BASF Finance Europe N.V.
Arnhem, The Netherlands
Semi-annual report 2023
CONTENTS
Page
FINANCIAL REPORT
1 Report of the Board of Directors 4
FINANCIAL STATEMENTS
1 Balance sheet as per June 30, 2023 9
2 Profit and loss account for 2023 10
3 Cash flow statement for the first half year of 2023 11
4 Notes to the financial statements 12
5 Notes to the balance sheet as per June 30, 2023 18
6 Notes to the profit & loss account for the first half year of 2023 24
OTHER INFORMATION
1 Provisions of the Articles of Association relating to profit appropriation 26
2 Appropriation of the result for 2022 26
3 Subsequent events 26
BASF Finance Europe N.V.
Arnhem, The Netherlands
FINANCIAL REPORT
BASF Finance Europe N.V.
Arnhem, The Netherlands
1 REPORT OF THE BOARD OF DIRECTORS
1.01 Policy, state of affairs and previous expectations
In accordance with article 5:25c of the Financial Markets Supervision Act (Wet op het financeel toezicht), the
Board of Directors confirms that to the best of its knowledge:
- the semi-annual financial statements give a true and fair view of the assets, liabilities, financial position
and profit and loss of the Company;
- the semi-annual report gives a true and fair view of the position as per June 30, 2023 and the
development during the financial half year of the Company;
- the semi-annual report describes the principal risks the Company is facing.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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Semi-annual Report 2023
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1.02 Objectives and core activities
The objective of the Company is to optimize the financial activities within BASF Group companies in Europe.
The core activities of the Company involve the forming of, financing of, participating in, managing of,
supervision of and contribution of services to companies, as well as performing commercial, industrial and
financial operations.
1.03 Corporate structure and staffing
BASF Finance Europe N.V. (hereinafter: the Company) has its legal address in the Netherlands, Velperplein
23, 6811 AH, Arnhem and is listed under number 09041351 in the Trade Register.
All amounts are in € x 1,000 or in US$ x 1,000 unless otherwise stated.
The Company is a 100% subsidiary of BASF SE, Ludwigshafen, Germany.
The Company has no employees and receives services through the staff of BASF Nederland B.V..
The Supervisory Board and the Board of Directors are each comprised of three natural persons.
1.04 Financial developments
Result
The Company has completed the first half year of 2023 with a positive result of € 135 (June 30, 2022: positive
result of € 70).
During the reporting period the Company did not use financial derivatives.
Current ratio
The current ratio as per June 30, 2023 measured as Current Assets / Current Liabilities amounts to 1.839
(December 31, 2022: 1.867).
Solvency ratio
The solvency ratio as per June 30, 2023 measured as Shareholders' Equity / Balance sheet total
amounts to 0.009 (December 31, 2022: 0.009).
The low solvency ratio results from the high amount of total liabilities. However, due to the fact that financial
fixed assets and non-current liabilities have the same duration with a fixed margin, the Company has limited
risk with regards to solvency.
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1.05 Risks and risk management
The risk management goal of the Company is to identify and evaluate risks as early as possible and limit
business losses by taking appropriate measures, thus avoiding risks that pose a threat to the continuity of the
Company.
Management is not aware of any significant risks and uncertainties. Therefore, there are no improvement
measures planned.
In specific areas with a higher risk for fraud, management took separate measures. Especially the payment
process has been identified as a process with a potential higher fraud risk. In this area there is a strict focus on
Segregation of Duties and access control to the software environment.
Financial risk
The management of currency and interest rate risks is conducted in the treasury department of BASF
Nederland B.V., detailed BASF guidelines and procedures exist for dealing with financial risks.
Interest risk
Interest rate risks are the result of changes in prevailing market interest rates, which can cause a change in the
present value of fixed-rate instruments, and changes in the interest payments of floating rate instruments. To
hedge these risks the interest rates of the assets and the liabilities have the same base. This will offset the
interest rate risk.
Liquidity risk
Risks from cash flow fluctuations are recognized in a timely manner as part of the liquidity planning.
Uncertainties are taken into account by means of additional risk scenarios and the short-term updating of our
liquidity planning. This means we can promptly take the necessary measures when required. The liquidity
policy is determined by BASF SE.
Credit risk
On a yearly basis, the Company assesses the credit risk for counterparties within the BASF Group where there
are loans granted at year-end. So far, the Company has only granted loans to 100% Group companies, which
are classified as counterparties with low credit risk.
Risks arising, for example, from the Covid-19 crisis, the war between Russia and Ukraine, and other
macroeconomic factors are continuously analyzed and management will take measures to reduce the credit
risk when possible. So far there is no significant higher credit risk determined.
The Company's obligations to third parties on the bond markets are guaranteed by BASF SE, the parent
company of the BASF Group.
Foreign currency risk
Financial foreign currency risks are the result of the translation of receivables, liabilities and other monetary
items. These risks are not hedged by using derivative instruments.
The Company is exposed to foreign exchange risk on liabilities and receivables denominated in a currency
other than Euro, but these related risks are naturally hedged. In general, the Company strives to match foreign
exchange risks of its assets and liabilities.
1.06 Culture and behaviour – soft controls
Based on international standards, BASF's Compliance Program combines important laws and company-
internal policies - often exceeding legal requirements - with external voluntary commitments to create a
framework that regulates how all BASF employees interact with business partners, officials, colleagues and
society.
The core of our Compliance Program is the global, standardized Code of Conduct received by every employee.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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1.07 Risk management policy for financial instruments
On September 7, 2007 the Company and BASF SE established their Debt Issuance Program (hereinafter: DIP
or the Program). Under this DIP, the Company or BASF SE may issue one or more notes to a specific number
of banks (so-called: Dealers). As of June 30, 2023, the maximum aggregate principal amount of notes which
can be issued and outstanding under the Program is € 20,000,000. Notes issued by the Company under the
DIP have the benefit of a guarantee provided by BASF SE. Notes will be issued in such denominations as may
be agreed between the issuer and the relevant Dealer and as indicated in the applicable final terms.
Notes issued under the DIP can be listed for trading on the regulated market of the Luxembourg Stock
Exchange.
The DIP prospectus is updated annually.
Current notes overview at nominal value
Date of issuance Interest rate Nominal amount Carrying amount
06/30/2023
November 10, 2016 0.750% € 500,000 € 497,792
June 20, 2018 3.625% US$ 200,000 € 183,824
Total outstanding notes on June 30, 2023 € 681,616
1.08 Application and compliance with codes of conduct
Corporate Governance
The Board of Directors is responsible for the establishment and adequate functioning of internal control in the
Company. Consequently, the Board of Directors has implemented a range of processes designed to provide
control by the Board of Directors over the Company's operations. These processes and procedures include
measures regarding the general control environment as well as specific internal control measures.
All these processes and procedures are aimed at ensuring a reasonable level of assurance that the Company
has identified and managed its significant risks and that it meets the operational and financial objectives in
compliance with applicable laws and regulations.
The Supervisory Board comprises of three persons (one female / two male). The Board of Managing Directors
comprises of three persons, all are male. For future changes of the Boards, the Company aims to take into
account article 2:166, article 2:167 of the Dutch Civil Code and article 3d of the 'Besluit inhoud
Bestuursverslag'.
While the Board of Directors routinely works towards continuous improvement of the processes and
procedures regarding financial reporting, the Board of Directors is of the opinion that, regarding financial
reporting risks, the internal risk management and control systems:
- provide a reasonable level of assurance that the financial reporting in this annual report does not contain
any errors of material importance;
- have worked properly in the first half year of 2023.
The duty of the Board of Supervisory Directors shall be to supervise the policies of the Board of Directors and
the general course of affairs of the Company and its affiliated business. It shall give advice to the Board of
Directors, asked and un-asked for when performing their duties, the Supervisory Directors shall be guided by
the interests of the Company and its affiliated business.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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All employees and managers are obligated to adhere to the global, standardized Code of Conduct (see
www.basf.com), which describe our principles for proper conduct and overall topics ranging from corruption
and antitrust laws to human rights, labor and social standards, conflicts of interest and tradecontrol, and
protection of data privacy. See also "1.06 Culture and behaviour - soft controls".
All employees are required within a predescribed time frame to take part in basic compliance training, refresher
courses and special tutorials dealing with, for example, antitrust legislation or trade control regulations. Despite
the fact that the Company has no staff, the Directors and the members of the Supervisory Board are bound by
the corporate Compliance Program.
Going concern
As part of the preparation of the financial statements, Management assessed the Company's ability to continue
as a going concern. As the outstanding bonds have been guaranteed by BASF SE, the Company has secured
the risk of non repayment of the outstanding bonds. Furthermore, Management analysed the Financials of the
group companies with outstanding loans and concluded that the risk of non-repayment of the outstanding loans
is low. As there is no indication of circumstances that raise significant doubt, Management concluded that the
Company is able to continue as a going concern.
1.09 Research and development
The Company does not conduct any research and development
1.1 0 Future expectations
Outlook for second half year of 2023 and 2024
When new applications for financing will be received during the second half year of 2023 and 2024, the
Company will decide if, how and where to issue new notes or to take or provide new loans. The Company does
not plan to have employees for second half 2023 and 2024. The Company does not intend to make
investments in the second half year of 2023 and 2024.
1.11 Additional information about statutory tasks of an audit committee
The Company does not have an audit committee. Article 21a of the "Wet toezicht accountantsorganisaties"
(Wta) offers the (informal) legislator the opportunity to introduce an audit committee. This was done by decree
of 26 July 2008 and applies to "public interest entities", what is meant by this is defined in Article 1, letter l of the
Wta. The Company meets this definition. However, Article 3(a) of the decree mentions an exemption, which the
Company complies with.
Arnhem, The Netherlands, August 18, 2023
BASF Finance Europe N.V.
J. Hoekstra (Director)
R. Holtermann (Director)
F. Wilhelmi (Director)
BASF Finance Europe N.V.
Arnhem, The Netherlands
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FINANCIAL STATEMENTS
BASF Finance Europe N.V.
Arnhem, The Netherlands
1 BALANCE SHEET AS PER JUNE 30, 2023
06/30/2023
€ x 1,000 € x 1,000
12/31/2022
€ x 1,000 € x 1,000
ASSETS
FIXED ASSETS
Financial fixed assets
(1)
Loans to Group companies 681,564 684,629
NON-CURRENT ASSETS
681,564 684,629
CURRENT ASSETS
Other receivables
(2)
13,987 13,462
TOTAL ASSETS
695,551 698,091
SHAREHOLDERS' EQUITY
(3)
Issued share capital 2,087 2,087
Share premium reserve 2,513 2,513
Other reserves 1,597 1,523
Result of the year 135 74
6,332 6,197
LONG-TERM LIABILITIES
(4)
Non-current loans 681,615 684,684
CURRENT LIABILITIES
(5)
Loans from Group companies 3,000 3,000
Taxes and social securities 41 25
Other current liabilities 4,563 4,185
7,604 7,210
TOTAL SHAREHOLDERS' EQUITY
AND LIABILITIES
695,551 698,091
BASF Finance Europe N.V.
Arnhem, The Netherlands
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2 PROFIT AND LOSS ACCOUNT FOR 2023
01/01/2023 - 06/30/2023
€ x 1,000 € x 1,000
01/01/2022 - 06/30/2022
€ x 1,000 € x 1,000
(6)
7,821 8,293
Interest and similar income
Interest and similar expenses
(7)
7,512 8,110
Net financial income and expenses
309 183
General and administrative expenses 114 85
Result from ordinary activities before
tax
195 98
Tax on result from ordinary activities
(8)
-60 -28
Net result
135 70
BASF Finance Europe N.V.
Arnhem, The Netherlands
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BASF Finance Europe N.V.
Arnhem, The Netherlands
3 CASH FLOW STATEMENT FOR THE FIRST HALF YEAR OF 2023
The cash flow statement has been prepared using the indirect method.
€ x 1,000 € x 1,000 € x 1,000 € x 1,000
Net cash flow from operating activities
Result before taxation 195 105
Interest income and interest expense -309 -319
Adjustment effective interest methode -3 -2
Change in other working capital 25 -42
-92 -258
Interest paid -6,722 -14,902
Interest received 7,812 15,235
Corporate income tax -5 -30
1,085 303
Net cash flow (used in) / from operating activities 993 45
Issued Financial Assets 0 0
Repayment Financial Assets 0 0
Net cash flow (used in) / from investing activities 00
Repayment Loans/Notes (Note 5) 0 -8,600
Dividend payment (Note 3) 0 0
Proceeds Loans/Notes (Note 5) 0 0
Net cash flow (used in) / from financing activities 0 -8,600
Changes in cash & cash equivalents 993 -8,555
The movement in the cash & cash equivalents can be broken down in the Current account with
parent company as follows:
Balance as at January 1 8,110 16,665
Movement during the financial year 993 -8,555
Balance as at June 30 (Note 2) 9,103 8,110
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01/01/2023-06/30/2023 01/01/2022-12/31/2022
4 NOTES TO THE FINANCIAL STATEMENTS
GENERAL
BASF Finance Europe N.V. (the Company) has been established per April 22, 1976. The first financial year
started on April 22 and ended on December 31, 1976. The Company has its legal address in the Netherlands,
Velperplein 23, 6811 AH, Arnhem and is listed under number 09041351 in the Trade Register.
The financial year is from January 1, 2023 until December 31, 2023.
Activities
The activities of the Company involve the forming of, financing of, participating in, managing of, supervision of
and contribution of services to companies, as well as performing commercial, industrial and financial
operations.
Going concern
As part of the preparation of the financial statements, Management assessed the Company's ability to continue
as a going concern. As the outstanding bonds have been guaranteed by BASF SE, the Company has secured
the risk of non repayment of the outstanding bonds. Furthermore, Management analysed the Financials of the
group companies with outstanding loans and concluded that the risk of non-repayment of the outstanding loans
is low. As there is no indication of circumstances that raise significant doubt, Management concluded that the
Company is able to continue as a going concern.
Ownership
The financial statements of the Company are consolidated in the consolidated financial statements of BASF
SE in Ludwigshafen, Germany, the ultimate parent company, which can be found on the website:
https://www.basf.com. BASF Finance Europe N.V. is a 100% subsidiary of BASF SE, Ludwigshafen, Germany.
GENERAL ACCOUNTING PRINCIPLES FOR THE PREPARATION OF THE SEMI-ANNUAL
ACCOUNTS
The financial statements have been prepared in accordance with Title 9 Book 2 of the Dutch Civil Code and the
Dutch Accounting Standards.
Valuation of assets and liabilities and determination of the result takes place under the historical cost
convention. Unless presented otherwise at the relevant principle for the specific balance sheet item, assets and
liabilities are presented at nominal value.
An asset is recognized in the balance sheet when it is probable that the expected future economic benefits that
are attributable to the asset will flow to the entity and the cost of the asset can be measured reliably. A liability
is recognized in the balance sheet when it is expected to result in an outflow of resources embodying economic
benefits and the amount of the obligation can be measured reliably.
An asset or liability that is recognized in the balance sheet, remains on the balance sheet if a transaction (with
respect to the asset or liability) does not lead to a major change in the economic reality with respect to the
asset or liability.
An asset or liability is no longer recognized in the balance sheet when two conditions have been met:
1. substantially all rights to economic benefits have been transferred to a third party; and
2. substantially all risks related to the asset or liability have been transferred to a third party.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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Management estimates
The preparation of the financial statements requires the management to form opinions and to make estimates
and assumptions that influence the application of principles and the reported values of assets and liabilities and
of income and expenditure. The actual results may differ from these estimates. Revisions of estimates are
recognized in the period in which the estimate is revised and in future periods for which the revision has
consequences.
The major estimations management made, were regarding the credibility of the counterparties of the loan
receivable and the determination of the fair value of the financial instruments.
Management investigated the credibility of the Group companies who received a loan and concluded there is
no reason for impairment of these loans.
The fair values of the loans represent the clean fair value excluding interest accruals. For the calculation,
discount factors based on secondary market yields (source: Bloomberg) were used to reflect BASF risk.
The fair value of financial instruments other than the ones stated in the above table is close to the carrying
amount.
Financial instruments
Financial instruments are primarily instruments such as receivables and financial derivatives. For the principles
of primary financial instruments, reference is made to the treatment per balance sheet item.
Financial instruments are recognized initially at fair value, including discounts/premium and any directly
attributable transaction costs. If instruments are not subsequently measured at fair value with value changes
recognized in the profit and loss account, any directly attributable transaction costs are included in the initial
measurement.
Financial instruments include loans and (other) receivables, cash items, bonds/notes and other financing
commitments.
The company has no derivative financial instruments embedded in contracts.
After initial recognition, financial instruments are valued in the manner described below.
Determination of Fair Value
A number of accounting principles and disclosures require the determination of fair values, for both financial
and non-financial assets and liabilities.
The fair value of financial fixed assets is estimated on the basis of the expected and/or contractual cash flows.
These cash flows are discounted at the market interest rates as at balance sheet date, including a margin
representing the relevant risks involved.
If applicable, detailed information concerning the principles for determining the fair value is included in the
section that specifically relates to the relevant asset or liability.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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Translation of assets, liabilities and transactions denominated in foreign currency
Monetary assets and liabilities denominated in foreign currency are translated into the functional currency
(Euro) at the balance sheet date at the exchange rate applying on that date. Non-monetary assets and
liabilities in foreign currency that are stated at historical cost are translated into Euro at the applicable
exchange rates on the transaction date. Translation gains and losses are taken to the profit and loss account
as income and expenditure.
The Company granted loans to BASF Group companies for the same amount and denominated in the same
currency as the notes issued. As such, except for the applicable margin, foreign currency risks are passed on
to Group companies and do not have any impact on the results of the Company.
The balance sheet positions denominated in foreign currency are translated at the exchange rate on the
balance sheet date.
In the profit and loss account foreign currency amounts are translated at monthly average rates. Foreign
exchange gains and losses are included in interest and similar income.
PRINCIPLES FOR VALUATION OF ASSETS AND LIABILITIES
Financial fixed assets
Financial instruments are initially recognized at fair value, including discount or premium and directly
attributable transaction costs. However, if financial instruments are subsequently measured at fair value
through profit and loss, then directly attributable transaction costs are directly recognized in the profit and loss
account at the initial recognition.
After initial recognition, loans and other financial commitments are carried at amortized cost using the effective
interest rate method. Valuation is at amortised cost minus impairments if applicable. Interest income, based on
the effective interest rate method, is accounted for under the interest and similar income from financing
activities within the profit and loss account.
A financial asset and a financial liability are offset when the entity has a legally enforceable right to set off the
financial asset and financial liability and the company has the firm intention to settle the balance on a net basis,
or to settle the asset and the liability simultaneously.
If there is a transfer of a financial asset that does not qualify for derecognition in the balance sheet, the
transferred asset and the associated liability are not offset.
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Arnhem, The Netherlands
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Impairment of fixed assets
A financial asset is impaired if there is objective evidence of impairment as a result of one or more events that
occurred after the initial recognition of the asset, with negative impact on the estimated future cash flows of
that asset, which can be estimated reliably.
Objective evidence that financial assets are impaired includes default or delinquency by a debtor, indications
that a debtor or issuer will enter bankruptcy, adverse changes in the payment status of borrowers or issuers,
indications that a debtor or issuer is approaching bankruptcy, or the disappearance of an active market for a
security.
The entity considers evidence of impairment for financial assets measured at amortized cost, loan and
receivables both individually and on a portfolio basis. All individually significant assets are assessed individually
for impairment. Those individually significant assets found not to be individually impaired and assets that are
not individually significant are then collectively assessed for impairment by grouping together assets with
similar risk characteristics.
In assessing collective impairment, the company uses historical trends of the probability of default, the timing
of collections and the amount of loss incurred, adjusted for management’s judgement as to whether current
economic and credit conditions are such that the actual losses are likely to be greater or lesser than suggested
by historical trends.
A previously recognised impairment loss is reversed if the decrease of the impairment can be related
objectively to an event occurring after the impairment was recognised. The reversal is limited to at most the
amount required to measure the asset at its original amortised cost at the date of reversal had the impairment
not been recognised.
An impairment loss in respect of a financial asset stated at amortised cost is calculated as the difference
between its carrying amount and the present value of the estimated future cash flows discounted at the asset’s
original effective interest rate.
Losses are recognised in the profit and loss account and reflected in an allowance account against loans and
receivables. Interest on the impaired asset continues to be recognised by using the asset's original effective
interest rate.
Loans granted, other receivables and cash and cash equivalents
Loans and receivables are initially measured at fair value, including discount or premium and directly
attributable transaction costs.
Loans and receivables are measured after their initial valuation at amortized cost using the effective interest
rate method, less impairment losses. The loans and receivables with a remaining time to maturity exceeding
12 months are presented as financial fixed assets. Interest income, based on the effective interest rate
method, are accounted for in the interest and similar income within the income statement.
Provisions
A provision is recognised when the company has a present obligation as a result of a past event, when it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation,
and a reliable estimate can be made of the amount of the obligation. Provisions are valued at nominal value.
BASF Finance Europe N.V.
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Shareholders' equity
Financial instruments that are designated as equity instruments by virtue of the economic reality are presented
under shareholders' equity. Payments to holders of these instruments are deducted from the shareholders'
equity as part of the profit distribution.
Financial instruments that are designated as a financial liability by virtue of the economic reality are presented
under liabilities. Interest, dividends, income and expenditure with respect to these financial instruments are
recognized in the profit and loss as financial income or expense.
Share premium:
Amounts contributed by the shareholder(s) of the Company in excess of the nominal share capital, are
accounted for as share premium. This also includes additional capital contributions by existing shareholders
without the issue of shares or issue of rights to acquire shares of the Company.
Costs and capital taxes associated with the issue of shares that are not capitalized are deducted from share
premium, after taken into account tax effects. If the share premium is insufficient for such deductions, the
amounts are deducted from retained earnings.
Long-term liabilities
Long-term and other financial commitments are initially measured at fair value, including discount or premium
and directly attributable transaction costs.
Long-term and current liabilities and other financial commitments are stated after their initial recognition at
amortized cost on the basis of the effective interest rate method.
Redemption payments regarding long-term liabilities that are due next year, are presented under current
liabilities.
Notes issued, loans received and other payables
Notes, loans and other financial commitments are initially measured at fair value, including discount or
premium and directly attributable transaction costs.
Notes, loans and other financial commitments are carried after their initial valuation at amortized cost using the
effective interest rate method. The notes and loans with a remaining time to maturity exceeding 12 months are
presented as non-current liabilities. Interest expense, based on the effective interest rate method, is accounted
for in the interest and similar charges.
PRINCIPLES FOR THE DETERMINATION OF THE RESULT
Determination of the result
Interest income and expenses are accounted for on accrual basis. Profit is only included when realized on the
balance sheet date. Losses originating before the end of the financial year are taken into account if they have
become known before preparation of the financial statements.
Interest and similar expenses
Interest income is recognized in the profit and loss account on an accrual basis, using the effective interest rate
method. Interest expenses and similar charges are recognized in the period to which they belong.
Premium, discount and redemption premiums are recognized as interest expense in the period to which they
belong. The allocation of these interest expenses and the interest income on the loan is the effective interest
rate that is recognized in the profit and loss account. On the balance sheet, the amortized value of the debt(s)
is recognised (on balance). The amounts of the premium that are not yet recognised in the profit and loss
account and the redemption premiums already recognised in the profit and loss account, are recognised as an
increase in debt(s) to which they relate. Amounts of the discount that are not yet recognised in the profit and
loss account are recognised as a reduction of the debt(s) to which they relate.
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Arnhem, The Netherlands
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Taxes
Corporate income tax expense comprises current and deferred tax. Corporate income tax expense is
recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which
case it is recognized in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized for temporary differences between the carrying amounts of assets and liabilities in
the financial statements and the carrying amounts for tax purposes. A deferred tax asset is recognized for
future tax benefits, arising from temporary differences and for tax loss carry forwards to the extent that the tax
benefits are likely to be realized.
Taxes on income are based on the result in the financial statements, taking into account the permanent
differences between determinations of result according to the financial statements on the one hand and
according to the fiscal determination of result on the other. Calculation is based on current tax rate.
PRINCIPLES FOR PREPARATION OF THE CASH FLOW STATEMENT
The cash flow statement is prepared using the indirect method. Cash flows in foreign currency are translated
into euros using the weighted average exchange rates at the dates of the transactions.
The interest received and paid as well as the income tax are allocated to operating cash flows.
Transactions that do not result in exchange of cash and cash equivalents are not presented in the cash flow
statement.
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5 NOTES TO THE BALANCE SHEET AS PER JUNE 30, 2023
ASSETS
1.
Financial fixed assets
06/30/2023
€ x 1,000
12/31/2022
€ x 1,000
Loans to Group companies
Loan 20, BASF Antwerpen N.V. 497,743 497,419
Loan 22, BASF Nederland B.V. 183,821 187,210
681,564 684,629
Loan 20, BASF Antwerpen N.V.
Balance as of January 1 497,419 496,775
Amortization of disagio 324 644
Balance as of June 30, 2023 497,743 497,419
Cumulative amortization of disagio as of June 30, 2023 amounts to € 4,128 (December 31, 2022 € 3,804).
This loan has been issued on November 10, 2016 to BASF Group company BASF Antwerpen N.V. for a total
amount of € 500,000 less disagio of € 6.385 and a term of 10 years. The nominal interest rate amounts to
0.750% per annum plus the applicable spread of 0.680% per annum. The yield interest 2023 amounts to
1.569%. The loan shall be repaid in full on November 10, 2026.
Loan 22, BASF Nederland B.V.
Balance as of January 1 187,210 176,193
Amortization of disagio 48 135
FX result -3,437 10,882
Balance as of June 30, 2023 183,821 187,210
Cumulative amortization of disagio as of June 30, 2023 amounts to € 528 (December 31, 2022 € 480).
This loan has been issued on June 20, 2018 to BASF Group company BASF Nederland B.V. for a total amount
of US$ 200,000 less disagio of US$ 834 with the initial value of € 169,147 and a term of 7 years. The nominal
interest rate amounts to 3.625% per annum plus the applicable spread of 0.640% per annum. The yield
interest 2023 amounts to 4.335% per annum. The loan shall be repaid in full on June 20, 2025.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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CURRENT ASSETS
2.
Other receivables
06/30/2023
€ x 1,000
12/31/2022
€ x 1,000
Receivables from Group companies
Interest receivable from Group companies 4,884 5,352
Current account with parent company 9,103 8,110
13,987 13,462
The accounts receivable from Group companies and other receivables are due within one year.
The Company has a current account with BASF SE. The interest rate for overnight money investments based
on (for EUR-countries) ESTR plus a debtor spread.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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EQUITY AND LIABILITIES
3.
SHAREHOLDERS' EQUITY
Issued share capital
Ordinary
shares
€ x 1,000
Carrying amount as of January 1, 2022 2,087
Carrying amount as of December 31, 2022 2,087
Balance as of January 1, 2023 2,087
Balance as of June 30, 2023 2,087
Authorized share capital (x € 1,-), consists of ordinary shares 2,086,875
Ordinary shares issued 46,375
Nominal value per ordinary share (x € 1,-) 45.00
06/30/2023
€ x 1,000
12/31/2022
€ x 1,000
Share premium reserve
Balance as of January 1 2,513 2,513
Balance as of June 30, 2023 2,513 2,513
The share premium concerns the income from the issuing of shares in so far as this exceeds the nominal
value of the shares (above par income).
Other reserves
Balance as of January 1 1,523 1,437
Result prior year appropriation 74 86
Balance as of June 30, 2023 1,597 1,523
BASF Finance Europe N.V.
Arnhem, The Netherlands
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06/30/2023
€ x 1,000
12/31/2022
€ x 1,000
Result of the year
Balance as of January 1 74 86
Result prior year appropriation -74 -86
- -
Result of the year 135 74
Balance as of June 30, 2023 135 74
4.
LONG-TERM LIABILITIES
Non-current loans
Note 20, 0.75% EUR bond 2016-2026 497,791 497,471
Note 22, 3.625% USD bond 2018-2025 183,824 187,213
681,615 684,684
Note 20, 0.75% EUR bond 2016-2026
Balance as of January 1 497,471 496,829
Amortization of disagio 320 642
Balance as of June 30, 2023 497,791 497,471
Cumulative amortization of disagio as of June 30, 2023 amounts to € 4,176 (December 31, 2022 € 3,856).
On November 10, 2016 the Company issued notes for a total amount of € 500,000 less a disagio and bank
fees of € 6,385 through the banking group. The notes will be repaid in full on November 10, 2026. The interest
amounts to 0.750% per annum (effective interest 0.884% per annum) and is paid annually. BASF SE is the
guarantor for these notes.
Note 22, 3.625% USD bond 2018-2025
Balance as of January 1 187,213 176,197
Amortization of disagio 48 135
FX result -3,437 10,881
Balance as of June 30, 2023 183,824 187,213
Cumulative amortization of disagio as of June 30, 2023 amounts to € 532 (December 31, 2022 € 484).
On June 20, 2018 the Company issued notes for a total amount of US$ 200,000 less disagio of US$ 834. The
notes will be repaid on June 20, 2025. The interest amounts to 3.625% per annum (effective interest 3.694%
per annum). BASF SE is the guarantor for these notes.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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5.
CURRENT LIABILITIES
06/30/2023
€ x 1,000
12/31/2022
€ x 1,000
Loans from Group companies
Loan 13, BASF Ireland Limited 3,000 3,000
At November 29, 2022 a new Loan 13 from BASF Ireland Limited was received with a principal amount of
€ 3,000 till December 1, 2023. The loan at the amount of € 11,600 matured on November 9, 2022 and was
repaid in line with the conditions of the contract.
On June 30, 2023, the nominal interest rate amounts to 3.25%, based on 12-months Euribor plus an applicable
spread of 0.39%, according to the loan agreement.
Taxes and social securities
Corporate income tax payable 41 25
Other current liabilities
Accruals and deferred income 2,598 4,185
Guarantee fee bonds 1,965 -
4,563 4,185
The current liabilities are all due within one year.
FINANCIAL INSTRUMENTS
General
During the normal course of business, the Company uses various financial instruments that expose the
Company to market, credit and liquidity risks. The Company is exposed to these risks given the portfolio of
interest-bearing receivables (mainly taken up in financial fixed assets and cash and cash equivalents), interest-
bearing non-current and current liabilities (including bonds, notes and bank loans).
Credit risk
On a yearly basis, the Company assesses the credit risk for counterparties within the BASF Group where there
are loans granted at year-end. So far, the Company has only granted loans to 100% Group companies, which
are classified as counterparties with low credit risk.
In 2023, 100% (2022: 100%) of the receivables of the Company were held with related parties, which are 100%
(2022: 100%) concentrated with BASF Group companies.
In general, the management of the Company assesses and reviews credit risk for counterparties within the
BASF Group.
The Company's obligations to third parties on the bond markets are guaranteed by BASF SE, the parent
company of the BASF Group.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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Fraud risk
In specific areas with a higher risk for fraud, Management took separate measures. Especially the payment
process has been identified as a process with a potential higher fraud risk. In this area there is a strict focus on
Segregation of Duties and access control to the software environment
Interest rate risk
Interest rate risks are the result of changes in prevailing market interest rates, which can cause a change in the
present value of fixed-rate instruments, and changes in the interest payments of floating rate instruments.
In general, the Company strives to match interest rate risks of its assets and liabilities.
Due to the fact that the bonds have the same interest base and term as the issued loans to group companies,
the interest rate risk is naturally hedged.
Derivative financial instruments may be used by the entity to hedge interest rate risks, if deemed necessary.
Interest rate derivative financial instruments may be used to adjust the fixed or floating nature of the external
notes or loans obtained to the desired profile. In the first half of the year 2023, no derivative financial
instruments are outstanding and no derivative instruments have been used during the reporting period.
Cash flow risk
The Company is currently not exposed to cash flow risk due to the intercompany financing structure.
Any cash payment regarding loans payable are directly offset by a cash flow regarding the loans receivable.
Foreign currency risk
Financial foreign currency risks are the result of the translation of receivables, liabilities and other monetary
items. These risks are not hedged by using derivative instruments.
The Company is exposed to foreign exchange risk on liabilities and receivables denominated in a currency
other than Euro, but these related risks are naturally hedged. In general, the Company strives to match foreign
exchange risks of its assets and liabilities.
Foreign currency derivative financial instruments, mainly currency forwards and swaps, may be used to reduce
the foreign currency risk arising on financing and funding transactions in foreign currencies.
No foreign currency derivative financial instruments are outstanding and have been used during the reporting
period.
Liquidity risk
Risks from cash flow fluctuations are recognized in a timely manner as part of the liquidity planning.
Uncertainties are taken into account by means of additional risk scenarios and the short-term updating of our
liquidity planning. This means we can promptly take the necessary measures when required. The liquidity
policy is determined by BASF SE.
Due to a cash-pooling agreement for all bank accounts of the Company with BASF SE, the Company has
access to sufficient liquidity reserves so that there is no danger of liquidity risk even if an unexpected event has
a negative financial impact on the Company's liquidity situation.
BASF Finance Europe N.V.
Arnhem, The Netherlands
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6 NOTES TO THE PROFIT & LOSS ACCOUNT FOR THE FIRST HALF YEAR OF 2023
01/01/2023 -
06/30/2023
€ x 1,000
01/01/2022 -
06/30/2022
€ x 1,000
6.
Interest and similar income
Loan 20 BASF Antwerpen N.V. 3,869 3,864
Loan 22, BASF Nederland B.V. 3,847 4,429
Current account with parent company 105 -
7,821 8,293
7.
Interest and similar expenses
Loan 13, BASF Ireland Ltd. 90 91
Note 20, 0.75% EUR bond 2016-2026 2,180 2,178
Note 22, 3.625% USD bond 2018-2025 3,277 3,778
5,547 6,047
Guarantee fees to BASF SE 1,965 2,063
7,512 8,110
In accordance with DAS 273.104 the guarantee fees are a part of the interest and similar charges.
Emoluments of directors and supervisory directors
The Company pays no remuneration and has not issued loans or advances to members of the Board of
Directors and Supervisory Board.
Staff
During the first half year of 2023 and 2022 the Company had no employees.
General and administrative expenses
Other general expenses 114 85
The other general expenses substantially comprise consulting costs related to accounting, legal, finance and
bank charges. They also comprise auditor's fees, non-recoverable VAT and other professional charges as well
as service charges from BASF Nederland B.V.
With reference to Section 2:382a (3) of the Dutch Civil Code the Company did not disclose the fees for the
auditor as these are incorporated in the consolidated financial statements of BASF SE.
8.
Tax on result from ordinary activities
Result before tax 195 98
Corporate income tax -60 -28
Net result 135 70
BASF Finance Europe N.V.
Arnhem, The Netherlands
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The result before taxation amounts to € 195 (June 30, 2022: € 98), the non deductable interest expenses
amount to € 90 (June 30, 2022: € 91) which makes the taxable result for the half year to amount to € 285 (June
30, 2022: € 189).
Income tax expense consists of current corporate income tax. The effective tax rate of 30.78% (June 30, 2022:
28.57%) is not equal to the prevailing tax rates for 2023 (19% tax rate on the first € 200,000 of taxable profits,
25.8% tax rate for the rest) in the Netherlands. This is due to non-deductable interest expenses.
9. Transactions with related parties
There were no reportable related party transactions with members of the Board of Directors.
There are no transactions with related parties, except otherwise disclosed in this report.
Transactions with related parties are assumed when a relationship exists between the company and a natural
person or entity that is affiliated with the company. This includes, amongst others, the relationship between the
company and its Group companies, shareholders, directors and key management personnel. Transactions are
transfers of resources, services or obligations, regardless whether anything has been charged.
The Company has loans and receivables outstanding with the shareholder and other Group companies. The
terms and conditions are disclosed at the respective note.
Signing of the financial statements
Arnhem, The Netherlands, Augustus 18, 2023
Board of Directors for approval
Supervisory Board for approval
J. Hoekstra (Director) O. Nussbaum (Chairman of the Supervisory Board)
R. Holtermann (Director) B. Benecke (Member of the Supervisory Board)
F. Wilhelmi (Director) C. Becx (Member of the Supervisory Board)
BASF Finance Europe N.V.
Arnhem, The Netherlands
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OTHER INFORMATION
1 Provisions of the Articles of Association relating to profit appropriation
In the articles of association (article 20) it is stated that profits of the company shall be at the disposal of the
General Meeting of Shareholders. At the same time, the articles state that the Company may distribute profits
only if and to the extent that its shareholders' equity is higher than the aggregate of the paid and called-up part
of the issued capital and the reserves, which must be maintained by law.
The Company can only make payments to the shareholders in sofar as:
the Company can continue to pay its outstanding debts after the distribution (the so-called distribution
test), and;
the shareholders’ equity exceeds the legal reserves and statutory reserves under the articles of
association to be maintained (the so-called balance sheet test).
If not, the General Meeting of Shareholders shall not approve the distribution.
2 Appropriation of the result for 2022
The annual accounts for 2022 were adopted by the General Meeting of Shareholders. The General Meeting of
Shareholders has determined the appropriation of the result as it was proposed.
3 Subsequent events
No subsequent events occurred.
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Arnhem, The Netherlands
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