Company registration number 03380658 (England and Wales)
CLARIANT PRODUCTION UK LTD
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
CLARIANT PRODUCTION 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
03380658
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 PRODUCTION UK LTD
CONTENTS
Page
Strategic report
1 - 2
Directors' report
3 - 5
Independent auditor's report
6 - 8
Statement of comprehensive income
9
Statement of financial position
10
Statement of changes in equity
11
Notes to the financial statements
12 - 30
CLARIANT PRODUCTION 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 Production 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. In 2022, the Company was active in the areas of Care Chemicals and Adsorbents.
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 new 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.
Turnover of the Company increased by 32% in 2023 to £4,120,000 (2022: £3,123,000). Increased sale of product to refineries in UK.
The Company made a profit on ordinary activities before tax in the year of £5,017,000 (2022 - £7,962,000).
The Company received no dividend in 2023 from its subsidiary companies, (2022: £5,000,000 from its subsidiary Clariant Oil Services UK).
The Company paid no interim dividend in 2023 (2022 - £10,000,000 to Clariant Services UK Ltd).
A dividend was received from its joint venture, Clariant Ali AI Abdulla Al Tamimi Co. Ltd, of £3,223,000 (2022: £1,571,000). No final dividend was paid or proposed in the year (2022 - £NIL).
The Company's assets exceeded its liabilities at the end of the year by £37,761,000 (2022: £37,110,000).
The global and local marketplace remains highly competitive for speciality chemicals. The Company will continue to seek to remain competitive by streamlining systems and processes to reduce costs to ensure its distribution activities are cost effective. It is envisaged that the Company will remain profitable in the coming year although forecasting at this time is clearly more challenging due to the global economic environment.
Principal risks and uncertainties
Trading in speciality chemicals, the Company is exposed to various general and sector-specific risks. These include, but are not limited to, environmental and product risks. These are reviewed and managed with the assistance of specialists within the Group and external advisers. Specific risk evaluations may be carried out by functions such as Internal Audit, Environmental, Health and Safety and Legal. The Company maintains appropriate levels of insurance cover.
Environmental risks
Environmental and safety issues are addressed as part of the focus on sustainable development in all aspects of production, transport, distribution and use of products and services. The risks identified are routinely reviewed and regular audits monitor compliance with legislative requirements and Group guidelines.
Mandatory principles on Environment, Safety and Health ("ESH") are laid down in the Group's ESH regulations which form an integral part of business processes and strategic planning.
Corporate Sustainability & 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 business activities by participation in the Global Responsible Care initiative of the chemical industry.
CLARIANT PRODUCTION UK LTD
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -
Product risks
The Group's integrated product policy ensures the inclusion of environmental and safety issues in all processes along the entire value chain. From supplier selection to providing customers with comprehensive information and services, the Company ensures that its products are used in ways that are safe, which minimise environmental impact and that they can be properly disposed of. The Company is continuing to monitor any developments with regards to Brexit and has implemented appropriate measures to ensure that its products will remain compliant with all applicable regulations.
Key performance indicators
The UK management team uses a number of KPls to monitor and manage performance against strategic objectives. The principal KPls include:
• Growth in sales(%)
• Improvement in net working capital (primarily stock days).
Sales increased by 32% compared to 2022.
Stock days are the number of days cost of goods sold represented by the value of the stock. Monitoring of networking capital is an on-going activity. Stock days reduced to 60 days (2022 - 130 days).
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 Management Bylaws of Clariant. The directors ensure that they act in good faith, using their own skill and judgement to assess the long term consequences of their decisions, 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.
A Horn
Director
17 September 2024
CLARIANT PRODUCTION 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 continued to be that of distribution of speciality chemical products and sponsoring employer for a group pension scheme.
Results and dividends
The results for the year are set out on page 9.
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 of these financial statements were approved.
Engagement with suppliers, customers and others
Suppliers of Clariant form an integral part of our network and we expect that they commit to ethical and sustainable business practices, with consideration for human rights, child protection, labour standards and anti-corruption regulations. In order to set a binding framework, we have issued a Code of Ethics for Suppliers in which we outline our strategy, scope and expectations, both in general terms and in detail. When carrying out procurement duties and responsibilities, all Clariant employees are expected to engage with suppliers and contractors to work collaboratively to comply with the Code of Ethics and the Company's commitments to high legal, ethical and moral standards. All suppliers are expected to cooperate for jointly improving and developing innovative solutions for a sustainable future. Being a responsible chemical Company, and in line with Responsible Care ® principles, we also expect our suppliers to continuously improve their sustainability efforts.
The customers of Clariant Production UK Ltd are internal rather than external customers therefore, engagement with this group is considered as part of our employee engagement.
Principal risks and uncertainties
The principal risks and uncertainties are discussed in the Strategic Report.
CLARIANT PRODUCTION UK LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -
Engagement with employees
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 employee's day-to-day actions, supporting continuous development and growth. The process enables regular feedback on performance, based on constructive dialogue, respect and trust.
All permanent employees in the UK also participate in the group 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 a common understanding of the Company performance, and the financial factors affecting this.
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 of 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.
Corporate governance
The way we do business is a key element for our reputation. Clariant wants to be perceived as a world-class performance Company and, by the same token, as a reliable and integral partner of our stakeholders all over the world. We are convinced that sustainable business success is closely linked to compliance with laws, regulations and ethical standards, and in defining the management structure, organisation, and processes of the Clariant Group, the corporate governance principles aim to provide stakeholder value and transparency to promote this sustainable long-term success.
Both the Group and the Company are committed to local and international standards of corporate governance by following the respective statutory provisions and rules applicable in the UK.
The board of directors are ultimately responsible for the governance of the Company, but the Clariant Code of Ethics provides the comprehensive framework, and outlines the compliance principles for all Clariant employees. Clariant does not tolerate any violation of the Code of Ethics and encourages employees to report non compliance behaviour to the compliance organisation. The Company guarantees utmost confidentiality with a dedicated Integrity Line where reporting can be done anonymously. In addition, the Company actively promotes the Code of Ethics as an opportunity to conduct business in a sustainable way, ensuring good quality and ethical decision making across the organisation.
CLARIANT PRODUCTION UK LTD
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
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:
select suitable accounting policies and then apply them consistently;
make judgements and accounting estimates that are reasonable and prudent;
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
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 PRODUCTION UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARIANT PRODUCTION UK LTD
- 6 -
Opinion
We have audited the financial statements of Clariant Production UK Ltd (the 'Company') for the year ended 31 December 2023 which comprise the statement of comprehensive income, the statement of financial position, 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:
give a true and fair view of the state of the Company's affairs as at 31 December 2023 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
have been prepared in accordance with the requirements of the Companies Act 2006.
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.
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:
the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.
CLARIANT PRODUCTION UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARIANT PRODUCTION UK LTD (CONTINUED)
- 7 -
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:
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns; or
certain disclosures of remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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.
As part of our audit procedures we held a discussion with the management and were able to gain an understanding of and assess the processes in place for ensuring compliance with laws and regulations.
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.
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.
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.
CLARIANT PRODUCTION UK LTD
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF CLARIANT PRODUCTION UK LTD (CONTINUED)
- 8 -
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 PRODUCTION UK LTD
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 9 -
2023
2022
Notes
£'000
£'000
Revenue
3
4,120
3,123
Change in stocks of finished goods and work in progress
(241)
321
Other operating income
1,162
771
Raw materials and consumables
(2,801)
(1,967)
Other external charges
(140)
(235)
Gross profit
2,100
2,013
Staff costs
6
(531)
(394)
Depreciation and amortisation
(30)
(2)
Other operating expenses
(1,726)
(896)
Operating profit/(loss)
4
(187)
721
Income from fixed asset investments
8
3,223
6,571
Interest receivable and similar income
8
195
18
Interest payable and similar expenses
9
(2)
Other finance income
8
1,786
654
Profit before taxation
5,017
7,962
Tax on profit
10
(449)
(298)
Profit for the financial year
4,568
7,664
Other comprehensive income:
Items that will not be reclassified to profit or loss
Actuarial loss on defined benefit pension schemes
23
(5,225)
(1,269)
Movement of deferred tax relating to pension surplus
21
1,308
317
Total items that will not be reclassified to profit or loss
(3,917)
(952)
Total comprehensive income for the year
651
6,712
CLARIANT PRODUCTION UK LTD
STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 10 -
2023
2022
Notes
£'000
£'000
£'000
£'000
Non-current assets
Property, plant and equipment
12
70
7
Investments
13
994
994
1,064
1,001
Current assets
Inventories
16
458
698
Trade and other receivables
17
15,177
10,288
Cash and cash equivalents
178
15,635
11,164
Current liabilities
18
(3,144)
(1,843)
Net current assets
12,491
9,321
Total assets less current liabilities
13,555
10,322
Provisions for liabilities
Deferred tax liabilities
21
(8,057)
(8,931)
Other provisions
22
(17)
Net assets excluding pension surplus
5,481
1,391
Defined benefit pension surplus
23
32,280
35,719
Net assets
37,761
37,110
Equity
Called up share capital
24
500
500
Retained earnings
37,261
36,610
Total equity
37,761
37,110
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 03380658 (England and Wales)
CLARIANT PRODUCTION UK LTD
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 11 -
Share capital
Retained earnings
Total
Notes
£'000
£'000
£'000
Balance at 1 January 2022
500
39,898
40,398
Year ended 31 December 2022:
Profit for the year
-
7,664
7,664
Other comprehensive income:
Actuarial gains on pensions scheme
-
(1,269)
(1,269)
Tax relating to other comprehensive income
-
317
317
Total comprehensive income for the year
-
6,712
6,712
Dividends
11
-
(10,000)
(10,000)
Balance at 31 December 2022
500
36,610
37,110
Year ended 31 December 2023:
Profit for the year
-
4,568
4,568
Other comprehensive income:
Actuarial gains on pensions scheme
-
(5,225)
(5,225)
Tax relating to other comprehensive income
-
1,308
1,308
Total comprehensive income for the year
-
651
651
Balance at 31 December 2023
500
37,261
37,761
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 12 -
1
Accounting policies
Company information
Clariant Production UK Ltd ("the Company") distributes speciality chemical products, mainly in the United Kingdom.
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 under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 101 'Reduced Disclosure Framework' and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 101 requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the Company's accounting policies (see note 2).
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.
The Company has taken advantage of the following disclosure exemptions under FRS 101:
the requirements of IFRS 7 Financial Instruments: Disclosures;
the requirements of paragraphs 91-99 of IFRS 13 Fair Value Measurement;
the requirements of paragraphs 10(d), 10(f), 16, 38A, 38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134-136 of IAS 1 Presentation of Financial Statements;
the requirements of IAS 7 Statement of Cash Flows;
the requirements of paragraphs 30 and 31 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors;
the requirements of paragraph 17 and 18A of IAS 24 Related Party Disclosures;
the requirements in IAS 24 Related Party Disclosures to disclose related party transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly owned by such a member.
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 PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 13 -
1.3
Revenue
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue 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.
Sale of goods
Revenue from the sale of goods is recognised on the satisfaction of performance obligations, such as the transfer of a promised good, identified in the contract between the Company and the customer.
A receivable is recognised when the goods are delivered as this is the point in time that the consideration is unconditional because only the passage of time is required before the payment is due.
1.4
Property, plant and equipment
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 asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Land is not depreciated. Depreciation on other assets is charged so as to allocate the cost of assets less their fair value over their estimated useful lives, using the straight-line method.
The estimated useful lives range as follows:
Short-term leasehold property
Over the life of the lease
Fixtures and fittings
3-16 years
Plant and machinery
3-16 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 or losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.
1.5
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.
Associates and Joint Ventures are held at cost less impairment.
1.6
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.
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 14 -
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.
1.7
Stocks
Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a standard cost basis. Work in progress and finished goods include labour and attributable overheads.
At each balance sheet date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment cost is recognised immediately in profit or loss.
1.8
Cash and cash equivalents
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.
1.9
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.
1.10
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.
1.11
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.
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 15 -
1.12
Current and deferred tax
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 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:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.
Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair value 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 by the balance sheet date.
1.13
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 net 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.
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 16 -
1.14
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.
Defined benefit pension plan
The Company operated a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.
The asset recognised in the Balance Sheet in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the balance sheet date less the fair value of plan assets at the balance sheet date (if any) out of which the obligations are to be settled.
The defined benefit obligation is calculated using the projected unit credit method. Annually the Company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').
The fair value of plan assets is measured in accordance with the FRS 101 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.
The cost of the defined benefit plan, recognised in profit or loss as employee costs, except where included in the cost of an asset, comprises:
a) the increase in net pension benefit liability arising from employee service during the period; and
b) the cost of plan introductions, benefit changes, curtailments and settlements.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in profit or loss as a 'finance expense'.
The DB plan is a multi-employer plan.
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 17 -
1.15
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 the 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 1.6.
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.
1.16
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 PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 18 -
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 instruments 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.
1.18
Exceptional items are transactions that fall within the ordinary activities of the Company but are presented separately due to the size or incidence.
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 19 -
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, other than those related to the defined benefit pension scheme which are discussed in note 23, 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 to 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 12 for the carrying amount of the property plant and equipment, and note 1.4 for the useful economic lives for each class of assets.
(b) Inventory provisioning
The Company distributed chemical products which often have a finite shelf life. As a result it is necessary to consider the recoverability of the cost of inventory and the associated provisioning required. When calculating the inventory provision, management considers the nature and condition of the inventory, as well as applying assumptions around anticipated saleability of finished goods and future usage of raw materials. See note 16 for the net carrying amount of the inventory and associated provision.
(c) Impairment of trade receivables
The Company makes an estimate of the recoverable value of trade and other debtors. When assessing impairment of trade and other receivables, management considers factors including the credit rating of the receivable, the ageing profile of receivables and historical experience. See note 17 for the net carrying amount of the receivables and associated impairment provision.
(d) Defined benefit pension scheme
The company has an obligation to pay pension benefits to certain employees. The cost of these benefits and the present value of the obligation depend on a number of factors, including the life expectancy, salary increases, asset valuations and the discount rate of corporate bonds. Management estimates these factors in determining the net pension obligation in the balance sheet. The assumptions reflect historical experience and current trends. See note 23 for the disclosures of the defined benefit pension scheme.
3
Revenue
2023
2022
£'000
£'000
Revenue analysed by geographical market
United Kingdom
4,120
3,123
The whole of the turnover is attributable to one single activity, originating within the UK, being the distribution of chemical products with group.
4
Operating profit/(loss)
2023
2022
Operating profit for the year is stated after charging/(crediting):
£'000
£'000
Depreciation of property, plant and equipment
25
2
Loss on disposal of property, plant and equipment
5
-
Cost of inventories recognised as an expense
2,801
1,967
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 20 -
5
Auditor's remuneration
2023
2022
Fees payable to the Company's auditor and associates:
£'000
£'000
For audit services
Audit of the financial statements of the Company
28
27
For other services
Other services
4
3
6
Employees
The average monthly number of persons (including directors) employed by the Company during the year was:
2023
2022
Number
Number
Manufacturing and distribution
2
2
Marketing and administration
5
3
Total
7
5
Their aggregate remuneration comprised:
2023
2022
£'000
£'000
Wages and salaries
424
313
Social security costs
46
38
Pension costs
61
43
531
394
7
Directors' remuneration
The directors received no remuneration for their services to the Company during the year (2022 - £NIL ). Two of the directors were remunerated for their services to the UK Group of Clariant companies ('UK Group') and their costs were borne by the parent company, Clariant Services UK Ltd.
The directors' emoluments paid by Clariant Services UK Ltd was solely in respect of duties under the directors' contracts of employment with Clariant Services UK Ltd 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).
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 21 -
8
Investment income
2023
2022
£'000
£'000
Interest income
Interest on the net defined benefit asset
1,786
654
Interest receivable from group companies
195
18
Total interest revenue
1,981
672
Income from fixed asset investments
Income from other fixed asset investments
3,223
6,571
Total income
5,204
7,243
9
Finance costs
2023
2022
£'000
£'000
Interest on financial liabilities measured at amortised cost:
Interest on other loans
2
10
Taxation
2023
2022
£'000
£'000
Current tax
UK corporation tax on profits for the current period
15
134
Deferred tax
Origination and reversal of temporary differences
408
132
Changes in tax rates
26
42
Adjustment in respect of prior periods
(10)
434
164
Total tax charge
449
298
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
10
Taxation
(Continued)
- 22 -
The charge for the year can be reconciled to the profit per the income statement as follows:
2023
2022
£'000
£'000
Profit before taxation
5,017
7,962
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
1,180
1,513
Effect of expenses not deductible in determining taxable profit
1
1
Income not taxable
(758)
(1,248)
Adjustment in respect of prior years
(10)
Effect of change in UK corporation tax rate
26
42
Taxation charge for the year
449
298
11
Dividends
2023
2022
2023
2022
Amounts recognised as distributions:
per share
per share
Total
Total
£'000
£'000
£'000
£'000
Ordinary shares
Final dividend paid
-
0.02
-
10,000
12
Property, plant and equipment
Short-term leasehold property
Plant and machinery
Fixtures and fittings
Total
£'000
£'000
£'000
£'000
Cost
At 1 January 2023
42
42
Additions
14
2
72
88
Disposals
-
(25)
(25)
At 31 December 2023
14
19
72
105
Accumulated depreciation and impairment
At 1 January 2023
35
35
Charge for the year
4
3
18
25
Eliminated on disposal
(25)
(25)
At 31 December 2023
4
13
18
35
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
12
Property, plant and equipment
Short-term leasehold property
Plant and machinery
Fixtures and fittings
Total
£'000
£'000
£'000
£'000
(Continued)
- 23 -
Carrying amount
At 31 December 2023
10
6
54
70
At 31 December 2022
7
7
Property, plant and equipment includes right-of-use assets, as follows:
Right-of-use assets
2023
2022
£'000
£'000
Net values at the year end
Property
10
-
Total additions in the year
14
-
Depreciation charge for the year
Property
4
-
13
Investments
Current
Non-current
2023
2022
2023
2022
£'000
£'000
£'000
£'000
Investments in subsidiaries
-
-
981
981
Investments in joint ventures
-
-
13
13
994
994
14
Subsidiaries
Details of the Company's subsidiaries at 31 December 2023 are as follows:
Name of undertaking
Principal activities
Class of
% Held
% Held
shares held
Direct
Indirect
Clariant Oil Services UK Ltd
Manufacture and sale of chemical products
Ordinary
100
0
Clariant Trustees Ltd
Trustee company
Ordinary
100
0
Clariant Holdings UK Ltd
Dormant company
Ordinary
100
0
Clariant UK Ltd
Dormant company
Ordinary
0
100
The registered address of all subsidiary Companies is: Airedale House 423, Kirkstall Road, Leeds, LS4 2EW, United Kingdom.
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 24 -
15
Joint ventures
The investment in joint ventures relates to Clariant Ali Al-Abdulla Al-Tamimi Co. Ltd whose registered address is PO Box 230, Al-Khobar 31952. Saudi Arabia, the Company owns a 49% holding.
16
Inventories
2023
2022
£'000
£'000
Raw materials
15
8
Finished goods
443
690
458
698
The difference between purchase price or production cost of stocks and their replacement cost is not material.
Stocks are stated after provisions for impairment of £Nil (2022: £32,000).
17
Trade and other receivables
2023
2022
£'000
£'000
Corporation tax recoverable
617
-
Amounts owed by fellow group undertakings
13,481
10,080
Amounts owed by joint ventures
980
Other receivables
16
119
Prepayments and accrued income
83
89
15,177
10,288
Included within amounts owed by group undertakings are loans receivable of £934,000 (2022: £3,525,000) which are unsecured and repayable on demand with interest charged at base rate minus 1%.
Also included in amounts owed by group undertakings is a loan receivable of £4,818,000 (2022: £1,731,000) denominated in Euros, repayable on demand with no interest charged.
Other amounts owed by group undertakings represent trading balances, which are unsecured, bear no interest and are payable in accordance with the Group's intercompany payment terms.
Amounts owed by joint ventures are repayable on demand and bear no interest.
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 25 -
18
Liabilities
2023
2022
Notes
£'000
£'000
Trade and other payables
19
2,918
1,763
Taxation and social security
219
80
Lease liabilities
20
7
-
3,144
1,843
19
Trade and other payables
2023
2022
£'000
£'000
Trade payables
141
140
Amounts owed to fellow group undertakings
2,629
1,469
Accruals and deferred income
148
154
2,918
1,763
Included in amounts owed to group undertakings are loans payable of £1,111,000 (2022: £1,111,000) owed to dormant companies in the UK group which are unsecured, repayable on demand and interest free.
The balance of amounts owed to group undertakings represents trading balances which are unsecured, bear no interest and are payable in accordance with the Group's intercompany payment terms,
20
Lease liabilities
2023
2022
Maturity analysis
£'000
£'000
Within one year
7
-
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
7
-
21
Deferred taxation
Liabilities
2023
2022
£'000
£'000
Deferred tax balances
8,057
8,931
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Deferred taxation
(Continued)
- 26 -
The following are the major deferred tax liabilities and assets recognised by the Company and movements thereon during the current and prior reporting period.
Retirement benefit obligations
£'000
Liability at 1 January 2022
9,084
Deferred tax movements in prior year
Charge/(credit) to profit or loss
164
Charge/(credit) to other comprehensive income
(317)
Liability at 1 January 2023
8,931
Deferred tax movements in current year
Charge/(credit) to profit or loss
434
Charge/(credit) to other comprehensive income
(1,308)
Liability at 31 December 2023
8,057
22
Provisions for liabilities
2023
2022
£'000
£'000
Dilapidations provisions
17
-
Movements on provisions:
Dilapidations provisions
£'000
Additional provisions in the year
17
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
23
Retirement benefit schemes
2023
2022
Defined contribution schemes
£'000
£'000
Charge to profit or loss in respect of defined contribution schemes
61
43
The Company operates a Defined Contribution Pension Scheme. The assets of the scheme are held separately from those of the Company in an independently administered fund.
The Company is the principal 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. The Plan is funded by contributions from the Company and its employees.
Total contributions in respect of the Defined Benefit Section are based on the advice of a qualified independent actuary. On 31 December 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. 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 the Clariant Retirement Savings Scheme (the "New Scheme").
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.
Following the valuation at 1 April 2018 the Company, along with other participating companies agreed with the Trustee to discontinue the previously agreed exceptional contributions towards the deficit.
Having reviewed the trust deed and rules of the scheme the Company considers that it has the ability to take a refund of any surplus on a gradual settlement or wind up of the scheme (as defined in the exposure draft to IFRIC14), and has therefore continued to recognise the full surplus in these financial statements.
Defined benefit scheme
2023
2022
Key assumptions
%
%
Discount rate
4.7
5.0
Pension growth rate
3.1
3.2
Salary growth rate
3.2
3.4
Mortality assumptions
2023
2022
Assumed life expectations on retirement at age 65:
Years
Years
Retiring today
- Males
20.9
21.2
- Females
23.2
23.5
Retiring in 20 years
- Males
22.2
22.5
- Females
24.7
25.0
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Retirement benefit schemes
(Continued)
- 28 -
2023
2022
Amounts recognised in the income statement
£'000
£'000
Net interest on defined benefit liability/(asset)
(1,786)
(654)
2023
2022
Amounts recognised in other comprehensive income
£'000
£'000
Actuarial changes arising from changes in financial assumptions
5,589
(131,869)
Actuarial changes related to plan assets
(364)
133,138
Total costs
5,225
1,269
The amounts included in the statement of financial position arising from the Company's obligations in respect of defined benefit plans are as follows:
2023
2022
£'000
£'000
Present value of defined benefit obligations
236,785
232,751
Fair value of plan assets
(269,065)
(268,470)
Surplus in scheme
(32,280)
(35,719)
2023
2022
Movements in the present value of defined benefit obligations
£'000
£'000
At 1 January 2023
232,751
372,393
Benefits paid
(12,875)
(14,347)
Actuarial gains and losses
5,589
(131,869)
Interest cost
11,320
6,574
At 31 December 2023
236,785
232,751
2023
2022
The defined benefit obligations arise from plans funded as follows:
£'000
£'000
Deferred members
103,926
97,333
Retired members
132,859
135,418
236,785
232,751
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
23
Retirement benefit schemes
(Continued)
- 29 -
2023
2022
Movements in the fair value of plan assets:
£'000
£'000
At 1 January 2023
268,470
408,727
Interest income
13,106
7,228
Return on plan assets (excluding amounts included in net interest)
364
(133,138)
Benefits paid
(12,875)
(14,347)
At 31 December 2023
269,065
268,470
Sensitivity of the defined benefit obligations to changes in assumptions
Scheme obligations would have been affected by changes in assumptions as follows:
2023
2022
£'000
£'000
A 25 basis point change in discount rate
- increase
(7,218)
(7,224)
- decrease
7,599
7,613
The fair value of plan assets at the reporting period end was as follows:
Quoted
Unquoted
Quoted
Unquoted
2023
2023
2022
2022
£'000
£'000
£'000
£'000
Equity instruments
38,806
-
37,874
-
Debt instruments
20,574
-
10,847
-
Others
86,304
123,381
93,650
126,099
145,684
123,381
142,371
126,099
24
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£'000
£'000
Issued and fully paid
Ordinary shares of £'0001 each
500,000
500,000
500
500
CLARIANT PRODUCTION UK LTD
NOTES TO THE FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
25
Controlling party
The immediate parent undertaking is Clariant Services UK Ltd.
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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