Leasing commitments. The Group leases land, buildings, machinery and equipment, furniture and vehicles under fixed-term agreements. The leases have varying terms, escalation clauses, and renewal rights.

Commitments arising from fixed-term operating leases mainly concern buildings in Germany and in the United States. The most important partners for operating leases of buildings in Germany are the Infraserv companies. There exist no particular renewal options other than annual prolongations in case there is no explicit termination of the lease contract.

Expected expenses for operating leases breakdown by maturities as follows:

Expenses for operating leases were CHF 77 million in 2017 (2016: CHF 74 million).

Guarantees. No guarantees on behalf of third parties were issued in 2017 and 2016.

Purchase commitments. In the regular course of business, Clariant enters into relationships with suppliers whereby the Group com-mits itself to purchase certain minimum quantities of materials in order to benefit from better pricing conditions. These commitments are not in excess of current market prices and reflect normal business operations.

Clariant is engaged in contracts to buy a minimum quantity of ethylene for the next years (between four to ten years depending on the contract) and in two contracts to buy a minimum quantity of propylenoxide in the years 2016 – 2018. This implies a total purchase commitment of about CHF 1.12 billion (2016: CHF 1.26 billion).

Contingencies. Clariant operates in countries where political, economic, social, legal, and regulatory developments can have an impact on the operational activities. The effects of such risks on the company’s results, which arise during the normal course of business, are not foreseeable and are therefore not included in the accompanying financial statements.

In the aftermath of the procedure to acquire subsequent to the acquisition of Süd-Chemie, the 1.36% of shares still in possession of third parties (squeeze-out) at the time, several minority shareholders initiated appraisal proceedings to reassess the adequacy of the cash compensation paid to the minority shareholders. Clariant opines that the cash compensation agreed is fair and complies with all legal and economic requirements. The court of first instance has decided on an increase of the cash compensation from EUR 125.26 by EUR 7.04 to EUR 132.30 EUR per share. Clariant and several plaintiffs have contested this court decision. The appraisal proceedings is currently pending in the second instance. At this time it cannot be detemined to what extent these proceedings will lead to additional liabilities.

In 2017, the European Commission (Antitrust) initiated an investigation on Clariant and some of its competitors active in the ethylene purchasing sector in some member states. The investigation is at an early stage; should antitrust violations be brought up against Clariant by the European Commission, it can impose significant fines that may affect the Group’s result and cash flow with an amount that may be material.

Given the ongoing nature of the investigation and the uncertainties associated with them, management has concluded that the amount of such fine cannot be determined as of 31 December 2017 as a reliable estimate is dependent on numerous factors which have not been defined as of the closing date. This assessment is supported by external advisors.

In connection with the dismantlement of a wastewater treatment plant in France Clariant is faced with a claim by the Swiss-based group Novartis in the amount of CHF 22 million. Clariant has the view that this claim is unfounded. The case is currently pending at court.

In the ordinary course of business, Clariant is involved in lawsuits, claims, investigations and proceedings, including product liability, intellectual property, commercial, environmental, and health and safety matters. Although the outcome of any legal proceedings cannot be predicted with certainty, management is of the opinion that, apart from those cases where a provision has already been recognized, there are no such matters pending which would likely have any material adverse effect in relation to its business, financial position, or results of operations.

Environmental risks. Clariant is exposed to environmental liabilities and risks relating to its past operations, principally in respect of remediation costs. Provisions for non-recurring remediation costs are made when there is a legal or constructive obligation and the costs can be reliably estimated. It is difficult to estimate the action required by Clariant in the future to correct the effects on the environment of prior disposal or release of chemical substances by Clariant or other parties, and the associated costs, pursuant to environmental laws and regulations. The material components of the environmental provisions consist of costs to fully clean and refurbish contaminated sites and to treat and contain contamination at sites where the environmental exposure is less severe.