BASF Report 2021

31. Related Party Transactions

Related parties are legal or natural entities that can exert influence on the BASF Group or over which the BASF Group exercises control or joint control, or a significant influence. These primarily include nonconsolidated subsidiaries, joint ventures and associated companies.

The following tables show the volume of business with related parties that are included in the Consolidated Financial Statements at amortized cost or accounted for using the equity method. The values include sales, receivables, other receivables, liabilities and other liabilities with respect to the disposal groups and/or discontinued operations.

Sales and trade accounts receivable from and trade accounts payable to related parties mainly included business with own products and merchandise, agency and licensing businesses, and other operating businesses.

Other receivables and liabilities primarily arose from financing activities, from accounts used for cash pooling, outstanding dividend payments, profit and loss transfer agreements, and other finance-related and operating activities and transactions.

The increase in other receivables from nonconsolidated subsidiaries as well as the decrease from associated companies resulted primarily from other finance-related receivables.

The decline in other liabilities to associated companies resulted from other finance-related liabilities and contract liabilities.

Balances outstanding to related parties were generally not hedged and were settled in cash.

The balance of valuation allowances on other receivables from nonconsolidated subsidiaries declined from €105 million as of December 31, 2020, to €100 million as of December 31, 2021.

The balance of valuation allowances on trade accounts receivable from nonconsolidated subsidiaries was, as in the previous year, €3 million as of December 31, 2021.

BASF had obligations from guarantees and other financial obligations in favor of nonconsolidated subsidiaries in the amount of €21 million as of December 31, 2021 (December 31, 2020: €8 million), and in favor of associated companies in the amount of €389 million as of December 31, 2021 (December 31, 2020: €28 million). Furthermore, there were obligations from guarantees in the amount of €341 million favoring a joint venture as of December 31, 2020.

Obligations arising from purchase contracts with joint ventures amounted to €4 million as of December 31, 2021, and €6 million as of December 31, 2020.

Annual minimum rental payments for an office building including a parking area payable by BASF SE to BASF Pensionskasse VVaG for the nonterminable basic rental period until 2029 amounted to €7 million.

BASF SE had other finance-related receivables from BASF Pensionskasse VVaG in the amount of €83 million as of December 31, 2021, and €3 million as of December 31, 2020.

There were no reportable related party transactions with members of the Board of Executive Directors or the Supervisory Board and their related parties in 2021.