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03/11/2020 | 02:17am EDT
LANXESS AG ANNUAL FINANCIAL STATEMENTS LANXESS AKTIENGESELLSCHAFT, KÖLN
5 Fundamentals
7 (1) Gross sales
10 Notes to the Statements of Monetary Place 10 (12) Non-Present Property
17 Different Obligatory Disclosures 17 (31) Notification of Pursuits Held within the Firm (Part 160, Paragraph 1, No. Eight of the German Inventory Company Act (AktG)) 17 (32) Spinoff Monetary Devices 19 (33) Whole Compensation of the Board of Administration and Supervisory Board (Pursuant to Part 285, No. 9 a HGB) 20 (34) Whole Remuneration of Former Members of the Board of Administration and of Members of the Board of Administration Who Stepped Down Throughout the Fiscal 12 months (Pursuant to Part 285, No. 9 a, Sentence 6 dd and No. 9 b HGB) 20 (35) Loans and Advances Granted to Members of the Board of Administration and the Supervisory Board (Pursuant to Part 285, No. 9 c HGB) 20 (36) Quantities Barred from Distribution (Pursuant to Part 253, Paragraph 6, Sentence 2 HGB) 21 (37) Occasions After the Finish of the Reporting Interval 21 (38) Appropriation of Earnings 21 (39) Company Officers
Revenue Assertion LANXESS AG
Assertion of Monetary Place LANXESS AG
Notes to the Annual Monetary Statements GENERAL INFORMATION The Board of Administration and Supervisory Board have issued the declaration required beneath Part 161 of the German Inventory Company Act (AktG) concerning the German Company Governance Code. This has been made accessible to the stockholders and will be discovered at www.lanxess.com within the Buyers part beneath Company Governance. FUNDAMENTALS The annual monetary statements of LANXESS AG, Cologne (registered at Cologne District Court docket, HRB 53652), are ready in accordance with the provisions of the German Business Code (HGB) and the German Inventory Company Act which might be relevant to massive inventory firms in addition to the supplementary provisions of the articles of affiliation. As within the earlier 12 months, the administration report of LANXESS AG has been mixed with the administration report of the LANXESS Group in utility of Part 315, Paragraph 5 HGB along with Part 298, Paragraph 2 HGB. To reinforce readability, sure objects within the earnings assertion and the assertion of monetary place are mixed and are defined within the Notes. Additionally for causes of readability, the “of which” objects required for sure monetary assertion objects are included completely within the Notes. The earnings assertion has been drawn up utilizing the cost-of-sales methodology. Monetary earnings and bills whose disclosure is just not coated by a compulsory merchandise and which can’t be assigned to a separate merchandise are reported beneath different monetary earnings or bills. As the first guardian firm of the LANXESS Group, LANXESS AG has ready consolidated monetary statements as of December 31, 2019, in accordance with the Worldwide Monetary Reporting Requirements (IFRS), as endorsed by the European Union. The annual monetary statements and mixed administration report for fiscal 12 months 2019 ready in utility of Part 315, Paragraph 5 HGB along with Part 298, Paragraph 2 HGB are revealed along with the auditor’s report within the German Federal Gazette (Bundesanzeiger). They’re made accessible at www.lanxess.de beneath Buyers, Publications. ACCOUNTING POLICIES AND VALUATION PRINCIPLES Intangible property which have been acquired are acknowledged at value and amortized on a straight-line foundation over their estimated helpful lives. Self-generated intangible property should not capitalized. Property, plant and tools is carried at the price of acquisition. Property topic to depletion are depreciated. Write-downs are made for any declines in worth that transcend the depletion mirrored in depreciation and are anticipated to be everlasting. Additions made within the reporting 12 months are depreciated utilizing the straight-line methodology. Low-value property costing as much as €250.00 are expensed within the 12 months of acquisition. Low-value property costing between €250.00 and €1,000.00 are mixed in a collective merchandise and depreciated over 5 years utilizing the straight-line methodology. Helpful lives of intangible property, property, plant and tools:
Investments in affiliated corporations are acknowledged at value of acquisition, much less write-downs for any decline in worth that’s anticipated to be everlasting. The place the explanations for write-downs made in earlier years not apply or solely partially apply, the respective objects are written again accordingly, offered that the write-back doesn’t trigger the carrying quantity to exceed the price of acquisition.
Money has been deposited in a fiduciary account to fulfill the obligations regarding the “demographic change fund” for workers outlined within the collective bargaining settlement for the German chemical trade. This money deposit is run on behalf of LANXESS AG by the fiduciary agent Willis Towers Watson (earlier 12 months: Deutsche Treuinvest Stiftung) and is ring-fenced towards different collectors’ claims. The extent of advantages owed to the staff thus meets the circumstances for classification as “securities-linked pension or comparable commitments” pursuant to Part 253, Paragraph 1, Sentence Three HGB. The fund property as outlined in Part 246, Paragraph 2, Sentence 2, Subsentence 1 HGB are measured at honest worth pursuant to Part 253, Paragraph 1, Sentence Four HGB and offset towards the underlying commitments pursuant to Part 246, Paragraph 2, Sentence 2, Subsentence 1 HGB. Since, within the case of “securities- linked pension and comparable commitments,” adjusting the carrying quantity of the commitments to the honest worth of the corresponding property acts as a de facto bar to distribution, the ban on distribution pursuant to Part 268, Paragraph 8, Sentence Three along with Sentence 1 HGB subsequently doesn’t apply. Loans receivable which might be interest-free or bear low charges of curiosity are carried at current worth; different loans receivable are carried at nominal worth. Receivables and different property are acknowledged at nominal worth, much less any vital write-downs. The quantities of such write-downs mirror the likelihood of default. Marketable securities are valued on the decrease of value and honest worth. Financial institution deposits held in euro are acknowledged at their nominal worth; such property held in foreign currency are translated on the spot price on the cut-off date of the monetary statements. Disbursements previous to the cut-off date that signify spending for a selected interval thereafter are acknowledged as pay as you go bills. Additionally included are the variations between the difficulty and settlement quantity for bonds issued by LANXESS AG that will probably be amortized over the maturity of the bonds. Deferred taxes are calculated for short-term variations between the accounting valuations and tax valuations of property, liabilities and deferred objects. As the first firm of the LANXESS Group’s fiscal entity in Germany, LANXESS AG subsequently has to acknowledge short-term variations relating each to its personal monetary statements and to these of corporations with which it varieties a fiscal entity. Along with short-term variations, tax loss carryforwards are additionally accounted for. Deferred taxes are based mostly on the combination earnings tax price for all corporations in LANXESS AG’s fiscal entity, which is at the moment 29.1% (earlier 12 months: 32.3%). The mixed earnings tax price contains company earnings tax, commerce tax and the solidarity surcharge. Any ensuing tax legal responsibility could be acknowledged as a deferred tax legal responsibility within the assertion of monetary place. The choice of capitalizing tax refunds is just not utilized. Within the reporting 12 months, there was a web surplus of deferred tax property, which isn’t acknowledged. The capital inventory is acknowledged at par worth. Provisions for pensions and different post-employment advantages are computed utilizing the projected unit credit score methodology on the premise of biometric likelihood utilizing the Heubeck 2018 G reference tables. Anticipated future wage and pension will increase are taken into consideration. The present assumptions for wage will increase are unchanged from the earlier 12 months at 2.50% for non-managerial workers and a pair of.75% for managerial workers. For older pension commitments, the anticipated price of enhance was left at 1.50% within the annual monetary statements for 2019. For pension commitments from 2001 onwards, the anticipated price of enhance is unchanged from the earlier 12 months at 1.00%. The low cost price used is 2.71% (earlier 12 months: 3.21%) for pensions, 0.58% (earlier 12 months: 0.81%) for early retirement advantages and 1.97% (earlier 12 months: 2.32%) for miscellaneous post-employment advantages. The rate of interest used to low cost pension and different post- employment profit obligations to December 31, 2019, is the typical market rate of interest for the previous ten fiscal years for an assumed residual maturity as calculated and revealed by the Deutsche Bundesbank. The assumed residual maturity is 15 years for pensions and different post- employment advantages and one 12 months for early retirement advantages.
For workers who joined after December 31, 2016, and new workers, LANXESS has launched a pension mannequin comprising employee- and employer-financed parts as an adjunct to pension legal responsibility insurance coverage. The settlement quantity of the duty equates to the honest worth of the pension legal responsibility insurance coverage secured by way of a contractual belief association (CTA), which constitutes fund property as outlined in Part 246, Paragraph 2, Sentence 2 HGB, so the duty and fund property stability out to zero. Within the case of the current dedication, the curiosity expense equals the earnings from the pension legal responsibility insurance coverage. Each quantities are to be netted in accordance with Part 246, Paragraph 2, Sentence 2 HGB. Tax provisions are established for the quantities of tax arrears anticipated to be payable much less the advance funds made. The opposite provisions are established to cowl all foreseeable dangers and unsure liabilities, based mostly on affordable estimates of the long run settlement quantities of such commitments. Future worth and price will increase are taken into consideration if there are ample goal indications that they are going to happen. Provisions maturing in a couple of 12 months are discounted to current worth utilizing the typical market rate of interest for the previous seven years, based mostly on their remaining maturities. Liabilities are mirrored at their settlement quantities. Contingent liabilities arising from sureties and debt ensures are proven on the quantities equal to the loans or commitments really excellent on the cut-off date. Revenue and bills are accrued within the fiscal 12 months. International forex receivables and liabilities, ahead alternate contracts and different forex derivatives are acknowledged utilizing the mark-to-market methodology. International forex receivables and payables are valued at center spot alternate charges, whereas forex derivatives contracts concluded to hedge them are valued on the ahead market charges on the cut-off date. Valuation positive aspects and losses are offset towards each other. Provisions for impending losses are established with respect to any extra of losses over positive aspects. Positive factors are solely acknowledged in the event that they relate to receivables and payables due inside one 12 months. International forex money and money equivalents and balances with banks are translated on the common alternate charges prevailing on the cut-off date. NOTES TO THE INCOME STATEMENT 1 | Gross sales Gross sales revenues totaled €4,914 thousand (earlier 12 months: €7,256 thousand) and associated primarily to companies offered to LANXESS Deutschland GmbH in Germany on the premise of a service settlement. 2 | Price of Gross sales The price of gross sales totaling €4,911 thousand (earlier 12 months: €7,253 thousand) primarily comprised bills regarding the companies offered. These had been particularly personnel and normal administration bills. 3 | Different Working Revenue The opposite working earnings included prior-period earnings of €1,266 thousand (earlier 12 months: €2,012 thousand) from the reversal of provisions.
4 | Different Working Bills The opposite working bills included prior-period bills of €34 thousand (earlier 12 months: €35 thousand). 5 | Revenue from Different Securities and Loans Included in Monetary Non-Present Property The earnings from different securities and loans included in monetary non-current property largely comprised earnings of €8,258 thousand (earlier 12 months: €8,258 thousand) from long-term loans to LANXESS Deutschland GmbH. 6 | Web Curiosity Expense
7 | Different Monetary Revenue and Bills – Web
The alternate positive aspects and losses had been principally attributable to overseas forex objects regarding LANXESS AG and to the valuation of overseas forex transactions undertaken with third events on behalf of Group corporations. The miscellaneous monetary bills had been primarily for assure fee funds to affiliated corporations. Miscellaneous monetary earnings largely comprised assure fee funds obtained from affiliated corporations. 8 | Revenue Taxes The tax expense of €158,091 thousand within the reporting 12 months (earlier 12 months: €109,445 thousand) is the combination of the tax expense of €35,081 thousand for the reporting 12 months and tax expense of €123,010 thousand in respect of earlier years. Tax expense doesn’t embrace deferred taxes. As of December 31, 2019, LANXESS AG anticipated to obtain a future tax profit ensuing from short-term accounting variations, each in its personal monetary statements and in these of corporations with which it varieties a fiscal entity for tax functions. This quantity was calculated on the premise of a mixed earnings tax price of 29.1% (LANXESS AG and firms with which it has revenue and loss switch agreements). Deferred tax liabilities primarily relate to variations in valuations of property, plant and tools, intangible property and fairness pursuits in Group corporations. A deferred tax asset is acknowledged because of the upper pension obligations acknowledged for accounting functions than for tax functions. Different deferred tax property relate to provisions that aren’t tax-deductible, resembling these for impending losses or for pre-retirement go away, and valuation variations, as within the case of provisions for service anniversaries and miscellaneous provisions and liabilities.
9 | Personnel Bills
The curiosity portion of personnel-related provisions, particularly provisions for pensions, is acknowledged not in personnel bills however in curiosity expense. 10 | Workers
11 | Audit Charges All charges for the companies of PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft are revealed within the notes to the LANXESS Group consolidated monetary statements. The charges had been primarily paid for the audit of LANXESS AG’s annual monetary statements and of the consolidated monetary statements together with the early warning system and for the assessment of the condensed consolidated interim monetary statements. Charges had been additionally paid for different audit-related companies, tax consultancy companies and different companies. The opposite audit-related companies primarily embrace companies in reference to sustainability reporting and for audit certificates. The opposite companies embrace project-related consulting companies.
NOTES TO THE STATEMENTS OF FINANCIAL POSITION 12 | Non-Present Property
13 | Shareholdings Pursuant to Part 285, No. 11 HGB The necessary disclosures in accordance with Part 285, No. 11 HGB are contained within the checklist of shareholdings. 14 | Loans to Subsidiaries Loans to subsidiaries comprised two long-term loans to LANXESS Deutschland GmbH. 15 | Different Loans The opposite loans nearly totally comprised the professional rata belief property of LANXESS Pension Belief e.V. (LXS Belief). LANXESS AG has transferred money amounting to €58,248 thousand, of which €Zero thousand within the reporting 12 months, to LXS Belief in a number of tranches beneath a contractual belief association (CTA) to safe pension obligations. The professional rata belief property of LANXESS AG are invested in shares in a particular fund run by an funding administration firm. Income recognition by LANXESS AG takes place on the time a distribution decision is reached by the funding administration firm. Contractually agreed obligations for the cost of extra premiums by the trustor may have an effect. No distribution decision was taken within the reporting interval. The web earnings and bills of minus €Three thousand recorded within the reporting 12 months (earlier 12 months: €371 thousand) largely resulted from different bills. The honest worth of the property of LXS Belief exceeded their carrying quantity at 12 months finish. Because the property allotted to the CTA don’t represent plan property inside the which means of Part 246, Paragraph 2, Sentence 2 HGB, they’re measured at value of acquisition pursuant to Part 253, Paragraph 1, Sentence Four HGB and never at honest worth, and there’s no ban on their distribution. Money has been deposited in a fiduciary account yearly to fulfill the obligations regarding the “demographic change fund” for workers outlined within the collective bargaining settlement for the German chemical trade. The honest worth of the fiduciary property corresponds to the honest worth of the obligations beneath the “demographic change fund” amounting to €299 thousand (earlier 12 months: €249 thousand). The carrying quantities of the fiduciary property and the obligations acknowledged beneath different provisions have been netted, as have earnings and bills. 16 | Receivables from Affiliated Firms Receivables from affiliated corporations totaling €4,513,800 thousand (earlier 12 months: €3,060,820 thousand) associated primarily to short-term loans receivable, together with accrued curiosity, receivables from monetary transactions and receivables beneath revenue and loss switch agreements. Commerce receivables amounting to €1,628 thousand (earlier 12 months: €2,481 thousand) existed in reference to the service settlement described in Notice (1). Moreover, there have been no receivables with maturities in extra of 1 12 months, as within the earlier 12 months. 17 | Different Property Different property comprised the next:
All the different property had been due within the respective following 12 months. 18 | Securities The securities of €49,212 thousand acknowledged within the earlier 12 months had been bought within the reporting 12 months. 19 | Pay as you go Bills The pay as you go bills in fiscal 12 months 2019 primarily included reductions of €25,543 thousand (earlier 12 months: €29,222 thousand) on the bonds issued.
20 | Fairness Adjustments in fairness in 2019 had been as follows:
maturity, and to grant possibility rights to, or impose train obligations on, the holders or collectors of warrant bonds, profit-participation rights with warrants or earnings bonds with warrants, and/or to grant conversion rights to, or impose conversion obligations on, the holders or collectors of convertible bonds, convertible profit- participation rights or convertible earnings bonds in respect of bearer shares of the corporate representing a complete professional rata enhance of as much as €9,152,293 within the firm’s capital inventory on the phrases to be outlined for these bonds. Pursuant to Part 4, Paragraph 5 of the articles of affiliation, the capital inventory of LANXESS AG is thus conditionally elevated by as much as €9,152,293 (conditional capital). The Board of Administration is allowed, with the approval of the Supervisory As of the cut-off date, the capital inventory was divided into 87,447,852 no-par bearer shares. On the premise of a Board of Administration decision dated July 9, 2019, the corporate, after implementing a inventory repurchase, resolved to cut back the capital inventory by means of simplified capital discount in accordance with Part 71, Paragraph 1, No. 8, Sentence 6 of the German Inventory Company Act by €4,075,084 from €91,522,936 to €87,447,852 by withdrawing 4,075,084 no-par bearer shares with a notional share within the capital inventory of €1.00 per share. In accordance with Part 237, Paragraph 5 of the German Inventory Company Act, an quantity of €4,075,084 was added to the capital reserves. All shares carry the identical rights and obligations. One vote is granted per share, and revenue is distributed per share. On the premise of the proposed decision that was up to date earlier than the Annual Stockholders’ Assembly, the Annual Stockholders’ Assembly on Might 23, 2019, resolved to make the most of the distributable revenue for fiscal 12 months 2018, amounting to €126,931 thousand, as follows:
Conditional Capital The Annual Stockholders’ Assembly of LANXESS AG on Might 15, 2018, approved the Board of Administration till Might 14, 2023, with the approval of the Supervisory Board, to situation – in a number of installments – warrant bonds and/or convertible bonds, profit-participation rights and/or earnings bonds or a mix of those devices (collectively known as “bonds”) – as both registered or bearer bonds – with a complete nominal worth of as much as €1,000,000,000, with or with out restricted Board, to exclude subscription rights in sure circumstances that are detailed within the authorization. The Board of Administration will contemplate different capital measures with stockholders’ subscription rights disapplied in its choice to disapply stockholders’ subscription rights when issuing convertible bonds or bonds with warrants, revenue participation rights or earnings bonds (or combos of those devices). By the use of self-commitment, the Board of Administration undertakes to carry out capital measures with stockholders’ subscription rights disapplied as much as a most complete quantity of 20% of the corporate’s present capital inventory. This restriction applies when issuing new shares using approved capital, using treasury shares or issuing bonds with warrants or conversion rights/obligations on the premise of which shares have to be issued, with stockholders’ subscription rights disapplied in every case. The Board of Administration will probably be sure by this declaration till a future Annual Stockholders’ Assembly once more resolves to authorize the Board of Administration to implement capital measures
beneath exclusion of stockholders’ subscription rights. The authorization to situation bonds has but to be utilized. Licensed Capital I and III Pursuant to Part 4, Paragraph Three of LANXESS AG’s articles of affiliation, the Annual Stockholders’ Assembly on Might 15, 2018, approved the Board of Administration till Might 14, 2023, with the approval of the Supervisory Board, to extend the capital inventory on a number of events by issuing new no-par bearer shares towards money or contributions in form as much as a complete quantity of €18,304,587 (Licensed Capital I). Moreover, pursuant to Part 4, Paragraph Four of LANXESS AG’s articles of affiliation, the Annual Stockholders’ Assembly on Might 26, 2017, approved the Board of Administration till Might 25, 2022, with the approval of the Supervisory Board, to extend the corporate’s capital inventory on a number of events by issuing new bearer shares towards money or contributions in form as much as a complete quantity of €9,152,293 (Licensed Capital III). Stockholders are typically entitled to subscription rights when Licensed Capital I and III are utilized. Nonetheless, these rights will be excluded in sure circumstances that are outlined in Part 4, Paragraphs Three and Four of the articles of affiliation of LANXESS AG. By the use of self-commitment, the Board of Administration undertakes to carry out capital measures with stockholders’ subscription rights disapplied as much as a most complete quantity of 20% of the corporate’s present capital inventory. This restriction applies when issuing new shares using approved capital, using treasury shares or issuing bonds with warrants or conversion rights/obligations on the premise of which shares have to be issued, with stockholders’ subscription rights disapplied in every case. The Board of Administration will probably be sure by this declaration till a future Annual Stockholders’ Assembly once more resolves to authorize the Board of Administration to implement capital measures beneath exclusion of stockholders’ subscription rights. Licensed Capital I and III haven’t but been utilized. Share buyback and retirement Initially of fiscal 12 months 2019, neither the corporate nor dependent or majority-owned entities, or third events appearing for the account of the corporate or for the account of dependent or majority-owned entities, held shares within the firm. On the premise of the decision of the Annual Stockholders’ Assembly of LANXESS AG of Might 20, 2016, the Board of Administration was approved in accordance with Part 71, Paragraph 1, No. Eight of the German Inventory Company Act to accumulate shares within the firm representing as much as 10% of the capital inventory till Might 19, 2021, and to make the most of them for any function permitted by legislation. Subsidiaries of the corporate or third events appearing for the account of the corporate or its subsidiaries had been additionally permitted to make the most of this authorization. On the discretion of the Board of Administration, such shares had been in a position to be acquired both in the marketplace or by way of a public tender supply. The Board of Administration was approved to make use of them for any function permitted by legislation, particularly the needs particularly listed within the authorization. The Board of Administration of the corporate resolved on January 10, 2019 to train its inventory repurchase authorization and to purchase treasury shares at a purchase order worth of as much as €200 million (not together with incidental bills) on the inventory alternate. Within the interval from January 14, 2019, to June 12, 2019, the corporate then bought a complete of 4,075,084 no-par bearer shares of the corporate with a professional rata quantity of €1.00 per share. The quantity of capital inventory attributable to those shares is €4,075,084. This equates to 4.453% of the corporate’s capital inventory of €91,522,936 at the moment. The purchases had been made completely by way of the inventory market by a financial institution commissioned by the corporate. They had been carried out in digital buying and selling on the Frankfurt Inventory Trade on 94 Xetra buying and selling days. The weighted common worth quantities to €49.0787 per repurchased share. The whole worth for the repurchased shares, not together with incidental bills, amounted to €199,999,958.47. The treasury shares had been acquired for the aim of withdrawing them and decreasing the corporate’s capital inventory. On July 9, 2019, the Board of Administration resolved to withdraw all repurchased shares in keeping with the inventory repurchase authorization in accordance with Part 71, Paragraph 1, No. 8, Sentence 6 of the German Inventory Company Act. The shares had been withdrawn on July 12, 2019, and not using a additional decision by the Annual Stockholders’ Assembly. The corporate’s capital inventory was accordingly decreased to €87,447,852. In accordance with Part 237, Paragraph 5 of the German Inventory Company Act, an quantity of €4,075,084 was added to the capital reserves.
On Might 23, 2019, the Annual Stockholders’ Assembly of LANXESS AG resolved, with impact after a time delay, to droop the inventory repurchase authorization of Might 20, 2016, and situation a brand new authorization for the acquisition and utilization of treasury shares. The suspension and the brand new authorization took impact on August 13, 2019, firstly of the day that lay two months after the day on which the final notification regarding the inventory repurchase program introduced on January 10, 2019, saying its completion, was revealed by way of a European media pool. The brand new authorization permits the Board of Administration to accumulate shares within the firm representing as much as 10% of the capital inventory till Might 22, 2024, and to make the most of them for any function permitted by legislation. This authorization may be utilized by subsidiaries of the corporate or by third events on behalf of the corporate or its subsidiaries. On the discretion of the Board of Administration, such shares could also be acquired both in the marketplace or by way of a public tender supply. The Board of Administration is allowed to make use of them for any function permitted by legislation, particularly the needs particularly listed within the authorization. No treasury shares had been bought on the premise of this new authorization in fiscal 12 months 2019. On the finish of fiscal 12 months 2019, neither the corporate nor dependent or majority- owned entities, or third events appearing for the account of the corporate or for the account of dependent or majority- owned entities, held shares within the firm. 21 | Provisions for Pensions and Different Put up-Employment Advantages Pension provisions relate to pension obligations for current and former workers and to commitments beneath early retirement packages. Provisions for pensions and different post-employment advantages as of December 31, 2019, amounted to €81,462 thousand (earlier 12 months: €74,190 thousand). The distinction pursuant to Part 253, Paragraph 6, Sentence 1 HGB for the fiscal 12 months amounted to €10,889 thousand (earlier 12 months: €11,672 thousand) and is topic to the ban on distribution pursuant to Part 253, Paragraph 6, Sentence 2 HGB. The settlement quantities of the obligations from the pension and comparable commitments accent to the pension legal responsibility insurance coverage amounted to €398 thousand and had been netted towards the honest worth of the pledged pension legal responsibility insurance coverage, which constitutes fund property as outlined in Part 246, Paragraph 2, Sentence 2 HGB, of €398 thousand. No curiosity bills or earnings resulted from the pension legal responsibility insurance coverage within the reporting interval. 22 | Tax Provisions The tax provisions relate to earnings taxes of €122,790 thousand for earlier years. 23 | Different Provisions The opposite provisions are established for performance- associated compensation parts (APP, LTSP, LTPB) for workers, trip and additional time credit, long- service anniversaries and different unsure liabilities. Different unsure liabilities comprised, amongst different issues, the anticipated value of the Annual Stockholders’ Assembly for fiscal 12 months 2019 and the variable and glued compensation of the Supervisory Board. The annual performance-based element of the variable compensation, often known as the Annual Efficiency Cost (APP), relies on company enterprise targets and different circumstances, such because the attainment of sure targets for Group EBITDA pre exceptionals, that are outlined by the Board of Administration and the Supervisory Board earlier than the start of the respective fiscal 12 months. Precise funds could differ from the quantity calculated prematurely. The long-term,performance-related parts of the compensation system are the Lengthy-Time period Inventory Efficiency Plan (LTSP) and the Lengthy-Time period Efficiency Bonus (LTPB). The LTSP relies on the efficiency of LANXESS inventory. The LTSP 2014-2017 program arrange in 2014 makes use of the MSCI World Chemical compounds Index as a reference worth. The Dow Jones STOXX 600 Chemical compoundsSM serves
as a reference index for the LTSP 2010-2013, in place since 2010, from which exercisable rights are nonetheless excellent. It responds to the decision by legislators for a stronger give attention to long-term firm efficiency. The LTSP is split into 4 four-year tranches, and participation is contingent upon a private funding in LANXESS shares. These shares are topic to a median vesting interval of 5 years (LTSP 2010-2013) and 4 years (LTSP 2014-2017). The rights granted by the LTSP could also be exercised on the finish of those intervals. The train interval is three years basically, however 5 years for the 2012 and 2013 tranches. Within the LTSP 2018-2021, in place since 2018, the rights granted are exercised instantly on the finish of the four-year vesting interval. The worth of a inventory efficiency proper depends on the typical efficiency of LANXESS inventory relative to the MSCI World Chemical compounds Index throughout the vesting interval. The efficiency relative to the index is calculated individually for every of the 4 years of the vesting interval. The LTPB rewards the monetary growth of the Group based mostly on the enterprise efficiency in three consecutive years. The bonus cost is a share of the annual base wage. 24 | Bonds Bonds as of December 31, 2019, totaled €2,700,000 thousand (earlier 12 months: €2,700,000 thousand) and comprised the next:
25 | Liabilities to Banks The liabilities to banks of €24,741 thousand (earlier 12 months: €28,973 thousand) primarily comprise accrued curiosity. 26 | Commerce Payables All commerce payables are to 3rd events. 27 | Payables to Affiliated Firms Payables to affiliated corporations amounting to €1,416,016 thousand (earlier 12 months: €527,203 thousand) primarily comprised loans, together with accrued curiosity, and liabilities regarding monetary transactions. 28 | Different Liabilities
29 | Additional Data on Liabilities The residual maturities of liabilities are as follows:
As well as, LANXESS AG has offered ensures on behalf of subsidiaries for cost obligations regarding future deliveries beneath long-term procurement agreements. Outdoors of Germany, LANXESS Restricted (registration no. 03498959), Newbury, Nice Britain, utilized the exemption from the auditing of its annual monetary statements as permitted by Part 479A of the U.Okay. Firms Act 2006. As required by legislation, LANXESS AG, as the final word guardian firm, assured all excellent liabilities as of December 31, 2019, with respect to Part 479C of the U.Okay. Firms Act 2006. The web liabilities of LANXESS Restricted as of December 31, 2019, amounted to €2,510 thousand. 30 | Contingent Liabilities from Ensures Beneath the grasp settlement that was concluded between Bayer AG and LANXESS AG along with the Spin-Off and Takeover Settlement, Bayer AG and LANXESS AG agreed, amongst different issues, on commitments concerning mutual indemnification for liabilities in keeping with the respective asset allocation, and on particular preparations allocating accountability to take care of claims within the areas of product legal responsibility, environmental contamination and antitrust violations. The grasp settlement additionally accommodates preparations for the allocation of tax results regarding the spin-off and to the previous measures to create the subgroup that was subsequently spun off. LANXESS AG has given the next ensures on behalf of subsidiaries:
Based mostly on the knowledge accessible to us, the businesses involved ought to be capable of fulfill the underlying obligations in all circumstances. The ensures should not anticipated to be utilized.
OTHER MANDATORY DISCLOSURES 31 | Notification of Pursuits Held within the Firm (Part 160, Paragraph 1, No. Eight of the German Inventory Company Act (AktG)) Notifications of pursuits held in LANXESS AG are set out within the disclosures pursuant to Part 160, Paragraph 1, No. Eight AktG. 32 | Spinoff Monetary Devices In the midst of their enterprise, LANXESS AG and firms within the LANXESS Group are uncovered to dangers of modifications in alternate charges and market costs. Spinoff monetary devices are utilized in some circumstances to hedge towards these dangers. These comprise over-the-counter (OTC) devices that aren’t traded on an alternate. They primarily embrace ahead alternate contracts, rate of interest swaps and ahead commodity contracts. The usage of such devices is ruled by uniform tips and is topic to stringent inside controls. It’s confined to hedging of the Group’s working enterprise and the associated investments and financing transactions. The aim of utilizing spinoff monetary devices is to cut back fluctuations in earnings and money flows brought on by modifications in alternate charges, rates of interest and market costs. There’s a threat that the worth of monetary derivatives could change because of fluctuations in underlying parameters resembling alternate charges. The place derivatives are used for hedging functions, the potential for a lack of worth attributable to a drop in costs is offset by corresponding will increase within the values of the hedged contracts. Within the case of derivatives with a constructive honest worth, a credit score or default threat arises if the counterparties can not meet their obligations. To reduce this threat, credit score limits are assigned to particular person banks, and framework agreements are used that enable offsetting of the honest worth of open spinoff positions within the occasion of insolvency of a counterparty. The notional quantity of monetary spinoff contracts concluded with exterior counterparties was €1,454,316 thousand as of December 31, 2019 (earlier 12 months: €1,129,453 thousand). Again-to-back spinoff contracts with a notional quantity of €1,259,915 thousand (earlier 12 months: €1,110,805 thousand) had been concluded with Group corporations. The whole notional quantity of derivatives was €2,714,231 thousand (earlier 12 months: €2,240,258 thousand). This determine additionally accommodates these derivatives included in valuation items.
The derivatives comprised the next:
To hedge forex dangers regarding receivables and payables of LANXESS AG and Group corporations (threat within the assertion of monetary place), LANXESS AG concluded ahead alternate contracts with exterior counterparties with a notional quantity of €1,106,850 thousand (earlier 12 months: €792,044 thousand) and a good worth of minus €5,019 thousand (earlier 12 months: minus €5,275 thousand). A few of these transactions had been handed by way of to Group corporations. Contracts with these inside counterparties had a notional quantity of €912,449 thousand (earlier 12 months: €773,395 thousand) and a good worth of €2,695 thousand (earlier 12 months: €746 thousand). The place ahead alternate contracts concluded to hedge overseas forex receivables and payables of Group corporations had been handed by way of to Monetary Derivatives Used to Hedge Forex Dangers LANXESS AG used ahead alternate contracts to hedge alternate price dangers. Hedging was undertaken utilizing ahead alternate contracts for extremely possible forecast transactions by Group corporations in foreign currency and was handed by way of to those Group corporations on a back-to-back foundation. Ahead alternate contracts with a notional quantity of €344,824 thousand (earlier 12 months: €332,607 thousand) and a good worth of minus €7,997 thousand (earlier 12 months: minus €12,900 thousand) had been concluded with exterior counterparties to hedge extremely possible forecast transactions by Group corporations in foreign currency. They had been matched by transactions with Group corporations with a notional quantity of €344,824 thousand (earlier 12 months: €332,607 thousand) and had a good worth of €7,997 thousand (earlier 12 months: minus €12,900 thousand). Adjustments within the worth of the corresponding exterior and inside transactions transfer in reverse instructions and can offset each other by 2022. These transactions had been grouped in valuation portfolios and never acknowledged within the assertion of monetary place. the businesses involved by means of inside contracts, they had been grouped in valuation portfolios along with the opposing transactions. On the cut-off date, valuation portfolios comprising exterior and inside transactions had completely equal honest values. The vast majority of them mature in 2020 and the rest in 2022 on the newest. These transactions weren’t mirrored within the assertion of monetary place. Ahead alternate contracts that had been used to hedge overseas forex threat within the statements of monetary place of Group corporations and weren’t matched by inside transactions had a good worth of minus €1,248 thousand (earlier 12 months: minus €3,132 thousand). The unfavorable honest worth is mirrored in different provisions.
Additional valuation items (micro hedges) comprised overseas forex loans from Group corporations to LANXESS AG or vice versa for which ahead alternate contracts had been concluded on a back-to-back foundation. The carrying quantity of loans granted by LANXESS AG was €105,595 thousand at 12 months finish (earlier 12 months: €63,015 thousand), whereas the carrying quantity of loans to LANXESS AG was €68,112 thousand (earlier 12 months: €64,047 thousand). The web forex threat was €1,076 thousand (earlier 12 months: €1,397 thousand). The exterior ahead alternate contracts had a web unfavorable honest worth of minus €1,248 thousand (earlier 12 months: minus €3,132 thousand) and are all due in 2020. They weren’t acknowledged within the assertion of monetary place. Monetary Derivatives Used to Hedge Worth Dangers Ahead commodity contracts concluded with exterior counterparties, all of which mature inside one 12 months, had been handed by way of to Group corporations on a back- to-back foundation. The outcomes of such transactions that had terminated by 12 months finish canceled one another out. Micro hedges had been established for open transactions, giving a web zero end result. Valuation Strategies The honest values of monetary derivatives are decided utilizing customary valuation strategies and are based mostly in the marketplace knowledge (market values) accessible on the measurement date. The next ideas are utilized:
The effectiveness of hedge relationships is measured utilizing the dollar-offset methodology. 33 | Whole Compensation of the Board of Administration and Supervisory Board (Pursuant to Part 285, No. 9 a HGB) Whole compensation of €11,790 thousand (earlier 12 months: €12,183 thousand) was paid to the members of the Board of Administration of LANXESS AG for fiscal 12 months 2019, comprising €7,101 thousand (earlier 12 months: €8,597 thousand) in annual compensation (annual base wage, Annual Efficiency Cost (APP), advantages in form and different), minus €34 thousand (earlier 12 months: €Zero thousand) in compensation regarding the earlier 12 months and €4,723 thousand (earlier 12 months: €3,586 thousand) in multi-year compensation. The multi-year compensation consists of complete funds of €2,688 thousand (earlier 12 months: €1,726 thousand) beneath the Lengthy-Time period Efficiency Bonus (LTPB) and the stock-basedLong-Time period Inventory Efficiency Plan (LTSP). The variety of compensation rights granted beneath the LTSP was 2,035,000 (earlier 12 months: 1,860,000). The honest worth of those rights on the grant date was €2,035 thousand (earlier 12 months: €1,860 thousand). In fiscal 12 months 2019, stock-based compensation resulted in web expense of €4,518 thousand (earlier 12 months: earnings of €81 thousand). As well as, web bills of €5,094 thousand (earlier 12 months: €2,581 thousand) had been incurred to supply retirement pensions for the members of the Board of Administration. The current worth of the profit obligation as of the tip of 2018 for these members of the Board of Administration serving on that date was €21,952 thousand (earlier 12 months: €16,858 thousand). Particulars of the compensation system for members of the Board of Administration and a person breakdown of the compensation are given within the “Compensation Report” part of the mixed administration report for the LANXESS Group and LANXESS AG for fiscal 12 months 2019.
Compensation of the Supervisory Board
35 | Loans and Advances Granted to Members of the Board of Administration and the Supervisory Board (Pursuant to Part 285, No. 9 c HGB) There have been no loans or advances to members of the Board of Administration or the Supervisory Board as of December 31, 2019, nor had some other monetary The members of the Supervisory Board obtained complete compensation of €1,804 thousand in fiscal 12 months 2019 (earlier 12 months: €1,921 thousand). The provisions established for multi-year compensation for Supervisory Board members as of December 31, 2019, amounted to €1,670 thousand (earlier 12 months: €1,310 thousand). As well as, the worker representatives on the Supervisory Board who’re workers of the LANXESS Group obtained salaries beneath their employment contracts. The quantities of those salaries represented applicable compensation for the staff’ features and duties inside the Group. Particulars of the compensation system for members of the Supervisory Board and a person breakdown of the compensation are given within the “Compensation report” part of the mixed administration report for the LANXESS Group and LANXESS AG for fiscal 12 months 2019. 34 | Whole Remuneration of Former Members of the Board of Administration and of Members of the Board of Administration Who Stepped Down Throughout the Fiscal 12 months (Pursuant to Part 285, No. 9 a, Sentence 6 dd and No. 9 b HGB) Funds totaling €7,070 thousand (earlier 12 months: €473 thousand) and regarding pension advantages had been made to former members of the Board of Administration in fiscal 12 months 2019, of which €6,459 thousand (earlier 12 months: €Zero thousand) associated to one-time capital funds. €4,885 thousand (earlier 12 months: €2,790 thousand) was acknowledged as present pension expense. Provisions of €27,904 thousand had been acknowledged as of December 31, 2019 (earlier 12 months: €30,089 thousand) for the present pensions and the pension entitlements of former members of the Board of Administration. commitments been entered into for these people. 36 | Quantities Barred from Distribution (Pursuant to Part 253, Paragraph 6, Sentence 2 HGB) Quantities topic to the bar on distribution as of the cut-off date:
As of December 31, 2019, the extent of unrestricted reserves exceeded the overall quantity of quantities barred from distribution. Subsequently, no bar on distribution applies to the distributable revenue of €279,359 thousand. 37 | Occasions After the Finish of the Reporting Interval No occasions of particular significance befell after December 31, 2019, which might be anticipated to materially have an effect on the monetary place or outcomes of operations of LANXESS AG. 38 | Appropriation of Earnings Relating to the appropriation of distributable revenue of €279,359 thousand, the Board of Administration proposes that the Annual Stockholders’ Assembly resolve on the cost of a dividend of €0.95 per no-par share entitled to the dividend. This equates to a complete distribution of €83,075 thousand. The quantity remaining after deduction of the deliberate dividend, €196,284 thousand, is to be carried ahead to new account. 39 | Company Officers Supervisory Board Members of the Supervisory Board maintain places of work as members of the supervisory board or a comparable supervising physique of the firms listed. The next representatives of the corporate’s stockholders are at the moment members of the Supervisory Board: Dr. Matthias L. Wolfgruber (Chairman) Self-employed advisor Former Chairman of the Administration Board of ALTANA AG Additional places of work: LANXESS Deutschland GmbH, Cologne1) (Chairman) Grillo Werke AG, Duisburg1) ALTANA AG, Wesel1) ARDEX GmbH, Witten (Chairman of the Advisory Board) Cabot Company, Boston, Massachusetts (U.S.) Dr. Heike Hanagarth Self-employed administration advisor Former member of the Board of Administration of Deutsche Bahn AG, Berlin Additional places of work: LANXESS Deutschland GmbH, Cologne1) aichele GROUP GmbH & Co. KG, Bretten Gilde Purchase Out Companions BV, Utrecht, Netherlands NXT Boardroom GmbH, Munich (since January 1, 2020) Dr. Friedrich Janssen Member of the Supervisory Boards of assorted business enterprises Former member of the Board of Administration of E.ON Ruhrgas AG, Essen Additional places of work: LANXESS Deutschland GmbH, Cologne1) Hoberg & Driesch GmbH, Düsseldorf (Chairman of the Advisory Committee) Pamela Knapp Member of the Boards of Administration and Supervisory Boards of assorted European business enterprises Former CFO of GfK SE Additional places of work: NV Bekaert SA, Kortrijk, Belgium (Member of the Board of Administrators) Panalpina World Transport (Holding) AG, Basel, Switzerland (Member of the Board of Administrators till August 8, 2019) Compagnie de Saint-Gobain S.A., Courbevoie, France (Member of the Board of Administrators – Conseil d’Administration) Peugeot S.A., Rueil-Malmaison, France (Member of the Supervisory Board – Conseil de Surveillance) HKP Group AG, Zürich, Switzerland (Member of the Board of Administrators till October 15, 2019) Lawrence A. Rosen Member of the Supervisory Boards of assorted business enterprises Former member of the Board of Administration of Deutsche Put up AG Additional places of work: LANXESS Deutschland GmbH, Cologne1) Qiagen N.V., Venlo, Netherlands Theo H. Walthie Self-employed advisor Former World Enterprise Group President for the Hydrocarbons & Vitality Enterprise of the Dow Chemical Firm Additional places of work: LANXESS Deutschland GmbH, Cologne1) NBE Therapeutics AG, Basel, Switzerland (Chairman of the Board of Administrators) 1) Statutory supervisory boards
The next representatives of the corporate’s workers are at the moment members of the Supervisory Board: Ralf Sikorski (Vice Chairman) Board Member of the German Mining, Chemical and Vitality Industrial Union (IG BCE), Hanover (since June 17, 2019) Additional places of work: LANXESS Deutschland GmbH, Cologne1) (Vice Chairman) Chemie Pensionsfonds AG, Munich1) (Chair) (since January 1, 2018) RAG AG, Herne1) RWE AG, Essen1) RWE Energy AG, Cologne and Essen1) (Vice Chairman) RWE Era SE, Essen1) KSBG – Kommunale Verwaltungsgesellschaft GmbH, Essen1) (Vice Chairman) Birgit Bierther (since January 25, 2019) Chairwoman of the LANXESS Works Council on the Cologne web site Additional places of work: LANXESS Deutschland GmbH, Köln1) (since January 25, 2019) Werner Czaplik Chairman of the LANXESS Central Works Council and of the LANXESS Group Works Council Member of the LANXESS Works Council on the Leverkusen web site Additional places of work: LANXESS Deutschland GmbH, Cologne1) Dr. Hans-Dieter Gerriets Chairman of the LANXESS Group Managerial Workers’ Committee and Chairman of the LANXESS Managerial Workers’ Committee; Supervisor of a manufacturing facility within the Superior Industrial Intermediates enterprise unit of LANXESS Deutschland GmbH Additional places of work: LANXESS Deutschland GmbH, Cologne1) Thomas Meiers Secretary to the Board of Administrators, Board Division 3 “Digitalization/Labor/Members” of the German Mining, Chemical and Vitality Industrial Union (IG BCE), Hanover Additional places of work: LANXESS Deutschland GmbH, Cologne1) INEOS Deutschland Holding GmbH, Cologne1) INEOS Köln GmbH, Cologne1) Manuela Strauch Chairwoman of the LANXESS Works Council on the Uerdingen web site Member of the LANXESS Central Works Council Vice Chairwoman of the LANXESS Group Works Council Additional places of work: LANXESS Deutschland GmbH, Cologne1) 1) Statutory supervisory boards
Board of Administration The next individuals are at the moment members of the Board of Administration: Workplaces held by serving Board of Administration members
Member of the Board of Administration (since June 1, 2019) Dr. Stephanie Coßmann Member of the Board of Administration and Labor Relations Director (since January 1, 2020) Dr. Hubert Fink
Workplaces held by serving Board of Administration members
Member of the Board of Administration and Chief Monetary Officer Dr. Rainier van Roessel
Disclosures Pursuant to Part 160, Paragraph 1, No. Eight of the German Inventory Company Act (AktG)
Firm Title and Domicile Curiosity Fairness Consequence held (€ million) (€ million) (%) Firm Title and Domicile
LANXESS AG, both straight or not directly, holds at the least 20% of the shares within the following corporations (data pursuant to Part 285, No. 11 HGB). The figures acknowledged for fairness and web earnings/loss are derived from the annual monetary statements ready in accordance with native legislation. Firm Title and Domicile
Totally consolidated corporations LANXESS Distribution GmbH, Leverkusen LANXESS Organometallics GmbH, Bergkamen Saltigo GmbH, Leverkusen EMEA, excluding Germany Anderol B.V., Venlo, Netherlands Antec Internation Ltd., Sud- bury, Suffolk, Nice Britain Chemtura France S.A.S., Fitz James, France Europigments, S.L., Barcelona, Spain Nice Lakes Chemical Netherlands, B.V., Amsterdam, Netherlands Nice Lakes Holding S.A.S., Fitz James, France LANXESS (Pty.) Ltd., Modderfontein, South Africa LANXESS Central Jap Europe s.r.o., Bratislava, Slovakia LANXESS CISA (Pty.) Ltd., Newcastle, South Africa LANXESS Chemical compounds, S.L., Barcelona, Spain LANXESS Chrome Mining (Pty.) Ltd., Modderfontein, South Africa LANXESS Epierre SAS, Epierre, France LANXESS Holding Switzerland AG, Frauenfeld, Switzerland
Firm Title and Domicile Curiosity Fairness Consequence held (€ million) (€ million) (%) Totally consolidated corporations North America Firm Title and Domicile
Firm Title and Domicile
Assured Insurance coverage Firm, Montpelier, U.S. Nice Lakes Chemical Company, Wilmington, New Fortress, U.S. LANXESS Canada Co./Cie, Elmira, Canada LANXESS Company, Pittsburgh, U.S. LANXESS Companies US LLC, Wilmington, New Fortress, U.S. LANXESS Options US Inc., Wilmington, New Fortress, U.S. Sybron Chemical Holdings Inc., Birmingham, U.S. Latin America Chemtura Company Mexico, S. de R.L. de C.V., Atizapan de Zaragoza, Mexico LANXESS Indústria de Poliuretanose Lubrificantes Ltda., Rio Claro, Brazil LANXESS Industria de Produtos Quimicos e Plasticos Ltda., São Paulo, Brazil LANXESS S.A. de C.V., Mexico Metropolis, Mexico LANXESS S.A., Buenos Aires, Argentina Rhein Chemie Uruguay S.A., Colonia, Uruguay
100 12 0 100 8 (2) 100 101 (4) 100 25 2 100 18 2 100 1 0
Firm Title and Domicile
Accountability Assertion To the most effective of our information, and in accordance with the relevant monetary reporting ideas, the annual monetary statements give a real and honest view of the earnings, asset and monetary place of the LANXESS AG, and the mixed administration report features a honest assessment of the event and efficiency of the enterprise and the place of the LANXESS Group and LANXESS AG, along with an outline of the principal alternatives and dangers related to the anticipated growth of the LANXESS Group and LANXESS AG. Cologne, February 27, 2020 LANXESS Aktiengesellschaft
Unbiased Auditor’s Report INDEPENDENT AUDITOR’S REPORT “To LANXESS Aktiengesellschaft, Cologne REPORT ON THE AUDIT OF THE ANNUAL FINANCIAL STATEMENTS AND OF THE MANAGEMENT REPORT Audit Opinions Now we have audited the annual monetary statements of LANXESS Aktiengesellschaft, Cologne, which comprise the stability sheet as at December 31, 2019, and the assertion of revenue and loss for the monetary 12 months from January 1 to December 31, 2019, and notes to the monetary statements, together with the presentation of the popularity and measurement insurance policies. As well as, we’ve got audited the administration report of LANXESS Aktiengesellschaft, which is mixed with the group administration report, for the monetary 12 months from January 1 to December 31, 2019. In accordance with the German authorized necessities, we’ve got not audited the content material of the [statement on corporate governance pursuant to § [Article] 289f HGB [Handelsgesetzbuch: German Commercial Code] and § 315d HGB. In our opinion, on the premise of the information obtained within the audit,
Pursuant to § 322 Abs. [paragraph] Three Satz [sentence] 1 HGB, we declare that our audit has not led to any reservations regarding the authorized compliance of the annual monetary statements and of the administration report. Foundation for the Audit Opinions We performed our audit of the annual monetary statements and of the administration report in accordance with § 317 HGB and the EU Audit Regulation (No. 537/2014, referred to subsequently as “EU Audit Regulation”) in compliance with German Typically Accepted Requirements for Monetary Assertion Audits promulgated by the Institut der Wirtschaftsprüfer [Institute of Public Auditors in Germany] (IDW). Our obligations beneath these necessities and ideas are additional described within the “Auditor’s Duties for the Audit of the Annual Monetary Statements and of the Administration Report” part of our auditor’s report. We’re unbiased of the Firm in accordance with the necessities of European legislation and German business {and professional} legislation, and we’ve got fulfilled our different German skilled obligations in accordance with these necessities. As well as, in accordance with Article 10 (2) level (f) of the EU Audit Regulation, we declare that we’ve got not offered non-audit companies prohibited beneath Article 5 (1) of the EU Audit Regulation. We consider that the audit proof we’ve got obtained is ample and applicable to supply a foundation for our audit opinions on the annual monetary statements and on the administration report. Key Audit Issues within the Audit of the Annual Monetary Statements Key audit issues are these issues that, in our skilled judgment, had been of most significance in our audit of the annual monetary statements for the monetary 12 months from January 1 to December 31, 2019. These issues had been addressed within the context of our audit of the annual monetary statements as an entire, and in forming our audit opinion thereon; we don’t present a separate audit opinion on these issues.
In our view, the matter of most significance in our audit was as follows: 1 Recoverability of investements in affiliated corporations Our presentation of this key audit matter has been structured as follows:
Hereinafter we current the important thing audit matter: 1 Recoverability of investements in affiliated corporations 1 Investments in affiliated corporations amounting to EUR 739 million (11,2% of complete property) are reported beneath the “Monetary Property” stability sheet merchandise within the annual monetary statements of LANXESS AG. The investments in affiliated corporations comprise the funding in LANXESS Deutschland GmbH, which holds additional investments in flip. Investments in affiliated corporations are measured in accordance with German business legislation on the decrease of value and honest worth. The impairment testing of the shares in LANXESS Deutschland GmbH additionally takes into consideration the honest values of its oblique and direct investments, since these may have a cloth impression on the honest worth of the shares in LANXESS Deutschland GmbH. The respective honest values of LANXESS Deutschland GmbH and its oblique and direct investments are decided if there are indications of doable impairment. For this function, the investments are reviewed to determine whether or not the carrying quantity of the funding is just not coated by the corresponding (share of) web property of the corporate, the corporate has a historical past of creating losses or there are different indicators which may end result within the everlasting impairment of the funding. The honest values for investments are typically calculated as the current values of the anticipated future money flows derived from the planning projections ready by the Firm. The opinions for indications impairment and the honest values decided didn’t lead to a necessity for any write-downs for the fiscal 12 months. The result of the opinions and valuations relies upon particularly on planning projections, the estimation of future money inflows in addition to low cost and progress charges, that are topic to materials uncertainty. In opposition to this background and in view of its materials significance for LANXESS AG’s property, liabilities, and monetary efficiency, this matter was of specific significance for our audit. 2 As a part of our audit, we reviewed and evaluated the methodological process as adopted for the needs of the impairment testing of the shares in LANXESS Deutschland GmbH, amongst different issues. Utilizing the annual monetary statements of LANXESS Deutschland GmbH, we verified that the carrying quantity of the funding in LANXESS Deutschland GmbH is roofed by the corporate’s web property and that there isn’t a historical past of creating losses. As well as, we performed interviews with the shopper, examined the documentation for issues that would end result within the everlasting impairment of the funding and in addition obtained data on this topic from the manager administrators. We additionally inspected the planning projections for the varied enterprise areas on the stage of LANXESS AG and verified that these contained no proof for the everlasting impairment of the investments both. We assessed the appropriateness of the long run money inflows used within the planning projections, amongst different issues by evaluating this knowledge with the present budgets within the five-year plan accredited by the manager administrators, and reconciling it towards normal and sector-specific market expectations. Total, the assumptions utilized by the manager administrators are in keeping with our expectations. We additionally assessed the recoverability of the investments held by LANXESS Deutschland GmbH. For this function, we investigated whether or not the carrying quantity of the funding is roofed by the (share of) the web property of the respective firm. Within the case of these corporations with (a share of) web property under the carrying quantity
of the funding, a historical past of losses or different indicators that would end result within the everlasting impairment of the funding, we obtained the related dedication of honest worth for the funding and assessed whether or not the honest values had been correctly calculated and whether or not they have an effect on the carrying quantity of the funding in LANXESS Deutschland GmbH. In our view, on the premise of the accessible data, the procedures adopted by the manager administrators for the aim of the impairment testing of the shares in LANXESS Deutschland GmbH, together with the measurement parameters utilized and underlying measurement assumptions, are applicable total for the correct measurement of the investments in affiliated corporations. 3 The Firm’s disclosures regarding the investments in affiliated corporations are contained within the notes to the monetary statements within the part entitled “Accounting Insurance policies and Valuation Rules”. Different Data The chief administrators are answerable for the opposite data. The opposite data contains the [statement on corporate governance pursuant to § 289f HGB and § 315d HGB. The other information comprises the annual report – excluding cross-references to external information – with the exception of the audited annual financial statements, the audited management report and our auditor’s report. Our audit opinions on the annual financial statements and on the management report do not cover the other information, and consequently we do not express an audit opinion or any other form of assurance conclusion thereon. In connection with our audit, our responsibility is to read the other information and, in so doing, to consider whether the other information
Responsibilities of the Executive Directors and the Supervisory Board for the Annual Financial Statements and the Management Report The executive directors are responsible for the preparation of the annual financial statements that comply, in all material respects, with the requirements of German commercial law, and that the annual financial statements give a true and fair view of the assets, liabilities, financial position and financial performance of the Company in compliance with German Legally Required Accounting Principles. In addition, the executive directors are responsible for such internal control as they, in accordance with German Legally Required Accounting Principles, have determined necessary to enable the preparation of annual financial statements that are free from material misstatement, whether due to fraud or error. In preparing the annual financial statements, the executive directors are responsible for assessing the Company’s ability to continue as a going concern. They also have the responsibility for disclosing, as applicable, matters related to going concern. In addition, they are responsible for financial reporting based on the going concern basis of accounting, provided no actual or legal circumstances conflict therewith. Furthermore, the executive directors are responsible for the preparation of the management report that as a whole provides an appropriate view of the Company’s position and is, in all material respects, consistent with the annual financial statements, complies with German legal requirements, and appropriately presents the opportunities and risks of future development. In addition, the executive directors are responsible for such arrangements and measures (systems) as they have considered necessary to enable the preparation of a management report that is in accordance with the applicable German legal requirements, and to be able to provide sufficient appropriate evidence for the assertions in the management report. The supervisory board is responsible for overseeing the Company’s financial reporting process for the preparation of the annual financial statements and of the management report.
Auditor’s Responsibilities for the Audit of the Annual Financial Statements and of the Management Report Our objectives are to obtain reasonable assurance about whether the annual financial statements as a whole are free from material misstatement, whether due to fraud or error, and whether the management report as a whole provides an appropriate view of the Company’s position and, in all material respects, is consistent with the annual financial statements and the knowledge obtained in the audit, complies with the German legal requirements and appropriately presents the opportunities and risks of future development, as well as to issue an auditor’s report that includes our audit opinions on the annual financial statements and on the management report. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with § 317 HGB and the EU Audit Regulation and in compliance with German Generally Accepted Standards for Financial Statement Audits promulgated by the Institut der Wirtschaftsprüfer (IDW) will always detect a material misstatement. 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 annual financial statements and this management report. We exercise professional judgment and maintain professional skepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide those charged with governance with a statement that we have complied with the relevant independence requirements, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, the related safeguards. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the annual financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter. OTHER LEGAL AND REGULATORY REQUIREMENTS Further Information pursuant to Article 10 of the EU Audit Regulation We were elected as auditor by the annual general meeting on May 23, 2019. We were engaged by the supervisory board on August 2, 2019. We have been the auditor of the LANXESS Aktiengesellschaft, Cologne, without interruption since the financial year 2014. We declare that the audit opinions expressed in this auditor’s report are consistent with the additional report to the audit committee pursuant to Article 11 of the EU Audit Regulation (long-form audit report). GERMAN PUBLIC AUDITOR RESPONSIBLE FOR THE ENGAGEMENT The German Public Auditor responsible for the engagement is Jörg Sechser.” Cologne, February 28, 2020 PricewaterhouseCoopers Aktiengesellschaft Wirtschaftsprüfungsgesellschaft
PUBLISHER LANXESS AG 50569 Cologne www.lanxess.com Disclaimer Lanxess AG published this content on 11 March 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 March 2020 07:16:18 UTC
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Technical analysis trends LANXESS AG
Income Statement Evolution Consensus
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