hat are d en omin ated in or lin ked to cu rre ncies
ot h er t ha n t heir fu n ctional cu rre ncies. A surplu s of a sse ts ove r lia b ilities d e nomin ated in cur rencies
t hat are n ot t he fu nction a l cu rrency cr eates exposu r e for us in respect of excha nge rate flu ctuation s.
212 ICL Group Limited
For In vest men t in su b sid iaries wh ose fu n ct ional cu rren cy is n ot t h e U.S. d olla r, t h e en d of per iod
b alan ce sh eet accou nt s of t h ese compan ie s are t ra nslated in t o U.S. d ollars b ased on t h e e xch ange
rat e of t he U.S. d ollar to t he repor t ing cu rrency of t h ese compan ies at t h e en d of t h e r elevant period.
Th e b e g in n ing of period b alance sh eet b a lances, as well as capit al cha nge s d uring t he per iod , are
t ran slat ed in t o U.S. d ollar s at t h e excha n ge ra t e at t h e b e gin nin g of t h e pe riod or on t h e d a t e of
t he ch an g e in ca pit al, respect ively. Th e d iffere nces arisin g from t h e effect of t h e cha nge in the
excha ng e rat e b et ween t h e U.S. d ollar a nd t he cu rrency in wh ich t h e compa nies repor t cre ate
exposu re. Th e e ffect s of t his e xposu re are ch arge d d irect ly to e quit y.
We examin e period ically t h e ext en t of t h e h edgin g t ransa ction s imple me nt ed to h edge each of the
exposu res d escrib ed ab ove and d ecides on t h e required scope of t h e h ed gin g wit h in t he he dging
policy frame. We u se var iou s fin an cial in strume nt s for ou r h edg ing a ctivit y, in clud ing derivat ives.
E x p la nation s of t he ma in cha ng es betwe en th e peri ods
E x chang e rate:
As at De cemb e r 31, 2020, t h e posit ive fair va lu e of th e d er ivat ive in st ru ment s wit h respect to
excha ng e rat e s was ab ou t $97 million compar ed to a posit ive fair va lu e of $58 million as at
De cemb er 31, 2019. As a resu lt, in 2020, an income of ab out $39 million was re corded with respect
to t h ese t ransa ction s.
E n e rgy:
As at Decemb er 31, 2020, t h e posit ive fair valu e of t h e d e riva tive in st ruments wit h respe ct to e n ergy
cost s was ab ou t $0.5 million compared to a posit ive fa ir valu e of $1 million as at Dece mb e r 31,
2019. As a r esu lt , in 2020, an expen se of ab ou t $1.5 million was re cord ed wit h respect to t h ese
t ran sa ct ions.
D r y bu lk marine sh ipp ing :
As at Decemb er 31, 2020, t he n eg ative fair va lu e of t h e d e riva tive in st ru ments wit h respect to dry
b u lk marin e sh ippin g is a lmost n il compa red to a n eg at ive fair valu e of $2.8 million as at December
31, 2019. As a re su lt , in 2020, an in come of ab ou t $2.8 million wa s r ecord ed wit h respe ct to t h ese
t ran sa ct ions.
213 ICL Group Limited
Th e t a b le s b elow set fort h t h e sensit ivit y of ou r d e riva t ive in st ru ments and cer t ain b alance sh eet
it e ms to 5% an d 10% in creases and decrea ses in t he exchan ge r ate s as at Decemb er 31, 2020.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
US D/NIS
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(0.2)
(0.1)
2.2
0.1
0.2
Trade receivables
(5.3)
(2.8)
58.0
3.1
6.4
Receivables and debit balances
(0.6)
(0.3)
6.7
0.4
0.7
Credit from banks and others
3.3
1.7
(35.8)
(1.9)
(4.0)
Trade payables
29.6
15.5
(325.8)
(17.1)
(36.2)
Other payables
1.5
0.8
(17.0)
(0.9)
(1.9)
Long-term loans
12.4
6.5
(135.9)
(7.2)
(15.1)
Fixed rate debentures
67.9
35.6
(747.4)
(39.3)
(83.0)
Options
(26.1)
(13.6)
11.2
19.2
43.9
Forward
(39.0)
(20.4)
8.1
22.6
47.7
Swa p
(81.7)
(43.0)
115.2
47.8
101.0
T o t al
(3 8.2)
(2 0.1)
(1 ,060.5)
2 6 .8
5 9 .7
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
E UR /USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
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)
T o t al
5 5 .3
2 9 .1
(9 1.8)
(3 2.7)
(6 9.1)
214 ICL Group Limited
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
GBP/USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease 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
For ward
(2.5)
(1.3)
0.3
1.4
3.0
T o t al
(1 .2)
(0 .6)
(8 6.3)
0 .6
1 .5
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
BR L /USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(0.6)
(0.3)
6.4
0.3
0.7
Trade receivables
(1.9)
(1.0)
21.4
1.1
2.4
Trade payables
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
Ot h er payab les
0.0
0.0
(0.1)
0.0
0.0
Lon g -t erm loan s fr om b anks
0.8
0.4
(8.9)
(0.5)
(1.0)
Opt ion s
(0.2)
(0.2)
0.2
0.2
0.2
For ward
0.1
0.0
0.0
(0.1)
(0.1)
T o t al
(1 .1)
(0.8)
1 1 .6
0 .6
1 .4
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
CN Y/USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(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
(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
6.0
3.2
(66.3)
(3.5)
(7.4)
Other payables
2.4
1.2
(26.0)
(1.4)
(2.9)
Credit from banks and others
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
2.1
1.1
(0.2)
(1.2)
(2.6)
Tot al
(1 .2)
(0 .8)
3 6 .5
0 .7
1 .5
215 ICL Group Limited
Th e t a b le s b elow set fort h t h e sensit ivit y of ou r d e riva t ive in st ru ments and cer t ain b alance sh eet
it e ms to 5% an d 10% in creases and decrea ses in t he exchan ge r ate s as at Decemb er 31, 2019.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
US D/NIS
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(0.3)
(0.2)
3.7
0.2
0.4
Short term deposits and loans
0.0
0.0
0.1
0.0
0.0
Trade receivables
(4.5)
(2.4)
49.5
2.6
5.5
Receivables and debit balances
(0.3)
(0.1)
3.1
0.2
0.3
Credit from banks and others
4.4
2.3
(48.5)
(2.6)
(5.4)
Trade payables
22.4
11.7
(246.6)
(13.0)
(27.4)
Other payables
4.3
2.2
(47.0)
(2.5)
(5.2)
Long-term loans
7.1
3.7
(77.6)
(4.1)
(8.6)
Fixed rate debentures
43.3
22.7
(476.5)
(25.1)
(52.9)
Options
(37.5)
(8.1)
3.5
22.0
51.9
Forward
(28.1)
(14.7)
0.4
16.3
34.4
Swap
(51.8)
(27.1)
57.6
30.0
63.4
T o t al
(4 1.0)
(1 0.0)
(7 78.3)
2 4 .0
5 6 .4
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
E UR /USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(1.7)
(0.9)
19.1
1.0
2.1
Short term deposits and loans
(0.1)
0.0
0.6
0.0
0.1
Trade receivables
(16.0)
(8.4)
176.5
9.3
19.6
Receivables and debit balances
(1.5)
(0.8)
16.2
0.9
1.8
Long-term deposits and loans
(0.1)
(0.1)
1.1
0.1
0.1
Credit from banks and others
8.6
4.5
(95.0)
(5.0)
(10.6)
Trade payables
16.2
8.5
(178.5)
(9.4)
(19.8)
Other payables
4.0
2.1
(44.0)
(2.3)
(4.9)
Long-term loans from banks
6.6
3.4
(72.1)
(3.8)
(8.0)
Options
4.2
1.9
0.2
(1.8)
(4.3)
Forward
6.8
3.2
(0.7)
(2.9)
(5.6)
Swap
45.0
22.5
(2.5)
(22.5)
(45.0)
T o t al
7 2 .0
3 5 .9
(1 79.1)
(3 6.4)
(7 4.5)
216 ICL Group Limited
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
GBP/USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(0.4)
(0.2)
4.4
0.2
0.5
Trade receivables
(3.4)
(1.8)
37.0
1.9
4.1
Receivables and debit balances
0.0
0.0
0.0
0.0
0.0
Credit from banks and others
1.6
0.9
(18.1)
(1.0)
(2.0)
Trade payables
2.0
1.0
(21.8)
(1.1)
(2.4)
Other payables
0.3
0.2
(3.7)
(0.2)
(0.4)
Options
(1.5)
(0.4)
0.2
0.6
1.2
Forward
(3.6)
(1.7)
0.4
1.5
3.0
T o t al
(5 .0)
(2 .0)
(1 .6)
1 .9
4 .0
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
GBP/EUR
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Forward
(0.5)
(0.3)
0.0
0.3
0.6
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
BR L /USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(0.5)
(0.3)
5.9
0.3
0.7
Trade receivables
(2.0)
(1.0)
22.0
1.2
2.4
Trade payables
0.8
0.4
(9.2)
(0.5)
(1.0)
Other payables
0.0
0.0
(0.3)
0.0
0.0
Long-term loans from banks
1.0
0.5
(11.0)
(0.6)
(1.2)
Forward
1.7
0.9
)0.2(
)1.0(
)2.0(
T o t al
1 .0
0 .5
7 .2
(0.6)
(1 .1)
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
CN Y/USD
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Cash and cash equivalents
(3.0)
(1.6)
33.0
1.7
3.7
Trade receivables
(4.4)
(2.3)
48.0
2.5
5.3
Receivables and debit balances
(3.7)
(1.9)
40.5
2.1
4.5
Trade payables
7.2
3.8
(79.2)
(4.2)
(8.8)
Other payables
1.1
0.6
(12.2)
(0.6)
(1.4)
Credit from banks and others
4.3
2.2
(46.8)
(2.5)
(5.2)
Forward
2.5
1.3
(0.2)
(1.5)
(3.1)
Long-term loans (CNY)
5.8
3.0
(63.7)
(3.4)
(7.1)
T o t al
9 .8
5 .1
(8 0.6)
(5 .9)
(1 2.1)
217 ICL Group Limited
I n t erest Ra te R isk
We h ave loan s b earin g var iable in t erest t ha t expose ou r fin ance expe nses a nd ca sh flows to ch anges
in in t erest r ate s. W it h r espect to ou r fixed - in t er est loa ns, t h ere is e xposu re to ch an g es in t h e fair
va lu e of t h e loa n s d u e to ch an ge s in the ma rke t in ter est r ate .
We u se some h ed g in g t ran saction s in ord er to h ed ge some of t h e ab ove e xposu re. Th e h edgin g is
impleme n t ed by u sin g a fixe d interest rang e an d by h edgin g varia ble in terest.
Th e t a b le b elow set s fort h t he sen sitivit y of ce rt ain fin ancia l in st ru ments to 0.5% a n d 1% incre ases
an d d ecreases in t he USD in terest rate as at December 31, 2020.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
1%
Inc rease of
0 .5 %
Dec rease of
0 .5 %
Dec rease of
1%
Fixed-USD interest debentures
108.0
55.8
(1,419.1)
(59.8)
(124.0)
Swap transactions
5.9
3.0
(13.1)
(3.0)
(6.1)
NIS/USD swap
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 swa p
(0.9)
(0.5)
(41.1)
0.5
1.0
T o t al
1 4 9.8
7 7 .2
(1 ,353.1)
(8 1.9)
(1 68.8)
Th e t a b le b elow set s fort h t he sen sitivit y of ce rt ain fin ancia l in st ru ments to 0.5% a n d 1% incre ases
an d d ecreases in t he USD in terest rate as at December 31, 2019.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in fair value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
1%
Inc rease of
0 .5 %
Dec rease of
0 .5 %
Dec rease of
1%
Fixed-USD interest debentures
90.3
46.7
(1,210.9)
(49.9)
(103.4)
Swap transactions
6.7
3.4
(6.0)
(3.5)
(7.0)
NIS/USD swap
13.4
6.8
57.4
(6.9)
(14.0)
EUR/USD swap
(0.3)
(0.1)
(2.5)
0.1
0.3
T o t al
1 1 0.1
5 6 .8
(1 ,162.0)
(6 0.2)
(1 24.1)
Th e t a b le b elow set s fort h t he sen sitivit y of ce rt ain fin ancia l in st ru ments to 0.5% a n d 1% incre ases
an d d ecreases in t he NI S in terest ra te as at Decemb er 31, 2020.
Sensitivity to changes in the shekel interest
r ate
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
1%
Inc rease of
0 .5 %
Dec rease of
0 .5 %
Dec rease of
1%
Fixed-interest long-term loan
1.9
0.9
(135.9)
(1.0)
(1.9)
Fixed rate debentures
31.6
16.2
(747.4)
(17.1)
(35.1)
NIS/USD swap
(42.4)
(22.1)
115.2
23.8
49.0
T o t al
(8 .9)
(5 .0)
(7 68.1)
5 .7
1 2 .0
218 ICL Group Limited
Th e t a b le b elow set s fort h t he sen sitivit y of ce rt ain fin ancia l in st ru ments to 0.5% a n d 1% incre ases
an d d ecreases in t he NI S in terest ra te as at Decemb er 31, 2019.
Sensitivity to changes in the shekel interest
r ate
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
1%
Inc rease of
0 .5 %
Dec rease of
0 .5 %
Dec rease of
1%
Fixed-interest long-term loan
2.5
1.2
(77.6)
(1.3)
(2.6)
Fixed rate debentures (series E)
12.3
6.2
(476.5)
(6.4)
(12.8)
NIS/USD swap
(15.5)
(7.8)
57.6
8.0
16.2
T o t al
(0 .7)
(0 .4)
(4 96.5)
0 .3
0 .8
E n e rgy Price Risk
We u se En erg y as par t of ope rat in g ou r min e s, fa cilit ies and log ist ics chan nels. We are exe cu t ing
some h ed g ing t ran sact ions to h edg e some of t his exposu re.
Th e t a b le b elow set s forth t he sen sitivit y of inst r ument s h edgin g en er gy price risks to 5% a nd 10%
in cr ease s an d d ecreases in e ne rg y pr ices as of Dece mb er 31, 2020.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of 5%
Dec rease of
5%
Dec rease of
10%
Energy hedges
0.0
0.0
(0.5)
0.0
0.0
Th e t a b le b elow set s forth t he sen sitivit y of inst r ument s h edgin g en er gy price risks to 5% a nd 10%
in cr ease s an d d ecreases in e ne rg y pr ices as of Dece mb er 31, 2019.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Inc rease of
10%
Inc rease of 5%
Dec rease of
5%
Dec rease of
10%
Energy hedges
2.0
1.0
0.8
(1.0)
(2.3)
219 ICL Group Limited
M a r in e Shi ppin g Price Risk
We are sh ippin g su b st ant ial amou n ts of g ood s wor ld wid e u sin g ma rin e shipme nt s. We e xe cute
some h ed g ing t ran sact ions to r edu ce some of ou r exposu re to ma rine b ulk sh ippin g prices.
As of 31.12.20 t he re a re no he dg ing transaction for ma rine shippin g . T he table be low se ts forth the
se n sit ivit y of in st ru men ts h ed gin g marin e sh ippin g price risk to 5% an d 10% in cr ea se s an d d ecreases
in marin e sh ippin g prices as of Decemb er 31, 2020.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Marine shipping hedges
0.0
0.0
0.0
0.0
0.0
Th e t a b le b elow set s fort h t h e sen sitivit y of in st ru men ts he dg ing ma rine sh ippin g pr ice risk to 5%
an d 10% in creases and decrea ses in marin e sh ippin g price s as of De cemb e r 31, 2019.
Inc rease (decrease)
in f air value
Fair value
Inc rease (decrease)
in f air value
$ m illions
$ m illions
$ m illions
$ m illions
$ m illions
Typ e of instrument
Inc rease of
10%
Inc rease of
5%
Dec rease of
5%
Dec rease of
10%
Marine shipping hedges
1.4
0.7
(2.8)
(0.7)
(1.4)
Item 12 – DESCRIPTION OF SECURITIES OTHER THAN
EQUITY SECURITIES
Not A pplicab le.
Item 13 – DEFAULTS, DIVIDEND ARRANGEMENTS AND
DELINQUENCIES
Not A pplicab le.
Item 14 – MATERIAL MODIFICATIONS TO THE RIGHTS OF
SECURITY HOLDERS AND USE OF PROCEEDS
Not A pplicab le.
220 ICL Group Limited
Item 15 – CONTROLS AND PROCEDURES
A. DISCLOSURE CONTROLS AND PROCEDURES
ICL’s Ch ief Execu t ive Office r and Ch ief Fin an cial Officer, aft er evalu atin g t h e effect iven ess of I CL’s
d isclosu re con t rols a nd pr ocedures ( as d efin ed in Exchang e A ct Rule 13a-15( e)) as of t he end of the
period cover ed by th is a nn ual re port, h ave con clud ed that, as of su ch d ate , I CL’s d isclosu r e con tr ols
and proce d u res we re e ffective to e nsure t hat t he in for ma tion r equ ir ed in th e reports t h at it file s or
su b mit s u n d e r t he Exch an ge Act is re corded , processed, su mma rized an d repor ted, wit hin th e time
period s specified in t he SEC’s ru les an d forms, an d su ch informat ion is accu mu lat ed and
commu n icat e d to its man age men t, in clud ing its ch ief e xecutive office r and ch ief fin an cial officer, as
appropr iat e to a llow t ime ly d e cision s re ga rd ing requ ired d isclosu re.
B. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROLS OVER
FINANCIAL REPORTING
ICL’s man age ment is r espon sib le for est ab lishin g and ma in t a in ing ad e qua te in t ernal con t rol over
fin a ncia l r epor t in g. I CL’s in terna l con tr ol ove r fin an cial r eportin g syst em wa s desig ned by, or u nder
t he su pe rvision of, t h e Chief Execu t ive Officer and Chief Fin ancial Officer, and effected by ou r b oard
of d ir ect ors, man age me nt a nd ot h er person n el, to provid e r eason ab le assu ran ce reg ard ing the
reliab ilit y of fin a ncia l r eport in g an d t he prepar at ion of it s con solid at ed fin an cial st atements, for
ext ern al pu rpose s, in accor d an ce wit h ge nerally accept ed accou n t ing pr in ciple s. T h ese in clu de
t hose policie s an d proced u res t hat:
• per t ain to t h e ma in t ena nce of re cor d s t hat , in rea son ab le d et ail, accu rately an d fa irly reflect
t ran sa ct ions an d d isposit ion s of ou r assets;
• provid e re ason a b le assur an ce t ha t t ra nsaction s a re r ecorded as n ecessa ry to permit prepar at ion
of fin an cial st a t emen ts, in accor d ance wit h g ene rally accept ed a ccou n ting prin ciples, and that
receipt s a nd e xpe nd it u res are be ing mad e on ly in accor d an ce wit h a u t horiza tion of ou r
ma na g emen t an d d irector s; a nd
• provid e re ason a b le assu rance re g ard in g pr even t ion or t imely d et ect ion of u n au thorized
acqu isit ion , u se or d isposit ion of ou r a sse t s t h at cou ld h ave a mat e ria l effect on ou r fin an cial
st at emen ts.
B eca u se of it s in he ren t limit a t ion s, in t er nal con t rol over fin an cial re port in g may n ot pre vent or
d et e ct misst a t ements. T he refore, effect ive con t r ol ove r fin a ncia l report in g cann ot , an d d oes n ot ,
provid e ab solu t e assu rance of a ch ie vin g ou r con t rol ob ject ives. A lso, proje ct ion s of, a n d a ny
evalu at ion of effect iven ess of t he in t er nal con t rols in fu t u re per iod s are su b ject to t he risk t hat
con t rols may b e come in ad e qu at e b e cau se of cha nge s in con d it ion s, or t h at t h e d e gr ee of
compliance wit h t h e policies or proced u res ma y d e ter iora te.
Ou r man ag e men t, in clu d in g ou r Chief Execu t ive Officer and ou r Ch ief F in an cial O fficer, assessed
t he effe ct iven ess of ICL’s in t ern a l con t rol over fin an cial re port in g as of De cemb er 31, 2020. In
ma kin g t h is assessmen t , ou r man a ge me nt u sed t h e crit eria est a b lish ed in I nt erna l Con t rol –
In t e gr ate d Framework ( 2013) issu ed by t h e Commit t ee of Sponsorin g Org aniza t ions of t he
Tr ead way Commission of 2013 ( COSO). Based on su ch assessment, ou r man ag eme nt ha s con cluded
t hat , as of Dece mb e r 31, 2020, ICL’s in t erna l con t r ol ove r fin an cial reportin g is effect ive b ased on
t hose crit eria.
221 ICL Group Limited
C. Attestation Report of the Registered Public Accounting Firm
Somekh Cha ikin , me mb e r firm of KPMG In t erna tion al, an in dependent regist ered pu blic accou nting
fir m, h as au d it e d a nd reported on t h e effectiven ess of I CL’s in t e rn al con tr ols ove r fin an cial r eporting
as of De cemb er 31, 2020. See Some kh C ha ikin’s a tte station report on page F -2 of th is ann ual r eport.
D. Changes in internal control over financial reporting
Th er e h as b ee n no id entified cha nge in ou r in t erna l con trol over fin an cial r epor t ing in con nection
wit h t he evaluation requ ired by Rule s 13a- 15 or 15d-15 th at occu rred du rin g t he period covered by
t his an n u al repor t t h at h as mat e rially a ffect ed , or is likely to mat e ria lly affect , ou r in t er nal con t rol
over fin an cia l r eport in g.
Item 16A – AUDIT AND ACCOUNTING COMMITTEE
FINANCIAL EXPERT
Ou r B oa rd of Direct ors h as d et er min ed, b ased on qu alificat ion st a t emen ts d e livere d to t he
Compan y, t ha t B oar d memb ers Ms. Ru t h Ralb ag an d Messr s. Na d av Kapla n an d Lior Reit b la t t sh all
se rve as fin an cial exper t s of t h e A u d it a nd Accou n t in g Commit t ee, as t h at t e rm is d e fin ed in
It e m 16A( b ) of Form 20- F, an d t h at all memb e rs of t he A ud it an d A ccou ntin g Commit t ee, Ms. Ruth
Ralb ag and Me ssr s. Na d av Kapla n an d Lior Reit b la t t are fin an cially lit e rat e an d are in d epen dent
dir ect ors for t h e pu r poses Ru le of 10A-3 of t h e Excha ng e Act an d of t he NYSE t r ad e list ing
requ iremen t s.
Item 16B – CODE OF ETHICS
Ou r B oa rd of Dire ct ors h ave a d opt ed a Cod e of Con d u ct t h at a pplies to ou r B oard of Dir ect ors,
se n ior man ag emen t an d e mployee s, in clu d in g ou r chief execu t ive officer , ch ief fin an cial office r,
con t roller an d an y ot h er per son s wh o perform simila r fu n ct ion s for us. O u r Cod e of Et hics is
availa b le , on ou r web sit e, www.icl- g rou p.com. We in t en d to d isclose fu t u re amen d ment s to ou r
cod e of et h ics, or an y waivers of su ch cod e, on ou r website or in pub lic filin gs. Th e referen ce to our
web sit e is in t en d ed to be an in act ive t ext u a l re fer en ce an d t h e in format ion on , or accessib le
t hrou g h , ou r we b site is n ot in tended to be pa rt of t his A n nu al Report .
222 ICL Group Limited
Item 16C – PRINCIPAL ACCOUNTANT FEES AND SERVICES
Somekh Cha ikin , a me mb er of KPMG Intern ational, h as se rved as ou r in dependent re gist ere d pu blic
accou n t in g firm for 2020 and 2019. Followin g are KPMG I n t ern ation al's fees for pr ofe ssion al
se rvices in each of t h e r espe ctive fiscal ye ars:
2 0 20
2 0 19
US $ thousands
US $ thousands
Aud it fees(1)
4 , 7 39
4,595
Aud it - re la ted fe es(2)
1 46
150
Ta x fee s( 3)
1 , 6 43
1 ,7 8 8
Tot al
6 , 5 28
6 ,5 3 3
( 1) A u d it fe es are t he ag g regat e fees b illed or expect ed to be b illed for t h e aud it of ou r a nn ual
fin a ncia l st a t emen t s. T his cat e g ory a lso in clu d e s se rvices t h at are gen era lly pr ovid ed by t he
in d epen d e nt accou ntant , su ch as conse nt s and re view of d ocu me nts filed wit h t he SEC.
( 2) A u d it - rela ted Fe es are t he ag g rega te fees b ille d for assu r an ce an d re la t ed service s ren d e red
d u rin g t h e yea rs en d e d De cemb er 31, 2020 a n d 2019, t h at are r eason ab ly re lat ed to t he
performan ce of t he au d it a nd are n ot report ed u n der audit fee s. T he se fe es in clu d e main ly a u dits
of fin an cial st at emen ts of a carve- ou t e nt it y in ant icipat ion of a d ivest it u re an d accou n t ing
con su lt at ion on proposed t ra nsaction s.
( 3) T ax fees are t he a ggrega te fees b ille d for profession a l se rvices r ende red d uring th e years ended
De cemb er 31, 2020 a nd 2019, r ende red for tax complian ce , tax advice, a nd tax plan nin g, assist ance
wit h t ax au d its an d a ppeals.
Audit Committee’s pre-approval policies and procedures
All se rvices provid e d by ou r in depen dent au ditors are appr oved in a dvance by e it he r t he A udit and
Accou n t in g Commit tee or me mb e rs t hereof, to whom au thorit y h as b e en de lega ted , in accord ance
wit h t he Audit and Accou ntin g Commit t ee's pre -a pproval procedure respe ctin g su ch se rvices.
Item 16D – EXEMPTIONS FROM THE LISTING STANDARDS
FOR AUDIT COMMITTEES
Not A pplicab le.
Item 16E – PURCHASE OF EQUITY SECURITIES BY THE
ISSUER AND AFFILIATED PURCHASERS
Not A pplicab le.
223 ICL Group Limited
Item 16F – CHANGE IN REGISTRANT’S CERTIFYING
ACCOUNTANT
Not A pplicab le.
Item 16G – CORPORATE GOVERNANCE
Corporate Governance Practices
We are in corpor at ed in I srae l an d t he refore su b ject to variou s corporat e g ove rnance provisions
u n d er the Compan ies Law an d th e re gulation s pr omu lg ate d t he reun der , relatin g to such ma tters as
ext ern al d ir ect ors, t h e au d it commit t ee, t h e compe nsa t ion commit t e e an d t h e in t e rnal aud itor.
Th ese are in ad dition to t he r equ irement s of th e NYSE and re leva nt provision s of U.S. securities laws
t hat apply to fore ig n compa nies list ed for t rade in t he U.S.
As a foreig n priva t e issu er wh ose shares are list ed on t h e NYSE, we h ave t he opt ion to follow cert ain
corporat e g ove rn an ce pra ct ices applyin g in t he cou n try of incor porat ion of t h e foreig n compa ny,
Isr ael, rat her t ha n t hose of t h e NYSE, except to t he extent t hat su ch la ws wou ld be con trary to U.S.
se cu rit ies laws an d provid ed t h at we d isclose t h e pra ctice s t h at we are n ot followin g an d d escribe
t he home cou n t ry pra ct ices wh ich we elect ed to follow in st ead . We in te nd to re ly on t h is “foreign
privat e issu er exe mpt ion ” wit h respe ct to t he followin g NYSE re qu ireme nt s:
• M a j ority I n depend en t B oa rd . Und er Sect ion 303A.01 of t h e NY SE List ed Compa ny Ma nu al (the
“LCM”), a U.S. d omest ic list ed compan y, ot h er t h an a con t rolle d compa ny, mu st h ave a major ity
of in d epen d en t d irectors. Six of ou r t e n d irectors are n ot con sider ed in de pen dent d ire ctors under
Isra eli law wh et h er d ue to t he ir relation ship wit h t he Compa ny, ou r con t rollin g sh ar eh older or
t he le ngt h of t h eir t en ure on ou r B oa rd of Dir ect ors.
• N o m in a tin g/Cor porate G o ve rn an ce C o mmit tee . Un d er Sect ion 303A .04 of t he LCM, a U.S.
d omest ic list ed compan y, ot h er t h an a con t rolle d compa ny, mu st h ave a n omin ating /cor porate
governa nce commit t ee composed ent ire ly of in d epen d en t d ire ct ors. Ou r con t rolling
sh areh old er , I sr ael Corpor at ion , h as sig n ifican t con t rol over t he appoin t men t of ou r d ire ct ors
( ot h er t han e xt er na l d ir ector s).
• E q u ity Com pensation Plans. Un de r Se ction 303A .08 of t h e LCM, sh arehold ers mu st be given the
opport u n it y to vot e on all e qu it y- compensa t ion plan s an d ma t erial r evision s t he reto, wit h certain
limit e d exempt ion s as d e scrib ed t here in. We follow t h e re qu iremen ts of t he C ompa nies Law,
u n d er which appr oval of equ ity compe nsa tion plan s and ma teria l r evision s t he reto is wit h in the
au t h or it y of ou r HR & Compe nsation Commit te e an d the B oa rd of Director s. Howeve r, under the
Compan ie s La w, an y compe n sa t ion to d irect or s, t he ch ief execu t ive officer or a con t rolling
sh areh old er or a n ot h er per son in wh ich a con t rollin g sha reh old e r h as a pe rson al in t er est,
in clu d in g equ it y compen sat ion plan s, g e ne rally requ ires t he a pproval of t h e compe nsa t ion
commit t ee , t he b oa rd of d ir ect ors an d t h e sh arehold ers, in t h at ord e r. Un d er t h e Companies
La w, t h e compen sat ion of d irect ors a nd office rs is gen era lly re qu ired to comply wit h a
sh areh old er -appr oved compen sation policy, wh ich is r equ ired, a mon g ot her th ing s, to in clude a
mon et ary cap on t h e valu e of equ it y compe nsa t ion t h at may be grant ed to any d ire ctor or office r.
224 ICL Group Limited
• S h areh older Ap pro val of S ecurities I ssuances. Un d er Sect ion 312.03 of th e LCM, sh areh older
approval is a pre requ isit e to ( a) issu in g or d in ar y sh ar es, or se cu rit ies con vert ib le in t o or
exer cisab le for ord in ar y sha res, to a r ela t ed pa rt y, a su b sid iary, a ffiliat e or ot he r closely related
person of a r elat ed pa rt y or an y compan y or en t it y in which a re la t ed par t y ha s a su b st an tial
in t er est , if t h e n u mb er of ord in ar y sh ar es to be issu ed exce ed s eit h er 1% of t he nu mb e r of
ord in ar y sh ar es or 1% of th e vot in g power ou t st a n din g b efore t he issu an ce, an d (b) issu ing
ord in ar y sha res, or secu rit ie s con ver tible in t o or exercisab le for ord in ary sh ares, if t he or d inary
sh are h as, or will h ave u pon issu an ce , vot in g power equ al to or in e xcess of 20% of t h e vot ing
power ou t st an din g b e for e t h e issu ance or t h e n u mber of ord in ar y sha res to be issu ed is equ al
to or in e xcess of 20% of t h e nu mber of ord inary shares b efore t he issu an ce, in each case sub ject
to ce rt ain except ion s. We se ek sh are hold er appr oval for all cor porat e act ion s re qu irin g such
approval u n d er t h e re qu ire ments of t h e Compan ies Law, wh ich are d iffer en t from t he
requ iremen t s for se ekin g sh ar eh older approva l u n d e r Sect ion 312.03 of th e LCM. Un d er the
Compan ie s Law, sh are hold er appr oval is a pre requ isit e to any ext raordina ry t ransa ction with a
con t rollin g sh ar eh old er or in which a cont rollin g shareh older ha s a person al in terest. Under the
Compan ie s Law, sh are hold er approva l is also a pre requ isit e to a priva t e pla cement of secu rities
if it will cau se a person to be come a con t r ollin g sha reh old er or in ca se all of th e followin g
con d it ion s are met :
• T h e secu rit ies issu ed amou n t to 20% or mor e of t h e company’s ou tstan ding vot ing righ ts before
t he issu a nce;
• Some or all of t he con sid e rat ion is ot h er t h an cash or list ed se cu rities or t he t ransa ction is n ot
on market t e rms; a nd
• T h e t ra n sa ction will in crease t he relat ive holdin gs of a 5% sh ar eh olde r or will cau se a ny per son
to b e come , as a re su lt of t h e issu ance, a 5% sh arehold er.
Exce pt as st at e d above, we int end to comply wit h vir tu ally all t he rules a pplica ble to U.S. companies
list ed on t h e NY SE. We may d e cid e in t h e fu t u re to u se ad dition al and/or ot h er for eig n pr ivat e issuer
exempt ion s wit h respect to some or all of t h e ot h er NY SE list in g requ irement s. F ollowin g
governa nce pra ct ices of ou r h ome cou n t ry, I sr ael, as opposed to t h e requ ire me nts t h at would
ot h er wise apply to a compa n y list ed on t h e NY SE, may provid e less prot ect ion t h an is a ccord ed to
in vest ors u n d e r NYSE list in g re qu irement s applicab le to d omest ic issu ers. For fu rt h er in formation,
se e “I t em 3 - Key In format ion — D. Risk F act ors— As a fore ig n priva t e issu er, we are per mit t ed to
follow cer t ain h ome cou n t ry cor porat e g ove rn ance pra ct ices in st ead of a pplica b le SEC and NYSE
requ iremen t s, wh ich ma y resu lt in le ss prot ection t han is affor d ed to in vest ors u n der ru les applicable
to d omest ic issu er s”.
225 ICL Group Limited
Item 16H – MINE SAFETY DISCLOSURE
Not a pplica b le .
Item 17 – FINANCIAL STATEMENTS
See “ It e m 18 - F in an cial Statements”.
Item 18 – FINANCIAL STATEMENTS
See pag e F -1.
Item 19 – EXHIBITS
We ha ve file d cer t ain exh ib its to ou r Form 20- F filed wit h t h e SEC, wh ich are availab le for peru sal
at : www.se c.g ov.
226 ICL Group Limited
Consolidated
Financial
Statements
As at
December 31, 2020
Consolidated Financial Statements as at December 31, 2020
Contents
Auditors' Report
Consolidated Statements of Financial Position 1
Consolidated Statements of Income 2
Consolidated Statements of Comprehensive Income 3
Consolidated Statements of Changes in Equity 4
Consolidated Statements of Cash Flows 7
Notes to the Consolidated Financial Stat ements 9
Somekh Chaikin Telephone 972 3 684 8000
KPMG Millennium Tower Fax 972 3 684 8444
17 Ha'arba'a Street, PO Box 609 Internet www.kpmg.co.il
Tel Aviv 61006 Israel
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
ICL Group LTD
Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting
We ha ve au d ite d the accompan yin g con solid ated statements of fin an cial posit ion of I CL Grou p Ltd.
an d su b sid ia ries ( the “Company”) as of Dece mb e r 31, 2020 an d 2019, a nd th e re lat ed con solidated
st at emen ts of in come, compre he n sive in come, ch an g es in equ it y, a nd cash flows for e ach of t he
years in t h e t h ree - ye ar per iod en d e d Decemb er 31, 2020, a nd t h e re lat ed n ot es ( collect ively, the
"con solid at e d fin an cial st atement s"). We also h ave au d it ed t he Compa ny’s in t er nal con t rol over
fin a ncia l r eport in g as of Decemb er 31, 2020, b ase d on crit eria est ablish ed in In te rnal Con trol –
In t e gr ate d Framework ( 2013) issu ed by t h e Commit t ee of Sponsorin g Org aniza t ions of t he
Tr ead way Commission .
In ou r opin ion , t h e con solid ated fin ancial statements re fer red to above pr esen t fairly, in all material
respect s, t he fin ancial posit ion of t h e Company as of Decemb er 31, 2020 an d 2019, an d t he r esults
of it s ope rat ion s an d it s ca sh flows for e ach of t he years in t he t hree -ye ar period en ded December
31, 2020, in con formit y wit h I nt erna tion al Fin an cial Re port in g St an d a rd s as issu ed by t he
In t e rn ation al A ccou nt ing St anda rd s B oard. A lso in ou r opin ion , t h e Compa ny main t ain ed, in all
ma t erial respect s, effective in ter nal con tr ol over financia l r eport ing as of December 31, 2020, b ased
on cr it e ria est a blish ed in In tern al Con trol – I n t eg ra ted Framewor k ( 2013) issu ed by t he Commit tee
of Spon sorin g Org a niza tion s of t h e T rea dway Commission .
Basis for Opinions
Th e Compan y’s ma na g emen t is respon sib le for t he se con solid at ed fin an cial st at emen ts, for
ma in t ain in g e ffect ive in t ernal con t rol over fin an cial re port in g , a nd for it s assessmen t of t he
effect iven ess of in t e rn al con t rol over fin a ncia l report in g in clu d e d in t he accompan ying
Ma nag emen t’s Repor t on I nt ernal Con trol over Fin ancial Reportin g. O u r respon sib ility is to e xpre ss
an opin ion on t h e Compan y’s con solid at ed fin ancial st a tements and an opin ion on t he Compan y’s
in t er n al con t r ol over fin ancia l r eport in g b ase d on ou r a u d it s. We are a pu b lic accou n t in g firm
reg ist er ed wit h th e Pub lic Company A ccou ntin g Oversig ht Boa rd (Unit ed St at es) ( “PCAO B”) and are
requ ired to be in d epen d en t wit h respect to t h e Compan y in accord a nce wit h t h e U.S. fed eral
se cu rit ies laws an d t he applicab le ru les a nd reg ulation s of t he Secu rit ies and Exchang e Commission
an d t h e PCAO B.
We cond u ct ed ou r a u dits in a ccordance wit h t he stand ards of t h e PCA OB . T hose st a ndard s r equ ire
t hat we plan an d per form t h e au d it s to ob t ain r eason ab le a ssu r an ce ab ou t wh et h er t he
con solid a t ed fin ancial st a temen ts are fr ee of mat eria l misst atement, wh eth er d ue to e rror or fraud,
an d wh et h er effe ct ive in t ern a l con t rol over fin an cial r eport in g was main t ain ed in all ma t erial
respect s.
Ou r au d it s of t h e con solid at e d fin an cial st atements in clu d ed pe rformin g pr oced ur es to a sse ss the
risks of ma t erial misst a t emen t of t h e con solid at ed fin ancial st a tements, wh et he r d u e to error or
fra u d , an d pe rformin g proced ures t hat re spon d to t hose risks. Su ch proce d u res in clu ded exa min ing,
on a t est b a sis, evid en ce reg ar d in g t he a mou n t s an d d isclosu r es in th e con solid at e d fin an cial
st at emen ts. Ou r au d it s also in clu d ed evalu at ing t h e accou n tin g pr in ciple s u se d an d sig n ificant
est ima t es mad e by man ag eme nt, as well as evalu at ing th e ove rall present ation of t h e con solidated
fin a ncia l st at emen ts. Ou r au d it of in t ern al con t rol ove r fin an cial r eport in g in clu ded ob t ain ing an
u n d erst an ding of in t ern al con t r ol over fin an cial re port in g , a sse ssin g th e risk t h at a mat e rial
wea kn ess exist s, an d t est in g an d evalu ating t he d esig n an d opera t in g effe ct ive ness of in t e rnal
con t rol b a sed on t h e assessed risk. Ou r aud its a lso in clu d e d performin g su ch ot h er proce d ures as
we con sid ere d n ecessar y in t h e circu mst an ce s. We b elie ve t h at ou r au d it s provid e a rea son able
b asis for ou r opin ion s.
Definition and Limitations of Internal Control over Financial Reporting
A compa ny’s in t e rn al con t r ol over fin an cial report ing is a pr ocess d esig ned t o provid e re ason able
assu ra nce re g ardin g t h e r eliab ility of fin an cial r eport in g an d t he pr epara tion of fin a ncia l st atements
for e xt erna l pu r poses in accord a nce wit h g en era lly accept ed a ccou n t ing prin ciples. A compa ny’s
in t er n al con t rol over fin an cial report ing in clu de s t hose policies an d pr oced u res t h at ( 1) pe rt ain to
t he ma in t e nan ce of re cord s t hat, in r eason ab le d e tail, accu rate ly an d fair ly re fle ct t he t ransa ctions
an d d isposit ion s of t he a sse t s of t h e compa ny; ( 2) provid e reason ab le assu ran ce t hat t ra nsactions
are re cord ed as n ece ssa ry t o per mit pre parat ion of fin an cial s t at e me nt s in accord a nce with
gen era lly a ccept e d accou n ting prin ciples, an d t h at re ceipt s a nd e xpen ditu re s of t h e compan y are
b ein g mad e on ly in accord an ce wit h au th oriza tion s of man a ge me nt an d d irector s of t h e company;
an d ( 3) provid e reason ab le assu ran ce r eg ardin g preven t ion or t ime ly d et e ct ion of u nau t h orized
acqu isit ion , u se, or d isposit ion of t h e compa ny’s asset s t h at cou ld ha ve a mat e rial e ffect on t he
fin a ncia l st at emen ts.
B eca u se of it s in h er en t limit a t ion s, in t er nal con t rol over fin an cial report in g may n ot pr even t or
d et e ct misst at e me nts. A lso, proje ct ion s of an y e va lu a t ion of effect iven ess t o fu t u r e per iod s are
su b je ct t o t h e risk t hat con t rols may b ecome in ad equa te beca use of ch ang es in con d it ions, or t hat
t he d eg ree of complian ce wit h th e policie s or pr oce d u re s may d et eriorat e.
Critical Audit Matters
Th e crit ical au dit ma tte rs commu nicate d b elow are ma t ters ar isin g from t h e cu rren t per iod audit of
t he con solid a t ed fin ancia l st ate ments t h at were commu n icat ed or re qu ired to be commu n icated to
t he a u d it commit t ee a nd t h at : ( 1) relat e to accou n t s or d isclosu res t ha t are mat e ria l to t he
con solid a t ed fin an cial st at emen t s an d ( 2) in volve d ou r e specia lly cha llen g in g , su b ject ive, or
complex ju d g ments. Th e commu nica t ion of crit ica l au d it mat t ers d oes n ot alt er in an y way ou r
opin ion on t h e con solid at ed fin an cial st a t emen ts, t aken as a wh ole, an d we are n ot , by
commu n icat in g t h e crit ical au d it ma t t ers b elow, provid in g separ at e opin ion s on t he crit ica l a u dit
ma t t ers or on t he accoun ts or d isclosu res to which th ey relate.
U s efu l l ives of t he l ong -lived a sset s associate d wit h Dea d Se a W or ks Lt d. con cession
As d iscu sse d in Not e 18b ( 1) to t he con solid a t ed fin an cial st at emen ts, t he con ce ssion of Dea d Sea
W orks Lt d . ( DSW ) will en d on March 31, 2030. T he consolid ated finan cia l st at ement s were pre pared
b ased on t h e Company's b elie f t hat it is more likely t h an n ot t h at DSW will con t in u e to ope rate its
lon g -live d asset s for t h eir re ma in ing u se fu l live s, which ext e nd b eyon d t he t erm of t he cu rr ent
con cession per iod , by ob t ain in g th e re newe d con cession or by oper at in g t he a sse t s for an
alt erna tive h old er.
We id ent ified t h e evalu ation of t h e u sefu l live s of t he lon g -live d asset s associat e d wit h DSW's
con cession ( he rein after – t h e relevan t asset s) as a crit ical au d it ma t t er. Specifically, ch allen g ing
au d it or ju dg men t was required to evalua te the Company’s deter min at ion t hat th e u sefu l lives of the
relevant asset s exceed t he cu rr ent con cession per iod d u e to u n ce rt ainty relat in g to con cession
ren ewal an d to e ffe cts from pot en tial cha ng es of t h e con cession hold er. Chang es in t h e e st imated
u sefu l lives of th e re levant asset s cou ld have a sig nifica n t effect on t h e d e pre ciat ion expen ses of
t hese asset s.
Th e followin g are t he pr imary proce d u res we pe rformed to ad d r ess t h is crit ical au d it mat t er. We
evalu at e d t h e d e sig n an d t e sted t h e ope rat in g e ffect ive ness of an in t er nal con t rol relat ed to t he
d et e rmin ation of u sefu l live s of t h e lon g - lived asse ts associat ed wit h t he wit h De ad Sea W orks Ltd.
con cession . We e valu at ed t h e Compan y's e st imate r egar ding t he u seful lives of t h e re levant assets
by examin in g it s a nalysis of pot en t ia l a lt e rn at ives of opera t in g t h e asse t s for an alt er na tive
con cession h old e r, as well as con sid erin g relevant pu b licly availab le in format ion , su ch a s, t he
Con cession Law an d the report released by t he Isr aeli Min istry of Finance regarding th e a ctions that
t he g over nme nt may t ake t owa rds t h e en d of t h e con ce ssion pe riod.
U n cert ain tax t rea tment u n der t he Law for T axat ion of Profit fro m Natu ral Resou rce s
As d iscu sse d in Not e 15E to t he con solid a t ed fin an cial st a t ement s, t h e La w for T axat ion of Pr ofit s
from Nat u r al Resou rces in Isr ael ( th e Law) b e came e ffect ive in 2016. Un d er t he law, t he C ompa ny's
ha s t ake n a posit ion r eg ardin g t h e valu e a ssign ed to ce rta in property, plant an d equ ipment for tax
pu rpose s at t he d at e t he law became e ffective. Specifically, t hat t he value of certain property, plant
an d equ ipmen t for t ax pu rposes can be d et ermin ed b a se d on it s fair valu e as d et er min ed by an
in d epen d e nt appr aise r usin g a repla cement cost met hod an d not b a sed on it s h ist orica l d epreciated
cost . T h e Compan y b e lieves t h at it is more likely t h an n ot th at its posit ion will be accept ed.
We id e nt ified t h e eva lu at ion of u n cer t ain t ax t r eatment u n d er t h e Law as a crit ica l au d it mat t er.
Du e to t he la ck of t ax r egu lat ions, cir cu lars, or cou rt ca ses, complex a u d itor ju dgmen t was requ ired
in evalu at in g t he Compan y’s posit ion t h at t h e valu e of ce rt ain propert y, plan t a nd e qu ipme nt for
t ax pu rpose s can be d et e rmin ed, at t h e d at e t h e law b ecame effect ive , b a sed on it s fa ir valu e as
d et e rmin ed by an in d epen d ent a ppraiser u sing a r eplacemen t cost met h od an d n ot b ased on it s
hist orica l d e preciated cost .
Th e followin g are t he pr imary proce d u res we pe rformed to ad d r ess t h is crit ical au d it mat t er. We
evalu at e d t h e d e sig n an d t e sted t h e ope rat in g e ffect ive ness of an in t er nal con t rol relat ed to t he
in t er pr et ation of t h e n ew t a x law an d t h e Company's a pplica t ion in t h e t ax provision est ima t ion
proce ss. We read let ters re ceived d irectly from t he Compan y’s e xtern al legal coun sel that e va luated
t he Compan y's in ter preta tion of the Law. In a ddit ion , we in volve d tax profession a ls with specialized
skills and knowled ge who assist ed in evalu at in g t h e Compa ny’s in t e rpr et at ion of t h e Law an d it s
pot en t ial impact on t he tax provision .
( sig n ed ) Somekh Ch aikin
Me mb e r Firm of KPMG In t e rn ation al
We ha ve served as t he Compa ny’s a ud itor sin ce 2006.
Te l A viv, Isr ael
Ma rch , 1, 2021
Somekh Chaikin, a partnership registered under the Israeli partnership
Ordinance, is the Israeli member firm of KPMG International,
a Swiss cooperative.
IC L G rou p L imited A nnual Report 1
Consolidated Statements of Financial Position as at December 31
2020
2019
N o te
$ m illio ns
$ m illio ns
C u rrent as set s
Cash an d cash equ ivalen ts
2 1 4
95
Sh ort - t erm in ve st me nts a nd d eposit s
1 0 0
96
Tr ad e r ece ivable s
8 8 3
778
In ven t ories
6
1 , 2 50
1,312
Ot h er r ece ivable s
7
3 9 4
403
T o t al curren t asse ts
2 , 8 41
2 ,6 8 4
N o n -curr en t assets
In vest ments at fa ir value th rou gh ot he r
compre he nsive in come
83
111
De ferred t ax a sse ts
15
1 2 7
109
Propert y, plan t a nd equ ipmen t
10
5 , 5 50
5,331
In t a ngib le assets
11
6 7 0
652
Ot h er n on -cu rren t assets
9,16
3 9 3
286
T o t al n on- current as sets
6 , 8 23
6 ,4 8 9
T o t al assets
9 , 6 64
9 ,1 7 3
C u rrent l iabilit ies
Sh ort - t erm d e bt
13
6 7 9
420
Tr ad e payab les
7 4 0
712
Provision s
17
54
42
Ot h er paya b les
14
7 0 4
587
T o t al curren t lia b ilities
2 , 1 77
1 ,7 6 1
N o n -curr en t liab ilitie s
Lon g - t erm d ebt a nd d eb en tures
13
2 , 0 53
2,181
De ferred t ax lia b ilit ies
15
3 2 6
341
Lon g - t erm employee liab ilit ies
16
6 5 5
575
Provision s
17
2 6 7
202
Ot h er
98
52
T o t al n on- current l iabilit ie s
3 , 3 99
3 ,3 5 1
T o t al liabi litie s
5 , 5 76
5 ,1 1 2
E q u ity
T o t al sharehold ers’ equ ity
19
3 , 9 30
3 ,9 2 5
Non - con t rollin g in terests
1 5 8
136
T o t al equit y
4 , 0 88
4 ,0 6 1
T o t al liabi litie s and equit y
9 , 6 64
9 ,1 7 3
The acc om pan y ing notes ar e an in tegral p art of these c onso lidated fin anc ial s tatements.
2 IC L G rou p L imited A n nual Report
Consolidated Statements of Income for the Year Ended December 31
2 02 0
2 01 9
2 01 8
N o te
$ m illio ns
$ m illio ns
$ m illio ns
Sales
20
5 , 0 43
5,271
5,556
Cost of sales
20
3 , 5 53
3 ,4 5 4
3 ,7 0 2
G r o ss profit
1 , 4 90
1,817
1,854
Sellin g , t ra nsport a nd marketin g e xpense s
20
7 6 6
767
798
Gen eral an d a dmin istrat ive expenses
20
2 3 2
254
257
Rese arch a n d deve lopmen t expense s
20
54
50
55
Ot h er e xpense s
20
2 5 6
30
84
Ot h er in come
20
( 2 0 )
(4 0 )
(8 5 9 )
O p er atin g in come
2 0 2
756
1 ,5 1 9
Fin a nce e xpen se s
2 1 9
220
214
Fin a nce in come
( 6 1 )
(9 1 )
(5 6 )
F i n ance expense s, net
20
1 5 8
129
158
Sh are in ea rn ing s of equ ity- account ed
in vest e es
5
1
3
I n come b efor e in come taxe s
49
628
1,364
Provision for in come t axe s
15
25
147
129
N e t in come
24
481
1 ,2 3 5
Net in come ( loss) at t r ib ut able to t he n on-
con t rollin g in t erests
13
6
(5 )
N e t in come att rib utable to t he sh ar eh old er s
of t h e Com pany
11
475
1 ,2 4 0
E a rn ing s pe r sh are at trib utable to t he
s h ar eh old er s of t h e Co mpany:
22
B asic earn in g s per sh are ( in dollars)
0 . 0 1
0 .3 7
0 .9 7
Dilu t ed e arnin gs per sh are ( in d ollar s)
0 . 0 1
0 .3 7
0 .9 7
W e ig hte d- averag e n u mber of ordin a ry
s h ar es ou t standin g:
22
B asic ( in t h ou sand s)
1 , 2 80,0 26
1 ,2 7 8 ,9 50
1 ,2 7 7 ,2 09
Dilu t ed ( in t hou san ds)
1 , 2 80,2 73
1 ,2 8 2 ,0 56
1 ,2 7 9 ,7 81
The acc om pan y ing notes ar e an in tegral p art of these c onso lidated fin anc ial s tatements.
IC L G rou p L imited A nnual Report 3
Consolidated Statements of Comprehensive Income for
the Year Ended December 31
2 02 0
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
N e t in come
24
481
1 ,2 3 5
C o m pon ents of ot h er com preh en sive in come that
w i l l be reclassified sub sequ e ntly to n et in come
Cu rren cy t ranslat ion d iffere nces
1 1 8
(20)
(95)
Chan ge in fair valu e of ca sh flow h ed ge s t ra nsferred
to t h e st a t emen t of in come
( 5 4 )
(38)
-
Effect ive por t ion of t h e ch ang e in fa ir valu e of cash
flow h ed g es
53
42
-
Ta x relat in g to it ems t h at will be re classifie d
su b sequ en tly to n et in come
-
(1 )
-
1 1 7
(1 7 )
(9 5 )
C o m pon ents of ot h er com preh en sive in come that
w i l l n ot be reclassified to n et in co me
Net cha n ge s of in vest men ts at fair valu e t h rou gh
ot h er comprehensive in come
18
10
(58)
Gain s ( losses) fr om d efin ed b ene fit pla ns
( 1 5 )
(75)
56
Ta x relat in g to it ems t h at will n ot be r eclassified to
net in come
( 6 )
10
(3)
( 3 )
(5 5 )
(5)
T o t al com prehen sive in come
1 38
409
1 ,1 3 5
C o m pre he nsive in come ( loss ) attribu table to t h e
n o n -con trollin g i n tere sts
23
4
)9(
C o m pre he nsive in come at trib utable to t he
s h ar eh old er s of t h e Co mpany
1 15
405
1 ,1 4 4
The acc om pan y ing notes ar e an in tegral p art of these c onso lidated fin anc ial s tatements.
4 IC L G rou p Limited Annual R epo rt
Consolidated Statements of Changes in Equity
A t tributab le to the sh arehold ers of the Comp any
N on-
c o ntrolling
i n teres ts
T o tal eq uity
Share c apital
S h are
p r emium
C u mulative
t r anslation
a d ju s tm ent
C a p ital
r e s erves
T r easury
s h ares,
at c o st
R e tained
e a r nings
T o tal
shareholders’
e q uity
$ m illio ns
F o r t h e year ended Dece mber 3 1,
2020
B ala n ce as at J an uary 1, 2020
5 4 6
1 9 8
( 4 4 2)
3
( 2 6 0)
3 , 8 80
3 , 9 25
1 36
4 , 0 61
Sh are -b ased compen sat ion
-
6
-
2
-
-
8
-
8
Divid e n d s
-
-
-
-
-
( 1 1 8)
( 1 1 8)
( 1 )
( 1 1 9)
Compreh en sive in come
-
-
1 0 8
17
-
( 1 0 )
1 1 5
23
1 38
B a la nce as at December 3 1, 2 020
5 4 6
2 0 4
( 3 3 4)
22
( 2 6 0)
3 , 7 52
3 , 9 30
1 58
4 , 0 88
The ac c o m panying notes ar e an integral p art of these c onso lidated financ ial s tatements .
5 IC L G rou p Limited Annual R epo rt
Consolidated Statements of Changes in Equity (cont'd)
A t tributab le to the sh arehold ers of the Comp any
N on-
c o ntrolling
i n teres ts
T o tal eq uity
Share c apital
S h are
p r emium
C u mulative
t r anslation
a d ju s tm ent
C a p ital
r e s erves
T r easury
s h ares,
at c o st
R e tained
e a r nings
T o tal
shareholders’
e q uity
$ m illio ns
F o r t h e year ended Dece mber 3 1,
2019
B ala n ce as at J an uary 1, 2019
546
193
(424)
(17)
(260)
3,743
3,781
134
3,915
Sh are -b ased compen sat ion
-
5
-
7
-
-
12
-
12
Divid e n d s
-
-
-
-
-
(273)
(273)
(2)
(275)
Compreh en sive in come
-
-
(18 )
13
-
410
405
4
409
B a la nce as at December 3 1, 2 019
546
198
(4 4 2 )
3
(2 6 0 )
3 ,8 8 0
3 ,9 2 5
136
4 ,0 6 1
The ac c o m panying notes ar e an integral p art of these c onso lidated financ ial s tatements .
6 IC L G rou p Limited Annual R epo rt
Consolidated Statements of Changes in Equity (cont'd)
A t tributab le to the sh arehold ers of the Comp any
N on-
c o ntrolling
i n teres ts
T o tal eq uity
Share c apital
S h are
p r emium
C u mulative
t r anslation
a d ju s tm ent
C a p ital
r e s erves
T r easury
s h ares,
at c o st
R e tained
e a r nings
T o tal
shareholders’
e q uity
$ m illio ns
F o r t h e year ended Dece mber 3 1,
2018
B ala n ce as at J an uary 1, 2018
545
186
(333)
30
(260)
2,691
2,859
71
2,930
Sh are -b ased compen sat ion
1
7
-
11
-
-
19
-
19
Divid e n d s
-
-
-
-
-
(241)
(241)
(1)
(242)
Capit a lizat ion of su b sidia ry d eb t
-
-
-
-
-
-
-
73
73
Compreh en sive in come ( loss)
-
-
(9 1 )
(5 8 )
-
1 ,2 9 3
1 ,1 4 4
(9 )
1 ,1 3 5
B a la nce as at December 3 1, 2 018
546
193
)424(
)17(
)260(
3 ,7 4 3
3 ,7 8 1
134
3 ,9 1 5
The ac c o m panying notes ar e an integral p art of these c onso lidated financ ial s tatements .
IC L G rou p L imited A nnual Report 7
Consolidated Statements of Cash Flows for the Year Ended
December 31
2020
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
C a sh flo ws fr om o pera tin g acti vities
Net in come
24
481
1,235
Ad ju st men ts for:
De pre ciat ion an d a mort ization
4 8 9
443
403
Impairmen t of fixed asset s ( Reve rsal of)
90
(10)
17
Exch ang e rate, in terest an d d erivative, n et
90
110
140
Loss ( pr ofit ) from d ivest it u r e of b u sinesses
4
-
(841)
Ta x expen ses
25
147
129
Chan ge in provision s
1 1 3
(21)
(66)
Ot h er
1
(1 )
16
8 1 2
668
(202)
Chan ge in in ve nt orie s
54
(72)
(115)
Chan ge in t rade r eceivables
( 8 9 )
199
(101)
Chan ge in t rade payable s
84
(58)
(34)
Chan ge in ot h er r ece ivable s
5
5
(3)
Chan ge in ot h er payable s
54
4
(1 )
N e t ch an ge in o per ating a sse ts and liabi litie s
1 0 8
78
(254)
I n t erest s paid
( 1 0 9)
(115)
(103)
I n come t axe s paid , n et of refun d
( 3 1 )
(120)
(56)
N e t cash provid ed by o peratin g a ct ivitie s
8 0 4
992
620
C a sh flo ws fr om in vestin g act ivities
Procee d s ( in ve stmen ts) in d eposit s, n et
34
(2)
(3)
B u sin ess comb inat ion s
( 2 7 )
-
-
Pu rch ase s of propert y, pla n t and equ ipmen t and in tan gib le
asset s
( 6 2 6)
(576)
(572)
Procee d s fr om d ive st it ure of b u sin esse s n et of t r an sact ion
expen ses
26
-
902
Divid e n d s from equ it y-accoun ted in vest ees
7
3
2
Procee d s fr om sale of pr opert y, pla n t an d e qu ipment
3
50
2
N e t cash provid ed by ( used i n ) in vest ing activit ies
( 5 8 3)
(5 2 5 )
331
C a sh flo ws fr om f ina ncin g acti vities
Divid e n d s pa id to t he Company's sh areh olde rs
( 1 1 8)
(273)
(241)
Receipt of lon g - t er m d eb t
1 , 1 75
657
1,746
Repaymen t s of lon g - t erm d ebt
( 1 ,1 33)
(689)
(2,115)
Repaymen t s of sh ort -t erm d eb t, n et
( 5 2 )
(183)
(283)
Receipt from t ransa ction s in d e riva tive s d esign at ed as a cash
flow h ed g e
24
-
-
Ot h er
( 1 )
(2 )
(1 )
N e t cash use d in f inancin g acti vities
( 1 0 5)
(4 9 0 )
(8 9 4 )
N e t ch an ge in ca sh an d cash equi vale nt s
1 1 6
(23)
57
Cash an d cash e qu ivalen ts as at the b egin ning of t he yea r
95
121
83
Net effect of cu rr ency t ranslation on cash and cash
equ ivalent s
3
(3)
(24)
Cash an d cash e qu ivalen ts in clu ded as part of a sse t s h eld for
sa le
-
-
5
C a sh a nd ca sh e qu ivalen ts as at th e e nd of t he year
2 1 4
95
121
The ac c o m panying notes ar e an integral part of these c onsolidated financ ial s tatements.
Notes to the Consolidated Financial Statements as at December 31, 2020
8 ICL G rou p L imite d Consolidated Financial S tatements
Note 1 – General
A. The reporting entity
ICL Gr ou p Lt d . ( h er ein a fter – t he Compa ny), is a company d omiciled and incor porated in Isr ael. The
Compan y's sh are s a re t rad ed on b ot h t he T el- Aviv St ock Exch an ge ( TA SE) an d t h e Ne w York St ock
Exch ang e ( NY SE) un der t he ticker : I CL. The a d dress of t h e Compan y’s re gist ere d headqu arters is 23
Aran h a St., T el-A viv, Israel. Th e Compa ny is a sub sidia ry of Isra el Corpor ation Ltd. , a pu blic company
t rad ed on th e TASE u n d er th e ticke r: I LC O:T A . T h e Company t og et h er wit h it s su b sid iaries,
associa t ed compan ies an d join t ve n t u res ( her ein aft er – t he Grou p or I CL), is a lea d in g specia lty
mine rals grou p t ha t opera t es a u niqu e, in t eg rate d b u sin ess mod e l. T h e Compa ny compet it ively
ext ract s cert ain minerals as ra w ma t erials an d u t iliz es proce ssin g an d prod u ct formu lat ion
t echn olog ie s t o ad d va lu e t o cu st ome rs in t wo main end -mar kets: ag ricu lt u re an d I n d u st rial
( in clu d in g food ad d it ives). I CL’s prod u ct s a re u sed main ly in t h e are as of ag r icu lt ure, elect ron ics,
food , fu el an d g as explora t ion , wat er pu rificat ion an d d e sa lin at ion , d e t ergen ts, cosmet ics,
ph armaceu t ica ls, a nd automot ive.
Th e St at e of Israel hold s a Spe cial St at e Sha re in I CL a nd in some of it s su b sid iar ies, en t itlin g the
St at e t h e rig ht t o safeg u ar d t h e St ate of Isr ael vit al in t e rests . For ad d it ional in format ion, see Note
19 - Equ it y.
B. Material events in the reporting period
Th e COVI D- 19 pan d e mic spread in 2020 led t o sig n ifican t r est riction s , wh ich we re impose d b y
governmen t s aroun d t he world, in clu din g lockd own s a nd ot he r movemen t rest rict ions . As a r esult,
it cr eat e d sig n ificant b u sin ess and e con omic u n cert a in ty an d volat ilit y for g lob a l ma rket s, wh ich
was man ifest e d , amon g ot h er s, by a down ward t re n d in g lob al e con omic a ct ivit y. Given th ese
con d it ion s, ICL ha s t aken measu res t o en su re t he h ea lth an d safe t y of it s employees, su ppliers,
b u sin ess part ners and the commu n ities in which it operates in ord er to ensu re, amon g ot her things,
t he opera t ion level, t h e prope r fu n ct ion in g of it s facilit ies ar ou n d t h e world an d t o min imiz e t he
pot en t ial impact on it s b u sin ess.
Du r in g t he first h alf of 2020, followin g in st ru ct ion s b y t h e loca l aut horit ies, t h e u nderg rou nd min ing
operat ion s in Spain an d t h e UK were t empora rily d ist u rb ed and g ra du ally ramped b ack u p t o n or mal
capacit y. Except for t h e said in t e rmission s, manu fact u ring in most of t h e Compan y's sit e s a round
t he wor ld con t inu e d wit h out in t err upt ion. Nevert he less, as part of t h e Compan y's re sponse t o the
ou t b r eak a nd it s impact on t h e Compan y's resu lts, sever al e fficien cy in itiatives an d measures were
in it ia t ed , wh ich in clud e, ( 1) a head coun t redu ction plan, primarily t hr oug h an early r etirement plan
of ove r 200 e mployee s for Rot em A mfert I srae l ( h er ein after – Rot em I sr ael), B romin e Compou n d s,
an d Dead Sea Mag ne siu m; ( 2) opera tion al cost savin g in it ia tive s; an d ( 3) an efficie ncy plan for Rotem
Isr ael, wh ich is main ly con sist e d of t h e d iscon t in uation of t h e u n profita ble pr od uct ion a nd sa le of
t he ph osph at e rock act ivit y an d t he e xecu t ion of t h e said e arly ret ir eme n t plan , which also t akes
in t o a ccou n t t h e requ ired employe e b en efit s pr ovision followin g t h e ph osph at e r ock prod u ct ion
an d sale d iscon t in uat ion .
For fu rt h er in formation , see Not e 12 – Impairment T est ing , Not e 16 – Employee B en efit s, Not e 17 –
Provision s, and Not e 18( B ) – Con cession s.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
9 Statements Financial Consolidated Limited Grou p CLI
Note 1 – General (cont'd)
B. Material events in the reporting period (cont'd)
In ad d it ion , in or d er t o act ively ad dress g lob a l market volat ilit y, t h e con t inuin g t rend of econ omic
an d b u siness u n cer taint y, an d specifica lly, t h e sig n ifican t ch allenge s in t h e work en viron me nt at the
Spa n ish sit e Sallent , th e Company d ecid ed to acceler at e t he sit es con solid ation plan in I CL I b eria by
closin g t h e Sa llen t sit e ( Vila fru ns min e) as of J u n e 30, 2020.
Th er e is a d ifficu lt y in a sse ssin g t he fu t u re impa ct s of t h e CO VI D - 19 pa nd emic on t he Company's
operat ion s, in t er alia, in lig ht of t h e heig hte ned volat ilit y in t he mar ket s, t he un certaint y regarding
t he d u rat ion of t h e pa n d emic, t h e ext en t of it s in t e nsit y an d effect s on t h e market s in wh ich t he
Compan y opera t es an d add ition al cou n terme asur es t h e g overnment s a nd central b anks may t ake .
C. Definitions
1. Su b sid iary – a company over wh ich t h e Compan y has con t r ol a nd t h e fin ancia l st atements of
wh ich ar e fu lly con solid at e d wit h t h e Compa ny's st at ements a s part of t h e consolid a ted
fin a ncia l st at emen ts.
2. I nve st ee compa ny – Su b sid iarie s, in clu din g a part nersh ip or joint ven tu re, wh ich is accounted
for u sin g t h e equ ity met hod .
3. Re lat ed pa rt y – A s in I AS 24 ( 2009), “Relat ed Party Disclosu res”.
Note 2 - Basis of Preparation of the Financial Statements
A. Statement of compliance with International Financial Reporting Standards
Th e con solid at ed fin an cial st at e men ts were pre par ed b y I CL in a ccord an ce wit h In t er nat ional
Fin a ncia l Re port in g St an d ar ds ( IFRS) as issu e d b y t h e Int e rnation al Accou n ting St an dards B oards
( IA SB).
Th e con solid at ed fin an cial st at eme nts were au thorize d for issu an ce b y t h e Compa n y’s B oard of
Dire ct ors on March 1, 2021.
B. Functional and presentation currency
Th e con solid at e d financial st atements are pr esent ed in Un it ed St at es Dolla rs ( “US Dollars”; $), which
is t he fu n ct ion al cu rrency of t he Company an d h ave b e en r ou n d ed t o t h e n earest million , e xcept
wh en ot h er wise in dicate d. I te ms includ ed in t he con solid at ed financia l st atemen ts of t h e Company
are mea su r ed u sin g t he cu rre ncy of t h e primary econ omic en vir on men t in wh ich t h e in d ividual
ent it y oper at es ( “the fu nction al cu rren cy”).
C. Basis of measurement
Th e con solid at ed fin an cial st a t emen ts were pre par ed u sing t h e d epreciat ed h ist orical cost b asis
except for t h e followin g a sse t s a n d liab ilitie s: Fin ancial in strument s mea sured at fa ir va lue t hr ough
profit or loss, Fin an cial in st r u men ts me asu red at fa ir valu e t h roug h ot h er compreh ensive in come,
In vest ments in a ssociat es, de ferred t a x a sse t s a nd liab ilit ies, a sse t s and lia b ilit ie s in re spect of
employe e b en efit s. For fu rth er in for mat ion regarding t he measurement of asse ts an d lia b ilitie s, see
Not e 3.
Notes to the Consolidated Financial Statements as at December 31, 2020
10 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 2 - Basis of Preparation of the Financial Statements (cont'd)
D. Operating cycle
Th e Company’s regu lar opera t in g cycle is up t o on e year . A s a resu lt , t h e cu rren t asse t s a nd the
cu rr en t liab ilit ies inclu de it ems for wh ich t h e realiz at ion is in t en d ed an d an ticipat ed t o t a ke place
wit h in on e yea r.
E. Use of estimates and judgment
Th e pr epa rat ion of fin an cial st at ements in con formit y wit h IFRS r equ ires man a ge me nt t o ma ke
ju d g men t s, e st imat es an d assu mpt ion s t ha t a ffe ct t h e applicat ion of accou n t in g policies an d t he
report ed a mou n t s of asse t s, liab ilit ies, in come an d expen se s. A ct u al resu lt s may d iffer from t h ese
est ima t es.
Th e evalu at ion of accou n t in g est imat e s u sed in t he pre par at ion of ICL’s Fin an cial St at e ments
requ ires t h e Compan y's mana geme n t t o make a ssu mpt ion s reg a rd ing laws in t er pre t at ions which
apply t o t he Compa ny, circu mst a n ces an d even t s in volvin g con sid er ab le u ncert aint y. The
Compan y's man a ge me nt pre pa res t h e est imates b a se d on past e xperie nce, va riou s fa ct s, e xt ernal
circu mst a nces, a nd re ason ab le assu mpt ions relat in g t o t h e per t in en t circu mst an ce s of each
est imat e. Est imat es and u n d e rlyin g a ssu mpt ion s are r evie wed on a n ongoin g b asis. Revision s to
accou n t in g e st imates are recog n ized in t he period in wh ich t h e est imat e s a re re vised and in a n y
fu t u re per iod s affected.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
11 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 2 - Basis of Preparation of the Financial Statements (cont'd)
E. Use of estimates and judgment (cont'd)
In format ion ab ou t assu mpt ion s mad e b y I CL wit h re spect t o t h e fu t u re and ot her rea son s for
u n cer t ainty wit h respect t o est imate s t ha t h ave a sig n ifican t risk of re su lt in g in a mat erial ad just ment
t o carryin g a mou n t s of asse t s a nd lia b ilit ie s in fu t u re fin a ncia l yea rs a re in clu ded in t h e following
t ab le:
E s t imat e
P r in cipal assu mpti ons
P o s sib le e ffects
R e feren ce
Con cession s,
permit s and
b u sin ess
lice nse s
For eca st of ob t a in ing ren ewed
con cession s, per mit s an d b u siness
lice nse s wh ich con st it u te t h e b asis for
t he Compan y's con t in ued ope ration s and
t he Compan y's e xpect ation s regardin g
t he hold in g of t h e operatin g a sse ts by it
an d / or by a su b sid iary u n til t he end of
t heir u sefu l lives
Impact on t h e valu e
of t h e oper at ion ,
d eprecia t ion per iods
an d re sid u al va lu e s
of relat e d asset s.
See Not e 18
-
Con cession s.
Recover ab le
amou n t of a
cash g en eratin g
u n it , amon g
ot h er t h in gs,
con t ainin g
good will
Expect ed cash - flow for eca sts in clud ing
est ima t es of min er al re se rves, d iscou nt
rat e , mar ket risk an d t he for ecasted
growt h rat e.
Chan ge in
impa ir men t loss.
See Not e 12
- impairmen t
t est in g .
Uncert ain tax
posit ion s
Th e ext e n t of t h e ce rta int y th at I CL’s t ax
posit ion s will be accept ed and th e risk of
it in cu rr in g any ad dition al t ax an d
in t er est e xpense s. Th is is b ased on an
an alysis of sever al mat t e rs, in clu din g
in t er pr et ation s of t ax laws an d t he
Compan y’s exper ience.
Recog n it ion of
ad d it ion al in come
t ax expen ses.
See Not e 15
- t a xes on
in come.
Prob ab ilit y
assessmen t of
con t in g en t an d
en viron me nt al
liab ilit ies
in clu d in g cost of
wast e re moval/
rest ora t ion
W he t he r it is mor e like ly t h an n ot t hat an
ou t flow of econ omic resou rces will be
requ ired in respe ct of pot e ntia l liab ilitie s
u n d er t he e nviron me ntal prot ect ion la ws
an d leg al claims pen d ing a g ainst I CL a nd
t he est imat ion of t h eir a mou nts. T he
wast e removal/ rest or ation ob lig ation s
d epen d on t h e re liabilit y of t h e est ima tes
of fu t u r e removal cost s and
in t er pr et ation of re gula tion s.
Creat ion , ad just ment
or r eversa l of a
provision for a claim
an d / or
en viron me nt al
liab ilit y in clu d ing
cost of wa st e
remova l/ r est or ation .
See Not e 18
- con t in gen t
liab ilit ies.
Notes to the Consolidated Financial Statements as at December 31, 2020
12 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies
Th e accou n t in g policies in accor d an ce wit h IFRS ar e con sist e ntly applied b y I CL compan ie s for all
t he per iod s pr esen te d in t hese con solid a ted financial st at ement s.
A. Basis for Consolidation
1. B u siness c ombination s
ICL implemen t s t h e a cqu isit ion met h od t o a ll b u sin ess comb in a tion s. T h e acqu isition d ate is t he date
on wh ich t h e acqu ire r ob t ain s con tr ol over t he acquir ee. Con t rol exist s wh en I CL is exposed or has
rig ht s t o va riab le re t u rn s from it s in volvemen t wit h t he ac qu iree a nd it cou ld affect t h ose re turns
t hrou g h it s power over t h e acqu ir ee. Su b stantive rig h ts h eld b y I CL an d ot h ers ar e con sid er ed when
assessin g con t rol.
ICL r ecog n ize s good will on an a cqu isit ion accord in g t o t h e fair valu e of t h e con sid e rat ion
t ran sferred in clu ding any amou nts recog nized in re spect of n on - cont rollin g int erest in the acquiree
as well as t h e fair valu e a t t he acqu isit ion d ate of a ny pre - exist ing equ ity r ig h t of ICL in t he acqu iree,
less t h e n et amou n t of t h e id entifiab le asse ts acqu ired , and t h e liab ilit ies a ssu med.
Cost s associat e d wit h t h e acqu isit ion t hat were in curred b y IC L in a b u sin ess comb in a t ion su ch as
ad visory, leg a l, valu at ion a nd ot h er profession a l or con su lt in g fee s, ot h er t h an t h ose associat ed
wit h an issu e of d e b t or equ it y inst r u me nts con n ected t o t h e b usin ess comb in at ion, a re expen sed
in t h e pe riod t h e services a re r ece ived .
2. S u b sidiaries
Su b sid ia ries are e nt itie s con tr olle d b y ICL. Th e fin an cial st atements of t h e su bsid iarie s are included
in t he con solid at ed fin an cial st at e me nts from t he d a t e con t rol commen ce d u n t il t he d a te con t rol
cea ses t o exist . T h e fin an cial st at ement s of sub sidiarie s h ave been cha ng ed whe n ne cessary to align
t hem wit h I CL's accou ntin g policies.
3. N o n - con tr ollin g in te rest s
Non - con t rollin g in t ere sts comprise of t he su b sid iar y's equ ity t hat ca nnot b e a t tribu ted, d ire ctly or
in d irect ly, t o t h e paren t compan y. Profit or loss an d an y pa rt of ot h er compr eh en sive in come are
alloca t ed t o t he own ers of th e Compan y an d t h e n on -cont rollin g in t e rests, eve n if t h e resu lt is a
neg at ive b alan ce of n on -cont rollin g in terests.
Me asu re me nt on t h e d at e of t h e bu sin ess comb in at ion – Non - con t rollin g in t erests t h at are
in st ru me nts t hat g ive rise t o a pr esen t own er sh ip in t erest an d entit le t he h old e r t o a sh are of n et
asset s in t h e event of liqu id at ion , a re mea su r ed a t t h e d a t e of t he b u sin ess comb in a t ion at eit her
fair valu e, or a t t h eir proport ion ate in terest in t h e id en tifiable asse ts an d lia b ilit ies of t h e acqu iree,
on a t ra nsa ct ion -by- tran sact ion b asis.
Tr an sact ion s wit h n on - con trollin g in t er ests, while ret ain in g con t r ol - are accou n t e d for as equ ity
t ran sa ct ions. A n y d iffere nce b et ween t h e con sid erat ion pa id or r ece ived an d th e ch an g e in
non - cont rollin g in t erests is in clu d e d in t h e sh are of t he own e rs of t he compan y d ir ectly in a separate
cat eg or y in equ it y.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
13 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
A. Basis for Consolidation (cont'd)
4. L o s s of c ont rol
Upon t h e loss of con t rol, IC L derecog n izes t he a sse t s a nd lia b ilit ie s of t h e su b sid ia ry, an y non -
con t rollin g in t erests a nd t he oth er compon en ts of equ ity rela ted t o th e su bsid iary. I f ICL ret ains any
in t er est in t he pre viou s su b sid iary, t he n su ch in t erest is mea su red at fair va lu e at t he d ate that
con t rol is lost . The d iffere n ce b et wee n t h e su m of t h e pr oce ed s an d fair va lu e of t he r et ained
in t er est , and th e d e recogn ized balances is recogn ized in profit or loss u n d er ot her in come or ot her
expen ses. Th e amou n t s r ecog n ize d in ca pit al res erve s t h rou gh ot h er compreh ensive in come with
respect t o t h e same su bsid iar y are re classifie d t o profit or loss or t o r et ained earn ing s .
5. T r ansa ction s e lim inated in con solid ation
In t r a- group b a la nces, t ransaction s, u n re alized income an d expen ses an d g ain s a n d losse s ar ising
from in t ra - gr oup t ran saction s, are elimin ated in pre parin g t he con solid at ed fin an cial st atemen ts.
6. I n ve stment in a ssociated co mpa nie s and jo int v entu res
J oin t ven t u res are join t arr an gements in wh ich I CL ha s r ig hts t o t he n et asse ts of t h e arrange ment.
Associat e s an d join t ven t u r es a re accou n t ed for u sin g t h e equ it y met h od ( equ it y accou n ted
in vest e es) and a re re cogn ize d in it ially at cost .
B. Foreign Currency
1. T r ansaction s in fore ign curren cy
Tr an sact ion s in for eig n cu r rency a re t ran slated t o t h e fu n ction al cu rrency b a se d on t h e exchange
rat e in effect on t h e d ates of t h e t r ansaction s. Mon etary assets an d lia b ilit ie s d enomin ated in for eign
cu rr en cy on t he report d ate ar e t ranslated in to t he fu n ction al curre ncy b ase d on t he exchange rate
in effect on t ha t d ate.
Non - mon et a ry it e ms d en omin at ed in fore ig n cu rr en cy me asu re d at h ist orica l cost are t r an sla ted
u sin g t he e xch an ge r ate at t he d at e of t h e tran saction .
2. F o reig n o pe ration s
Th e asse t s a n d lia b ilit ies of fore ig n opera t ions, in clu d ing g oodwill an d fa ir valu e ad ju stments from
acqu isit ion , ar e t ra nslated t o USD at exch ang e rates at t he repor tin g d ate . T he in come and expe nses
of foreig n ope rat ion s ar e t ran slated t o USD at excha nge r at es at t h e d at es of t he t r an sactions.
For eig n cu rre ncy d ifferen ces are r ecogn iz ed in ot h er compr eh ensive in come a nd a re prese nted in
equ it y in t h e fore ig n cu rre ncy t ranslation reserve (hereinafter –T ran slation Reserve).
W he n t h e fore ig n opera tion is a n on - wh olly own ed su b sid iary of t h e Compan y, t h en t h e re levant
proport ion at e sh are of t h e for eig n oper at ion t ran slation d iffere nce is alloca t ed t o t h e n on -
con t rollin g in t er est s. W h en a for eig n opera t ion is d isposed of, t h e cu mu la t ive amou n t in t he
Tr an sla t ion Reserve is re classified t o pr ofit or loss a s a part of t h e capit al g ain or loss on d isposal.
Notes to the Consolidated Financial Statements as at December 31, 2020
14 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
B. Foreign Currency (cont'd)
2. F o r eig n o peration s ( cont'd)
Gen erally, foreig n cu rrency d iffere nces from a mon et ary it e m re ceivable from or payab le t o a fore ign
operat ion , in clu d in g fore ig n oper ation s t ha t are su bsidia ries, a re re cogn ized in profit or loss in the
con solid a t ed fin an cial st atemen ts. Fore ig n excha nge g ains or losses arisin g from a monet ar y it em
receiva b le from or pa ya b le t o a for eig n oper at ion , t he se t tlemen t of wh ich is n eit h er pla nn e d nor
likely in t h e fore se eab le fu t u re, are con sid ere d t o for m part of a ne t in vest men t in a for eign
operat ion an d are r ecog n ized in ot h er compr eh en sive in come a nd ar e pr esented wit hin equ ity in
t he T ra nslation Reserve.
C. Financial Instruments
1. N o n - d er ivative fin an cial assets ( IFRS9)
In it ia l re cog nition of fin an cial assets:
ICL in it ially recog n izes t ra de receivables an d d ebt in st ru men ts issu ed on t he d a te t h at t h ey are
orig in at ed a n d for a ll ot h er fin an cial asset s at t he t r ad e d a te in which I CL b ecomes a part y t o t he
con t ract ual pr ovision s of t h e in st r u me nt. A fin an cial a sset is in it ially me asu re d a t fair va lu e plu s
d ir ect t ransa ction cost s.
De recog n it ion of fin ancial assets:
De recog n it ion of fin an cial asset s occu rs wh en t h e con t ractu al rig hts of ICL t o t h e cash flows from
t he a sse t expire, or wh en ICL t r an sfer s t h e rig ht s t o re ceive t he con t ract u al ca sh flows and
su b st an tially a ll t he r isks an d r ewa rd s of own ership of t he fin an cial asset . Wh en ICL ret ains
su b st an tially all t h e said r isks an d r ewards, it con t inu es t o re cogn ize t he fin an cial asset .
Cla ssifica t ion of fin an cial asset s in to cat eg ories a nd t he accoun tin g t reat ment of ea ch cate gor y:
Fin a ncia l asse t s a re classified at in itia l re cog n ition to on e of t he followin g measu re ment categories:
( 1) amort ized cost ; ( 2) fair va lu e t h rou g h ot her compre he nsive in come – in ve st ment s in d ebt
in st ru me nts; ( 3) fair va lu e t hr ou g h ot h er compr eh en sive in come – in vest me nt s in equ ity
in st ru me nts; or ( 4) fair valu e t h rou g h profit or loss. The r eclassifica t ion of th e fin an cial asset s in
su b sequ en t period s will on ly occu r if I CL's cha ng es it s fin ancia l d ebt asse ts b usin ess mod el.
A fin an cial asset is me asu re d a t a mort ized cost if it mee t s b ot h of t h e followin g con d it ion s an d is
not d esig na t ed a t fair va lu e t h rou g h pro fit or loss: ( 1) I t is held wit hin a b u sin ess mod e l wh ose
ob ject ive is t o h old asset s so a s t o collect con t ract ual cash flows; an d ( 2) t h e con t ractual t e rms of
t he fin an cial asset g ive rise t o cash flows r epr esent ing solely pa ymen t s of pr in cipal a nd in t er e st on
t he prin cipal a mou n t ou t st a nd ing on specified d a t es. T h ese asse t s a re su b se qu ent ly me asu red at
amor t ize d cost u sin g t h e effect ive in t ere st met h od . The amort ized cost is red u ced b y impa irment
losses. I n t er est income, foreig n exchan ge gain s and losse s and impairmen t a re r ecogn ized in profit
or loss. A n y g ain or loss on d er ecog n it ion is recog n ized in profit or loss.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
15 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
C. Financial Instruments (cont'd)
1. N o n - d er ivative fin an cial a sse ts ( IFRS9) (con t'd)
ICL h as b alan ces of t r ad e and ot he r receivables and d eposit s th at a re h eld wit hin a bu sine ss model
wh ose ob je ct ive is collect in g con t ra ctu al cash flows, wh ich r epr esen t solely paymen t s of pr in cipa l
an d in t e rest ( for t h e t ime valu e and t h e cr edit r isk). A ccor d in g ly, t h ese fin an cial asse t s are measured
at amort ized cost .
Fin a ncia l asse t s a t fair valu e t h rou g h profit or loss - are su b se qu ently mea su r ed at fair valu e. Net
gain s or losses, in clu d in g a ny in t ere st in come or d ivid en d in come , ar e recog n iz ed in profit or loss
( ot h er t ha n certain d erivative s d e sign at ed as accoun ting h ed gin g instruments).
In vest ments in equ it y in st r u me nts a t fa ir valu e t h rou gh ot h er compr eh en sive in come - are
su b sequ en tly me asu re d at fa ir valu e. Divid en d s are r ecog n ize d as income in profit or loss, u n less
t he d ivid end clearly r epresen ts a re cove ry of part of the cost of t he investment. Oth er net g ains and
losses are r ecog n ized in ot he r comprehensive in come a nd are n ever reclassified t o pr ofit or loss.
2. N o n - d erivative fin an cial liabil ities
Non - d er ivat ive fin an cial liab ilit ies in clu d e b a nk overd raft s, loa ns an d b orr owin g s from b anks and
ot h er s, ma rke t able debt in stru me nts, lease liab ilities, a nd t ra de and ot her payables.
ICL in it ially re cognize s d e b t se cu rities issu ed on t h e d at e t h at t h ey or ig inated. A ll ot her fin an cial
liab ilit ies are re cog nize d in itially on t h e t r ade d at e at wh ich I CL b ecomes a party t o t he con tractual
provision s of t h e in st ru ment. Su b se qu e nt t o init ial r ecog n it ion th ese fin an cial liab ilit ies are
me asu re d a t a mort ized cost u sin g t he effect ive in t erest met h od . De recogn ition of t h e fin a ncial
liab ilit ies occu r whe n t h e ob lig at ion of I CL, as specified in t h e ag reemen t, expir es or wh en it is
d ischa rg ed or can ce lled .
Chan ge in t er ms of d eb t in strument s:
A su b st a ntial mod ificat ion of t h e te rms of an exist ing financia l liabilit y or part of it an d a n exchange
of d eb t in st ru men ts ha vin g su bst an tially d iffe rent t erms, b et ween an existin g b or rower a n d lender
is accou n t ed for as an ext inguish men t of t he origin al fin ancial liabilit y a nd t he recog nition of a new
fin a ncia l lia b ilit y at fair va lu e. I n such cases t he entir e differe nce b etwe en th e amort ize d cost of the
orig in al fin an cial liab ilit y and t h e fa ir valu e of t he n e w fin an cial liab ilit y is r ecog n ize d in profit or
loss a s fin an cin g in come or expen se.
Su b st antia lly d ifferent t erms - if t h e d iscou n t ed pre se nt va lu e of t he cash f lows accord in g t o t he
new t er ms an d d iscou n t e d u sin g t h e orig in al effe ctive in t er est rat e, is d iffere nt b y at le ast t en
percent ( 10%) from t h e d iscou n t ed presen t valu e of t h e re main in g cash flows of t h e orig in a l
fin a ncia l lia b ilit y. I n ad d ition t o t he afore sa id qu a nt itative crit er ion, ICL exa min es, in t er alia , wh ether
t here h ave also b ee n ch an g es in var iou s e conomic par amet er s in h eren t in t he e xch ang ed debt
in st ru me nts ( e .g. lin kag e).
In a n on -sub stant ial mod ificat ion of t erms ( or e xch an g e) of d eb t in st ru men ts, t h e n ew cash flows
are d iscou n t ed u sin g t h e orig in al effect ive in t erest rat e, an d t h e d iffer ence b etwee n t he pre sent
va lu e of t he n ew fin an cial liab ilit y an d t he prese nt valu e of t he orig in al finan cial lia b ilit y is
recog n iz ed in profit or loss.
Notes to the Consolidated Financial Statements as at December 31, 2020
16 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
C. Financial Instruments (cont'd)
3. D e rivative f inancia l in strume nts
Offse t of fin an cial in st r ument s:
Fin a ncia l asset s an d liab ilit ies are offse t , an d t h e ne t a mou n t is pre se n t ed in t h e st at emen t of
fin a ncia l posit ion wh en , a nd on ly wh en , I CL cu rren tly h as a leg al rig ht t o offset t h e amou n t s and
in t en d s eit her t o set tle on a n et b asis or t o realize t he a sset and se t tle th e lia bilit y simu lt an eou sly.
ICL h old s d e riva t ive fin an cial in st rume nts in ord er t o r ed uce exposu re t o for eig n cu rr ency risks,
ma rin e sh ippin g price s, an d in t er est . Der ivative s are r ecogn ized accordin g t o fair valu e an d the
ch an g es in va lu e are recor d ed in t h e st at emen t of in come u nd er f inan cin g in come or expen ses,
except for d e riva t ives use d t o h edge ca sh flows ( a ccou ntin g h edg ing). T h e attribut ab le t ran saction
cost s a re record e d in t he st at emen t of in come as in cu rred.
Cash flow h ed g es
Chan ges in t h e fair valu e of d eriva t ives u sed t o h e dg e ca sh flows, in accord a nce wit h th e effective
port ion of t h e he d g e, a re recor d ed t hroug h ot h er compr eh ensive in come d ire ct ly in a h ed g ing
rese rve. W it h r espe ct t o t h e non - effective par t , ch an ges in t h e fair va lu e are recog n iz ed in the
st at emen t of in come. Th e amou n t accumu lat ed in th e ca pit al reserve is recla ssified a nd in clu ded in
t he st at eme nt of in come in t he sa me period as t h e hed ged cash flows a ffe ct ed profit or loss u n der
t he sa me lin e it em in the statement of in come as t he hedg ed it em. W he re th e h ed ge d it em is a n on-
fin a ncia l asse t , t h e amou nt recorde d in t h e ca pital rese rve is a d d ed t o t he b ook valu e of t h e asset,
u pon re cog nit ion t h ere of. If t h e hed g in g in st ru men t n o lon g er mee t s t h e crit er ia for h edge
accou n t in g , expires or is sold , t er min at ed or exercised , th en hedg e accou ntin g is d iscon tin ue d. The
cu mu la t ive g ain or loss re main s in ot h er compr eh en sive in come and is pre se n t ed in t h e h ed g ing
rese rve in equ it y u n t il t he forecast ed t ra nsa ction occu rs or is no lon g er expe ct ed t o occu r and then
is recla ssified t o t h e statements of in come .
4. C P I -lin ked assets a n d l iab ilities n ot measu re d at fa ir v alue
Th e valu e of in d ex- lin ked finan cial a sse t s a n d liab ilit ies, wh ich ar e not measu r ed at fair valu e, is
re-mea su red every per iod in accor dance with t he actua l in crea se/ decre ase in t he CPI.
5. S h ar e ca pit al
Ord in ar y shares are cla ssified as equ it y. In cr emen t al cost s d ire ct ly a t t rib u table t o t h e issu e of
ord in ar y sh ares an d shar e opt ion s are recog nized as a d edu ction from equ ity, n et of a ny t a x effe cts.
In cremen tal cost s d ir ectly at tribut ab le t o an expect ed is su an ce of an equ it y in st rume nt ar e d ed ucted
from t h e equ it y u pon the in it ial recog nition of t h e equ ity in strument s or are amortized as fin ancing
expen ses in t h e st atement of in come when the issu an ce is n o longe r expected to t ake place.
Tr easu r y sh are s - wh en sh ares r ecog n ized as equ it y are r epu rch ase d b y t he Grou p, t h e amou n t of
t he con sid era t ion paid , which in clu d es d ir ect ly at t r ib u tab le cost s, n et of an y t ax effect s, is
recog n iz ed as a dedu ction from equ ity. W h en treasury share s a re sold or re issue d su bs eque ntly, the
amou n t re ceived is recog nize d as an increase in equ ity, and the re su lting surplu s on t he tran saction
is ca rried t o sh are pre miu m, whe reas a d eficit on t he t ran saction is d e d ucted from ret ained e arnin gs.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
17 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
D. Property, plant and equipment
6. R e c ogn ition a nd me asureme nt
Propert y, pla nt an d equ ipmen t in t h e con solid at e d st at emen ts ar e presen t ed at cost le ss
accu mu lat ed d epre ciation and provision for impa irment . Th e cost in clu d e s expen ses t h at ca n b e
d ir ect ly at t rib uted t o t h e acquisit ion of t h e asset after d ed uctin g t he r ela ted amou nt s of g ove rn ment
gran t s. Th e cost of a sse t s t ha t wer e self -con st ruct ed in clu des t h e cost of t h e mat e rials a nd d irect
lab or, as well as an y ad d it ion al cost s t h at are d ir ectly at t r ibut able t o b rin g in g t he a sse t t o the
requ ired posit ion an d con dit ion so t ha t it will b e ab le t o fu nction as mana ge me nt int en ded, a s well
as an est ima t e of t h e costs t o d isman tle , remove an d restore, wh ere t here is an ob lig ation for such,
an d capit alized b orrowin g cost s.
Gain s a n d losse s on d isposa l of a prope rt y, pla nt or equ ipmen t it em are d et ermin ed b y compar ing
t he proce ed s fr om d isposa l of t h e carr yin g amou n t of t h e asset a nd are re cog nized n et in t he in come
st at emen t.
7. S u b sequ en t Co sts ( after in itia l re cognition )
Th e cost of r eplacin g pa rt of a n it em of prope rt y, plan t and equipme nt an d ot her su b sequ en t costs
are r ecog n ize d a s pa rt of t h e b ook valu e of t h e it e m, if it is e xpe ct ed t h at t he fu t ure e con omic
b en efit in herent t herein will flow t o I CL an d t h at it s cost can b e reliably measu red. T he b ook value
of t h e par t t h at was repla ced is d ere cog n ized. Rou t in e main t en an ce cost s are ch arg ed t o t he
st at emen t of in come as in cu rred.
8. D e precia tion
De pre ciat ion is a syst emat ic allocat ion of t h e d epre ciab le amou n t of an asset ove r it s est imated
u sefu l life . Th e d e pre ciab le amou n t is t h e cost of t h e asse t , or ot h er amou n t su b st it uted for cost ,
less it s resid u a l valu e. De preciat ion of an it em of propert y, pla n t a nd e qu ipment b e gins wh en the
asset is a va ilab le for it s in t ended u se , th at is, when it h as re ache d th e place an d con dit ion re qu ired
in or d er t h at it can b e u sed in th e ma n ne r con templa t ed for it b y Mana gement .
De pre ciat ion is r ecord ed in t he sta tement of in come a ccordin g t o t he straig h t -lin e met hod over the
est ima t ed u sefu l life of ea ch sig n ifica n t compon en t of t he prope rt y, plan t an d equ ipmen t it e ms,
sin ce t h is most closely refle cts t he expe cte d pa tte rn of con sumpt ion of the fut ur e economic b enefits
emb od ied in t h e a sset . O wned la nd is n ot d epr eciated .
Th e est imat e d u sefu l life is as follows:
In Years
B u ild in g s
15 - 30
Te ch nica l equ ipmen t an d mach inery ( 1)
5 - 25
Dikes a nd evapor at in g pon d s ( 2)
20 - 40
Ot h er
3 - 10
( 1) Main ly 25 ye ars
( 2) Main ly 40 year s
Notes to the Consolidated Financial Statements as at December 31, 2020
18 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
D. Property, plant and equipment (cont'd)
3. D e pre ciation (con t'd)
Th e Compan y r evie ws, a t lea st at t h e en d of ever y re port in g year, t he e st imat es reg ard ing the
d eprecia t ion met hod , u sefu l lives an d t h e r esidu al va lu e , and a dju sts t hem if a ppropriat e . Over the
ye ar s, t he Compa ny ha s su cceed e d t o ext e n d t he u se fu l lives of pa rt of pr opert y, plan t and
equ ipmen t it e ms b eyon d t he orig in al est imat ed u se fu l life , as a resu lt of in vest men t s t h ere in and
ot h er cu rre nt, on g oin g main tena nce th ereof.
E. Intangible Assets
1. G o o d will
Good will re cord e d con sequ en t t o t h e acqu isit ion of su b sid ia rie s is pr esen t e d at cost le ss
accu mu lat ed impairment ch arg es, u n de r in tang ible assets.
2. C o st s o f e xpl ora tion an d evalua tion of resou rces
Cost s in cu rr ed in re spect of explor at ion of r esou r ces an d t h e evalu ation t hereof are r ecogn ized at
cost less a provision for impairment , u n d er in t an gib le asset s. The cost in clu d e s, int er -alia , cost s of
performin g research st u die s, d rillin g cost s and a ctivit ies in con nection wit h assessin g t he t echnical
fea sib ilit y wit h respect to t h e comme rcial viab ilit y of ext ractin g t he r esou r ces.
3. R e sea rch and developmen t
Expen d it u res for r esearch act ivit ies ar e e xpen sed as in cu r red . Developmen t expen d it u res are
recog n iz ed as int angib le a sse t on ly if d e ve lopmen t cost s ca n b e mea s u re d reliably, t h e prod uct or
proce ss is t ech nically a nd commercially fe asib le, fu tur e econ omic b en efit s are prob ab le, a nd ICL has
t he in t en tion a nd su fficient r esou rces t o complet e developmen t and to u se or sell t he asset .
4. O t h er in tan gib le a sset s
Ot h er in t an gib le assets wit h a defined u seful life, a re measured accor din g t o cost le ss accu mulated
amor t iza t ion a n d accumu lat ed losses from impa ir ment. I n tan gib le assets wit h in defin ite u sefu l lives
are mea su red a ccord ing to cost less accu mu lat ed losses f rom impairmen t .
5. S u bsequ en t c osts
Su b sequ ent cost s are recog nize d a s an in t an g ib le a sset on ly whe n th ey in crease t h e fu t ure
econ omic b en e fit in heren t in th e asse t for wh ich th ey were incu rred . A ll ot her cost s a re cha rged to
t he st at emen t of in come a s in cu rred.
6. A m o r tiz ati on
Amort izat ion is a syst e mat ic allocat ion of th e amort iza b le amou n t of an in t a ngib le asse t over it s
u sefu l life . Th e amort iza b le amou n t is t h e cost of th e asse t less it s re sid u a l valu e. A mor t iz at ion is
recor d ed in th e st a tement of in come a ccording to t he st r aight-lin e method fr om t he da te th e a ssets
are a vailab le for use, over t h e est imat e d u se ful econ omic life of t h e in t ang ible asse t s, except for
cu st ome r relat ion sh ips an d g eolog ical su rveys, which are amort ize d a ccord in g t o t he rat e of
con su mpt ion of t h e econ omic b e n efit s e xpe cte d from t he a sset b a sed on cash flow for ecast s.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
19 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
E. Intangible Assets (cont'd)
6. A m o r tiz ati on ( con t'd )
Good will a nd in t ang ible asset s ha vin g an ind efin ite lifespa n a re not amort ize d on a syste ma tic basis
b u t , ra t h er, are exa min ed at least on ce a yea r for impairmen t in valu e. I n t er nally g en erated
in t an g ib le assets are not syst emat ically amor t iz ed as lon g as t hey ar e n ot availab le for u se, i.e. they
are n ot ye t on sit e or in w orkin g con d it ion for t h eir in t en d ed u se. A ccor d in g ly, t h ese in t an gible
asset s, su ch as d evelopmen t cost s, are t est ed for impairme nt at le ast on ce a year, u nt il su ch d ate as
t hey a re ava ilab le for u se.
Th e est imat e d u sefu l life is as follows:
In Years
Con cession s and min in g rig hts – over t h e ba la nce of t he rig hts g ran ted to the
compan ies
Tr ad emarks
15 - 20
Te ch nolog y / pat ent s
7 - 20
Cu st omer re lat ionships
15 - 25
Explora t ion an d e va lu ation asset s
8 - 10
Compu t er applicat ions
3 - 10
ICL pe riod ica lly e xamin e s t h e est imat e d u se fu l life of an in t an g ib le asset t h at is n ot a mort ized , at
least on ce a year , in ord e r t o det ermin e if event s an d circu mst a nces con t in u e t o su pport t he
d et e rmin ation th at the in tan gib le a sse t has a n in d efin ite life.
Deferr ed expen ses in r espe ct of g eolog ical su r veys ar e amor t ize d ove r t heir u se ful life b a se d on a
geologica l est imat e of t h e amoun t of t h e ma t erial t hat will b e prod uced fr om t h e min in g sit e.
Th e est imat es regardin g t he amort iza tion me th od a nd u sefu l life are re viewed, at a min imu m, at the
en d of ever y re port in g yea r an d ar e ad ju st ed wh ere n ecessary. I CL assesse s t h e u sefu l life of the
cu st ome r relat ion sh ips on an on goin g b asis, b ase d on an a na lysis of all th e re le vant fact ors and
evid e n ce, con sid e ring the experience t h e Compan y h as wit h r espect to r ecu rring orders a nd churn
rat e s a nd con sid erin g t h e fu t ur e econ omic b e ne fit s e xpect ed t o flow t o t h e Compan y from t h ese
cu st ome r relat ion ships.
F. Inventories
In ven t ories ar e me asu red at t h e lower of cost or n et re aliza b le valu e. Th e cost of t he in ve n t ories
in clu d e s t h e cost s of pu rcha sin g t he in ven t ories an d b rin gin g t he m t o t h eir pre se nt loca t ion and
con d it ion . In t h e ca se of work in process an d fin ish ed g ood s, t he cost in clu d es t h e pr opor t ion ate
part of t h e man ufact uring overh ead base d on normal capacit y. Net r ealizab le valu e is t he estimated
se lling price in t h e ord inary cou r se of b usin ess, aft er dedu ction of t he estimated cost of complet ion
an d t h e estimat ed cost s r equ ired t o exe cute t he sale.
Th e cost of t h e in ven t ories of raw a n d a u xilia ry ma t erials, main t en an ce mat er ia ls, fin ishe d g oods
an d g ood s in pr oce ss, is d et ermin ed mainly a ccord ing to t he “movin g average ” meth od.
Notes to the Consolidated Financial Statements as at December 31, 2020
20 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
F. Inventories (cont'd)
If t h e b e ne fit from st r ippin g cost s ( cost s of removin g wast e prod u ce d a s par t of a min e's min in g
act ivit ie s d u r ing its produ ction sta ge ) is a ttr ibu tab le t o inve ntor ies, t he Company accou nts for these
st rippin g cost s as in ven t ories. In a case whe re t h e b ene fit is improved access t o t h e qu arr y, t he
Compan y recog n iz es t h e cost s as a non -current addit ion t o t he a sse t, provid e d t h e cr it e ria pr esented
in IF RI C 20 ar e me t . I n vent ories which are expect ed t o b e sold in a period of mor e t h an 12 mon ths
from t h e re port in g date are pr esented a s n on -curren t in ventor ie s, as pa rt of n on - cur rent assets.
G. Capitalization of Borrowing Costs
A qu alifyin g a sse t is an a sset t h at re qu ires a sig n ifican t per iod of t ime t o pre par e for it s in t en ded
u se or sale. Specific and non -spe cific b or rowin g cost s are capit aliz ed to qu alifyin g assets d uring the
period requ ired for th eir complet ion an d esta blish ment , u ntil t h e time wh en they are rea dy for their
in t en d e d u se . Ot h er b orr owin g cost s ar e charg ed t o "fin an cin g e xpen se s" in t h e st at ement of
in come as in cu rr ed .
H. Impairment
1. N o n - d erivative Financial a sse ts
Provision for e xpect ed cred it losses in re spect of a fin an cial asset at amortize d cost , in clud ing trade
receiva b le s, will b e mea su red at a n amou n t e qu a l t o t h e fu ll lifet ime of e xpect ed cr ed it losses.
Expect ed cr ed it losses are a prob ab ilit y - weig h ted est imat e of cr ed it losses. W it h respe ct t o ot her
d eb t in st rument s, provision for expect ed credit losse s will b e mea su red a t a n a mou nt equ al t o 12-
mon t h expect ed cr ed it losse s, u n le ss t h eir cre d it risk h as in cr eased sig nifica n t ly sin ce in it ial
recog n it ion . Pr ovision for su ch losses in r espe ct of a fin an cial asset at amor t ize d cost , will b e
presen t ed ne t of t h e g ross b ook valu e of t h e asset.
2. N o n - fin an cial asset s
In every repor t in g pe riod, an e xamin ation is mad e wit h respect to wh et he r t h ere are sig n s in dicating
impa ir men t in t h e valu e of I CL’s non -fina ncial a sset s, oth er th an inve ntor ies a n d deferred t ax assets.
If su ch sig n s exist , t h e est ima t ed re cove rable amou n t of t he a sset is ca lcu lat ed . I CL con d u ct s an
an n u al e xamin ation , on th e same date, of t he recoverable amou nt of g oodwill an d in ta n gib le assets
wit h in d efin it e u sefu l lives or t h ose t h at a re n ot a va ilable for u se – or mor e fre qu e nt ly if t he re are
in d icat ion s of impairmen t .
Asse t s t ha t can not b e t este d in d ivid ually a re g rouped t og e ther in t o t he sma llest g rou p of a sse t s t hat
gen era te cash in flows fr om con t in u in g u se t h at are larg e ly in d epe nd en t of t h e cash in flows of ot h er
asset s or g rou ps of asset s ( t he “cash- ge neratin g u nit ”).
Th e re cove rable a mou nt of an asset or a cash -g en erat ing un it is t he hig her of it s value in use or the
net sellin g price ( fair valu e less cost of d isposal). W h en d e t er min ing t he value in u se , I CL d iscounts
t he an t icipa t ed fu ture cash flows accor d in g t o a n after- tax d iscou n t rate t hat re fle cts t he evaluations
of t h e market 's pa rticipan ts re gard ing th e t ime valu e of mon ey a n d th e specific r isks re lat ing to the
asset or t o t h e cash - g en er at ing u n it , in re spect of which t h e fu t u re cash flows expect ed t o d er ive
from t h e asse t or t h e cash- gene ratin g u nit were n ot a d justed.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
21 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
H. Impairment (cont'd)
2. N o n - fin an cial asset s (con t'd)
Asset s of t h e Compan y's h ea d qu a rte rs an d ad min ist rative facilit ies d o n ot pr od u ce separat e ca sh
flows and t h ey serve mor e t h an on e ca sh - g en er ating u nit . Su ch a sset s are allocat ed t o cash -
gen era tin g u n its on a reason able and con sist en t b asis an d ar e exa min ed for impairmen t as part of
t he e xamin a t ion of impairment of t h e ca sh -g en era ting u nits t o wh ich t hey are allocate d.
Impairmen t losses are re cog nize d if t he carryin g a mou n t of an asse t or ca sh -ge neratin g u n it e xceeds
it s est imat ed recovera b le amou n t a nd ar e recog n ized in t h e st at e ment of in come . F or ope rat ing
se g ment s t ha t in clu de g ood will, an impa irment loss is r ecog n ized wh en t h e b ook valu e of t he
operat in g se g ment exceeds it s recove r ab le va lu e . Impa ir ment losses in re spect of an operat ing
se g ment a re allocat ed first t o red u ce t h e carryin g a mou n t of it s g ood will an d t h en t o r ed u ce the
car ryin g amou nts of t h e ot her a sse ts of t h at seg men t on a proport ion at e b a sis.
An impairmen t loss is a llocat ed b e t ween t he own er s of th e Compan y and t h e n on - con t rolling
in t er est s on t he sa me b asis t h at t he profit or loss is a llocat e d .
A loss from impairmen t in va lu e of g ood will recog n ized in pr eviou s per iod s is n ot r eversib le
prospe ct ively. A loss from impa irment of ot he r assets r ecogn ized in pr eviou s periods is e xamin ed in
fu t u re per iod s t o asse ss whe t her t h ere are sig n s in dicatin g t h at t hese losses have d ecreased or no
lon g er exist . A loss from impa irment of valu e is reve rsed if t h ere is a cha nge in t he est ima tes u sed
t o d e t ermin e t h e re cove rab le va lu e, on ly if t he b ook valu e of t h e asse t , aft er r eversal of t he loss from
impa ir men t of valu e, d oes n ot e xcee d t h e b ook valu e, aft er d ed u ct ion of d epr eciat ion or
amor t iza t ion , t h at wou ld h ave b een d etermin ed if t h e loss fr om impa irmen t of valu e h ad n ot been
recog n iz ed .
I. Employee Benefits
ICL h as se ve ral post -e mploymen t b en efit plan s. T he pla n s are fu nd ed par t ly b y d e posit s wit h
in su ra nce compa nies, fin an cial in st it ution s or fu n ds mana ged b y a t ru stee. T he pla n s are classified
as d efin ed con t rib ution plan s and a s d efin ed be ne fit plan s.
1. D e fin ed con tr ibu tion plans
A post -e mploymen t b en e fit plan u n der wh ich ICL pays fixed con t rib ut ions in t o a separ at e en tit y and
ha s n o leg a l or con st ructive ob lig at ion to pa y fu r th er a mou nt s.
ICL’s ob lig at ion to d eposit in a de fined con trib ution pla n is recorded as a n expe nse in the state ment
of income in t he per iod s in which t he employee s provid ed t he services.
Ret ire me nt benefit plan s t hat a re n ot d efin ed con trib ution pla ns:
ICL’s n et ob lig at ion is calcu lat ed for ea ch plan separ ate ly, b y est imat in g t h e fu ture amou nt of the
b en efit t o wh ich an employee will b e entit led as compen sation for se rvices in t h e cu r rent a nd past
period s. T h e b en efit is pre sente d at pre sent valu e a fte r deductin g t he fair value of t he pla n's a sse ts.
Th e d iscou n t rate for I CL compa n ies ope rat in g in cou n tries h avin g a “d eep” ma rket wh erein t here
is a h ig h level of t radin g in corporate bon ds is in accor dance with the yield on th e corpor ate bonds,
in clu d in g I srael.
Notes to the Consolidated Financial Statements as at December 31, 2020
22 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
I. Employee Benefits (cont'd)
1 . D efin ed con tribu tion plan s (con t'd)
Th e d iscou n t rate for I CL compan ie s ope rat in g in cou n trie s n ot h avin g a mar ket wherein t her e is a
hig h level of t rad in g in cor porat e b on d s, a s st at e d a b ove, is in a ccord an ce wit h t he yield on
governmen t b on ds – t h e cu r rency an d re d empt ion d a te of wh ich a re similar t o t he t erms b in d ing
ICL. Th e calcu lat ion s are performed by a qu alified a ct ua ry u sin g t he proje cte d u nit cred it met hod
2. D e fin ed b en efit plan s
W he n a n et asset is cre at ed for I CL, t h e asse t is r ecog n ize d u p t o t h e ne t pre sen t va lu e of t he
availa b le econ omic b en e fit s in t he form of a re fu n d fr om t h e plan or b y a r edu ction in fu ture d eposits
t o t h e plan . A n econ omic b en efit in t h e form of a re fu n d from t h e pla n or a r ed u ct ion in fu t ure
d eposit s will b e con sid ered availa b le when it ca n b e re alize d in t h e life t ime of t h e plan or a ft er
se t t lemen t of t h e ob ligation .
Th e movemen t in t h e n et liab ilit y in respect of a d efin ed b en efit pla n t h at is recog n ized in e ve ry
accou n t in g per iod in t he st a t emen t of in come is comprised of t h e followin g : (1) Cu rre nt se rvice
cost s – t h e in crea se in t he pre se nt va lu e of t he liab ilit y d erivin g from e mployee s’ ser vice in t he
cu rr en t pe riod ; ( 2) T h e n et fin an cing in come (expense ) is calcu lated b y mu ltiplyin g t he n et d efined
b en efit liab ilit y ( asse t ) b y t h e d iscou n t r at e u sed for measu r in g t he d e fin ed b enefit liab ilit y, a s
d et e rmin ed at the begin nin g of t he annual reportin g pe riod ; (3) Exch ange rat e d ifferen ces; ( 4) Past
se rvice cost s a n d plan r ed u ct ion – t he chan g e in t h e pr esen t valu e of t he liab ilit y in t he cu rrent
period as a re su lt of a ch ang e in post - employmen t b en efit s attribu ted t o prior period s.
Th e d ifference, a s a t t he d at e of t h e re port , b etwee n t he n et liab ility at t h e b eg inn ing of t h e year
plu s t he movemen t in t he ne t liabilit y a s d eta iled a bove , an d the actu ar ial liabilit y less t he fair va lue
of t h e fu n d asse t s a t t h e e nd of t h e yea r, r eflect s t he b alance of t he a ct ua rial in come or e xp en ses
recog n iz ed in ot h er compreh en sive in come an d is r ecord ed in ret a in ed e arn ing s. Th e cu r rent
in t er est cost s a n d r et ur n on plan asset s are r ecog n ize d as e xpe nse s an d in t erest in come in t he
respect ive fin an cin g cat eg ory. Cost s in respect of past ser vice s a re recog n ized immed iat ely and
wit h ou t re ference t o whet her t he b en efit s h ave vest ed.
3. O t h er lon g-term em ployee benefits
Some of t he Company’s employee s ar e en t it le d t o ot h er lon g -term b en efits t h at d o n ot relat e to a
post - ret ireme nt b en efit plan . A ct u aria l g ain s and losse s a re re cord ed d ire ct ly t o t h e st at e me nt of
in come in t h e period in wh ich t h ey ar ise.
4. E a rly R etirement Pay
Ear ly ret ire me nt pay is r ecog n ized a s an expense a nd a s a liabilit y whe n I CL h as clearly u n dert aken
t o pa y it , wit h ou t a ny re ason ab le cha nce of cancella t ion , in respe ct of t e rmin at ion of employees,
b efore t he y r each t he cu st omary age of ret iremen t accor din g t o a formal, d et a iled plan . T h e b ene fits
provid e d t o employees u pon volu n t ary re t irement are ch arg ed when ICL proposes t h e pla n t o the
employe es, it is expect ed t h at t h e proposal will b e accept ed , an d it is possib le t o reliab ly e st imate
t he n u mb e r of employe es t h at will acce pt t h e proposal. I f b e ne fits ar e pa ya b le more t h an 12 mon ths
aft e r t h e report ing period , t hen t he y ar e d iscou nted t o t heir presen t valu e. Th e d iscou nt r ate is the
yield at t h e report in g d a t e on h ig h -qu alit y, in d ex- lin ked corporat e d ebe nt ures, t h e d e nomin ated
cu rr en cy of wh ich is t h e paymen t cu r rency, an d t hat have ma t urity d ates approximat ing t he t erms
of I CL’s ob lig at ion s.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
23 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
I. Employee Benefits (cont'd)
5. S h ort -term be nefits
Ob lig at ion s for short -t erm employe e b en efit s are mea su r ed on a n on - d iscou n t ed b asis, an d the
expen se is r ecord e d at the t ime th e se rvice is provid ed or u pon th e a ctual a bsen ce of t he e mployee
wh en t h e b ene fit is n ot accumu lated (su ch a s mat ernit y le ave).
A provision for sh or t -t erm employee b ene fit s in r espect of ca sh b on u ses or profit -sh arin g plan s is
recog n iz ed for t he amou nt expected t o b e paid, wh en ICL h as a cu rren t le gal or implie d ob lig a tion
an d it is possib le t o reliab ly e st imat e t h e ob lig at ion.
Cla ssifica t ion of employee b en e fit s is d et ermin ed b ased on ICL's expect at ion wit h respect t o fu ll
u t ilizat ion of t he benefits a nd not b ased on th e d at e on which th e employee is e nt itled to u tilize the
b en efit .
6. S h a re-based compen sat ion
Th e fair valu e on t he gr an t d ate of sh are - b ased compen sat ion awards g r an ted t o employe es is
recog n iz ed as a salary e xpen se , wit h a cor respon d in g in crease in e qu it y, over t h e period t h at the
employe es b ecome u n con d it ion ally en t itled t o t h e award s. The a mou n t re cognize d as an ex pense
in respect of sh are -b ased compen sat ion awa rd s t ha t a re con d it ion al u pon meet in g vest ing
con d it ion s t h at a re se rvice con d ition s an d n on -market performan ce con d ition s, is ad ju st ed t o r eflect
t he n u mb er of awar ds t hat ar e expect ed to vest .
J. Provisions
A provision is recog n ized wh en I CL ha s a prese nt leg al or implie d ob lig at ion , a s t h e re su lt of a n
even t t h at occu r red in t he past , t ha t can b e re liab ly est ima t ed , and whe n it is expect ed t h at an
ou t flow of econ omic b en efit s will b e re qu ire d in ord e r to set t le t h e ob lig ation . T he provision s are
ma d e b y mean s of d iscou n tin g t he fu tur e cash flows a t a pre -tax in ter est rat e r eflect ing th e cu rrent
ma rket est imat e s of t he t ime va lu e of mon ey an d t he risks spe cific t o t he lia b ilit y, wit h out
con sid erin g t h e Compan y’s cr ed it risk. Th e b ook valu e of t h e pr ovision is ad ju st ed in e ve ry period
in or d er to r eflect t he amou nt of t ime t hat h as elapsed an d is r ecog niz ed as fin ancin g expen se s. In
rar e case s whe re it is not possib le t o est imat e t h e ou t come of a pot ent ial liab ilit y, n o pr ovision is
recor d ed in t he fin an cial st atements.
ICL re cog n izes a r eimb u r se me nt asset if, an d on ly if, it is virt u ally ce rt ain t ha t t h e reimb urse ment
will b e receive d if t h e Compan y se t t le s t h e ob lig at ion . T he amou n t r ecog n ize d in re spe ct of t he
reimb u rse ment d oe s not exceed the amou n t of t h e provision .
( 1) W a rrant y
A pr ovision for wa rrant y is re cog n ized wh en t h e prod u cts or services, in r espe ct of which t he
war ran t y is provid e d , ar e sold . T h e pr ovision is b ased on h ist or ical d a t a an d on a weig ht in g of all
possib le ou t comes accord in g t o t heir pr obabilit y of occu rren ce.
Notes to the Consolidated Financial Statements as at December 31, 2020
24 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
J. Provisions (cont'd)
( 2) P r o vision for env iron ment al c osts
ICL recog n ize s a provision for an exist in g ob lig ation for pr even tion of en vir on men ta l pollu t ion and
an t icipat ed provision s for cost s relatin g t o envir on mental r est oration st emmin g from past a ctivit ies.
Cost s for pr even t in g environ me nt al pollu t ion t h at in cre as e t h e life e xpect an cy or efficien cy of a
facilit y are capit a lized t o t he cost of t h e propert y, plan t an d equ ipmen t an d a re depre ciated
accor d in g t o t h e u sua l d epreciation r ate s u se d b y I CL.
( 3) R e st ructuring
A provision for rest ru ct urin g is re cog nized whe n I CL has approved a d e t aile d an d formal
rest r u ct urin g plan , and t h e restruct urin g e it h er h as commen ce d or h as b ee n an n oun ced pu b licly.
Th e pr ovision in clu d e s d ire ct expen d it u res ca u se d b y th e rest ru ct uring an d ne cessa ry for t he
rest r u ct urin g, an d which are n ot a ssociat ed with t he con tin uing a ctivit ies of I CL.
( 4) S i t e restorat ion
A provision for re clamat ion and r est or ation of I CL's sit es is re cog n ized whe n t h e Company h as a
lega l ob lig at ion which cou ld a rise, a mon g ot hers, fr om en vironmen tal reg ulation s .
( 5) L e g al claim s
A provision for le g al claims is recog n ized whe n I CL has a pr esen t lega l or con structive ob lig ation as
a re su lt of an event t ha t occu r red in t h e past , if it is more like ly t h an n ot t h at an ou tflow of e con omic
resou rces will b e re qu ire d t o sett le t he ob lig at ion a nd it ca n b e reliably est imated.
K. Revenue Recognition
I d e ntifyin g a c ont ract
ICL accou n t s for a con t ra ct wit h a cu st omer on ly whe n t h e followin g con d it ion s are met : ( a) T he
part ie s t o t he con t ra ct ha ve a pprove d t h e con t ract an d t he y ar e commit t ed to sat isfyin g t he
ob ligat ion s a t t ribut able t o t h em; ( b ) I CL ca n id entify t h e rig ht s of each par t y in relat ion t o t he goods
t hat will b e t ran sfe rre d; ( c) ICL can id e n tify t he pa ymen t t erms for t h e g ood s t h at will b e t r ansfe rred;
( d ) T h e con t ract has a commercia l su b st an ce ( i.e . t he r isk, t imin g a nd a mou nt of t h e en tity’s fu ture
cash flows ar e expect ed t o ch an g e as a resu lt of t h e con t ract ); an d ( e) I t is prob a b le t h at the
con sid erat ion , t o which I CL is en t it led t o in exch an g e for t h e g ood s t ran sfe rred t o t h e cu st omer,
will b e collect ed .
For t h e pu r pose of clau se ( e ) ab ove , IC L ta kes in t o con sid era t ion it s past exper ience wit h t he
cu st ome r, t he finan cial st abilit y in formation over t he cu stomer, t h e st atu s an d exist en ce of su fficient
collat e ral an d t he percent ag e of ad vances re ceived.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
25 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
K. Revenue Recognition (cont'd)
I d e ntifyin g p e rformance ob ligation s
ICL is a glob al specia lt y min era ls an d ch emicals compan y eng age d in t he sale of variou s good s
prod u ce d in it s d iffer en t se gments of oper at ion . I CL's con t r act s primarily d e rive d from a sin g le
performan ce ob lig at ion t o d e live r th e produ ct specified in t he con tr act. For ad dit ion al in formation
ab ou t t h e Compan y's prod uct s, se e not e 5 – Oper at ing Segment s.
D e t ermining th e tr an sact ion price
ICL's t ra nsa ction price is t h e a mou n t of t h e con sid e rat ion specified in t h e con t ract wit h the
cu st ome r, wh ich it expect s t o b e en t itled in excha nge for t he g ood s pr omise d t o t h e cu stome r, ot her
t han a mou n ts collect ed for t hird par ties. T he variab le con sid eration s at ICL, wh ich are main ly t rade
d iscou n t s, commercia l ret u rns an d volu me re b at es, ha ve n o mat eria l impa ct on t he C ompa ny's
fin a ncia l st at emen ts.
S a t isfaction of p erformance ob lig ati on
Revenu e is r ecog n ize d at t h e point in t ime, wh en t h e Compan y t ran sfers con t rol over promised
good s t o t h e cu stomer . The t ransfer of con t rol over g oods t o a custome r gene rally t a kes place upon
sh ipmen t or wh en accept ed by t he cu stomer , as provid ed for in t he sales con tract .
P a yment t erms
ICL h as variou s paymen t te rms wh ich ar e alig ned wit h t he a ccept ab le comme rcial con dit ion s in the
relevant mar ket s. ICL's policy is to en g ag e in ag r eemen ts wit h pa yment t e rms n ot exceed ing one
ye ar, an d applies t he pra ct ica l exped ien t inclu d ed in t he st and ard t o n ot se par at e a sig n ifi cant
fin a ncin g compon en t wh ere the difference b etwe en t he time of r ece ivin g paymen t a nd t he t ime of
t ran sferr ing th e g ood s t o t he cust ome r is one ye ar or le ss.
L. Government grants
Gove rn me n t g ra n ts are r ecog n ized in it ially at fa ir valu e whe n t h er e is rea son ab le assu r an ce t hat
t hey will b e received , an d t h e Grou p will comply wit h t he con d it ion s associa t ed wit h t h e g rant.
Uncon d it ion al g overnment g r ant s are recog nized wh en t h e Gr ou p is en t it led t o receive t he m.
Gra nt s t h at compe n sa t e t h e Grou p for expen s e s in cu rred ar e pr esen t ed as a d ed u ct ion fr om t he
corre spon d in g expen se. Gra n ts t hat compe nsa t e t he Gr ou p for t h e cost of a n asse t a re prese nted
as a d ed u ction from t he rela ted asset s an d are recog nized in pr ofit or loss on a syst ematic b asis over
t he u se fu l life of t h e asse t.
M. Leases
D e t ermining wh et he r an arr an gement c ont ain s a lea se
On t he in ce pt ion d at e of t h e lea se , I CL d etermines whe ther the a rran gement is a lease or con t ains
a le ase, wh ile e xa min in g if it con ve ys t h e rig ht t o con t rol t h e u se of an id en tified asset for a per iod
of time in excha nge for con sid era t ion . I n it s assessmen t of wh et h er a n ar ran ge ment con veys the
rig ht t o con t rol t h e u se of an id en tified a sse t, I CL assesses whe t her it has t he followin g t wo r ights
t hroug h ou t t he lea se t er m: (a) t h e rig ht t o ob t ain su b stant ially a ll t h e econ omic b en e fit s from u se
of th e ident ified a sset ; a nd (b ) t h e rig ht t o d irect t he id en tified a sset’s u se .
Notes to the Consolidated Financial Statements as at December 31, 2020
26 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
M. Leases (cont'd)
D e t ermining wh et he r an arran gement c ont ain s a lease (con t'd)
For lea se con t r act s t h at con t ain n on -le ase compon en t s, su ch as ser vice s or main t en an ce, t ha t are
relat ed t o a lea se compon en t , ICL elected t o accou n t for t h e con tract as a sin gle lease compon ent
wit h ou t separ atin g t he compon en ts.
L e a se d as sets and l ease lia bi litie s:
Con t r act s t hat awa rd I CL con trol ove r t he u se of a lease d a sset for a period of t ime in exch ange for
con sid erat ion , are a ccoun ted for a s lease s. Upon in it ial recog nit ion I CL r ecog niz es a liab ilit y at the
presen t valu e of t h e b a lance of fu t u re lea se pa ymen t s, an d con cu r rent ly re cog nize s a r ig h t -of-use
asset at t h e same amou nt of t he lease liab ility, ad just ed for any prepaid or accrued lease payments,
plu s in it ia l d irect cost s in cu r red in re spect of t h e leas e. Su bseque nt t o initial re cog nition , t h e right-
of- u se asse t is a ccou n t ed for u sin g t h e cost mod e l an d d eprecia t ed over t h e sh or t er of t h e le ase
t erm or u sefu l life of t h e asse t.
ICL h as elect ed to apply t he pr actical expedient b y which short- term leases of u p to on e year and/or
leases in wh ich t h e u n d erlyin g asse t ha s a low va lu e, are r ecog nized in profit or loss on a st r aig ht -
lin e b asis, over t h e lea se t e rm, wit h ou t recog nizin g a n asse t a nd / or lia b ilit y in t h e st a t emen t of
fin a ncia l posit ion .
Th e lease t e rm is t he n on - can cellable per iod of t h e lease plu s period s cover ed b y an ext e nsion or
t ermin at ion opt ion if it is r eason ab ly cert ain t h at t he lesse e will or will n ot exercise t he opt ion,
respect ively.
Va riab le lease paymen t s t h at d epend on an in d e x or a rat e, are in it ially mea su red u sin g t he index
or ra t e exist in g at t h e comme ncemen t of t h e lea se an d are in clu d ed in t he measu rement of t he le ase
liab ilit y. W he n t he cash flows of fu t ure lease pa yments ch an ge as t he r esu lt of a chan ge in an index
or a rat e, t h e b alance of t h e liab ilit y is ad ju st ed again st t he rig ht -of- use asse t. Ot he r va riab le lease
paymen t s t h at ar e not in clud ed in t he mea sureme nt of t h e lea se lia bilit y are r ecogn ized in pr ofit or
loss in t he per iod in wh ich t he event or con dit ion t ha t t rigg ers payment occu rs.
Aft er lease comme n cemen t , a r ig h t -of-u se asse t is mea su red on a cost b asis less a ccu mu lated
d eprecia t ion a nd accu mulate d impairmen t losse s. Depr eciation is ca lcula ted on a st ra igh t -lin e basis
over t h e u sefu l life or con t ractu al le ase period, wh iche ver ea rlier.
S a le a nd leaseba ck:
ICL applies t h e requ irements of I FRS 15 t o d et ermine wh eth er an asse t t ransfer is a ccou n t ed for as
a sa le. If an asse t t r an sfer sa t isfies t h e re qu iremen ts of I FRS 15 t o b e accou n t ed for a s a sale, I CL
me asu re s t h e r ig h t-of- use asset arisin g fr om t h e le aseback a t t he pr opor t ion of t h e pre viou s carr ying
amou n t t h at relat es t o th e righ t of use retain ed b y ICL. A ccord ing ly, ICL on ly recog nize s th e amount
of g ain or loss t h at re la tes to t h e rig ht s transferr ed .
If t h e asse t t r an sfer d oes n ot sa t isfy t h e requir emen ts of IF RS 15 t o b e accou n t ed for a s a sale, t he
t ran sa ct ion is a ccou nted for as a fin an cing tran saction . I nsofar as I CL is th e seller - lessee of th e asset,
it con t in u es t o r ecog n ize t h e t ra nsferred asset an d recog nizes a fin ancial lia b ilit y in ac cord ance with
IF RS 9, a t a n amou n t e qu al t o t he t ra nsferred proce ed s.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
27 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 3 - Significant Accounting Policies (cont'd)
N. Financing Income and Expenses
Fin a ncin g in come in clu d e s in come from in t erest on a mou n t s in ve st ed , g a in s from d er ivat ive
fin a ncia l in st ru ments r ecog n ized in t he st a t emen t of in come , for eig n cu rr en cy g ain s, ga in s on
ch an g es in t he fair value of fin an cial assets at fair value throu gh profit or loss and finan cin g in come
recor d ed in relat ion t o employee b e nefit s. Int ere st in come is recog n ized as accru e d , u sin g the
effect ive in t erest met h od.
Fin a ncin g expen ses in clu de in t erest on loan s re ceived , se cu ritization t ransa ction cost s , losses fr om
d erivat ive fin an cial in st ru ment s, ch an ges d u e t o t h e passag e of t ime in liab ilit ies in re sp ect of
d efin ed b en efit plan s for employee s less in t er est in come d erivin g from plan asset s of a defined
b en efit pla n for employees and losses from e xch an ge r ate differences.
Gain s a n d losse s from excha nge r at e d ifferen ces and d erivative fin ancia l in st ru me nts are r eported
on a n et b asis.
In t h e con solid at ed st ate me nts of cash flows, in t er est re ceived a nd in t erest pa id , are pre se nted as
part of cash flows fr om opera t in g activit ies.
O. Taxes on Income
Ta xes on in come ( in clu d in g su r plus profit le vy on n at u ral r esou r ces) in clu de cu r rent an d d eferred
t axes, t ha t are r ecog n ized in pr ofit or loss, u n less t he y re lat e t o a b u sin ess comb in at ion or a re
recog n iz ed d ir ect ly in e qu it y or in ot h er compre he n sive in come wh en t hey re la t e t o it ems
recog n iz ed d irectly in equ ity or in ot h er compr eh ensive in come.
Cu rren t t ax is t he expected tax payable (or receivab le) on t he taxab le income for th e year, using tax
rat e s e nact e d or su b st a ntively en act ed at t h e r eport in g d at e . Cu rren t t a xes also in clu d e t a xes in
respect of prior years an d any t ax a risin g fr om d ivid en ds. Cu rr en t ta x a sse ts and lia bilit ies are offset
if t h er e is a leg ally enforceab le rig ht an d t here is int en t t o se ttle cu rren t t ax lia b ilit ies a n d assets on
a n et b asis.
A provision for u ncer t ain t ax posit ion s, in clu d in g add ition al t ax a nd in terest expen ses, is re cog nized
wh en it is more likely t h an n ot t hat ICL will h ave t o pay t h e ob lig ation .
Recog n it ion of d efe rred ta xes relat es t o t empora ry d ifferences b etween t h e b ook valu es of t h e assets
an d liab ilit ies for pu r poses of fin an cial repor t in g an d t h eir valu e for t ax pu rposes. Th e Compan y
d oe s n ot re cog n ize d e ferred t axe s for t h e followin g t empor ary d iffe ren ces: in it ial re cog n it ion of
good will an d d iffer en ces d erivin g from in vest ment s in su b sid iar ies, if it is not expect ed t h at t hey
will rever se in t he foresee able fu tur e and if ICL con trols t he date t he provision will re verse, wh ether
via sale or d ist r ib u tion of a d ivid en d . T h e d eferr ed t a xes are mea su red accor d in g t o t he t ax ra tes
expect ed t o a pply t o t he tempora ry diffe ren ces at th e t ime t hey are realized, b ased on t he law that
was fin ally leg isla t ed or e ffe ct ive ly le g islate d as at t he d at e of t h e rep ort. Deferr ed t axes in re spect
of int ra -compa n y t ran sa ction s in t h e con solid at ed fin an cial st at eme n ts are r ecord ed accordin g to
t he t ax ra te applica b le t o t h e b uyin g compan y.
De ferred t ax asse ts an d lia b ilit ies a re offse t if t h ere is a leg ally e nfor cea ble rig ht a nd th ey relate to
in come t axe s levied b y t h e sa me tax au t horit y on t h e same t axable en tity, or on d ifferen t t ax e ntities,
b u t t h ey in te nd t o set tle on a n et b asis.
Notes to the Consolidated Financial Statements as at December 31, 2020
28 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 3 - Significant Accounting Policies (cont'd)
O. Taxes on Income (cont'd)
A d eferr ed t ax a sse t is re cog n ized in t h e b ooks wh en it is expect ed t ha t in t h e fu t ure t h er e will be
t axab le in come ag a in st wh ich t h e t e mpor ary d iffe ren ces can b e u t ilized . Deferred t ax asse t s a re
examin ed at each report in g d ate an d ar e red uced t o t h e e xt en t t h at it is n o lon g er prob ab le t hat
t he r elat ed tax b en efit will b e re alized.
ICL cou ld b ecome lia b le for ad d it ion a l t axe s in t he case of d ist rib u tion of in t ercompan y d ividends
b et ween I CL's compa nies. Th ese a d d it ion al t a xes are n ot in clu d ed in t h e fin an cial st at emen t s as
ICL's compa n ies d ecid e d not to cause dist rib ut ion of a d ividend that in volve s a dd ition al t axes to the
payin g compa ny in th e for esee ab le fu t ur e. I n cases wh er e an in vest ee compa n y is expect ed to
d ist r ib u te a d ivid en d in volvin g ad d it ion al t ax, t h e Company re cord s a rese rve for expected
ad d it ion al t axe s.
P. Earnings per share
ICL pr esen t s b asic an d d ilu t e d earn ing s per sh ar e d at a for it s or d in ary sh ar e capit al. Th e b asic
ear nin g s per sh are a re calcu lated b y d ivid in g t he in come or loss at t rib ut able t o t he h old ers of the
Compan y’s or d in ary sh are s b y t he we ig h ted- averag e n u mbe r of ord in ar y sh ar es ou t stan din g d u ring
t he year, aft er ad ju st men t in respe ct of t r easu r y sh are s. T h e d ilu t ed earn ings pe r sh ar e are
d et e rmin ed b y a d ju stin g t h e in come or loss at t rib ut ab le t o t h e hold ers of t h e Co mpa ny’s ord in ary
sh ares an d t he weight e d -average n u mb er of ord in ar y sh are s ou t st an din g a ft er a d ju st ment in
respect of t r easu r y sh are s a nd for t h e effect of r est ricted sh ar es an d opt ion s for sh ares g ran ted to
employe es.
Q. Transactions with controlling shareholder
Asset s and liab ilit ies in clu d e d in a t r an saction wit h a con t rollin g sha rehold er ar e me asu re d at fair
va lu e on t h e d a te of t h e t ra nsa ction .
R. Non-current assets and disposal groups held for sale
Non - cu r ren t a sse ts ( or d isposal g rou ps composed of asset s and liab ilit ies) a re classified as h eld for
sa le if it is hig h ly pr ob ab le t ha t t hey will b e recover ed prima rily t h roug h a sa le t ransa ction an d not
t hrou g h con tin uing u se.
Immed iat e ly b efore cla ssif ication as h eld for sale, t h e asset s ( or compon en t s of t h e d isposal g roup)
are r emeasu red in accord an ce wit h ICL’s a ccou ntin g policie s. Th erea fter, th e assets ( or compon ents
of t h e d isposal g r ou p) ar e me asu red at t he lower of t h eir ca rrying amou nt an d fa ir valu e less costs
t o sell.
Any impairmen t loss on a d isposa l grou p is in it ially allocat ed t o g ood will, an d t he n t o rema in ing
asset s on a pro r at a b asis, e xcept t hat n o loss is alloca t ed t o asset s t h at a re n ot in t he scope of the
me asu re men t requir emen ts of IF RS 5 su ch as: in ve n t orie s, fin a ncia l asse t s, d eferred t a x a sse t s and
employe e b en efit asset s, wh ich con t inu e t o be measu r ed in accor d an ce wit h IC L’s accou n t ing
policies. Impairmen t losses recog n ized an d su b se qu e nt g a in s or losses on r emeasu r ement, are
recog n iz ed as pr ofit or loss. Gain s ar e n ot re cog nize d in excess of any cu mu lat ive impairmen t loss.
In su b sequ e nt per iods, d epre cia b le asset s classifie d as h eld for sale a re n ot d epre ciated on a pe riodic
b asis .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
29 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 4 - Determination of Fair Values
As part of t h e accou n t in g policies an d d isclosu res, I CL is r equ ir ed t o d ete rmin e t he fair valu e of b oth
fin a ncia l an d n on -fin an cial a sset s an d liab ilit ies. T h e fair valu es ha ve b een d et ermin ed for
me asu re men t an d / or d isclosu re pu rposes b a se d on t he met hod s d escrib ed be low. Fu rt her
in format ion a b ou t t h e assu mpt ion s ma d e in d et e rmin in g t h e fa ir valu es is d isclosed in t he n ot es
specific t o t h at asset or lia b ilit y.
A. Investments in securities
Th e fa ir valu e of in vest men t s in equ it y in st ru ments cla ssified a s fair valu e t h rou g h ot her
compre he nsive in come - in vestmen ts in equit y inst ru ments an d as fair va lu e t hroug h profit and loss,
is d et e rmin ed based on t heir market price at da te of t he re port.
B. Derivatives
Th e fa ir valu e of for war d con t racts on fore ig n cu rrency is d e t ermined b y a ve rag ing t he e xch ange
rat e a nd t h e appr opriat e in t erest coefficie nt for t h e period of th e t ra nsa ction an d t he r elevant
cu rr en cy in d ex. Th e fair valu e of in t erest rat e swap con t ra cts is d et ermin ed b y d iscou n t ing the
est ima t ed amou n t of t h e fu ture cash flows b ased on t h e t er ms an d lengt h of pe riod t o ma t u rity of
each con t ra ct, wh ile u sin g mar ket in te rest r ate s of similar in st ruments at th e d a te of measu rement.
Fu t u re con tracts on en ergy an d mar ine sh ippin g pr ices are presented a t fair value b ased on qu otes
of t h e pr ices of prod u ct s on a n on goin g b a sis. T h e re asona bleness of t h e ma rket price is exa mined
b y compa rin g it t o qu ot a t ion s by b anks.
C. Liabilities in respect of debentures
Th e fa ir valu e of t he liab ilit ies an d t h e d e bentu re s is d et ermin ed for d isclosu r e pu r poses on ly a nd
calcu lat ed b ased on t h e pr esent va lu e of fu t u re ca sh flows in re spect of t h e prin cipal an d in t e rest
compon e nt s, d iscou n t ed at t h e mar ke t ra t e of in t er est as at t h e re port in g d a t e. T h e fair valu e of
ma rket ab le d eben tures is d eter mined b ased on th e st ock ma rket prices as at t he d ate of t h e re port.
D. Property, plant and equipment of the subsidiaries Dead Sea Works, Dead Sea
Bromine and Dead Sea Magnesium in Israel
Th e fair valu e of pr opert y, plan t an d e qu ipme nt , of t h e su b sid iarie s Dead Sea W or ks, De ad Sea
B romin e an d Dead Se a Mag nesium ( h ere ina fter - t h e Su bsid iaries) was evalu ated in t he ir st at utory
report s b ase d on th e Repla cement Cost Methodolog y u nd er I FRS. T hi s e valua tion was perfor med in
recen t years, which ser ve , amon g ot hers, as a basis for the min eral b ased fin ancial repor ts pr epared
pu rsu a nt t o t h e provision s of t he T axa t ion of Nat u ral Re sou rces Law. For fu rt h er in for ma t ion , see
Not e 15.
Notes to the Consolidated Financial Statements as at December 31, 2020
30 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 5 - Operating Segments
A. General
1 . I nformati on on o pera tin g se gments :
ICL is a g lob a l spe cialt y min erals an d chemicals compan y operatin g b romin e, pot ash an d ph osphate
min era l valu e cha in s in a u niqu e , integr ate d b usin ess mod el.
Ou r ope rat ion s a re org an ized u n de r fou r seg men ts: I ndust ria l Prod ucts, Pot a sh, Ph osphate Solu tions
an d In n ova tive A gricult ure Solu t ions.
I n d ust rial Pr od ucts – T he I ndu strial Prod uct s se gme nt pr od uces b romin e ou t of a solu t ion t ha t is a
by-pr od u ct of t he pot ash prod u ction proce ss in Sod om, Isr ael, as we ll as b romin e -b ase d compou n ds.
In d u st ria l Produ ct s uses most of t he bromin e it produ ces for self -prod uction of b romin e compounds
at it s pr od u ct ion sit es in Isr ael, t he Ne t herland s an d Ch in a. I n ad d ition , t h e In du strial Prod ucts
se g ment prod u ce s several g r ad es of pot a sh, salt , ma g ne siu m ch lorid e an d mag n esia prod u ct s.
In d u st ria l Prod u ct s is also e nga ged in t he prod u ct ion an d ma rke t in g of phosphorou s - b a sed
prod u ct s.
P o t ash – T he Pot ash segmen t prod u ces an d sells ma in ly pot ash , salt , Polysu lph at e ®, ma gne sium
an d ele ct ricit y. Pot ash is prod u ced in I sra el an d Spain , u sin g an evaporat ion pr ocess to ext ract
pot ash fr om t he De ad Sea in Isr ael an d con ven tion al min in g from an u n d erg rou nd min e in Spain.
In it s ICL B ou lb y min e in t h e UK, th e Compan y prod u ces Polysu lph at e® , which is composed of
su lphu r, pot a sh, ca lciu m and mag ne sium. Th e Compan y's Fe rtilizerplu S produ ct line is b ase d mainly
on Polysu lph at e®. T h e seg men t also in clu des mag nesiu m activit y un der wh ich it pr od uces, mar kets
an d sells pu re ma g ne siu m a nd mag nesium a lloys, an d prod u ce s ch lorine a nd sylvin it e. In ad dition,
t he seg men t se lls salt t ha t is prod uced in it s pot ash and Polysu lph ate® un de rg rou nd min es in Spain
an d t h e UK. T h e Company h as a powe r plan t in Sod om, which su pplie s e lectr icity t o ICL companies
in Isr ael ( elect ricit y surplu s is sold to e xternal cust omers) an d steam to all fa cilities in the Sodom sit e .
P h os phate Soluti ons – Th e Ph osph ate Solu t ion s segmen t is b ase d on a phosph at e valu e cha in which
u ses ph osph at e commod it y prod u ct s, su ch as phospha t e rock a nd fert ilizer -g rade ph osph or ic a cid
( “g reen ph osph oric acid ”), t o prod u ce specia lt y pr od u ct s wit h h ig h er ad d ed valu e. Th e seg ment
also prod u ces an d ma rkets ph osph ate -b ased fer tilizers.
Phospha t e rock is min ed an d pr oce ssed from ope n pit min es, t hree of wh ich ar e locat e d in the
Neg ev Desert in I sra el, wh ile t h e fou rt h is sit u a t ed in Y u nnan provin ce in Ch in a ( rega rdin g to the
d iscon t in u ation of t h e pr od u ct ion a nd sale of t h e phospha te rock a ct ivit y in Rot em I sr ael, see Note
12). Su lph u ric acid , g reen ph osph oric acid an d ph osph at e fe rt ilize rs are prod u ced in facilit ie s in
Isr ael, Ch in a an d Eu rope.
Th e Phosph at e Solu t ion s seg me n t man u fact ur es pu r ified phosph oric acid b y pu r ifyin g g reen
ph osph oric a cid . Pu re ph osph or ic a cid a nd g reen phosph oric acid are u sed to man u fact ure
d own st r eam prod u cts wit h h ig h ad ded valu e, su ch as phosph at e salt s an d acid s, for a wid e ra nge
of food an d in d u st rial applicat ion s. Phosph at e salt s an d a cid s are u se d in variou s in d u st rial end
ma rket s, su ch a s or al care , cleanin g prod u ct s, pa in t s a n d coat in g s, wat er treat men t, asphalt
mod ificat ion , con st ru ction , me t al t re atment, an d mor e. T h e seg ment's prod uct s for t he food ind ustry
inclu d e fu nct ion al food in g red ients an d ph osph at e ad d itives, wh ich provid e t ext u re a n d st a bility
solu t ion s for pr oce ssed meat, mea t altern atives, pou lt ry, seafood , da iry, b ever age an d baked goods.
In ad d it ion , t he segment su pplies pu r ifie d ph osph or ic a cid t o I CL’s specia lt y fert ilizer s b usin ess and
prod u ce s milk and whe y prot ein s for t he food in gred ien ts in d ustr y.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
31 Statem ents Financ ial Consolidated Limited G rou p CLI
Note 5 - Operating Segments (cont’d)
A. General (cont’d)
1 . I nformati on on o pera tin g se gments : (con t'd)
I n n o vat ive A g So lution s – The I n novative A g Solu t ion s seg ment aims t o achieve g lob a l lead e rship
in specia lt y fer t ilizer market s b y en h an cin g it s g lob al posit ion s in it s cor e ma rket s of specia lt y
ag ricu lt u re, orn ament al h ort icu ltu re, t u rf a nd lan d scapin g an d b y t ar getin g h ig h -g rowt h ma rkets
su ch as Brazil, In d ia an d Ch in a. Th e Compan y also lever ag es it s un iqu e R& D capab ilit ies, vast
ag ron omic e xper ie nce, glob al foot pr in t , b a ckward int eg ration t o pot ash and phosph at e, and
ch emist r y know- how, as well as seeks M& A opport u n it ie s. I CL is workin g t o expan d it s b road product
port folio of con t rolled r ele ase fe rt ilize rs ( CRF ), wat e r solu b le fert ilizer s ( W SF), liqu id fert ilizers and
st raig h t fert iliz ers ( MKP/MA P/ PeKacid).
Th e I n n ovat ive Ag Solu t ion s segment d e ve lops, man u factures, mar ket s and sells fert iliz ers t hat are
b ased pr imarily on n it rogen, pot ash (pot assiu m ch loride ) a nd ph osph at e. It prod uces wate r soluble
specia lt y fe rt ilize rs in B elg iu m, liqu id fert iliz ers a nd solu b le fer t ilizer s in Israel an d Spain , and
con t rolled - relea se fert ilizer s in t h e Net h er land s an d t h e Un it e d St at es. I CL's spe cia lt y fert ilizers
b u sin ess market s it s prod ucts world wide , ma in ly in Eu rope, A sia, Nor th A merica, B ra zil and Israel.
O t h er A ctivit ie s – B u sin ess act ivit ies which in clu d e , amon g ot h er t hin g s, I CL’s in n ovat ive arm,
promot in g in n ovat ion , d evelopin g n e w prod u ct s an d service s, as well as d ig it a l plat forms and
t echn olog ical solu t ion s for farmers and ag ron omist s. This ca tegory in clud es Grower s, an in novative
compan y in t he field of ag ricult ural d at a processin g a nd ana lysis t hat was acquir ed in 2020, as part
of th e Company's st rat eg y to acceler at e an d e xpand it s d ig it a l offerin g s. F or fu rt h er in format ion,
se e Not e 8. T he act ivit ie s inclu d ed u nder "O t her act ivities" do n ot mee t t he qu antit at ive t hresholds
requ ired for prese nt at ion as r eportable seg men ts.
2 . S e g ment capit al in vest ments
Th e capit al in vest ment s mad e b y t h e seg men t s, for each of t he r eport in g per iod s, in clu d e main ly
prope rt y, pla nt and e qu ipmen t , as well as in t an g ib le asset s acqu ire d in t he ord in ary cou rse of
b u sin ess and a s part of b u siness comb in a tion s.
3 . I nter –segment transfers an d u nalloca ted in come ( expe nses )
Seg men t reven u e , expen ses an d resu lt s in clu d e int er - seg ment t r an sfer s t h at ar e b ased on
t ran sa ct ion price s in t he ord in ar y cou rse of b u sin ess. T his b ein g alig ned wit h t he r eport s t hat are
reg u lar ly r evie wed b y t h e Ch ief O perat in g Decision Ma ker. T he in t e r -seg ment tr an sfer s are
eliminat ed as part of fin ancial st at emen ts con solid ation .
Th e Se g men t profit is measu r ed b ase d on t he opera t in g pr ofit , wit h ou t t h e alloca t ion of cert ain
expen ses t o t h e operat in g se gments, as prese nt ed in t h e re port s re gula rly r evie wed b y t h e Ch ief
Ope rat in g Decision Maker. Th is me asu re se rves for measu r in g t h e segmen t resu l t s, sin ce
ma na g emen t b e lieves t hat it is t h e most rele va nt mea su re for t he assessment of t he se gmen t resu lts.
Notes to the Consolidated Financial Statements as at December 31, 2020
32 ICL G rou p Limited Co nsolid ated Financ ial Statem ents
Note 5 - Operating Segments (cont’d)
B. Operating segment data
I n d ustrial
P r odu cts
P o tas h
P h o sphate
S o lutions
I n n o vativ e Ag
S o lutions
O t her
A c tivities
R e c onciliations
C o nsolidated
$ m illio ns
F o r t h e year ended Dece mber 3 1,
2020
Sales to e xt erna l par tie s
1 , 2 42
1 , 1 83
1 , 8 71
7 1 5
32
-
5 , 0 43
In t e r- seg me nt sa les
13
1 6 3
77
16
3
( 2 7 2)
-
Tot al sales
1 , 2 55
1 , 3 46
1 , 9 48
7 3 1
35
( 2 7 2)
5 , 0 43
Seg men t profit ( loss)
3 0 3
1 2 0
66
40
( 5 )
( 1 5 )
5 0 9
Ot h er e xpense s n ot a llocated to t he
se g ment s
( 3 0 7)
Ope rat in g in come
2 0 2
Fin a ncin g e xpense s, n et
( 1 5 8)
Sh are in ea rn ings of equ ity-
accou n t e d in vest ees
5
In come b e for e in come t axes
49
De pre ciat ion , a mort ization and
impa ir men t
77
1 6 6
2 1 0
25
3
98
5 7 9
Capit a l e xpe nd it ur es as part of
b u sin ess comb in at ion
-
-
-
-
26
-
26
Capit a l e xpe nd it ur es
84
2 9 6
2 7 5
20
6
15
6 9 6
Notes to the Consolidated Financial Statements as at December 31, 2020
33 ICL G rou p Limited Co nsolid ated Financ ial Statem ents
Note 5 - Operating Segments (cont'd)
B. Operating segment data (cont'd)
I n d ustrial
P r odu cts
P o tas h
P h o sphate
S o lutions
I n n o vativ e Ag
S o lutions
O t her
A c tivities
R e c onciliations
C o nsolidated
$ m illio ns
F o r t h e ye ar ended Dece mber 3 1,
2019
Sales to e xt erna l par ties
1,307
1,330
1,901
699
34
-
5,271
In t e r- seg me nt sa les
11
164
79
18
3
(2 7 5 )
-
Tot al sales
1 ,3 1 8
1 ,4 9 4
1 ,9 8 0
717
37
(2 7 5 )
5 ,2 7 1
Seg men t profit
338
289
100
21
19
(7 )
760
Ot h er e xpense s n ot a llocated to t he
se g ment s
(4 )
Ope rat in g in come
756
Fin a ncin g e xpense s, n et
(129)
Sh are in ea rn ing s of equ ity-
accou n t e d in vest ees
1
In come b e for e in come t axe s
628
De pre ciat ion , amort ization a nd
impa ir men t
67
149
177
21
22
(3)
433
Imple ment a t ion of IFRS 16
8
95
113
9
105
9
339
Capit a l e xpend it ures
66
383
213
21
4
6
693
Notes to the Consolidated Financial Statements as at December 31, 2020
34 ICL G rou p Limited Co nsolid ated Financ ial Statem ents
Note 5 - Operating Segments (cont’d)
B. Operating segment data (cont'd)
I n d ustrial
P r odu cts
P o tas h
P h o sphate
S o lutions
I n n o vativ e Ag
S o lutions
O t her
A c tivities
R e c onciliations
C o nsolidated
$ m illio ns
F o r t h e ye ar ended Dece mber 3 1,
2018
Sales to e xt erna l par ties
1,281
1,481
2,001
719
74
-
5,556
In t e r- seg me nt sa les
15
142
98
22
5
(2 8 2 )
-
Tot al sales
1 ,2 9 6
1 ,6 2 3
2 ,0 9 9
741
79
(2 8 2 )
5 ,5 5 6
Seg men t profit
300
315
113
29
9
(1 3 )
753
Ot h er in come n ot a llocate d to t he
se g ment s
766
Ope rat in g in come
1 ,5 1 9
Fin a ncin g e xpense s, n et
(158)
Sh are in ea rn ing s of equ ity-
accou n t e d in vest ees
3
In come b e for e in come t axe s
1 ,3 6 4
De pre ciat ion , amort ization a nd
impa ir men t
63
141
172
19
4
21
420
Capit a l e xpend it ures
50
356
180
15
1
3
605
2020 31, December at as Statements Financial Consolidated the to Notes
35 ICL G rou p L imited Consolidated Financial Statements
Note 5 - Operating Segments (cont'd)
C. Information based on geographical location
Th e followin g t ab le prese nt s t he d istribu tion of I CL's sales b y g eog raph ica l locat ion of t h e cu stomer:
2 02 0
2 01 9
2 01 8
$
m i llion s
% of
s a les
$
m i llion s
% of
s a les
$
m i llion s
% of
s a les
Chin a
8 06
16
802
15
848
15
USA
7 93
16
840
16
903
16
B razil
4 47
9
581
11
656
12
Unit ed Kin g dom
3 36
7
347
7
382
7
Ger ma ny
3 27
6
334
6
365
7
Isr ael
2 60
5
241
5
223
4
Spa in
2 43
5
249
5
262
5
Fra nce
2 38
5
257
5
267
5
In d ia
1 94
4
178
3
211
4
It a ly
1 14
2
116
2
125
2
All ot h er
1 , 2 85
25
1 ,3 2 6
25
1 ,3 1 4
23
T o t al
5 , 0 43
1 0 0
5 ,2 7 1
100
5 ,5 5 6
100
Notes to the Consolidated Financial Statements as at December 31, 2020
36 ICL G rou p Limited Co nsolid ated Financial Statem ents
Note 5 - Operating Segments (cont'd)
C. Information based on geographical location (cont'd)
Th e followin g t a b le pre se nts t he d istr ibu tion of t he ope ratin g segments sales b y g eog raphical location of t h e cust omer:
I n d ustrial
P r odu cts
P o tas h
P h o sphate
S o lutions
I n n o vativ e Ag
S o lutions
O t her
A c tivities
R e c onciliations
C o nsolidated
$ m illio ns
F o r t h e year ended Dece mber 3 1,
2020
Eu rope
4 5 8
4 1 1
6 6 5
3 3 4
30
( 7 6 )
1 , 8 22
Asia
4 0 5
4 3 3
4 8 0
1 2 7
1
( 1 4 )
1 , 4 32
Nor t h A merica
2 9 9
86
3 7 2
1 0 5
2
( 5 )
8 5 9
Sou t h A mer ica
40
2 3 0
2 2 7
21
-
( 1 )
5 1 7
Rest of t h e world
53
1 8 6
2 0 4
1 4 4
2
( 1 7 6)
4 1 3
T o t al
1 , 2 55
1 , 3 46
1 , 9 48
7 3 1
35
( 2 7 2)
5 , 0 43
I n d ustrial
P r odu cts
P o tas h
P h o sphate
S o lutions
I n n o vativ e Ag
S o lutions
O t her
A c tivities
R e c onciliations
C o nsolidated
$ m illio ns
F o r t h e year ended Dece mber 3 1,
2019
Eu rope
469
422
712
336
31
(85)
1,885
Asia
399
470
447
118
1
(12)
1,423
Nor t h A merica
353
95
370
95
-
(3)
910
Sou t h A mer ica
56
327
263
23
-
(1)
668
Rest of t h e world
41
180
188
145
5
(1 7 4 )
385
T o t al
1 ,3 1 8
1 ,4 9 4
1 ,9 8 0
717
37
(2 7 5 )
5 ,2 7 1
Notes to the Consolidated Financial Statements as at December 31, 2020
37 Isr ael Chemi cals Li mit ed C ons olida ted Financial St at ement s
Note 5 - Operating Segments (cont'd)
C. Information based on geographical location (cont'd)
Th e followin g t a b le pre se nts t he d istr ibu tion of t he ope ratin g segments sales b y g eog raphical location of t h e cust omer: (con t'd)
I n d ustrial
P r odu cts
P o tas h
P h o sphate
S o lutions
I n n o vativ e Ag
S o lutions
O t her
A c tivities
R e c onciliations
C o nsolidated
$ m illio ns
F o r t h e year ended Dece mber 3 1,
2018
Eu rope
473
459
719
362
49
(92)
1,970
Asia
399
519
481
105
2
(18)
1,488
Nor t h A merica
347
107
405
103
24
(8)
978
Sou t h A mer ica
21
408
264
21
1
(3)
712
Rest of t h e world
56
130
230
150
3
(1 6 1 )
408
T o t al
1 ,2 9 6
1 ,6 2 3
2 ,0 9 9
741
79
(2 8 2 )
5 ,5 5 6
Notes to the Consolidated Financial Statements as at December 31, 2020
38 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 5 - Operating Segments (cont'd)
C. Information based on geographical location (cont'd)
Th e followin g t a b le prese nt s t h e d ist rib ut ion of I CL's sa les b y g eog ra ph ical locat ion of th e main
facilit ies fr om wh ich it was prod u ce d .
F o r the y ear ended Decemb er 31
2020
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
Isr ael
2 , 6 36
2,815
2,841
Eu rope
2 , 0 14
2,079
2,198
Nor t h A merica
7 5 7
816
831
Asia
6 4 3
615
617
Sou t h A mer ica
4 2 4
441
163
Ot h ers
48
47
48
6 , 5 22
6,813
6,698
In t e rcompany sales
( 1 ,4 79)
(1 ,54 2 )
(1 ,14 2 )
T o t al
5 , 0 43
5 ,2 7 1
5 ,5 5 6
Th e followin g t a b le presents opera tin g in come b y geogra phical loca t ion of t h e a sse ts from wh ich it
was prod u ce d :
F o r the y ear ended Decemb er 31
2020
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
Isr ael*
1 0 5
578
526
Nor t h A merica
47
61
74
Asia
64
59
52
Eu rope* *
( 5 0 )
32
834
Ot h ers
39
22
29
In t e rcompany elimin ation s
( 3 )
4
4
T o t al
2 0 2
756
1 ,5 1 9
* Isra el opera t in g in come for 2020 in clu d es a loss of $27 4 million resu lt ing fr om impairmen ts and
t he in it ia t ion of efficie ncy in it iatives and measu re s. For fu rt her in formation , see Not e 1B.
* * Eu rope ope rat in g in come for 2018 in clu d es a g ain of $841 million relat e d t o t h e d ive st itu re of
b u sin esse s.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
39 Statements Finan cial Con s olidated Limite d G rou p CLI
Note 5 - Operating Segments (cont'd)
C. Information based on geographical location (cont'd)
Th e followin g t a b le pre se nt t he n on- current asset s by geog raphical locat ion of t h e assets ( *)
As at Dec ember 31
2020
2 01 9
$ m illio ns
$ m illio ns
Isr ael
3 , 9 52
3,905
Eu rope
1 , 5 75
1,380
Asia
4 9 0
434
Nor t h A merica
3 1 9
333
Ot h er
63
76
T o t al
6 , 3 99
6 ,1 2 8
( * ) Main ly con sist of pr opert y, plan t an d equipme nt, in t an gible asse ts an d n on -current in ven tories.
Notes to the Consolidated Financial Statements as at December 31, 2020
40 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 6 – Inventories
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Fin ish ed prod u cts
8 0 7
800
W ork in pr og re ss
2 6 3
326
Raw ma t erials
2 0 7
176
Spa re par t s
1 2 5
127
Tot al in ve nt ories
1 , 4 02
1,429
Of which :
Non - cu r ren t in ventor ie s. main ly raw mater ials ( pre sen ted
in n on - cu r ren t assets)
1 5 2
117
Cu rren t in ve ntor ies
1 , 2 50
1 ,3 1 2
Note 7 - Other Receivables
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Gove rn me n t in st itu tion s
72
98
Fin a ncia l asset at a mort ized cost *
66
67
Cu rren t t a x assets
65
87
In vest ments at fa ir value th rou gh ot he r compr eh ensive
in come
53
40
Prepaid e xpense s
50
51
Ot h er
88
60
3 9 4
403
* See Not e 21 E.3
Note 8 - Investments in Subsidiaries
A. Non-controlling interests in subsidiaries
Th e followin g t ab les pr esen t in format ion wit h r espect t o n on -con t rollin g in t er ests in a Grou p
su b sid iar y, YPH J V ( a t t he r at e of 50%), b efore elimin at ion of in t e r -compan y t ran saction s. The
in format ion in clu d es fair valu e ad just ments t ha t wer e mad e on t he a cqu isit ion d at e, ot h er than
good will an d pr esen t ed wit h out adjust me nts for t h e own ership rates h eld b y t he Gr oup.
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Cu rren t asse ts
1 4 9
151
Non - cu r ren t assets
4 0 0
346
Cu rren t lia b ilit ies
( 1 8 9)
(150)
Non - cu r ren t liabilit ie s
( 7 6 )
(103)
Equ it y
( 2 8 4)
(244)
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
41 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 8 - Investments in Subsidiaries (cont'd)
A. Non-controlling interests in subsidiaries (cont'd)
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
Sales
3 59
349
387
Ope rat in g I ncome
29
23
-
De pre ciat ion an d a mort ization
37
41
34
Ope rat in g in come b efore depreciation
an d amort ization
66
64
34
Net I n come ( loss)
23
11
(13)
Tot al Compreh en sive in come
40
8
3
B. Business Acquisition and Divestiture
( 1) As pa rt of th e Compan y's st r at egy t o e xpand t h e spe cialt y fert iliz er b u siness an d focu s on
growin g ma rket s, in Oct ob er 2020, t h e Compan y en tere d in to an ag reemen t t o acqu ire 100%
of t h e sh ar es of A gr o Fer t ilaqu a Par t icipações S.A., on e of B razil's lea d in g specia lt y plant
nu t rit ion compan ie s, for a con sid era tion of $122 million ( b efore d ed uction of Fert ilaqua's net
d eb t of $40 million ). In J an u ar y 2021, t h e acqu isit ion was complet ed followin g t h e fu lfilment
of t h e cu st oma ry closin g con d it ion s. A s at t he r eport in g d at e, t he Compa ny has not yet
complet ed F ert ilaqua's Pur chase Price A llocation ( PPA ) process.
( 2) As part of I CL's g oal t o fu r t h er enh an ce it s d ig it al service an d accelerate it s g lob al d evelopment
road map, in F eb ruary 2020, t he Compa ny acquir ed Grower s Hold ing s, In c., an inn ovator in the
fie ld of proce ss and d a t a -d riven farmin g, for a t ot al con sid eration of $27 million . Grower s h as
d eveloped a pla t form t h at pr oce sses an d an alyzes d ata t h at is collect ed man u ally or t h rough
ma ch in e -g ene rated farm d ata in to focu se d plan s tha t enh an ce d ecision -making capa bilit ies for
far mers, ag r on omist s a n d ot h er agro- profe ssion als.
( 3) As pa rt of th e Compan y's st rat e g y t o d ive st low syn e rg y b u sin esses an d n on - core b u siness
act ivit ie s, in A pr il 2020, t he Compa ny en tere d in to an a greeme n t wit h Solin a Cor porat e SAS to
se ll Hag e sü d I n t erspice Gewü rzwerke Gmb H, in clu d ing r elated r eal-estate assets. Th e sale's
con sid erat ion is $35 million , of wh ich $9 million repre se n t a con t in g en t con sid er ation , which
accor d in g t o t h e Compa n y's est imat e , as at Dece mb e r 31, 2020, is pa rt of t h e sale's
con sid erat ion . In May 2020, t he t r an sact ion wa s complet ed wit h n o mat e rial impa ct on t he
Compan y's fin an cial resu lt s. Th e con tin gent con sid eration will b e r ece ived su bje ct t o me eting
a spe cific sa les t a rg et for a su b sequ en t pe riod of 12 mon t h s, end ing on J une 30, 2021.
Notes to the Consolidated Financial Statements as at December 31, 2020
42 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 9 – Other non-current assets
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Non - cu r ren t in ventor ie s
1 5 2
117
De riva t ive d esig nated as a cash flow h ed ge
1 1 5
57
Su rplu s in e mployee s' d efin ed b ene fit pla n s ( 1)
91
78
In vest ments in e qu it y-accoun ted in vest ees
27
29
Ot h er
8
5
3 9 3
286
( 1) Se e Not e 16.
Notes to the Consolidated Financial Statements as at December 31, 2020
43 ICL Grou p L imited Consolid ated Financial S tatements
Note 10 - Property, Plant and Equipment
L a nd and
b u ildings
T e c hnical
e q uipm ent and
m a c hinery
D i k es and
e v ap or ating
p o nds
P l a nts under
c onstruction (1)
O t her
R i ght of use
a s set
T o tal
$ m illio ns
C o st
B ala n ce as at J an uary 1, 2020
8 04
6 , 8 65
1 , 3 92
7 6 5
9 4 5
4 2 3
1 1 ,194
Ad d it ion s
63
4 6 7
21
( 2 4 )
68
80
6 7 5
Disposals
( 7 )
( 3 4 )
-
-
( 7 )
( 2 1 )
( 6 9 )
Exit from con solid at ion
( 1 4 )
( 5 )
-
-
( 6 )
( 1 )
( 2 6 )
Tr an sla t ion d ifferen ces
34
1 2 6
28
37
3
15
2 4 3
B ala n ce as at December 31, 2020
8 80
7 , 4 19
1 , 4 41
7 7 8
1 , 0 03
4 9 6
1 2 ,017
A c cu mulate d d eprecia tion
B ala n ce as at J an uary 1, 2020
4 45
3 , 9 50
6 6 6
-
7 6 0
42
5 , 8 63
De pre ciat ion
35
2 4 6
47
-
66
67
4 6 1
Disposals
( 6 )
( 3 1 )
-
-
( 7 )
( 1 5 )
( 5 9 )
Impairmen t
-
58
27
-
-
-
85
Exit from con solid at ion
( 2 )
( 4 )
-
-
( 4 )
-
( 1 0 )
Tr an sla t ion d ifferen ces
19
81
23
-
2
2
1 2 7
B ala n ce as at December 31, 2020
4 91
4 , 3 00
7 6 3
-
8 1 7
96
6 , 4 67
D e precia ted b alance as at
D e cemb er 31, 2020
3 89
3 , 1 19
6 7 8
7 7 8
1 8 6
4 0 0
5 , 5 50
( 1) T h e ad dit ion s are presented n et of it ems for wh ich const ruct ion h as been comple ted a n d accor d ingly we re reclassified to ot her cat eg ories in the “pr operty,
plan t an d equ ipmen t” se ction .
Notes to the Consolidated Financial Statements as at December 31, 2020
44 ICL Grou p L imited Consolid ated Financial S tatements
Note 10 - Property, Plant and Equipment (cont’d)
L a nd and
b u ildings
T e c hnical
e q uipm ent and
m a c hinery
D i k es and
e v ap or ating
p o nds
P l a nts under
c onstruction (1)
O t her
R i ght of use
a s set
T o tal
$ m illio ns
C o st
B ala n ce as at J an uary 1, 2019
861
6,635
1,376
507
858
-
10,237
IF RS 16 init ial imple me nt at ion
-
-
-
-
-
300
300
Recla ssifica t ion of fin an ce lease ( 2)
-
-
-
-
-
96
96
Ad d it ion s
17
283
21
261
93
39
714
Disposals
(69)
(47)
-
-
(5)
(11)
(132)
Tr an sla t ion d ifferen ces
(5 )
(6 )
(5 )
(3 )
(1 )
(1 )
(2 1 )
B ala n ce as at December 31, 2019
804
6 ,8 6 5
1 ,3 9 2
765
945
423
1 1 ,1 9 4
A c cu mulate d d eprecia tion
B ala n ce as at J an uary 1, 2019
468
3,782
627
-
697
-
5,574
De pre ciat ion
36
218
43
-
67
51
415
Disposals
(45)
(44)
-
-
(4)
(9)
(102)
Reversal of impa irmen t
(10)
-
-
-
-
-
(10)
Tr an sla t ion d ifferen ces
(4 )
(6 )
(4 )
-
-
-
(1 4 )
B ala n ce as at December 31, 2019
445
3 ,9 5 0
666
-
760
42
5 ,8 6 3
D e precia ted b alance as at
D e cemb er 31, 2019
359
2 ,9 1 5
726
765
185
381
5 ,3 3 1
( 1) T h e ad dit ion s ar e pr esented n et of it ems for wh ich const ruct ion h as been comple ted a n d accor d ingly we re reclassified to ot h er cat eg ories in th e “pr operty,
plan t an d equ ipmen t” se ction .
( 2) Reclassifica t ion of fin an ce lea ses ( as d efine d in I AS 17) fr om n on -cu rrent asset t o pr operty, pla nt a nd equ ipmen t.
Notes to the Consolidated Financial Statements as at December 31, 2020
45 ICL Grou p L imited Consolid ated Financial S tatements
Note 11 - Intangible Assets
A. Composition
G o odwill
C o ncessions
a n d m ining
r i ghts
T r adem arks
T e c hnolog y /
p a tents
C u stom er
r e lationships
E xplo ration
a n d
e v alu ation
a s sets
C o m puter
a p plication
O t hers
T o tal
$ m illio ns
C o st
B ala n ce as at J an uary 1, 2020
3 2 3
2 0 9
86
75
1 7 6
44
99
34
1 , 0 46
Ad d it ion s
-
-
-
-
-
2
18
1
21
Ad d it ion s in respect of b u siness
comb in at ion s
18
-
-
-
1
-
-
7
26
Exit from con solid at ion
-
-
-
( 5 )
( 1 0 )
-
-
-
( 1 5 )
Tr an sla t ion d ifferen ces
-
9
6
5
5
2
1
1
29
B ala n ce as at December 31, 2020
3 4 1
2 1 8
92
75
1 7 2
48
1 1 8
43
1 , 1 07
A m o rtiza tion a nd i mpairment losses
B ala n ce as at J an uary 1, 2020
21
70
28
43
1 1 4
26
68
24
3 9 4
Amort izat ion
-
2
3
4
9
1
7
2
28
Impairmen t
-
-
-
-
-
5
-
-
5
Exit from con solid at ion
-
-
-
( 2 )
( 3 )
-
-
-
( 5 )
Tr an sla t ion d ifferen ces
-
2
3
3
3
2
1
1
15
B ala n ce as at December 31, 2020
21
74
34
48
1 2 3
34
76
27
4 3 7
A m o rtiz ed B alance as at December
31 , 2 020
3 2 0
1 4 4
58
27
49
14
42
16
6 7 0
Notes to the Consolidated Financial Statements as at December 31, 2020
46 ICL Grou p L imited Consolid ated Financial S tatements
Note 11 - Intangible Assets (cont'd)
A. Composition (cont’d)
G o odwill
C o ncessions
a n d m ining
r i ghts
T r adem arks
T e c hnolog y /
p a tents
C u stom er
r e lationships
E xplo ration
a n d
e v alu ation
a s sets
C o m puter
a p plication
O t hers
T o tal
$ m illio ns
C o st
B ala n ce as at J an uary 1, 2019
331
210
88
75
178
39
87
33
1,041
Ad d it ion s
-
-
-
-
-
5
12
1
18
Tr an sla t ion d ifferen ces
(8 )
(1 )
(2 )
-
(2 )
-
-
-
(1 3 )
B ala n ce as at December 31, 2019
323
209
86
75
176
44
99
34
1 ,0 4 6
A m o rtiza tion a nd i mpairment
l o s ses
B ala n ce as at J an uary 1, 2019
22
68
26
39
105
25
63
22
370
Amort izat ion
-
2
3
5
10
1
5
2
28
Tr an sla t ion d ifferen ces
(1 )
-
(1 )
(1 )
(1 )
-
-
-
(4 )
B ala n ce as at December 31, 2019
21
70
28
43
114
26
68
24
394
A m o rtiz ed B alance as at December
31 , 2 019
302
139
58
32
62
18
31
10
652
Notes to the Consolidated Financial Statements as at December 31, 2020
47 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 11 - 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 at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
In t a ngib le a ssets h avin g a d e fine d u se ful life
3 17
318
In t a ngib le a ssets h avin g an in de finit e u seful life
3 53
334
6 70
652
Note 12 - Impairment Testing
A. Impairment testing for intangible assets with an indefinite useful life
G o o d will - The g ood will is not mon it ore d for in t e rn al repor tin g pu r poses an d , a ccord in gly, it is
alloca t ed t o t he Compa ny’s operat in g segments a n d n ot t o t he cash -g en e rating u n its, t h e level of
wh ich is lower t han t h e oper at in g seg men t , as lon g as t he a cqu ir ed u ni t is pre se n t ed in the
Compan y's report a b le se gment s. Th e exa min ation of impa irmen t of t h e ca rryin g amou n t of t he
good will is mad e a ccord in g ly.
T r a demar ks - For impairmen t test in g pu rpose, t h e t ra d emarks wit h in d efin it e u sefu l life we re
alloca t ed t o t he cash -g en er ating u nits, which re pr esent t he lowe st leve l wit hin t he Company.
Th e carr yin g amou nts of in t ang ible asse ts wit h an in de finit e u seful life are a s follows:
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
G o o d will
Phospha t e Solu t ion s
1 1 6
123
In d u st ria l Prod ucts
94
91
In n ova t ive A g . Solu tion s
73
70
Pot a sh
19
18
Ot h er
18
-
3 2 0
302
T r a demar ks
33
32
3 5 3
334
Notes to the Consolidated Financial Statements as at December 31, 2020
48 ICL Grou p L imited Consolidated Finan cial S tatements
Note 12 - Impairment Testing (cont’d)
A. Impairment testing for intangible assets with an indefinite useful life (cont’d)
Th e Company con d u ct ed it s an nua l impairmen t t e st of g ood will d u rin g t h e fou rth qu art er a nd did
not id en t ify a n y impairmen t . The re cove rab le a mou n t of t h e ope rat in g seg me n ts was d et ermined
b ased on t he ir valu e in u se, wh ich is an in t er nal valu ation of t h e d iscou n ted fu t ur e cash flows
gen era ted from t he con tinu ing operat ions of t h e operating se gme nts.
Th e fu t u re cash flow of each oper at in g segment was b a sed on t h e segmen t approved five -year plan,
wh ich in clu d es t h e seg ment e stimation s for reve nu es, operat ing in come and ot her fact ors, su ch as
workin g capit a l an d capit al e xpen d it u res. T h e se gments' proje ct ion s were b ased , amon g ot h er
t hin g s, on t he a ssume d sales volu me growth rate s b ased on lon g -term expectation s, in ter nal selling
price s a nd r aw mat e rials price s b ase d on external data sou r ces, wh en a pplica b le and releva nt.
Th e key assu mpt ions used t o calcu lat e t h e oper at in g seg men t s' recoverab le amou nt s ar e t he
nomin al aft er - tax discou nt r ate of 8% an d t he lon g-t er m g rowt h rat e of 2%, re fle cting th e indust ries
an d ma rket s t he Company is e nga ged in .
Followin g are t he b r eakeven discou n t rat es for ea ch seg ment :
B r eakev en nom inal
a f ter-tax discount rate
In d u st ria l Prod ucts
1 6 .4%
Pot a sh
1 2 .7%
In n ova t ive Ag. Solu tion s
1 0 .4%
Phospha t e Solu t ion s
1 0 .6%
B. Impairment testing for fixed assets
1. In ord er to act ive ly ad d ress g lob al market vola t ilit y, t h e con t inu ing t ren d of econ omic a nd
b u sin ess u ncertain ty a nd t o mit ig a t e t h e implica t ion s of t h e COVI D - 19 spread an d it s impact
on t he Compa ny's resu lt s, se ve ral efficien cy in it iat ives an d mea su r es we re in it iat ed in 2020,
wh ich in clu d ed , amon g ot h er t h ings, t h e d iscon tinu at ion of t h e u n profit able pr od uct ion and
sa le of t he ph osph at e rock a ct ivit y in Rot em I sra el, lead ing t o a wr it e - off of fixed asse t s in the
amou n t of $70 million .
2. In t h e se con d qu ar t e r of 2020, th e b u siness a nd econ omic u n ce rt ainty, t he g lob al mar ket
volat ilit y, and t h e con t in uou s t ren d of low ph osph at e price s in d icat ed t h e pot en t ial for an
impa ir men t in t he va lu e of Rot em I sra el's n on -fin an cial a sset s. A s a re su lt , t he Company
con d u ct ed an examin at ion of Rot em Israel's r ecoverab le a mou n t. T h e assu mpt ion s u sed to
calcu lat e t h e recover able amoun t in clud ed a n omin al after -tax d iscou nt rate of 9% and a long-
t erm g rowt h r at e of appr oximat ely 2%, re fle ct in g t he in du stries and mar ket s in wh ic h the entity
operat es.
B ased on t h e evalu ation pe rformed , it was fou n d t hat Rot em Isr ael's carrying a mou nt is h igher
t han it s r ecovera b le a mou n t . As a r esu lt , in t he secon d qu a rt er of 2020, t h e Compan y
recog n iz ed an expen se of $8 million u n d er "ot her e xpense s" in th e st atemen ts of in come .
Notes to the Consolidated Financial Statements as at December 31, 2020
49 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 12 - Impairment Testing (cont’d)
B. Impairment testing for fixed assets (cont'd)
3. In or d er t o a ct ively ad d ress g lob al market volat ilit y, t he con t inu ing t r en d of econ omic and
b u sin ess u n ce rt ain ty and , spe cifically, t h e sig n ifican t ch alle nge s in t he wor k e n viron me nt at
t he Spa nish sit e Sa llen t, t he Company d ecid ed to accelerate t he sit es con solid ation plan in ICL
Ib e ria b y closin g t h e Sa llen t sit e ( Vila fru ns min e) as of J u n e 30, 2020, which le d t o a writ e -off
in t h e amou n t of $12 million a t t rib uted t o fixed asset s.
Note 13 - Credit from Banks and Others
A. Composition
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
S h ort -term debt
From fin an cial in st it u tion s
2 9 6
358
Cu rren t mat urities of:
De b en t ur es
2 0 6
-
Lon g -t erm loa ns from fin an cial in st itu tion s
90
13
Le ase Lia b ilit y
64
49
Lon g -t erm loa ns from ot h ers
23
-
3 8 3
62
T o t al Sh ort -T erm d eb t
6 7 9
420
L o n g - ter m d ebt a nd d e bentu re s
Lon g t erm lease liab ilit y
3 2 5
300
Loan s fr om fin an cial in st it u tion s
1 9 4
408
Ot h er loan s
24
29
5 4 3
737
Ma rket ab le d eb en tures
1 , 6 18
1,231
Non - ma rke t able d eb en tur es
2 7 5
275
1 , 8 93
1 ,5 0 6
2 , 4 36
2 ,2 4 3
Less – cu r ren t ma tu rit ies of:
De b en t ur es
2 0 6
-
Lon g -t erm loa ns from fin an cial in st itu tion s
90
13
Le ase lia b ilit y
64
49
Lon g -t erm loa ns from ot h ers
23
-
3 8 3
62
T o t al Lon g- t erm d eb t a nd debent ure s
2 , 0 53
2 ,1 8 1
For fu rt h er in for mation , see Not e 21.
Notes to the Consolidated Financial Statements as at December 31, 2020
50 ICL Grou p L imited Consolidated Finan cial S tatements
Note 13 - Credit from Banks and Others (cont’d)
B. Yearly movement in Credit from Banks and Others (*)
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
B a la nce as at J anuary 1
2 , 5 59
2,442
C h a nges fr o m fin an cing cash f lows
Receipt of lon g - t er m d eb t
1 , 1 75
657
Repaymen t of lon g - t erm d ebt
( 1 ,1 33)
(689)
Repaymen t of sh or t - ter m d ebt , n et
( 5 2 )
(183)
In t e rest pa id
( 1 0 9)
(115)
Receipt from t ransa ction s in d e riva tive s d esign at ed as a
cash flow h ed g e
24
-
T o t al n et f inancin g ca sh flo ws
( 9 5 )
(330)
In it ia l r ecog n ition of le ase lia b ility
80
353
In t e rest expen ses
1 2 0
125
Effect of cha nge s in fore ig n e xchang e ra tes
84
48
Chan ge in fair va lu e of cash flow h ed ges
( 5 3 )
(42)
Ot h er cha ng es
( 3 5 )
(3 7 )
B a la nce as at December 31
2 , 6 60
2 ,5 5 9
( * ) T he b alan ce in clu d es Sh ort - ter m d eb t, d e riva tive s d e sig nated a s a ca sh flow he d g e, loan s and
d eb e ntu re s a nd in terest pa ya bles.
C. Restrictions on the Group relating to the receipt of credit
As part of t h e loan ag r eemen ts t he Grou p h as sig n ed, var iou s r est rict ion s a pply in clu ding fin ancial
cove nan t s, a cross- d efault mech anism a nd a n eg at ive pled ge.
Set fort h b elow is in formation r egard ing the fin an cial covenant s a pplica ble t o th e Compan y a s part
of t h e loan ag r eements an d t he complian ce t he rewith:
Tot al sh arehold er's equ ity
Equ it y g reat e r t han
$2,000 million
$ 3 ,930 million
Rat io of EB IT DA to t h e ne t int erest expense s
Equ al to or g rea t er
t han 3.5
9 . 3
Rat io of t h e n et fin a ncial d eb t to EB IT DA
Le ss t h an 3.5
2 . 3
Rat io of cert ain su b sid iaries loa n s to t he t otal
asset s of t h e con solid at ed compan y
Le ss t h an 10%
4%
( 1) Examin at ion of complian ce wit h t h e ab ove -men t ion ed fin an cial covena nt s is b ase d on t he
Compan y's con solid at ed fin ancial st atemen ts. A s a t Decembe r 31, 2020, t he Company complies
wit h all of it s fin an cial coven an t s.
F i nancial Covenants (1)
F i nancial R atio Req uired
u n der the A greemen t
F i nancial R atio
D e c ember 3 1,
2 02 0
Notes to the Consolidated Financial Statements as at December 31, 2020
51 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 13 - Credit from Banks and Others (cont'd)
D. Sale of receivables under securitization transaction
In Sept emb e r 2020, t he Company an d ce rt ain Grou p su b sid iar ies ( h er einafter – t h e Su b sid iar ies)
sig n ed a serie s of ag re emen ts reg ardin g a secu rit ization t ransa ction wit h t hre e in ternation al b anks
( herein after – t he Lendin g B anks) for t he sale of t h eir tr ade r eceiva b les t o a special compan y wh ich
was est a b lish ed spe cifically for t h is pu rpose ( h er ein after – t h e A cqu irin g Compa ny).
Th e n ew se cu rit ization ag re emen ts were sig n ed wit h a commit t e d a mou nt of $300 million an d an
ad d it ion al u n commit t ed a mou n t of $100 million , mat u r in g in Sept emb e r 2025 ( h ere in after – t he
Agr eemen ts). Th ese A g ree ments r epla ce t h e prior se cu rit izat ion ag reeme nt s, wh ich e xpire d in
Sept emb e r 2020. Th e st ru ct u re an d te rms of t he A g ree me nts a re ve ry similar t o t h e prior
se cu rit izat ion ag re emen t.
Th e Company's policy is t o u t ilize t h e secu ritization limit b a se d on it s cash flow n eed s, alt er native
fin a ncin g sou rces an d ma rket con d it ion s. Accordin g t o t he A g re ement s, ICL u n d er took t o comply
wit h a fin an cial coven an t a ccordin g t o wh ich t he r atio of n et d ebt t o EB IT DA will n ot exceed 4.75.
If I CL does not meet th is ra t io, t h e A cqu ir in g Compa ny can discon t in u e acqu irin g n ew t rade
receiva b le s ( wit hou t a ffectin g exist ing a cqu isit ions). A s a t th e re portin g date, ICL complies wit h the
ab ove fin an cial coven an t.
Th e A cqu irin g Compan y fin ances acqu isition of t h e d eb ts t hrou gh a loan re ceived from a fin an cial
in st it u t ion t h at is n ot affiliat ed wit h ICL. T h e pe riod d u rin g which t h e Su b sid iaries are en t itled to
se ll t he ir t r ad e re ceivab les t o t h e Acqu irin g C ompa ny is five ye ars from t h e closin g d at e of t he
t ran sa ct ion, wit h bot h part ies h avin g t h e opt ion , at t h e e nd of e ach year, t o n ot ify of t he
t ran sa ct ion's cance llation . On ce t he Company h as t ransfe rre d it s trad e re ceivables, it n o longer has
t he r ig h t t o sell t he m t o an ot h er par t y. T he sellin g price of t h e t ra d e re ceivable s is t he a mou n t of
t he d eb t sold , less t h e calcu la ted in terest cost b ased on t he expected period b e twe en th e sale date
of t h e cu st omer debt an d its repayment d at e. Upon acquisit ion of t he debt, t he Acqu irin g Company
pays part of t h e d eb t price in cash an d t h e remain d er in a su b ord in ated n ot e, wh ich is paid aft er
collect ion of t h e d e bt sold . Th e r ate of t h e cash con sid eration va ries depend ing on t he composit ion
an d b eh avior of t h e cu st omer por t folio. Th e Su b sid iar ies con t in ue t o h an d le t h e colle ct ion of t he
t rad e receivab les in clu ded in t he securitiza ti on tr an sact ion , on b eh alf of t h e A cqu iring Compa ny.
In ad d it ion, t h e A greement s set several con dition s r egard ing the qu alit y of t h e cu stomer por tfolios,
wh ich g ive t h e Len d ing Ban ks t h e opt ion of t e rmin at in g t he u n d e rt akin g or exclu d in g t he
su b sid iar ies wh ose cu stome r port folios d o n ot mee t t he provid ed con dit ions from t h e A gre ements.
Th e t r ad e receivab les a re fully pr esen ted in th e Compa ny's st atemen ts of fin an cial posit ion a n d the
receipt s r ece ived from t h e A cqu iring Compan y are pre se nted as a fin an cial liab ilit y u n der sh or t-term
cre d it . As at Dece mb e r 31, 2020, u t ilizat ion of t he se cu rit ization facilit y wit h in t his framewor k
amou n t e d t o $183 million ( De cemb er 31, 2019 - $261 million ).
Notes to the Consolidated Financial Statements as at December 31, 2020
52 ICL G rou p Limited Co nsolid ated Fin anc ial S tatem ents
Note 13 - Credit from Banks and Others (cont'd)
E. Information on material loans and debentures outstanding as at December 31, 2020:
I n s tru ment type
L o an date
O r iginal
p r inc ipal
( m illions)
C u r renc y
C a r rying
a m o un t
($ m illions)
I n t erest rate
P r incipal r epaym ent d ate
A d ditio nal
i n f o rmation
Debentur es - S eries F
M ay 2 01 8, Decem ber 2 020
693
U.S . Dollar
716
6 .3 8 %
M ay 2038
(1 )
Debentur es - S eries E
Apr il 2 0 16
1 ,5 6 9
Isr aeli S hek el
487
2 .4 5 %
2021- 2 02 4
(annual installment)
Debentur es (private
offer ing ) – 3 series
Januar y 2 01 4
84
145
46
U.S . Dollar
84
145
46
4 .5 5 %
5 .1 6 %
5 .3 1 %
Januar y 2 02 1
Januar y 2 02 4
Januar y 2 02 6
Debentur es - S eries G
Januar y /M ay 20 20
766
Isr aeli S hek el
232
2 .4 0 %
Dec em b er 20 34
Debentur es - S eries D
Dec em b er 20 14
184
U.S . Dollar
183
4 .5 0 %
Dec em b er 20 24
(1 )
Loan - E ur opean Bank
July 2020
50
GBP
68
0 .7 9 %
M ay 2021
Loan-Is r aeli in stitu tio ns
N ovem b er 20 13
207
Isr aeli S hek el
64
4 .7 4 %
2015-2 024
(annual installment)
Par tially
r epaid
Loan - Asian Bank
M ay- June 2 0 20
139
Chinese Yuan
21
4 .9 5 %-4 .25 %
Febr uar y 20 21-Mar ch 202 3
Febr uar y -Sep tember 2 020
140
21
4 .8 7 %-4 .40 %
Loan - other s
Apr il 2 0 19
160
Chinese Yuan
24
4 .4 0 %-5 .23 %
Apr il 2 0 21-M arch 20 22
Notes to the Consolidated Financial Statements as at December 31, 2020
53 Statements Financial Co ns olid ated Limited Grou p CLI
Note 13 - Credit from Banks and Others (cont'd)
E. Information on material loans and debentures: (cont’d)
Ad d it ion a l Information :
( 1) On J an u ary 2, 2020, t h e Compan y complet ed an I LS 380 million ( ab ou t $118 million ) placement
of series G u n se cu red d ebe nt ures ( he rein aft er - Ser ies G) in I srael. On May 18, 2020, t he
Compan y comple t ed an expan sion of Series G d eb en t ur es in Isr ael, a t t he a mou n t of I LS 386
million ( ab ou t $120 million ).
( 2) Th e a gg r egate prin cipal of Ser ies G de b en tures amou n ts t o I LS 766 million ( ab ou t $238 million ).
Th e prin cipal of Series G sh all b e payable in th irt een con secutive u nequa l annual payments, to
b e pa id , on De cemb er 30 of ea ch of t h e ye ars 2022 t hr ou g h 2034, wit h 64% of t h e prin cipal
t o b e paid on De cemb er 30, 2034. Serie s G car ries an an n ua l cou pon of 2.4% pa id in se mian nual
in st allme n t s on Ju ne 30 and De cemb er 30 of each year, commen cing Jun e 30, 2020. T he series
G h ave b ee n rated "ilA A" by Stand ard & Poor 's Maa lot rat ing agency. T he in te rest r ate on Series
G will in crease b y 0.25% a b ove t h e b ase in t erest rate for any ra t ing level d ecrea se st arting at
a rat in g of "ilA an d rea chin g a maximu m cumu lat ive inte rest rate in crease of 1% u pon r eaching
a rat in g of "ilB BB".
Th e in t erest rate on t he se rie s G d e ben ture s will a lso in cr ease b y 0.25%, b eg inn ing on th e first
b u sin ess d a y followin g t h e pu b lica t ion of t h e Compa ny’s fin an cial re port s in d ica ting t hat the
Compan y’s e qu it y has falle n below $2,000 million ( h erein aft er, th e Equit y Thresh old), u ntil the
ear lier of ( a) t h e fu ll r epaymen t of t h e u n paid b alan ce of t h e series G de b en tures or ( b ) t he
d at e of pu b lica t ion of t h e Compan y’s fin ancial report s in dicatin g t h at t he Compan y’s equ ity is
at or a b ove t h e Equ it y Th re sh old , pr ovid ed t h at t he t ot a l in cre ase in t h e in t erest r at e due to
t he provision s of t h is an d t h e prior con dit ion sh all n ot e xceed 1.00% in t h e ag greg at e.
( 3) On Dece mb e r 3, 2020, t h e Company complet e d a pr ivat e expan sion of Series F d ebent ures, at
t he a mou n t of $93 million par valu e, ca rryin g an an n u al cou pon of 6.375%, in con sid er ation
of $1.29 per $1 pa r valu e, amou n t in g t o a t ot al con sid er at ion of ab ou t $120 million . Th is
expan sion sh all con st it u te a part of a d e b en ture serie s previou sly issu ed b y t he Company . The
t erms of t he d e b ent ures a re id ent ical t o t h e issu a nce t er ms of Ser ie s F d e b en tu res in t h e first
placemen t t h ere of. The ag g re g ate prin cipa l of Se ries F d eb en tu res followin g t h is e xpansion
amou n t s t o a b ou t $693 million . Th e prin cipa l of Series F sh all b e payab le in a sin g le p a yment,
t o b e paid on May 31, 2038. Series F d e bent ures carry a n a nnual cou pon of 6.375% , t o b e paid
in semia nnu a l in st allments, on May 31 and Novemb er 30 of ea ch ye ar .
( 4) In J u n e 2020, t h e cr ed it r at in g compan y F it ch Rat in gs revised t h e Company’s ra t in g ou t l ook
from “posit ive” t o “st ab le”, wh ile reaffir min g t h e Compan y’s in t ern ation al cre d it rat in g B BB -.
Du r in g J u n e 2020, t he cred it rat in g a gen cy St an d ard & Poor’s reaffirmed t h e Compa n y’s
in t er n ation a l cr edit ra tin g, B B B- wit h a st a b le r at ing ou tlook. Fu rt her mor e, St an dard & Poor’s
Ma alot re affirmed t he Compa ny’s local cre d it r atin g in Israel, ilA A with a stable ra ting ou tlook.
( 5) On J u ly 2, 2020, t h e Compan y en g ag ed in an agreement wit h t he B an k of En g land, wh ereby
t he C ompa ny sh all b e en t it led t o r ece ive a loa n u p t o an amou n t of GB P 300 million ( about
$401 million ), carr yin g a n an n u al in t er est of SO NI A +0.6%. As at Dece mb e r 31, 2 020, the
Compan y ha s b orrowed GBP 50 million ( ab ou t $68 million ) t h at will b e repaid on May 18, 2021.
Notes to the Consolidated Financial Statements as at December 31, 2020
54 ICL Grou p L imited Consolidated Finan cial S tatements
Note 13 - Credit from Banks and Others (cont'd)
F. Credit facilities:
I s suer
G r oup of international bank s (1 )
E ur o pean bank
D a t e of the credit f acility
M ar c h 2 015
Dec em b er 20 16
D a t e of cr edit fac ility
t e r mination
M ar c h 2 025
M ay 2024
T h e am ou n t of the c redit facility
US D 1 ,1 0 0 million
US D 99 m illion
C r ed it facility has been utilized
-
US D 99 m illion
I n t erest rate
Up to 33% use of the c redit:
Libo r /E uribor + 0.7 0%.
Fr om 33% to 66 % use of the c redit:
Libo r /E uribor + 0.8 0%
66% or mo re use of the cr edit:
Libo r /E uribor + 0.9 5%
69 m illio n do llar-Libor + 0.6 6%
30 m illio n do llar-Libor + 0.8 0%
L o an cu rren cy type
US D and E ur o lo ans
US D lo an s
P l ed ges and restrictions
Financ ial c ovenants - see S ection D,
a c r o s s -defau lt mechanism and a
neg ative p ledge.
Financ ial c ovenants - see S ection D
and a negative pledge.
N o n -u tilization fee
0.21%
0.00%
( 1) Some of t he b a nks agr eed t o exten d t he maturity of $900 million cre d it facilit y from March 2024
t o Mar ch 2025. A s at Dece mb e r 31, 2020, t h e Compan y ha s $1.1 b illion of u n u t ilized lon g -term
cre d it lin e s.
G. Pledges and Restrictions Placed in Respect of Liabilities
1) Th e Grou p h as u n d erta ken various ob lig ation s in r espe ct of loan s an d cred it lin e s fr om b anks,
in clu d in g a n eg ative ple d ge, whe reby t he Grou p commit t e d, a mon g ot h er t h in gs, in fa vor of
t he len d e rs, t o limit gu aran tee s an d in d emn ities t o t h ir d par t ie s ( ot her t h an g u arant ees in
respect of su b sid iaries) u p t o an ag r eed a mou n t of $550 million . T he Grou p h as also commit t ed
t o g ra nt loan s on ly t o su b sidia ries an d t o associa t ed compa nies, in wh ich it h old s at le ast 25%
of t h e vot ing rig ht s. ICL has fu rt he r commit t ed n ot t o g ran t an y cre d it , ot h er t h an in the
ord in ar y cou rse of b u sin ess, a nd n ot t o reg ist er a n y cha rges on it s exist in g an d fu tu re assets
an d in come. For fu rt he r in format ion reg ardin g t h e coven an t s in r espe ct of t h ese loa n s and
cre d it lin es, se e it em D ab ove.
2) As at Decemb er 31, 2020, t h e t ot al g uara ntee s provid e d b y t he Compan y were in t he amount
of 92$ million .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
55 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 14 – Other Payables
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Employe es ( 1)
3 2 2
294
Cu rren t t a x liabilit ie s
87
78
Accru ed e xpenses
76
70
Gove rn me n t al ( mainly in r espe ct of royalt ies)
75
67
In come re ceived in ad van ce
17
7
De riva t ive d esig n ated as an economic h ed ge
43
8
Ot h ers
84
63
7 0 4
587
( 1) I nclu d in g post -employmen t liabilit ie s in t he amou nt of $40 million an d $29 million as at December
31, 2020 an d 2019 re spect ive ly. Se e n ot e 16.
Note 15 - Taxes on Income
A. Taxation of companies in Israel
Th e cu rre nt an d d e ferred t axe s e xpense s of I srae li en t ities ar e b ooke d u n der t h e applicab le t ax rates
b elow:
1. I n come t ax r ate
Th e I srae li st atu tory primary in come tax ra te is 23%.
2. T a x b enefits u n de r t he I sraeli L aw f o r t he E n cou rage me nt o f C apital I nvestme nts, 1959
( herein a fter – the En cou ra gement L aw)
a) B ene ficia ry En t er prises
Th e pr od u ct ion fa cilit ies of some of t h e Compa n y’s su b sid iar ies in Isr ael ( h erein after – t he
Su b sid ia ries) h ave received “B en eficiar y En t e rpr ise” st at us u nd er t h e En cou ra ge me nt law a ft er
Amen d men t No. 60 t o t he Law pu b lish ed in A pril 2005. Th e b en e fit g ra n ted t o t h e Compan y is
ma in ly a pre ferred t ax r ate.
A compa ny h avin g a “B en eficiary En terprise” that dist rib utes a d ivid en d ou t of e xempt in come , will
b e su b je ct t o corpor at e t ax in t h e ye ar in wh ich t h e d ivid en d wa s dist rib u ted on t h e amou nt
d ist r ib u ted ( inclu din g th e a mou n t of t he corpor at e t ax appli cab le d ue to t he d istr ibut ion) at the tax
rat e a pplica b le u n der t he Encou r ag emen t La w in t he year in which t h e in come was pr od uced, had
it n ot b e en exempt from t ax.
As at Decemb er 31, 2020, t h e t empor ary d iffe ren ce re lated t o d istr ibu tion of a d ivid e n d fro m exe mpt
in come, in re spect of wh ich d e fer red t axes were n ot recog nized , is in t h e a mou n t of ab ou t NIS 2,435
million of d ist rib u t ab le amou n t a n d a bou t NIS 609 million of rela t ed t axes ( $757 million a nd $189
million , respect ive ly).
Notes to the Consolidated Financial Statements as at December 31, 2020
56 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 15 - Taxes on Income (cont'd)
A. Taxation of companies in Israel (cont'd)
2 . Tax be nefits u nder the Isr aeli La w for th e En cou r ag emen t of Capit al Invest ments, 1959 ( cont 'd)
a) B ene ficia ry En t er prises (con t'd)
Und er t h e “Ire lan d” t ra ck, t he compan y paid a re d uced t ax rate of 11.5% a s of 2008 on par t s of it s
in come. T h e b en efit d e rivin g from t h e "I relan d" t rack e nd ed in 2017, ot h er t h an wit h r espe ct to a
sin g le e nt it y in Israel for which en t it lemen t will e n d in 2 021, assu min g t h e en t ity will g e ne rate
su fficien t t axa ble in come b y th en .
Th e part of t axa ble in come en title d t o b e nefit s at r educed t ax ra tes is calcu lated b ased on t he ratio
of t h e t u r nover of t h e “Be neficiary En t er prise” t o a compa ny’s t ot al t ur nover. T he t u rnover at tributed
t o th e “B en eficiary En t erprise” is g en er ally calcu lat ed accor d ing t o t h e in crease in t h e t u rn over
compar ed t o a “b a se” t ur nover , which is t he averag e t urnover in t he th re e years prior to t he year of
elect ion of t h e “B ene ficiary Enterprise”.
b ) Pre fer red En ter prises
In Dece mb e r 2010, t h e Isr aeli Kn esse t appr oved t he Econ omic Policy Law for 2011 - 2012, wh ereby
t he En cou ra geme nt la w, was a mend ed ( he rein aft er – t h e A me nd men t). T h e A me nd me nt is e ffect ive
from J anu a ry 1, 2011 and it s provision s apply t o preferr ed in come, d er ived or accru ed b y a Pr eferred
En t er prise, as d efin ed in t h e A me nd me nt, in 2011 and thereafter.
Th e A men d men t d oes n ot apply t o an I n d u st rial En t erpr ise t h at is a min e, or an y ot h er facilit y for
prod u ct ion of min erals or a facilit y for explorat ion of fu el. T he refore, I CL plan ts t h at are d efin ed as
min in g plan t s an d min eral prod ucers will n ot b e able t o take ad vantage of th e tax ra tes in cluded as
part of t h e A men dmen t.
Th e t a x r at es applica b le t o Preferr ed Ent erprises in Isra el:
1) Pr eferred En t erprises locat e d in Developmen t A rea A – 7.5% .
2) Pr eferred En t erprises locat e d in t he rest of t he cou nt ry – 16%.
In Nove mb e r 2015, t h e Econ omic Efficien cy La w wa s pa ssed b y t he Kn esset , wh ich e xpa nd ed the
except ion t o all of t h e En t er prise’s act ivit ies up t o t he t ime of t h e first ma rket ab le prod u ct ( for
ad d it ion al de tails – see Sect ion 4 b e low). Non etheless, t ax b en efits t o wh ich a Beneficiary Plant was
en t it le d were n ot cancelle d in respect of invest men t s u p t o Decemb er 31, 2012. Th er efore, such
plan t s are ab le t o u t ilize t h e t ax b en efit s in respect of qu alifyin g in ve st me nt s mad e u p t o
De cemb er 31, 2012, in accord a nce wit h t he provision s of t h e old law.
It is fu r t he r pr ovid ed in t h e A me n d me nt t h at t ax will not apply t o a d ivid en d d ist r ib ut ed ou t of
prefer red in come to a sh are hold er t hat is an Isr aeli - resid en t compan y. A divid e nd d istribu ted out of
prefer red in come t o a sh are hold er t h at is an in d ivid u a l or a fore ig n resid en t is su b ject t o t a x at a
rat e of 20%, u nless a lower t ax ra t e applies u n der a re leva n t t re at y for prevent ion of d ou ble t axation.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
57 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 15 - Taxes on Income (cont'd)
A. Taxation of companies in Israel (cont'd)
3 . T h e Law for t he En courag eme nt o f In dust ry (Taxation ), 1 969
a) Some of t he Compan y’s I sr aeli su b sid iaries ar e “ In d u strial Ent erprise”, as d efin ed in t he
ab ove - ment ion ed la w. In re spect of b u ild ings, ma ch in ery a nd equ ipment own e d an d u sed by
an y "In d u st ria l En t er prise", t h e Compan y is en t it led t o claim acceler at ed d epr eciat ion a s
provid e d b y t h e I ncome T ax Reg ulation s – Ad justmen ts for In flat ion (Depre ciat ion Rate s), 1986
wh ich a llow a cce le rat e d d epreciation t o an y "I ndu strial En t er prise" as of t h e t ax ye ar in which
each asse t is first placed in se rvice.
b) Th e I n d ustr ial Enter prises own ed by some of t he Company's Israeli su bsid iarie s have a common
lin e of prod u ct ion or simila r in d u st rial b ra nch a ct ivit y an d, t h erefore, t h ey file, t og et he r with
t he Compa ny, a con solid at e d t a x r et ur n in accord an ce wit h Sect ion 23 of t he Law for t he
En cou rag ement of In dust ry. A ccordin gly, each of t he sa id compa n ies is e n titled t o offset its tax
losses ag ain st t he t axable in come of t he ot h er compa n ies.
4 . T h e Law for T axati on o f Profits fr o m Na tu ra l Re sou rces
Th e Law for Taxat ion of Profit s fr om Nat u ra l Re sou rces ( h erein after – t h e Law), is effect ive sin ce
J an u ary 1, 2016. T h e govern men t t ake on n at u ral resou rces in I sra el inclu d e s t hr ee elemen ts:
Roya lt ies, Corpor at e I n come T ax an d Su rplu s profit levy . Th e h ig h lig h ts of t h e Law ar e se t for th
b elow:
R o y a ltie s:
In accor d an ce wit h t h e Min es Or d in ance, t he r at e of t h e royalt ie s, in con ne ct ion wit h resou rces
prod u ce d from t h e qu arrie s, will b e 5% . For prod u ction of ph ospha t es, t he r oyalt y rate is 5% of the
va lu e of t h e qu an tit y pr od uced.
I m p osit ion of Su rplus Pr ofit Levy:
Th e Su r plu s Profit Le vy is applied for t h e b romin e, ph osph at e an d mag ne sium min er als from 2016
an d for Pot a sh from 2017. T h e tax base, which will b e calcu lat ed for eve ry min eral se parately, is the
min era l’s oper at in g in come , in accord a nce wit h t h e accou n ting st at emen t of in come , to wh ich
cer t ain a d just me nts will b e mad e .
Th e t a xa b le profit is b ase d on t he min era l oper at in g in come, a s a d ju st e d, a ft er a d ed uct ion of 5%
of t h e min er al’s year en d workin g capit al, an d a n amou nt t hat r eflect s a yield of 14% on t he value
of propert y, pla nt and equipmen t u sed for prod uction and sale of t he quarried ma teria l ( hereinafter
–Yield ).
On t he t ax b ase , as st at ed , a prog ressive t a x will b e imposed at a r at e t o b e d et ermin ed b ased on
t he Y ield in t h at ye ar. For a Y ield b etween 14% a n d 20% , Natu ra l Re sou rces T ax will b e imp osed at
t he r at e of 25%, while yie ld in e xcess of 20% will b e su b ject t o Na t u ral Resou rces Tax a t t he r ate
of 42% . In yea rs in wh ich t he Na t u ral Re sou rces T ax b ase is n ega tive , t h e n eg ative amou n t will be
car ried forward from year t o ye ar a nd will con st it u t e a t a x sh ie ld in t h e su ccee d in g t ax yea r. The
ab ove compu t at ion s, in clu d in g t h e rig h t t o u se prior year s’ los ses, a re mad e separ at ely, wit h out
con sid erin g set offs, for ea ch natural resou rce pr od uction a nd sa le activit y.
Notes to the Consolidated Financial Statements as at December 31, 2020
58 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 15 - Taxes on Income (cont'd)
A. Taxation of companies in Israel (cont'd)
4 . T h e Law for T axati on o f Profits fr o m Na tu ra l Resou rce s ( cont'd)
I m p osit ion of Su rplus Pr ofit Levy: ( con t'd)
Limit a t ion s on t h e Nat u ral Resou rces Ta x – t h e Nat u ral Resou rces Tax will on ly apply to profit s
d eriving fr om t h e act u al prod u ction an d sale of each of t h e followin g re sou rces: pot ash , b romine,
ma gn e siu m a nd ph osph at es, an d not t o t h e pr ofit s d erivin g from t h e down st ream in d u st rial
act ivit ie s. Calcu lation of the Nat ural Resources Tax will b e made separately for eve ry min eral min ing
con cession . Non et he less, rega rd ing Ma gne sium, it was pro vid ed t h at commen cin g from 2017, u pon
sa le of Carn a lit e b y DSW t o Ma gne siu m an d reacqu isit ion of a Sylvin it e b y - prod u ct b y DSW ,
Ma gne siu m will ch ar ge DSW $100 per ton ne of pot ash, which is prod uced from th e Sylvin it e ( linked
t o t h e CPI ).
A mechan ism was pr ovid ed for d e t ermin ation of t h e ma rke t price , wit h r espect t o t ra nsa ct ions in
nat u ra l resou rce s exe cuted between related par tie s in Isr ael, a s well as a mechan ism for calcula tion
of t h e man n er for cost s allocation b etween t he prod uction an d sa le of t he n atu ral resource, on the
on e h an d , a n d t h e d own stre am a ctivit ies, on t he ot her h and.
Reg ard in g t he b romin e resou rce, t he sale price of b romin e sold to re lated par ties, in a nd ou t side of
Isr ael, who u se t h e b romin e for b romin e compou n d s man ufact ur ing activit ies, sh all b e, in each tax
ye ar, t h e hig her of:
1) A ct u al price in t he sa le t ransa ction .
2) A pr ice wh ich will ke ep an ope rating profit wit h th e b romin e compou n ds man ufact ure r of 12%
ou t of t h e re ve nue it g en erat es fr om b romin e compou n ds sales.
Reg ard in g t h e ph osph ate resource, t h e sale pr ice of phosph at e sold t o related par ties for pu r poses
of d own st re am manufacturing a ctivit ies sh all b e, in each tax yea r, t h e h ig he r of:
1) A ct u al price in t he sa le t ransa ction .
2) A price which will keep an opera t in g profit wit h t he d ownst rea m prod u ct s man u fa cturer of
12% ou t of t h e re venue it g en erat es fr om d own st ream ph ospha t e mad e of pr od ucts sa les.
3) T h e prod u ct ion a nd oper atin g cost s at trib uta ble t o a u nit of ph osph ate .
Th e Company t ook a n a lt ern ative t ax filin g posit ion , accord ing t o which, all t h e Dead Sea min erals
sh ou ld b e t axe d as a u n ified min era l u nde r t he above -mention ed me ch anism a s t h e n atur al resou rce
t hat is u sed b y t he compa n y is t h e Dea d- Sea brin e.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
59 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 15 - Taxes on Income (cont'd)
4 . T h e Law for T axati on o f Profits fr o m Na tu ra l Re sou rces ( cont'd)
C o r porate in come T ax:
Th e Law for En cou rag ement of Ca pit al In vest ments was revised su ch t ha t t he d efinition of a “Plant
for Prod u ct ion of Qu ar rie s” will in clu d e all t h e plan t ’s act ivit ies u p t o pr od u ct ion of t h e first
ma rket ab le nat u r al re sou rce, of pot a sh, b romin e, mag n esiu m a n d ph osph at e s. A ccord in gly,
act ivit ie s in volve d wit h prod u ct ion of t h e resou rce will not b e e nt it led t o t ax b e nefit s u n d e r the
La w, whereas a ct ivit ies re la t ing t o d ownst rea m prod u cts, su ch as b romin e compou n d s, acid s a nd
fer t iliz ers, will b e en t itled t o t ax b enefits u nd er t he Law.
Th e Na t u ral Resou rce Tax will b e d edu ctible from t h e Compa ny's t axable in come and the Company
will pay t h e Cor porat e T ax on th e b a la nce as is cu stoma ry in Isr ael.
B. Taxation of non-Israeli subsidiaries
Su b sid ia ries in corpor ate d ou tsid e of I srael are assessed for tax u nder the t ax laws in t he ir cou n tries
of resid e n ce. The prin cipa l t ax r ate s a pplica b le t o t h e major su b sid iarie s ou t side Israel are as follows:
C o untry
T a x r ate
N o te
B razil
34%
Ger ma ny
29%
Unit ed St a tes
26%
(1)
Net h er lan ds
25%
Spa in
25%
Chin a
25%
Unit ed Kin g dom
19%
( 1) Th e t a x ra t e is an est ima t ed average and in clu d es fe d eral and st a t es t ax. Differe nt rate may
apply in e ach spe cific year , as a resu lt of d iffer en t allocat ion of in come b et ween t h e d ifferent
st at es.
C. Carried forward tax losses
As at Dece mb e r 31, 2020, t he b alan ce s of t h e ca rryforwar d t ax losses of su b sid iar ies for wh ich
d efe rre d t axe s were recorded, is a bou t $ 418 million ( December 31, 2019 – ab out $181 million ). The
in cr ease r ela t es main ly t o losse s in r elat ion t o t h e closu re of sit es in Isr ael an d Spain , for ad dit ional
in format ion se e not e 12.
As at Decemb er 31, 2020, t h e b alances of t h e car ryforward t ax losse s t o fut ure yea rs of su b sidiaries
for wh ich d e fer red t a xes we re n ot r ecord e d , is ab ou t $392 million ( Dece mb e r 31, 2019 –
ab ou t $363 million ).
As at Dece mb e r 31, 2020, th e ca pit al losses for t ax pu rpose s a va ilab le for ca rryforward t o fu t ure
ye ars for which deferr ed t axe s we re n ot re cor d ed is ab ou t $16 3 million ( De cemb e r 31, 2019 –
ab ou t $165 million ).
Notes to the Consolidated Financial Statements as at December 31, 2020
60 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 15 - Taxes on Income (cont'd)
D. Tax assessments
1) T h e Compan y a nd t h e main opera tion al compa nies in I sra el ( DSW, Rot em, B romin e, DSM, BCL
an d F& C), alon g wit h most of t he ot h er compan ie s in Isr ael, h ave receive d fin al t ax a sse ssments
u p t o a nd in clu din g 2011. Th e main su bsid iaries ou tside of Isr ael have fin al t ax assessments up
t o an d in clu d in g 2014.
2) I n Decemb er 2018, t h e Isr aeli T ax A u t horit ies ( h erein aft er - t h e I TA ) r eje ct e d t he Compan y's
ob ject ion r elat ing an a ssessmen t issu ed to t he Compan y and t o certain Israeli su bsid iaries, and
d eman d ed a n ad d it ional t ax paymen t , for t h e ye ars 2012 -2014, in t h e a mou n t of NIS 303
million ($94 million ). Th e Company file d a n a ppeal t o t h e J eru sa lem Dist r ict Cou rt d isputing
t he a ssessmen t .
In De cemb er 2020, t he I TA issu e d a n asse ssmen t for t h e year 2015, wit h a d eman d for an
ad d it ion al t ax paymen t of NI S 181 million ( $56 million ). Th is a mou n t con t ain s a cha rge of NIS
68 million ( $21 million ), wh ich is a t t ribu ted to a matt er alre ad y in cluded in th e asse ssments for
2012-2014, a nd t h e Compa ny's cha rg e for it is su b ject t o t h e can cellat ion of it s ch ar g e from
previou s assessmen t . In Ja nuar y 2021, t he Company filed an obje ction t o th e I TA dispu ting the
assessmen t for 2015. Th e Company b elieves, it is more likely th an n ot t h at it s claims will be
accept ed .
3) T h e Compan y's su b sid iary in B elg ium ( h erein after - ICL B elg iu m or th e Compan y) re cognized a
not ion d ed u ct ion on it s capit al, b ase d on it s in t erpr et at ion of t h e Be lg ian t ax law. T he tax
au t h or it ies d ispu ted t he e lig ib ilit y of t his posit ion a nd issu ed t a x a sse ssment s t o IC L B elg ium
amou n t in g t o $30 million for t h e years 2010-2015. W it h r eg ard s t o t he yea r 2010, t he
Compan y's posit ion was va lid at e d , b ot h b y t he Cou rt of Appeals in Ant wer p an d lat er, in
De cemb er 2020, b y t h e Cou rt of A ppeals in Gen t, followin g t he Supr eme Cou rt's r esolu tion to
accept t h e t ax au th orit ies ap peal a nd t o d ema n d a re- he arin g. W it h respect to t h e yea rs 2011-
2014, in J u ly 2020, t he t a x a u t h orit ies appe aled t o t h e Su preme Cou rt a b ou t t h e su pporting
ru lin g of Cou rt of A ppeals in A nt werp. Rela tin g t o th e asse ssment for ye ar 2015, t h e Company
appeale d t o a low cou rt , wh ich is a pr ior st ep b e fore t h e Cou r t of Appe als. Th e Compan y
b elie ve s it is mor e likely t han n ot t hat it s t ax posit ion will b e accepte d.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
61 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 15 - Taxes on Income (cont'd)
E. Uncertain Tax Position
Th e mea su r emen t of t h e est imated Ta x provision s r equ ires ju dg ment related t o cert ain t ax posit ion s,
wh ich may r esu lt in fu t u re d e ma nd for ad d it ion al t a x paymen t s b y t h e Tax a u t horit ies. A t ax
provision is record ed on ly whe n t h e Compan y est imat es t ha t t h e ch an ces of it s posit ion t o b e
accept ed are lower t h an t h e ch an ces it will b e reject ed . It is possib le t h at t h e t ax au t horit ies will
d eman d ad dit ional t ax paymen ts t h at are not kn own to t h e Company at th is st ag e.
Th e Law for T axation of Profit s from Nat ural Resou rces in Israel ( he reinafter – t he Law) is a n ew law
t hat en t er ed into effect wit h r espect t o t h e b r omin e, phospha t e an d mag n esiu m min erals in 2016,
an d wit h r eg ard t o t he pot a sh min eral, in 2017.
As at t he report in g d a t e, n o r eg u la t ion s u n d e r t he Law h ave ye t b e en ena ct ed ( e xce pt for
reg u lat ion s regard ing ad van ces on a ccou n t of t a x paymen t s, pu b lished in J u ly 2018), n o circu lars
ha ve b e en pu b lish ed a n d n o cou rt d e cision s h ave b e en re nder ed as t o t h e implemen t at ion of t h is
new Law t h at was impose d , t o t he b est of t h e Compan y's kn owledg e, on ly on on e ot h er company.
Th e fin an cial st a t emen t s of Dea d Sea W or ks, De ad Sea B romin e an d De ad Sea Mag n esium
( herein after – t h e Su bsid iarie s), se rve as a b a sis for t h e min er al b a sed fin an cial report s ( he reinafter
– Su rplu s Profit Re port s) requ ired t o b e filed for t ax ca lcu la t ion u n d e r t he La w. Su ch calcu lat ion
in volves in t erpre t ation s a nd a ssu mpt ion s on sever al sig n ifica n t mat t e rs, which requ ire
ma na g emen t’s ju d gment .
Th e Compan y's posit ion is t ha t t he Su rplu s Profit Levy sh ou ld b e c alcu lat ed on t he Dead Se a
Solu t ion , wh ich is t he n at u ral re sou rce u sed b y t h e Compa ny, an d n ot for ea ch prod u ct pr od uced
from t h e Dea d Sea Solu t ion . Fu rth er more , b ased on t h e Compan y’s u n d erstan ding of t he law, the
car ryin g amou n t of t h e prope rt y, plan t a n d equ ipme n t , for t he pu rpose of pre parat ion of t he
fin a ncia l st at e ments for 2016 a nd on ward of th e Su b sid ia ries, which se rve as t he b a sis for t he
Su rplu s Pr ofit Re port s, a re presen ted on t he b asis of t h eir re placement cost (a s u sed assets), on the
d at e t h e Law e nt ere d in t o effect . Replace me nt cost is an accou n t in g me t h od accor d in g t o
In t e rn ation al F inancial Repor tin g St an da rd s (I FRS), wh ich are th e a ccept ed account ing pr inciples in
Isr ael, applied b y t h e Compan y an d it s Su b sid iarie s. Th e pr esen t at ion of pro pert y, plan t a nd
equ ipmen t in t h e Su b sid iaries' fin an cial st a t ement s accord in g t o t he a for esaid me t hod , is n ot
reflect ed in t he Company's con solid ated fin ancia l st at ement s .
As part of t he pre par at ion of th e Su b sid iaries' fin an cial st at ements, t h e Compan y r eceive d a n
opin ion from an in d epen d ent appra ise r r eg ard in g t he fa ir valu e of t h e pr opert y, plan t a nd
equ ipmen t , which wa s b a sed on th e Re placement Cost meth odolog y ( a s used asse ts). A ccording to
t he opin ion , t he fair va lu e of t h e pr operty, plant an d equ ipm en t wa s estimat ed at a bou t $6 b illion,
as at Dece mb e r 31, 2015, t h e d ate th e Law e ntered in t o effect.
Th e ope rat in g in come, a s report e d in t h e la t est "Su rplus Pr ofit Repor t " for t a xa t ion of profit s from
nat u ra l resou rce s for 2019 ( with requ ire d adju stmen ts as de fined in t he law), attribu ted to B romine
operat ion an d Pot a sh oper at ion in t h e Dead Sea, was ab ou t $84 million and a b ou t $243 million
( refle ct in g a n a verage realiz ed pot a sh pr ices of ab ou t $286 per -t on ne ), respect ively. A t su ch le vel
of ope rat in g in come, a valu e of t he propert y, plan t an d equ ipmen t , of ab ove $0.7 billion for t he
B romin e min eral and a b ove $2.3 b illion for t h e Pot ash min era l ( approximately a n aggreg at e of $3
b illion ), wou ld re su lt in n o n a t ural resou rces t ax liab ilit y. Th e g l obal aver ag e re alized pot a sh pr ice,
in 2020, was ab ou t $230 per-t onn e.
Notes to the Consolidated Financial Statements as at December 31, 2020
62 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 15 - Taxes on Income (cont'd)
E. Uncertain Tax Position (cont'd)
Ha d t h e Compan y ch osen t o me asu re propert y, plan t an d equ ipmen t un d er t h e d epre ciated
hist orica l cost alt erna tive accoun tin g met hod ( also allowe d b y IF RS), t h e a mou n t accordin g t o wh ich
is ab ou t $2 b illion , t h e level of a n ave rag e r ealiz ed pot a sh price , at tribut ed to t h e I sr aeli ope ration,
of ab ou t $220 per -ton n e wou ld resu lt in n o n atural re sou rces t ax li ab ilit y.
Give n t h e min eral's price en viron me nt , it s e ffect on t he profit ab ilit y of t h e Su b sid ia ries an d after
d ed u ct ion of a 14% a llowed deduct ible on th e balance of property, pla nt an d equ ipment , as stated
in t h e la w an d b ase d on t he r epla cement cost , a s at Decemb er 31, 2020, n o n at u ral r esou r ces tax
liab ilit y wa s payab le.
Th e T ax A u t hor ity's posit ion cou ld be mat erially d iffe ren t, even in very sig n ifica nt amou nt s, main ly,
as a re su lt of t h e d iffer en t in terpretation r eg ar ding t he implemen t ation of t h e Law, wit h re spect to
t he carryin g amoun t for n atural re sou rces t ax pu r pose s of t h e propert y, pla nt a n d equipmen t.
Sh ou ld t h e I sr aeli Ta x A u thority, an d su b sequ ently t h e applica b le Dist rict Cou r t, in ca se of an a ppeal,
d ecid e s t hat t he measu rement of t he prope rty, plan t an d e qu ipme nt, for t h is pu rpose , sh ou ld be in
accor d an ce wit h d eprecia ted h istorical cost , an d fu lly re jects t he Compan y's a rg uments wit h respect
t o t h is a nd ot her issu es, t h e re sult can b e an in cr ease in t h e Compan y's t ax liab ilit ies in an ag gregate
amou n t of ab ou t $185 million ( in clu d ing in te rest a nd lin kage a nd n et of Cor porat e in come t ax) for
t he ye ars 2016- 2020. T h e Compan y b elieves t h a t it is more likely t h an not t h at it s posit ion will b e
accept ed .
Su b sequ ent t o t he d at e of t h e re port , t he Compa ny learn ed t h at t h e IT A in t en ds t o issu e an
assessmen t t o t he Compan y for the years 2016 -2017, wh ich will in clu de a d eman d for sur plu s profit
levy, in t he a mou n t of ab ou t NI S 240 million (n ot in clu d in g in t erest an d lin ka ge). T he Compa ny
in t en d s t o su bmit it s ob jection to t h e said assessment t o t he I TA .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
63 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 15 - Taxes on Income (cont'd)
F. Deferred income taxes
1. The composit ion of t h e d efe rre d t axe s and t he change s th erein , are as follows:
In r espect of fin anc ial p osition
In r espect
of c arry
f o r ward
t a x losses
T o tal
D ep r eciable
p r op erty,
p l ant and
e q uipm ent
a n d
i n tangible
a s sets
I nventories
P r ovisions
f o r
e m p loyee
b e nef its
O t her
$ m illio ns
B a la nce as at J a nuary 1, 2 019
(412)
26
74
20
117
(175)
C h a nges in 2 019:
Amou n t s re cor d ed in the st atemen t of
in come
(9)
6
-
(1)
(63)
(67)
Amou n t s re cor d ed to a ca pit al reserve
-
-
10
-
-
10
B a la nce as at Decembe r 3 1, 2 019
(42 1 )
32
84
19
54
(2 3 2 )
B a la nce as at J a nuary 1, 2 020
Amou n t s re cor d ed in the st atemen t of
in come
( 1 7 )
6
13
( 2 8 )
60
34
Amou n t s re cor d ed to a ca pit al reserve
-
-
( 6 )
-
( 3 )
( 9 )
Tr an sla t ion d ifferen ces
( 1 )
-
3
2
4
8
B a la nce as at Decembe r 3 1, 2 020
( 4 3 9)
38
94
( 7 )
1 1 5
( 1 9 9)
2. The cu rre ncies in wh ich t he d eferre d t axe s are d en omin ated :
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Eu ro
73
44
B rit ish Pou n d
17
16
Isr aeli Sh ekels
( 2 8 0)
(285)
U.S Dollar
( 6 )
(1)
Ot h er
( 3 )
(6 )
( 1 9 9)
(2 3 2 )
Notes to the Consolidated Financial Statements as at December 31, 2020
64 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 15 - Taxes on Income (cont'd)
G. Taxes on income included in the income statements
1 . C o m po sition o f in come t ax expen ses ( in come )
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
Cu rren t t a xes
70
91
53
De ferred t axe s
( 4 3 )
61
76
Ta xes in r espe ct of prior years
( 2 )
(5 )
-
25
147
129
2 . T h eore tical t ax
Followin g is a r econ ciliat ion of t h e t he ore tical t ax e xpe nse, assu min g all in come is t axe d a t the
reg u lar t a x r at es in Isr ael ( see A ( 2) a b ove) an d t he t a x e xpe nse pre se n ted in t he st a t emen ts of
in come:
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
In come b efor e in come t axe s, as r eported in the
st at emen ts of in come
49
628
1,364
St at u t ory t ax r ate ( in Israel)
2 3%
23%
23%
Th eore t ical t ax expen se
11
144
314
Ad d ( le ss) – t h e t ax effect of:
Ta x b en efit s d erivin g from t he Law for Encou r ag emen t
of Capit al I nvest me nts n et of n atu ra l Resou rce s Tax
( 6 )
(8)
(20)
Differe nces d erivin g from ad dition al d ed uction a nd
d iffer en t ta x rates applica ble to fore ign su bsidia ries
( 4 )
(15)
(186)
Ta x on d ivid e nd
2
2
-
De d u ct ib le tempora ry d iffere nces ( inclu ding
car ryforward losses) for which d e ferred t axes asset s
wer e n ot r ecord ed a nd n on –de duct ible expenses
14
17
24
Ta xes in r espe ct of prior years
( 2 )
(5)
-
Differe nces in me asu remen t basis ( main ly I LS/USD)
10
15
(11)
Ot h er d iffere nce s
-
(3 )
8
Ta xes on in come in clu d ed in the in come st a temen ts
25
147
129
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
65 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 15 - Taxes on Income (cont'd)
H. Taxes on income relating to items recorded in equity
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
T a x r ecorded in ot her c ompre he nsive in come
Act u ar ial g ain s fr om d efine d b e nefit plan
( 6 )
10
(3)
Chan ge in in vestmen ts at fa ir valu e t hroug h ot h er
compre he nsive in come
-
(1)
-
Ta xes in r espe ct of exch an ge r at e d ifference s on
equ it y loan to a su b sid iary in clu ded in t ranslat ion
ad ju st men t
( 3 )
1
2
Tot al
( 9 )
10
(1 )
Note 16 - Employee Benefits
A. Composition
Composit ion of employee b e nefit s:
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Fair valu e of plan a sse t s
6 2 9
583
Te rmin at ion b en efit s
( 1 5 8)
(105)
De fin ed b en efit ob ligation
( 1 ,0 75)
(1 ,00 4 )
( 6 0 4)
(5 2 6 )
Composit ion of fa ir valu e of t h e plan asse t s:
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
E q u ity in strume n ts
W it h qu ot ed ma rket price
2 2 4
237
W it h ou t qu ot ed market price
40
10
2 6 4
247
D e b t instruments
W it h qu ot ed ma rket price
3 3 4
307
W it h ou t qu ot ed market price
3
1
3 3 7
308
De posit s wit h in su ran ce compa n ies
28
28
6 2 9
583
Notes to the Consolidated Financial Statements as at December 31, 2020
66 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 16 - Employee Benefits (cont'd)
B. Severance Pay
1 . I s ra eli com pan ies
Th e lab or laws in I srael requ ire t h e Grou p t o pa y severan ce pay t o e mployee s who we re d ismissed
or h ave re t ir ed (in cludin g t hose wh o left th e Grou p in oth er specific circumst an ces). T he liab ility for
t he paymen t of severance pa y is calcula ted accord ing to th e lab or agreeme nts in effect on the basis
of salar y compon en t s wh ich , in t h e opin ion of Compan y ma n ag emen t, cr eat e an ob lig at ion t o pay
se ve ran ce pa y.
Th e Company h as t wo se ve ran ce pay plans: on e pla n accord in g t o t h e pr ovision s of sect ion 14 of
t he Seve ran ce Pa y Law, wh ich is a ccou n t ed for a s a d efin ed con t ribut ion pla n; an d t h e ot h er for
employe es t o wh om se ct ion 14 d oe s n ot apply, wh ich is a ccou n t ed for a s a d efin ed b e n efit plan.
Th e Grou p’s liab ilit y in I sra el for t h e pa ymen t of sever an ce pay t o e mpl oye es is most ly cover ed b y
cu rr en t d eposit s in t h e n ames of t he e mployee s in recog n ized pen sion an d sever an ce pay fu n d s,
an d b y t he a cquisit ion of in su ran ce policies, wh ich ar e accoun ted for as pla n asse ts.
2 . C e rtain su bs idia ries ou t side Israel
In cou n t ries where in su bsidiar ies ope rate tha t h ave no law r equ ir ing payme nt of severance pa y, the
Grou p compa n ies h ave n ot record e d a provision in t h e fin an cial st at ement s for possib le even t ual
fu t u re se ve ran ce paymen t s to employees, exce pt in cases wh ere pa rt of t h e act ivit ie s of t he
en t er prise is d iscon t inued an d, as a re sult , t he employee s ar e d ismissed .
C. Pension and Early Retirement
1) Some of t h e Gr ou p’s employe es in an d ou tside of I sr ael h ave d efin ed benefit pen sion plans for
t heir ret ireme nt , which ar e con t rolled b y t h e Company. Gen e rally, accord in g t o t he t erms of
t he plan s, a s st at ed , th e employees ar e entit led to r ece ive pension pa yments b ased on , a mong
ot h er t h in gs, t h eir n u mb e r of yea rs of ser vice ( in cer t ain cases u p t o 70% of th eir last b ase
sa la ry) or compu t e d , in cert a in ca se s, b ased on a fixed sa lar y. Some e mployee s of a su b sid iary
in I sra el a re en t it le d t o early ret iremen t if t h ey me et cer t ain con d ition s, in clu din g age and
se n iorit y a t t he time of ret ire me nt .
2) Some Gr ou p compan ies have en t er ed in t o pla n s wit h fu n ds – an d wit h a pen sion fu n d for some
of t h e employees – u n d er wh ich su ch compa nies make cu rr en t d e posit s wit h t h at fu nd which
relea ses t h em from t heir liab ilit y for ma king a pen sion pa yment und er the lab or agreement s to
all of t h eir employees u pon re ach in g a r et irement ag e. Th e amou n ts fu n ded are n ot re flected
in t h e st at e ments of fin an cial posit ion sin ce t h ey ar e n ot u n de r t h e con t rol an d mana gement
of t h e Gr ou p compan ie s.
3) I n 2020, as pa rt of t h e Compan y's effort s t o ad d r ess t he fin an cial impa ct of t h e sig n ificant
u n cer t ainty in t h e b usin ess an d e con omic e nviron me nt an d t he g lobal ma rket vola tilit y, which
resu lt ed , amon g ot h ers, from t h e COVI D 19 ou t b r eak , a fe w in it iat ives an d st r eamlining
me asu re s we re in it ia t ed, in clu din g an a pproval of a head cou n t re d uction plan of ove r 200
employe es, pr imar ily t hr ou g h a n e arly ret irement pla n, for Rot em Isr ael, B romin e Compou nds,
an d Dea d Sea Mag n esiu m. As a r esu lt , t h e Compan y u pd at ed it s provision for employe e
b en efit s in t he amou nt of $78 million .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
67 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 16 - Employee Benefits (cont'd)
D. Post-employment retirement benefits
Some of t h e ret ire es of t h e Grou p compa n ies re ceive, asid e from th e pen sion paymen t s from a
pension fu n d , b en efit s t h at are primarily h olid ay g ift s a nd paid vaca t ion s. T he compa n ies’ lia b ility
for t h ese cost s accru e s d u rin g t h e employme n t per iod . Th e Gr ou p compa n ies in clu d e in t h eir
fin a ncia l st at emen ts t h e project ed cost s in t h e post -e mploymen t pe riod accord in g t o an act u arial
calcu lat ion .
E. Movement in net defined benefit obligation and in its components:
F a ir v alue of plan
a s sets
D e fined ben efit
o b ligation
D e fined ben efit
o b ligation, net
2 02 0
2 01 9
2 02 0
2 01 9
2 02 0
2 01 9
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
B a la nce as at J anuary 1
5 8 3
518
( 1 ,0 04)
(860)
( 4 2 1)
(342)
I n come ( costs) in clu ded in
p r o fit or lo ss:
Cu rren t service cost s
-
-
( 2 2 )
(21)
( 2 2 )
(21)
In t e rest in come ( expen ses)
5
15
( 1 4 )
(27)
( 9 )
(12)
Past ser vice cost
-
-
11
5
11
5
Effect of move ment s in
excha ng e rates, n et
16
17
( 3 4 )
(31)
( 1 8 )
(14)
I n clud ed in oth er
c o m pre he nsi ve in co me:
Act u ar ial losse s d er ivin g from
ch an g es in fin ancial
assu mpt ions
-
-
( 2 4 )
(121)
( 2 4 )
(121)
Ot h er a ct ua rial g ains
9
46
-
-
9
46
Chan ge wit h re spect to
t ran slat ion differen ces, n et
18
9
( 3 2 )
(4)
( 1 4 )
5
O t h er mo vemen ts:
B en efit s r ece ived (paid )
( 6 )
(32)
44
55
38
23
Employe r con t rib u tion
4
10
-
-
4
10
B a la nce as at December 31
6 2 9
583
( 1 ,0 75)
(1,00 4 )
( 4 4 6)
(4 2 1 )
Th e act u al re t urn ( loss) on plan asset s in 2020, is $14 million , compar ed wit h $61 million in 2019
an d $( 1) million in 2018.
Notes to the Consolidated Financial Statements as at December 31, 2020
68 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 16 - Employee Benefits (cont'd)
F. Actuarial assumptions
Prin cipal act u arial assu mpt ion s a s of t h e repor tin g d at e ( e xpressed as we ig ht ed averag es):
F o r the year ended Decemb er 31
2 02 0
2 01 9
2 01 8
%
%
%
Discou n t rat e as at Decembe r 31
1 . 7
2.1
3.0
Fu t u re salary in crea se s
3 . 4
3.2
3.3
Fu t u re pe nsion increase
2 . 0
2.1
2.2
Th e assu mpt ion s regarding th e fu tu re mortality r ate are ba se d on pu blish ed statist ics and accepted
mort a lit y t ab les.
G. Sensitivity analysis
Assu ming all ot h er assu mpt ions re main con stant, t h e followin g reasonable possib le ch ang es a ffect
t he d efin ed b en efit ob ligation as of t h e date of t h e fin ancial st at ement s in the followin g ma n ner:
D e c ember 2 020
D ec rease 10 %
D e c reas e
5%
I n c rease
5%
I n c rease
1 0%
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
S i g n ifica nt act uaria l a ssu mpti ons
Salar y in cr ease
( 1 9 )
( 1 0 )
10
19
Discou n t rat e
22
11
( 1 1 )
( 2 2 )
Mort alit y t a b le
26
13
( 1 3 )
( 2 6 )
H. The Effect of the plans on the Group's future cash flows
Th e expen ses re cord e d in r espect of d efin ed con t rib ution plan s in 2020 are $39 million ( in 2019
an d 2018, $37 million a n d $35 million , r espect ively).
Th e Compa ny’s e st imat ion of t h e expect ed d eposit s in 2021 t o fu n d ed d e fined b e nefit pla n s is ab out
$9 million .
As a t Decemb er 31, 2020, t he Compan y est imat es t h at t he life of t h e d efin ed b enefit plan s, b ased
on a weight e d a ve rage , is a b ou t 15.3 years ( 2019 – a b out 14.3 year s).
I. Long-term incentive plan
In April 2019, I CL's B oard of Direct ors approve d t h e amen d men t of t he Company's in t ernal
lon g -t erm in ce nt ive fra me work (h erein after – New LT I Pla n) a nd accord in g ly, a pprove d n ew
t rien n ia l equ ity g rants for t he years 2019 - 2021, in the form of opt ion s exe rcisable to t he Company's
ord in ar y sh are s. For fu r t he r in format ion - see Not e 19. In ad d it ion , a Cash LT I pla n was appr oved,
accor d in g t o which , ot h er sen ior ma nagers will b e award ed wit h a cash in cen tive of $32 million in
2022, su b ject t o complian ce wit h certa in fin an cial t arg et s over the t hree years.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
69 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 17 – Provisions
Composition and changes in the provision
S i te restoration
a n d equipment
d i s mantling (1)
L e gal claims
( 2 )
O t her
( 3 )
T o tal
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
B a la nce as at J a nuary 1, 2 020
2 0 2
10
32
2 4 4
Provision s r ecord e d d ur in g t he
period
79
-
5
84
Provision s r everse d d u rin g t he
period
( 1 )
-
( 3 )
( 4 )
Paymen t s d u r ing the pe riod
( 1 2 )
( 1 )
( 2 )
( 1 5 )
Tr an sla t ion d ifferen ces
11
1
-
12
B ala n ce as at Decembe r 31, 2020
2 7 9
10
32
3 2 1
( 1) Ma in plan s for min e r est or at ion and waste r emoval:
a. Spain – In J u n e 2018, a n ew r est orat ion plan for Su ria an d Sa llen t sit e s, wh ich in cluded a
plan for h an d lin g t he salt pile s a nd d ismantlin g of fa cilit ies, was appr oved . The r estoration
plan for t h e Su ria sit e is sche d u le d t o ru n u p t o 2094, wh ereas for t h e Sa llen t sit e u p t o
2070.
Est ima t ion of th e project ed cost s for th e closu re an d rest or at ion of t h e Sa llen t sit e – the
ma in cost of th e est imat e d cost s for closu re a nd rest ora t ion is a t t rib ut ed to t h e salt pile
rest ora t ion . Th e Company is act in g to t re at t h e salt pile , by b ot h ut ilizin g t he sa lt for
prod u ct ion an d sa le for De- icin g pu rposes, a nd by processin g t h e mat erial a nd removing it
to t h e sea via a Collect or . As at Decemb er 31, 2020, t he t ot al provision for t he closu re and
rest ora t ion of t h e Sa llen t sit e amou n t s to $77 million . Th e est imat ion is b ased on a lon g -
t erm fore cast , cover in g a period of more t han 50 years, alon g wit h ob served estimates and,
t herefore, t he a ct ual cost s t h at may be re qu ired to r estore t he Sa llent sit e may d iffer, even
su b st an tially, from t he cu r ren t pr ovision . In t he Compan y's e st imat ion , t he provision in it s
b ooks r eflect s t h e b est estimate of t h e expen se re quire d to se tt le t his ob lig ation. Following
t he efficiency pla n, which in clu d es t h e exped it ing of t h e Sa llen t sit e closu re, in 2020, the
Compan y re cord e d add ition al expense s in t he a mou nt of $20 million .
b. Rot em I sra el – as at Dece mb er 31, 2020, a ccord in g t o t h e Company's est imat ion , th e
provision for t h e re st ora t ion of th e min in g sit e s, con sid erin g Rot e m Isr ael's opera t ion,
amou n t e d to $78 million . T he provision is mea su red b ased on t he prese nt va lue of the cash
flows, wh ich are b ase d on assessin g t he fu tu re e xpense require d for t h e res t ora tion of the
min in g sit e s. The act u al cost s t h at may b e re quir ed may d iffer, even su bst an tially, from the
cu rr en t pr ovision , as a re su lt of t h e in h erent comple xit y of su ch est imat ion , t he Company's
fu t u re d ecision s rega rding t he fa cilities, a n d regulato ry require me nts.
Notes to the Consolidated Financial Statements as at December 31, 2020
70 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 17 – Provisions (cont'd)
Composition and changes in the provision (cont'd)
c. B romin e Isr ael ( Neot Hovav) – pu rsu a n t t o t h e Min ist ry of En vir on men t al Prot ection, the
Compan y is re qu ired t o t reat bot h solid wast e of past period s wh ich is st ored in a d esignated
d efin ed ar ea on t he sit e's pr emises, an d cu rren t ly -prod uced wast e crea t ed d u rin g the
on g oin g prod u ct ion pr oce sse s in t he plan t. W aste tr eatme n t is part ly con du cted through a
hyd r o-b r omine a cid recoverin g fa cilit y ( B RU), oper a ted b y t h e Company. Part of t h e waste
is sen t for ext e rn al d esig nated t re at ment. A s at Dece mber 31, 2020, t h e pr ovision for prior
period s wast e t rea t me nt a mou n t ed t o a b ou t $50 million . In t he Compa ny's est imat ion,
b ased on t he in format ion cu r rent ly availa ble t o it , t he provision in clu d e d in it s fin a ncial
st at emen ts cover s t h e e st imated cost for t re atin g pr ior pe riod s wast e.
( 2) In 2016, a cou r t d ecision wa s re ceived , wh ich d et ermin ed t h at I CL I b er ia b e ars re spon sib ility
for con t amin at ion of t h e wat er in cer t ai n wells in t h e Su r ia an d Sa llen t sit es ( d u e t o an over
con cen t r ation of sa lt ). I n 2018, claims wer e received from se ve ral own ers of t he land
su rrou n d ing t h e wells, wh ere b y I CL I b eria is re qu ire d t o compensa t e t h em for t h eir d a mages
in t he agg r eg at e a mou n t of $22 million . Havin g examin ed t he claiman t s' alle gat ion s, the
Compan y e st imat e d t hat it is mor e likely t h an not th at it would be r equired to compe nsate the
owners in t h e amou n t of u p t o $4 million . T h e pr ovision in t h e Compa ny's b ooks re fle ct s t his
est imat e.
( 3) In 2017, t he I sraeli Wat er La w was amen d ed , accor d in g t o wh ich saline wat e r of t h e kind
prod u ce d b y De ad Sea pla n t s in t h e Compan y's wat e r d rillin g is ch arg e d wit h wat er fees.
Accord in g ly, t he Compa ny re ceived a cha rg e fr om t h e W at er A u thorit y in t h e amou n t of $31
million for wa t er d r awn fr om a ll it s d rillin gs, in clu d in g in t h e con ce ssion area b et ween the
ye ars 2018- 2020. Th e Company su b mit t ed it s appe al t o t h e W at er A u thor ity, ob ject ing to the
ch arg e s rela t ing to wat er d rillin g wit h in t he con ce ssion area , wh ich con stit ute s abou t 65% of
t he t ot a l ch ar ge. I t is t he Company's vie w, t hat such cha rg es shou ld n ot apply t o wa t er d rilling
wit h in t h e De ad Sea con cession a rea , for var iou s r eason s, most n ot ab ly t he provision s of t he
Con cession Law. T he Compa ny b e lieves it is more likely t h an n ot t hat t he cha rg es will n ot apply
t o t h e wa t er d rillin g wit h in t h e con ce ssion area. Th e Compa ny h as a su fficien t provision in its
b ooks, in imma t erial amou n t s, for t he d rillin g of wate r ou tside t he co ncession ar ea.
In Nove mb e r 2020, t h e W at er A ut hority a nn oun ced t hat as par t of t he lice nse re n ewa l for 2021
an d fu r th er, t he Govern me nt A uth or ity Dir ect or in te nd s to examine the possib ilit y of ch anging
t he d efin it ion of Dead Sea W or ks from "Su pplie r- Prod u ce r" t o "Con su mer -Producer", t h e main
implicat ion of which is a rise of u p t o d ou b le t h e fu t u re wat er rat es. Th e Company ha s
expresse d it s ob ject ion to chan gin g t he d efin ition in a h earing pr ocedure and is workin g with
t he r elevan t a uth or itie s to keep t he cu rren t d efin ition in th e lice nse as is. T he W at er A uth ority'
respon se rela t in g t o t he h earing h as n ot ye t b ee n r eceive d .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
71 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities
A. Commitments
( 1) Sever al of t h e Grou p’s su b sid iaries have e n t ere d in t o ag r eemen t s wit h su ppliers for t he
pu rch ase of raw ma t erials an d en er gy in t he ord in ary cou r se of b u sin ess, for var iou s per iod s
en d in g on Decemb er 31, 2036. A s of Decemb er 31, 2020, t h e t ot al amou n t of t h e commit ments
u n d er t h e said pu rcha se pe riod s of t he a greemen ts is ab ou t $2.48 b illion . T h is it em t akes into
con sid erat ion part of t h e a gree men ts d escrib ed b e low.
( 2) Sever al of t h e Grou p’s su b sid iaries have e n t ere d in t o ag r eemen t s wit h su ppliers for t he
acqu isit ion of prope rt y, pla n t a nd equ ipmen t. A s a t Decembe r 31, 2020, t he su b sid iarie s have
capit al expe nd it u res commit men t s of a b ou t $400 million . T h is it em t ake s in t o con sid er ation
part of t h e agr eement s d escr ibe d b elow.
( 3) In 2017, Dead Se a W or ks ( he rein after - DSW ) sig ne d an agr eement, t he cost of wh ich for ICL is
$280 million , for t h e exe cu t ion of t he first st a ge of t h e Salt Ha rvest in g Proje ct , wit h
Holland Sh allow Sea s Dre d g ing Lt d., which in clu d es, amon g ot h er t h ing s, t he con st ru ction of
a spe cia l d re d g er t h at is d esigned t o execu te t he salt h arve stin g. Th e d redg er commen ce d its
operat ion d u ring t he fou rth qu arte r of 2020. F or fu rt h er in for mat ion - see it em C(2).
( 4) In 2017, DSW sig n ed ag re emen ts wit h sever al execu tion an d in fr astr ucture compa n ies, for
con st r u ct ion of a n ew pu mpin g st at ion ( h er einafter - t h e P- 9 Pu mpin g St at ion ), for a t ot al
amou n t of $180 million ( ou t of t h e t otal pr oject cost of ab out $220 million ). I n e arly 2020, due
t o t h e COVI D- 19 pa n d emic, t h e pu mps su pplier issu ed a "For ce Majeu r e" n ot ice result ing in a
d elay of t h e pu mpin g st at ion ’s complet ion , wh ich was expec t ed in t he first h alf of 2021. T he
P-9 pu mpin g st at ion is e xpe ct ed t o comme nce oper at ion d u rin g t he se con d h alf of 2021. For
fu rt h er in format ion – see it em C( 2).
( 5) In 2018, t he Compa ny en t e red in t o t wo su pply ag re emen ts wit h "Ta ma r" an d “Levia t han”
rese rvoir ( h er einafter – t h e A g reemen ts), t o secu re it s gas su pply n eed s u nt il t he en d of 2025
or u n t il t h e entry of t he “Kar ish ” a n d “Tanin ” reservoirs in to ser vice , wh ichever occu rs first. The
gas price in t h e A gr eement s is in accord ance wit h th e g as pr ice formu la s st ipula ted under the
governmen t ’s g as ou t line.
Th e Company an t icipa t es t h at t h e scope of th e an n u al g as con su mpt ion will be ab ou t 0.75
B CM. T he Compan y is en t it led t o t ermin ate t he Agr eements in ord e r t o st art t he n ew agreement
wit h Ene rg ea n I srael Lt d. ( h ereinafter – “En er gean”), which wa s sig ned in 2017. A ccord ing to
t he n e w ag re ement , En erg ean will su pply u p t o 13 BCM of n at u ral g as ( NG) ove r a pe riod of
15 years, a mou n t in g t o abou t $1.8 b illion .
En erge an h old s licen ses for d evelopmen t of t h e Kar ish a n d T an in g as rese rvoirs, wh ich are
loca t ed in I sr ael’s t er ritorial wat ers. Th e NG fr om t h e rese rvoirs will b e u sed for runn in g I CL’s
fact or ies and power st ation s in Israel.
Notes to the Consolidated Financial Statements as at December 31, 2020
72 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
A. Commitments (cont'd)
( 5) ( Con t 'd )
Fu rt h er t o En erg ean's "Force Majeu re" an nou ncement u nd er t h e GSPA , from F eb ru ary 2020,
t hat pot en t ial d elays a re expect ed in t he su pply of NG d u e t o C OVI D- 19 impact s on it s
prod u ct ion , in J an u ary 2021, Energ ea n u pd ated t h at t h e g as su pply will be post pon e d u n t il
t he se con d h alf of 2021, as an n ou n ced in J u ne 2020, su b ject t o increasing t he a vailab ility of
t he r elevan t man power n ee d ed for it s opera t ion s. Ot h er wise , t h e g as su pply will be fu r ther
post pon ed u n t il t he first qua rter of 2022 .
Followin g t he sa id "Force Majeu r e" n ot ice, i n O ct ob er 2020, an ag re eme n t was sig ne d with
Ta mar r eser voir, t he owner of T ama r g as field in I srael, t o su pply NG in t he inte rim period, until
fu ll g as su pply is main t ain ed fr om En erg ean, at a price of ab ou t $4 pe r MMB T U ( herein after –
t he B r id g e A g reemen t). T he B rid ge A g ree men t is in e ffect u n t il J u ly 2022, wit h an ext en sion
opt ion unt il De cemb er 31, 2022. If t h e comme rcial opera t ion of Karish a n d T an in reservoirs
commen ces b efore t h e e nd of t h e B ridg e A gr eemen t, ICL can con sume all t he qu a ntit ies it has
commit t ed t o t h rou gh the a g ree ment wit h Enegean. I n case En e rg ean is u n able t o su pply the
ag reed qu a ntit ie s, I CL is en t it led to con su me t he m u nd er t he B rid ge A greement b y t he end of
2022. On Oct ob e r 14, 2020, t h e B rid g e A g reement was a pprove d b y ICL's sh areholder s general
me et in g. Given t h e ab ove , n o sig nifica nt impa ct is expect ed on t h e Company d u e t o t h e said
d elay.
( 6) In J u ne 2020, t h e Compan y e n t ere d in t o a lon g -t erm lease ag re eme n t wit h a t h ird part y,
accor d in g t o wh ich I CL will lease an office b u ild in g in B e'er Sh eva Isr ael for a per iod of 15
ye ars, wit h a 10- year ext e nsion opt ion , at an an n u al r en t of NI S 11 million ( $3 million). T he
lease pe riod is e xpe ct ed t o comme nce in 2024 ( at t he e nd of t he con str uction per iod ).
( 7) Th e A rt icles of A ssociat ion of t h e Compan y a n d it s Isr aeli su b sid iar ies in clu d e provision s that
permit exe mpt ion , in d emn ificat ion an d in su r an ce of t h e lia b ilit y of officers, all in accor d ance
wit h t h e provision s of t h e Compa nies Law.
Th e Compa ny, wit h t h e appr oval of HR & Compen sat ion Commit t ee, t h e B oa rd of Dir ect ors and
t he Gen eral Meet in g of t h e sh are hold ers, gran t ed it s officers a let t er of exempt ion a nd
in d emn ificat ion , an d also main t ain s an in su ran ce policy cover in g d ire ct ors' an d officers'
liab ilit y. T h e d irect ors' an d officers' liab ilit y in su ran ce an d t h e e xempt ion an d in d e mn ity
u n d ertakin g d o n ot apply t o t h ose cases spe cified in Se ct ion 263 of t he C ompa nies Law. The
exempt ion relat es t o d amag e cau sed a n d /or will b e cause d , b y t h ose officers as a resu lt of a
b rea ch of t he du ty of care to th e Company. Rega rd ing dir ect ors who are office hold er s of I srael
Cor p., who ma y serve from t ime t o t ime, on Ja n u ary 5, 2021, t h e sh are hold ers' g eneral me eting
approved t h e ext en d t h e period for exempt ion an d in d emn ification en tered in t o wit h such
office hold ers, for ad d it ional 9 ye ars, commen cin g Novemb er 30, 2020, provid e d t ha t the
exempt ion sha ll n ot apply t o liab ilit ies ar ising in con ne ction with a tr an sact ion or r esolu tion in
wh ich a con t rollin g sh areh old er or an office hold er, in clu d in g a n office h old e r wh o is ot her
t han t h e office hold er par t y to t h e agree ment, h as a personal in terest .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
73 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
A. Commitments (cont'd)
( 7) ( Con t 'd )
Th e amou n t of t h e in d emn ificat ion payab le b y t he Compan y u n d e r t h e let t er of
in d emn ificat ion , in ad dit ion t o amou n ts received from a n in su rance compa ny, if a ny, for all of
t he officers on a cu mu lat ive b asis, for on e or mor e of t h e even t s d e tailed t h er ein , is limit ed to
$300 million . Th e in su r ance is re newe d an nua lly.
B. Concessions
( 1) D e ad Sea W orks Lt d. ( her ein aft er – D SW)
Pu rsu an t t o t h e Isr aeli Dea d Sea Con cession Law, 1961 ( h erein after – t h e Con cession Law), as
amen d ed in 1986, a n d t he con cession d e ed atta ched a s a n a d den dum t o t h e Con cession Law,
DSW was gr an t ed a con ce ssion t o u t ilize t he r esources of t h e Dead Sea and t o lea se t h e land
requ ired for it s plan t s in Sod om for a pe riod e nd in g on March 31, 2030, accompanied b y a
prior it y rig h t t o re ceive t h e con cession aft er it s expir at ion , sh ou ld t h e Gover nment d ecide to
offer a n ew con cession .
In accord ance with sect ion 24 (a) of t h e Supplemen t to t he Concession La w, it is st at ed , among
ot h er t h in gs, t h at a t the en d of t h e con cession period a ll t he ta ng ible asse ts at t h e con ce ssion
are a will b e t r an sferre d t o t he g overn me nt, in excha nge of t h eir a mort ized replace me nt value
– t he valu e of t h e asset s as if t h ey are pu rchased a s n ew a t t he en d of t h e con cession period,
less t h eir tech nical de pre ciat ion base d on t h eir ma in t ena nce con d it ion an d th e u nique
ch ara ct e rist ics of t h e Dead Sea area .
Pu rsu an t t o sect ion 24 ( b ) of t he Su pple ment t o t h e Con cession La w, it is st at e d t h at capital
in vest men t s ma d e 10 ye ars before t he con ce ssion e nd s ( i.e. A pril 2020) t o t h e en d of the
con cession period requ ire a pr ior con sen t of t h e Govern ment , u nless t he y can b e fu lly d educted
for t a x pu r pose s b e for e th e end of t he concession period . However, th e Government's consent
t o an y fu n d amen tal in vest ment t h at may b e n ecessar y for t h e prope r operat ion of t h e pla n t,
will not b e u n reason ably d elayed or su spen de d. In March 2020, a work proce d u re wa s signed
b et ween t h e Compan y an d t h e Isr aeli Gover nmen t for t h e pu rpose of implement in g se ct ion
24( b ). T he proce d u re de t ermin es, amon g ot h er t h in g s, th e mann e r of examin ing n ew
in vest men t s an d t h e con sen t pr ocess. I n ad d it ion , t h e pr oce d u re d et ermin es t h e Company's
commit me n t t o in vest in fixed asset s, in clu d in g for pr eser va t ion a nd in fra st ructur e, a nd in
on g oin g main t ena nce of th e fa cilit ies in th e concession are a ( for t he period star ting 2026) and
t he Compa ny's commit men t t o con t in u e pr od u ct ion of pot assi u m chlor id e a nd elemen tal
b romin e ( for t h e period st artin g 2028), all su b ject to t h e con dit ions spe cifie d in t he procedure.
Su ch commit men t s d o n ot ch ange t he way t he Compan y cu rren tly oper ate s.
In 2015, t h e Min ist er of Fin an ce appoin t ed a t eam t o d et e rmin e t h e “g overn mental act ivities
t o b e con d u ct e d t oward s t h e end of th e con cession period ”. Th e pu b lic’s commen t s in t his
ma t t er we re su bmit ted to t h e t eam.
Notes to the Consolidated Financial Statements as at December 31, 2020
74 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 1) D e ad Sea W orks Lt d. ( her ein aft er – D SW) ( con t'd)
B ased on t h e in terim re port and its recommendation s pu blished in May 2018, an d following a
pu b lic h ear in g , in J anuar y 2019, t h e I sraeli Min ist ry of F in an ce released t h e fin al report of the
in t er - min ist ry t eam h eaded b y Mr. Yoel Naveh , former Chief Econ omis t , wh ich inclu des a series
of gu id elin es an d recomme nd ation s reg ardin g t h e act ion s t hat t h e g over n ment sh ou ld take
t oward s t h e end of t h e con cession period . Sin ce t he r eport in clu des g u idin g pr in ciple s and a
recommen d at ion t o est ab lish su b -t eams t o impleme n t su ch prin ciples, t h e Compan y is u n able
t o asse ss, at t h is st ag e, t h e con cre t e implicat ion s, or if t he re commen d a t ion s will be
impleme nt ed in pract ice , as we ll as t h e relevant t imin g . In ad dition , t h ere is n o cer t ain ty as to
how t he Gover nmen t will in t erpr et the Concession La w and implement pr ocesses accor dingly.
In ad d it ion , in 2015, t h e Min ist er of Fin an ce a ppoin t ed a t eam he ad ed b y t h e ( for me r)
Accou n t an t Gen er al t o evalu at e t h e man n er in wh ich , accord in g t o t he cu rr ent con cession, the
replace me nt valu e of DSW ’s t an g ib le asse t s wou ld b e calcu la t ed , a ssu min g t h at t he se assets
wou ld b e r et ur ned t o t he g overn me nt at the e n d of t h e con ce ssion period. T h e d etermin ation
d at e of t h e a ct u al calcu lation is only at t h e e nd of t h e con cession period . As far as t h e Company
is awa re, t h is work h as n ot yet b een complet ed .
Th e con solid at ed Fin an cial St at emen ts were prepa red u n der man agemen t's b elie f t hat it is
more likely t h an n ot , t hat DSW will con t inu e t o opera te the r elevan t a sse ts for t heir remaining
u sefu l lives, wh ich ext en ds b eyon d th e term of t he current con cession period , by ob taining the
ren ewed con cession or b y operat in g t he a sse t s for an alt erna tive h old er. Th e con solidated
d eprecia t ion e xpe nse s in 2020, relat in g t o t h e asset s loca t ed wit h in t he con cession a rea,
amou n t e d t o abou t $ 105 million .
As part of t h e pr epara tion pr ocess for t h e I srae li Su bsid iaries’ fin ancia l st atement s, DSW, Dead
Sea B romin e an d Dead Se a Mag n esiu m for 2016 an d on wa rd , wh ich ser ve a s a b asis for t he
fin a ncia l re port s prepar ed pu rsu an t to t he provision s of t h e Taxation of Na t ura l Re sou rces Law
( herein after – t he Law), th e Compan y r ece ives an opin ion from an in d e pen d e nt appra iser
reg ard in g t h e fair valu e of fixed a sse t s. T h e Prope rt y, Plan t an d Equ ipme nt valu e provid ed in
t he opin ion is b ased on t h e Replacemen t Cost met h od olog y ( as u se d asset s) an d was e st imated
at ab ou t $6 b illion , a s a t Decembe r 31, 2015 , t he d ate th e Law entered in t o effect .
Th ou gh t h e asse t s a sse sse d for t ax pu rpose s an d t h e asse t s t h at may b e valu at ed u n der the
Con cession Law are h ig h ly correla t ed , t he re is n o comple t e id ent it y b et ween t h em. The
Compan y b e lieves t h at t he applie d Replacemen t Cost Me t hod olog y u se d in t he opin i on for
est ima t in g th e fa ir valu e coin cides wit h th e methodolog y me ntion ed in th e Con cession Law for
fu t u re valu ation of t h e Pr opert y, Plan t an d Equ ipment u pon t ermin at ion of t h e con cession
period . Ne ve rt h eless, t here cou ld b e ot her int erpret ation s t o t he m ann er of implemen t ation of
t he C on ce ssion Law’s provisions or wit h r espect t o t h e va luation met hod olog y. T herefore, the
est ima t ed value with re spect to t he Con cession Law cou ld materia lly d iffer from th e Company's
est ima t es, e ve n wit h respect t o t he sa me a sse ts an d d ate s.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
75 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 1) D e ad Sea W orks Lt d. ( her ein aft er – D SW) ( con t'd)
It is expect ed tha t th e valu e of t he Property, Plant and Equipmen t, at t he en d of th e con ce ssion
period , will chan ge a s t ime passes and a s a result of pu rch ase an d d isposal of a sse t s.
In con sid e ration of t h e con ce ssion , DSW pays royalt ies t o t he Gover nme n t of I sr ael, calculated
at t h e rate of 5% of t h e va lu e of t h e prod ucts at t h e factor y g ate, less ce rtain expense s.
DSW g ra nt ed a sub -con cession to Dea d Sea B romin e Lt d. (hereinafter – th e B romin e Company)
t o pr od u ce b romin e and it s compou n d s fr om t h e Dea d Sea, t he e xpira t ion d a t e of which is
con cu rr en t wit h th e DSW con cession . The royalt ies in r espe ct of the produ cts ma nu factured by
t he B r omin e Company ar e received b y DSW from t h e B romin e Compan y, a n d DSW t h en pays
t hem over to t h e St a t e. Roya lt ies are als o paid b y De ad Se a Mag n esiu m on t h e b asis of car nallite
u sed for pr od u ct ion of mag nesiu m.
( 2) R o t em A m fert I sra el (h ere inafter – “Rotem I srael”)
Rot em Isr ael h as b ee n min in g ph osph at es in t he Ne gev in I sra el for mor e t h an sixt y years. The
min in g is con d u ct ed in accor d an ce wit h ph osph at e min in g con ce ssion s, wh ich ar e gr anted
from t ime t o t ime b y t h e Min ist er of En erg y u n d er t h e Min es Or d ina nce, b y t he Su pervisor of
Min es in h is Office ( h ere in after – t h e Su per visor), as well as t h e min in g au t h or ization s issued
b y t h e I srae l Lan d s A u thorit y ( he rein after – t he Auth or ity). Th e con ce ssion s re la te t o qu a rries
( ph osph at e rock), whereas t he aut horizat ions cover u se of la nd a s a ct ive min in g ar eas.
M i n ing Con cessi ons a nd Le ase Ag re ements
Rot em Isr ael h as t h e followin g two minin g con cession s:
a) Rot em Field ( in clu d ing th e Hatr urim F ield ) – valid u p t o t he end of 2021.
b) Za fir F ield ( Oron - Zin) – valid u p t o t h e e nd of 2021.
Du r in g t he fou rth qu ar ter of 2020, as pa rt of t h e Company's act ion s t o ext en d t h e valid ity of
t he sa id min ing con cession s an d ob t ain t h e n ecessar y appr ovals, posit ive recommen d at ions
wer e received from t h e Min ist ry of Energ y, the C ommit t ee for Red ucin g Conce nt ration and the
Compet it ion A u t h ority, t o ext en d t he licen ses for an ad d it ional per iod of t h re e years. In
De cemb er 2020, t he Min ist e r of Ene rg y a pproache d t he Ch airman of t h e Fin an ce Committee
in t h e Kn e sse t r equestin g t hat t he Commit te e g ran t fin al appr oval t o t he said e xt en sion .
Rot em h as two lea se ag reeme n t s in effect u n t il 2024 a n d 2041 an d an a d d it ion al lea se
ag reeme n t of t h e Oron plant, which th e Company h as b een wor king to ext e nd sin ce 2017, by
exer cisin g t h e exte nsion opt ion provid ed in t he a gree me nt .
Notes to the Consolidated Financial Statements as at December 31, 2020
76 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 2) R o t em A m fert I sra el (hereinafter – “Rotem I srael”) ( cont 'd )
M i n ing Royalt ies
As pa rt of th e t erms of th e con cessions in respect of min in g of ph osph at e, Rot e m I sr ael is
requ ired t o pa y t h e St a t e of I sra el royalt ies b ase d on a calcu lat ion as st ipu lat e d in t h e Isr aeli
Min es Or d in an ce.
In J an u ary 2016, in lig ht of a leg islat ive amend ment for t he implemen t a tion of t h e Sheshinski
Commit t ee's recommendation s, t he royalties ' rate was in creased from 2% t o 5% of t h e value of
t he qu arried mat e rial. A ccord ing t o t h e ame ndment , t h e Su pervisor h as t h e opt ion t o collect
roya lt ies at a hig h er ra t e, if he d ecid ed t o g ra nt a min in g rig ht in a compe t it ive proce ss whe rein
on e of t h e sele ct ion in d ices is t h e royalty ra te.
P l an nin g a nd B uild ing
Th e min in g and qu ar ryin g act ivit ies requ ire a zon in g appr oval of t h e sit e b ase d on a plan in
accor d an ce wit h t he I sraeli Plan n in g a nd B u ild in g La w, 1965. T h ese plan s are u pd at e d, as
need e d , fr om t ime t o t ime. As at t h e report in g d a t e , t h ere are var iou s requ est s at d ifferent
st ag es of d elib erat ions pen din g b efore t he plan nin g aut horities.
In 2016, t h e Dist rict B oard for t h e Sou t h ern Dist r ict a pproved a d et ailed sit e pla n for mining
ph osph at e in t h e Zin - Oron a rea. T h is plan , wh ich cove rs a n ar ea of ab ou t 350 squ are
kilome t ers, will pe rmit t h e con t in ued min in g of phosph at e loca ted in t h e Zin valley and in the
Oron va lley for a per iod of 25 ye ars or u p t o exh au st ion of t h e r aw mat erial – whiche ve r occurs
fir st , wit h t h e possib ilit y for ext ension ( und er t he auth or ity of t h e Dist rict Pla nning B oard).
Th e Company is workin g t o promot e t he pla n for mi n in g ph osphat es in B ar ir field , which is
loca t ed in t he sou t h ern pa rt of t he Sou t h Zoha r d e posit in t he Ne gev De se rt. In 2015, the
Nat ion a l Plann in g an d B u ild ing Cou n cil ( h erein afte r – t h e Nat ion al Cou n cil) approved t he
Policy Docu me nt r eg arding Min in g a nd Qu a rrying of In d u strial Min era ls, wh ich in cluded a
recommen d at ion t o pe rmit ph osph at e min in g in t he Sou t h Z oh ar d e posit an d t o a d va n ce a
d et a iled Nat ion al Ou tlin e Plan for t he B arir field min in g sit e. Accordin g t o t he recommen dation
of t h e Na t ion al Cou n cil, t h e governme nt’s Hou sin g Cabin et appr oved t he Na tion al Ou tline Plan
( herein after - NOP 14B ), which d esig n ates t h e Sou t h Zoh ar d eposit , t hat in clud es t h e B ar ir field
min in g sit e , as an ar ea for ph ospha te min in g.
In 2018, t h e Min ist er of He alth filed a n appe al of t he said a pprova l, requ iring complian ce with
t he Min ist r y of He alt h’s recommend ation t o con d u ct a su rvey re gard ing t he h ealth impact in
each sit e inclu d ed in NOP 14B . A s par t of a d iscu ssion in t he Hou sin g Ca b in et r eg arding the
appeal, it was d ecid e d , wit h t h e con se nt of t h e Min ist ries of Hea lt h , F in an ce an d En er gy, to
remove t h e appe al a nd t o a pprove t he NO P 14B , which was for ma lly pu b lish ed la t er . In
ad d it ion , it wa s d e cid ed t o est ab lish a t ea m wit h repre se ntatives of t h e min ist r ies of T reasury,
He alt h, Tr an sport a tion , Environ me nt al Prot ect ion a n d En e rg y, wh ich will prese nt t o t he
Hou sin g Cab in et a repor t t hat in clud es healt h aspects for NOP 14B .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
77 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 2) R o t em A m fert I sra el (h ere inafter – “Rotem Isr ael”) ( cont 'd )
In July 2018, a pet it ion was su b mit t ed to t h e Isr aeli Su pre me Cou rt of Ju st ice b y t he
mu n icipa lit y of Ara d a gain st t h e Nat ional Cou n cil, t h e Govern men t of Israel, t h e Minist ry of
He alt h, t h e Min ist r y of En viron ment a l Prot ect ion an d Rot em Isr ael ( he rein after – t he
Respon d e nt s), t o re voke the appr oval of NO P 14B an d t o order t he Na tion al Cou ncil t o d iscuss
t he NOP d ir ect ives wh ile g ivin g pr oper weight to t h e h ealt h risk.
In J an u ary 2019, t he pet it ion su b mit ted b y resid en ts of t h e Be d ou in d ia spora in t h e "Arad
Va lley" was con solid a t ed t o th e said pe tition . I n February 2019, t h e Su preme Cou rt d e cided on
a con d it ion al ord e r in st ru cting t he Respon dents t o sh ow cau se as t o wh y t h e Pla n sh ou ld not
b e re t u rn ed to t he Nat ion al C ou n cil for d iscu ssion , con sid e rin g no met h od olog y was
d et e rmin ed for e xamin in g h ealt h e ffe ct s an d n o pot en t ia l healt h impact d ocu men t was
presen t ed t o t h e Nat ional Cou n cil. I n Novemb er 2020, th e St at e in form e d t he cou r t t h at an
ou t lin e a g ree ment b et ween t he r elevan t min ist r ie s h ad b een reach ed an d sig n ed b y t he
Dire ct or Gen eral of th e Pla nnin g A d minist rat ion , r eg ardin g t h e examin at ion of t h e he alth
aspe ct s of t he NO P 14B for min in g a nd qu ar ryin g. In Decemb er 2020, t he St ate su bmit ted its
respon se t o t he pet it ion st at ing t h at t h e said ou t lin e con st it ute s an appropr iat e respon se for
t he r evie w of pot e nt ial healt h h az ards on wh ich t h e pe t it ions focu s. On t he sa me d at e, the
Compan y su b mit t ed it s re spon se t o t h e pe t it ion , an d simila r t o t h e St at e's posit ion , t he
Compan y's opin ion is t h at t he pet ition sh ould b e d ismisse d .
In Fe b ru ar y 2021, t h e Cou rt issu ed a d ecision t o can cel t he h ea rin g u nt il a resolu tion on other
ou t st a ndin g pet it ion t h at d eals wit h a similar leg al issu e . On Feb r u ary 22, 2021, t he St at e of
Isr ael an d IC L su b mit t ed t h eir r equ est t o recon sid er t he Cou rt’s d ecision claimin g t h ere is n o
lega l corre la t ion b e t we en t h e procee d in g s . On Fe b ru ary 24, 2021, t h e Cou r t d e n ied the
requ est s b u t n ote d t hat t he resolut ion on t h e ot h er petit ion is n ot expect ed to b e d ela ye d.
In ad d it ion t o t h e proced u res d e scrib ed a b ove, secu rin g t he fu t ure of t h e ph osph at e min ing
operat ion s at Rot em d epends on ob t ainin g several approvals a nd permit s fr om t he au thorities
in Isr ael, a s follows:
• Emission pe rmit u n d er t he I sr aeli Cle an A ir Act ( herein aft er - t he Law): In 2018, t h e Company
con d u ct ed t wo risk a sse ssments b y e xt ernal exper ts regardin g t he possib ilit y t o exe cu te all
t he cle an air t asks requ ired b y t he e mission permit as per t h eir appr oved t imeline . T he risk
assessmen t s focu se d on t he t echn ica l an d safe t y con sid e rat ions ar isin g from
impleme nt at ion of a lar g e n u mb er of pr oject s , in paralle l, in an in d u st rial sit e. The
assessmen t s in d icat ed t hat t he re is n o opera t ion al feasib ilit y t o implemen t t h e fu ll
requ iremen t s of t h e pe rmit wit hin t h e d e fin e d t ime lin e, a nd a ccord in g ly t h e Compan y is
u n ab le t o mee t t h e t imelin e set in th e cu rre nt permit .
Notes to the Consolidated Financial Statements as at December 31, 2020
78 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 2) R o t e m A m fert Israel (h ereinafter – “Rotem I srael”) ( cont 'd )
In 2019, followin g d iscu ssion s wit h t h e Isr aeli Min ist ry of En viron men t a l Prot ection
( herein after - MoEP), t he MoEP in formed the Compa ny t hat dur in g th e cou rse of discu ssions
to r en ew Rot em Israel's emission per mit , wh ich cu r ren t ly re ma in s u n ch an ged, t h ey will
con sid er t h e safet y con st ra in t s, t h e complexit y a nd mu lt iplicit y of pr oject s, as well as the
Compan y's dilig en ce to comply wit h t he pre se nt per mit con d it ion s an d t h eir sched ules,
wh ile prior it izin g pr oject s wit h sig n ifica n t en viron ment al impact . Th e Company provid ed
t he MoEP wit h it s u pd ated pr oject s' ou t line, sche dule a nd complet ion sta tu s.
In lig h t of bu sin ess u n cert ain ty an d t he C OVID- 19 pa nd emic, t he Compan y con t in u ed its
d iscu ssion s wit h t h e MoEP r eg ar d ing t he t imin g a nd scope of execu t in g t h e in ve st ments,
in clu d in g t h e impact of th e u n ce rt ain ty su rrou n din g Rot em I srael's a ct ivit y, as far as the
impleme nt at ion of lon g - t er m pr oject s is con cer n ed . In Decemb er 2020, t h e Compan y
su b mit t e d to t h e MoEP an applicat ion to u pd at e t h e cu rrent emission pe rmit , in clu ding
u pd a t ed sche d u le s for proje ct s' e xecu t ion in accor d an ce wit h t h eir en vir on mental
sig n ifican ce.
In respon se, in De cemb e r 2020, a su mmar y le t t er was re ceived fr om t h e MoEP re garding a
prin ciple ou t lin e t h at in clu d es, amon g ot h er t hin g s, post pon in g t h e execu t ion of cert ain
proje ct s b e yon d t h e cu rre nt permit pe riod , wh ich is to expire in Sept emb er 2023, a nd a
d eman d to comple t e cert a in project s wit h in t he pe rmit pe riod . T he Compan y con t inues to
hold d iscu ssion s wit h t h e MoEP reg ard ing prior itizing th e pr ojects' e xecu tion a nd re aching
u n d erst an ding s wit hin th e framewor k of t h e cu rre nt emission pe rmit .
• Min in g con cession s - T he Company is workin g wit h t h e rele va nt a u th orit ies t o extend the
ab ove - me nt ion ed con ce ssion s, which are in effe ct u nt il t h e en d of 2021. For fu r ther
in format ion on re cent d eve lopmen ts r eg ard ing t h e ext e nsion of t h e con cession s for an
ad d it ion al pe riod of t hree ye ars, see a bove.
• O ron 's lea se a greemen t - Th e Compa ny h as b ee n workin g t o ext en d t h e lease agr eement
for Or on 's plan t are a sin ce 2017, b y exe rcisin g th e ext e n sion opt ion provid e d in the
ag reeme n t.
• Dry an d we t ph osph og ypsu m st orage - in O ct ob er 2020, th e con st ruction an d u se permit
for pon d 5 wer e e xt en d ed u n t il De cemb er 31, 2021. T h e Compa ny is workin g wit h the
relevant a u t horities t o ob t a in all t h e requ ire d pe rmit s, for t h e con t inu ed operat ion of the
gypsu m pon d s b eyon d 2021 a nd for t h e con t in u ed pilin g of g ypsu m, in a ccord an ce with
t he r equ ir ements se t by law an d /or in struction s of t h e Pla n nin g and B uild ing Commit te e.
• Ext en sion of oil sh ale ext r action permit – Th e ERD ( e nerg y resou rce d eve lopmen t) fa cility in
Rot em I sra el, wh ich is u sed for e xt ract ing ene rg y from oil shale s ( h ereinafter – t h e facility),
is essen t ial for t h e con t in u e d prod uct ion act ivit y of Rot em Isra el. In Feb r u ary 2020, the
Min ist ry of Ene rg y n ot ified of it s in t ention not to ren ew t h e oil sh ale ext ract ion pe rmit due
t o t h e en viron me nt al effect s of t h e facilit y, wh ose oper at ion is b ase d on ou t d ated
t echn olog y.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
79 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 2) Rot em A m fert I srael ( hereinafter – “Rote m I srae l”) ( cont 'd )
Th e Compa ny is act ively workin g in lin e wit h t he Minist ry of Ene rg y's inst ru ction s to replace
t he facilit y wit h a n at u r al g as st ea m b oile r. As t he replacemen t pr oject is complex, an d in
lig h t of t h e d elays re su lt in g from t he Coron aviru s crisis, t he Compa n y a pproache d the
Min ist ry of En er gy wit h a request to extend th e fa cilit y's prod uction per mit, fr om May 2021
u n t il t h e end of 2022, so t h at t he facility ca n be u sed u ntil t h e complet ion of the proje ct.
• F in d in g e con omically fea sib le alt ern at ives t o t h e con t in u ed min in g of phospha t e rock in
Isr ael – A ccord in g t o t he C ompa ny's assessment of econ omic ph osph at e reserves in the
exist in g min in g ar eas, t he e st imated u seful life of Rot e m's ph osph at e rock reserve s, wh ich
are e sse nt ial for some prod u ct ion lin e s, is limit e d t o on ly a few ye ars. As d e scrib ed a b ove,
t he C ompa ny is wor kin g t o ob t ain per mit s an d appr ovals wh ich will provid e a n e con omic
alt erna tive for fu tu re min in g of ph osph at e roc k in I sra el.
Th e Company is con t in u in g it s d iscu ssion s wit h t h e relevant au t horities, in t er alia d u e t o the
COVI D- 19 pan d e mic and t he b u siness u n certa inty, u n t il t he requ ired appr ovals an d permits are
gran t ed. A dd ition ally, t he Company in cre ased its effor t s t o accelerate th e d iscu ssion s with the
St at e of I srael on makin g de cision s reg ardin g fut ure phosphat e rock sou rces, in order to secure
lon g -t erm ce rtain ty for Rot em I srae l. T he Company est imates t h at it is mor e likely t han not that
t he sa id appr ovals, pe rmit s a nd fu t u re phospha t e rock sou r ces will b e g ran t ed wit hin a
t imeframe which will n ot mat erially impact t he Compa ny's resu lt s. Nevert he le ss, t h ere is no
cer t ain t y as t o t h e r ece ipt of su ch appr ovals, permit s an d fu t u re ph osphate rock sou r ces and/or
t he d at e of t heir r ece ipt . Failu r e t o ob t ain th ese approva ls, per mit s an d fu tu re ph osphate r ock
resou rces, or a sig n ifican t d elay in r ece ivin g t h em can lea d t o a mat erial impa ct on t he
Compan y's b u sin ess, finan cial posit ion and r esu lts of opera t ion s.
( 3) S p a in
A su b sid ia ry in Spain ( h ereinafter – I CL Ib e ria) was g ranted min in g righ ts b ased on le gislation
of Spain ’s Gover n ment from 1973 a nd t h e re g u lation s accompan yin g t h is leg isla tion . Further
t o t h e leg islat ion , as st ated, t he Gover nmen t of t h e Ca talonia region pu blishe d spe cial mining
reg u lat ion s whe reby I CL Ib e ria re ceived in divid u al licen ses for ea ch of t h e 126 d iffe ren t sites
t hat are r elevan t t o t h e cu rrent and possib le fu tu re min in g act ivit ies. Some of t he licen ses are
va lid u p t o 2037 and t h e re st ar e e ffect ive u p t o 2067. T he con ce ssion for t h e "Rese rva
Cat a lan a ", a n a d d ition al sit e whe rein min in g h as n ot yet b e en commenced , expir ed in 2012.
Th e Company is a ct in g in coopera tion with th e Spanish Gover nme nt t o obt ain a r enewal of the
con cession . A ccord in g t o t h e Span ish au t horit ies, t he con cession pe riod is valid u n t il a fin a l
d ecision is mad e r eg ardin g t he renewal.
Notes to the Consolidated Financial Statements as at December 31, 2020
80 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 4) U n it ed Kin gdo m
A. Th e min in g rig ht s of a su b sid iar y in t h e Un it ed Kin g d om ( h er ein aft er – I CL B ou lb y), are
b ased on a pproximat ely 114 min in g leases and license s for extract ing va riou s min erals, in
ad d it ion t o n u merou s ease me nt s and r ig h t s of way from privat e own er s of lan d u nder
wh ich I CL B ou lb y ope rat es, a nd min in g rights u nd er t he North Sea g ran ted b y t he Br itish
Crown ( Crown Est at es). Th e le ase rig hts wit h t h e Crown Est ates, in clu d e pr ovision s to
explore and e xploit all t a rg eted and kn own Polysu lph ate min e ral resou rces of in t e rest to
ICL Bou lb y. T h e sa id min er al lease s cover a tot al area of ab ou t 720 squ a re kilomet ers
( on sh or e le ases t ot a lin g arou n d 90 squ ar e kilomet er s a nd t h e offsh ore le ases from the
Crown Est at es coverin g arou n d 630 squ a re kilome t ers). All th e le ase pe riod s, licen se s,
ease ment s a nd rig ht s of wa y are effective , some u p t o 2022 a nd ot h ers u p t o 2038.
Th e Compan y is act in g t o ren e w t he r ig h ts ne cessa ry for t h e min in g operat ion which
expir e in 2022 or alt er n at ively will see k t o ob ta in own ersh ip of t hese rig hts. Th e Company
b elie ve s, it is more likely t h an n ot , t h at it will ob t ain ren ewa l or own er ship of all the
need e d r igh ts.
B. A UK su b sid ia ry wh ich is a part of t h e In n ovat ive A g Solu t ion s se g ment ( hereinafter –
Everris Limit ed ), h as pe at min es in t h e UK ( Creca , Nu t b e rry an d Dou g las W ate r). Pea t is
u sed as a compon en t t o pr od u ce profession al growin g med ia. A ll sit e s ar e own e d by
Everris Limit ed . T he cu rr ent extract ion permit s ar e g ranted b y t he loca l au t horities and are
ren ewed after examin ing the ren ewal a pplica t ions. T he ext raction permit s are g ranted up
t o t h e en d of 2024 for Nu t b err y a nd Dou g la s W ater a nd 2037 for Cr eca .
( 5) C h in a
YPH J V h old s t wo ph osph at e min in g licen ses t h at were issu ed in J u ly 2015, b y t h e Division of
La nd and Resou r ces of t h e Yu n nan d ist rict in Chin a: ( 1) a min in g licen se for t h e Haikou Mine
( herein after – Haikou ) in wh ich t h e Compan y ru n s it s opera t ion s a nd which is va lid u p t o
J an u ary 2043, an d ( 2) a min in g licen se for t h e B ait acu n Min e, which expired in
Novemb e r 2018. I n ord e r t o prese rve t h e rig ht s for t h e B aita cun min in g licen se and facilitate
it s re n ewa l in 2021, t h e Compa n y paid an ad van ce in an immat erial amou n t. T he Compan y is
examin in g t he fe asib ilit y of re n ewin g t h e B ait acun con cession , a n d will b ase it s d e cision,
amon g ot h er t hin gs, on ph osphate re serve s soil su rvey resu lts and on t he un derst an ding to be
ach ieved wit h t he a uth orities.
N a t ural Re sour ces Royalties
W it h respect t o t he min in g rig hts, in accord an ce wit h Ch in a "Nat ural Resou rces T ax La w", YPH
J V pa ys royalt ie s of 8% on t h e sellin g price b a se d on t h e ma rket price of t he r ock prior t o it s
proce ssin g .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
81 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
B. Concessions (cont'd)
( 5) China (cont'd)
G r an t of M in ing Rig hts to Lin du
In 2016, YPC issu ed a st a t emen t whe reby in 2010 YPC en t ere d in to ag reements wit h t he local
au t h or it y of J in n in g Cou n ty, Yu n na n Provin ce an d J in nin g Lin d u Min in g De velopment and
Con st ru ct ion Co. Lt d . ( h er ein after - Lin d u C ompa ny), accord in g t o wh ich Lin d u C ompan y is
permit t e d t o min e u p t o t wo million t on n es of ph ospha t e rock from a cer t ain area mea suring
0.414 squ ar e kilomet er s wit h in t h e area of t h e Ha ikou min e ( h ere in after – t h e Daqin g A rea)
an d t o sell su ch ph osphat e rock to any t hird par t y in its own d i scretion .
YPC has u n d ertaken t ha t YPH J V’s min in g rig h t in t h e Haikou min e will not be ad ve rsely
affect e d b y th e ab ove - me nt ion ed arr ang emen ts. It was d ecid ed t h at YPH sh ou ld con d uct
fu rt h er commu n ications wit h YPC and Lin d u Compan y, for t h e pu rpose of pr o t e ct in g it s legal
rig ht s and t o ur ge the partie s to reach a fa ir, ju st, a nd rea sonable solu tion to t his issu e , as soon
as possib le.
C. Contingent liabilities
( 1) E c o log y
A. In Sept emb er 2020, an applicat ion for a class act ion was filed t o t he d istr ict cou rt in Beer
Sh eva, I sra el, ag ain st t h e Compan y, th e Company's su b sid iar y Rot em Isr ael an d cer tain
Compan y's pre se n t a nd past office h old ers, b y a n u mb e r of local r esid en ts in t h e A rava
reg ion in t he sou t h of Isr ael ( he rein after – t h e A pplica n t s). T h e Applica nt s cla im that
d ischa rg e, le akag e and se epa ge of sewag e fr om I CL's Zin sit e, alle ge d ly ca u sed various
en viron me nt al h azard s t o t he Zin st r eam, wh ich re su lted in d amage t o va riou s g roups in
t he popu lat ion of I sr ael, in clu d in g: t h e Isr aeli pu b lic whose prope rt y is Zin st ream; t h ose
wh o avoid e d visit in g Zin st ream d ue t o t h e e nviron me ntal h aza rds; visit or s of Zin st ream
wh o were exposed t o t h e aforeme ntion ed h azard s a nd th e resi d ents of t h e area n ear Zin
st rea m wh o we re affect ed b y t he h azards. Accord in gly, t he A pplican ts r equ est se veral
remed ie s, in clu d in g re stit ution a nd compe n sa tion for t h e d amage t h at t he y claim was
cau se d t o t h e variou s g rou ps in a min imu m a mou n t of NI S 3 b illion ( approxima t ely $933
million ), t h e major it y of wh ich r elat es t o compe nsa t ion for cla imed con sequ en tial
d amag e s. I n Decemb er 2020, t he Company filed a request for dismissal t he application for
approval wit h re spect t o t h e propriet ary ca u ses cit ed , wh ich con st itu te t he main portion
of th e claimed d amag e . I n J anu a ry 2021, t he cou r t d ecid e d t o d iscu ss a nd ru le on the
Compan y's mot ion for d ismissal as pa rt of the resolu tion requ est for appr oval. Consid ering
t he pre limin ar y st ag e of t he proce ed in g and lack of pre ced e n t s of su ch cases in Isr ael,
t here is a d ifficu lt y in e st imat in g it s ou t come. No provision ha s b e en r e cord e d in the
Compan y's b ooks.
B. I n J u ly 2019, an applicat ion for approva l of a cla im a s a class act ion was su b mit t ed to the
J eru sa lem Dist rict C our t by an I srae li en vironmen ta l associat ion ( here aft er - th e A pplicant)
ag ain st 30 d efe nd an ts, in clu d in g Fe rt ilizers an d Che micals Lt d ., a su b sid iary of the
Compan y ( h erein after – t h e Respon d ents). The applicat ion in clu des claims r elat ing to air
pollu t ion in Haifa B ay ( locat e d in nort he rn Isr ael) a nd t o alleg ed illn ess t h ere from to the
popu lat ion of t he sa id ar ea.
Notes to the Consolidated Financial Statements as at December 31, 2020
82 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 1) Ecology (cont'd)
B . ( con t 'd )
In t he framewor k of th e pe t it ion , t he A pplican t requ ests for d ecla rat ive relief and the
est ab lish ment of a me ch an ism for compe n sa t ion awa rd s, wit h ou t specifyin g t heir amount,
or alt e rn at ively, for split t in g remedie s t o allow each g roup memb er to su e for d amages in
a separa t e proce ed in g. I n F eb ru a ry 2020, t he Re spon d en t s requ est ed th e cou rt to
complet ely reject t he a pplica t ion for appr oval of a claim, wh ich was d en ie d in Feb ruary
2021, wit hou t referr in g t o t h e applicat ion for a pprova l of a claim a s a class act ion , in
respect of wh ich a ll r ig h t s a re r eserved . Con sid e ring t he e arly st ag e of t he p roce ed ing,
an d t h e limit e d pre ced e n t s of su ch cases in Isr ael, t h er e is a difficu lt y in est imat in g its
ou t come. No provision ha s b e en recor ded in t he Compan y's b ooks.
C. I n March 2018, an a pplica t ion for cert ifica t ion of a claim a s a class act ion was file d wi th
t he Dist rict Cou r t in B e’e r Sh eva b y t wo g rou ps: t h e first class con st it u ting t he en tire pu blic
in t he St at e of Israel an d t h e secon d - class con st it u ting visit ors of Bokek st r eam an d the
De ad Sea ( he rein aft er – t h e Applicant s), aga in st t he su b sid iaries, Rot em I sra el and
Periclase Dea d Sea Lt d. ( herein after – t he Respon de nts).
Accord in g t o t h e claim, t h e Respon d e n t s h ave a lleg ed ly cau se d con t in uou s, se ve re and
ext reme e nviron me ntal hazards t hroug h pollu t ion of t h e “J ud ea g rou p – Zafit formation”
grou n d water aqu ifer ( h ere inafter – t he A quifer) an d t he Ein B okek sprin g wit h in d ust rial
wast ewa t er, an d in d oin g so th e Respon dent s have violat ed variou s provisions of pr operty
law an d en vir on ment al prot ect ion la w, in clu ding th e provision s of t h e Law for Pre vention
of En vir on men t al Ha zar d s a nd t h e W ate r La w, a s well as viola t ion s r ela t in g t o t h e T orts
Ord in an ce – b rea ch of st a tu tory d uty, n eglig ence an d u nju st profit s.
As a re su lt , t h e Cou rt was r equ este d t o ord er t h e Respon d e nts t o elimin a t e t he propr ietary
violat ion in r efe ren ce t o t h e A qu ifer and B okek st r eam b y rest orat ion t h ereof and t o pay
t he pu b lic compen sat ion in an e st imat ed amou n t of NI S 1.4 b illion ( ab ou t $43 5 million ).
In J u ly 2019, th e Re spond en ts file d t he ir respon se, t og ether wit h t h ree expert opin ions,
in wh ich t h ey d en ied all t he A pplica nt's cla ims. I n Novemb e r 2020, t h e pa rties ag reed on
a med iat ion proce ss, su b je ct t o a n ot ice t h at will b e su b mit te d t o t he Cou rt and it s approval
t hereof. Con sid erin g t h e ea rly st a ge of t h e procee d in g s , t he limit e d pre ced e n ts of su ch
case s in I srae l an d d u e t o t he pre limin ary issu es, t ha t arise fr om t he r equ est , t he re is a
d ifficu lt y in e st imat in g t heir ou t come . No pr ovision ha s b e en recor d ed in t h e Company's
b ooks.
D. In con nect ion wit h t he 2017 even t of t h e part ial collapse of a d yke in Pon d 3, wh ich is
u sed for accu mu lat ion of ph osphog ypsu m flu id t h at is creat ed as part of t h e pr od u ction
proce sse s in Rot e m I sr ael plan t s in I srae l. To t h e b est of t h e Compan y's knowled ge, as at
t he r eport in g d at e, t he crimin al in vestig a tion of t he event is st ill u n derway. T he C ompany
is commit t e d t o en vir on men ta l prot ect ion , a nd for ye ars h as worked closely wit h t he Israeli
en viron me nt al prot ection au th orit ies t o ma in t ain t he Neg ev’s na t ure in t h e are a of its
facilit ies. Severa l applica t ion s for cert ificat ion of claims a s class act ion s were filed a ga inst
t he Compa ny con t en d in g, amon g ot he r t hin g s, th at th e Compan y sh ou ld b ea r the
rest ora t ion cost s in t he lon g- term ( see it em E b elow).
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
83 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 1) E c o log y ( cont 'd )
E. In J u ly an d Au gust 2017, t hree applica tion s for certification of claims a s class action s were
filed aga in st t h e Compan y, a s a re su lt of a part ial collapse of t h e d yke in t h e e va poration
pon d of Rot em A mfert I srae l, wh ich cau sed con t amin ation of t h e A sh alim St ream a nd its
su rrou n d ing area. Th e claimant s con tend t ha t t h e Compan y b reached va riou s provisions
of environ me nt al laws, in clu d in g , t h e provision s of t h e Law for Pre vent ion of
En viron me nt al Hazard s, t h e W at er La w, provision s of th e T ort s Or d in an ce, a b r each of
st at u t ory d u ty and n eg ligen ce. In t h e fr amework of th e first applica t ion , t h e Cou r t was
requ est ed to in st ruct t h e Compa ny t o r ectify t h e h ar m ca u sed as a result of it s omission s,
in ord er t o pre ve nt r ecu r rence of t h e d am ag e cau sed a s we ll a s t o g ran t a monetary
remed y for non - pecu n iary d amag es. Th e mon et a ry r emed y was n ot d efin ed , however,
accor d in g t o t he claimant s, t he amoun t of t he pe rson al claim is NI S 1,000 ( $311) for each
resid en t of t h e St a te of Isr ael, which tot als approximat e ly 8.68 million per son s.
In t h e frame work of t h e secon d applica tion , t he Cour t was requ este d to g ran t a monetary
remed y in a n amou n t of n o le ss th an NI S 250 million ($77 million ), an d con cu rren tly to
awa rd pe rson al compe nsa t ion in t he amou nt of NI S 2,000 ( $622) for ea ch r esident of the
St at e of I srae l, t h is b ein g in r espe ct of n on - pecu n ia ry d amag es. Fu rth ermore, t h e Court
was re qu est e d t o in st r u ct t h e Compa ny t o comply wit h t h e rele va nt laws a nd t h e rules
provid e d t he reu nder . As pa rt of t he third a pplica tion , t he Court was requested t o in struct
t he C ompa ny, a mon g ot h er t h in gs, t o pre par e plan s for removal of th e con t amin at ion,
rest ora t ion of t h e A sh alim St ream an d it s su r rou ndin g a rea, for con t rol a n d prevent ion of
recu rren ce of t h e d ama g e caused, t o pay mon et ary re lief t o t he class of in ju red parties, in
t he a mou n t of NI S 202.5 million ( $63 million ), an d t o provid e compen sat ion b y me ans of
rest orin g t he n at ural valu es impaire d and r et urn t he a rea t o it s former con dit ion.
In May 2018, t h e Nat u r e an d Pa rks A uth or ity ( h erein aft er – NPA ), file d a n applicat ion for
cer t ificat ion of a class act ion a ga in st t he Compa ny, Rot e m A mfe rt Isr ael an d past and
presen t officers of t h e C ompa ny a nd Rot em A mfe rt Israel ( join t ly h ere in after - the
Respon d en t s), wit h respect t o t h e A sh alim in cid ent . Accord in g t o t h e NPA , the
Respon d e nt s, join t ly a n d / or severally, are lia b le for compensa t ion d u e t o t h e Ash alim
in cid ent , amon g ot h er t hin gs b y virt u e of t h e T or t s O rd inance an d/ or u nju st pr ofits and
b y vir t u e of an y ot h er law. In t he A pplicat ion , t h e Cou rt was requ est ed , a mon g other
t hin g s, t o issu e ord ers, t h e pu rpose of wh ich is t o t a ke all n e cessary mea su res t o pr event
t he r ecu rre nce of t h e en vironment al ha zar d, a nd a lso t o coope rate wit h t he NPA and the
St at e's aut horities in order to min imize t he ecolog ical and e nviron me nt al d amag e in order
to allow for t he rest oration of t he n atu re r eserve . Fu rt hermore , t h e Cou rt was re qu ested
t o g ran t mon et a ry relief t o t he pu b lic in ju re d b y t h e e colog ical an d en viron me ntal
d amag e, an d t o g ran t a mon et ary re lief for t h e pu rpose of t h e re st ora t ion of t h e nature
rese rve, in t h e ag gre gate a mou nt of NI S 397 million ( a b ou t $ 123 million ).
Notes to the Consolidated Financial Statements as at December 31, 2020
84 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 1 ) E c o log y ( cont 'd )
E. ( Con t 'd )
In con ju n ct ion wit h t h e afore said applicat ion , t h e NPA filed a mot ion t o st rike t h e t hree
applicat ion s men t ion ed a b ove and t o pr efer t he a pprova l applica t ion on it s b eh alf, as it
arg u es t h at it is t h e most su it ab le t o ser ve as t h e re presen tat ive plain tiff in a cla ss act ion
in t h is re g ard , as it s applicat ion is d et a iled an d well -e stablish ed as well a s t h e special status
con ferred u pon it un der t he Class A ction s Law, which allows for specific b e ne fits.
In Nove mb e r 2018, t h e Compan y was n ot ified t h at a ll fou r applican t s h ad a greed t o join
effort s a nd manage the class action s in a join t and coord inated mann er, as we ll a s of their
con se nt t o t ake par t in a me d ia tion pr oce ss in a n at tempt t o r esolve t h e d isput es ou tside
of cou rt . I n J an u a ry 2020, t he par t ie s sig ned a proced u ral ag reement t h at re g ulates the
proce d u re b y wh ich t he dispu tes will b e addressed in t he media tion pr oce dur e wh ich has
in it ia t ed . Con siderin g t he early st ag e of t h e pr oceedin gs, t here is a d ifficult y in est imating
t heir ou t come. T h e Company is in con t act wit h it s in su r an ce carr ier s t o act ivat e the
relevant in su rance policie s. No provision h as b een recorded in t he Company's b ooks.
In Ma y 2018, t h e Compan y was se rved wit h a mot ion for d iscovery an d pu r su al of
d ocu me nt s (h er ein aft er – t he Mot ion ), file d wit h t h e T el A viv Dist r ict Cou rt , b y a
sh areh old er of t h e Compan y ( h erein after – t h e Movant ), a s a prelimin ary proceed ing in
prepa rat ion for t he possib le filin g of an applic at ion for cert ifica t ion of a mu lt iple d e riva tive
act ion a ga in st officer s of th e Compan y an d Rot em A mfe rt Isr ael wh o, accor d in g t o the
Movan t , cau sed t h e alleg ed d a mage s in cu rred a nd t o b e in cu rr ed b y t h e Compan y as a
resu lt of t he A sh alim in cid e nt. I n 2018 , t he partie s r eache d an arran ge me nt, a ccording to
wh ich, t h e le g al proce ed in gs will b e d e t ained u n til t h e relevant in vest igation 's ma t erials
will b e pr ovid ed t o t h e Compan y b y t he in vestig at ing auth or ity. A s at t he report ing date,
su ch in vest ig ative mat erials have n ot yet b een re ceived . Consid e rin g t he proce edings are
in an ear ly st ag e and e ven su spended, t h ere is a d ifficu lt y in estimatin g t heir ou tcome.
F. In 2015, a requ est was filed for ce rt ificat ion of a claim a s a class a ct ion , in t h e Dist r ict
Cou r t in Te l-Aviv–J affa, ag ain st eleven d efend an ts, in clu din g a su b sid iary, Fer t ilizers and
Chemical Lt d ., in r espect of claims r elat in g t o air pollu t ion in Haifa B ay and for t h e harm
alle ge d ly ca u sed from it t o t he resid ents of t h e Haifa B ay area. T he a mou n t of t he claim is
ab ou t NI S 13.4 b illion ( ab ou t $4.2 b illion ). I n t h e Compan y’s est ima t ion , b ased on the
fact u al ma t erial pr ovid ed t o it an d t h e re le va nt cou rt d ecision, it is more like ly t ha n not
t hat t h e plain t iffs’ con tention s will b e rejected .
( 2) I n crease in t he level o f th e e vap oration Pon d in S odo m ( Pon d 5 )
Th e min er als fr om t h e Dead Sea a re ext r act ed b y way of solar evaporat ion , wh ereb y sa lt
precipit at es on t o t h e b ed of Pon d 5 ( he reina fter – t he Pon d ), locat e d in on e of t he sit es of Dead
Sea W orks ( h ere in after – DSW ). Th e pr ecipit a t ed sa lt cr eat es a la ye r on t he Pon d b ed with a
volu me of approxima t ely 16 million cu b ic met ers per year.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
85 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 2 ) I n crease in t he level o f Pon d 5 ( h erein after – t h e Pon d) (con t'd)
Th e process of prod u ct ion of t h e ra w ma t erial require s t ha t a fixed b r in e volu me is pre se rved
in t he Pon d . Failu re t o main t ain a con st an t volu me of solu t ion s in t h e Pon d cou ld re su lt in a
red u ct ion in prod u ct ion capacit y. T o t his e n d , u p t o th e en d of 2021, t he raisin g of t he
solu t ion s' le ve l of t h e Pon d will con t in u e accord ing t o t h e ra te at wh ich t h e pon d floor rises,
wh ile perfor min g t h e salt h arvest , in it iate d in t h e fou rth qu ar ter of 2020. The solu t ion s' level
ma ximu m h eig h t ( 15.1) is expected to b e rea ched b y th e end of 2021. Fr om 2022 on wards, the
solu t ion s' volu me in t he Pon d will b e preserved on ly b y wa y of h arvesting t he salt .
Raisin g t h e wa t er level of t h e Pon d a b ove a cer t ain level ma y cau se st r u ctural d amage to the
fou n d a t ion s a n d t h e h ot el b u ild ing s sit u ated close t o t h e wa t er’s ed ge, t o t he se t t lemen t of
Neve Zohar an d t o ot h er in frast ruct ure locat ed along t he weste rn sh oreline of t h e Pond .
Up t o th e en d of 2020, in ord er t o en su re t ha t t he Pon d wat e r level d oe s n ot exceed the
ma ximu m he ig h t ( 15.1), t he Governmen t of Israel, t h rou gh th e De ad Sea Preservation
Gove rn me n t Compa ny Lt d ., implemen t e d a project for con st ru ct ion of coast lin e d efen ses ,
t og et he r wit h DSW (wh o fin an ced 39.5% of t h e pr oject's cost ), as part of wh ich t he dyke along
t he west e rn b eachfron t of t h e Pon d , across from t h e h ot e ls, is ra ised , t og et h er wit h a system
for lower in g su b t erran ean wat er .
Th e con st ru ct ion work wit h respe ct t o t he h ot els' coast lin es is complet e an d a t presen t , the
De ad Sea Pre se rvat ion Gover nment Compa ny Lt d . is carryin g ou t elevat ion work in t he
in t er me d ia te ar ea b etween th e t wo hote l complexe s. T he Pon d le ve l will b e main tained as part
of t h e perman e nt solu tion (t he sa lt h ar ve stin g proje ct) d escrib ed b e low, wh ich sh ou ld provide
a d efen se u n til t he end of t h e cu rre nt con cession period in 2030 .
In 2012, an ag re eme n t was sig ne d wit h t h e Gover nment of I srael, reg a rd in g "Execu tion and
Fu n d in g of t h e Dead Sea Pr ot ect ion Proje ct an d I ncrease of t he Royalt ies Paid t o t h e St ate"
( herein after – t h e Sa lt Harvest in g Proje ct ) which pu r pose is t o provid e a perman e nt solu tion
for r aisin g t he wat e r level in t h e Pon d an d st a bilizin g of t h e wa t er t her ein a t a fixed level b y
ha rvest in g of th e salt from t h is pon d an d tra nsferr ing it t o the Nor t hern Basin of t he Dead Sea.
Accord in g t o t he agree me nt, t h e plan nin g and execution of t he Salt Ha rvesting Proje ct will be
performed b y DSW . In ad d it ion , t h e ag reement st ipu lat es t h at st arting from J a nuary 1, 2017,
t he wat e r le ve l in t he pon d will not r ise ab ove 15.1 met ers. Never t h ele ss, in t h e event of a
ma t erial d evia t ion from t h e proje ct 's t imet ab les, wit h ou t t he Compa ny havin g violat ed it s
ob ligat ion s, t h e Compa ny will b e per mit t ed t o r equ est raisin g of t he wat er level ab ove t h e level
st at ed above .
Th e Compan y will b ea r 80% and th e st at e of Isr ael will b e ar 20% of t he cost of t h e Salt
Ha rvest in g Proje ct. However, t he State 's sha re will n ot exce ed NI S 1.4 b illion .
In 2015 an d in 2016, t he Na t ion al I n fra st ructu res Commit t ee an d t h e Isra eli Govern ment,
respect ively, appr oved Nat ional In frast r uctu re s Plan 35A ( h ere in after – t h e Pla n), wh ich
in clu d e s t h e st at ut ory in frast ru cture for est ab lish men t of t h e Sa lt Ha rvest in g Pr oject in the
Pon d , a n d con st ruction of t h e P -9 pu mpin g st ation in th e nor th ern b a sin of t he Dead Sea.
Notes to the Consolidated Financial Statements as at December 31, 2020
86 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 2 ) I n crease in t he level o f Pon d 5 ( h er ein after – t h e Pon d) (con t'd)
Th e salt d re d ger, as pa rt of t h e Sa lt Ha rvest in g Pr oject , comme n ced ope rat ion in t he fou rth
qu a rt er of 2020. Commencement of th e Harve sting Project will allow DSW t o set th e le ve l at its
ma ximu m h eig ht a t t h e en d of 2021. T he P -9 pu mping st at ion ope rat ion is expect ed t o
commen ce d u rin g t he second h alf of 2021 .
( 3 ) In con nect ion wit h a prin ciple ag ree men t wit h a con st ruct ion con t ractor , A b en goa, to est ablish
a cog en er at ion st at ion ( EPC) in Sod om Isr ael, in lig h t of t h e con t inu ed violat ion s by Ab engoa
an d t h e fin an cial d ispu t es b etween t he partie s, t h e Company n ot ified it of t h e can cellation of
t he a g reemen t an d t h e in it iat ion of an a rb it ration pr oceed in g in a ccord an ce wit h t he
provision s of t h e ag r eement.
Fu rt h er to discu ssion s he ld b etween t he Compa n y an d Ab eng oa to en d t h e d ispu te, t h e parties
sig n ed a se t t le me nt agr eemen t wh ich was approve d as an arb it ration award by t h e court.
W it h in t h e framewor k of t h e ag reemen t , A b en g oa pled g ed to pa y EUR 37 million
( appr oxima t e ly $45 million ) in qu a rt er ly paymen ts, ove r a five- year per iod , st a rt ing J anuary
2020. T he a greemen t in clu d e s mu t u a l waive r of fu t u re claims a n d su it s u pon payment
complet ion . T he ag re emen t also d e termin ed th at in case A be ngoa violat es th e ag reement, the
Compan y will be ent it led to apply for enforcement of t h e ar bit ration award, an d alt ernatively,
to ret u rn to t h e orig in al a rbit ration pr oceeding s.
On Feb ru a ry 22, 2021, A b e ngoa report ed on filin g a r equ est for b an krupt cy in a Span ish Cou rt.
Th e Compa ny int e n d s to exercise all it s leg al rig h t s in ord e r to cla im a ll t h e amou n t s it 's en titled
t o. Con sid erin g t h e pre limin ary st age of t h e proceed in g , t h ere is a d ifficu lt y in est ima t in g its
ou t come . Neve rt h eless, t he re is n o ma t erial impact on t he Company's resu lts.
( 4 ) S p ain
A. Th e su b sid iar y in Spain ( he rein after – I CL I b er ia ) had t wo pot ash prod u ct ion cen t ers –
Su ria an d Sallen t . A s part of an efficien cy plan , t h e Compan y is in t h e proce ss of
con solid a t in g t h e act ivit ie s of ICL Ib eria in t o on e sit e b y mea n s of expan d in g t h e Sur ia
prod u ct ion sit e an d d iscon t in u in g t h e min in g a ct ivit ies in t h e Salle nt sit e. For fu r ther
in format ion r eg arding t he Compa ny's d ecision t o accelerat e t he sites' consolid ation in ICL
Ib e ria b y closin g t he Sa llen t sit e from Ju n e 30, 2020, please see Not e 12 . T he min ing
act ivit ie s in Spain requ ire, amon g ot he r t h in gs, a n en viron ment al min in g license and an
u rb an licen se.
In 2014, I CL I b er ia re ceived an u rb an lice nse for t h e Su ria sit e , followed b y an
en viron me nt al min in g licen se , th at complies wit h t h e n ew en vir on men t al prot ection
reg u lat ion s in Spain ( aut oritzacio su b st an tive). In 2018, IC L Ib e ria ob t ain ed an
en viron me nt al impact a ssessmen t , a s well as, t h e ne w u rb an permit s t o expan d the
capacit y of t h e salt mou nt ain in Su ria, wh ich allow to con tin ue pilin g salt for the following
ye ars, u n t il t he evacuation solu tion th rou gh a collect or is applied . T he re stor ation plan for
t he Su ria sit e, which wa s appr oved in 2018 a nd which in clu d e s a plan for h an d ling the
sa lt piles and d isman t lin g of facilit ie s is sch ed uled t o run u p to 2094.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
87 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 4 ) S p ain ( con t'd )
B. A s part of t h e a rb it ration proce edin g con d uct ed b e twe en a Span ish su b sidiar y an d Akzo
Nob e l In d u st rial Chemicals B .V. ( cu rre n tly - Nob ian ), con ce rn in g t h e t er min at ion of the
part n ersh ip ag re ement b etwe en t he m, in Ma y 2019, Nob ian su b mit t ed a st a t ement of
claim t o t h e A rb it ral Trib u n al, wh er eb y it see ks t o d et ermin e t ha t t h e ag re ement
t ermin at ion by t he Compa ny const itut es an unlawfully b r each of con tract and the refore it
is en t it le d t o en force t h e ag re emen t and t o b e compen sa t ed in an immat e ria l amou nt.
Alt er n atively, in case it is d et er min ed t h at t h e ag reemen t is n ot en for ceab le , Nob ian
ou t lin es se ve ral d iffer ent compen sation a ltern at ives in the a mou nts of u p t o $152 million.
Th e Company believes t h at t h e ag r eemen t was la wfu lly t e rmin at ed an d t h at it is mor e
likely t h an n ot t h at Nob ia n cla ims will b e reject ed . To t he b est of t he Compan y's
kn owled ge , t h e arb itra tion award is expected d urin g t he first qu a rte r of 2021.
( 5 ) In con n ect ion wit h the Harmon izat ion Proje ct (on e global ERP syst em), wh ich was d iscon tinued
in 2016 by t h e Company's B oar d of Dire ctors d ecision , in Decemb er 2018 t h e Compan y filed a
lawsu it in t h e Te l A viv Dist rict Cou rt , ag ain st IBM Isr ael, t h e lea d in g pr oject pr ovid er
( herein after – I BM), in t h e amou nt of $300 million ( ab ou t a b illion NI S), for compe n sa t ion of
t he d amag es in cu rred to t he Compan y d ue to I BM’s failu re to me et it s u ndert akin gs wit hin the
Project , wh ich led to t he failu re of t h e Project.
In Ma rch 2019, I B M filed it s st at e me nt of d efense , t og et he r wit h a cou n t er claim ag ain st the
Compan y, a ccord in g to wh ich IB M claims t ha t ICL alleg ed ly re fra in ed from makin g cert ain
paymen t s, con d u ct ed n e gotiation s in b ad fait h, and t ermin ate d t h e proje ct u n ilat erally, in a
way t h at h ar me d I BM's reputation an d goodwill an d th erefore claims an a mou nt of a b ou t $53
million ( ab ou t I LS 170 million ), inclu d in g VA T a nd in t erest . In J u ne 2019, t he Compan y filed a
st at emen t of d efe n se wit h respect to t h e cou n t er claim in which t h e Compa ny r eject ed a ll of
IB M's claims. In J an u ary 2021, IB M file d a requ est for d ismissal in clu d in g t h e d e let ion of t he
remed ie s claime d by th e Compan y arisin g fr om t he termin ation of t he agr eement b et ween the
part ie s. Con sid e ring th e early sta ge of t he proce ed ing s and t he complexit y of t h e claims, there
is a d ifficu lt y in e st imat in g t h eir ou tcome. Ne ve rth eless, t h e Compan y b elieves it is more likely
t han n ot I BM's claims in it s cou n te rclaim will be rejected.
( 6 ) In Dece mb e r 2018, an applicat ion for cert ification of a cla ss act ion was file d wit h t h e T el A viv
Dist rict Cou rt again st t h e Company, I srae l Corpor ation , and office h old ers, in clu din g d irectors
wh o h eld office d u rin g t he sa id d ate s wh ich are st a ted in t h e a pplica t ion , wit h re spe ct to the
ma nn e r in which t h e IT (t he Harmon iz ation ) proje ct wa s man a ge d a n d t er min at ed . A ccording
to t h e alleg at ion s mad e in t he Applicat ion , t he C ompa ny faile d to properly re port n ega tive
d evelopmen t s wh ich occu rre d on ce rt ain d ates d u rin g t h e sa id IT pr oject , a nd su ch failure
cau se d t h e compa ny imme n se fin an cial d a ma ge s.
Th e re pr esen ted class wa s d efin ed in the applicat ion a s all t hose who acqu ire d t he Company's
sh are at any t ime d u r in g t h e period commen cin g J u n e 11, 2015 an d d id n ot sell t h em u n t il
Sept e mb e r 29, 2016 ( h ere ina fter – t h e A pplican ts).
Notes to the Consolidated Financial Statements as at December 31, 2020
88 ICL G rou p Limited Conso lidated Financ ial S tatem ents
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 6 ) ( cont'd)
Th e ag g reg ate a mou n t of t h e claim, for all memb er s of t h e repre se n t ed class, is est ima t ed to
b e b et wee n $123 million ( ab ou t NI S 395 million) for maximal d amag e, an d $8 million ( a bout
NIS 26 million ), for min imal d amag e. In A pr il 2019, t he Compan y filed it s posit ion t o t he Court
d en yin g t h e alle gation s mad e in t h e applicat ion .
In J an u ary 2020, t he Compa ny filed an applicat ion , wh ich was accept ed in cou rt , t o post pone
t he proceed in g s u n t il a ver d ict is receive d in it s la wsu it ag ain st IB M ( see it em 5 ab ove ). T he
d elay wa s accept ed su b ject t o t h e Compan y's on -g oin g u pd at es r eg ard ing t he IB M's
proce ed in gs. In A pr il 2020, t h e A pplica nts filed a request wit h t he Su pre me Cou rt for leave to
appeal t h e sa id Cou rt 's d ecision . Con sid ering t he proce edin gs a re in early s t ag es an d even
su spen d e d , t here is a d ifficu lt y in est imatin g t h e ch ances t he applicat ion will b e a cce pt ed. No
provision has b een re cor ded in th e Compan y's b ooks.
( 7 ) In J u ly 2018, an applica t ion for certification of a cla ss a ct ion was file d with the Cent ral District
Cou r t a g ain st t he Company a nd it s su b sid iar ie s, Rot em A mfert I sra el a nd F ert ilizers and
Chemicals Lt d . ( join t ly h ere in aft er – t he Defen d ants). T h e cause s of act ion are t h e alleged
exploit at ion of t h e Defen d ant s' mon opolist ic posit ion to ch ar ge con su me rs in I sra el excessive
an d u n fair pr ice s for prod ucts classified as "solid ph osph ate fertilizer" b et ween 2011 an d 2018,
con t rar y to t h e provision s of t he Rest r ict ive T ra d e Pra ct ices La w, an d u nju st pr ofit s at t he
expen se of t he plain t iff an d t he repre se nt ed g rou p. T h e re pre se n tative plain t iff is a Kib butz
me mb e r who g rows var iou s pla nt s an d t rees in h is yar d and in a n ea rby orchard .
Th e re presen te d g r oup in clu d es a ll t h e con su me rs who pu rch ase d, d irect ly or in d irect ly, solid
ph osph at e fer t iliz er prod u cts man u fa ctured by t h e Defe n d an ts, or fa rmin g prod u ce fert ilized
wit h solid ph osphat e fert iliz er or food prod u ct s t h at in clu de su ch farmin g pr od u ce as st ated
ab ove , in t h e years 2011- 2018 ( h erein aft er – t h e Re pre sen ted Group).
Accord in g t o t he st ate ment of claim, t h e pla in tiff r equ ests, amon g ot he r t h ings, t h at th e Court
ru les in h is fa vor an d in favor of t he Re pre sented Grou p, a wardin g t hem compen sation for the
d amag es alleg ed ly cau sed t o t h em, in t h e t ot al a mou n t of NI S 56 million ( ab ou t $17 million ),
b ased on a calcu lat ion pu rsuant t o th e "difference te st", me asur ing the d ifferen ce b et ween the
price of a prod u ct an d it s cost , as d e scrib ed in t he st atemen t of claim, or in t he amou n t of about
NIS 73 million ( ab ou t $23 million ), b ased on t h e "comparison t est ", comparin g t h e price of a
prod u ct t o it s price in ot her ma rket s, as de scribe d in th e st at ement of claim. I t sh ould be noted
t hat t he Compan y's t ot a l sales of solid ph osph at e fert ilizer s in Israel d u r in g 2017 we re
neg lig ib le. In March 2020, t he cen tral d istr ict cou rt gr ante d t he Defe nd an ts a mot ion for delay
in pr oce ed in g s, u n t il a d e cision is ma d e b y t h e Su preme Cou rt in simila r proce ed ings
implicat in g t he sa id ca se. T h e Compan y is d en yin g t h e alle gation s, a n d in it s est imat ion , it is
more likely t ha n n ot th at it s claims will b e a cce pt ed.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
89 Statements Fin ancial Co ns olid ated Limite d G rou p CLI
Note 18 - Commitments, Concessions and Contingent Liabilities (cont'd)
C. Contingent liabilities (cont'd)
( 8) W it h r espe ct to t h e tran sfer of wat e r from t he Nort h er n B asin of t h e De ad Sea t o t he
evapor at ion pon d s in t he Se a's Sou th ern B asin , i n 2015, a pet ition wa s filed in t he Israe li Court
for W a t er Mat ters b y A da m T eva V’Din - I sraeli A ssociation for En viron ment al Pr ot ection (ATD)
wh ere in t he Cou rt wa s requ e st ed t o or d er t h e Gove rn me n t W at er an d Sewa g e Au t hority
( herein after – th e W at er Au thority) t o issu e a produ ction license to DSW pur suant t o the Water
La w. T h e goal is t o reg u lat e a nd su per vise t h e t ran sfer of t h e wa t er, as st a t ed , in cluding
limit a t ion of t h e qu an tit ies t ran sfer red.
In 2019, t h e cou rt par tia lly a ccepted t he pe t ition st atin g t h at t h e wat er pu mpin g a ctivit y must
b e re gu lat ed b y me an s of a prod u ct ion licen se as d efin ed in t h e W ate r Law and n ot t hrough
t he Wat er A u t h orit y's d irect ive wh ich in clu d es limit at ion of qu ant it ies a nd re port ing
me ch an isms, u n d e r wh ich t h e Compan y oper at es t od ay. In March 2020, t h e W at e r A u thority
gran t ed t he Company a pr od u ct ion lice nse for 2020 t h at in clu d es provision s wh ich are n ot
sig n ifican t ly d iffer en t from t h e W at er A u t h ority's direct ive , u nd er wh ich t h e Compan y
operat ed . In accor d an ce wit h t he W at er A u t horit y's d ir ect ives, t he Compa ny will oper ate
accor d in g t o t h is licen se u n t il t h e d at e t h e n ew prod uct ion licen se for 2021 will be received,
wh ich is expect ed b y J u n e 2021. As pa rt of t h e prod u ct ion license ren ewa l pr oce ss, t he
Compan y is hold in g d iscu ssion s wit h t h e Wat e r Au t hority in ord er to se t t le t h e exist ing
d ispu t es, amon g ot he r t hin gs, relat ing to th e possib ilit y of ch ang ing the definit ion of Dead Sea
W orks from "Su pplier -Pr od u cer" t o "Con sumer -Prod ucer". Se e Not e 17.
( 9 ) In ad d it ion t o t he con tin gent liabilit ies, as st ated ab ove , as a t th e report ing da te, t he con tingent
liab ilit ies re gard in g t he mat t ers of en viron ment al prot ect ion an d leg al claims, wh ich are
pend in g a g ain st th e Grou p, are in immateria l amou nts. It is n ot ed that par t of the above claims
is cove red b y in su r ance. A ccor din g t o t h e Compan y’s est ima tion , t h e provision s re cognized in
it s fin an cial st at emen ts ar e su fficient .
Notes to the Consolidated Financial Statements as at December 31, 2020
90St ateme nts F i nancia l C onsolida ted Li mit ed Gro u p IC L
Note 19 – Equity
A. Composition:
As at Dec ember 3 1, 20 20
As at Dec ember 3 1, 20 19
A u thorized
Issued an d paid
A u thorized
Issued an d paid
Nu mb er of Ord in ar y sh ares
of I sr aeli She kel 1 par va lu e
( in million s)
1 ,485
* 1 ,305
1 ,4 8 5
* 1 ,3 0 5
Nu mb er of Special St a t e
sh are of I sra eli Sh eke l 1 pa r
va lu e
1
1
1
1
( * ) For in format ion r egard ing the a mou n t of t reasur y sh ares, se e Not e 19.G.( 1).
Th e re con ciliat ion of th e n umb er of sh ares ou tsta nd ing at th e b eg inn ing and at t he e nd of t h e year
is as follows:
N um ber of
O u tstand ing
S h ares (in
m i llion s)
As at J anu a ry 1, 2019
1,305
Issu a nce of sha res
-
As at Decemb er 31, 2019
1,305
Issu a nce of sha res
-
As at Decemb er 3 1, 2020
1 ,305
B. Rights conferred by the shares
1. The ord in ary sh ares g ran t their hold er s vot ing righ ts in Ge neral Me etin gs of t he Company, the
rig ht t o pa rt icipate in sh areh old ers’ mee tings, t he rig ht t o r eceive d ivid en ds and th e right to a
sh are in excess asse t s u pon liqu id at ion of I CL.
2. The Specia l St a t e of I srael Sh are, h eld by t he St ate of Isr ael in ord er t o mon it or mat ter s of vital
in t er est t o t h e St a te of Isr ael, g r ants special rig ht s t o ma ke d ecision s, amon g ot h er t h in gs, on
t he followin g mat t ers:
- Sale or t ra nsfer of Compan y asset s, wh ich are “essentia l” t o t he St ate of I sra el, n ot in the
ord in ar y cou rse of b u sin ess.
- Volu n t a ry liqu id at ion , ch ang e or re orga niza tion of t h e org anizat ion al st ruct ure of I CL or
me rg er ( e xclu din g merg ers of en t ities con t rolle d b y I CL, d irect ly or in d irect ly, t ha t would
not impair t h e rig hts or power of t h e Gove rn men t, as hold er of t h e Special St ate Sha re).
- A n y a cqu isit ion or h old in g of 14% or mor e of t h e issu ed sh are ca pit al of I CL.
- T he a cqu isit ion or h old in g of 25% or mor e of th e issu ed sh are capit a l of I CL ( in clu ding
au g me n t at ion of a n exist in g h old in g u p t o 25%), even if t h er e was previou sly an
u n d erst an ding r eg ar din g a h old ing of less t h an 25% .
91 ICL G rou p L imited Consolidated Financ ial S tatem ents
Note 19 – Equity (Cont'd)
B. Rights conferred by the shares (cont'd)
- A n y per cen t a ge of h old in g of t h e Company’s sh ares, wh ich g ra nt s it s h old er t h e rig ht,
ab ilit y or act u al possib ilit y t o appoin t , d irect ly or in d ir ect ly, su ch nu mber of t h e Compa ny’s
d ir ect ors equ al t o h alf or more of t h e Company’s d irect ors appoin t ed.
Du r in g t he second half of 2018, an in ter-min istr y team was e stablish ed, hea ded by t he Ministry
of Fin an ce , wh ose pu r pose is, a mon g ot h er t h in gs, t o r eg u la te t h e auth ority an d su pervision
in respect of t h e Specia l State of I srae l Share, as well a s r ed uce th e re gulatory b ur den . In 2019,
t he wor k of t h is t e am was su spen ded u ntil fu rth er n otice du e t o t he d issolu tion of t he Kn esset
an d la ck of per ma ne n t Gove rn ment. T he Compa ny is u n able t o e stima t e wh en or wh ether the
t eam will recommence an d wh at are th e implica t ion s of t h is process ove r th e Compan y, if an y.
Notes to the Consolidated Financial Statements as at December 31, 2020
92 ICL G rou p L imited Co nsolid ated Financ ial S tatem ents
Note 19 – Equity (cont'd)
C. Share-based payments
Non-marketable options
Gr ant date
E m ployees entitled
N umber of
instruments
(thousands)
Issuance's details
Instrument terms
V es ting conditions
E xpiration date
August 6, 2014
Officers and senior
employees
3,993
An issuance of non-
marketable and non-
transferrable options, for no
consideration, under the
2014 Equity Compensation
Plan.
Upon exercise, each option may be
converted into one ordinary share of NIS 1
par value of the Company. In case that 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,
2014
Former CEO
367
May 12, 2015
Officers and senior
employees
6,729
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, 2015
Former CEO
530
Former chairman
of BOD
404
June 30, 2016
Officers and senior
employees
3,035
June 30, 2023
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
Notes to the Consolidated Financial Statements as at December 31, 2020
93 ICL G rou p L imited Co nsolid ated Financ ial S tatem ents
Note 19 – Equity (cont'd)
C. Share-based payments (cont'd)
1. Non-marketable options (cont'd)
* Th e opt ion s were issu ed u pon Mr. Doppelt 's entry in to office on J u ly 1, 2019.
Gr ant date
E m ployees entitled
N umber of
instruments
(thousands)
Issuance's details
Instrument terms
V es ting conditions
E xpiration date
March 6, 2018
Officers and senior
employees
5,554
An issuance of non-
marketable and non-
transferrable options, for no
consideration, under the
2014 Equity Compensation
Plan.
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, 2018
CEO
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
2,169
2 equal tranches:
(1) half at the end of 24 months
after the issuance date.
(2) half at the end of 36 months
after the issuance date.
5 years after the
issuance date
Notes to the Consolidated Financial Statements as at December 31, 2020
94 ICL G rou p L imited Consolidated Financ ial S tatem ents
Note 19 – Equity (cont'd)
C. Share-based payments (cont'd)
1. Non-marketable options (cont'd)
Addi tional Information
Th e opt ion s issu e d t o t h e employees in I sr ael ar e cove red b y t h e provision s of Sect ion 102 of t he
Isr aeli I n come T ax Or dinance . The issu an ce is performed throu gh a t ru stee u nd er th e Capit al Gains
Tr ack. The exercise price is lin ked t o t he C PI t h at is known a s of t h e d at e of paymen t , which is the
exer cise d at e . I n a case of d ist rib ut ion of a d ivid e n d b y t h e Company, t he e xercise pr ice is re d uced
on t he “ex d ivid en d” d a te, b y t he a mou n t of t h e d ivid en d pe r sh are ( gr oss) , b ase d on t h e amount
t hereof in NI S on t h e effective d at e.
Th e fair valu e of t h e opt ion s g r an t ed in 2014, a s part of 2014 equ it y compen sat ion plan , a s
amen d ed , wa s e st imat e d u sin g t h e b in omial mod el for pricin g opt ion s. Th e g ra n ts in 2015, 2016,
2017, 2018 an d 2019 u n d er t he 2014 Equ it y Compen sat ion Plan , as amend ed, were est imated u sing
t he B lack & Sch oles mod e l for pr icin g opt ion s. T he par amet ers u se d in applyin g t h e mod els a re as
follows:
2 01 4 Plan
G r anted
2 01 4
G r anted
2 01 5
G r anted
2 01 6
G r anted
2 01 7
G r anted
2 01 8
G r anted
2 01 9
Sh are price ( in $)
8.2
7.0
3.9
4.5
4.4
5.4
CPI -lin ke d exercise price ( in $)
8.4
7.2
4.3
4.3
4.3
5.3
E x p ected v olatilit y:
F irst t r an ch e
29.40%
25.40%
30.51%
31.88%
28.86%
27.85%
Secon d t ranch e
31.20%
25.40%
30.51%
31.88%
28.86%
27.85%
T h ird t r an che
40.80%
28.80%
30.51%
31.88%
28.86%
27.85%
E x p e ct ed l ife of o pt ions (in ye ars):
F irst t r an ch e
4.3
3.0
7.0
7.0
7.0
4.4
Secon d t ranch e
5.3
3.0
7.0
7.0
7.0
4.4
T h ird t r an che
6.3
4.0
7.0
7.0
7.0
4.4
R i s k-free in t erest rat e:
F irst t r an ch e
(0.17)%
(1.00)%
0.01%
0.37%
0.03%
(0.67)%
Secon d t ranch e
0.05%
(1.00)%
0.01%
0.37%
0.03%
(0.67)%
T h ird t r an che
0.24%
(0.88)%
0.01%
0.37%
0.03%
(0.67)%
Fair valu e ( in $ million s)
8.4
9.0
4.0
11.3
8.8
7.5
W eig h t ed aver ag e g ran t d ate fair
va lu e per opt ion ( in $)
1.9
1.2
1.1
1.6
1.4
1.2
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
95 S tatements Financial Co nsolid ated Limite d G rou p CLI
Note 19 – Equity (cont'd)
C. Share-based payments (cont'd)
1. Non-marketable options (cont'd)
Th e expect ed volat ilit y wa s d et ermin ed b ased on t h e hist orical volat ilit y in t he Company’s share
price s in t he T el-A viv St ock Exch ang e.
Th e expect ed life of t he opt ion s was d et ermin ed accor din g t o Management’s estimat e of t he period
t he e mployee s will h old t h e option s, t akin g in to con sid era tion their posit ion with th e Company and
t he C ompa ny’s past exper ience re ga rd ing th e t ur nover of employees.
Th e risk-free in t er est rat e wa s d e t ermin ed b ase d on t h e yield t o ma t u rit y of sh ekel -d e nomin ated
Isr aeli Gover nme nt d e bentu re s, wit h a rema in ing life equ al or similar t o t h e an t icipat ed life of t he
opt ion .
Th e cost of th e b e ne fit e mb e dd ed in t h e opt ion s an d shares fr om t he Equ it y C ompe nsa t ion Plan
2014 is r ecog n ize d in t h e st atemen t of in come over t he ve st in g period of each por t io n . A ccor d in g ly,
in 2020, 2019, an d 2018, t h e Compa ny re cord e d expenses of $8 million , $12 million an d $19 million ,
respect ively.
Th e movemen t in t h e opt ion s a re as follows:
N um ber of options
( i n m illio ns)
2 01 4 Plan
B ala n ce as at J an uary 1, 2019
18
M o v emen t in 2019:
Gra nt ed du rin g t he yea r
19
Expir ed d u rin g the ye ar
(3)
For feit ed d uring t he year
(3)
Exer cised d u ring t he year
(1 )
Tot al opt ion s ou t st and ing as at Decembe r 31, 2019
30
M o v emen t in 2020:
Expir ed d u rin g the ye ar
(2 )
Exer cised d u ring t he year
( 1 )
Tot al opt ion s ou t st and ing as at Decembe r 31, 2020
27
Notes to the Consolidated Financial Statements as at December 31, 2020
96 ICL G rou p L imited Consolidated Financ ial S tatem ents
Note 19 – Equity (cont'd)
C. Share-based payments (cont'd)
1. Non-marketable options (cont'd)
Th e exercise prices for opt ion s ou tstand ing at th e b eg inn ing an d end of each pe riod ar e as follows:
D e c ember
31, 202 0
D e c ember
31, 201 9
D e c ember
31, 201 8
Gra nt ed 2014 US Dollar
-
7.15
6.77
Gra nt ed 2015 US Dollar
-
-
6.92
Gra nt ed 2016 US Dollar
4 .56
4.36
4.21
Gra nt ed 2017 US Dollar
4 .17
4.01
3.89
Gra nt ed 2018 US Dollar
4 .12
3.99
3.89
Gra nt ed 2019 US Dollar
5 .66
5.42
-
Th e n u mb er of ou t st a ndin g vest e d opt ion s a t t h e en d of each period a n d t h e weig h t ed average
exer cise pr ice for t h ese opt ions ar e as follows ( * ):
D e c ember
31, 202 0
D e c ember
31, 201 9
D e c ember
31, 201 8
Nu mb er of opt ion s exe rcisab le ( In Million s)
11
12
11
W eig h t ed aver ag e exe rcise price in I sraeli Sh ekel
1 3 .89
15.19
18.53
W eig h t ed aver ag e exe rcise price in US Dollar
4 .32
4.40
4.94
( * ) T he sh ar e pr ice as of Decemb er 31, 2020, is NI S 16.36 an d $5.09.
Th e ra n ge of exe rcise prices for t he opt ion s ou t st a nd ing vest ed at t h e en d of e ach pe riod ar e as
follows:
D e c ember
31, 202 0
D e c ember
31, 201 9
D e c ember
31, 201 8
Ran g e of e xercise price in I sraeli Sh eke l
1 3 .15-18.32
13.55-24.71
14.26-25.93
Ran g e of exe rcise price in US Dollar
4 .09-5.70
3.92-7.15
3.81-6.92
Th e a verag e r emaining con tract ual life for t he ou t stan ding ve st ed opt ion s a t t he en d of each period
are a s follows:
D e c ember
31, 202 0
D e c ember
31, 201 9
D e c ember
31, 201 8
Aver ag e re ma inin g con t ractual life
3 .58
3.85
3.90
Notes to the Consolidated Financial Statements as at December 31, 2020
97 ICL G rou p L imited Co nsolid ated Financ ial S tatem ents
Note 19 – Equity (cont'd)
C. Share-based payments (cont'd)
2. Restricted shares
( * ) Vest in g of t h e Re stricted Shares wou ld b e fu lly a ccelerat ed if t h e h old er ceases t o se rve as a d ire ctor of t he Company, u nle s s h e/ she cease d t o h old office
d u e t o t h ose ce rt ain circu mst a nces re garding early t ermination of office or imposit ion of en forcemen t me asu res, as set fort h in Sect ion s 231- 232a and
233( 2) of t h e I sraeli Compan ies La w.
Gr ant date
E m ployees entitled
N umber of
instruments
(thousands)
V es ting conditions (*)
Instrument terms
Additional Information
Fair value at
the grant date
(M illion)
August 6, 2014
Officers 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.
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 date of the approval of the
General Meeting where required).
7.6
February 26, 2015
ICL’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
0.7
May 12, 2015
Officers 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
8.8
June 29, 2015
Former chairman of
the BOD
68
December 23,
2015
ICL’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
0.5
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
4.1
September 5, 2016
Former chairman of
BOD
55
Notes to the Consolidated Financial Statements as at December 31, 2020
98 IC L G rou p Limited Co nso lidated Financ ial S tatements
Note 19 – Equity (cont'd)
C. Share-based payments (cont'd)
2. Restricted shares (cont’d)
( * ) Vest in g of t he Re stricted Sh are s wou ld b e fully acceler ate d if t h e hold e r ce ases to serve a s a d irector of t h e Company, u n les s h e/ she ce ased t o hold
office d u e t o t hose ce rt ain circumst ances regardin g ea rly t e rmina tion of office or imposit ion of en force me n t me asu re s, as set fort h in Section s 231-
232a an d 233( 2) of t h e I sr aeli Compa nies Law.
Gr ant date
E m ployees entitled
N umber of
instruments
(thousands)
V es ting conditions (*)
Instrument terms
Additional Information
Fair value at
the grant date
(M illion)
January 3, 2017
ICL’s Directors
(excluding ICL's
Chairman of the BOD)
146
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.
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.
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 date of the approval of the
General Meeting where required).
0.6
February 14,
2017
Former CEO
38
An issuance for no consideration, under
the 2014 Equity Compensation Plan.
0.2
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
ICL’s Directors
(excluding ICL's CEO &
Chairman of the BOD)
88
Acceleration at January 2019.
0.4
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
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 annual
General Meeting of shareholders).
0.6
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
99 Statem ents Financ ial Co nsolid ated Limited G rou p CLI
Note 19 – Equity (cont’d)
C. Share-based payments (cont'd)
2. Restricted shares (cont’d)
In Nove mb e r 2019, March 2020 an d A pr il 2020 , t h e Compan y’s HR & Compen sat ion Commit t e e,
B oar d of Dir ect ors and sha rehold ers, re spectively, appr oved an e quity g ran t for 2020 in t he form of
rest r ict ed sh ar es, t o t h e Compan y's d irector s ( e xclu ding d irect ors whom a re office rs an d d irect ors
of I sr ael Cor por at ion Lt d.), in a valu e per grant of NIS 310,000 ( $87,152).
D. Dividends distributed to the Company's Shareholders
B o ard of Directo rs
d e c ision date
to d istr ibute
t h e div idend
A c tual d ate of
d i s tribution of
t h e div idend
G r oss amo unt of
t h e div idend
d i s tributed
( i n m illio ns of $)
N e t amount of
t h e dis tributio n
( n et of the
s u b sidiary’s share)
( i n m illio ns of $)
A m o unt of
the dividend
p e r share
( i n $)
Feb r u ary 13, 2018
Ma rch 14, 2018
70
69
0.05
Ma y 10, 2018
J u ne 20, 2018
52
51
0.04
J u ly 31, 2018
Sept emb e r 4, 2018
56
56
0.04
Oct ob e r 31, 2018
De cemb er 19, 2018
66
65
0 .0 5
T o t al 2018
244
241
0 .1 8
Feb r u ary 5, 2019
Ma rch 13, 2019
62
61
0.05
Ma y 7, 2019
J u ne 19, 2019
76
75
0.06
J u ly 31, 2019
Sept emb e r 24, 2019
74
73
0.06
Novemb e r 6, 2019
De cemb er 18, 2019
65
64
0 .0 5
T o t al 2019
277
273
0 .2 2
Feb r u ary 12, 2020
Ma rch 18, 2020
23
23
0.02
Ma y 11, 2020
J u ne 17, 2020
30
30
0.02
J u ly 28, 2020
Sept emb e r 16, 2020
36
36
0.03
Novemb e r 11, 2020
De cemb er 16, 2020
29
29
0 .0 2
T o t al 2020
118
118
0 .0 9
Feb r u ary 11, 2021 ( a fter
t he r eport in g d ate)*
Ma rch 16, 2021
34
34
0.03
( * ) T he r ecord d ate is Mar ch 3, 2021 an d t h e pa ymen t d at e is Ma rch 16, 2021.
Notes to the Consolidated Financial Statements as at December 31, 2020
100 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 19 – Equity (cont’d)
E. Cumulative translation adjustment
Th e tr an sla t ion reserve in clu d es all t ra nslat ion d iffere nces arisin g fr om t r an sla t ion of fin an cial
st at emen ts of fore ig n operat ion s.
F. Capital reserves
Th e capit al reserve s in clu d e expen se s for sh are - b ase d compen sat ion t o employees a ga in st a
corre spon d in g in crease in equ it y ( se e se ct ion C. ab ove) a n d cha n ge in in ve st me n t at fair va lue
t hrou g h ot h er compreh ensive in come ( in ve st me n t in 10% of t he sh ar e ca pit al of YY TH, se e Not e
21.E( 3).
G. Treasury shares
1) Du rin g 2008 an d 2009 22.4 million sh ar es were acqu ired b y the Grou p un der a pu rchase plan,
for a t ot al con sid e rat ion of approxima t ely $258 million . T ot al sh ar es he ld b y th e Gr ou p a re
ab ou t 24.5 million .
2) In d e t ermin ing t he a mou n t of re t ain ed ear n in gs a vailab le for d ist rib u tion as a d ivid end
pu rsu a nt t o t he I srae li Compa nies Law, t he a mou n t of self - acqu isit ion s ( t h at a re pr esented
se pa rat e ly in t h e “t re asury sh are s” cat egory in t h e equ it y sect ion ), mu st b e d ed u ct from t he
b alan ce of t h e re tain ed e arnin gs .
H. Retained earnings
Th e re t ain ed e arnin gs in clu de act uaria l g ain s ( see Not e 16.E) an d d ivid en ds t o t he sh arehold ers.
Note 20 - Details of Income Statement Items
F o r the y ear ended Decemb er 31
2020
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
Sales
5 ,043
5,271
5,556
C o st of sales
Ma t erials con su med
1 ,647
1,702
1,643
Cost of lab or
794
766
791
De pre ciat ion an d a mort ization
416
384
384
En ergy a nd fu el
316
340
349
Ot h er( *)
3 8 0
262
535
3 ,553
3 ,4 5 4
3 ,7 0 2
( * ) The amoun t in 2020 in clud es a wr ite -off of in ve ntor y, main ly in ventor y in -process u nlikely to be
rea lized , in t he amou n t of $55 million followin g t h e d iscon t in u ation of t he u n profit able
prod u ct ion a nd sa le of t h e ph osph at e rock a ct ivity in Rot e m I sr ael.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
101 Statements Financ ial Conso lidated Limited G rou p CLI
Note 20 - Details of Income Statement Items (cont’d)
F o r the year ended Decemb er 31
2020
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
S e l ling , t ransp ort and m a rketin g expen ses
La nd a n d Ma rin e t ranspor t at ion
515
509
553
Cost of lab or
134
133
125
Ot h er
1 1 7
125
120
766
767
798
G e n eral and a dmin istr ative e xpense s
Cost of lab or
136
153
172
Profession al Service s
32
42
44
Ot h er
64
59
41
232
254
257
R e search and developmen t expense s, n et
Cost of lab or
40
36
38
Ot h er
14
14
17
54
50
55
F o r the year ended Decemb er 31
2020
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
O t h er in come
Past ser vice cost
11
5
7
Capit a l g a in
-
12
841
Reversal of Impairmen t of fixed asset s
-
10
-
Reversal of provision for leg al claims
-
7
-
Ot h er
9
6
11
O t h er in come recorde d in t he in come
s t ateme nts
20
40
859
O t h er expense s
Impairmen t of fixed asset s
90
-
19
Provision for h ist orical wa st e re moval an d sit e
closu r e cost s
83
7
18
Provision for early ret ire me nt and d ismissal of
employe es
78
5
7
Provision for leg al claims
-
14
31
En viron me nt re lated pr ovision s
-
-
1
Ot h er
5
4
8
O t h er expense s recorded in t h e in come
s t ateme nts
256
30
84
Notes to the Consolidated Financial Statements as at December 31, 2020
102 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 20 - Details of Income Statement Items (cont’d)
F o r the year ended Decemb er 31
2020
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
F i n ancin g in come an d expense s
F i n ancin g in come:
Net g ain fr om ch an g e in fair valu e of d e rivative
d esig nat ed as cash flow h ed ge
54
38
-
In t e rest in come from b a nks an d ot h ers
7
8
3
Fin a ncin g in come in r ela tion to employee
b en efit s
-
-
7
Net g ain fr om ch an g e in fair valu e of d e rivative
d esig nat ed as economic h ed ge
-
45
-
Net g ain fr om ch an g es in exchan ge r at es
-
-
46
61
91
56
F i n ancin g e xpe nses:
In t e rest expen ses to b anks an d ot hers
120
125
117
Net loss fr om ch an g es in exchan ge rat es
58
72
-
Fin a ncin g e xpense s in r ela tion to e mployee s'
b en efit s
38
39
-
Net loss fr om ch an g e in fair valu e of d e riva tive
d esig nat ed as economic h ed ge
23
-
101
B an ks an d fin ance in stitu tion s commission s
( ma in ly commission on e arly re paymen t of
loan s)
4
3
18
F i n ancin g e xpe nses
243
239
236
Net of b or rowin g cost s ca pit aliz ed
24
19
22
219
220
214
N e t fin ancing e xpenses r ecord ed in th e
i n c ome statements
158
129
158
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
103 Statements Financ ial Conso lidated Limited G rou p CLI
Note 21 - Financial Instruments and Risk Management
A. General
Th e Gr ou p h as ext e nsive in t e rn ation al ope rat ion s wh er ein it is e xposed t o cred it , liqu id it y and
ma rket r isks ( in clu d in g cu rre ncy, in t er est an d ot h er price risks). I n ord er t o re d uce t he e xposure to
t hese risks, t he Grou p hold s fin an cial d erivative in strume nt s, (in cluding forward tran saction s, SWAP
t ran sa ct ions, an d opt ion s) t o re d uce t he e xposu re t o foreig n cu rr en cy risks, commod it y pr ice r isks,
en ergy an d mar in e t ra nsport a n d in t er est risks. Fu rt he rmor e, t h e Grou p h old s d erivat ive fin ancial
in st ru me nts t o h edg e t he e xposu re and ch an ges in th e cash flows.
Th e t r an saction s in d erivat ives ar e exe cut ed wit h la rg e Isr aeli a nd n on - Israeli fin an cial in st it utions,
an d t h erefore Group man agement b elieve s t he credit risk in re spect t her eof is low.
Th is Not e pr esen t s in format ion ab ou t t h e Gr ou p’s exposu re t o each of t h e ab ove risks, a nd the
Grou p’s ob ject ives, policies a nd proce sse s for mea su r in g an d man ag ing risk.
Th e Compa ny re gu larly mon it or t h e ext ent of ou r exposu re a nd t he ra te of t h e h edging t ra nsactions
for t h e var iou s r isks d escribed b elow. T he C ompa ny exe cut e he dgin g t ransa ction s a ccordin g t o our
he d g in g policy wit h referen ce t o t he actua l de ve lopmen ts a nd expect ation s in t he various marke ts.
Notes to the Consolidated Financial Statements as at December 31, 2020
104 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
B. Groups and measurement bases of financial assets and financial liabilities
As at Dec ember 3 1, 2020
F i nancial assets
F i nancial liab ilities
M easured at
f a ir value
thr ou gh the
s t atemen t
of inco me
M e as ured at
f a ir value
t h r ough the
s t atemen t of
c om p rehensive
i n c om e
M easured at
a m o rtized
c os t
M easured at
f a ir value
thr ou gh the
s t atemen t
of inco me
M easured at
a m o rtized
c os t
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
C u rrent as set s
Cash an d cash e qu ivalen ts
-
-
2 14
-
-
Sh ort - t erm in ve st me nts and
d eposit s
-
-
1 00
-
-
Tr ad e r ece ivable s
-
-
8 83
-
-
Ot h er r ece ivable s
-
-
1 22
-
-
In vest ments at fa ir value th rou gh
ot h er comprehensive in come
-
53
-
-
-
For eig n cu rr en cy a nd in tere st
d erivat ive d e sig nated as
econ omic h ed g e
24
-
-
-
-
N o n -curr en t assets
For eig n cu rr en cy a nd in tere st
d erivat ive in st ru ments
d esig nat ed as cash flow h ed ge
1 1 5
-
-
-
-
In vest ments at fa ir value th rou gh
ot h er comprehensive in come
-
83
-
-
-
Ot h er n on -cu rr en t asset
-
-
8
-
-
T o t al fin an cial asset s
1 3 9
1 3 6
1 , 3 27
-
-
C u rrent l iabilit ies
Sh ort t er m d e bt
-
-
-
-
( 6 7 9)
Tr ad e payab le s
-
-
-
-
( 7 4 0)
Ot h er cu rre nt lia bilit ies
-
-
-
-
( 1 5 6)
For eig n cu rr en cy a nd in tere st
d erivat ive d e sig nated as
econ omic h ed g e
-
-
-
( 4 2 )
-
En ergy a nd marine t ra nsport
d erivat ive d e sig nated as
econ omic h ed g e
-
-
-
( 1 )
-
N o n -curr en t liab ilitie s
Lon g t erm d eb t an d d eb en tur es
-
-
-
-
( 2 ,0 53)
For eig n cu rr en cy a nd in tere st
d erivat ive d e sig nated as
econ omic h ed g e
-
-
-
( 1 3 )
-
For eig n cu rr en cy a nd in tere st
d erivat ive in st ru ments
d esig nat ed as cash flow h ed ge
-
-
-
( 2 8 )
-
Ot h er n on - cu rrent liabilit ies
-
-
-
-
( 5 3 )
T o t al fin an cial liabil itie s
-
-
-
( 8 4 )
( 3 ,6 81)
T o t al fin an cial in struments , n et
1 3 9
1 3 6
1 , 3 27
( 8 4 )
( 3 ,6 81)
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
105 Statements Financ ial Conso lidated Limited G rou p CLI
Note 21 - Financial Instruments and Risk Management (cont'd)
B. Groups and measurement bases of financial assets and financial liabilities (cont'd)
As at Dec ember 3 1, 20 19
F i nancial assets
F i nancial liab ilities
M e as ured at
f a ir value
t h r ough the
s tatement of
i n c om e
M e as ured at
f a ir value
t h r ough the
s t atemen t of
c om p rehensive
i n c om e
M easured at
a m o rtized
c os t
M easured at
f a ir value
thr ou gh the
s t atemen t
of income
M easured at
a m o rtized
c os t
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
C u rrent as set s
Cash an d cash e qu ivalen ts
-
-
95
-
-
Sh ort - t erm in ve st me nts and
d eposit s
-
-
96
-
-
Tr ad e r ece ivable s
-
-
778
-
-
Ot h er r ece ivable s
-
-
105
-
-
For eig n cu rr en cy a nd in tere st
d erivat ive d e sig nated as
econ omic h ed g e
10
-
-
-
-
En ergy a nd marine t ra nsport
d erivat ive d e sig nated as
econ omic h ed g e
1
-
-
-
-
In vest ments at fa ir value
t hrou g h ot her compre he nsive
in come
-
40
-
-
-
N o n -curr en t assets
In vest ments at fa ir value
t hrou g h ot her compre he nsive
in come
-
111
-
-
-
For eig n cu rr en cy a nd in tere st
d erivat ive in st ru ments
d esig nat ed as cash flow h ed ge
57
-
-
-
-
Ot h er n on -cu rr en t asset
-
-
6
-
-
T o t al fin an cial asset s
68
151
1 ,0 8 0
-
-
C u rrent l iabilit ies
Sh ort t er m d e bt
-
-
-
-
(420)
Tr ad e payab le s
-
-
-
-
(712)
Ot h er cu rre nt lia bilit ies
-
-
-
-
(128)
For eig n cu rr en cy a nd in tere st
d erivat ive d e sig nated as
econ omic h ed g e
-
-
-
(5)
-
En ergy a nd marine t ra nsport
d erivat ive d e sig nated as
econ omic h ed g e
-
-
-
(3)
-
N o n -curr en t liab ilitie s
Lon g t erm d eb t an d d eb en tur es
-
-
-
-
(2,181)
For eig n cu rr en cy a nd in tere st
d erivat ive d e sig nated as
econ omic h ed g e
-
-
-
(6)
-
Ot h er n on - cu rrent liabilit ies
-
-
-
-
(3 8 )
T o t al fin an cial liabil itie s
-
-
-
(1 4 )
(3 ,47 9 )
T o t al fin an cial in struments , n et
68
151
1 ,0 8 0
(1 4 )
(3 ,47 9 )
Notes to the Consolidated Financial Statements as at December 31, 2020
106 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
C. Credit risk
( 1 ) G ene ral
( a) C u st omer credit r isks
Cred it risk is t he r isk of fin an cial loss t o t he Grou p if a cu st omer or cou n t erpar ty t o a fin an cial
in st ru me nt fails t o meet it s con t ra ct ua l ob lig ation s, an d it arise s main ly from t h e Grou p’s re ceivab les
from cu st omer s a nd from ot he r receivable s a s well as fr om in vest ments in secu rit ie s.
Th e Compan y se lls t o a wid e rang e an d larg e n u mb er of cu st omers, in clu d in g cu st omer s with
ma t erial cr ed it b a lan ces. On t h e ot he r h an d, t he Compan y d oe s n ot h ave a con ce n t ration of sales
t o in d ivid u al cu st ome rs.
Th e Compa ny h as a reg u la r policy of in su ring t h e credit risk of it s cu st omer s b y mea ns of pu rcha sing
cre d it in su rance wit h in su rance compan ies, ot h er t h an sales t o g overn men t a gen cies an d sa les in
sma ll a mou n t s. Most of all ot h er sales are exe cuted on ly after receivin g approval of coverage in the
nece ssa ry a mou n t from a n in su rance compa ny or ot h er collat erals of a similar level.
Th e use of an in su ran ce compan y a s aforeme n t ion ed en su res t h at t h e cr ed it risk is man aged
profession a lly a nd ob ject ively b y a n e xper t ext ern al par t y a nd t r an sfers most of t h e cr ed it risk t o
t hird par t ies. Never t hele ss, t h e common d e d u ct ible in cred it in su r an ces is 10% ( even h ig h er i n a
sma ll n u mb er of ca se s) t h u s t he Grou p is st ill exposed t o par t of t h e risk, ou t of t h e t ot al in su red
amou n t .
In ad d it ion , t h e Grou p h as an ad d it ion a l d ed u ctible cu mu lative ann ua l amou n t of appr oximat ely
$6 million t hr ou g h a wh olly- owne d ca ptive re insu rance Compa ny.
Most of t h e Gr ou p’s cu st omers h ave b e en t rading wit h t he Grou p for man y ye ars an d on ly rar ely
ha ve cred it losses b een in cu rre d b y t he Group. T he fin ancia l st at emen ts in clud e specific allowance
for d ou b t fu l d eb ts t hat appropr ia tely r eflect, i n Man ag emen t’s opin ion , t h e credit loss in r espe ct of
accou n t s re ceivable s which ar e con sidered d ou btful.
( b ) Cr ed it risks in respect of d eposit s
Th e Grou p d eposit s it s b a la nce of liqu id fin an cial asset s in b a n k d e posit s a nd in se cu rit ies. All the
d eposit s are wit h a d ive rsified g rou p of lead in g b anks preferab ly wit h b an ks t ha t provid e loan s to
t he Grou p.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
107 Statements Financ ial Conso lidated Limited G rou p CLI
Note 21 - Financial Instruments and Risk Management (cont'd)
C. Credit risk (cont'd)
( 2 ) M a ximu m Exp osure t o cr edit risk
Th e carr yin g amou n t of fin an cial asset s re pre sen t s t h e ma ximu m cred it exposu re. Th e maximu m
exposu re t o cr ed it risk at t h e r eportin g d at e was:
As at Dec ember 31
C a r rying amo unt ($ millions)
2 02 0
2 01 9
Cash an d cash equ ivalen ts
2 1 4
95
Sh ort t er m in ve st me nts a nd d eposit s
1 0 0
96
Tr ad e r ece ivable s
8 8 3
778
Ot h er r ece ivable s
1 2 2
105
De riva t ives
1 3 9
68
Ot h er n on -cu rren t asse ts
8
6
1 , 4 66
1 ,1 4 8
Th e maximu m exposu re t o cr ed it risk for t rad e re ceivab les, at t h e re port in g d a t e b y ge og ra phic
reg ion wa s:
As at Dec ember 31
C a r rying amount ($ millions)
2 02 0
2 01 9
Eu rope
3 3 0
252
Asia
2 5 8
249
Nor t h A merica
1 4 4
114
Sou t h A mer ica
68
74
Isr ael
67
72
Ot h er
16
17
8 8 3
778
( 3 ) A g ing of d e bts an d i mpairment l osses
Th e a gin g of t rad e r eceivab les a t th e reportin g d ate wa s:
As at Dec ember 31
2 02 0
2 01 9
G r oss
I m pairment
G r oss
I m pairment
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
Not past d u e
7 88
-
661
-
Past d u e up to 3 mon t h s
58
-
65
-
Past d u e 3 to 12 mont hs
7
( 1 )
26
(1)
Past d u e over 12 mon t hs
40
( 9 )
29
(2 )
8 93
( 1 0 )
781
(3 )
Notes to the Consolidated Financial Statements as at December 31, 2020
108 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
C. Credit risk (cont'd)
( 3 ) A g ing of d e bts an d i mpairment l osses ( cont'd)
Th e movemen t in t h e a llowance for d oubt ful accou nts d urin g t he year was as follows:
2 02 0
2 01 9
$ m illio ns
$ m illio ns
B a la nce as at J a nuary 1
3
3
Ad d it ion a l allowa nce
5
2
W rit e offs
-
(1)
Reversals
-
(1)
Chan ges d ue to t ra nslation d iffere nces
2
-
B a la nce as at Decembe r 31
10
3
D. Liquidity risk
Liqu id it y risk is t h e risk t h at t h e Grou p will n ot b e ab le t o meet it s fin ancia l ob lig ation s as t h ey fa ll
d u e. T h e Gr ou p’s a pproach t o ma na gin g liqu id ity is t o e nsu r e, a s far as possib le, t ha t it will a lways
ha ve su fficie nt liqu id it y t o time ly meet it s liab ilit ies, u nd er b ot h n ormal an d st re sse d con d it ion s,
wit h ou t in cu rrin g u nwante d losses.
Th e Company man ag es the liqu id ity risk b y holding cash balances, sh ort -te rm d eposit s and secured
b an k cr ed it facilit ies.
Th e followin g are t he con t ract u al mat u r ities of fin an cial liab ilit ies, in clu d in g est imat ed in t erest
paymen t s:
As at Dec ember 3 1, 2020
C a r rying
a m o un t
12
m onths
or less
1 - 2 years
3 - 5 years
M or e
t h an 5
y e ar s
$ m illio ns
N o n -d erivative fin an cial lia bil ities
Sh ort t er m d e bt ( not in clud ing curr en t
ma t u rit ie s)
2 9 6
2 9 9
-
-
-
Tr ad e payab les
7 4 0
7 4 0
-
-
-
Ot h er cu rrent liabilit ies
1 5 6
1 5 6
-
-
-
Lon g - t erm d e bt, d ebentu re s and others
2 , 4 89
4 8 9
5 2 9
8 5 9
1 , 5 59
3 , 6 81
1 , 6 84
5 2 9
8 5 9
1 , 5 59
F i n ancia l l iab ilities – d erivative
i n st ru ments
For eig n cu rr en cy a nd in tere st
d erivat ive d esigna ted as e conomic
he d g e
55
42
-
-
13
En ergy a nd marine t ra nsport derivat ive
d esig nat ed as economic h ed ge
1
1
-
-
-
For eig n cu rr en cy a nd in tere st
d erivat ive d esigna ted as cash flow
he d g e
28
-
-
-
28
84
43
-
-
41
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
109 Statements Financ ial Conso lidated Limited G rou p CLI
Note 21 - Financial Instruments and Risk Management (cont'd)
D. Liquidity risk (cont'd)
As at Dec ember 3 1, 20 19
C a r rying
a m o un t
12
m onths
or less
1 - 2 years
3 - 5 years
M or e
t h an 5
y e ar s
$ m illio ns
N o n -d erivative finan cial lia bil ities
Sh ort t er m d e bt ( not in clud ing curr en t
ma t u rit ie s)
358
361
-
-
-
Tr ad e payab le s
712
712
-
-
-
Ot h er cu rre nt lia bilit ies
128
128
-
-
-
Lon g -t erm d ebt a nd d eb en tur es
2 ,2 8 1
157
645
1 ,1 0 1
1 ,2 8 8
3 ,4 7 9
1 ,3 5 8
645
1 ,1 0 1
1 ,2 8 8
F i n ancia l l iab ilities – d erivative
i n st ru ments u ti lized f or econo mic
h e d ging
For eig n cu rr en cy a nd in tere st
d erivat ive d e sig nated as economic
he d g e
11
5
-
-
6
En ergy a nd marine t ra nsport derivat ive
d esig nat ed as economic h ed ge
3
3
-
-
-
14
8
-
-
6
E. Market risk
Ma rket r isk is t h e risk t h at ch an ge s in market prices, su ch as foreig n e xch ang e r at es, in t e rest rates
an d equ it y prices will affect t he fair valu e or fu ture cash flows of a fin an cial in st ru men t.
1 . I ntere st risk
Th e Grou p h as loan s b ea rin g var iable int erest s and t he refore it s fin an cial re sult s a nd cash flows are
exposed t o flu ct u a tion s in t he market inter est ra tes.
ICL u ses fin a ncia l in st r u me nts, in clu d ing d e rivatives, in or d er t o h ed ge t h is e xposu re . The Gr ou p
u ses in t e rest r ate swap con tra cts main ly in order to re du ce t he exposu re to ca sh flow ris k in r espect
of ch an g es in in terest r ate s.
As part of t h e g lob al reform in in terest rate b en chmarks, t he Lib or fa llb ack is sch edu led for the end
of 2021. Th re e g lob al in t e rest rat e b enchma rks ar e expect ed t o t r an sit ion t o alt er nat ive risk -free
rat e s a nd t o r eplace t h e exist in g b e nch mark Lon d on in t erbank offe red r at es ( LI B OR): SOFR ( USD),
EST R ( EUR) an d SO NIA ( GBP).
As of Dece mb e r 31,2020 LI B OR, con t in u es t o be u sed as a r efe ren ce rat e a n d in va lu at ion of
in st ru me nts wit h mat u rit ies t ha t e xceed t h e expect e d en d d a t e for LIB O R. t h e Company's LI B OR -
b ased d e bt is USD 99.4 million , ou t of which on ly USD 30 million will mat u re aft er the e xpe cted end
d at e for LI BOR. T h e Compan y's LI BOR -b ased d erivatives a mou n t t o $150 million .
As of Decemb er 31,2020, we h ave n ot fin alized an agr eement wit h t h e b an ks r egard ing t he Libor
t ran sit ion effects on loan s and derivat ives.
Notes to the Consolidated Financial Statements as at December 31, 2020
110 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont'd)
1 . I ntere st risk ( cont 'd )
( a ) I nt er est Ra te Pro file
Set fort h b elow are d et a ils re g ard ing t he t ype of in t er est on t he Grou p’s n on -d er ivative
in t er est -b earin g fin ancia l in struments:
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
F i xed r at e in st rumen ts
Fin a ncia l asset s
1 6 5
164
Fin a ncia l liab ilit ies
( 2 ,4 50)
(1 ,94 7 )
( 2 ,2 85)
(1 ,78 3 )
V a r iable ra te in strume nts
Fin a ncia l asset s
2 2 3
100
Fin a ncia l liab ilit ies
( 2 9 6)
(6 6 9 )
( 7 3 )
(5 6 9 )
( b ) Sensit ivity a nalysis f or f ixe d rate in st ru ments
Most of t h e Gr ou p’s in st ru ment s b ear ing fixed in t erest a re n ot mea sure d at fa ir valu e t h roug h the
st at emen t of in come . Therefore , ch anges in t he in terest r ate will n ot have a ny impact on t h e pr ofit
or loss in respect of cha nge s in t he valu e of asset s and liabilit ies b earin g f ixed in terest.
( c ) Se n sitiv ity analy sis for var iable r at e in st rume nts
Th e b e low ana lysis assu mes t h at a ll ot h er va riab les ( except for t h e in t er est r ate ), in pa rticu lar foreign
cu rr en cy ra tes, remain con st an t.
As at Dec ember 3 1, 2020
I m pact on profit (loss)
D e c reas e of
1% in interest
D e c reas e of
0 . 5 % in
i n teres t
I n c rease of
0 . 5 % in
i n teres t
I n c rease of
1% in interest
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
S W A P in strume nt s
Chan ges in U.S. Dolla r in t ere st
( 3 9 )
( 1 9 )
18
36
Chan ges in I sraeli She kel in t erest
49
24
( 2 2 )
( 4 2 )
Chan ges in Eu ro in tere st
( 2 )
( 1 )
1
2
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
111 Statements Financ ial Conso lidated Limited G rou p CLI
Note 21- Financial Instruments and Risk Management (cont'd)
E. Market risk (cont’d)
1 . I ntere st risk ( cont ’d)
( d ) T erms o f d erivative fin an cial in str ument s use d t o h edge in te rest r isk
As at Dec ember 3 1, 2020
C a r rying
a m o un t
( f air v alue)
S t ated
a m o un t
M atu rity date
I n t erest rate
r a nge
$ m illio ns
$ m illio ns
Y e ar s
%
U . S . Do lla r
SW A P con t r acts fr om variab le in terest
to fixed in t er est
( 1 3 )
1 5 0
2 02 4
2 . 4 7% -2.60 %
I s raeli Sh eke l
SW A P con t r acts fr om fixed ILS
in t er est to fixe d USD int erest
87
7 0 1
2 03 4
2 . 4 0% -4.47 %
G B P
SW A P con t r acts fr om variab le USD
in t er est to fixe d GB P in terest.
5
63
1 8/0 5/20 21
1 - m onth
l i bor
E u ro
SW A P con t r acts fr om variab le USD
in t er est to fixe d EUR in t erest
( 4 1 )
3 2 4
1 9/0 5/20 21
1 - m onth
l i bor
As at Dec ember 3 1, 20 19
C a r rying
a m o un t
( f air v alue)
S t ated
a m o un t
M atu rity date
I n t erest rate
r a nge
$ m illio ns
$ m illio ns
Y e ar s
%
U . S . Do lla r
SW A P con t r acts fr om variab le
in t er est to fixe d in t erest
(6)
150
2024
2.47%-2.60%
I s raeli Sh eke l
SW A P con t r acts fr om fixed ILS
in t er est to fixe d USD int erest
57
482
2024
2.45%-4.47%
E u ro
SW A P con t r acts fr om variab le USD
in t er est to fixe d EUR in t erest
(3)
447
19/02/2020
1-month libor
Notes to the Consolidated Financial Statements as at December 31, 2020
112 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 21- Financial Instruments and Risk Management (cont'd)
E. Market risk (cont’d)
2 . C u rren cy risk
Th e Grou p is expose d t o cu r rency risk wit h respect t o sales, pu r chase s, assets a nd liab ilit ies t ha t are
d en omin at ed in a cu r ren cy ot her t han t he fu nct iona l cu rre ncy of t h e Gr ou p. T he main exposu re is
t he New I srae li Sh ekel, Eu ro, B ritish St erlin g, Ch ine se Yua n B razilia n Re al a nd T urkey Lir a.
Th e Grou p en t er s in t o fore ig n cu r rency d erivat ives – forwar d e xchang e t ransa ction s a nd cu rrency
opt ion s – all in or d er t o pr ot ect th e Grou p fr om th e risk t hat t he even tual cash flows, re su ltin g from
exist in g asset s a nd liab ilit ies, an d sa les an d pu r ch ases of g ood s wit hin t he fra mewor k of firm or
an t icipat ed commit men t s (base d on a b udg et of u p t o on e year), d en omin at ed in foreig n cu rre ncy,
will b e affect ed b y ch ang es in t he exchang e rates.
( a ) Sens itivit y a nalysis
A 10% in cr ease a t t h e rat e of th e US$ ag ain st t he followin g cu rre n cie s wou ld ha ve in creased
( d ecrea sed) profit or loss b y t h e amou n t s sh own b elow. T his a nalysis a ssu mes t h at all ot h er
va ria b le s, in part icu la r in te rest r ate s, remain con st an t.
As at Dec ember 31
I m pact on p rofit (loss)
2 02 0
2 01 9
$ m illio ns
$ m illio ns
N o n -d erivative fin an cial in strume nts
U.S. Dolla r/ Eu r o
( 9 6 )
(95)
U.S. Dolla r/ Isr aeli Sh ekel
1 3 4
98
U.S. Dolla r/ B rit ish Pound
2
(4)
U.S. Dolla r/ Ch in ese Yu an
( 1 )
(1)
U.S. Dolla r/ Turkey Lir a
( 1 )
(1)
A 10% d e cre ase of t he US$ a gain st t h e ab ove cu rre ncie s a t Decemb er 31 wou ld ha ve t h e same
effect b u t in th e opposit e d irection .
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
113 Statements Financ ial Conso lidated Limited G rou p CLI
Note 21 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont'd)
2 . C u rren cy risk ( con t'd )
( a ) Sens itivit y a nalysis (con t'd)
Prese nt ed h ere un der is a sen sit ivity an a lysis of t h e Gr oup’s foreig n cu r rency d e riva tive in st ru ments
as a t Decemb er 31, 2020. Any ch an g e in t he e xch an ge ra tes of t h e p rin cipa l cu rr encies sh own
b elow wou ld h ave in cre ased (d ecrea sed) pr ofit an d loss a nd e qu it y b y t h e a mou n ts shown b elow.
Th is a na lysis a ssu me s t h at a ll ot h er va riables r emain con stant .
As at Dec ember 3 1, 2020
I n c rease 10%
I n c rease 5%
D e c reas e 5%
D e c reas e 10 %
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
E u ro/ U .S. Do llar
For ward t ransaction s
14
7
( 8 )
( 1 7 )
Opt ion s
4
2
( 3 )
( 6 )
SW A P
33
18
( 1 9 )
( 4 1 )
U . S . Do lla r/ Israeli Sh ekel
For ward t ransaction s
( 3 9 )
( 2 0 )
23
48
Opt ion s
( 2 6 )
( 1 4 )
19
44
SW A P
( 8 2 )
( 4 3 )
48
1 0 1
B r iti sh Pou nd /U.S. Do lla r
For ward t ransaction s
( 3 )
( 1 )
1
3
Opt ion s
( 1 )
-
1
1
SW A P
( 6 )
( 3 )
4
8
U . S . Do lla r/ Japa nese Yen
For ward t ransaction s
1
-
-
( 1 )
Notes to the Consolidated Financial Statements as at December 31, 2020
114 ICL G rou p Limited Co nso lidated Financ ial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont'd)
2 . C u r rency r i sk (con t'd)
( b ) T erms o f d erivative fin an cial in strument s used t o redu ce f oreig n cu rren cy risk
As at Dec ember 3 1, 2020
C a r rying
a m o un t
S t ated amount
A v erage
$ m illio ns
$ m illio ns
e x change rate
F o rward con tr act s
U.S. Dolla r/ Isr aeli Sh ekel
8
3 7 7
3 . 2
Eu ro/ U.S. Dolla r
-
1 5 0
1 . 2
U.S. Dolla r/ B rit ish Poun d
-
27
1 . 4
U.S. Dolla r/ Ch in ese Yu an Renmin bi
-
23
6 . 6
Ot h er
-
53
-
C u rrency a n d interest SW A Ps
U.S. Dolla r/ Isr aeli Sh ekel
87
7 0 1
3 . 7
Eu ro/ U.S. Dolla r
( 4 1 )
3 2 4
1 . 1
U.S. Dolla r/ B rit ish Poun d
5
63
1 . 3
P u t o pt ions
U.S. Dolla r/ Isr aeli Sh ekel
13
4 0 0
3 . 3
Eu ro/ U.S. Dolla r
-
47
1 . 2
U.S. Dolla r/ J apan ese Yen
-
2
1 0 7
U.S. Dolla r/ B rit ish Poun d
-
10
1 . 3
C a ll opt ion s
U.S. Dolla r/ Isr aeli Sh ekel
( 1 )
3 8 0
3 . 3
Eu ro/ U.S. Dolla r
( 2 )
47
1 . 2
U.S. Dolla r/ J apan ese Yen
-
2
1 0 7
U.S. Dolla r/ B rit ish Poun d
-
10
1 . 3
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
115 Statements Financ ial Conso lidated Limited G rou p CLI
Note 21 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont'd)
2 . C u rren cy risk ( con t'd )
( b ) T erms o f d er ivative fin an cial in strument s used t o redu ce f oreig n cu rren cy risk ( cont ’d)
As at Dec ember 3 1, 20 19
C a r rying
a m o un t
S tated amou n t
A v erage
e x change rate
$ m illio ns
$ m illio ns
F o rward con tr act s
U.S. Dolla r/ Isr aeli Sh ekel
-
309
3.5
Eu ro/ U.S. Dolla r
(1)
61
1.1
U.S. Dolla r/ B rit ish Poun d
-
33
1.3
U.S. Dolla r/ Ch in ese Yu an Renmin bi
-
28
7.1
Ot h er
4
56
0.9
C u rrency a n d interest SW A Ps
U.S. Dolla r/ Isr aeli Sh ekel
57
482
3.7
Eu ro/ U.S. Dolla r
(3)
447
1.1
P u t o pt ions
U.S. Dolla r/ Isr aeli Sh ekel
4
600
3.4
Eu ro/ U.S. Dolla r
-
45
1.1
U.S. Dolla r/ J apan ese Yen
-
1
108.5
U.S. Dolla r/ B rit ish Poun d
-
15
1.3
C a ll opt ion s
U.S. Dolla r/ Isr aeli Sh ekel
-
440
3.4
Eu ro/ U.S. Dolla r
1
45
1.1
Notes to the Consolidated Financial Statements as at December 31, 2020
116 ICL G rou p Limited Consolidated Financial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont'd)
2 . C u rren cy risk ( con t'd )
( c ) L in kag e t erms o f m onetary ba lances – in m ill ions o f Do lla rs
As at Dec ember 3 1, 20 20
US Dollar
E ur o
B r itish
P o und
Isr aeli S hekel
B r azilian
R e al
C h inese
Y u an
R e nminbi
O t her
T o tal
N o n -d erivative in str ument s:
Cash an d cash e qu ivalen ts
1 14
13
5
2
6
60
14
2 1 4
Sh ort t er m in ve st me nts a nd d eposit s
88
5
-
-
-
4
3
1 0 0
Tr ad e r ece ivable s
4 54
2 27
35
58
21
51
37
8 8 3
Ot h er r ece ivable s
72
41
-
7
-
-
2
1 2 2
In vest ments at fa ir value th rou gh ot he r
compre he nsive in come
-
-
-
-
-
1 3 6
-
1 3 6
Ot h er n on -cu rr en t assets
1
3
-
-
4
-
-
8
T o t al fin an cial asset s
7 29
2 89
40
67
31
2 5 1
56
1 , 4 63
Sh ort - t erm d e bt
2 67
70
85
1 8 1
7
68
1
6 7 9
Tr ad e payab le s
1 45
1 63
21
3 2 6
11
66
8
7 4 0
Ot h er cu rre nt lia bilit ies
41
68
4
17
-
26
1 5 6
Lon g t erm d eb t, d ebentu res and oth ers
1 , 2 11
36
22
7 1 6
2
60
6
2 , 0 53
Ot h er n on -cu rr en t liab ilitie s
2
51
-
-
-
-
-
53
T o t al fin an cial liabil itie s
1 , 6 66
3 88
1 3 2
1 , 2 40
20
2 2 0
15
3 , 6 81
T ot al n on-derivative financial in st rumen ts, net
( 9 3 7)
( 9 9 )
( 9 2 )
( 1 ,1 73)
11
31
41
( 2 ,2 18)
D e rivative in st rume n ts:
For ward t r ansaction s
-
1 50
27
3 7 7
15
23
38
6 3 0
Cylin d er
-
47
10
4 0 0
20
-
2
4 7 9
SW A PS – U.S. Dollar in t o Isr aeli Sh eke l
-
-
-
7 0 1
-
-
-
7 0 1
SW A PS – U.S. Dollar in t o Eu ro
-
3 24
-
-
-
-
-
3 2 4
SW A PS – U.S. Dollar in t o B rit ish Pou n d
-
-
63
-
-
-
-
63
T o t al d er ivative in str ument s
-
5 21
1 0 0
1 , 4 78
35
23
40
2 , 1 97
N e t expo sur e
( 9 3 7)
4 22
8
3 0 5
46
54
81
( 2 1 )
Notes to the Consolidated Financial Statements as at December 31, 2020
117 ICL g rou p Limited Co n so lidated Financ ial S tatements
Note 21 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont'd)
2 . C u rren cy risk ( con t'd )
( c ) L in kag e t er ms o f m one tary balances – in m ill ions o f Do lla rs ( con t'd )
As at Dec ember 3 1, 20 19
US Dollar
E ur o
B r itish
P o und
I s r aeli
S h ekel
B r azilian
R e al
C h inese
Y u an
R e nminbi
O t hers
T o tal
N o n -d erivative in str ument s:
Cash an d cash e qu ivalen ts
18
19
4
4
6
33
11
95
Sh ort t er m in ve st me nts a nd d eposit s
89
1
-
-
-
3
3
96
Tr ad e r ece ivable s
381
177
37
50
22
48
63
778
Ot h er r ece ivable s
84
16
-
3
-
-
2
105
In vest ments at fa ir value th rou gh ot he r
compre he nsive in come
-
-
-
-
-
151
-
151
Ot h er n on -cu rr en t assets
3
1
-
-
2
-
-
6
T o t al fin an cial asset s
575
214
41
57
30
235
79
1 ,2 3 1
Sh ort - t erm d e bt
198
95
18
58
4
47
-
420
Tr ad e payab le s
172
178
22
247
9
79
5
712
Ot h er cu rre nt lia bilit ies
19
44
4
47
-
12
2
128
Lon g t erm d eb t, d ebentu res and oth ers
1,452
34
29
596
7
60
4
2,182
Ot h er n on -cu rr en t liab ilitie s
38
38
T o t al fin an cial liabil itie s
1 ,8 4 1
389
73
948
20
198
11
3 ,4 8 0
T o t al n on- de riva ti ve f inancial in st rume nts, n et
(1 ,26 6 )
(1 7 5 )
(3 2 )
(8 9 1 )
10
37
68
(2 ,24 9 )
D e rivative in st rume n ts:
For ward t r ansaction s
-
61
33
309
-
28
56
487
Cylin d er
-
45
15
600
-
-
-
660
SW A PS – U.S. Dollar in t o Isr aeli Sh eke l
-
-
-
482
-
-
-
482
SW A PS – U.S. Dollar in t o Eu ro
-
447
-
-
-
-
-
447
T o t al d er ivative in str ument s
-
553
48
1 ,3 9 1
-
28
56
2 ,0 7 6
N e t expo sur e
( 1 ,2 66)
3 7 8
16
5 0 0
10
65
1 2 4
( 1 7 3)
Notes to the Consolidated Financial Statements as at December 31, 2020
118 ICL G rou p Limited Consolidated Financial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
E. Market risk (cont’d)
3 . O t her pri ce r isk
A . I n ve stment in sh ar es
Du r in g t he yea r 2020 t h e Compan y sold a t ot al of 42.9 million of it s sh ar es in YYTH for a
con sid erat ion of $32 million . A s a t Decemb er 31, 2020, t h e re main in g b ala nce of t h e in vestme nt is
$136 million , repre se n tin g ab ou t 10% of Y YTH's share capit al. In J an uary 2021 YYTH issu e d sh ares
wh ich d ilu t ed the compan y’s h old ing t o 8% .
B . F ina ncial asset a t a mor tized cost
As pa rt of t h e sale of t he fire sa fet y an d oil ad d it ives b u sinesses, in 2018, t he Company g ra nted a
loan t o t h e b uye rs, in th e ca rryin g a mou nt of $53 million b e arin g in tere st t o be pa id alon g with the
loan pr in cipal. A s of Decemb er 31, 2020, t h e loan is pr esen ted as a fin ancia l asset at amort ized cost
u n d er “cu rren t assets” in th e st atement of fin an cial posit ion , in t h e a mou nt of $66 milli on .
C . F oreig n cu r rency r is ks
Th e Company is e xposed to ch ange s in the exchang e rate of t he sh eke l a gainst the dollar in re spect
of prin cipal and in t erest in ce rta in d eb entures an d loan s. The Compa ny's risk man age men t st rategy
is to h ed g e t he chang es in cash flows d e riving fr om liab ilit ies in sh eke ls by u sin g d erivatives. T hese
exposu res are h edg ed from t ime to time, accordin g to the assessment of t h e e xposu re and inh erent
risks ag ain st wh ich t he Compa ny chooses to h ed g e, in accor d an ce wit h t h e Compan y's risk
ma na g emen t st rat eg y.
In vie w of t h e above, in Ja nu ary and May 2020, t he Compan y de sign ated se ve ral swap con tracts for
cash flow h ed g e. Th ese t ransaction s, wh ich in clu d e principal an d int erest of Series G d e b en tu res,
en t it le t he Compa ny t o receive fixe d shekel in terest aga inst a liab ility t o pay dollar int erest at a fixed
rat e . Th e Compan y d esig n at ed t h e spot compon en t of t h e excha nge rat e swa p con t r act s for
he d g in g t he cu rrency r isk in t h e cash flows of t h e said d eb t b alances. T he C ompa ny applies a 1:1
he d g in g r atio. T he main sou r ce of pot en t ial in effect ive ness in t h ese h edg ing ratios is t h e effect of
t he C ompa ny's an d cou nterparty's cred it risk on t he fa ir value of t h e swa p con t ra cts. As at t he date
of th e h ed g e t r ansaction , t he t ot a l b alan ce of t h e h ed g ed in st ru me nts amou n t e d t o ab ou t $110
million an d $109 million , re spect ively
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
119 S tatem ents Financ ial Consolidated L imited G rou p CLI
Note 21 - Financial Instruments and Risk Management (cont'd)
F. Fair value of financial instruments
Th e carr yin g amou n ts in the b ooks of certain financia l asse ts and fina ncia l lia b ilitie s, inclu ding cash
an d cash e qu ivalen t s, in ve st me n t s, short -term d e posit s an d loan s, r ece ivab les an d ot h er d e bit
b alan ce s, lon g - t er m in vest men t s an d receivab les, sh or t - t erm cre d it , paya b le s an d ot h er cred it
b alan ce s, lon g - t erm loans b ea r in g va ria b le in t erest an d ot h er liab ilit ies, an d d erivat ive financial
in st ru me nts, corr espon d t o or appr oximat e their fair value.
Th e followin g t ab le de t ails t h e b ook valu e an d th e fair valu e of fin an cial in st rumen t g r ou ps
presen t ed in th e fin ancial st atem en ts n ot in a ccordance wit h t heir fa ir valu e:
As at Dec ember 3 1, 2020
As at Dec ember 3 1, 20 19
C a r rying
a m o un t
F a ir v alue
C a r rying
a m o un t
F a ir v alue
$ m illio ns
$ m illio ns
$ m illio ns
$ m illio ns
Loan s b e arin g fixed in t erest (1)
89
96
74
82
De b en t ur es bearing fixed
in t er est
Ma rket ab le ( 2)
1 , 6 25
1 , 8 70
1,237
1,395
Non - ma rke t able ( 3)
2 8 1
2 9 6
281
293
1 , 9 95
2 , 2 62
1 ,5 9 2
1 ,7 7 0
( 1) Th e fa ir valu e of t h e Sh ekel, Eu r o, a n d Y u an loan s issu ed b e arin g fixed in t erest is b ase d on
calcu lat ion of t h e prese nt valu e of t h e ca sh flows in r espect of t h e pr in cipa l an d t h e in t erest
an d is d iscou n t ed at t h e mar ket in terest r at es on t h e me asu re me nt d ate for similar loan s ha ving
similar cha ract eristics an d is classified as Le vel 2 in t he fair valu e hier archy. Th e aver age
d iscou n t in t erest as of Decemb er 31, 2020 for t h e Sh ekel, Eu r o and Yu an loa ns was 1.6%, 1.4%
an d 5.1%, r espe ct ively ( Decemb er 31, 2019 for t h e Sh eke l, Eu ro an d Yu an loa ns 1.4% , 1.3%,
an d 4.2%, r espe ct ively).
( 2) Th e fa ir va lu e of t h e ma rke table d e ben ture s is b ased on t h e qu ot ed st ock e xch an ge price and
is classified as Level 1 in t h e fa ir valu e h ie rar chy.
( 3) Th e fa ir valu e of t he n on - ma rketable d e bentur es is b ase d on calcu lat ion of t h e prese nt value
of t h e cash flows in re spe ct of t he principa l an d th e in te rest an d is d iscou nted a t t he Lib or rate
cu st oma ry in t h e market for similar loan s havin g similar ch ar act erist ics an d is classifie d as
Le ve l 2 in t h e fair valu e h ie rarch y. T he average discou n t in ter est as of De cembe r 31, 2020 was
2.6% ( Dece mb e r 31, 2019 – 3.7%).
Notes to the Consolidated Financial Statements as at December 31, 2020
120 ICL G rou p Limited Consolidated Financial Statements
Note 21 - Financial Instruments and Risk Management (cont'd)
G. Hierarchy of fair value
Th e followin g t a b le pre se n ts an a n alysis of t h e fin an cial in st rumen ts mea su red b y fair valu e, u sing
t he va lu at ion meth od. ( See Not e 4).
Th e followin g levels we re d efin ed:
Le ve l 1: Quot ed ( un adju sted) pr ices in an active mar ket for id en tical in strument s
Le ve l 2: O b served d at a ( dir ect ly or in directly) n ot in clud ed in Level 1 ab ove.
L e v el 1
As at
D e c ember
31, 202 0
As at
D e c ember
31, 201 9
$ m illio ns
$ m illio ns
In vest ments at fa ir value th rou gh ot he r compr eh ensive in come
1 3 6
151
L e v el 2
As at
D e c ember
31, 202 0
As at
D e c ember
31, 201 9
$ m illio ns
$ m illio ns
De riva t ives d esig nate d as econ omic h ed ge, n et
( 3 2 )
(3)
De riva t ives d esig nate d as cash flow h ed ge, n et
87
57
55
54
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
121 S tatem ents Financ ial Consolidated L imited G rou p CLI
Note 22 - Earnings per Share
B a sic e arn ing s per sh are
Calcu lat ion of t h e b asic e arnin gs per sh are for t he year e n ded Decembe r 31, 2020, is b a se d on the
ear nin g s a llocat ed t o t h e h old er s of t h e or d ina ry sha res d ivid e d b y t he weig hted -average n umber
of or d in ary sh ar es ou t standin g, calcu lated as follows:
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
Ear nin g s at tribut ed to t h e sh are hold ers of t h e
Compan y
11
475
1 ,2 4 0
W eig h t ed- aver ag e n umb er of ord in ary sh are s in t hou san ds:
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
S h ares
t h o u sands
S h ares
t h o u sands
S h ares
t h o u sands
B ala n ce as at J an uary 1
1 , 2 79,3 79
1,278,084
1,276,238
Sh are s issu e d d uring t he year
29
98
73
Sh are s ve st ed
6 18
768
898
W eig h t ed aver ag e n umb er of ord in ary sh ares
u sed in compu t at ion of t he b asic e arnin gs per
sh are
1 , 2 80,0 26
1 ,2 7 8 ,9 50
1 ,2 7 7 ,2 09
D i l u ted e arnin gs p er sha re
Calcu lat ion of t h e d ilu t e d e arnin gs pe r share for t h e yea r en d ed De cemb e r 31, 2020, is b ased on
t he e arn in g s allocat ed t o t he h old e rs of t he ord in ar y sh ares d ivid ed b y th e we ig h t ed -average
nu mb e r of ord in ary sha res ou t st an d ing aft er ad ju st men t for t he n u mb er of pot e nt ial d ilu ted
ord in ar y sh are s, ca lcula ted as follows:
W eig h t ed aver ag e n umb er of ord in ary sh ares ( dilu ted ) in t hou san ds:
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
S h ares
t h o u sands
S h ares
t h o u sands
S h ares
t h o u sands
W eig h t ed aver ag e n umb er of ord in ary sh ares
u sed in t he compu t at ion of t h e b asic ear ning s
per share
1 , 2 80,0 26
1,278,950
1,277,209
Effect of st ock opt ion s an d r est ricted share s
2 4 7
3 ,1 0 6
2 ,5 7 2
W eig h t ed aver ag e n umb er of ord in ary sh ares
u sed in t he compu t at ion of t h e d ilute d
ear nin g s pe r sh are
1 , 2 80,2 73
1 ,2 8 2 ,0 56
1 ,2 7 9 ,7 81
At Dece mb e r 31, 2020, 27 million opt ion s were exclu d ed from t h e d ilu t e d weig ht e d average
nu mb e r of or d in ary sh ar es ca lcu lat ion a s t h eir effect wou ld h ave b e en an t i -d ilu tive, ( at
De cemb er 31, 2019 and 2018 – 17.5 million opt ion s and 5 million opt ion s, re spect ive ly).
Notes to the Consolidated Financial Statements as at December 31, 2020
122 ICL G rou p Limited Consolidated Financial Statements
Note 22 - Earnings per Share (cont'd)
Th e ave rag e mar ket value of th e Compan y’s sh are s, for pu rposes of ca lcu lating the d ilut ive effect of
t he st ock opt ion s, is b ase d on t he qu ot ed mar ket prices for t h e period in wh ich t h e opt ion s were
ou t st a ndin g.
Note 23 - Related and Interested Parties
Relat ed pa rt ies wit hin it s me an in g in IA S 24 ( 2009), “Re la t ed Parties Disclosu re”; I nterested parties
wit h in t h eir mea n in g in Para graph 1 of t he d efin it ion of an “in t e rested par t y” in Sect ion 1 of t he
Isr aeli Secu r it ies Law, 1968.
A. Parent company and subsidiaries
Isr ael Cor p. is a pu b lic compa n y list e d for t rad ing on t h e T el Aviv St ock Exch ang e ( TASE). B ased on
t he in format ion provid ed b y I sr ael Corp., Mille n iu m In vest me nts Elad Lt d . ( “Millen ium”) an d Mr. Idan
Ofe r are con sid ere d a s join t con t rollin g sh arehold ers o f Isr ael Cor p., for pu rpose s of t he I sra eli
Secu rit ie s Law ( ea ch of Millen iu m an d Mr. Id a n Ofer hold sha res in Isr ael Corp. d ire ct ly, an d Mr. Idan
Ofe r se rves as a d ir ect or of Mille niu m a n d h as an in d ire ct in t e rest in it as th e b en e ficia ry of t he
d iscret ion ar y tr u st t h at h as in d irect con t r ol of Millen iu m, as st at e d b e low). Mille n iu m hold s
approxima t ely 46.94% of th e sh are capit al in Isra el Corp., wh ich h old s as at Decemb er 31, 2020
approxima t ely 45.85% of t h e vot in g r ig hts an d issu ed sh are capita l of t h e Co mpan y.
To t h e b e st of I sr ael Compan y’s kn owle d ge, Mille n iu m is held b y Mash at ( I nve st ment s) Ltd.
(“M a shat”) an d b y X T I nvest me nt s Ltd . ( “XT In vest ments”), wit h 80% and 20% h old in g rat es in the
issu ed sh are capit a l, r espe ct ively (I t is n ot ed t h at Ma sha t g r an t ed X T I n vest men ts a powe r of
at t orn ey for a fixed per iod ( wh ich is ext en d able ) t o vot e accord in g t o X T 's d iscret ion a t Gen er al
Me et in gs of Millen iu m in respect of sh ar es con st it u ting 5% of t h e vot in g righ ts in Millen iu m). Ma shat
is wh olly owned b y An son ia Hold in g s Sin g apor e B .V. (“ A nsonia”) wh ich is in corpor at ed in t he
Net h er lan ds. A nson ia is a wholly own ed su b sid iary of J elan y C orporat ion N.V. ( reg ist er ed in
Cu raçao), wh ich is a wh olly own ed su b sid ia ry of t h e Lib er ia n compa ny, C ou rt I n ve st me nts Ltd.
( “Cou rt ”). Cou rt is wh olly own ed b y a d iscr et iona ry t rust , in which Mr. Id an O fer is t h e b ene ficia ry.
X T In vest me nts is fu lly he ld b y X T Hold in g s Lt d . ( “ XT H o ldin gs ”). To t he b est of I srael Company’s
kn owled ge , or d in ar y sh are s of X T Hold ings are h eld in e qu a l sha res b y O rona I n vest men ts Ltd.
( wh ich is in d irect ly con t rolle d b y Mr. Ehu d A n g el) an d b y Lynav Hold in g s Lt d ., a compa ny t hat is
con t rolled b y a d iscr et ion ar y t ru st in which Mr. Id an Ofe r is t h e b eneficiar y. Mr. Ehu d Ange l h olds,
amon g ot h er t h ing s, a spe cia l share t h at g ra nts h im, in t er a lia, u nd er ce rt ain limit at ion s an d for
cer t ain issu es, a n ad d it ion al vot e on t h e B oa rd of Dire ct ors of X T Hold in g s. I n ad d it ion , Kirby
En t er prises In c., wh ich is t o t h e b est of Isr ael Compan y’s kn owled ge, in d ir e ct ly h eld b y t h e same
t ru st t h at h old s Mash at , in which , a s st at ed , Mr . I d an Ofer is t he b en eficiar y, h old s approxima t ely
0.74% of t h e sh are capit a l of I srael Corp. Furt h ermore, Mr. I d an Ofer h old s d irect ly appr oximat ely
3.85% of t h e sh are capit al of I sr ae l Corp.
Even t h ou g h I srael Corp. h old s less t h an 50% of t h e Compan y’s or d ina ry sha res, it st ill h as d ecisive
in flu en ce at th e Gen eral Mee ting s of t he Compa ny’s sh arehold e rs an d, effective ly, it h as t he power
t o appoin t d irect ors an d t o exert sig n ifican t i n flu ence wit h respe ct t o th e composit ion of t he
Compan y’s B oar d of Dir ect ors.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
123 S tatem ents Financ ial Consolidated L imited G rou p CLI
Note 23 - Related and Interested Parties (cont'd)
A. Parent company and subsidiaries (cont'd)
As of Decemb er 31, 2020, 256 million ord in ar y sh are s h ave b een ple d g ed b y Isr ael Cor poration to
se cu re cert ain liab ilit ies, almost en t ire ly comprised of marg in loan s wit h a n a ggreg at e ou t standing
prin cipa l of a b ou t $400 million .
B. Benefits to key management personnel (including dire ctors)
Th e sen ior man a gers, in add ition to t heir salaries, are entit led to n on -ca sh b en efit s (su ch as vehicle,
mob ile e t c.). The Gr ou p con t rib u te s t o a post - employme nt d e fined b e n efit pla n on t h eir b ehalf. In
accor d an ce wit h t he ter ms of t h e plan, t he r etireme nt age of sen ior ma na gers is 67. Sen ior man agers
an d d ir ect ors also par t icipat e in t he Compa ny's in cen t ive a nd eq u it y r emu n erat ion pla ns ( opt ions
for Company sh are s) ( see Not e s 16 an d 19).
Set fort h b elow ar e details of t h e bene fits for key man age me nt person n el in 20 20 a nd 2019.
Th e Company's key man ag eme nt pe rson ne l in 20 20, con sist s of 19 in d ivid uals, of wh om 10 ar e not
employe d b y t h e compan y ( d irect ors). Th e Compan y's key man ag e ment pe rson ne l in 201 9,
con sist ed of 22 in d ivid u als, of wh om 9 were n ot e mployed b y t h e Compan y ( directors).
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Sh ort - t erm b e nefits
9
13
Post - employme n t b enefit s
1
1
Sh are - b ased payments
7
8
Tot al *
17
22
* To in t erest ed pa rties e mployed by t h e Compa ny
3
5
* To in t erest ed pa rties not employed by t he Company
2
1
C. Ordinary transactions that are not exceptional
Th e Compan y’s Boar d of Dire ct ors, wit h t h e ag reement of t h e Au d it Commit t e e, d e cided that a
t ran sa ct ion wit h r elat ed a n d in t ereste d part ie s will b e con sid ere d a “ne glig ib le t ran sact ion” for
pu b lic report in g pu rposes if all t he followin g con d ition s h ave b e en me t:
( 1) I t is n ot a n “e xt raor din ary t ra nsaction ” wit hin th e mea n ing th ereof in th e Compan ies La w.
( 2) T he e ffect of ea ch of th e para met ers list e d b elow is less th an on e percen t ( h erein afte r – the
Neg lig ib ilit y T h reshold ).
Notes to the Consolidated Financial Statements as at December 31, 2020
124 ICL G rou p Limited Consolidated Financial Statements
Note 23 - Related and Interested Parties (cont’d)
C. Ordinary transactions that are not exceptional (cont'd)
For e ve ry t ran sact ion or arran ge men t t h at is t est ed for t h e Negligib ilit y T hreshold , t he parameters
will b e exa min ed , t o t h e ext en t t hey are r ele van t, on t he b a sis of t h e Compan y's con d e nse d or
au d it ed con solid ated fina ncial st ate me nt s, as applicab le, pr ior t o th e t ra nsaction , a s detailed below:
Acqu isit ion of a sse t s
Asset s rat io – t he a mou nt of t he a sse ts in t he t ransaction divid ed b y t otal assets.
Sale of asset s
Asset s rat io – t he a mou nt of t he a sse ts in t he t ransaction divid ed b y t otal assets.
Profit r at io – t he profit or loss a t t rib u ted t o t h e t ra n sa ction d ivid e d b y t h e t ot a l an n ual
compre he nsive in come or loss d u rin g t he period .
Fin a ncia l lia b ilit ies
Liab ilit ie s r at io – t he a mou n t of t he liab ilitie s in t he t ransa ction d ivid ed b y t he t ota l liab ilitie s.
Fin a ncin g expen ses ratio – t he e xpe ct ed fin an cing e xpenses in t h e specific t r an saction d ivided by
t he t ot a l fin ancin g expense s in t he st at ement of income.
Acqu isit ion an d sale of pr od u cts, se rvices and manu factu rin g in pu ts
Revenu e r at io – est imated reven ue from t he t ransaction divid ed b y t he ann ual r evenu e, or
Ma nu fact u rin g expen ses ra tio – t h e amou n t of t he expe nses in t he t ran sa ction d ivid ed b y t he annual
cost of sa les.
( 3) T h e t ra nsa ction is n eg lig ib le also from a qu alit a t ive poin t of view. For t h e pu rpose of t h is crit eria,
it sh all b e examin ed wh eth er t h ere a re special con sid eration s ju st ifyin g re port ing of t h e transa ction,
even if it d oe s n ot me et t he qu antit ative cr it eria de scribed above.
( 4) I n exa min in g t h e n eg lig ib ilit y of a t ran saction expect ed t o occu r in t h e fu t u re, amon g ot her
t hin g s, t h e pr obabilit y of t h e tran sact ion occu rring will b e e xa min ed.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
125 S tatem ents Financ ial Consolidated L imited G rou p CLI
Note 23 - Related and Interested Parties (cont’d)
D. Transactions with related and interested parties
F o r the y ear ended Decemb er 31
2 02 0
2 01 9
2 01 8
$ m illio ns
$ m illio ns
$ m illio ns
Sales
3
4
5
Cost of sales
3
8
19
Sellin g , t ra nsport a nd marketin g e xpense s
7
10
7
Fin a ncin g e xpe nse s ( income), n e t
( 1 )
(1)
3
Gen eral an d a dmin istrat ive expense s
1
1
1
Ma nag emen t fe es to t he paren t compan y
1
1
1
( 1) On Novemb er 9, 2020, a n d Novemb er 11, 2020, ou r A u d it an d A ccou n tin g Commit t ee and
B oar d of Dir ect ors, re spect ive ly, a pprove d , an d on J anu ary 5, 2021, ou r g en e ral me et ing of
sh areh old er s a pprove d , t h e re n ewa l of t h e man ag e ment se rvices ag re emen t b et ween the
Compan y a nd I srael Corp. e ffective ret roactive ly as of J a nuar y 1, 2021, for an ad dition al term
of t h re e years, e xpirin g on Decemb er 31, 2023. A ccord in g t o t he ren ewe d mana gement
se rvices ag reemen t, t h e an nu al man ag eme nt fee to b e paid t o I sr ael Corp for ea ch calendar
ye ar sh all con t in u e t o b e $1 million plu s VA T. Du rin g t h e t e rm of t he ag reement, t he Company
will n ot pa y or g ra n t a ny cash or equ it y compe nsa t ion for t h e ser vice of ou r d irect ors who
are office h old ers of I sr ael Corp. ( except for t h e separ ate compen sat ion arr an gement b etween
t he C ompa ny an d ou r Exe cu t ive Ch airman of t h e B oard , Mr. Yoav Doppel t , as appr oved b y
ou r sh are hold er s in May 2019, an d as may b e amen d ed b y sh are holder appr oval from t ime
t o t ime ). Th e A u d it & A ccou n t in g Commit t ee will con t in u e t o an n u ally examin e t he
rea son ab len ess of t h e man ag eme nt fee s paid in t h e pr eviou s year a gain st t h e man agement
se rvices act u ally provid e d b y I sr ael Corp t o t h e Compan y in t h e same yea r. On Fe bruar y 28,
2021, t he A u d it & A ccou n t in g Commit t e e examin e d t h e man age me nt se rvices t ha t were
act u ally re ndered in 2020 aga inst the management fees paid in that ye ar a nd con clu ded that
t he fees were r eason able.
( 2) On J an u ar y 30, 2020, ou r sh are hold er s a pprove d a n ew t hree -ye ar fr amework t ransa ction for
t he Compa ny's en g ag eme nt in d irect ors' an d officers' liab ilit y in su ran ce policies, st arting
Feb r u ary 1, 2020 ( t he "New Framework T ran saction "). T he in suran ce policies u n d er the New
Fra mewor k Tr an sact ion shall in clu de a join t primary tier with I srael Corp. wit h a join t liab ility
cap of u p t o $20 million , a nd a separ ate tie r cove rin g t he Compa ny alone, wit h a lia b ility ca p
of u p t o $330 million , wit h a t ot a l liab ilit y limit of u p t o $350 million for b ot h t ie rs.
Notes to the Consolidated Financial Statements as at December 31, 2020
126 ICL G rou p Limited Consolidated Financial Statements
Note 23 - Related and Interested Parties (cont’d)
D. Transactions with related and interested parties (cont'd)
Ou r d ire ct ors an d officer s a re b en eficiar ie s of b ot h t ie rs. Pu r su an t t o t h e Ne w Framework
Agr eemen t, t h e cost of t he a nnu a l pr emiu m sh all n ot e xceed a cap of $10 million for b oth
t ie rs. T he d ivision of t h e premium a mou n t be tween th e Company and Israel Cor p. in th e joint
t ie r a re 80% t o b e pa id b y t h e C ompa ny an d 20% b y t h e Israe l Corp, an d th e HR &
Compen sat ion Commit t e e an d t h e B oard of Direct or s ha ve t h e au thority t o ch an ge, fr om t ime
t o t ime , t h e premiu m allocation in respect of the join t tie r b etween th e companies, according
t o t h e r ecomme n d ation of t h e in sur ers and/ or b rokers, and provid ed t hat su ch cha nge s will
not exceed 25% over t he e n t ire t ransa ction per iod . Deviat ion from t he se limit s sh all r equ ire
sh areh old er a pprova l. In accord an ce wit h th e t erms of t h e New F ramewor k Transa ction and
t he C ompa ny's Compensa tion Policy, t he Compa ny's dire ctors’ an d officers’ lia bilit y insurance
policy for 2020, was approve d b y t h e Company's au thor ize d or gan s, effect ive as of February
1, 2020. Th e 2020 d irect ors’ and officers’ lia b ilit y in su rance p olicy in clu d e s a lia b ilit y limit of
US$165 million for b ot h t iers (comprise d of a limit of $100 million , wit h an a d d it ional
cove rag e Sid e A ( d ir ect ors an d office rs on ly) limit of $65 million ). T he C ompa ny's d ire ct ors’
an d officers’ lia b ilit y in su rance policy for 2020 wa s ext en d ed u n til Ma rch 1, 2021, and the
Compan y is in t he fin al st ag es of re newin g t h e Compan y's d ire ctors’ an d office rs’ liab ility
in su ra nce policy for 2021, which is e xpect ed to in clu de lower cover age at high er cost due to
t he cu rr ent mar ke t for t hese policies.
( 3) Un t il March 2020, a framewor k ag re emen t wit h t he Company’s con t rollin g sh areholder, I srael
Cor p., was in effect . A ccor d in g t o t he framewor k ag reement, which wa s appr oved in Ma rch
2017, b y I CL's A u d it a nd Accoun tin g Commit te e and its B oar d of Dir ectors, for a per iod of the
t hree yea rs, I srae l Corp. was en t itled t o d eposit , from t ime t o t ime, an amou n t of u p t o $150
million in sh ort - t erm U.S. d ollar or sh ekel d eposit s in I CL, su b ject t o I CL’s a pprova l. In August
2017, t he t e rms of t h e framewor k a greemen t were expand ed to u p t o $250 million d eposit s.
Th e t e rms a nd con d ition s of t h e d eposit s, in clud ing th e in t erest rat e, was d etermin ed on the
d at e of t h e d eposit s.
Th e deposit s were received b y I CL wit h ou t se cu rit y. I n t h e fou r t h qu art er of 2017, t he
Compan y received short - t erm loan s, in a t ot al amou n t of $175 million , for a per iod of
6 mon t h s, b ea rin g in t erest at an annual rate of 1.72% –1.99% , which we re re paid in t he first
qu a rt er of 2018.
( 4) In Dece mb e r 2017, t h e Compan y, Oil Refin eries Lt d . ( a pu b lic compa n y con t rolled b y I sr ael
Cor p.) an d OPC En er gy Lt d . ( a pu b lic compa ny t h at is con t rolled in d irectly b y on e of t he
Compan y’s con t rollin g sh arehold ers) sig n ed in d ivid ual ag re emen ts wit h En erge an PLC for
t he su pply of nat u ral g as. Un d e r t he a g ree ment b e tween t h e Compan y an d En er gean, the
Compan y will b e en t it le d t o a cquire up t o 13 B CM of n atural g as ove r a period of 15 yea rs, in
t he t ot a l amou n t of ab out $1.8 b illion . For fu rthe r in formation se e Not e 18.
2020 31, December at as tatementsS inancialF onsolidatedC the to otesN
127 S tatem ents Financ ial Consolidated L imited G rou p CLI
Note 23 - Related and Interested Parties (cont’d)
D. Transactions with related and interested parties (cont'd)
( 5) In Oct ob e r 2020, t he Compa ny an d O il Refin er ies Lt d . sig ne d in d ivid u a l b rid g e su pply
ag reeme n ts wit h T amar Re servoir for t h e su pply of n at u r al g as, followin g a proce ss of joint
neg ot iat ion s wit h t h e su pplier an d t he appr oval of ICL's g en eral me et in g of sh ar eh olders. For
fu rt h er in format ion se e Not e 18.
E. Balances with related and interested parties
Composit ion :
As at Dec ember 31
2 02 0
2 01 9
$ m illio ns
$ m illio ns
Ot h er cu rrent a sset s
35
27
Ot h er cu rrent liabilit ies
2
2
Notes to the Consolidated Financial Statements as at December 31, 2020
128 ICL G rou p Limited Consolidated Financial Statements
Note 24 – Group Main Entities
O w ners hip interest in its sub s idiary and
i n v es tee c om panies for the y ear ended
D e c ember 31
c om pany of N am e
the of location P r incipal
activ ity c o m pany’s
2 02 0
2 01 9
ICL Isr ael Ltd.
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
Dead S ea W or ks Ltd.
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
Dead S ea Br o mine Com pany Ltd.
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
R otem Am fert Neg ev Ltd.
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
M ifalei To v ala Ltd.
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
Dead S ea M agnesium Ltd .
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
Br om ine Co mpo und s Ltd.
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
Fer tilizer s and Chemic als Ltd.
Isr ael
1 0 0 .0 0%
1 0 0 .0 0%
Ib er potash S.A .
Sp ain
1 0 0 .0 0%
1 0 0 .0 0%
Fuentes Fer tilizantes S .L.
Sp ain
1 0 0 .0 0%
1 0 0 .0 0%
ICL E ur o p e Coöperatief U.A.
The N ether lands
1 0 0 .0 0%
1 0 0 .0 0%
ICL E ur o p e B.V .
The N ether lands
1 0 0 .0 0%
1 0 0 .0 0%
ICL IP Ter neu zen B.V .
The N ether lands
1 0 0 .0 0%
1 0 0 .0 0%
ICL Financ e B.V .
The N ether lands
1 0 0 .0 0%
1 0 0 .0 0%
E ver r is International B.V .
The N ether lands
1 0 0 .0 0%
1 0 0 .0 0%
ICL Pur ip ho s B.V .
The N ether lands
1 0 0 .0 0%
1 0 0 .0 0%
ICL -IP Am er ica Inc.
United S tates of Am er ica
1 0 0 .0 0%
1 0 0 .0 0%
ICL S pec ialty Produ cts Inc.
United S tates of Am er ica
1 0 0 .0 0%
1 0 0 .0 0%
E ver r is N A, Inc.
United S tates of Am er ica
1 0 0 .0 0%
1 0 0 .0 0%
Gr o wer s Holding s, Inc.
United S tates of Am er ica
1 0 0 .0 0%
1 0 0 .0 0%
BK Giulini Gm bH
Ger m any
1 0 0 .0 0%
1 0 0 .0 0%
ICL Hold ing Ger many Gm bH
Ger m any
1 0 0 .0 0%
1 0 0 .0 0%
ICL Bitter f eld GmbH
Ger m any
1 0 0 .0 0%
1 0 0 .0 0%
Pr olac tal Gm bH
Austr ia
1 0 0 .0 0%
1 0 0 .0 0%
Clev eland Potas h Ltd.
United K ingdom
1 0 0 .0 0%
1 0 0 .0 0%
E ver r is L td.
United K ingdom
1 0 0 .0 0%
1 0 0 .0 0%
ICL Br asil, Ltda.
Br azil
1 0 0 .0 0%
1 0 0 .0 0%
ICL Inv estm ent Co. Ltd .
China
1 0 0 .0 0%
1 0 0 .0 0%
Yunnan Phosphate Haikou Co. Ltd.
China
5 0 .0 0 %
5 0 .0 0 %
ICL Asia L td.
Ho ng K o ng
1 0 0 .0 0%
1 0 0 .0 0%
ICL Tr ading (HK ) Ltd .
Ho ng K o ng
1 0 0 .0 0%
1 0 0 .0 0%
Sc or a S .A.S ., France
Fr anc e
1 0 0 .0 0%
1 0 0 .0 0%