Notes to the Consolidated Financial Statements

1. Accounting policies

1. Accounting policies

1.01 – General information

1.01 – General information

Clariant Ltd (the »Company«) and its consolidated subsidiaries (to- gether the »Group«) are a global leader in the field of specialty chemicals. The Group develops, manufactures, distributes, and sells a broad range of specialty chemicals, which play a key role in its customers’ manufacturing and treatment processes or add value to their end products. The Group has manufacturing plants around the world and sells mainly in countries within Europe, the Americas, and Asia.

Clariant Ltd is a limited liability company incorporated and domiciled in Switzerland. The address of its registered office is Rothausstrasse 61, CH-4132 Muttenz, Switzerland. The Company is listed on the SIX Swiss Exchange.

The Board of Directors approved the consolidated financial statements for issue on 17 May 2022. They will be subject to approval by the Annual General Meeting of Shareholders scheduled for 24 June 2022.

1.02 – Basis of preparation

1.02 – Basis of preparation

The consolidated financial statements of the Clariant Group have been prepared in accordance with the International Financial Reporting Standards (IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary ) and the IFRIC interpretations applicable to companies reporting under IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary , and with the significant accounting policies set out below.

The consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of certain financial assets and liabilities (including derivative instruments) at fair value through profit or loss and other comprehensive income.

The preparation of financial statements in conformity with the IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary requires the use of certain critical accounting estimates. It also requires Management to exercise its judgment in the process of applying the Group’s accounting policies.

These estimates and judgments affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements as well as the reported amounts of revenues and expenses during the reporting period.

Although these are based on Management’s best knowledge of current events and circumstances, actual outcomes may ultimately differ from those estimates. The areas involving a higher degree of judgment or complexity, or areas where estimates are significant to the consolidated financial statements, are disclosed under note 4.

1.03 – Restatements

1.03 – Restatements

Correction of errors

As a result of information received internally Clariant undertook an investigation which focused on the recognition and measurement of certain provisions and accruals, reviewing whether these were incorrectly recognized and/or measured with the potential aim of steering the Company’s results to meet internal and external targets. The investigation was performed by independent advisors and external counsel appointed by the Company.

As a result of this investigation Clariant is required to restate previously published financial statements, including the annual financial statements for the financial year ended 31 December 2020, the unaudited First Half Year financial statements for the periods ended 30 June 2020 and 30 June 2021 as well as the unaudited quarterly reporting during those years. Errors which relate back to periods before 1 January 2020 have been corrected in the opening balance sheet of the 2020 Annual Financial Statements.

The identified deviations from previously reported figures resulting from the restatement of the 2020 financial statements are mainly due to over- or understated provisions and accruals. The correction of errors was performed in accordance with IAS 8.

The restatement items reflect adjustments to correct errors on the balance sheet to adjust the related provisions and accruals, deferred tax assets and liabilities which were affected by the corrections and the corresponding increases/decreases of costs of goods sold and operating expenses in the income statement.

The errors corrected in the 2020 Annual Financial Statement resulted in an increase of net income of CHF 26 million, thereof CHF 14 million in continuing operations. The nature and impact of these adjustments are described in more detail below and also listed in the table below. The results of the investigation have no impact on the sales and cash and cash equivalent figures reported in 2020.

Overview of the recorded transactions requiring correction

The following types of transaction required a correction:

  • Overstatement of restructuring provisions
  • Overstatement of provisions for variable salaries
  • Overstatement of a provision in connection with an investigation by the EU.
  • Overstatement of provisions set up in connection with the disposal of business activities
  • Overstatement of provisions and accruals for expenses of various types (e.g. legal obligations, plant maintenance)
IMPACT OF THE CORRECTIONS ON THE ELEMENTS OF THE FINANCIAL STATEMENTS
in CHF millions   Amounts reported before correction in CHF m   Amounts reported after correction in CHF m   Difference in CHF m
Opening Balance Sheet 1 January 2020            
Provision for current liabilities   393   389   –4
Provision for noncurrent liabilities   164   159   –5
Deferred tax liabilities   43   43   0
Equity   2 677   2 686   9
             
Closing Balance Sheet 31 December 2020            
Deferred tax assets   160   158   –2
Assets held for sale   797   798   1
Provision for current liabilities   278   244   –34
Equity   2 381   2 416   35
Trade payables and other liabilities   817   814   –3
Deferred tax liabilities   18   24   6
Provision for noncurrent liabilities   202   197   –5
             
Income statement 2020            
Continuing operations            
Selling, general, and administrative costs   –747   –726   21
Research and development costs   –170   –172   –2
Taxes   –96   –101   –5
Net result from continuing operations   116   130   14
             
Net result from discontinued operations   683   695   12
             
Net income   799   825   26
             
Basic earnings per share 2020 attributable to the shareholders of Clariant ltd (ChF/share)            
Continuing operations   0.28   0.32   0.04
Discontinuing operations   2.02   2.06   0.04
Total   2.30   2.38   0.08
             
Diluted earnings per share 2020 attributable to the shareholders of Clariant ltd (ChF/share)            
Continuing operations   0.28   0.32   0.04
Discontinuing operations   2.01   2.05   0.04
             
Total   2.29   2.37   0.08
             
Cash FlowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary statement 2020            
Net income   799   825   26
Tax expense   174   183   9
Changes in other current assets and liabilities   –15   –19   –4
Changes in provisions   –115   –146   –31
Total   843   843   0
1.04 – Disclosure of business units as discontinued operations in accordance with IFRS 5, Noncurrent Assets Held for sale and Discontinued Operations

1.04 – Disclosure of business units as discontinued operations in accordance with IFRS 5, Noncurrent Assets Held for sale and Discontinued Operations

Following the decision of the Board of Directors to dispose of the Business Units MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary (including Business Line Healthcare Packaging) and PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary in June 2019, the two Business Units concerned were reclassified to discontinued operations in 2019 and therefore are presented separately in accordance with IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 5. Healthcare Packaging was sold in October 2019, and MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary in July 2020. See also note 25.

Assets and liabilities pertaining to the discontinued operations are presented as »assets held for sale, and as liabilities directly associated with assets held for sale respectively in the balance sheets of 2020 and 2019 as required by IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 5.

1.05 – Standards, interpretations, and amendments effective in 2021

1.05 – Standards, interpretations, and amendments effective in 2021

The Group has applied the following standards and amendments for the first time:

  • Amendments to IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9, IAS 39, IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 7, IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 4 and IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 16 – Interest Rate Benchmark (IBOR) Reform

The amendments listed above did not have any impact on the amounts recognized in the reporting period and prior periods and are not expected to significantly affect future periods.

1.06 – Standards, interpretations, and amendments not yet effective

1.06 – Standards, interpretations, and amendments not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for the reporting period ending on 31 December 2021 and have not been early adopted by the Group. These standards are not expected to have a material impact on the entity in the current or future reporting periods or on foreseeable future transactions.

1.07 – Scope of consolidation

1.07 – Scope of consolidation

  • Subsidiaries: Subsidiaries are those entities over which the Group has control. This is the case when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group, and they are deconsolidated from the date control ceases.
  • Associates: Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding of between 20 % and 50 % of the voting rights. Investments in associates are accounted for using the equity method.
  • Joint arrangements: The Group applies IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 11, Joint Arrangements, to all joint arrangements. Under IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 11, investments in joint arrangements are classified as either joint operations or joint ventures, depending on the contractual rights and obligations of each investor. Clariant has assessed the nature of its joint arrangements and determined them to be joint ventures. Joint ventures are accounted for using the equity method.

All associates and joint ventures apply the same accounting principles as the Group.

1.08 – Principles and methods of consolidation

1.08 – Principles and methods of consolidation

The annual closing date of the individual financial statements is 31 December. The consolidated financial statements are prepared applying uniform presentation and valuation principles. The results of noncontrolling interests are separately disclosed in the income statement and in the balance sheet.

1.09 – Recognition of revenue from contracts with customers

1.09 – Recognition of revenue from contracts with customers

Sales of goods and services are recognized in line with the requirements of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 15, Revenue from Contracts with Customers. Revenue is measured based on the consideration the Group expects to receive in exchange for the goods or services. Revenue from sales of goods is recognized in the income statement when control has been transferred to the buyer, which is usually upon delivery, at a fixed or determinable price, and when collectability is reasonably assured. Delivery is defined based on the terms of the sale contract.

Revenue from services is recognized when the respective services have been rendered.

Revenue is reported net of sales taxes, returns, discounts, and rebates. Rebates to customers are provided for in the same period that the related sales are recorded based on the contract terms.

Where third parties hold Clariant inventories on a consignment basis, revenue is recognized in the period when inventories are withdrawn from consignment and delivered to customers. Clariant periodically enters into prepayment contracts with customers whereby it receives contract liabilities for products to be delivered in a future period. These contract liabilities are recorded as liabilities and presented as part of other liabilities. Advance payment liabilities are released, and revenues associated with such advance payment transactions are recognized upon delivery and transfer of title, ownership, and risk of loss of the related products to the customer. Cash rebates and discounts granted to customers are classified as a reduction of revenue.

1.10 – Recognition of revenues from interest and dividends

1.10 – Recognition of revenues from interest and dividends

Interest income is recognized on a time proportion basis, taking into account the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group. Dividends are recognized when the right to receive the payment is established.

1.11 – Exchange rate differences

1.11 – Exchange rate differences

Exchange rate differences are recognized in line with the requirements of IAS 21, The Effect of Changes in Foreign Exchange Rates. The consolidated financial statements are presented in Swiss francs, which is the functional and presentation currency of the parent company.

Transactions and balances: Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are recognized in the line Finance costs in the income statement, except when deferred in Other comprehensive income as qualifying cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedges and net investment hedges.

Translation differences on debt securities and on other monetary financial assets measured at fair value are included in foreign exchange gains and losses in the line Finance costs in the income statement.

Group companies: Income statements and cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary statements of foreign entities are translated into the Group’s presentation currency at sales-weighted average exchange rates for the year, and their balance sheets are translated at the exchange rates prevailing on 31 December.

All resulting exchange rate differences are recognized in other comprehensive income in the line Currency translation differences. Exchange rate differences arising from the translation of the net investment in foreign entities and from borrowings and other currency instruments designated as hedges of such investments are recognized in Other comprehensive income in the line Net investment hedge. Net investments also include loans for which the settlement is neither planned nor likely to occur in the foreseeable future.

When a foreign operation is disposed of and as a consequence control, significant influence or joint control is lost, the cumulative amount in the translation reserve related to that foreign operation is reclassified to profit or loss as a part of the gain or loss on disposal.

When the Group’s interest in a subsidiary that includes a foreign operation changes, while retaining control in the subsidiary, a proportionate part of the cumulative amount of the translation difference that was recognized in other comprehensive income is reclassified to noncontrolling interests.

1.12 – Property, plant, and equipment

1.12 – Property, plant, and equipment

Property, plant, and equipment, except for the ones pertaining to mining activities, are valued at historical acquisition or production costs and depreciated on a straight-line basis to the income statement, using the following estimated useful lives in accordance with the Group guidelines:

  • Buildings: 15 to 40 years
  • Machinery and equipment: 10 to 16 years
  • Furniture, vehicles, computer hardware: 3 to 13 years
  • Land is not depreciated

Property, plant, and equipment pertaining to mining activities are valued at historical costs and depreciated over their useful lives to the income statement using the units of production method.

When the entity has a present legal or constructive obligation to dismantle an item of property, plant and equipment or restore a site, its initial costs include an estimate of the costs of dismantling and removing the item and restoring the site on which it is located. A corresponding provision is recorded for the amount of the asset component.

Financing costs directly associated with the acquisition, construction , or production of qualifying property, plant and equipment are capitalized as a part of the costs of these assets. Investment property is valued at cost less depreciation. As all investment property held by Clariant consists of industrial and administrative sites that have been in use for several decades, there is no active market that would give information on possible market prices. The fair values of the investment proper­ties are therefore determined by way of external appraisals and value-in-use calculations.

1.13 – Leases

1.13 – Leases

Clariant accounts for lease contracts in accordance with IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 16, Leases.

At the inception of the lease, a right-of-use asset and a lease liability are recognized in the balance sheet. The asset is initially measured at the amount of the lease liability plus any initial direct costs incurred.

The lease liability is initially measured at the present value of the lease payments payable over the lease term, including variable lease payments, depending on an index at the commencement date, and the exercise price of purchase options, if it is reasonably certain that the option will be exercised. The lease liability is discounted at the rate implicit in the lease. If that rate cannot readily be determined, the incremental borrowing rate is used. Lease liabilities are subsequently remeasured to reflect possible changes in the lease terms.

Right-of-use assets are depreciated over the duration of the lease contract, including contractually agreed optional extension periods whose exercise is deemed to be reasonably certain. The depreciation is recognized in operating income.

The unwinding of the discounting effect is included in the financial expense. Lease payments are accounted for as a repayment of the lease liability.

Expenses for lease contracts for objects with a value of less than CHF 5 000 and lease contracts with a duration of up to twelve months are recognized directly in the income statement.

1.14 – Intangible assets

1.14 – Intangible assets

Goodwill is recognized in accordance with the requirements of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 3, Business Combinations; IAS 38, Intangible Assets; and IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 11, Joint Arrangements. Goodwill is not amortized, but tested annually for impairment as required by IAS 36, Impairment of Assets.

Trademarks and licenses are capitalized at historical costs and amortized on a straight-line basis to the income statement over their estimated useful lives, with a maximum of ten years.

Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring to use the specific software. They are amortized on a straight-line basis to the income statement over their estimated useful lives (three to five years).

Costs directly associated with the production of identifiable and unique software and other intangible products controlled by the Group that will probably generate economic benefits beyond one year are recognized as intangible assets and depreciated over their useful life of three years. Direct costs include software development costs, personnel costs, and advisory costs directly related to the software or product development and an appropriate portion of the relevant overheads. Costs associated with developing and maintaining common software programs are recognized as an expense when incurred.

Intangibles acquired in a business combination, with the exception of mining rights, are amortized using a straight-line method over their remaining useful lives as follows:

  • Technology: 3 to 15 years
  • Customer relationships: 6 to 20 years
  • Tradenames: 10 years
  • Order backlog: 2 years

Mining rights are depreciated over their useful lives using the units of production method.

REACH costs were capitalized until the end of 2020 and are depreciated over a period of 12 years.

1.15 – Impairment of assets

1.15 – Impairment of assets

Impairment of assets is recognized and disclosed as per the requirements of IAS 36, Impairment of Assets.

1.16 – Noncurrent assets and disposal groups held for sale

1.16 – Noncurrent assets and disposal groups held for sale

Non-current assets and disposal groups are classified as held for sale when their carrying amount is to be recovered through a sale transaction and a sale is considered highly probable. They are stated at the lower of the carrying amount and fair value less costs of disposal, as per the requirements of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 5, Non-current Assets Held for Sale and Discontinued Operations.

1.17 – Inventories

1.17 – Inventories

Purchased goods are valued at acquisition costs, while self-manufactured products are valued at manufacturing costs, including related production overhead costs. Inventory held at the balance sheet date is primarily valued at standard costs, which approximate actual costs on a weighted-average basis. This valuation method is also used for valuing the costs of goods sold in the income statement. Adjustments are made for inventories with a lower net realizable value. Unsaleable inventories are fully written off. These adjustments are recorded as valuation allowances, which are deducted directly from the inventory value in the balance sheet. The allowances are reversed when the inventories concerned are either sold or destroyed and, as a consequence, are removed from the balance sheet.

1.18 – Trade receivables

1.18 – Trade receivables

Trade receivables are amounts due from customers for goods sold or services rendered in the ordinary course of business and are recognized in accordance with IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9, Financial Instruments. They are generally due within 40 days and therefore classified as current. Trade receivables are recognized initially at the amount of consideration that is unconditional. The Group holds trade receivables with the objective to collect the contractual cash flows and therefore measures them subsequently at amortized cost. Details about the Group’s impairment policies and the calculation of the loss allowance are provided in note 12.

1.19 – Cash and cash equivalents, short-term deposits

1.19 – Cash and cash equivalents, short-term deposits

Cash and cash equivalents comprise cash in hand, deposits, and calls with banks, as well as short-term investment instruments with an initial lifetime of 90 days or less. Bank overdrafts are reported within financial debt in current liabilities on the balance sheet.

Short-term deposits are disclosed separately in the balance sheet if they have an original maturity between 90 and 365 days. They are valued at their nominal value, which is close to their fair market value.

1.20 – Derivative financial instruments and hedging

1.20 – Derivative financial instruments and hedging

Derivative financial instruments and hedges are recognized in accordance with IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9, Financial Instruments. Qualifying hedge instruments are derivatives and nonderivative financial assets and liabilities that are fully measured at fair value through profit and loss. Hedged items are assets or liabilities, unrecognized firm commitments, forecast transactions, or net investments in foreign entities. They are reliably measurable, and, if not recognized, they are highly probable. The hedges are accounted for either as fair value hedges in the case of exposures in fair value of recognized assets and liabilities or unrecognized firm commitments, as cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedges in the case of exposures in cash flows arising from recognized assets or liabilities or forecast transactions that could affect profit or loss, or as hedges of a net investment in a foreign entity.

1.21 – Current income tax

1.21 – Current income tax

The taxable profits (losses) of Group companies are calculated in accordance with the rules established by the taxation authorities of the countries in which they operate. They are the basis for the de­ter­mination of income tax payments (reimbursements) for the reporting period in accordance with the prevailing local income tax rates. Current income tax is accounted for in accordance with the requirements of IAS 12, Income Taxes.

1.22 – Deferred income tax

1.22 – Deferred income tax

Deferred income tax is calculated using the comprehensive liability method in accordance with the requirements of IAS 12, Income Taxes. No deferred income tax is calculated for the temporary differences on investments in Group companies, provided that the investor (parent company) is able to control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred income tax assets are recognized on tax losses incurred if, based on the business plans of the respective subsidiaries, it is deemed probable that the tax losses are recoverable in the foreseeable future. The recoverability of these tax losses is assessed by Management on a regular basis.

1.23 – Employee benefits

1.23 – Employee benefits

Group companies operate various post-employment schemes, in-cluding both defined benefit and defined contribution pension plans, post-employment health care plans, and other benefits. Obligations for employee benefits are determined and recorded in line with the requirements of IAS 19, Employee Benefits.

Defined contribution plans: Contributions to defined contribution plans are recorded in the income statement in the period to which they relate.

Defined benefit plans: For defined benefit plans, the amount to be recognized in the provision is determined using the Projected Unit Credit method. Independent actuaries perform the actuarial valuations for the defined benefit plans on a regular basis. For the larger plans, these valuations take place annually. For the smaller ones, valuations are performed at least every three years, with systematic rollforwards in the years in between.

The retirement benefit obligations recognized in the balance sheet represent the present value of the obligations at the end of the reporting period less the fair value of the plan assets.

The prepaid pension assets recognized in the balance sheet are capitalized only to the extent of their recoverability, that is, when a cash refund or a reduction in the future payments is available. The return on plan assets, except for amounts reflected in net interest income, are reported under other comprehensive income.

Actuarial gains and losses are charged or credited to equity in other comprehensive income in the period in which they arise. Past service costs are recognized immediately in the income statement.

Some Group companies provide post-employment health care benefits to their retirees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using an accounting method similar to that for the defined benefit pension plans. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.

The charges for defined benefit plans, defined contribution plans, and termination benefits are included in personnel expenses and reported in the income statement under the corresponding functions of the related employees.

Other long-term employee benefits are employee benefits (other than post-employment benefits and termination benefits) that do not fall wholly due within twelve months after the end of the period in which the employees render the related service.

These include long-term compensated absences, such as long-service or sabbatical leave, and jubilee or other long-service benefits. The accounting policy for other long-term employee benefits is equal to that for post-employment benefits, with the exception that actuarial gains and losses are recognized immediately in the income statement.

Short-term employee benefits are employee benefits (other than termination benefits) that fall due wholly within twelve months after the end of the period in which the employees render the related service.

1.24 – Provisions

1.24 – Provisions

Provisions are recognized in accordance with the requirements of IAS 37, Provisions, Contingent Liabilities, and Contingent Assets.

1.25 – Research and development

1.25 – Research and development

Development expenses are capitalized to the extent that the recognition criteria set up by IAS 38, Intangible Assets, are met.

Considering the uncertainties inherent to the development of new key products, Clariant does not capitalize the associated development costs. Experience has proven that the structure of research and development in the industries that Clariant engages in makes it difficult to demonstrate how single intangible assets (patents) will generate probable future economic benefits.

Laboratory buildings and equipment included in property, plant, and equipment are depreciated over their estimated useful lives in accordance with the Group guidelines of note note 1.12.

1.26 – Segment reporting

1.26 – Segment reporting

Segment information is presented in the same manner as in the internal reporting to the chief operating decision maker. The chief operating decision maker, responsible for strategic decisions, for the assessment of the segments’ performance and for the allocation of resources to the segments, is the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary .

Clariant had seven business units (BUs), two of which were reclassified to discontinued operations on 30 June 2019, as a result of the Group’s decision to dispose of the Business Units MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary and PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary . The Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary was sold on 1 July 2020. The Business Unit PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary was sold subsequent to the balance sheet date on 3 January 2022. See also note 38. For external reporting purposes the remaining five business units are grouped into three business areas (BA) (reportable segments), in accordance with IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 8, Operating Segments:

  • Care Chemicals (BU ICS)
  • Catalysis (BU Catalysts)
  • Natural Resources (BU Oil & Mining Services, BU Functional Minerals, BU Additives)

The five business units were grouped into business areas so that they reflect, in Management’s opinion, the similar economic characteristics of certain BU’s and common traits regarding products, markets, technologies, and cyclicality. These business areas have full responsibility for their operating results.

The Business AreaBusiness AreaFor the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources.View entire glossary Care Chemicals comprises the BU Industrial & Consumer Specialties (ICS), Food Additives as well as the future Industrial Biotechnology business. It demonstrates a clear focus on highly attractive, high-margin, and low-cyclicality segments. The BA is a pillar of Clariant’s efforts to be a supplier of green and sustainable products.

The Business AreaBusiness AreaFor the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources.View entire glossary Catalysis develops, manufactures, and sells a wide range of catalystCatalystA substance that lowers the activation energy, thereby increasing the rate of a chemical reaction without being consumed by the reaction itself.View entire glossary products for the chemical, fuel, and automotive industries, as well for the biofuel business. This BA is highly profitable with a cyclicality in line with the investment cycle of the petrochemical industry.

The Business AreaBusiness AreaFor the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources.View entire glossary Natural Resources, comprising the BUs Oil & Mining Services, Functional Minerals, and Additives, is characterized by high growth and a low cyclicality. Main drivers are the rising demand for high-value-added specialty chemicals used in the oil, mining, food and packaging industries; the increased consumption of oil, gas, and base metals, and the increasing use of plastics with tailor-made properties in applications such as mobile phones, cars and construction, driven by the fast-growing economies.

Discontinued operations comprise Business Units MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary for the first six months of 2020 and PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary for 2020 and 2021.

Corporate: Income and expenses relating to Corporate include the costs of the Corporate headquarters and some of the corporate coor­dination functions in major countries. In addition, Corporate includes certain items of income and expense, that are not directly attributable to specific Business Areas, like central R&D costs.

The Group’s business areas are segments offering a large variety of products. The segments are managed separately because they manufacture, distribute, and sell distinct products, that require differ­ing technologies and marketing strategies. These products are also subject to risks and returns that are different from those of other segments.

Segment sales are sales reported in the Group’s income statement directly attributable to a segment, as well as the relevant portion of the company income that can be allocated on a reasonable basis to a segment, whether from sales to external customers or from transactions with other segments.

Segment operating expenses are expenses resulting from the operating activities of a segment directly attributable to the segment and the relevant portion of an expense that can be allocated on a reasonable basis, including expenses relating to sales to external cus­tomers and expenses relating to transactions with other segments. Inter-segment transactions are entered into under the normal circumstances and terms and conditions that would also be available to unrelated third parties.

The segment net assets consist of segment assets - primarily property, plant, and equipment, intangible assets, inventories and receivables, - less segment liabilities. Usually no allocation of Corporate items is made to the segments. Corporate assets and liabilities principally consist of net liquidity (cash, cash equivalents, and other current financial assets less financial debts) and deferred and current income taxes.

The Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary assesses the performance of the operating segments based on income statement parameters like third-party sales, EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary , operating result, and cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary . Interest income, interest expense, and taxes are not allocated to the segments. The return on the capital invested in each segment is measured by the Return on Net Assets (RONA).

1.27 – Share capital and other reserves

1.27 – Share capital and other reserves

All issued shares are ordinary shares and, as such, are classified as equity. Incremental costs, directly attributable to the issue of new shares or options, are shown in equity as a deduction, net of tax, from the proceeds.

Written put options, where Clariant Ltd shares are the underlying, are reported as obligations to purchase Clariant Ltd shares if the number of shares is fixed and physical settlement for a fixed amount of cash is required in case the option is exercised.

At inception, the obligation is recorded at the present value of the settlement amount of the option, and the corresponding effect is recognized in shareholders’ equity.

The liability is measured subsequently at amortized costs using the effective interest method. Upon settlement of such written put options, the liability is extinguished, and the charge to equity is reclassified to the treasury shares.

Clariant Ltd shares, subject to such put options, are not considered to be outstanding for the purpose of basic earnings per share calculations, but are considered for the dilutive earnings per share calculations to the extent that they are dilutive.

Other reserves comprise the following items:

  • Share premium: The share premium comprises the excess price paid over the par value of the share at the time of issuance of the share capital.
  • Cumulative translation reserves: The translation reserves comprise the foreign exchange differences arising from the translation of the financial statements of the foreign subsidiaries stated in a currency other than the Group’s functional currency. In addition, the cumulative translation reserves comprise the foreign exchange differences arising on the translation of financial liabilities denominated in a currency other than the functional currency of the parent company, Clariant Ltd, that are at the same time designated as a hedge of a net investment in a foreign entity.
1.28 – Treasury shares

1.28 – Treasury shares

Treasury shares are deducted from equity at their par value of CHF 3.00 per share (2020: CHF 3.70). Differences between this amount and the amount paid for acquiring, or received for disposing of, treasury shares are recorded in retained earnings.

1.29 – Financial debt

1.29 – Financial debt

Financial debt is recognized based on the requirements of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9, Financial Instruments: Recognition and Measurement.

All financial liabilities are valued at amortized cost.

1.30 – Financial assets

1.30 – Financial assets

Financial assets are classified, recognized, measured, and, if necessary, impaired based on the requirements of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9, Financial Instruments.

Financial assets are valued at amortized cost if there is the intention to hold them in order to collect the contractual cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary , and this cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary is only for the principal and interest.

Financial assets are valued at fair value through other comprehensive income when they are held with the intention of getting the contractual cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary , but also with the intention of eventually selling the asset.

Equity investments are measured at fair value through other comprehensive income based on the Group’s irrevocable election at initial recognition.

There are currently no financial assets at fair value though profit and loss.

Loss allowances are recognized for expected credit losses, in line with the requirements of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9, Financial Instruments. Changes in the measurement of the loss allowance are recognized in profit and loss.

Purchases and sales of financial assets are recognized on the settlement date, which is the date on which the Group receives or delivers the assets

1.31 – Business combinations

1.31 – Business combinations

The Group applies the acquisition method to account for business combinations in accordance with IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 3, Business Combinations, and recognizes any noncontrolling interests in the acquiree at fair value (full goodwill method).

Acquisition-related costs are expensed as incurred.

1.32 – COVID-19

1.32 – COVID-19

The outbreak of the COVID-19 pandemic has affected the world-economy deeply and, as a consequence also the environment of Clariant and the company itself. Clariant has taken early measures to minimize the COVID-19 impact by assuring people safety first while supporting its communities and concurrently running business continuity, cash, and cost programs.

Business continuity was able to be preserved by stringent safety and contingency measures mitigated disruptions caused by temporary production site closures while cooperating closely with customers and suppliers along the value chains.

Management, together with the business units is continuously modeling and assessing the situation and executing stringent cash and cost programs.

These cash programs are centrally run and focus on optimizing net working capitalNet working capitalNet working capital is the difference between a company’s current assets and its current liabilities.View entire glossary efficiency, spend avoidance, cost cuts, and operational flexibilization. Supply and production plans have been adjusted to assure efficient levels of inventories. The recoverability of inventories is also assessed to be unchanged compared to the time prior to the COVID-19 crisis due to tight inventory management. Debtors are prudently managed, and so far, no increase in overdues or defaults was recorded.

The economic development is continuously monitored together with the Business Units and assessed for the need to adjust the business plans.

2. Enterprise Risk Management Identification, Assessment, and Management

2. Enterprise Risk Management Identification, Assessment, and Management

In the framework of the Enterprise Risk Management Policy, risk assessments are prepared by business units, service units and corporate functions to assess threats that will impact the achievement of the objectives set for Clariant overall. These objectives are a result of the overall strategy of the Group as set by the Board of Directors and implemented by the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary .

The Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary is responsible for monitoring the risk assessments for relevance and consistency. The Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary has formed an »Ethics and Risk Management« subcommittee, which maintains an up-to-date understanding of areas where Clariant is, or may be, exposed to risk issues, and seeks to ensure that management is effectively addressing those issues.

The short- and long-term objectives are set in the fourth quarter of the year. These objectives and threats are subject to scrutiny by the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary during meetings with each business unit. Also reviewed and discussed are proposed measures to reduce or contain threats. In that context, responsibilities are assigned. All stakeholders are required to report significant changes to existing identified risks and new threats as they arise.

Risk registers are maintained using financial and reputational impact and probability assessments to score and rank all identified risks. The assessment also addresses the measures in place to manage the risks identified and indicate dates for completion of the measures.

When threats have been identified and quantified, they are delegated to qualified individuals who are required to deliver effective risk management. Depending on the nature of the risk identified, specific skill sets may be required for the management of those particular risks.

A summary risk assessment is submitted annually to the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary , the Audit Committee, and the Board of Directors for review.

In case of new or changed risks, reporting is accelerated. To support functional responsibility, certain functions have access to risk assessments to assist them in their roles.

Examples of such functions are Environmental Safety & Health Affairs (ESHA), to identify key sites for their property risk survey program, or Group Procurement, to ensure reliable and compliant supply of raw materials.

Examples of identified risks included in the risk register:

2.1 – Regulation & Compliance

2.1 – Regulation & Compliance

Clariant is subject to many rules and regulations as well as complianceComplianceCompliance is a key element of Corporate Governance. It refers to compliance with the law and directives as well as with company codes and ethical business practices and behaviors.View entire glossary standards. These include chemical industry, country, government, and customer requirements as well as the European Union’s (EU) Regulation on the Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH) or similar regulations in other countries.

The function Global Product Stewardship is responsible for ensuring that all relevant legal requirements are met. Certain specific matters are delegated to other functions.

2.2 – Sites and locations

2.2 – Sites and locations

This includes manufacturing plants and equipment important for the production of Clariant products for sale to customers.

Also addressed are country and culture issues that could create threats to business objectives. The aim is to maintain high-quality and safe production facilities. ESHA and Regional Services are responsible for the management of the associated risks.

Examples of emerging risks included in the risk register:

2.3 – Supply chain reliability

2.3 – Supply chain reliability

The achievement of targets depends on the reliability of the supply chain. The purchasing of raw materials may be impaired due to the unavailability of respective products, required energy, or corresponding means of transportation. Similarly, our customers may be affected by the unavailability of certain input materials outside the range of chemical products, limiting their production and thus Clariant’s sales opportunities. Clariant responds to these challenges with market intelligence to identify potential constraints in an early stage and in close cooperation with our business partners.

2.4 – Sustainability transformation

2.4 – Sustainability transformation

Demand for sustainable products is clearly increasing, which opens up business opportunities. Nonavailability of sustainable offerings represents a market disadvantage. Clariant is responding with the new organizational unit Group Innovation & Sustainability, which combines various resources to accelerate the sustainability transformation.

2.5 – Digital interconnection

2.5 – Digital interconnection

Successful performance of the Clariant Group depends on properly working information systems. Cyberattacks may result in the loss of business and personal data, knowledge, facilities, or money, leading to interruptions in manufacturing and product deliveries. Such attacks might cause significant economic damages as well as loss of trust. Clariant is responding to the increased cyber risk with a reinforced security operations center, state-of-the-art software, and frequent awareness campaigns.

3. Financial risk management

3. Financial risk management

3.1 – Financial risk factors

3.1 – Financial risk factors

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and price risk), credit risk, liquidity risk, counterparty risk, (re)financing and funding risk, and also settlement risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to reduce potential adverse effects on the Group’s financial performance at reasonable hedging costs. The Group uses derivative financial instruments, nonderivative financial instruments, and operating strategies to hedge certain risks.

Financial risk management is carried out by the central treasury department (Corporate Treasury) under policies approved by the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary and the Board of Directors. Corporate Treasury identifies, evaluates, and hedges financial risks in close cooperation with the Group’s operating units and functions. Written principles for the management of overall foreign exchange risk and credit risk for the use of derivative financial instruments, nonderivative financial instruments and investing excess liquidity (counterparty risk) are in place.

3.1.1 – Market risk

3.1.1.1 – Foreign exchange risk
  • Exposure to foreign exchange risk: The Group operates internationally and is exposed to foreign exchange risks arising from various currency exposures, primarily with respect to the euro, the US dollar and, to some extent, the currencies of emerg­ing countries. Foreign exchange risks arise from future commercial transactions, recognized assets and liabilities, and net investments in foreign operations when they are denominated in a currency that is not the respective subsidiary’s functional currency.
  • Foreign exchange risk management: To manage the foreign ex­change risk arising from future commercial transactions and recognized assets and liabilities, entities in the Group use spot transactions, FX forward contracts, FX options, and FX swaps according to the Group’s foreign exchange risk policy. Corporate Treasury is responsible, in close coordination with the Group’s operating units, for managing the net position in each foreign currency and for putting in place the appropriate hedging actions. The Group’s foreign exchange risk management policy is to selectively hedge net transaction exposures in major foreign currencies. Currency exposures arising from the net assets of the Group’s foreign operations are managed primarily through borrowings denominated in the relevant foreign currency. Detailed information regarding foreign exchange management is provided in note 31.
  • Foreign exchange risk sensitivity: The estimated percentage change of the following foreign exchange rates used in this calculation is based on the historical foreign exchange rate volatility for a term of 360 days. At 31 December 2021, if the euro had strengthened/weakened by 4 % (2020: 5 %) against the Swiss franc with all other variables held constant, pretax profit for the year would have been CHF 22 million higher/lower (2020: CHF 25 million higher/lower), mainly as a result of foreign exchange gains/losses on the translation of the euro-denominated financing, cash and cash equivalents, intragroup financing, and third-party trade receivables and payables. Equity would have been CHF 42 million lower/higher (2020: CHF 54 million lower/higher), arising mainly from foreign exchange gains/losses of the exposure of the foreign currency participations and the hedge instruments in the hedge of net investments, which partially offset this effect. At 31 December 2021, if the US dollar had strengthened/weakened by 6 % (2020: 8 %) against the Swiss franc with all other variables held constant, pretax profit for the year would have been CHF 13 million higher/lower (2020: CHF 34 million higher/lower), mainly as a result of foreign exchange gains/losses on the translation of US dollar-denominated cash and cash equivalents, intragroup financing, and trade receivables. Equity would have been CHF 60 million lower/higher (2020: CHF 30 million lower/higher), arising mainly from foreign exchange gains/ losses of the exposure of the foreign currency participations and the hedge instruments in the hedge of net investments, which partially offset this effect.
3.1.1.2 – Interest rate risk
  • Exposure to interest rate risk: Financial debt issued at variable rates and cash and cash equivalents expose the Group to cashflow interest rate risk; the net exposure as of 31 December 2021 was not significant. Financial debt issued at fixed rates does not expose the Group to fair value interest rate risk because it is recorded at amortized costs. At the end of 2021 and 2020, 100 % of the net financial debt was at fixed rates.
  • Interest rate risk management: It is the Group’s policy to manage the costs of interest using fixed- and variable-rate debt and interest-related derivatives. Corporate Treasury monitors the net debt fix-to-float mix on an ongoing basis.
  • Interest rate risk sensitivity: To calculate the impact of a potential interest rate shift on profit and loss, the net debt exposure is taken into consideration for cash and debt maturing within the next 12 months. The variable Certificates of Indebtedness maturing after 12 months are also taken into consideration (interest rates comparison between the end of 2021 and end of 2020). At 31 December 2021, if the CHF interest rates on net current financial debt including Certificates of Indebtedness with variable interest rates after 12 months, had been 1 basis point higher/lower with all other variables held constant, pretax profit for the year would have been CHF 0.00 million higher/lower (2020: CHF 0.16 million higher/lower for a CHF interest rate shift of 1 basis point).

At 31 December 2021, if the USD interest rates on net current financial debt issued, including Certificates of Indebtedness with variable interest rates after 12 months, had been 1 basis point higher/lower with all other variables held constant, pretax profit for the year would have been CHF 0.15 million higher/lower (2020: CHF 0.65 million higher/lower for a USD interest rate shift of 1 basis point).

At 31 December 2021, if the EUR interest rates on net current financial debt issued, including Certificates of Indebtedness with variable interest rates after 12 months had been 1 basis point higher/lower with all other variables held constant, pretax profit for the year would have been CHF 5.09 million higher/lower (2020: CHF 2.38 million higher/lower for a euro interest rate shift of 1 basis point).

3.1.2 – Other price risks

With regard to the financial statements as per 31 December 2021 and 2020, the Group was not exposed to other price risks in the sense of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 7, Financial Instruments: Disclosures.

3.1.2.1 – Credit risk
  • Exposures to credit risk: Credit risk arises from deposits of cash and cash equivalents, from entering into derivative financial instruments, and from deposits with banks and financial institutions, as well as from credit exposures to wholesale and retail customers, including outstanding re­ceiv­ables and committed transactions with suppli­ers. Customer credit risk exposure is triggered by customer default risk and country risk. As of 31 December 2021, the Group had a diversified portfolio with more than 16 000 active credit accounts (2020: more than 19 000), with no significant concentration either due to size of customers or due to country risk. Of the accounts receivable, 50 % are distributed among 244 corporate groups with moderate customer default risk.
  • Credit risk management: Clariant has a Group credit risk policy in place to ensure that sales are made to customers only after an appropriate credit assessment. Procedures are standardized within a corporate customer credit risk policy and supported by the IT system with respective credit management tools. Credit lines are partially backed by credit risk insurance.
Ageing balance of trade receivables
    31.12.2021   31.12.2020
Not due yet   93 %   93 %
Total overdue   7 %   7 %
– less than 30 days   4 %   5 %
– more than 30 days   3 %   2 %
Net trade receivables per Group internal risk category
    31.12.2021   31.12.2020
A – low credit risk   24 %   22 %
B – low to medium credit risk   31 %   33 %
C – medium to above-average risk   32 %   28 %
D – high credit risk   13 %   17 %
N – customers awaiting rating   0 %   0 %

Financial instruments contain an element of risk that the coun­ter­party may be unable to either issue securities or to fulfill the settlement terms of a contract. Clariant therefore – whenever possible – only cooperates with counterparties or issuers that are at least rated »BB-« when it comes to entering into deposits with such counterparties. The cumulative exposure to these counterparties is constantly monitored by Corporate Treasury. There is no expec­tation of a material loss due to counterparty risk.

The Group maintains a large EUR cash pooling structure with a leading European bank, over which most European subsidiaries execute their cash transactions denominated in euro. A USD cash pooling structure with a leading US bank was introduced in 2020. As a result of this cash pool, the Group at certain times has substantial current financial assets and at other times substantial current financial liabilities with the corresponding banks.

In view of the European bank being rated »A-« (2020: BBB+) and the US bank being rated »A+« by the most important rating agencies, Clariant does not consider this to pose any particular counterparty risk.

At the balance sheet date, 71 % (2020: 63 %) of the total cash and cash equivalents and short-term deposits were held with five banks (2020: five banks), each with a position between CHF 21 million and CHF 132 million (2020: between CHF 89 million and CHF 154 million). All of these banks are rated »A-« (2020: »A« ) and better.

The table below shows in percentage of total cash and cash equivalents the share deposited with each of the three major counter­parties at the balance sheet date (excluding the banks managing the EUR and USD cash pools):

Counterparty   Rating   31.12.2021
Bank 1   A+   20 %
Bank 2   A+   7 %
Bank 3   A+   5 %
Counterparty   Rating   31.12.2020
Bank 1   AA+   15 %
Bank 2   A+   13 %
Bank 3   A+   13 %

3.1.3 – Liquidity risk

  • Liquidity risk management: Cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary forecasting is performed in the subsidiaries of the Group and in aggregate by Corporate Treasury. Corporate Treasury monitors the forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet its operational needs while maintaining sufficient headroom on its undrawn borrowing facilities. At all times, the Group aims to meet the requirements set by the covenants of any of its borrowing facilities. Corporate Management therefore takes into consider­ation the Group’s debt financing plans and financing options.

Cash that is not needed in the operating activities of the Group is invested in short-term money market deposits or marketable securities if an interest income higher than the one on a regular bank deposit can be achieved. At 31 December 2021, the Group held money market funds of CHF 29 million (2020: CHF 485 million), of which CHF 12 million have an initial tenor of more than 90 days (2020: CHF 267 million).

The following table analyzes the maturity profile of the Group’s financial liabilities. The amounts disclosed are the contractual undiscounted cash flows and therefore do not reconcile with the financial liabilities presented in the consolidated balance sheets.

At 31 December 2021 in CHF m   Less than 1 year   Between 1 and 2 years   Between 2 and 5 years   Over 5 years
Borrowings   707   272   655   18
Interest on borrowings   21   13   17   1
Lease liabilities   50   40   78   121
Trade payables and other liabilities   1 122   4   10   44
Derivative financial instruments   8     14  
At 31 December 2020 Restated in CHF m   Less than 1 year   Between 1 and 2 years   Between 2 and 5 years   Over 5 years
Borrowings   411   358   832   234
Interest on borrowings   30   24   34   4
Lease liabilities   43   35   61   75
Trade payables and other liabilities   946   5   10   45
Derivative financial instruments   –1     –6  

The Group covers its liabilities out of generated operating cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary , liquidity reserves in form of cash and cash equivalents including money market deposits (31 December 2021: CHF 427 million vs. 31 December 2020: CHF 1004 million), out of uncommitted open cash pool limits and bank credit lines (31 December 2021: CHF 117 million vs. 31 December 2020: CHF 117 million), as well as out of additional uncommitted net working capitalNet working capitalNet working capital is the difference between a company’s current assets and its current liabilities.View entire glossary facilities and through issuance of capital market instruments.

Since 16 December 2016, Clariant Ltd had an agreement for a CHF 445 million (2020: CHF 445 million) five-year multicurrency revolving credit facility (RCF) with two one-year extension options. The RCF is structured as a club deal with ten key relationship banks with equal stakes and contains an accordion option for an increase up to CHF 600 million. The RCF is structured as a »backstop« facility for rating purposes to maintain Clariant’s liquidity headroom. It contains customary covenants such as negative pledge, cross default, owner­ship change, and restriction on disposals, mergers, and subsidiary debt. The Group is required to maintain one financial covenant (debt leverage) that is tested at the end of each financial half year. The RCF has been extended until 16 December 2023.

3.2 – Fair value measurement

3.2 – Fair value measurement

IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 13, Fair Value Measurement, requires the disclosure of fair value measurements for financial instruments measured at fair value in the balance sheet in accordance with the fair value measurement hierarchy.

The fair value hierarchies are defined as follows:

  • Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
  • Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices).
  • Level 3: Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

3.2.1 – Valuation methods

As of 31 December 2021, the open derivative financial instruments held were valued using the following valuation methods:

Forward exchange rate contracts: The valuations of forward exchange rate contracts are based on the discounted cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary model, using observable inputs such as interest curves and spot rates.

Exchange rate options: FX options are valued based on a Black-Scholes model, using major observable inputs such as volatility and exercise prices.

Equity investments valued at fair value through OCI: These are usually classified at Level 3. Their valuation is based on multiples of projected earnings and discounted cash flows.

The financial instruments measured at fair value through profit or loss were all classified as Level 2 (see note 31). There were no transfers between the levels in 2021 and 2020.

3.3 – Hedge accounting

3.3 – Hedge accounting

Derivatives are initially recognized at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. The Group designates certain derivatives as either:

  • Hedges of a particular risk associated with the cash flows of recognized assets and liabilities and highly probable forecast transactions (cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedges)
  • Hedges of a net investment in a foreign operation (net investment hedges).

At the inception of the hedge relationship, the Group documents the economic relationship between hedging instruments and hedged items, including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. The Group documents its risk management objective and strategy for undertaking its hedge transactions.

The fair values of derivative financial instruments designated in hedge relationships are disclosed in note 31. Movements in the hedging reserve in shareholders’ equity are shown in note 31. The full fair value of a hedging derivative is classified as a noncurrent asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Trading derivatives are classified as a current asset or liability.

  • Cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedges: The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedges is recognized within equity. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss. As long as the hedged cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary item is probable, the cumulative gain or loss on the respective hedge remains in equity and does not get recycled.

Amounts accumulated in equity are reclassified in the periods when the hedged item affects profit or loss, as follows:

  • The gain or loss relating to the effective portion of the interest rate/cross currency swaps hedging variable rate or fixed rate borrowings is recognized in profit or loss within finance cost at the same time as the interest expense on the hedged borrowings.

When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss.

  • Hedges of net investments in foreign operations are accounted for similarly to cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedges. Any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognized in other comprehensive income and accumulated within equity. The gain or loss relating to the ineffective portion is recognized immediately in profit or loss.

Gains and losses accumulated in equity are reclassified to profit or loss when the foreign operation is partially disposed of or sold.

3.4 – Capital risk management

3.4 – Capital risk management

The Group’s objectives when managing capital are to safeguard the ability to continue as a going concern in order to provide returns for the shareholders and benefits for other stakeholders and to maintain a capital structure suitable to optimize the cost of capital. This includes aspects of the credit rating.

In order to maintain or adjust the capital structure, the Group may adjust the amount of payouts to the shareholders, return capital to the shareholders, issue new shares, or sell assets to reduce debt.

The Group monitors capital on the basis of invested capital as part of the return on invested capital concept. Invested capital is calculated as the sum of total equity as reported in the consolidated balance sheet plus current and noncurrent financial liabilities as reported in the consolidated balance sheet, including lease liabilities, plus estimated cash needed for operating purposes, less cash and cash equivalents and near cash assets not needed for operating purposes.

Invested capital for the Group was as follows on 31 December 2021 and 2020 respectively:

in CHF m   2021   2020 2
Total equity   2 544   2 416
Total current and noncurrent financial liabilities (incl. lease liabilities)   1 949   2 022
Less cash and cash equivalents and short-term deposits 1   –427   –1 004
Less assets held for sale (net of liabilities related to assets held for sale)   –581   –535
Cash needed for operating purposes   87   77
Invested capital   3 572   2 976
1 Short-term deposits represent deposits over 90 days.
2 Restated see note 1.03

At the end of 2021, Clariant considers the invested capital to be adequate.

3.5 – IBOR Reform

3.5 – IBOR Reform

On 31 December 2021 LIBOR rates for all major currencies except for the US dollar were abandoned and replaced by alternative risk-free rates (ARFRs, e.g., SARON for CHF, SONIA for GBP, TONAR for JPY). ARFRs are transaction based on overnight rates (secured or unsecured). The loan documentation of Clariant’s revolving credit facility (RCF) has been amended for the switch from LIBOR to ARFR for the relevant currencies. No other financial liabilities or derivatives were affected by the discontinuation of LIBOR. All of Clariant’s floating Certificates of Indebtedness are denominated in EUR and therefore subject to EURIBOR, which continues to be used.

4. Critical accounting estimates and judgments

4. Critical accounting estimates and judgments

Estimates and judgments are continually evaluated and are based on historical experience and other factors, including expectations on future events that are believed to be reasonable under the circumstances.

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and as­sump­tions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

4.1 – Estimated impairment of goodwill, intangibles, and property, plant, and equipment

4.1 – Estimated impairment of goodwill, intangibles, and property, plant, and equipment

The Group tests annually whether goodwill has suffered any impairment in accordance with the requirements of IAS 36, Impairment of Assets. The recoverable amounts of all cash-generating units have been determined based on value-in-use calculations reported in continuing operations. The recoverable amounts of all cash-generating units classified as discontinued operations have been valued at fair value less cost to sell.

The recoverable value of intangibles and property, plant, and equipment is also assessed applying value-in-use calculations. These calculations require the use of estimates, in particular in relation to the expected growth of sales, the discount rates, the development of raw material prices, and the success of restructuring measures implemented.

4.2 – Environmental liabilities

4.2 – Environmental liabilities

The Group is exposed to environmental regulations in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for environmental remediation. The Group constantly monitors its sites to ensure complianceComplianceCompliance is a key element of Corporate Governance. It refers to compliance with the law and directives as well as with company codes and ethical business practices and behaviors.View entire glossary with legislative requirements and to assess the liability arising from the need to adapt to changing legal demands. The Group recognizes liabilities for environmental remediation based on the latest assessment of the environmental situation of the individual sites and the most recent requirements of the respective legislation. Where the final remediation results in expenses that differ from the amounts previously recorded, such differences impact the income statement in the period in which such determination is made.

4.3 – Income tax and other taxes

4.3 – Income tax and other taxes

The Group is subject to income tax and other taxes in numerous jurisdictions. Significant judgment is required in determining the worldwide provision for income tax and other taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain at the time a liability must be recorded.

The Group recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts initially recorded, such differences impact the income tax and deferred tax provisions in the period in which such deter­mination is made (see note 10). As a substantial part of Clariant’s activities are based in Germany, this is where the largest tax risks arise. Some subsidiaries generate tax losses. Often these can be used to offset taxable gains of subsequent periods. The Group constantly monitors the development of such tax loss situations. Based on the business plans for the subsidiaries concerned, the recoverability of such tax losses is determined. In the event that a tax loss is deemed to be recoverable, the capitalization of a deferred tax asset for such a tax loss is then decided.

4.4 – Estimates for the accounting for employee benefits

4.4 – Estimates for the accounting for employee benefits

IAS 19, Employee Benefits, requires that certain assumptions are made in order to determine the amount to be recorded for retirement benefit obligations and pension plan assets, in particular for defined benefit plans. These are mainly actuarial assumptions such as expected future salary increases, long-term increase in health care costs, average life expectancy, and discount rates. Substantial changes in the assumed development of any of these variables may significantly change the Group’s retirement benefit obligation and pension assets (see note 20).

4.5 – Provisions and Contingencies

4.5 – Provisions and Contingencies

Clariant is regularly confronted with situations where possible obligations arising from past events will only be confirmed by the occurrence or nonoccurrence of future events not wholly within the control of the Group or where the amount of the obligation cannot be reliably estimated. Clariant reviews such situations at each balance sheet date and makes judgments based on all information available to determine if an outflow of resources can be reliably estimated or not. If this is not possible, a contingency is reported for each material case.

4.6 – Assets held for sale and liabilities directly associated with assets held for sale

4.6 – Assets held for sale and liabilities directly associated with assets held for sale

As a result of the decision to divest two of its Business Units, Clariant reclassified the assets and liabilities pertaining to those activities to »held for sale« in accordance with IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 5 (see note 1.04). In distinguishing between the assets and liabilities pertaining to continuing operations and those pertaining to discontinued operations, judgment had to be applied, as a part of those assets and liabilities is used by both types of activities.

All assets and liabilities exclusively pertaining to one Business Unit were allocated to that Business Unit. In all other cases a critical assessment was conducted as to whether it could be reasonably expected that the asset or liability concerned would be transferred in a disposal. This assessment was made based on past experience and most recent market developments. The allocation made may have to be adjusted when the disposal is actually consummated.

5. Property, plant and equipment

5. Property, plant and equipment

in CHF m   Land   Buildings   Machinery and equipment   Furniture, vehicles, computer hardware   Assets under construction   Total 2021
Cost                        
As per 1 January   293   881   1 924   274   351   3 723
Additions   1   14   51   17   279   362
Acquired in business combinations (see note 27)   4   2   42   1     49
Reclassified to/from held for sale (see note 25)       7   2   –4   5
Disposals   –26   –13   –16   –12   –1   –68
Reclassifications   3   71   129   14   –217  
Exchange rate differences   –10   –12   –55   –5   –8   –90
At 31 December   265   943   2 082   291   400   3 981
Accumulated depreciation and impairment                        
As per 1 January   –78   –454   –1 343   –220     –2 095
Additions            
Reclassified to/from held for sale (see note 25)       –3   –2     –5
Disposals     12   15   12     39
Depreciation     –33   –117   –20     –170
Impairment (see note 28)       –1       –1
Reclassifications            
Exchange rate differences   3   7   28   3     41
At 31 December   –75   –468   –1 421   –227     –2 191
                         
Net book value   190   475   661   64   400   1 790

Impairments recognized in the income statement amounted to CHF 1 million in 2021 (2020: CHF 11 million). Impairments arise as a result of restructuring measures entailing site closures and of disposal projects.

Exchange rate differences mainly arise from the changes in the EUR/Swiss franc and Romanian leu/Swiss franc exchange rates. Both currencies significantly devalued against the Swiss franc in 2021.

As at 31 December 2021, commitments for the purchase of property plant, and equipment concerned various projects mainly in Germany, Romania and China and totaled CHF 78 million (2020: CHF 61 million).

As per 31 December 2021, property, plant, and equipment acquired by way of a business acquisition, with costs of CHF 49 million were recorded. See also note 27.

Additions in 2021 include CHF 112 million of investments in a cellulosic ethanol plant in Romania.

Disposals in 2021 include real estate in Germany, the US and Brazil with a total book value of CHF 27 million. A building in Brazil was subsequently leased back. Altogether a profit of CHF 15 million was incurred on these disposals, which is recognized in Selling, general and administrative costs.

in CHF m   Land   Buildings   Machinery and equipment   Furniture, vehicles, computer hardware   Assets under construction   Total 2020
Cost                        
As per 1 January   340   1 128   1 981   296   248   3 993
Additions   1   8   40   11   228   288
Acquired in business combinations (see note 27)     2   1       3
Reclassified to/from held for sale (see note 25)     63   –48   –7   10   18
Disposals   –40   –255   –43   –15   –1   –354
Reclassifications   2   23   90   7   –122  
Exchange rate differences   –10   –88   –97   –18   –12   –225
At 31 December   293   881   1 924   274   351   3 723
Accumulated depreciation and impairment                        
As per 1 January   –105   –700   –1 310   –229     –2 344
Reclassified to/from held for sale (see note 25)   –1   –10   –13   3     –21
Disposals   27   242   39   14     322
Depreciation     –33   –109   –20     –162
Impairment (see note 28)     –2   –7   –2     –11
Exchange rate differences   1   49   57   14     121
At 31 December   –78   –454   –1 343   –220     –2 095
                         
Net book value   215   427   581   54   351   1 628
Investment properties (Clariant as a lessor in operating leases)

Investment properties (Clariant as a lessor in operating leases)

As a result of the continuous efforts to increase efficiency and to optimize the structure of its facilities, sometimes production or adminstrative sites are vacated. In order to minimize expenses, Clariant seeks to find tenants for these facilities.

As a consequence, such facilities, which generate income exclusively from rental contracts, are considered as investment property in line with the requirements of IAS 40, Investment Property. All investment property is valued at cost less depreciation.

Investment property in Clariant is almost entirely located in Switzerland and Germany. The gross book value of investment property amounted to CHF 304 million on 31 December 2021 (CHF 524 million on 31 December 2020).

Accumulated depreciation on investment property amounted to CHF 186 million on 31 December 2021 (CHF 382 million on 31 December 2020).

The net book value amounted to CHF 118 million on 31 December 2021 (CHF 142 million on 31 December 2020).

Depreciation amounted to CHF 1 million in 2021 (CHF 1 million in 2020).

Income from investment properties amounted to CHF 6 million in 2021 (CHF 6 million in 2020) and is recorded in SG&A in the segment »Corporate«.

Expected minimum lease income varies between CHF 5 million and CHF 6 million (2020: CHF 5 million and CHF 6 million) per annum for the next five years and amounts to CHF 199 million for later periods (2020: CHF 193 million).

Since all investment property consists of industrial and administrative sites that have been in use for several decades, there is no active market that would give information on possible market prices. The fair values of the investment properties were therefore determined by way of external appraisals and value-in-use calculations. As of 31 December 2021, the estimated fair value of investment property amounted to CHF 171 million (CHF 186 million on 31 December 2020).

6. Intangible assets

6. Intangible assets

in CHF m   Goodwill   Technology   Customer relationships   Trade names   Other   Total 2021
Cost                        
As per 1 January   998   231   368   86   288   1 971
Additions           3   3
Acquired in business combinations (see note 27)   60       5   26   91
Disposals           –7   –7
Reclassified to held for sale (see note 25)   –1         3   2
Exchange rate differences   –5   –3   3     –10   –15
At 31 December   1 052   228   371   91   303   2 045
Accumulated amortization and impairment                        
As per 1 January   –4   –182   –251   –83   –213   –733
Disposals           3   3
Amortization     –9   –16   –3   –15   –43
Reclassified to held for sale (see note 25)   1         –1  
Exchange rate differences   –2   2   –1     9   8
At 31 December   –5   –189   –268   –86   –217   –765
                         
Net book value   1 047   39   103   5   86   1 280
in CHF m   Goodwill   Technology   Customer relationships   Trade names   Other   Total 2020
Cost                        
As per 1 January   1 069   238   387   87   292   2 073
Additions     1       10   11
Acquired in business combinations (see note 27)   2     2     2   6
Disposals           –2   –2
Reclassified to held for sale (see note 25)   –15   –6   –2   –1   –5   –29
Exchange rate differences   –58   –2   –19     –9   –88
At 31 December   998   231   368   86   288   1 971
                         
Accumulated amortization and impairment                        
As per 1 January   –24   –177   –243   –80   –198   –722
Disposals           1   1
Amortization     –12   –18   –4   –23   –57
Reclassified to held for sale (see note 25)   15   6   2   1   4   28
Exchange rate differences   5   1   8     3   17
At 31 December   –4   –182   –251   –83   –213   –733
                         
Net book value   994   49   117   3   75   1 238

Amortization is allocated to the line in the income statement that represents the function to which the intangible asset pertains.

In 2021 and 2020, no impairment losses were recognized.

As per end of 2021, other intangible assets include the carrying value in the amount of CHF 27 million (2020: CHF 34 million) capitalized in connection with the REACH regulation and less than CHF 1 million (2020: CHF 4 million) of capitalized internally generated intangibles.

Impairment test for goodwill. Goodwill is allocated to the Group’s cash-generating units (CGUs). Cash-generating units consist of business units which are for external reporting purposes reported under the corresponding business areas (reportable segments, see note 1.26).

Goodwill is allocated to the following CGUs:

in CHF m   31.12.2021   31.12.2020
Industrial & Consumer Specialties   119   60
PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary   11   11
Functional Minerals   137   139
Catalysts   636   645
Oil & Mining Services   155   150
Total net book value   1 058   1 005
         
Thereof reclassified to held for sale:        
PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary   –11   –11
Total as reported in the balance sheet   1 047   994
Continuing operations

Continuing operations

The recoverable amount for CGUs reported as continuing operations is determined based on their value-in-use. The value-in-use calculations use cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary projections based on the strategic plans up to 2025 as approved by the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary . For the terminal value, a market growth of 2.25 % is assumed. The main assumptions used for cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary projections are EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary in percent of sales and sales growth. The assumptions regarding these two variables are based on Management’s past experience and future expectations of business performance. The pretax discount rates used are based on the Group’s weighted average cost of capital. The assumed pre-tax discount rate was 10.70 % for all cash-generating units (2020: 10.68 %). As all CGUs operate in similar geographic areas, have the same source of funds and a similar risk pattern a uniform discount rate is applied to all of them.

For all CGUs, it was assumed that they achieve sales growth in line with or higher than market growth, based on the specific strategic plans for the respective CGUs. It was also assumed that the EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary in percent of sales will improve over present performance as a result of the continuous improvement measures implemented. The conclusion was that the net present value of the expected cash flows exceeds the carrying amount of the net assets allocated on a value-in-use basis of all CGU’s.

Discontinued operations

Discontinued operations

The estimated recoverable amount of the CGU and BU PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary , which is classified as a discontinued operation, was determined based on the signed sales contract. Based on this, the fair value less cost to sell of the CGU exceeds its book value. For further details on discontinued operations, see note 25.

7. Leases

7. Leases

in CHF m   31.12.2021   31.12.2020
Right-of-use assets – net book value        
Leasehold land   30   22
Buildings   149   158
Machinery and equipment   90   19
Furniture, vehicles, computer hardware   24   22
Total   293   221
Reclassified to held for sale (see note 25)   –12   –17
Total as reported in the balance sheet   281   204
         
Lease liabilities        
Noncurrent lease liabilities   238   173
Current lease liabilities   51   41
Total   289   214
Reclassified to held for sale (see note 25)   –7   –14
Total as reported in the balance sheet   282   200

Additions to the right-of-use assets during 2021 were CHF 129 million (2020: CHF 51 million).

Consolidated income statements include the following amounts relating to leases:

in CHF m   2021   2020
Depreciation expense        
Leasehold land   –3   –2
Buildings   –29   –29
Machinery and equipment   –9   –6
Furniture, vehicles, computer hardware   –13   –13
Total depreciation   –54   –50
         
Interest expense, included in finance costs   –11   –11
Expense relating to short-term leases   –11   –13
Expense relating to leases of low-value assets   –4   –5
Total   –80   –79
Thereof reported under discontinued operations   1   4
Total continuing operations   –79   –75

The total cash outflow for leases in 2021 was CHF 70 million (2020: CHF 66 million).

There are CHF 1 million of commitments for leases not commenced at year-end (2020: CHF 1 million).

Potential future cash outflows arising from extension options in the amount of CHF 44 million were not reflected in the measurement of lease liabilities on 31 December 2021 (2020: less than CHF 1 million).

8. Investments in associates and joint ventures

8. Investments in associates and joint ventures

in CHF m   2021   2020
As per 1 January   344   349
Change in the scope of consolidation   –14  
Additions     2
Disposals     –1
Share in profit   69   63
Share in other comprehensive income of associates and joint ventures   2   1
Dividends received   –44   –44
Exchange rate differences   –7   –26
At 31 December   350   344
Thereof joint ventures   120   118
Reclassified to held for sale (see note 25)   –139   –191
Total as reported in balance sheet   211   153

The key financial data of the Group’s principal associates is as follows:

Investments in associates:
  Infraserv GmbH & Co. Höchst KG   Infraserv GmbH & Co. Gendorf KG   Infraserv GmbH & Co. Knapsack KG   Others
  Germany   Germany   Germany  
in CHF m   2021   2020   2021   2020   2021   2020   2021   2020
Summarized financial information                                
Interest held %   33 %   33 %   50 %   50 %   21 %   21 %    
                                 
Revenue   1 218   927   294   234   250   234   149   115
Total comprehensive income   82   59   34   34   13   13   21   16
Net income   78   63   33   34   13   13   21   16
Other comprehensive income   4   –4   1          
                                 
Current assets   351   265   106   91   78   66   94   86
Noncurrent assets   930   815   193   199   119   126   23   23
Current liabilities   –311   –213   –78   –77   –73   –63   –40   –31
Noncurrent liabilities   –687   –605   –90   –76   –41   –41   –3   –3
Net assets   283   262   131   137   83   88   74   75
                                 
Reconciliation of book value                                
Book value at the beginning of the period   87   86   69   63   19   18   52   73
Additions                 2
Disposals                 –1
Change in the scope of consolidation               –14  
Share in profit for the period   25   21   17   17   3   3   17   6
Share in other comprehensive income   2   –1            
Dividends received   –16   –18   –17   –10   –3   –3   –6   –5
Foreign exchange rate differences   –4   –1   –3   –1   –2   1   4   –23
Book value at the end of the period   94   87   66   69   17   19   53   52
                                 
Clariant's share in the book values at the end of the period   94   87   66   69   17   19   53   52
Reclassified to held for sale (see note 25)     55           32   28

The Infraserv companies were set up by the former Hoechst group to cater to the infrastructure needs of its subsidiaries in Germany prior to 1997. The shareholdings in associates summarized under »Others« concern mainly companies specializing in selling Clariant products.

On 31 December 2021, accumulated unrecognized losses amounted to CHF 4 million (2020: CHF 3 million).

The key financial data of the Group’s principal joint ventures is as follows:

Investments in joint ventures:
  Scientific Design Company Inc.   Global Amines group
  USA  
in CHF m   2021   2020   2021   2020
Summarized financial information                
Interest held %   50 %   50 %   50 %   50 %
                 
Revenue   105   121   243   195
Total comprehensive income   14   17   14   19
Net income   14   17   14   14
Other comprehensive income         5
                 
Current assets   108   87   101   96
Noncurrent assets   32   30   86   67
Current liabilities   –34   –25   –101   –77
Noncurrent liabilities   –11   –8   –13   –20
Net assets   95   84   73   66
                 
Reconciliation of book value                
Book value beginning of period   108   108   10   1
Share in profit for the period     9   7   7
Share of other comprehensive income         2
Dividends received     –8   –2  
Foreign exchange rate differences   –1   –1   –2  
Book value end of the period   107   108   13   10
Reclassified to held for sale (see note 25)   107            
                 
Group's share in net assets at the end of the period   48   42   36   33
Fair value adjustment/goodwill   66   66    
Impairment       –23   –23
Taxes, minorities, and other adjustments        
Clariant's share in the book values at the end of the period   114   108   13   10

Scientific Design Company Inc. is a producer of ethylene and oxide catalysts headquartered in the United States and has around 140 employees. The Co-owner is the Saudi Arabia-based Sabic group. The sale of Clariant’s participation in this company is imminent, which is why it has been reclassified to Held for Sale. As a consequence the accounting at equity was discontinued and the value of the shareholding was valued at the lower of the book value or the value expected to be recovered from the sale, i.e. at the book value. For this reason the book value is lower than Clariant’s share in the net assets. Please also refer to note 38.

The Global Amines group is a joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary of Clariant and Wilmar International Limited, a leading Asian agribusiness group headquartered in Singapore, and serves as a global platform for the production and sale of fatty amines and selected amine derivatives. It also has worldwide sales, distribution, and production facilities. The joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary has existed since 26 October 2012 and is operated as part of the Business Unit ICS.

9. Financial assets

9. Financial assets

in CHF m   2021   2020
As per 1 January   202   218
Additions   5  
Fair value adjustment   2   –10
Repayments and disposals   –2   –5
Exchange rate differences   –9   –1
At 31 December   198   202

Financial assets include loans to joint ventures and a number of small-scale participations in companies, mostly in Germany and in Switzerland, engaged in activities closely related to those of Clariant.

In 2021, Clariant acquired a 10 % stake in Aqdot Limited, which develops intelligent encapsulation solutions for the consumer, agrochemical, and household and personal care industries. The purchase price amounted to CHF 5 million.

In 2021, loans amounted to CHF 1 million (2020: CHF 4 million). Participations amounted to CHF 197 million in 2021 (CHF 198 million in 2020).

In 2021, loans in the amount of CHF 2 million (2020: CHF 5 million) from associates were repaid.

While loans are carried at amortized cost, participations are valued at fair value through OCI using Level 3 methods.

The valuation of participations is based on multiples of projected earnings and discounted cash flows. The change in participation values was mainly driven by the fair value estimation performed in 2021 and resulted in an increase of CHF 2 million, which was recognized in Other comprehensive income.

The key unobservable inputs used in the fair value estimation of the most material participation which constitutes 87.9 % of these shareholdings are as follows: long-term revenue growth rate of 1 %, long-term pre-tax operating margin of 16.5 % and weighted-average cost of capital of 9.4 %. The sensitivity analysis shows that if the long-term growth rate had been higher/lower by 1 % with all other variables held constant, the fair value would have been CHF 8 million higher/lower. If the long-term pretax operating margin had been higher/lower by 1 % with all other variables held constant, the fair value would have been CHF 12 million higher/lower. If the weighted-average cost of capital had been higher/lower by 0.5 % with all other variables held constant, the fair value would have been CHF 10 million lower/CHF 12 million higher.

10. Taxes

10. Taxes

in CHF m   2021   2020 1
Current income taxes   –119   –167
Deferred income taxes   –18   –16
Total taxes   –137   –183
Thereof reported under discontinued operations   35   82
Total continuing operations   –102   –101
1 Restated, see note 1.03

The main elements contributing to the difference between the Group’s overall expected tax expense/rate and the effective tax expense/rate are:

  2021   2020 2
    in CHF m   in %   in CHF m   in %
Income before taxes from continuing operations   394       231    
Income before taxes from discontinued operations   116       777    
Income before taxes total   510       1 008    
Expected tax expense/rate 1   –146   28.6   –158   15.7
Effect of taxes on items not tax-deductible   –27   5.3   –115   11.4
Effect of utilization and changes in recognition of tax losses and tax credits   3   –0.6   –40   4.0
Effect of tax losses and tax credits of current year not recognized   –24   4.7   –10   1.0
Effect of adjustments to taxes recognized in prior periods   18   –3.5   –4   0.4
Effect of tax-exempt income   40   –7.8   148   –14.7
Effect of other items   –1   0.2   –4   0.4
Effective tax expense/rate   –137   26.9   –183   18.2
Thereof reported under discontinued operations   35   30.2   82   10.6
Effective tax expense/rate continuing operations   –102   25.9   –101   43.7
1 Calculated based on the income before tax of each subsidiary (weighted average).
2 Restated, see note 1.03.

The effective tax rate for the period (continuing operations) was positively impacted by the recognition of deferred tax assets in Switzerland, the PIS-COFINS credit in Brazil, and an increased profitability in low-tax jurisdictions.

The movement of the net deferred income tax balance is as follows:

in CHF m   PPE, RoU assets and intangible assets   Retirement benefit obligations/assets   Tax losses and tax credits   Other liabilities and provisions   Total   Thereof offset within the same jurisdiction   Total
Deferred tax assets at 31 December 2019   170   110   66   101   447   –213   234
Deferred tax liabilities at 31 December 2019   –229   –2     –25   –256   213   –43
Net deferred tax balance at 1 January 2020 restated   –59   108   66   76   191       191
Charged/credited to income (restated)   2   –1   2   20   15        
Effect of disposals   1     –33   1   –31        
Total charged/credited to income statement (restated)   3   –1   –31   13   –16        
Charged/credited to other comprehensive income     –18   1     –17        
Effect of disposals   –23   –7   4   –4   –30        
Reclassified to/ from held for sale     16       16        
Exchange rate differences   6   –2   3   –17   –10        
Net deferred tax balance at 31 December 2020 (restated)   –73   96   43   68   134     134
Deferred tax assets at 31 December 2020 (restated)   137   97   43   101   378   –220   158
Deferred tax liabilities at 31 December 2020 (restated)   –210   –1     –33   –244   220   –24
Net deferred tax balance at 1 January 2021 restated   –73   96   43   68   134     134
Charged/credited to income statement   –7   –11   –14   14   –18        
Total charged/credited to income statement   –7   –11   –14   14   –18        
Charged/credited to other comprehensive income     –7       –7        
Effect of disposals   1         1        
Effect of acquisitions   9         9        
Reclassified to/ from held for sale   18         18        
Exchange rate differences   1   6   –4   –7   –4        
Net deferred tax balance at 31 December 2021   –51   84   25   75   133     133
Deferred tax assets at 31 December 2021   155   87   25   114   381   –218   163
Deferred tax liabilities at 31 December 2021   –206   –3     –39   –248   218   –30
Net deferred tax balance at 31 December 2021   –51   84   25   75   133     133

Of the deferred tax assets capitalized on tax losses, CHF 0 million relate to tax losses of the US subsidiaries (2020: CHF 17 million), CHF 0 million to tax losses of the Spanish subsidiaries (2020: CHF 4 million), CHF 6 million to tax losses of the Indian subsidiaries (2020: CHF 10 million) and CHF 6 million to tax losses of the Chinese subsidiaries (2020: CHF 0 million). Clariant considers it probable that these tax losses can be recovered.

Deferred income tax liabilities have not been established for withholding tax and other taxes that would be payable on the unremitted earnings of certain foreign subsidiaries, as such amounts are currently regarded as permanently reinvested. These unremitted earnings totaled CHF 2 252 million at the end of 2021 (2020: CHF 2 415 million).

The change compared to the prior year is primarily the result of Group-internal transactions.

The tax losses on which no deferred tax assets are recognized are reviewed for recoverability at each balance sheet date. The largest part of these tax losses arose in France (with a tax rate of 27 %), in the US (with a tax rate of 25 %), and in Switzerland (with a tax rate of 14 %). At present, their recoverability is not considered probable.

Tax losses on which no deferred tax assets were recognized are as follows:

in CHF m   31.12.2021   31.12.2020
Expiry by:        
2021     15
2022   10   12
2023   5   12
2024   3   6
2025   33  
after 2025 (2020: after 2024)   532   406
Total   583   451

Tax credits amounting to CHF 9 million were recognized in 2021 (2020: CHF 3 million). They expire in and after 2026.

Temporary differences on which no deferred tax was recognized amount to CHF 1 208 million in 2021 (2020: CHF 1 160 million).

11. Inventories

11. Inventories

in CHF m   31.12.2021   31.12.2020
Raw material, consumables, work in progress   394   290
Finished products   531   430
Total   925   720
Reclassified to held for sale (see note 25)   –234   –186
Total as reported in the balance sheet   691   534
in CHF m   2021   2020
Movements in write-downs of inventories        
As per 1 January   –40   –40
Additions   –17   –23
Reversals   22   14
Effect of disposals     6
Exchange rate differences   1   3
At 31 December   –34   –40
Thereof reclassified to held for sale   –7   –9

As at 31 December 2021 and 2020, no inventories were pledged as collateral for liabilities.

The cost for raw materials and consumables recognized as an expense and included in »Costs of goods sold« amounted to CHF 1 860 million (2020: CHF 1 537 million) for continuing operations.

12. Trade receivables

12. Trade receivables

in CHF m   31.12.2021   31.12.2020
Gross accounts receivable – trade   860   694
Gross accounts receivable – associates and joint ventures   26   15
Less: provision for doubtful accounts receivable   –9   –5
Total trade receivables – net   877   704
Reclassified to held for sale (see note 25)   –148   –127
Total as reported in the balance sheet   729   577

The following summarizes the movement in the provision for doubtful accounts receivable:

in CHF m   2021   2020
As per 1 January   –5   –5
Charged to the income statement   –9   –8
Amounts used   2   3
Unused amounts reversed   2   3
Exchange rate differences   1   2
At 31 December   –9   –5

There is no concentration of credit risk with respect to trade receivables, as the Group has a large number of internationally dispersed customers.

The Group applies the IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9 simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance for all trade receivables within stage 1 and 2. The estimated expected loss rates are based on historical credit losses and are adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The Group recognizes impairment of trade receivables in »Selling, general, and administrative costs« in the income statement.

The maximum credit risk on trade receivables is equal to their fair value.

Collateral is only required in rare cases (2021: CHF 1 million, 2020: CHF 1 million).

The loss allowance for trade receivables as at 31 December 2021 and 2020 was determined as follows:

in CHF m   Current   30–60 days overdue   61–90 days overdue   More than 90 days overdue   Individually impaired   Total
31 December 2021                        
Expected loss rate (in %)   0.92   3.05   3.23   3.29        
Gross carrying amount, trade receivables   847   18   6   15     886
Loss allowance   8   1         9
in CHF m   Current   30–60 days overdue   61–90 days overdue   More than 90 days overdue   Individually impaired   Total
31 December 2020                        
Expected loss rate (in %)   0.29   5.65   9.81   14.38        
Gross carrying amount, trade receivables   678   13   7   11     709
Loss allowance   2   1   1   1     5

The carrying amounts of the Group’s trade receivables are denominated in the following currencies:

in CHF m   31.12.2021   31.12.2020
EUR   344   252
USD   262   198
CNY   54   66
BRL   45   40
JPY   29   28
INR   67   40
Other   76   80
Total trade receivables – net   877   704
Reclassified to held for sale (see note 25)   –148   –127
Total as reported in the balance sheet   729   577

As of 31 December 2021, »Total trade receivables – net« include an amount of CHF 72 million (2020: CHF 70 million) that was past due, but not impaired. These related to a number of customers for whom there is no recent history of default.

13. Other current assets

13. Other current assets

Other current assets include the following:

in CHF m   31.12.2021   31.12.2020
Other receivables   271   255
Current financial assets   49   51
Prepaid expenses and accrued income   44   41
Total   364   347
Reclassified to held for sale (see note 25)   –48   –35
Total as reported in the balance sheet   316   312

Other receivables include, among others, staff loans, deposits, advances, and VAT and sales tax receivables.

At the end of 2021 a VAT credit in the amount of CHF 17 million arising in Brazil was recognized in this position.

Other receivables are recognized at amortized cost in the balance sheet.

Current financial assets are mainly made up of notes receivable and short term loans. These are classified as loans and receivables and recognized at amortized cost in the balance sheet.

The book value of current financial assets equals their fair value.

Other receivables and other current financial assets are also subject to the impairment requirements of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 9. The identified impairment loss for other receivables was immaterial.

There was no impairment of current financial assets in 2021 and 2020.

Other receivables are denominated in the following currencies:

in CHF m   31.12.2021   31.12.2020
CHF   12   16
EUR   78   74
USD   18   8
JPY   5   3
BRL   33   20
CNY   24   16
INR   36   34
Other   65   84
Total   271   255
Thereof reclassified to held for sale   46   33

Current financial assets are denominated in the following currencies:

in CHF m   31.12.2021   31.12.2020
CHF   32   29
USD   1   5
CNY   16   17
Total   49   51

The maximum exposure to credit risk of other current assets at the reporting date is their fair value.

14. Short-term deposits

14. Short-term deposits

Short-term deposits have an original maturity between 90 and 365 days.

They are denominated in the following currencies:

in CHF m   31.12.2021   31.12.2020
CHF     80
USD     176
INR   12   11
Total   12   267
15. Cash and cash equivalents

15. Cash and cash equivalents

in CHF m   31.12.2021   31.12.2020
Cash at bank and on hand   398   520
Short-term bank deposits   17   217
Total   415   737

Cash and cash equivalents are denominated in the following currencies:

in CHF m   31.12.2021   31.12.2020
EUR   18   141
USD   149   304
CHF   83   71
GBP   23   27
CNY   8   2
JPY   20   63
INR   42   48
BRL   23   8
Other   49   73
Total   415   737

The effective average annual interest rate on short-term bank deposits in Swiss franc was –0.55 % (2020: 0 %); these deposits have an average maturity of 50 days (2020: 0 days).

The effective average annual interest rate on short-term bank deposits in US dollars was 0.31 % (2020: 0.34 %); these deposits have an average maturity of 60 days (2020: 21 days).

In 2021 and 2020, there were no short-term bank deposits in euro.

There were no material short-term bank deposits denominated in currencies other than Brazilian Real at the end of the reporting period (2020: US dollar and Swiss franc).

The maximum exposure to credit risk on cash and cash equivalents is equal to their book value.

16. Cash flow: Additional information

16. Cash flow: Additional information

for the years ended 31 December 2021 and 2020   Notes   2021 in CHF m   2020 in CHF m 1
Noncash Income and expenses           373       825
                     
Depreciation of property, plant, and equipment and right-of-use assets   5, 7    224       212    
Impairment   28    1       11    
Amortization of intangible assets   6    43       57    
Impairment of working capital       18       26    
Income from associates and joint ventures   8    –69       –63    
Tax expense   10    137       183    
Net financial income and costs   29    46       66    
Gain/loss from disposals not qualifying as discontinued operations   26          –12    
Gain on disposals of discontinued operations   25          –768    
Other noncash items       –9       20    
Total noncash income and expenses           391       –268
                     
Changes in net working capitalNet working capitalNet working capital is the difference between a company’s current assets and its current liabilities.View entire glossary and provisions                    
Changes in inventories           –226       84
Changes in trade receivables           –191       47
Changes in trade payables           196       –58
Changes in other current assets and liabilities           –26       –19
Changes in provisions (excluding payments for restructuring)           –58       –146
Total changes in net working capitalNet working capitalNet working capital is the difference between a company’s current assets and its current liabilities.View entire glossary and provisions           –305       –92
1 Restated, see note 1.03.
17. Changes in share capital and treasury shares and changes in non-controlling interests

17. Changes in share capital and treasury shares and changes in non-controlling interests

Registered shares each with a par value of CHF 3.00 (2020: CHF 3.70)   Number of shares 2021   Par value 2021 in CHF m   Number of shares 2020   Par value 2020 in CHF m
Share capital as per 1 January   331 939 199   1 228   331 939 199   1 228
Nominal value reduction       –232        
Share capital at 31 December   331 939 199   996   331 939 199   1 228
                 
Treasury shares   –2 822 712   –8   –2 385 509   –9
Outstanding share capital at 31 December   329 116 487   988   329 553 690   1 219
    2021   2020
Treasury shares (number of shares)        
Holdings as per 1 January   2 385 509   2 586 765
Shares purchased at market value   657 207   34 000
Shares purchased on exercise of put options   200 000  
Shares transferred to employees   –420 004   –235 256
Holdings at 31 December   2 822 712   2 385 509

All shares are duly authorized and fully paid in.

Dividends are paid out as and when declared equally on all shares, excluding treasury shares. The information concerning payments per share to the shareholders is disclosed in the notes to the financial statements of Clariant Ltd.

In accordance with Article 5 of the company’s Articles of Incorporation, no limitations exist with regard to the registration of shares which are acquired in one’s own name and on one’s own account. Special rules exist for nominees.

In accordance with Article 13 of the company’s Articles of Incorporation, each share has the right to one vote.

Distribution from share capital to shareholders

Distribution from share capital to shareholders

On 7 April 2021 the Annual General Meeting of Clariant AG approved a distribution through capital reduction by way of a par value reduction of the par value from CHF 3.70 to CHF 3.00 per registered share. The payout reduced the share capital by CHF 232 million.

Significant shareholders of 3% or more of total share capital

Significant shareholders of 3 % or more of total share capital

Based on the notifications received by Clariant and published by SIX Exchange Regulation, as at 31 December 2021, the following shareholders held more than 3 % of voting rights in Clariant Ltd:

Shareholders   Voting rights
SABIC International Holdings B.V., Sittard, The Netherlands, controlled by the Public Investment Fund of Saudi Arabia (PIF), Riyadh, Kingdom of Saudi Arabia   32.35 % 1
BlackRock Inc., New York, United States   3.80 %
Blue Beteiligungsgesellschaft mbH, Am Holzmaierfeld, 82064 Strasslach-Dingharting, Germany, and Maple Beteiligungsgesellschaft mbH, Am Holzmaierfeld, 82057 Icking, Germany 2   3.49 %
PSquared Master SICAV Ltd, on behalf of its subfund Valetta, Malta Leveraged Event Fund LP, Grand Cayman, Cayman Islands, controlled by Patrick Schmitz-Morkramer, Zurich, Switzerland, and Patrick Bierbaum, Zurich, Switzerland   3.035 %
1 SABIC acquired 24.99 % of the shares of Clariant Ltd on 17 September 2018, and increased its participation by 6.51 % to 31.5 % on 9 September 2020. SABIC has not changed its participation of 31.5 % since then. The difference between this figure (i.e. 31.5 %) and the abovementioned 32.35 % corresponds to the amount of treasury shares held by Clariant Ltd as of 31 December 2021, which have to be aggregated to the shares held by SABIC solely for regulatory disclosure purposes due to the Governance Agreement entered into by SABIC and Clariant on 17 September 2018.
2 According to a disclosure notification published on 18 December 2018, a group consisting of Konstantin Winterstein, 80333 Munich, Germany, and Elisabeth Prinzessin zu Sayn-Wittgenstein, 80333 Munich, Germany, was formed.

Disclosure notifications during the financial year 2021 reported to the Stock Exchange Disclosure Office pursuant to Art. 120 of the Financial Markets Infrastructure Act (FMIA) as well as further information in relation to disclosure notifications can be found on the SIX Swiss Exchange reporting platform: www.six-exchange-regulation.com/en/home/publications/significant-shareholders.html

On 31 December 2020, the following shareholders held a participation of 3 % or more of the total share capital: SABIC International Holdings B.V., Sittard, The Netherlands, controlled by the Public Investment Fund of Saudi Arabia (PIF), Riyadh, Kingdom of Saudi Arabia: 32.22 %; APG Asset Management N.V., Amsterdam, Netherlands: 5.01 %; BlackRock Inc., New York, United States: 3.8 %; Blue Beteiligungsgesellschaft mbH, Am Holzmaierfeld, 82064 Grossdingharting (Germany), and Maple Beteiligungsgesellschaft mbH, Am Holzmaierfeld, 82064 Gross­dingharting (Germany): 3.49 %.

On 31 December 2021, Clariant AG itself held 2 822 712 shares in treasury, corresponding to 0.85 % of the share capital.

Noncontrolling interests

Noncontrolling interests

At 31 December 2021, noncontrolling interests reported are primarily made up of those of the five following companies. They amount to more than 94.4 % of the minority shares reported:

Clariant Huajin Catalysts (Panjin) Ltd, reported sales in the amount of CHF 28 million in the reporting period and total assets in the amount of CHF 52 million as per 31 December 2021. The noncontrolling interests of 40 % of the shares outstanding are held by Northern Huajin Chemical Industry Group Co. Ltd.

Clariant Chemicals (India) Ltd reported sales in the amount of CHF 101 million in the reporting period and CHF 86 million of total assets as per 31 December 2021. The noncontrolling interests of 49 % of the shares outstanding are traded on the Bombay Stock Exchange (BSE) in Mumbai.

Clariant Catalysts (Japan) K.K. reported sales in the amount of CHF 157 million in the reporting period and CHF 84 million of total assets as per 31 December 2021. The noncontrolling interests of 38.6 % of the shares outstanding are held by Nissan Chemicals Industries Ltd.

Süd-Chemie India Ltd (SCIL) reported sales in the amount of CHF 208 million in the reporting period and total assets of CHF 219 million as per 31 December 2021, thereof current assets of CHF 137 million and noncurrent assets of CHF 82 million. Total liabilities amounted to CHF 32 million, thereof current liabilities of CHF 29 million and noncurrent liabilities of CHF 3 million. As per 31 December 2021, total equity of Süd-Chemie India Ltd (SCIL) amounted to CHF 187 million. The noncontrolling interests of 50 % of the shares outstanding are owned by private shareholders in India.

Clariant IGL Specialty Chemicals, acquired on 1 July 2021, reported sales in the amount of CHF 71 million in the reporting period since the time of the acquisition and total assets of CHF 156 million as per 31 December 2021, thereof current assets of CHF 51 million and noncurrents assets of CHF 105 million. Total liabilities amounted to CHF 70 million, thereof current liabilities of CHF 45 million and noncurrent liabilities of CHF 25 million. The noncontrolling interests of 49 % of the shares outstanding are owned by the India-based IGL group.

18. Noncurrent financial debts

18. Noncurrent financial debts

in CHF m   Interest rate in %   Term   Notional amount   Net amount 31.12.2021   Net amount 31.12.2020
Certificate of indebtedness   0.779   2016-2021   55 EUR m     60
Certificate of indebtedness   3 m LIBOR +1.5   2016-2021   166 USD m     146
Certificate of indebtedness   2.618   2016-2021   111 USD m     97
Straight bond   3.500   2012-2022   175 CHF m   175   175
Certificate of indebtedness   mixed   2020-2022   115 EUR m   118   124
Certificate of indebtedness   3 m LIBOR +1.5   2020-2022   37 CHF m     37
Certificate of indebtedness   mixed   2015-2023   150 EUR m   155   161
Certificate of indebtedness   6 m EURIBOR +1.1   2016-2023   13 EUR m   13   14
Certificate of indebtedness   1.137   2016-2023   27 EUR m   27   29
Certificate of indebtedness   1.501   2016-2023   73 EUR m   76   79
Straight bond   2.125   2014-2024   160 CHF m   160   160
Certificate of indebtedness   1.194   2018-2024   92 EUR m   95   99
Certificate of indebtedness   1.548   2018-2025   102 EUR m   106   112
Certificate of indebtedness   6 m EURIBOR +0.95   2018-2025   54 EUR m   55   58
Certificate of indebtedness   6m EURIBOR +1.9   2020-2025   83 EUR m     89
Certificate of indebtedness   3 m LIBOR +1.8   2020-2025   25 CHF m     25
Certificate of indebtedness   2.010   2016-2026   15 EUR m   15   16
Straight bond   1.125   2019-2026   200 CHF m   200   200
Certificate of indebtedness   2.087   2018-2028   17 EUR m   18   18
Total straight bonds and certificates of indebtedness               1 213   1 699
Liabilities to banks and other financial institutions               38   28
Subtotal               1 251   1 727
Less: current portion (see note 23)               –293   –303
Total               958   1 424
                     
Breakdown by maturity                    
            2022     358
            2023   271   283
            2024   283   261
            2025   170  
            after 2025 (2020: after 2024)   234   522
Total               958   1 424
Breakdown by currency           EUR   561   799
            CHF   374   603
            Others   23   22
Total               958   1 424
Fair value comparison (including current portion)                    
Straight bonds               554   561
Certificates of indebtedness               678   1 164
Others               38   28
Total               1 270   1 753
Total net book value of assets pledged as collateral for financial debts                
Total collateralized financial debts                

On 23 August 2021, two certificates of indebtedness issued in 2020 were repaid early (CHF 37 million, original maturity 2022; CHF 25 million, original maturity 2025).

On 22 November 2021, the certificate of indebtedness issued in 2020 with a notional amount of EUR 83 million was repaid early (original maturity 2025).

On 22 May 2020, Clariant issued five certificates of indebtedness with a total amount of EUR 197.5 million and CHF 62.5 million. These certificates have terms of 2 years, expiring on 23 May 2022 (EUR 114.5 million and CHF 37.5 million), and 5 years, expiring on 22 May 2025 (EUR 83 million and CHF 25 million). While a tranche of CHF 62.5 million has a variable interest of 3 months CHF LIBOR plus a spread ranging between 1.50 % and 1.80 % and a tranche in the amount of EUR 110.5 million has a variable interest rate of 6 months EURIBOR plus a spread ranging between 1.45 % and 1.90 %, the fixed interest rate is 1.45 % for a tranche in the amount of EUR 87 million.

Valuation. Noncurrent financial debt is recognized initially at fair value, net of transaction costs incurred. Financial debt is subsequently stated at amortized cost. There are no long-term financial liabilities valued at fair value through profit and loss.

Fair values of straight bonds are determined by quoted market prices (Level 1 in the fair value hierarchy).

Certificates of indebtedness and other financial debts are recorded at notional amounts, which are a reasonable approximation of the fair values.

Covenants. For the covenants, please refer to note 3.1.3 Financial risk factors.

Exposure of the Group’s borrowings to interest rate changes

Exposure of the Group’s borrowings to interest rate changes

  • Bonds: the interest rates of all bonds are fixed.
  • Certificates of indebtedness: the major part of the existing certificates of indebtedness has a fixed coupon.
  • Liabilities to banks and other financial institutions, mostly consisting of bank loans with fixed interest rates mainly.

Collateral. In 2021, no assets were pledged as collateral (2020: no assets were pledged as collateral).

19. Reconciliation of net debt

19. Reconciliation of net debt

in CHF m   01.01.2021   Effects of business acquisitions   Movements in cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary   Exchange rate differences   Other noncash movements   31.12.2021   Reclassified to held for sale (see note 25)   Total as reported in balance sheet
Cash and cash equivalents   737       –318   –4       415     415
Short-term deposits   267       –255           12     12
Financial instruments with positive fair values   5       –4           1     1
Total cash and liquid investments   1 009     –577   –4     428     428
Noncurrent financial debt   –1 424   –24   150   47   293   –958     –958
Current financial debt   –411     12   –24   –293   –716   7   –709
Lease liabilities   –214     70   3   –148   –289   7   –282
Borrowings and other financial liabilities   –2 049   –24   232   26   –148   –1 963   14   –1 949
Net debt   –1 040   –24   –345   22   –148   –1 535   14   –1 521
in CHF m   01.01.2020   Movements from the disposal   Movements in cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary   Exchange rate differences   Other noncash movements   31.12.2020   Reclassified to held for sale (see note 25)   Total as reported in balance sheet
Cash and cash equivalents   638       126   –27     737     737
Short-term deposits   304       –34   –3     267     267
Financial instruments with positive fair values   4       1       5     5
Total cash and liquid investments   946     93   –30     1 009     1 009
Noncurrent financial debt   –1 485       –288   46   303   –1 424     –1 424
Current financial debt   –587   6   472   1   –303   –411   13   –398
Lease liabilities   –246   23   66   11   –68   –214   14   –200
Borrowings and other financial liabilities   –2 318   29   250   58   –68   –2 049   27   –2 022
Net debt   –1 372   29   343   28   –68   –1 040   27   –1 013
20. Retirement benefit obligations

20. Retirement benefit obligations

Apart from the legally required social security schemes, the Group has numerous independent retirement benefit plans. As a principle, assets are held externally. For certain Group companies, however, no independent assets exist for the retirement benefit and other noncurrent employee benefit obligations. In these cases, the related liability is included in the balance sheet as part of the noncurrent liabilities.

Defined benefit post-employment plans. Defined benefit pensions and termination plans cover the majority of the Group’s employees. Future obligations and the corresponding assets of those plans considered as defined benefit plans under IAS 19 are reappraised annually and reassessed at least every three years by independent actuaries. Assets are valued at fair value.

Pension assets for funded defined benefit pension plans are managed according to local rules and legislation in each country.

The actual asset allocation is determined by current and expected economic and market conditions and in consideration of specific asset class risks in the risk profile. For this purpose, Asset Liability Matching studies are conducted by third party experts on a regular basis to ensure that investment strategies for pension assets are in line with the structure of the plan members of the pension plan concerned.

In all countries with funded defined benefit plans, the body governing the investment policy is constituted in accordance with local legal requirements. To the extent legally permitted, Clariant Corporate exercises influence to ensure that the investment policy is set in a way to serve best the needs of the retirement benefit plan and its members.

The largest defined benefit plans are operated in Switzerland, the United Kingdom, the United States, and Germany. These plans make up 95.2 % of the total defined benefit obligation.

The most important German plan is unfunded and covers the supplementary pension liabilities for plan members whose salaries exceed the level of the German mandatory social security coverage. Contributions are made primarily by the employer and vary depending on the salary level of the plan members. Benefits are paid out as annual pensions amounting to 20 % of total contributions. Lump-sum payments to employees are possible to the extent of the voluntary contributions. For employees having joined or joining in 2011 and later, there exists a funded retirement benefit plan. Contributions are primarily paid into the plan by the employer and vary depending on the income of the individual plan member. Employees contribute to the plan up to 2 % of pensionable earnings on a voluntary basis, to which the employer contributes an equal amount on top of the regular contributions. Pensions paid by this plan are principally based on the return on plan assets (contributions paid in plus interest), apart from a minimal interest. In addition, there exists a smaller, similarly structured funded defined benefit plan for former employees of the Süd-Chemie group, acquired in 2011. All other pension liabilities regarding German staff members are covered by a funded multi-employer plan, which is accounted for as a defined contribution plan.

The defined benefit obligation in the United Kingdom is a funded plan covering the retirement benefit liabilities of UK employees who joined the company before 31 December 2001 and was closed to further accruals in April 2016. All staff members are now covered by a defined contribution plan. The defined benefit pension plan is fully funded according to legal requirements.

In the United States, Clariant operates a funded defined benefit pension plan covering the pension liabilities of employees who joined the company before 31 December 2000. Contributions are paid by the employer exclusively. Benefits are paid out as lifetime pensions determined on the basis of a final/career average calculation. Staff members who joined on 1 January 2001 or later are covered by a defined contribution plan. For members of Management whose annual salaries exceed the amount of CHF 275 000, an additional pension scheme is in place in the form of an unfunded defined benefit obligation, which covers the part exceeding this amount.

US employees transferred to Clariant with the Hoechst Specialty Chemicals business remain insured with Hoechst for their pension claims incurred prior to 30 June 1997.

In Switzerland, Clariant operates a funded defined benefit pension plan that covers the pension liabilities of all employees of the Swiss Clariant companies up to a salary level of CHF 200 000.

Both the employer and the employees contribute to the plan, the employer paying two-thirds of the total contributions. The pension plan provides lifetime pensions determined based on cumulative savings of the individual plan member and converted into an annual pension at a fixed conversion rate. Lump-sum payments are possible at up to 100 percent of the total individual cumulative savings.

The Swiss retirement benefit plan is marked by a shrinking operating basis and, as a result, an increasing share of retired members.

For members of Management whose annual salaries exceed the amount of CHF 200 000, an additional pension scheme is in place in the form of a funded defined benefit obligation. Any shortfalls in funded provisions for pension commitments to members of the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary are accounted for as an unfunded defined benefit obligation.

Mortality tables

Mortality tables

The following mortality tables were used to determine the defined pension obligation of the most important pension plans:

  • Switzerland: BVG 2020 generation table
  • Germany: Richttafeln 2018G by Prof. Dr. Klaus Heubeck
  • UK: SAPS S2 series amount tables (base table), CMI Model (2019) (future improvements)
  • USA: Pri 2012 mortality table with projection scale, MP-2020

Post-employment medical benefits. The Group operates a number of post-employment medical benefit schemes in the United States and France. The method of accounting for the liabilities associated with these plans is largely equal to the one used for defined benefit pension schemes. These plans are not externally funded, but are recognized as provisions in the balance sheets of the Group companies concerned.

Expenses for net benefits are recorded in the same line and function in which the personnel costs are recorded.

Changes in the present value of defined benefit obligations are as follows:

in CHF m   Pension plans (funded and unfunded)   Post-employment medical benefits (unfunded)
    2021   2020   2021   2020
As per 1 January   2 497   2 686   48   75
Current service cost   28   30    
Past service cost/gain including curtailments   11   4    
Gain/loss on settlements   –2   –2    
Interest costs on obligation   22   29   1   2
Contributions to plan by employees   14   9    
Benefits paid out to personnel in reporting period   –134   –119   –3   –3
Remeasurements:                
Actuarial gain/loss arising from changes in demographic assumptions   –39     –1   –5
Actuarial gain/loss arising from changes in financial assumptions   –45   75   –1   5
Actuarial gain/loss due to experience adjustments   57   –28   1   –9
Liabilities acquired in a business combination   1      
Effect of disposals     –126     –13
Exchange rate differences   –15   –61     –4
At 31 December   2 395   2 497   45   48

Changes in the fair value of plan assets are as follows:

in CHF m   2021   2020
As per 1 January   1 932   1 981
Interest income on plan assets   15   20
Contributions to plan by employees   15   9
Contributions to plan by employer   37   30
Benefits paid out to personnel in reporting period   –109   –93
Remeasurements:        
Return on plan assets (excluding amount included in interest expense)   152   124
Effect of disposals     –85
Exchange rate differences   11   –54
At 31 December   2 053   1 932

As at 31 December 2021 and 2020, the pension plan assets did not include any directly held registered shares or bonds issued by Clariant Ltd.

The amounts recognized in the balance sheets are as follows:

  Defined benefit pension plans   Post-employment medical benefits   Total
in CHF m   31.12.2021   31.12.2020   31.12.2021   31.12.2020   31.12.2021   31.12.2020
Present value of funded obligations   –1 815   –1 894       –1 815   –1 894
Fair value of plan assets   2 053   1 932       2 053   1 932
Overfunding/Deficit   238   38       238   38
Present value of unfunded obligations   –580   –603   –45   –48   –625   –651
Limitation on recognition of net asset 1   –166         –166  
Net liabilities, total   –508   –565   –45   –48   –553   –613
Reclassified to held for sale (see note 25)   36   38     2   36   40
Net liabilities in the balance sheet   –472   –527   –45   –46   –517   –573
1 Limitation on recognition of net asset pertain to Swiss pension plan

Thereof recognized in:

in CHF m   31.12.2021   31.12.2020   31.12.2021   31.12.2020   31.12.2021   31.12.2020
Retirement benefit obligations   –585   –622   –45   –48   –630   –670
Reclassified to held for sale (see note 25)   37   38     2   37   40
Retirement benefit obligations in the balance sheet   –548   –584   –45   –46   –593   –630
Prepaid pension assets   77   57       77   57
Reclassified to held for sale (see note 25)   –1         –1  
Prepaid pension assets in the balance sheet   76   57       76   57
Net liabilities in the balance sheet for defined benefit plans   –472   –527   –45   –46   –517   –573

The amounts recognized in the income statement and in other comprehensive income are as follows:

  Defined benefit pension plans   Post-employment medical benefits   Total
in CHF m   2021   2020   2021   2020   2021   2020
Current service cost   –28   –30       –28   –30
Net interest cost   –7   –8   –1   –2   –8   –10
Past service cost/gain including curtailments   –11   –4       –11   –4
Gain/loss on settlements   2   2       2   2
Components of defined benefit expense reported in the income statement   –44   –40   –1   –2   –45   –42
                         
in CHF m                        
Actuarial gain/loss arising from changes in demographic assumptions   39     1   5   40   5
Actuarial gain/loss arising from changes in financial assumptions   45   –75   1   –5   46   –80
Actuarial gain/loss due to experience adjustments   –57   28   –1   9   –58   37
Return on plan assets (excluding amount included in net interest expense)   152   124       152   124
Limitation on recognition of net asset   –166         –166  
Components of defined benefit gain reported in other comprehensive income   13   77   1   9   14   86
                         
Total defined benefit expense/gain   –31   37     7   –31   44

The fair value of the plan assets is split into the major assets categories as follows:

in CHF m   31.12.2021   31.12.2020
Equities   427   402
thereof based on quoted market prices   423   399
Bonds   614   614
thereof based on quoted market prices   423   416
Cash   82   56
thereof based on quoted market prices   82   56
Property   298   283
thereof based on quoted market prices   215   204
Alternative investments   632   577
thereof based on quoted market prices   220   202
Total fair value of plan assets   2 053   1 932

The principal actuarial assumptions at the balance sheet dates in percent are as follows:

      2021 in %   2020 in %
      Group   Most important countries   Group   Most important countries
        Weighted average   Switzerland   United Kingdom   United States   Germany   Weighted average   Switzerland   United Kingdom   United States   Germany
Discount rate       1.1   0.2   1.8   2.6   1.2   0.9   0.1   1.4   2.3   1.0
Future salary increases       1.7   1.5     3.5   2.5   1.8   1.5     3.5   2.5
Long-term increase in health care costs       5.1       6.0     5.1       6.1  
Current average life expectancy for a 65-year-old male   in years   18   23   21   21   20   19   23   22   20   20
Current average life expectancy for a 65-year-old female   in years   20   25   24   23   24   22   25   24   22   24

A one-percentage-point change in health care cost trend rates would have the following effects on the obligation for post-employment medical benefits:

2021 in CHF m   One percentage point increase   One percentage point decrease
Effect on the aggregate of the service cost and interest cost   1   –1
Effect on defined benefit obligation   4   –3
2020 in CHF m   One percentage point increase   One percentage point decrease
Effect on the aggregate of the service cost and interest cost   1   –1
Effect on defined benefit obligation   5   –2

A 25-basis-point change in discount rate would have the following effects on the obligation for pension plans:

in CHF m   25 basis point increase       25 basis point decrease    
    2021   2020   2021   2020
Effect on defined benefit obligation   –81   –83   86   86

If life expectancy increased by one year, the defined benefit obligation would increase by CHF 96 million (2020: CHF 106 million).

Defined contribution post-employment plans. In 2021, CHF 22 million were charged to the income statement as contributions to defined contribution plans (2020: CHF 24 million).

In Germany, approximately 4 300 Clariant employees are insured in a defined benefit plan which is a multi-employer plan and as such is accounted for as a defined contribution plan. The reason for this accounting practice is that the plan exposes the participating Clariant companies to actuarial risks associated with the current and former employees of other companies which are members of the same pension plan. There is no consistent or reliable basis for allocating the obligation, plan assets and cost to individual companies participating in the plan.

Based on the statutory actuarial calculation of 2021, the pension fund’s obligations are fully funded. Also, for 2022 it is anticipated that the pension plan liabilities are covered by the respective assets.

In the case where the multi-employer plan faces a situation in which the pension plan liabilities exceed the assets, this can be remedied either by increasing the employer’s contributions to the pension plan or by reducing the benefits paid out to the entitled parties. In the case of a reduction of the benefits, this must be compensated by the employer according to German legislation. If the pension plan were unwound, the remaining funds would be distributed among the plan members. In case there are no plan members left, the remaining funds would be transferred to social institutions.

If Clariant withdrew from the pension fund, all rights and obligations of the employer against the pension plan would remain in force as long as the pension plan continues to render pension services to the Group’s plan members. Based on the number of plan members (active and passive), Clariant’s share in the pension plan amounts to approximately 7 %.

Clariant’s contribution to this pension plan amounted to CHF 16 million in 2021 (CHF 17 million in 2020) and is expected to be CHF 13 million in 2022.

The multi-employer plan originates in the pension plan scheme of the German companies of the former Hoechst Group, to which a part of the activities of Clariant pertained until 1997. Several of the companies that were formerly part of the Hoechst Group continue to participate in this multi-employer plan.

in CHF m   Pension plans   Post-employment medical benefits
    2021   2020   2021   2020
Clariant Group regular and supplemental contributions (employer's contributions):                
Actual contributions in 2020       30      
Actual contributions in 2021 (2020: estimated)   37   25    
Estimated contributions in 2022   19   25    
Estimated contributions in 2023   19   25    
Estimated contributions in 2024   19   25    
Estimated contributions in 2025   19   22    
Estimated contributions in 2026   19          
                 
Payments to beneficiaries:                
Actual payments in 2020       –119       –3
Actual payments in 2021 (2020: estimated)   –134   –113   –3   –3
Estimated payments in 2022   –120   –110   –3   –3
Estimated payments in 2023   –110   –109   –3   –3
Estimated payments in 2024   –112   –110   –3   –4
Estimated payments in 2025   –113   –112   –3   –3
Estimated payments in 2026   –113       –3    
                 
Allocation of defined benefit obligation to plan members (in CHF m):                
Active members   605   636   10   13
Deferred members   317   334   5   2
Retired members   1 473   1 527   30   33
Total funded and unfunded obligations at 31 December   2 395   2 497   45   48
                 
Weighted average duration of the defined benefit obligation at the end of reporting period (in years):                
At 31 December   14.4   14.1   9.8   10.0
21. Movements in provisions

21. Movements in provisions

in CHF m   Environmental provisions   Personnel provisions   Restructuring provisions   Other provisions   Total provisions 2021   Total provisions 2020 1
As per 1 January   108   137   119   116   480   557
Restatement (see Note 1.03)     –11   –22   –6   –39   –9
As per 1 January restated   108   126   97   110   441   548
Additions   27   112   26   47   212   441
Effect of business combinations (see note 27)             1
Disposals            
Reclassified to/from held for sale             –5
Amounts used   –12   –118   –38   –33   –201   –380
Unused amounts reversed   –4   –9   –15   –40   –68   –142
Changes due to the passage of time and changes in discount rates   1         1   3
Exchange rate differences   –3   –2   –3   –2   –10   –25
At 31 December   117   109   67   82   375   441
                         
Of which                        
– Current portion   26   92   42   63   223   244
– Noncurrent portion   91   17   25   19   152   197
Total provisions   117   109   67   82   375   441
                         
Expected outflow of resources                        
Within 1 year   26   92   42   63   223   244
Between 1 and 3 years   29   12   24   12   77   74
Between 3 and 5 years   19   1   1   2   23   44
Over 5 years   43   4     5   52   79
Total provisions   117   109   67   82   375   441
1 Restated, see note 1.03

Environmental provisions. Provisions for environmental liabilities are made when there is a legal or constructive obligation for the Group that will result in an outflow of economic resources. It is difficult to estimate the action required by Clariant in the future to correct the effects on the environment of prior disposals 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 the costs to fully clean and refurbish contaminated sites and to treat and contain contamination at sites where the environmental exposure is less severe. The Group’s future remediation expenses are affected by a number of uncertainties which include, but are not limited to, the method and extent of remediation and the percentage of material attributable to Clariant at the remediation sites relative to that attributable to other parties.

The environmental provisions reported in the balance sheet concern a number of different obligations, mainly in Germany, Brazil, the United States, and Switzerland.

Provisions are made for remedial work where there is an obligation to remedy environmental damage, as well as for containment work where required by environmental regulations. All provisions relate to environmental liabilities arising in connection with activities that occurred prior to the date when Clariant took control of the relevant site. At each balance sheet date, Clariant critically reviews all provisions and makes adjustments where required.

Personnel provisions. Personnel provisions include holiday entitlements, compensated absences such as sabbatical leave, jubilee, annual leave or other long-service benefits, profit sharing, and bonuses. Such provisions are established in proportion to the services rendered by the employee concerned.

Restructuring provisions. Restructuring provisions are established where there is a legal or constructive obligation for the Group that will result in the outflow of economic resources. The term restructuring refers to the activities that have as a consequence staff redundancies and the shutdown of production lines or entire sites. When the Group has approved a formal plan and has either started to implement the plan or announced its main features to the parties concerned and to the public, a restructuring provision is created. The restructuring provisions end of 2021 concern head count reductions in various countries, with the largest amounts incurred in Germany, Switzerland, and China. For further information regarding restructuring measures, refer to note 28.

Other provisions. Additionally, other provisions include provisions for obligations relating to tax (other than income tax) and legal cases and other items in various countries for which the amount can be reliably estimated.

An antitrust investigation initiated by the European Commission in 2017 against Clariant and some of its competitors was closed and settled with a payment of CHF 156 million in December 2020. A provision of CHF 50 million was reversed at the same time.

All noncurrent provisions are discounted to reflect the time value of money, where material. Discount rates reflect current market assessments of the time value of money and the risk specific to the provisions in the respective countries.

22. Trade payables and other liabilities

22. Trade payables and other liabilities

in CHF m   31.12.2021   31.12.2020 1
Trade payables   688   539
Contract liabilities   91   68
Payables to associates and joint ventures   55   51
Accruals   156   161
Other liabilities   190   187
Total trade payables and other liabilities   1 180   1 006
Reclassified to noncurrent liabilities   –58   –60
Reclassified to held for sale (see note 25)   –137   –132
Total as reported in the balance sheet   985   814
1 Restated, see note 1.03

The amount recognized for trade payables is equal to their fair value.

Contract liabilities are short-term and will be recognized as revenues in the next reporting period.

23. Current financial debts

23. Current financial debts

in CHF m   31.12.2021   31.12.2020
Banks and other financial institutions   423   108
Current portion of noncurrent financial debts (see note 18)   293   303
Total   716   411
Reclassified to held for sale (see note 25)   –7   –13
Total current financial debts as reported in the balance sheet   709   398
Breakdown by maturity:        
in CHF m   31.12.2021   31.12.2020
Up to three months after the balance sheet date   364   98
Three to six months after the balance sheet date   143   1
Six to twelve months after the balance sheet date   209   312
Total   716   411
Reclassified to held for sale (see note 25)   –7   –13
Total current financial debts as reported in the balance sheet   709   398

A bond issued in 2012 with a nominal value of CHF 175 million will mature in 2022 and was therefore reclassified to current financial debts.

Two certificates of indebtedness issued in 2020 with a nominal value of EUR 115 million will mature in 2022 and were therefore reclassified to current financial debts.

On 5 August 2021, certificates of indebtedness issued in 2016 in the amount of EUR 55 million (CHF 60 million) and USD 277 million (CHF 250 million) reached maturity and were repaid.

On 17 April 2020, the certificates of indebtedness issued in 2015 in the amount of EUR 150 million (CHF 162 million) reached maturity and were repaid. On 26 October 2020 certificates of indebtedness in the amount of EUR 212 million (CHF 229 million) reached maturity and were repaid.

Current financial debt is recognized initially at fair value, net of transaction costs incurred. Financial debt is subsequently stated at amortized cost. Except for derivatives, there are no current financial liabilities valued at fair value through profit and loss.

The fair value of financial debt at banks and other financial institutions approximates its carrying amount due to the short-term nature of these instruments.

24. Segment information

24. Segment information

In 2019, Clariant set out to rearrange its portfolio of business activities. In October 2019, Clariant sold its business line Healthcare Packaging, operated as a part of the Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary , to US-based Arsenal Capital Partners. In July 2020, the Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary was sold to the US-based group Avient. Business Unit PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary was sold in a post-balance sheet date transaction on 3 January 2022; see also notes 25 and 38. For these reasons, all these business units are reported as discontinued operations in the financial report (see also note 25 discontinued operations and assets held for sale).

As a result Clariant has grouped its remaining activities into three Business Areas (reportable segments): Care Chemicals (BU ICS), Catalysis (BU Catalysts), Natural Resources (BU Oil & Mining Services, BU Functional Minerals, BU Additives).

Intersegment transactions are entered into under the normal circumstances, terms, and conditions that would also be available to unrelated third parties.

Segment assets consist of property, plant, and equipment, goodwill, intangible assets, inventories, receivables, and investments in associates. They exclude deferred tax assets, financial assets, and operating cash. Segment liabilities comprise trade payables. They exclude items such as tax liabilities, provisions, pension liabilities, and corporate borrowings. Capital expenditure comprises additions to property, plant, and equipment, and intangibles.

SEGMENTS
in CHF m   Care Chemicals   Catalysis   Natural Resources   Corporate   Total Group
    2021   2020 2   2021   2020 2   2021   2020 2   2021   2020 2   2021   2020 2
Segment sales   1 716   1 423   907   879   1 790   1 581       4 413   3 883
Sales to other segments   –17   –12       –24   –11       –41   –23
Total sales from continuing operations   1 699   1 411   907   879   1 766   1 570       4 372   3 860
Operating expenses   –1 421   –1 205   –825   –783   –1 557   –1 442   –129   –113   –3 932   –3 543
Thereof:                                        
Income from associates and joint ventures   34   26     9   8   8   –1   –1   41   42
Gain/loss from disposals not qualifying as discontinued operations     12                 12
Restructuring, impairment, and transaction-related costs   –15   –15   2   –12   –3   –30   –37   –42   –53   –99
Reversal of provision for EU investigation                 50     50
Operating income   278   206   82   96   209   128   –129   –113   440   317
Net financial expenses and taxes                                   –148   –187
Net result from continuing operations                                   292   130
Result from discontinued operations                                   81   695
Net income                                   373   825
Segment assets   1 299   1 035   1 847   1 599   1 548   1 388       4 694   4 022
Segment liabilities   –239   –180   –192   –164   –259   –172       –690   –516
Net operating assets   1 060   855   1 655   1 435   1 289   1 216       4 004   3 506
Segment assets reported as assets held for sale       107   108     2         107   110
Corporate assets reported as assets held for sale               2   5   2   5
Segment assets of discontinued operations reported as assets held for sale                   719   683
Assets held for sale       107   108     2   2   5   828   798
Segment liabilities of discontinued operations reported as liabilities associated with assets held for sale                                   –247   –263
Liabilities directly associated with assets held for sale                                   –247   –263
Corporate assets without cash                           1 088   1 103   1 088   1 103
Corporate liabilities without financial liabilities                           –1 608   –1 715   –1 608   –1 715
Net debt (see note 19)                           –1 521   –1 013   –1 521   –1 013
Total net assets   1 060   855   1 762   1 543   1 289   1 218   –2 039   –1 620   2 544   2 416
Thereof:                                        
Investments in PPE and intangibles for the period   66   53   196   141   56   56   15   24   333   274
Investments in associates and joint ventures at the end of the period   85   85       121   63   5   5   211   153
Reconciliation of key figures                                        
Operating income   278   206   82   96   209   128   –129   –113   440   317
Add: systematic depreciation of PPE   57   52   50   50   49   45   14   15   170   162
Add: impairment         3   1   7     1   1   11
Add: depreciation of RoU assets   9   9   8   6   20   19   17   16   54   50
Add: amortization of intangible assets   7   7   12   14   21   25   3   11   43   57
EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary 1   351   274   152   169   300   224   –95   –70   708   597
Add: restructuring, impairment, and transaction-related costs   15   15   –2   12   3   30   37   42   53   99
Add: Reversal of provision for EU investigation                               –50     –50
Less: impairment         –3   –1   –7     –1   –1   –11
Less: gain/loss from disposals not qualifying as discontinued operations     –12                 –12
Adjusted EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary   366   277   150   178   302   247   –58   –79   760   623
Operating income   278   206   82   96   209   128   –129   –113   440   317
Add: restructuring, impairment and transaction-related costs   15   15   –2   12   3   30   37   42   53   99
Add: Reversal of provision for EU investigation                             –50     –50
Less: gain/loss from disposals not qualifying as discontinued operations     –12                 –12
Adjusted operating income   293   209   80   108   212   158   –92   –121   493   354
1 EBITDAEBITDAEarnings before interest, taxes, depreciation, and amortization.View entire glossary is earnings before interest, tax, depreciation and amortization.
2 Restated, see note 1.03
Reconciliation of segment assets to total assets
in CHF m   31.12.2021   31.12.2020 1
Segment assets   4 694   4 022
Segment assets reported as assets held for sale   107   110
Corporate assets reported as assets held for sale   2   5
Segment assets of discontinued operations reported as assets held for sale   719   683
Corporate assets without cash   1 088   1 103
Cash and cash equivalents   415   737
Short-term deposits   12   267
Financial instruments with positive fair values   1   5
Total Assets   7 038   6 932
1 Restated, see note 1.03.
in CHF m   Sales 1   Noncurrent assets 2
    2021   2020   31.12.2021   31.12.2020
EMEA   1 888   1 572   1 975   1 854
of which Germany   533   432   1 122   1 138
of which Switzerland   28   24   355   378
of which MEA   320   274   22   21
North America   692   703   903   895
of which USA   649   656   889   882
Latin America   487   457   171   140
of which Brazil   227   191   101   75
Asia-Pacific   1 305   1 128   711   536
of which China   479   402   291   216
of which India   262   168   232   123
Total   4 372   3 860   3 760   3 425
1 Allocated by region of third-party sale's destination. Continuing operations
2 Noncurrent assets excluding deferred tax assets and pension plan assets.

All of the Group’s segments generate their revenues to the largest extent from the sale of products. These come in such a great variety that a meaningful grouping below the segment information is not possible.

Revenue from services recognized in 2021 amounted to CHF 48 million (2020: CHF 83 million) and mostly were incurred in Business AreaBusiness AreaFor the financial reporting, Clariant grouped its businesses in three core Business Areas: Care Chemicals, Catalysis, and Natural Resources.View entire glossary Natural Resources.

For a description of the business units see note 1.26.

25. Discontinued operations and assets held for sale

25. Discontinued operations and assets held for sale

In 2019, Clariant announced its intention to sell the Business Units PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary and MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary and the Business Line Healthcare Packaging, which operated as a part of the Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary . As a result, these activities were reclassified to discontinued operations in June 2019. Income and expenses of the activities concerned have been reclassified to »Discontinued operations« in the consolidated income statement, and the assets and liabilities pertaining to these activities have been reclassified to »Assets held for sale« and »Liabilities directly associated with assets held for sale« in the consolidated balance sheet, according to IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 5, Noncurrent assets held for sale and discontinued operations.

On 31 October 2019, Clariant sold its Healthcare Packaging business to Arsenal Capital Partners, a private equity firm located in New York, USA. The final total consideration of the sale amounted to CHF 312 million including CHF 2 million received in 2020 and the after-tax gain to CHF 54 million.

On 1 July 2020, Clariant sold the Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary to the US-based group Avient. The total consideration of the sale net of cash transferred amounted to CHF 1 308 million and the after-tax gain to CHF 723 million.

In a transaction after the balance sheet date, Clariant sold the Business Unit PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary to US-based SK Capital Partners and the German Heubach Group on 3 January 2022. See also note 38.

One shareholding in an associate accounted for at equity in Germany, which was previously classified as »held for sale«, was reclassified to investments in associates and joint ventures in Q4 2021. Income from associates and joint ventures was adjusted accordingly for the reporting period. As the impact of the reclassification on the numbers of the prior year was immaterial, no restatement of the financials of 2020 was made.

For a description of the business units please refer to note 1.26.

Other assets held for sale

Other assets held for sale

An amount of CHF 2 million relates to plant, and equipment held for sale in Italy and in the US (2020: CHF 7 million), and CHF 107 million (2020: CHF 108 million) to an investement in an associate in the US.

During 2021, property held for sale in Italy and in the US partially have been sold.

DISCONTINUED OPERATIONS
in CHF m   Plastics & Coatings (discontinued) 1   Corporate   Total discontinued operations
    2021   2020 2   2021   2020 2   2021   2020 2
Sales   912   1 330       912   1 330
Operating expenses   –802   –1 189   –21   –62   –823   –1 251
Income from associates and joint ventures   28   21       28   21
Restructuring (see note 28)   2   –23   –5   –60   –3   –83
Operating result   140   139   –26   –122   114   17
Financial result                   2   –8
Result from discontinued operations before taxes                   116   9
Taxes                   –35   –40
Result from discontinued operations after taxes                   81   –31
Gain on the disposal of discontinued operations       768             768
Taxes (current and deferred)       –42               –42
Net result from discontinued operations                   81   695
                         
Currency translation differences of discontinued operations                   –9   50
Other items                   4   20
Other comprehensive income/loss from discontinued operations           –5   70
                         
Operating cash flows   –17   154   –9   –62   –26   92
thereof: payments for restructuring   –9   –7           –9   –7
Investing cash flows   –27   –25           –27   –25
Total cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary   –44   129   –9   –62   –53   67
                         
Cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary from disposals:                        
Gross proceeds     1 450             1 450
Less cash and cash equivalents transferred     –140             –140
Less refund transaction cost to buyer     –5             –5
Net proceeds from disposal     1 305         1 305
                         
Net assets held for sale:                        
Property, plant, and equipment   192   174           192   174
Right-of-use assets   12   17           12   17
Intangible assets   30   31           30   31
Investments in associates and joint ventures   32   84           32   84
Deferred and income tax assets   22   29           22   29
Prepaid pension assets   1             1  
Inventories   234   186           234   186
Trade receivables   148   127           148   127
Other current assets   48   35           48   35
Total assets held for sale   719   683       719   683
                         
Trade payables and other liabilities   –137   –132           –137   –132
Retirement benefit obligations   –37   –40           –37   –40
Provisions   –59   –64           –59   –64
Lease liabilities   –7   –14           –7   –14
Current financial debts   –7   –13           –7   –13
Total liabilities directly associated with assets held for sale   –247   –263       –247   –263
                         
Total net assets held for sale   472   420       472   420
1 Including the business unit PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary for 12 months in both 2021 and 2020 and the business unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary for 6 months in 2020.
2 Restated, see note 1.03

Cumulative exchange rate differences recognized in equity for discontinued operations amounted to CHF 93 million on 31 December 2021 (2020: CHF 92 million).

Masterbatches

Masterbatches

In July 2020, Clariant sold the Business Unit MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary to the US-based group Avient. The result of this disposal was as follows:

in CHF m   2020
Purchase price consideration   1 448
Less cash and cash equivalents transferred   –140
Total consideration for the sale   1 308
Net assets sold, including disposal-related expenses   –411
Gain on the disposal from discontinued operations   897
Effect of the reclassification of foreign exchange differences related to the disposal of discontinued operations   –132
Gain on the disposal from discontinued operations before taxes   765
Taxes (current and deferred)   –42
Gain on the disposal from discontinued operations after taxes   723

The result from disposals in 2020 also comprises an additional payment in the amount of CHF 3 million resulting from the disposal of the Health Care Packaging business in 2019.

26. Disposals

26. Disposals

Activities not qualifying as discontinued operations

Activities not qualifying as discontinued operations

In this section, disposals of subsidiaries, associates, and activities are reported that do not qualify as discontinued operations in the sense of IFRSIFRSThe International Financial Reporting Standards (IFRS) are international accounting standards.View entire glossary 5. The following disposal took place in 2020:

On 7 August 2020, Clariant sold its sulfonation production in Santa Clara, Mexico. pertaining to the Business Unit ICS, for a net consideration of CHF 13 million and resulting in a gain of CHF 12 million to the Mexico-based company Stepan Mexico. S.A. de C.V.

The result from disposals not qualifying as discontinued operations is reported under »Selling, general and administrative costs« in the income statement.

27. Acquisitions

27. Acquisitions

Beraca Ingredientes Naturais S.A.

Beraca Ingredientes Naturais S.A.

On 25 October 2021, Clariant acquired the remainining 70 % of the shares of the Brazilian Personal Care company Beraca Ingredientes Naturais S.A. from the company’s founder-owners. The company is one of the foremost producers of natural ingredients for the Personal Care industry and is based in the Amazonas region. This acquisition pertains to the Business Unit Industrial & Consumer Care Services (ICS). Clariant has been holding 30 % of the shares since 2015 and is now a 100 % owner. The shareholding was previously accounted for at equity, and the transaction is treated as a step acquisition. Since the acquisition date, Beraca Ingredientes Naturais S.A. is fully consolidated in Clariant’s financial statements. The summary of the financial impact of consolidating the company in the accounts at the acquisition date, using the provisional fair values of identified assets and liabilities, is as reported below. As part of the accounting for the business combination, the 30 % shareholding previously held was revalued to fair value, which resulted in a one-time gain of CHF 9 million, recorded in Selling, general and administrative costs in the income statement. Goodwill incurred in the acquisition refers to expected cost and supply chain synergies and better market access.

The acquired intangible assets comprise mainly trademarks and developed technology.

in CHF m   2021
Cash consideration fo the acquisition in 2021   33
Less cash and cash equivalents received   –2
Total cash outflow for the acquisition in 2021   31
Fair value of shareholdings previously owned   13
Total consideration for purchase   44
Recognized amounts of identifiable assets and liabilities assumed:    
Property plant, and equipment   2
Intangible assets   12
Inventories   3
Receivables   5
Other assets and liabilities   –3
Fair value of net assets acquired   19
Goodwill   25

From the acquisition date up to the end of the year 2021, Beraca Ingredientes Naturais S.A. reported net sales of CHF 3 million and an operating loss of CHF 1 million including CHF 1 million of depreciation and amortization. If the acquisition had occurred on 1 January 2021, Group sales would have been CHF 12 million higher and the operating result would have been CHF 6 million higher.

Joint venture Clariant IGL Specialty Chemicals Private Ltd

Joint venture Clariant IGL Specialty Chemicals Private Ltd

On 1 July 2021, Clariant and India Glycos Ltd (IGL) established a joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary for ethylene oxide derivatives from renewable sources, Clariant contributing 51 % to the joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary , and IGL 49 %. As Clariant excercises control over the joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary , it is consolidated in Clariant’s financial accounts and accounted for as a business combination. The joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary combines IGL’s business with bio-ethyleneoxide derivatives from renewable sources with Clariant’s ICS activities in India, Sri Lanka, Bangladesh and Nepal. It comprises a multipurpose plant in Kashipur, India, including an alkoxylation plant. This acquisition pertains to the Business Unit Industrial & Consumer Care Services (ICS). Since the initiation of the joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary , Clariant IGL SC is fully consolidated in Clariant’s financial statements. The summary of the financial impact of consolidating the joint ventureJoint ventureJoint ventures are all activities in which Clariant is involved with another partner. The accounting method applied for joint ventures depends on the specific conditions of the participation.View entire glossary in the accounts at the acquisition date, using the provisional fair values of identified assets and liabilities, is as reported below.

The acquired intangible assets comprise mainly customer relationships and vendor contract.

in CHF m   2021
Total cash outflow for the acquisition in 2021   58
Total consideration for purchase   58
Recognized amounts of identifiable assets and liabilities assumed:    
Property plant and equipment   47
Intangible assets   19
Deferred tax assets   9
Inventories   9
Receivables   10
Financial debt   –23
Pension plan liabilities   –1
Other assets and liabilities   –1
Fair value of net assets acquired   69
Noncontrolling interests   –46
Goodwill   35

For this transaction acquisition related costs of less than CHF 1 million, comprising M&A, legal costs and consulting, were recognized in Selling, general, and administrative costs. Goodwill incurred in the acquisition refers to a better access to important materials, expansion of the product portfolio and business know-how.

From the acquisition date up to the end of the year 2021, Clariant IGL Specialty Chemicals Inc. reported net sales of CHF 71 million and an operating result of CHF 9 million, including CHF 2 million of depreciation and amortization. This result includes the abovementioned items of a one-time nature, which were incurred in connection with the takeover by Clariant. If the acquisition had occurred on 1 January 2021, Group sales would have been CHF 54 million higher and the operating result would have been CHF 8 million higher.

Bentonite mining activities

Bentonite mining activities

In August 2020, Clariant acquired from Jianping Cimco Mining Co. Ltd, China, the activities of Clay Industrial Minerals Co Ltd by way of an asset deal for a consideration of CHF 9 million. The acquisition included a goodwill of CHF 2 million. The purpose of the transaction is to secure longer-term access to clay and to strengthen the Business Unit Functional Mineral’s foothold and the Group’s position in the Chinese Foundry market.

28. Restructuring, impairment, and transaction-related costs

in CHF m   2021   2020 1
Restructuring income/expenses   1   –118
Payments for restructuring   –38   –25
Impairment loss   –1   –11
thereof charged to PPE (see note 5)   –1   –11
Transaction-related costs   –77   –101
         
Total restructuring, impairment and transaction-related costs   –77   –230
thereof reported under discontinued operations   –24   –131
Total continuing operations   –53   –99
1 Restated, see note 1.03

In order to increase profitability over a sustained period, Clariant implements measures designed to improve the Group’s performance. The aim of these efforts is to increase the Group’s operating result and to reduce net working capitalNet working capitalNet working capital is the difference between a company’s current assets and its current liabilities.View entire glossary . The changes made to the processes and structures result in a reduction of head count across the Group.

Restructuring. In 2021, Clariant recorded a net income from the creation and reversal of restructuring provisions in the amount of CHF 1 million (2020: expenses CHF 118 million).

As a result of the economic developments, Clariant decided to resume its efficiency program in 2020. Measures to increase efficiency were defined, leading to a workforce reduction of approximately 600 positions and a reduction of the cost basis in excess of CHF 50 million for the continuing operations over the following two years. Additional measures are implemented to rightsize regional organizations and service units to the reduced size of the Group to avoid remnant costs post the expiration of transitory service agreements following the closing of the divestitures of the MasterbatchesMasterbatchesThese are plastic additives in the form of granules with dyestuffs or other additives used to dye or alter the properties of natural plastic.View entire glossary and PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary businesses. An efficiency program was also launched for the PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary business. Restructuring expenses for the efficiency program for continuing operations were booked in the amount of CHF 35 million. In 2021, additional measures were initiated to further automate and centralize processes primarily in the area of Finance.

In 2020, in discontinued operations, restructuring expenses for the efficiency program were booked for the PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary business in the amount of CHF 24 million. For the rightsizing program, restructuring expenses in amount of CHF 59 million were booked in discontinued operations.

In 2021, certain economic developments have given rise to a reconsideration of some of these restructuring measures. Some of the envisaged measures were recalibrated or revoked. As a consequence, Clariant reports in Continuing Operations net income from the change in restructuring provisions in the amount of CHF 4 million in 2021, compared to an expense of CHF 35 million in 2020.

In addition, in discontinued operations, an expense from the change in restructuring provisions in the amount of CHF 3 million in 2021 was recorded, compared to an expense of CHF 83 million in 2020 for the rightsizing program.

Impairment. The impaiment losses recorded in 2021 concerned mainly property, plant and equipment in USA, China and Italy. The ones recognized in 2020 relate mainly to properties, plants and equipment in USA, Germany and China.

Transaction-related costs comprise expenses incurred in connection with acquisition or disposal projects.

The total amount pertaining to continuing operations, CHF 53 million of Restructuring, impairment, and transaction-related costs (2020: CHF 99 million restated), is reported in the income statement from continuing operations as follows: CHF 7 million in Cost of goods sold (2020: CHF 31 million), CHF 47 million in Selling, general, and administrative costs (2020: CHF 55 million restated), and income of CHF 1 million in Research & Development costs (2020: CHF 13 million expenses).

29. Finance income and costs

29. Finance income and costs

Finance income
in CHF m   2021   2020
Interest income   11   13
thereof interest on loans, receivables and deposits   11   13
Other financial income   13   2
Total finance income   24   15
Finance costs
in CHF m   2021   2020
Interest expense   –62   –72
thereof effect of discounting of noncurrent provisions   –3   –4
thereof net interest component of pension provisions   –8   –10
thereof interest on lease liabilities   –11   –11
Other financial expenses   –8   –9
Total finance costs before currency result   –70   –81
Currency result, net   2   –28
Total finance costs   –68   –109
thereof reported under discontinued operations (see note 25)   2   –8
Total continuing operations   –70   –101

Other financial expenses include bank charges and miscellaneous financial expenses.

In 2021 and 2020, no foreign exchange gains pertaining to the ineffective part of hedges on net investments were recognized in the income statement.

Interest expense, other than the effect of discounting noncurrent provisions and the interest component of pension provisions, pertains to financial debts measured at amortized cost.

Interest costs capitalized on qualifying assets for 2021 were CHF 3 million (2020: CHF 1 million).

30. Earnings per share (EPS)

30. Earnings per share (EPS)

Earnings per share are calculated by dividing the Group net income by the average number of outstanding shares (issued shares less treasury shares).

    2021   2020 1
Net income attributable to shareholders of Clariant Ltd undiluted and diluted in CHF m        
Continuing operations   267   106
Discontinued operations   77   678
Total   344   784
         
Weighted average number of shares outstanding        
As per 1 January   329 517 644   329 594 997
Effect of transactions with treasury shares on weighted average number of shares outstanding   –180 855   –77 353
Weighted average number of shares outstanding at 31 December   329 336 789   329 517 644
         
Adjustment for granted Clariant shares   2 053 495   1 507 123
Weighted average diluted number of shares outstanding at 31 December   331 390 284   331 024 767
         
Basic earnings per share attributable to shareholders of Clariant Ltd (CHF/share)        
Continuing operations   0.81   0.32
Discontinued operations   0.23   2.06
Total   1.04   2.38
         
Diluted earnings per share attributable to shareholders of Clariant Ltd (CHF/share)        
Continuing operations   0.81   0.32
Discontinued operations   0.23   2.05
Total   1.04   2.37
1 Restated, see note 1.03

The dilution effect is triggered by the effect of Clariant shares granted as part of the share-based payment plan that have not yet vested. To calculate this dilutive potential, it is assumed that they vested on 1 January of the respective period. The effect of the services still to be rendered during the vesting period is taken into consideration.

Diluted earnings per share are calculated by adjusting the weighted-average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.

In 2021, Clariant made a cash distribution of CHF 0.70 per share to its shareholders out of the share capital, reducing the nominal value from CHF 3.70 to CHF 3.00 per share (see note 17).

31. Derivative financial instruments

31. Derivative financial instruments

Risk management (hedging) instruments and off-balance sheet risks. Clariant uses forward foreign exchange rate and option contracts, currency options as well as other financial instruments to hedge the Group’s risk exposure to volatility in interest rates, currencies and prices and to manage the return on cash and cash equivalents. Risk exposures from existing assets and liabilities as well as anticipated transactions are managed centrally.

Interest rate management. It is the Group’s policy to manage the costs of interest using fixed and variable rate debt and interest-related derivatives.

Foreign exchange management. To manage the exposure to the fluctuations in foreign currency exchange rates, the Group follows a strategy of hedging both balance sheet and revenue risk, partially through the use of forward contracts and currency swaps in various currencies. In order to contain costs, the Group does not hedge the entire exposure.

The following tables show the contract or underlying principal amounts and the respective fair value of derivative financial instruments by type at the year-end.

The contract or underlying principal amounts indicate the volume of business outstanding at the balance sheet date and do not represent the amount at risk.

Derivative Financial instruments
in CHF m   Contract or underlying principal amount   Positive fair values   Negative fair values
    31.12.2021   31.12.2020   31.12.2021   31.12.2020   31.12.2021   31.12.2020
Interest rate related instruments                        
Interest rate swaps     146         –1
Cross Currency Swaps   364   165       –22   –6
Currency related instruments                        
Forward foreign exchange rate contracts   413   274   1   5     –1
Total derivative financial instruments   777   585   1   5   –22   –8

The fair value of these derivative financial instruments is recorded in Other current assets in the balance sheet in the case of a positive value or in Current financial debts in the case of a negative value and if the instruments expire within the next twelve months.

If the remaining lifetime exceeds twelve months, the value is recorded in Financial assets in case it is positive and in Noncurrent financial debts in case it is negative.

Derivative financial instruments by maturity
in CHF m   31.12.2021   31.12.2020
Breakdown by maturity:        
Up to one month after the balance sheet date   32   100
More than one and up to three months after the balance sheet date   263   37
More than three and up to twelve months after the balance sheet date   324   283
More than one and up to five years after the balance sheet date   158   165
Total derivative financial instruments   777   585
Derivative Financial instruments by currency
in CHF m   31.12.2021   31.12.2020
USD   278   361
EUR   493   164
JPY   4   44
Others   2   16
Total derivative financial instruments   777   585
Financial instruments effective for hedge-accounting purposes
in CHF m   31.12.2021   31.12.2020
Contracts with negative fair values   –22    
Interest rate swaps    
Notional amount (USD)     146
Maturity date     05.08.2021
Hedge ratio     1:1
Change in fair value of hedging instruments since 1st January     –2
Change in fair value of hedged item     2
         
Cross Currency Swaps   –5   –2
Notional amount (EUR)   50   56
Maturity date   25.03.2024   25.03.2024
Hedge ratio   1:1   1:1
Change in fair value since 1 January   –3  
Change in fair value of hedged item   3  
         
Cross Currency Swaps   –9   –4
Notional amount (EUR)   103   116
Maturity date   25.09.2025   25.09.2025
Hedge ratio   1:1   1:1
Change in fair value since 1 January   –6  
Change in fair value of hedged item   6  
         
Cross Currency Swaps   –8    
Notional amount (EUR)   200    
Maturity date   29.07.2022    
Hedge ratio   1:1    
Change in fair value since 1 January   –8    
Change in fair value of hedged item   8    
         
Notional amount of hedges of net investments in foreign entities:        
Borrowings denominated in foreign currencies   –521   –937
EUR amount   –521   –694
USD amount     –243
Hedge ratio   1:1   1:1

Since 2015, Clariant issued various certificates of indebtedness totaling EUR 1 158 million, USD 277 million, and CHF 62 million (see note 18). During 2021, EUR 138 million and USD 277 million and CHF 62 million were paid back (2020: EUR 358 million). As per 31 December 2021, certificates of indebtedness totaling EUR 658 million are recorded.

As per 31 December 2021, EUR 505 million were designated as a hedge of a net investment in some of Clariant’s European subsidiaries (2020: EUR 699 million). Due to the repayment of the USD denominated certificates of indebtedness in 2021, the hedge of a net investment in some US subsidiaries (2020: USD 277 million) was terminated.

The unrealized foreign exchange rate gain resulting from the hedge of a net investments amounted to CHF 22 million for 2021 (2020: CHF 26 million) and is recorded in the cumulative translation difference in shareholders’ equity.

In addition the cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedge applied to hedge the interest rate risk arising from the USD denominated certificates of indebtedness which were issued at a variable interest rate were closed; the interest rate swaps amounting to USD 166 million were matured during 2021.

The hedge effectiveness is assessed at the beginning of the hedging relationship by way of recurring prospective effectiveness tests. Thus it is ensured that there exists an economic relationship between the underlying transaction and the hedging instrument.

The Group enters into interest rate and cross-currency swaps that have identical critical terms as the hedged item, such as the reference rate, reset dates, payment dates, maturities, and notional amount. The Group does not hedge 100 % of its loans; therefore the hedged item is identified as a proportion of the outstanding loans up to the notional amount of the swaps. As all critical terms matched during the year, the economic relationship was 100 % effective.

Hedge ineffectiveness for interest rate/cross-currency swaps is assessed using the following principles: The focus is on the credit value/debit value adjustment on the interest rate/cross-currency swaps that is not matched by the loan, and on differences in critical terms between the interest rate/cross-currency swaps and loans.

The Cross-Currency Basis Spread as per End of December 2021 was CHF -100 748 (2020: CHF 66 665).

There was no ineffectiveness during 2021 and 2020 in relation to the interest rate/cross-currency swaps. Clariant has chosen the cost-of-hedging approach for the newly entered cash flowCash flowEconomic indicator representing the operational net inflow of cash and cash equivalents during a given period.View entire glossary hedging relationship. The cross-currency basis spread is not part of the hedging relationship.

32. Employee participation plans

32. Employee participation plans

In 2019, the new Clariant Long-Term Incentive Plan (CLIP) was introduced with the first grants in April 2019. A subsequent grant took place in April 2020. The CLIP represents an equity-based award in the form of Performance Share Units with a three-year vesting period. The review of the target achievements (vesting criteria) for the first grant under this plan will be held in summer 2022, and vesting is scheduled to take place in September 2022. Target achievement reviews and vesting will continue on an annual basis for all subsequent grants.

For the first time in 2013, the Performance Share Unit (PSU) Plan was introduced for all senior managers. The term of Clariant’s Performance Share Unit Plan is a three-year vesting period. The vesting is conditional upon achievement of the performance targets at the end of the vesting period. If the performance targets are achieved, each PSU will be converted into one Clariant share. The last grant under this plan took place in September 2018. Performance targets for this grant were met and granted PSUs vested in September 2021.

Under the Group Senior Management – Long-Term Incentive Plan (GSM-LTIP), a certain percentage of the actual bonus is granted to the plan participants in the form of registered shares of Clariant Ltd (investment shares). These shares vest immediately upon grant, but are subject to a three-year blocking period. Shares were granted for the first time in 2011, based on the performance achieved in the base year 2010. Similar plans were launched in all subsequent years. In the years 2013 to 2018, the plan participants also received an additional share free of cost (matching share) for each investment share held at the end of the blocking period. The number of shares not yet vested and thus disclosed are the matching shares already granted. No further grants were made after 2018 under this plan.

The expense recorded in the income statement and in equity spreads the costs of each grant over the measurement period and the vesting period. Assumptions are made concerning the forfeiture rate, which is adjusted during the vesting period so that at the end of the vesting period, there is only a charge for the vested number of shares.

In 2021, CHF 12 million was debited to the income statement for equity-settled share-based payments (2020: income of CHF 11 million).

As of 31 December 2021, the total carrying value of liabilities arising from equity-settled share-based payments, entirely recognized in equity, is CHF 22 million (2020: CHF 20 million).

SHARES FOR MEMBERS OF MANAGEMENT AND THE EXECUTIVE COMMITTEEExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary
Base year   Granted   Vesting in   Fair value at grant date   Number 31.12.2021   Number 31.12.2020
2017   2018   2021   22.82     97 100
2018   2018   2021   23.58   4 665   270 024
2018   2018   2021   21.47     3 960
2018   2018   2021   24.11     2 074
2019   2019   2022   15.91   785 275   884 192
2020   2020   2023   12.87   1 025 099   1 138 348
2021   2021   2024   19.20   3 891  
2021   2021   2024   18.84   20 317  
2021   2021   2024   18.34   1 000  
2021   2021   2024   13.64   1 154 066  
Total               2 994 313   2 395 698
    Weighted average exercise price   Shares 2021   Weighted average exercise price   Shares 2020
Shares outstanding at 1 January   18.82   2 395 698   21.60   2 083 364
Granted       1 234 206       1 211 808
Exercised / distributed       –349 886       –173 290
Cancelled / forfeited       –285 705       –726 184
Outstanding at 31 December   14.03   2 994 313   18.82   2 395 698
Fair value of shares outstanding in CHF       42 010 204       45 087 027

The fair value of shares granted during 2021 is CHF 16 million (2020: CHF 15 million), calculated based on market value of shares at grant date.

No options were granted in 2021 and 2020.

33. Personnel expenses

33. Personnel expenses

in CHF m   2021   2020 1
Wages and salaries   –819   –1 010
Social welfare costs   –174   –185
Shares and options granted to directors and employees   –12   –11
Pension costs – defined contribution plans   –22   –24
Pension costs – defined benefit plans   –39   –34
Total personnel expenses   –1 066   –1 264
thereof reported under discontinued operations   133   265
Total continuing operations   –933   –999
1 Restated, see note 1.03

34. Related-party transactions

Clariant maintains business relationships with related parties. One group consists of the associates and joint ventures, of which the most important ones are described in note 8. The most important business with these companies is the purchase of services by Clariant (e.g., energy and rental of land and buildings) in Germany and the rendering of services to the Global Amines group.

The second group of related parties is key management, comprising the Board of Directors and the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary . The infor-mation required by the Ordinance against Excessive Compensation in Stock Exchange-Listed Companies regarding the emoluments for the members of the Board of Directors and the Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary is disclosed in the Compensation Report.

More information on the relationship with the Board of Directors is given in the Corporate Governance Report (non-audited).

The third group of related parties is the pension plans of major subsidiaries. Clariant provides services to its pension plans in Switzerland, the United Kingdom, and the United States. These services comprise mainly administrative and trustee services. The total costs in 2021 of these services is CHF 1 million (2020: CHF 1 million), of which approximately half is charged back to the pension plans. The number of full-time employees corresponding to these is approximately four (2020: approximately four).

The fourth group of related parties is all companies pertaining to the SABIC group, which is a 32.35 % shareholder of Clariant (see note 17). The most important business done with these companies is the sale and purchase of chemical products.

Transactions with related parties
in CHF m   2021   2020
Income from the sale of goods to related parties   51   47
thereof to joint ventures   9   9
thereof to associates   11   11
thereof to SABIC companies   31   27
Income from the rendering of services to related parties   54   48
thereof to joint ventures   32   26
thereof to associates   22   22
Expenses from the purchase of goods from related parties   –33   –39
thereof from joint ventures   –19   –17
thereof from associates   –14   –17
thereof from SABIC companies     –5
Expenses from services rendered by related parties   –261   –216
thereof by joint ventures   –24   –30
thereof by associates   –237   –186
Expense from the purchase of property, plant, and equipment from related parties   –5   –7
thereof from associates   –5   –7
Expense from lease contracts with related parties   –6   –7
thereof with associates   –6   –7
Payables and receivables with related parties
in CHF m   31.12.2021   31.12.2020
Receivables from related parties   26   15
thereof from joint ventures   12   4
thereof from associates   7   4
thereof from SABIC companies   7   7
Payables to related parties   55   51
thereof to joint ventures   7   4
thereof to associates   48   47
Loans to related parties   15   19
thereof to joint ventures     2
thereof to associates   15   17
Loans from related parties   1   1
thereof from associates   1   1
Transactions with Key Management
in CHF m   2021   2020
Salaries and other short-term benefits   9   9
Post-employment benefits   1   1
Share-based payments   3   2
Total   13   12

There are no outstanding loans by the Group to any members of the Board of Directors or Executive CommitteeExecutive CommitteeManagement body of joint stock companies; at Clariant the Executive Committee currently comprises four members.View entire glossary .

35. Commitments and contingencies

35. Commitments and contingencies

Guarantees. No guarantees on behalf of third parties were issued in 2021 and 2020.

Purchase commitments. In the regular course of business, Clariant enters into relationships with suppliers whereby the Group commits 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 nine years and other materials in 2022. This implies a total purchase commitment of about CHF 925 million (2020: CHF 700 million).

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 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 that would likely have any material adverse effect in relation to its business, financial position, or results of operations.

After an internal complaint concerning misstatements relating to provision bookings, Clariant engaged external counsel to investigate the matter. The investigation found that the 2020 financial statements required restatement and the quarterly reporting of key financial data for 2020 and 2021 required correction, as announced by the Company on 27 April 2022. Clariant has made the required restatement and correction and is confident that the matter has been resolved (see note 1.03). Nevertheless, uncertainties around the existence, timing and amount of possible financial obligations of the Company may exist. It cannot be ruled out that this matter could result in Clariant becoming subject to formal investigations, proceedings or claims, and any fine or other sanction imposed or other possible financial obligations arising in connection with the restatement or correction or the underlying behavior could adversely affect the Company.

A Clariant subsidiary in the United States has been named along with many other defendants in lawsuits involving per- and polyfluoroalkyl substances (PFAS). Clariant is monitoring the development of these cases, which relate to a line of business divested in 2013, and is defending all litigation matters related to PFAS. The initial trial on one of the PFAS litigation matters may occur no earlier than early 2023. As of this point in time, Clariant cannot assess if these litigation matters will have a material impact on Clariant’s financial results.

Environmental risks. Clariant is exposed to environmental liabilities and risks relating to its past operations, principally in respect of remediation costs. Provisions for nonrecurring 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.

36. Exchange rates of principal currencies

36. Exchange rates of principal currencies

Rates used to translate the consolidated balance sheets (closing rate):

    31.12.2021   31.12.2020
1 USD   0.91   0.88
1 EUR   1.03   1.08
1 BRL   0.16   0.17
1 CNY   0.14   0.13
100 INR   1.23   1.21
100 JPY   0.79   0.85

Sales-weighted average exchange rates used to translate the consolidated income statements and consolidated statements of cash flows:

    2021   2020
1 USD   0.92   0.94
1 EUR   1.08   1.07
1 BRL   0.17   0.18
1 CNY   0.14   0.14
100 INR   1.24   1.26
100 JPY   0.83   0.88
37. Important subsidiaries

37. Important subsidiaries

Country   Company name   Currency   Share-/paid in capital (in thousands)   Participation in %   Holding/ Finance/ Service   Sales   Production   Research   classified as discontinued operations
Argentina   Clariant (Argentina) SA, Buenos Aires   ARS   54 605   100.0                
    Colorants Solutions (Argentina) S.A., Ciudad Autónoma de Buenos Aires   ARS   92 556   100.0              
Australia   Clariant (Australia) Pty Ltd, Notting Hill   AUD   1 902   100.0                
    Colorants Solutions (Australia) Pty Ltd, Notting Hill   AUD   1 000   100.0                
Belgium   Colorants Solutions (Belgium) SA, Louvain-La-Neuve   EUR   19   100.0              
Brazil   Clariant S.A., São Paulo   BRL   276 953   100.0            
    Companhia Brasileira de Bentonita Ltda, Vitoria da Conquista   BRL   17 470   100.0                
    Consórcio CCPN, Niteroi   BRL   26 113   100.0                
    Beraca Ingredientes Naturais S.A.   BRL   18 158   100.0              
    Colorants Solutions (Brazil) Ltda., Santo Amaro   BRL   44 152   100.0            
Canada   Clariant (Canada) Inc., Toronto   CAD   10 415   100.0                
    Colorants Solutions (Canada) Inc., Toronto   CAD   2 800   100.0                
Chile   Clariant (Chile) Ltda., Maipú-Santiago de Chile   CLP   15   100.0                
    Clariant Plastics & Coatings (Chile) Ltda. Maipú-Santiago de Chile   CLP   1 842   100.0              
China   Clariant (China) Ltd., Hong Kong   HKD   414 788   100.0                  
    Clariant Bohai PigmentsPigmentsPigments are substances used for coloring; they are used in a technical manner, for example in the manufacture of dyes, varnishes, and plastics. In 2020, Clariant launched the divestment process of its Pigments business, which was completed on 3 January 2022.View entire glossary Preparations (Tianjin) Ltd., Tianjin   CNY   49 176   100.0              
    Clariant Catalysts (Nanjing) Co., Ltd., Nanjing   CNY   321 822   100.0                  
    Clariant Chemicals (China) Ltd., Shanghai   CNY   210 014   100.0              
    Clariant Chemicals (Huizhou) Ltd., Daya Bay, Huizhou   CNY   247 577   100.0                
    Clariant China Holding Limited, Hong Kong   HKD   67 251   100.0                  
    Clariant Huajin Catalysts (Panjin) Ltd., Panjin City   CNY   69 511   60.0                
    Clariant Redhill Bentonite (Liaoning) Ltd., Jianping   CNY   124 365   100.0                
    Clariant Specialty Chemicals (Zhenjiang) Co., Ltd., Zhenjiang   CNY   166 431   100.0                
    Clariant Bentonite (Jiangsu) Co., Ltd., Zhenjiang   CNY   79 058   100.0                
    Clariant Coatings (Shanghai) Ltd., Shanghai   CNY   245 393   100.0              
    Clariant Chemicals Technology (Shanghai) Ltd., Shanghai   CNY   170 286   100.0              
    Clariant Specialty Chemicals (Jiaxing) Co., Ltd., Jiangxing   CNY   170 347   100.0                  
Colombia   Clariant Colombia S.A., Cota (Cundinamarca)   COP   2 265   100.0                
    Colorants Solutions (Colombia) S.A.S., Cota (Cundinamarca)   COP   5 567   100.0              
France   Clariant Production (France), Choisy le Roi   EUR   6 273   100.0              
    Clariant Services (France), Choisy le Roi   EUR   21 200   100.0                  
    Colorants Solutions (France), Choisy le Roi   EUR   300   100.0                
Germany   Clariant Vierte Chemie GmbH   EUR   30   100.0                  
    Clariant Produkte (Deutschland) GmbH, Frankfurt a.M.   EUR   9 348   100.0            
    Clariant Plastics & Coatings (Deutschland) GmbH   EUR   149   100.0            
    Colorants Solutions (Deutschland) GmbH, Frankfurt a.M.   EUR   500   100.0            
    Clariant SE, Frankfurt a.M.   EUR   916   100.0                  
    Clariant Verwaltungsgesellschaft mbH, Frankfurt a.M.   EUR   2 560   100.0                  
Great Britain   Clariant Distribution UK Limited, Yeadon, Leeds   GBP   500   100.0                  
    Clariant Oil Services UK Ltd, Yeadon, Leeds   GBP   400   100.0              
    Clariant Production UK Ltd, Yeadon, Leeds   GBP   500   100.0              
    Clariant Services UK Ltd, Yeadon, Leeds   GBP   500   100.0                  
    Colorants Solutions (UK) Ltd, Yeadon, Leeds   GBP   3 501   100.0                
Greece   Süd-Chemie Hellas Monoprosopi EPE, Adamantas, Milos   EUR   548   100.0                
India   Clariant Chemicals (India) Ltd, Navi Mumbai   INR   230 818   51.0              
    Clariant India Private Limited, Navi Mumbai   INR   10 829   100.0            
    Süd-Chemie India Pvt. Ltd., Ernakulam   INR   9 623   50.0              
    Clariant IGL BioEthoxylates Private Limited, Kashipur   INR   220   51.0                
Indonesia   PT. Clariant Indonesia, Tangerang   IDR   267 577   100.0              
    PT. Clariant Kujang Süd-Chemie Catalysts, Cikampek   USD   3 447   76.9                
    PT. Clariant Plastics & Coatings, Tangerang Banten   USD   10 282   100.0                
    PT. Clariant Specialties Indonesia, Tangerang Banten   IDR   4 803   100.0                  
    PT. Clariant AdsorbentsAdsorbentsUsually solid substances which are able to selectively accumulate certain substances from adjacent gaseous or liquid phases.View entire glossary Indonesia, Sukabumi   IDR   12 375   100.0                
    P.T. Colorants Solutions (Indonesia), Tangerang   IDR   21 750   100.0              
Italy   Clariant Prodotti (Italia) S.p.A., Milano   EUR   1 000   100.0            
    Società Sarda di Bentonite S.r.l., Santa Giusta   EUR   2 050   100.0                  
    Colorants Solutions (Italia) S.p.A., Milano   EUR   5 200   100.0                
Japan   Clariant (Japan) K.K., Tokyo   JPY   450   100.0              
    Clariant Catalysts (Japan) K.K., Tokyo   JPY   544   61.5            
    Clariant Plastics & Coatings (Japan) K.K., Tokyo   JPY   250   100.0            
Korea   Clariant (Korea) Ltd., Pohang, Pohang-Si   KRW   6 361   100.0                
    Colorants Solutions (Korea) Ltd.   KRW   600   100.0                  
Luxemburg   Clariant Finance (Luxembourg) S.A., Luxemburg   EUR   82 030   100.0                  
Malaysia   Clariant (Malaysia) Sdn Bhd, Kuala Lumpur   MYR   5 000   100.0                
    Clariant Oil Services (Malaysia) Sdn Bhd, Petaling Jaya   MYR   411   48.9                  
    Clariant Specialty Chemical (M) Sdn Bhd, Kuala Lumpur   MYR   3 300   100.0                    
Mexico   Clariant (Mexico) S.A. de C.V., Ecatepec de Morelos   MXN   22 219   100.0            
    Clariant Productos Químicos, S.A. de C.V., Ecatepec de Morelos   MXN   2 475   100.0                  
    Clariant Plastics & Coatings México, S.A. de C.V., Ecatepec de Morelos   MXN   358   100.0          
    Clariant Servicios Integrales México, S.A. de C.V., Ecatepec de Morelos   MXN   3   100.0                    
Morocco   Clariant (Maroc) S.A., Casablanca   MAD   4 000   100.0                  
Norway   Clariant Oil Services Scandinavia AS, Bergen   NOK   4 725   100.0                
Pakistan   Clariant Pakistan (private) limited, Karachi   PKR   50 000   100.0                  
Peru   Clariant (Perú) S.A., Lima   PEN   20 454   100.0              
    Clariant Plastics & Coatings (Perú) S.A.C., Lima   PEN   2 010   100.0                
Poland   Clariant Poland Spolka z.o.o., Konstantynów Łódzki   PLN   3 000   100.0                
    Clariant Services (Poland) SP. z o.o., Łódź   PLN   10 000   100.0                    
    Colorants Solutions (Polska) Spolka z o.o., Łódź   PLN   4 500   100.0                
Qatar   Clariant Qatar W.L.L., Mesaieed   QAR   30 000   65.0                
Romania   Clariant Products Ro Srl, Bucarest   RON   105 261   100.0                    
Russia   Clariant (RUS) LLC, Moscow   RUB   19 000   100.0                  
Singapore   Clariant (Singapore) Pte. Ltd., Singapore   SGD   21 500   100.0              
    Clariant South East Asia Pte. Ltd., Singapore   SGD   1 560   100.0              
    Colorants Solutions (Singapore) Pte. Ltd., Singapore   SGD   3 000   100.0              
South Africa   Clariant Sasol Catalysts Ltd., Chloorkop, Gauteng   ZAR   1 417   80.0                  
    Clariant Southern Africa (Pty) Ltd. Chloorkop, Gauteng   ZAR   6   100.0              
    Clariant Plastics & Coatings Southern Africa (Pty) Ltd., Chloorkop, Gauteng   ZAR   70 000   100.0                
Spain   Clariant Ibérica Producción S.A., Sant Joan Despi   EUR   6 023   100.0            
    Colorants Solutions (Ibérica) S.A., Sant Joan Despi   EUR   3 503   100.0              
Sweden   Clariant Production Sweden AB, Mölndal   SEK   500   100.0                
    Colorants Solutions Scandinavia AB, Mölndal   SEK   50   100.0                
Switzerland   Clariant Consulting AG, Muttenz   CHF   200   100.0                  
    Clariant Chemical Consulting AG, Muttenz   CHF   100   100.0                  
    Clariant International AG, Muttenz   EUR   101 648   100.0            
    Clariant Oil Services AG, Muttenz   CHF   300   100.0                  
    Clariant Reinsurance AG, Muttenz   CHF   3 000   100.0                  
    EBITO Chemiebeteiligungen AG, Muttenz   CHF   202   100.0                
    Clariant Produkte (Schweiz) AG, Muttenz   CHF   5 000   100.0                  
    Clariant Additives (Switzerland) AG, Muttenz   CHF   5 000   100.0                
    Colorants International AG, Muttenz   EUR   28 799   100.0          
    Colorants Solutions Switzerland AG, Muttenz   EUR   100   100.0              
    Colorants Consulting AG, Muttenz   EUR   100   100.0                  
Taiwan   Clariant Specialty Chemicals (Taiwan) Co., Ltd., Taipei   TWD   36 000   100.0                
    Colorants Solutions (Taiwan) Co., Ltd.   TWD   1 000   100.0                
Thailand   Clariant (Thailand) Ltd., Bangkok   THB   250 000   100.0