IAS 24 para 18, transactions, balances, commitments and guarantees with associates and joint ventures

Siemens AG – Annual report – 30 September 2021

Industry: manufacturing

NOTE 31 Related party transactions (extract)

Joint ventures and associates

Siemens has relationships with many joint ventures and associates in the ordinary course of business whereby Siemens buys and sells a wide variety of products and services generally on arm’s length terms. The transactions between continuing operations and joint ventures and associates were as follows:

In fiscal 2021 and 2020, sales of goods and services and other income resulting from transactions between discontinued operations and joint ventures and associates amounted to €97 million and €391 million, respectively. Purchases of goods and services and other expenses resulting from transactions between discontinued operations and joint ventures and associates amounted to €1 million and €174 million, respectively.

As of September 30, 2021 and 2020, receivables to associates included reimbursement rights against Siemens Energy which were recognized correspondingly with obligations from customer contracts in connection with Siemens Energy activities legally remaining at Siemens. Liabilities to associates as of September 30, 2021 and 2020 were mainly due to trade receivables that also result from these activities and that have economically to be allocated to Siemens Energy.

As of September 30, 2021 and 2020, guarantees to joint ventures and associates amounted to €14,533 million and €27,505 million, respectively, thereof €14,159 million and €27,253 million, respectively, to associates. These guarantees included mainly obligations from performance and credit guarantees in connection with the Siemens Energy business. For these guarantees, Siemens has reimbursement rights towards Siemens Energy.

As of September 30, 2021 and 2020, loans given to joint ventures and associates amounted to €1,138 million and €900 million, therein €1,122 million and €881 million related to joint ventures, respectively. The related book values amounted to €28 million and €26 million, therein €25 million and €20 million related to joint ventures, respectively. Valuation adjustments recognized in fiscal 2021 and 2020 reduced book values of loans related to joint ventures by €242 million and €744 million, respectively.

As of September 30, 2021 and 2020, the Company had commitments to make capital contributions to joint ventures and associates of €72 million and €62 million, therein €65 million and €51 million related to joint ventures, respectively.

As of September 30, 2021 and 2020, there were loan commitments to joint ventures amounting to €222 million and €299 million, respectively.