Orica : Annual Report to shareholders

For personal use only

Annual Report 2021

Who we are

onlyOrica is one of the world's leading mining and infrastructure solutions

providers. From the production and supply of explosives, blasting systems, mining chemicals and geotechnical

usemonitoring to our cutting-edge digital solutions and comprehensive range of services, we sustainably mobilise the earth's resources.

We produce a suite of reports to meet the needs of a wide range of stakeholders including shareholders, debt investors, customers, suppliers, and government bodies. The following documents are available at orica.com/Investors

- FY2021 Full Year Results Investor Presentation

personal	-	FY2021 Full Year Results ASX Announcement
-	FY2021 Modern Slavery Statement
FY2021 Climate Action Report	FY2021 Sustainability Supplement

Climate-related information aligned to the Forecommendations of the Task Force on

Climate-related Financial Disclosures (TCFD).

FY2021 Corporate

Governance Statement

Supplement to our Annual Report which includes our sustainability scorecard and details our materiality assessment process.

FY2021 Tax Transparency Report

Made in accordance with the ASX	Overview of our approach
Council's Corporate Governance Principles	to tax, governance structure,
and Recommendations (4th Edition).	and tax position.

We are on a journey to enhance our reporting and welcome any feedback you may have regarding our reporting suite. Please address any questions, comments, or suggestions to [e-mail].

Introduction and Overview	Our Business	Our Performance	Governance and Risk	Directors' Report	Financial Statements	Other Information

personal use only

Contents

Who we are	IFC		Reporting what matters	03
About this report	02		FY2021 year in review	04

10		12
Our Business	Strategy

16	22
Business	Technology
model	and innovation

For

Letter from our Chairman and Managing Director 06

Our Business	10
Strategy	12
Business model	16
Operating in a dynamic environment	18
Our global footprint	20
Technology and innovation	22
Our stakeholders	24
Our Performance	26
Executive Committee	28
Financial	30
Safe and responsible business	42

People and capabilities	48
Climate and the natural environment	52
Community and relationships	64
Governance and Risk	70
Board of Directors	71
Managing risk through uncertain times	76
Material risks and opportunities	80
Directors' Report	82
Remuneration Report	86
Financial Statements	107
Other Information	175

ORICA Annual Report 2021  | 01

About this report

onlyWelcome to our FY2021 Annual Report, which forms

part of our corporate reporting suite for the 2021 financial year.

Integrating Sustainability

Sustainability is at the core of what we do; the decisions we make, our policies and processes, and the actions of our people. To reflect its importance, we have integrated our material sustainability disclosures and metrics into

useSTRUCTURE AND CONTENT The elements of the Directors' Report, required by Australian Securities and

Investments Commission (ASIC) Regulatory personalGuide 247, are covered on pages 04

to 106. This includes the Operating and Financial Review (OFR) which is presented on pages 04 to 69. The basis of preparation of our financial statements is outlined on page 114.

This report has been prepared with reference to elements of the International Integrated Reporting Council's (IIRC) International Integrated Reporting Framework (IR Framework). We have used the IR Framework to demonstrate how our purpose and our values, as well as consideration of risks and opportunities, drive our strategy. We have also considered how our strategy creates value, beyond financial performance alone. In FY2022, we expect to further enhance our disclosures, and introduce a holistic scorecard of Key Performance Indicators.

This report covers all Orica operations Forworldwide over which, unless otherwise

stated, we have control for the financial year ending 30 September 2021 (collectively 'the Orica Group', or 'the Group'). Monetary amounts in this document are subject to rounding and are reported in Australian dollars, unless otherwise stated.

VERIFICATION AND ASSURANCE

The Remuneration Report (pages 87 to 105) and Financial Statements (pages 108 to

1. have been independently audited by KPMG. Detailed information on the audit process and opinion is provided in

the Audit Report on pages 169 to 174.

We also obtain independent limited assurance over our greenhouse gas emissions metrics. Further details, and the Ernst & Young assurance statement, are included in our FY2021 Sustainability Supplement.

All unaudited information contained in this report has been subject to an internal review and approval process defined by our Corporate Reporting Verification Framework.

FORWARD-LOOKING

STATEMENTS

This report contains forward-looking statements, including statements of current intention, opinion and predictions regarding the Group's present and future operations, possible future events, and future financial prospects. While these statements reflect expectations at the date of this report, they are, by their nature, not certain and are susceptible to change. Orica makes no representation, assurance or guarantee as to the accuracy of or likelihood of fulfilling any such forward-looking statements (whether express or implied) and, except as required by applicable law or the ASX Listing Rules, disclaims any obligation

or undertaking to publicly update such forward-looking statements.

Reporting suite

We have been guided by the Global Reporting Initiative (GRI) Reporting Standards and report across a range of best practice environmental, social, and governance (ESG) indicators. We have aligned our reporting to the Financial Stability Board's TCFD Framework.

For the first time, we have published a standalone Climate Action Report.

Our Performance section of this report to present a more holistic and transparent view of our performance. We have also initiated the transition from pure environmental and social reporting towards integrated reporting by connecting sustainability directly with our business model and strategy.

These changes build on

the considerable progress in recent years to further embed sustainability into our business strategy, risk management and governance processes.

We always strive to do better. We want to consistently deliver value for our customers across the value chain, in a way

that is safe and sustainable. By leveraging our expertise in technology and digital solutions, we are in a unique position

to achieve this.

We have an obligation to our shareholders, and other stakeholders, to be transparent and demonstrate accountability for how we operate and our contribution to society, as well as detail how we are going to succeed in the mid to long-term energy transition.

Sustainability and value creation go hand in hand. In responding to the challenges of today

and tomorrow, our approach to sustainability continues to evolve.

02 |ORICA Annual Report 2021

Responding to communities

The full list of our material topics, as well as the key steps in the materiality assessment process, can be found in our FY2021 Sustainability Supplement.

Supplementary disclosures

Continuing our focus on community engagement through a shared value approach to community investment, while working towards enhancing our cultural competency to better engage with and support First Nations Peoples.

UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS

The United Nations Sustainable Development Goals (SDGs) are a set of 17 interconnected goals that form a global benchmark for achieving a sustainable future for all. We are committed to the SDGs, and our role in advancing them.

In FY2021, we mapped our material topics against the SDGs to determine which goals best reflect our business context and strategy, our capabilities, as well as our key risks and impacts across our value chain. We identified six priority SDGs for Orica to contribute towards. The SDG goals and targets have informed our sustainability strategy and scorecard.

OUR ASSESSMENT INDICATED OVER 30 MATERIAL TOPICS THAT WE GROUPED INTO SIX THEMES.

Business performance and resilience

Maintaining strong economic performance and growth, and ensuring that our operations and supply chains remain resilient by anticipating and managing ongoing disruption events, including impacts of COVID-19on our people and the communities in which we operate.

Safety and security

Ensuring the safety of our people, customers, and communities in which we operate, and the security of our products and operations, including managing physical and cyber security risks.

Responsible and ethical business

Operating ethically, fairly, and in accordance with our operating regulations and values. Managing our social and environmental impacts through strong corporate governance and building transparent relationships with stakeholders.

Action on climate

Contributing to the transition to a low-carboneconomy by addressing risks and opportunities associated with the economic transition and adapting to a changing climate.

Technology, innovation, and products

Investing in technology and innovation to optimise business performance and deliver innovative solutions that enhance customer experience and sustainability outcomes.

Introduction and Overview Our Business Our Performance Governance and Risk Directors' Report Financial Statements Other Information

Reporting what matters

onlyEach year, we perform a materiality assessment to understand the topics that matter most to our stakeholders.

useThis year our materiality assessment was conducted to align with the IR Framework, identifying the topics that most affect, or have the potential to affect, our ability to operate successfully and to create value. The results of the assessment inform

our strategic priorities, help us to identify risks and opportunities, and focus our

reporting on what matters over the short, personalmedium, and long-term.

We engaged with internal and external stakeholders, including customers, investor

groups, and senior leaders from Orica, representing a broad range of interests

covering government and regulatory affairs, supplier relationships, community, and non-government organisation views.

Our assessment was also informed by econdary research such as broader industry and global trends.

For

ORICA Annual Report 2021  | 03