Company registration number 03031202 (England and Wales)
CLARIANT SERVICES UK LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CLARIANT SERVICES UK LTD
COMPANY INFORMATION
Directors
C Ericsson
N Scothern
A Horn
(Appointed 4 July 2023)
M Porley Cavallero
(Appointed 5 March 2024)
Secretary
Oakwood Corporate Secretary Limited
Company number
03031202
Registered office
Airedale House
423 Kirkstall Road
Leeds
LS4 2EW
Auditor
BHP LLP
Mayesbrook House
Lawnswood Business Park
Redvers Close
Leeds
LS16 6QY
Bankers
Skandinaviska Enskilda Banken AB
1 Carter Lane
London
EC4V 5AN
CLARIANT SERVICES UK LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 4
Independent auditor's report
5 - 7
Statement of comprehensive income
8
Balance sheet
9
Statement of changes in equity
10
Notes to the financial statements
11 - 25
CLARIANT SERVICES UK LTD
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

 

Clariant Services UK Ltd ('the Company') is a subsidiary of the global speciality chemicals business, Clariant AG ('the Group'). In June 2022 the Group was reorganised into three global business units: Catalysts, Adsorbents & Additives and Care Chemicals.

Business review and future outlook

In June 2022 Clariant set a new strategic course, through a purpose led strategy – ‘Greater Chemistry between People and Planet’. The purpose led strategy underpins Clariant’s purpose with clear priorities and targets. Clariant has transformed its portfolio into a high value speciality chemical Company. Clariant’s strategic pillars are; Customer focus, Innovative Chemistry, Leading in sustainability and People engagement.

 

A new organisational model was implemented in 2022, to support the new strategy, with a flatter reporting structure to create greater accountability, speed up decision making and bring Clariant closer to customers.

Clariant is committed to creating shareholder value and aims to develop towards the top quartile performance versus speciality chemical peers. Focus is on outgrowing our markets and further improving profitability.

 

The Company received zero dividends of £0 within the year (2022 - £10m from Clariant Production UK Ltd)

The Company paid no interim dividend within the year (2022 - £10m to Clariant AG). No final dividend was paid or proposed in the year (2022 - £NIL).

 

The Company made a profit before tax of £207,000 (2022 - £10,312,000), The Company's assets exceeded its liabilities at the end of the year by £32,527,000 (2022 - £32,366,000).

 

The Company provides services to other Clariant group companies in the UK ("UK Group").

Principal risks and uncertainties

The principal risk to the Company is that the investments will not realise their full book value. The subsidiary companies operate in a highly competitive market for speciality chemicals and need to remain competitive by streamlining systems and processes to reduce costs.

 

Environmental risks

Mandatory principles on Environment, Safety and Health ("ESH") are laid down in the Group's ESH guidelines which form an integral part of business processes and strategic planning.

Corporate Sustainable & Regulatory Affairs have built on the Group's principles by drawing up an ESH strategy, a set of guidelines and targets that are mandatory worldwide and by assigning responsibilities. As well as complying with national laws and regulations, the ESH policy commits Clariant to ethical and sustainable operations in all its business activities and includes participation in the Global Responsible Care initiative of the chemical industry.

Financial key performance indicators (KIPs)

The management team uses KPls to monitor and manage performance against strategic objectives. The principal KPI for the Company is change in operating expenses.

Operating expenses reduced in 2023 by 3% compared with 2022.

Promoting the success of the company

In addition to Company law, Clariant provides a clear framework within which the directors must operate, and these are set out within the Clariant Bylaws of the Executive Steering Committee and the associated Terms of Reference. New Bylaws were introduced in 2023. The directors ensure that they act in good faith, using their own skill and judgement to assess the long-term consequences of their decisions, in order to promote the overall success of the Company. The directors recognise the need to fully engage with a diverse range of stakeholders and consider the interests of these groups when making decisions to ensure that they act fairly between members. The directors promote the Company's values and reinforce the Clariant Code of Ethics throughout the organisation to support employees and the wider workforce to act in line with these values and safeguard compliance with local regulations.

CLARIANT SERVICES UK LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

On behalf of the board

A Horn
Director
17 September 2024
CLARIANT SERVICES UK LTD
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

The directors present their annual report and financial statements for the year ended 31 December 2023.

Principal activities

The principal activity of the Company during the year was that of a holding company, including the provision of certain services (including legal, information technology, human resources and finance) to the UK Group.

Results and dividends

The results for the year are set out on page 8.

Details of dividends are given in the Strategic Report.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

C Ericsson
T Otteslev
(Resigned 22 March 2023)
N Scothern
A Tillmann
(Resigned 22 March 2023)
C Kos
(Appointed 22 March 2023 and resigned 5 March 2024)
A Horn
(Appointed 4 July 2023)
M Porley Cavallero
(Appointed 5 March 2024)
Qualifying third party indemnity provisions

A qualifying third party indemnity provision as defined in section 234 of the 2006 Companies Act, applicable to all of the Company's directors was in place during the financial year and continues to be in force as at the date these financial statements were approved.

Engagement with employees

All permanent employees in the UK also participate in the group bonus plans, which reward employees with an annual cash bonus based on the group company achievements. The key principle of the plans is to ensure a unified "One Clariant" culture whereby employees have common understanding of the Company performance, and the financial factors affecting this.

 

Employee engagement is vital for Clariant's journey to a high performing organisation. Employee engagement starts with providing a shared understanding on Corporate, Business and Service Units' initiatives to all its employees.

Therefore, Clariant is continuously communicating all corporate initiatives throughout the organisation. Communication is cascaded through to the local Company whereby information is then shared through local email correspondence, town hall meetings and team meetings.

 

In order to secure our long-term success, every employee must commit to a shared goal, shaping who we are and what we stand for: our Vision, Mission and Values. They describe what is important to us, where we want to go, and how we aim to get there. They give us direction and send a clear signal to all stakeholders supporting our business. The Corporate values also form an integral part of the annual performance management cycle, which all UK employees participate in. Performance Management at Clariant is a key driver for employee engagement and it ensures that the strategic business objectives are translated into the employees day-to-day actions, supporting continuous development and growth. The process enables regular feedback on performance, based on constructive dialogue, respect and trust.

CLARIANT SERVICES UK LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Engagement with employees (continued)

Since 2014, Clariant has committed to regular employee engagement surveys to assess levels of engagement and to continuously seek a better understanding of how employees experience their working environment. Clariant uses these assessments as a basis for appropriate and necessary activities and initiatives to enhance and drive future engagement.

Future developments

The directors' view on the future outlook for the company is outlined in the Strategic Report.

Auditor

In accordance with the company's articles, a resolution proposing that BHP LLP be reappointed as auditor of the company will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period. In preparing these financial statements, the directors are required to:

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company's auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the Company's auditor is aware of that information.

On behalf of the board
A Horn
Director
17 September 2024
CLARIANT SERVICES UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARIANT SERVICES UK LTD
- 5 -
Opinion

We have audited the financial statements of Clariant Services UK Ltd (the 'Company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the balance sheet, the statement of changes in equity and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

 

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

CLARIANT SERVICES UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARIANT SERVICES UK LTD (CONTINUED)
- 6 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the Company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

We gained an understanding of the legal and regulatory framework applicable to the Company and the industry in which it operates and considered the risk of acts by the Company that were contrary to applicable laws and regulations, including fraud. We designed audit procedures to respond to the risk, recognising that the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.

 

We focused on laws and regulations, relevant to the Company, which could give rise to a material misstatement in the financial statements. Our tests included agreeing the financial statement disclosures to underlying supporting documentation, enquiries with management, review of Company minutes and legal expenses. There are inherent limitations in the audit procedures described and, the further removed non-compliance with laws and regulations is from the events and transactions reflected in the financial statements, the less likely we would become aware of it.

 

As part of our audit, we addressed the risk of management override of internal controls, including testing of journals and review of nominal ledger. We evaluated whether there was evidence of bias by the directors that represented a risk of material misstatement due to fraud.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

CLARIANT SERVICES UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARIANT SERVICES UK LTD (CONTINUED)
- 7 -

Use of our report

This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Chris Neale (Senior Statutory Auditor)
For and on behalf of BHP LLP
19 September 2024
Chartered Accountants
Statutory Auditor
Mayesbrook House
Lawnswood Business Park
Redvers Close
Leeds
LS16 6QY
CLARIANT SERVICES UK LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 8 -
2023
2022
Notes
£'000
£'000
Other operating income
3
2,356
2,664
Staff costs
5
(1,120)
(1,131)
Depreciation
(31)
(53)
Other operating costs
(1,329)
(1,369)
Operating (loss)/profit
4
(124)
111
Interest receivable and similar income
7
780
10,253
Interest payable and similar expenses
8
(449)
(52)
Profit before taxation
207
10,312
Tax on profit
9
(46)
(59)
Profit and total comprehensive income for the financial year
161
10,253
CLARIANT SERVICES UK LTD
BALANCE SHEET
AS AT
31 DECEMBER 2023
31 December 2023
- 9 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Fixed assets
Tangible fixed assets
11
46
58
Investments
12
31,146
31,146
31,192
31,204
Current assets
Debtors
15
16,383
6,639
Cash at bank and in hand
9,284
8,490
25,667
15,129
Creditors: amounts falling due within one year
16
(24,221)
(13,834)
Net current assets
1,446
1,295
Total assets less current liabilities
32,638
32,499
Creditors: amounts falling due after more than one year
16
-
(13)
Provisions for liabilities
Other provisions
20
(111)
(120)
Net assets
32,527
32,366
Capital and reserves
Called up share capital
22
500
500
Profit and loss reserves
32,027
31,866
Total equity
32,527
32,366
The financial statements were approved by the board of directors and authorised for issue on 17 September 2024 and are signed on its behalf by:
N Scothern
Director
Company registration number 03031202 (England and Wales)
CLARIANT SERVICES UK LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
Share capital
Profit and loss reserves
Total
Notes
£'000
£'000
£'000
Balance at 1 January 2022
500
31,613
32,113
Year ended 31 December 2022:
Profit and total comprehensive income for the year
-
10,253
10,253
Transactions with owners in their capacity as owners:
Dividends
10
-
(10,000)
(10,000)
Balance at 31 December 2022
500
31,866
32,366
Year ended 31 December 2023:
Profit and total comprehensive income for the year
-
161
161
Balance at 31 December 2023
500
32,027
32,527
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
1
Accounting policies
Company information

Clariant Services UK Ltd ("the Company") is a holding company which provides services to both subsidiaries and other Clariant group companies in the UK and Ireland.

 

The Company is a private company, incorporated and domiciled in England, United Kingdom. The address of its registered office is Airedale House, 423 Kirkstall Road, Leeds, LS4 2EW.

1.1
Accounting convention

The financial statements have been prepared in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (FRS 101) and in accordance with applicable accounting standards.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £'000.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

As permitted by FRS 101, the Company has taken advantage of the following disclosure exemptions from the requirements of IFRS

Where required, equivalent disclosures are given in the group accounts of Clariant AG. The group accounts of Clariant AG are available to the public and can be obtained from Investor Relations at Hardstrasse 61, CH-4133, Pratteln, Switzerland.

Under section 401 of the Companies Act 2006 the Company is exempt from the requirement to prepare consolidated financial statements.

1.2
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the truecompany has adequate resources to continue in operational existence for the foreseeable future and retains the support of Clariant AG the ultimate parent. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 12 -
1.3
Tangible fixed assets
Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the assets to the location and condition necessary for it to be capable of operating in the manner intended by management.
Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.
Short-term leasehold property
over the life of the lease
Plant and machinery
3 - 16 years
Computers
5 years
Motor vehicles
3 - 5 years
The assets residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.
Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
1.4
Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment. Where merger relief is applicable, the cost of the investment in a subsidiary undertaking is measured at the nominal value of the shares issued together with the fair value of any additional consideration paid.

1.5
Impairment of tangible and intangible assets

At each reporting end date, the Company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.6
Cash at bank and in hand

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

1.7
Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

1.8
Creditors

Creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers.

 

Creditors are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.

1.9
Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the Company.

1.10
Taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

 

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date in the countries where the Company operates and generates income.

 

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Balance Sheet date, except that:

 

Deferred tax balances are not recognised in respect of permanent differences in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date.

CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
1.11
Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.

 

Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Balance Sheet date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.

 

When payments are eventually made, they are charged to the provision carried in the Balance Sheet.

1.12
Retirement benefits

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

 

The contributions are recognised as an expense in the Profit and Loss Account when they fall due. Amounts not paid are shown in accruals as a liability in the Balance Sheet. The assets of the plan are held separately from the Company in independently administered funds.

 

Multi-employer pension plan

The Company is a member of a multi-employer plan. Where it is not possible for the Company to obtain sufficient information to enable it to account for the plan as a defined benefit plan, it accounts for the plan as a defined contribution plan.

CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.13
Leases

The Company as a lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

 

Lease payments included in the measurement of the lease liability comprise:

 

 

The lease liability is included in 'Creditors' on the Balance sheet.

 

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

 

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

 

Right of use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

 

The right-of-use assets are included in the 'Intangible Assets', 'Tangible Fixed Assets' and 'Investment Property' lines, as applicable, in the Balance Sheet.

 

The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in note 1.5.

 

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient.

1.14
Foreign exchange

Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are included in profit or loss.

CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.15

Other operating income

Other operating income is recognised to the extent that it is probable that the economic benefits will flow to the Company and the other operating income can be reliably measured. Other operating income is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes.

 

The Company does not expect to have any contracts where the period between the transfer of the promised goods or services to the customer and payment by the customer exceeds one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.

 

Rendering of services

Other operating income from providing services is recognised in the accounting period in which the services are rendered.

1.16

Interest Income

Interest income is recognised in profit or loss using the effective interest method.

1.17

Financial instruments (under IFRS 9)

The Company recognises financial instruments when it becomes a party to the contractual arrangements of the instrument. Financial instruments are de-recognised when they are discharged or when the contractual terms expire. The Company's accounting policies in respect of financial instrument transactions are explained below:

 

Financial assets and financial liabilities are initially measured at fair value.

 

Financial assets

 

All recognised financial assets are subsequently measured in their entirety at either fair value or amortised cost, depending on the classification of the financial assets.

 

Fair value through profit or loss

 

All of the Company's financial assets other than those which meet the criteria to be measured at amortised cost are subsequently measured at fair value at the end of each reporting period, with any fair value gains or losses being recognised in profit or loss to the extent they are not part of a designated hedging relationship. The net gain or loss recognised in profit or loss includes any dividend or interest earned on the financial asset.

 

Debt instruments at amortised cost

 

Debt instruments are subsequently measured at amortised cost where they are financial assets held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and selling the financial assets. The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Amortised cost is calculated using the effective interest method. This represents the amount measured at initial recognition less repayments of principal plus the cumulative amortisation using the effective interest method of any difference between the initial amount and the maturity amount, adjusted for any loss allowance.

 

Financial liabilities at amortised cost

 

Financial liabilities which are neither contingent consideration of an acquirer in a business combination, held for trading, nor designated as at fair value through profit or loss are subsequently measured at amortised cost using the effective interest method. This is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or where appropriate a shorter period, to the amortised cost of a financial liability.

CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2
Critical accounting estimates and judgements

The Company 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 addressed below.

 

(a) Useful economic lives of property, plant and equipment

The annual depreciation charge for property, plant and equipment is sensitive to changes in the estimated useful economic lives and residual values of the assets. The useful economic lives and residual values are re-assessed annually. They are amended when necessary to reflect current estimates, based on technological advancement, future investments, economic utilisation and the physical condition of the assets. See note 11 for the carrying amount of the property plant and equipment, and note 1.3 for the useful economic lives for each class of assets.

 

(b) Investments

The most critical estimates, assumptions and judgements relate to the determination of carrying value of investments. The nature, facts and circumstances of the investment drives the valuation methodology. The Company makes an estimate of the recoverable amount of investments by reviewing the net assets of the subsidiaries and where considered necessary discounted cashflows. See note 12 for the carrying amount of investments, and note 1.4 for the valuation policy of investments.

 

(c) Impairment of trade receivables

The Company makes an estimate of the recoverable value of trade and other receivables. When assessing impairment of trade and other receivables, management consider factors including the credit rating of the receivable, the ageing profile of receivables and historic experience. See note 15 for the net carrying amount of the trade receivables balance.

3
Other operating income
2023
2022
£'000
£'000
Service charges to other Group companies
2,341
2,635
Service charges to third parties
15
29
2,356
2,664
4
Operating (loss)/profit
2023
2022
£'000
£'000
Operating (loss)/profit for the year is stated after charging/(crediting):
Fees payable to the company's auditor for the audit of the company's financial statements
20
18
Depreciation of property, plant and equipment
31
53
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
5
Employees

The average monthly number of persons (including directors) employed by the company during the year was:

2023
2022
Number
Number
Administration
13
14

Their aggregate remuneration comprised:

2023
2022
£'000
£'000
Wages and salaries
935
882
Social security costs
87
140
Pension costs
98
109
1,120
1,131

Included in wages and salaries are additional employment costs of £170,000 (2022 - £6,000) in respect of severance payments.

6
Directors' remuneration
2023
2022
£'000
£'000
Remuneration for qualifying services
179
191

Three directors were remunerated for their services to the UK Group of Clariant Companies ('UK Group') and their costs were borne by the Company.

 

The directors' emoluments paid by the Company was solely in respect of duties under the directors' contracts of employment with the Company and no separate directors' fees are payable.

 

The overseas based directors received no remuneration for their services to the Company as their costs were borne by a fellow group company (2022 - £NIL).

7
Interest receivable and similar income
2023
2022
£'000
£'000
Interest income
Other interest receivable
428
200
Interest receivable from group companies
352
53
Total interest revenue
780
253
Income from fixed asset investments
Income from shares in group undertakings
-
0
10,000
Total income
780
10,253
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
8
Interest payable and similar expenses
2023
2022
£'000
£'000
Interest on financial liabilities measured at amortised cost:
Interest payable to group undertakings
449
52
9
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
46
51
Deferred tax
Origination and reversal of temporary differences
1
6
Changes in tax rates
-
0
2
Adjustment in respect of prior periods
(1)
-
0
-
0
8
Total tax charge
46
59

The charge for the year can be reconciled to the profit per the profit and loss account as follows:

2023
2022
£'000
£'000
Profit before taxation
207
10,312
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
49
1,959
Effect of expenses not deductible in determining taxable profit
-
0
2
Income not taxable
-
0
(1,901)
Adjustment in respect of prior years
(1)
-
0
Effect of change in UK corporation tax rate
-
0
2
Group relief
(2)
(3)
Taxation charge for the year
46
59

 

10
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£
£
£'000
£'000
Ordinary
Interim dividend paid
-
20.00
-
10,000
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
11
Tangible fixed assets
Short-term leasehold property
Plant and machinery
Computers
Motor vehicles
Total
£'000
£'000
£'000
£'000
£'000
Cost
At 31 December 2022
142
30
7
77
256
Additions
-
0
21
-
0
-
0
21
Disposals
-
0
(4)
-
0
(29)
(33)
At 31 December 2023
142
47
7
48
244
Accumulated depreciation and impairment
At 31 December 2022
141
4
2
51
198
Charge for the year
1
12
1
17
31
Eliminated on disposal
-
0
(2)
-
0
(29)
(31)
At 31 December 2023
142
14
3
39
198
Carrying amount
At 31 December 2023
-
0
33
4
9
46
At 31 December 2022
1
26
5
26
58

Tangible fixed assets includes right-of-use assets, as follows:

Right-of-use assets
2023
2022
£'000
£'000
Net values
Property
-
1
Motor vehicles
9
26
Computers
4
5
13
32
Additions
-
7
Depreciation charge for the year
Property
1
28
Motor vehicles
17
18
Computers
1
1
19
47
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
12
Investments
Current
Non-current
2023
2022
2023
2022
£'000
£'000
£'000
£'000
Investments in subsidiaries
-
-
31,146
31,146
13
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Principal activities
Class of
% Held
shares held
Direct
Indirect
Clariant Production UK Ltd
Distribution and sale of chemical products
Ordinary
100.00
-
Clariant Distribution UK Ltd
Sales and marketing services
Ordinary
100.00
-
Cadihayes Services (No.3) Limited
Dormant
Ordinary
100.00
-
Clariant Oil Services UK Ltd
Manufacture and sale of chemical products
Ordinary
-
100.00
Clariant Holdings UK Ltd
Dormant company
Ordinary
-
100.00
Clariant Trustees Ltd
Dormant company
Ordinary
-
100.00
Clariant UK Ltd
Dormant company
Ordianry
-
100.00

The registered office of all subsidiary companies is Airedale House, 423 Kirkstall Road, Leeds, LS4 2EW.

14
Joint ventures

The Company holds an indirect investment in a joint venture Clariant Ali Al-Abdulla Al-Tamimi Co. Ltd whose registered address is PO Box 230, Al-Khobar 31952. Saudi Arabia, the Company indirectly owns a 49% holding.

15
Debtors
2023
2022
£'000
£'000
Amounts owed by fellow group undertakings
16,253
6,543
Other debtors
95
45
Prepayments and accrued income
30
43
16,377
6,632
Deferred tax asset (Note 19)
6
7
16,383
6,639
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
15
Debtors
(Continued)
- 22 -

Included in amounts owed by group undertakings is a loan receivable of £2,868,000 (2022 - £1,000) from group companies repayable on demand with interest charged at UK base rate plus 1%.

 

Also included in amounts owed by group undertakings are loans of £1,914,000 (2022 - £2,240,000) which are denominated in Euros, repayable on demand with interest charged at EONIA (Euro Overnight Index Average) plus 30 basis points and loans of £20,000 (2022 - £64,000) which are denominated in Euros, repayable on demand but with no interest charged.

 

All other amounts owed by group undertakings are secured, bear no interest and have no fixed repayment terms.

16
Liabilities
Due within one year
Due after one year
2023
2022
2023
2022
Notes
£'000
£'000
£'000
£'000
Creditors
17
24,209
13,816
-
0
-
0
Lease liabilities
18
12
18
-
13
24,221
13,834
-
13
17
Creditors
2023
2022
£'000
£'000
Trade creditors
92
68
Amounts owed to fellow group undertakings
23,857
13,415
Accruals and deferred income
260
286
Other creditors
-
47
24,209
13,816

Included in amounts owed to group companies are loans totalling £2,344,000 (2022 - £6,991,000) repayable on demand with interest charged at UK base rate plus 1%.

 

All other amounts owed to group companies are unsecured, bear no interest and have no fixed repayment terms.

18
Lease liabilities
2023
2022
Maturity analysis
£'000
£'000
Within one year
12
18
In two to five years
-
13
Total undiscounted liabilities
12
31
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Lease liabilities
(Continued)
- 23 -

Lease liabilities are classified based on the amounts that are expected to be settled within the next 12 months and after more than 12 months from the reporting date, as follows:

2023
2022
£'000
£'000
Current liabilities
12
18
Non-current liabilities
-
13
12
31
19
Deferred taxation
Assets
2023
2022
£'000
£'000
Deferred tax balances
6
7
Deferred tax assets are expected to be recovered within one year.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon during the current and prior reporting period.

ACAs
Temporary trading differences
Total
£'000
£'000
£'000
Asset at 1 January 2022
16
(3)
13
Deferred tax movements in prior year
Credit/(charge) to profit or loss
(5)
(1)
(6)
Asset at 1 January 2023
11
(4)
7
Deferred tax movements in current year
Credit/(charge) to profit or loss
(5)
4
(1)
Asset at 31 December 2023
6
-
6
20
Provisions for liabilities
2023
2022
£'000
£'000
General provisions
111
120
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
20
Provisions for liabilities
(Continued)
- 24 -
Movements on provisions:
General provisions
£'000
At 1 January 2023 and 31 December 2023
111

Other provisions include an uninsured claim provision of £30,000 (2022 - £75,000) relating to employee liability claims and is a best estimate based on advice from the Company's advisors. It is envisaged that these amounts will be settled within 1 year of the balance sheet date.

 

There is also a restructuring provision included above of £36,000 (2022: £nil).

 

The remainder of the other provisions of £45,000 (2022 - £45,000) arises from the legal obligation to reinstate a leasehold office to its original state at the end of the lease term. It is envisaged that the amount will be settled at the end of the lease.

21
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
98
109
CLARIANT SERVICES UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Retirement benefit schemes
(Continued)
- 25 -

The Company is a participating employer of the Clariant Pension Plan (the "Plan"), a scheme which is managed by an independent Trustee body and comprised both Defined Benefit and Defined Contribution sections. Total contributions in respect of the Defined Benefit Section are based on the advice of a qualified independent actuary. The Plan is funded by contributions from the Company and its employees.

 

On 31 December 2001 the existing Defined Benefit Section of the Plan was closed to new members and a new Defined Contribution Section of the Plan was established for new employees from 1 January 2002.

 

The details of the scheme are as follows:

 

The Clariant Pension Plan - Defined Benefit Section

The most recent actuarial valuation was carried out at 1 April 2022 by an independent actuary using the projected unit method. The review indicated that the value of the assets of the Plan exceeded the benefits earned up to the valuation date by £25,700,000 allowing for a pre-retirement discount rate of Gilt curve plus 1.5% and a post retirement discount rate of Gilt curve plus 0.25%. Future pension increase range between 0% and 5%, dependent on the terms of the pension offered. The market value of the Plan's assets was £400,300,000 as at 1 April 2022.

 

On 1 April 2016 the Defined Benefit Section of the Plan was closed for future accrual and all employees transferred to the Defined Contribution Section of the Plan.

 

IAS 19 disclosures

As permitted by IAS 19 'Employee benefits' the contributions paid by the Company to the Plan are accounted for as though to a defined contribution scheme. This arises since the share of assets and liabilities relating to the Company cannot be separately identified.

 

At 31 December 2023 the surplus of the Plan was £32,280,000 (2022 - £35,719,000). Full details of the Plan are provided in the financial statements of the principal employer, Clariant Production UK Ltd, which are publicly available.

 

Clariant Retirement Savings Scheme - Defined Contribution Section

The Defined Contribution Section is funded by the payment of contributions into personal accounts held under trust. These personal accounts are independent of the Company and are invested with a professional investment manager appointed by the Trustee. The charge against profit is the amount of employer contributions payable to the pension scheme in respect of the accounting year. On 31 October 2022, the Company closed the Defined Contribution Section of the Clariant Pension Plan and moved on 1 November 2022 into a new ‘Master Trust’ pension arrangement with Legal & General (‘’L&G’’), named Clariant Retirement Savings Scheme (the “New Scheme”).

 

22
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary of £1 each
500,000
500,000
500
500
23
Controlling party

The immediate parent undertaking, the ultimate parent undertaking and controlling party is Clariant AG, a Company incorporated in Switzerland.

 

Clariant AG is the parent undertaking of the smallest and largest group of undertakings to consolidate these financial statements at 31 December 2023. The consolidated financial statements of Clariant AG can be obtained from Investor Relations at Hardstrasse 61, CH-4133, Pratteln, Switzerland.

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