Financial assets and liabilities at fair value through income statement are measured with Level 1, Level 2 and Level 3 inputs. Level 1 financial assets consist of marketable securities quoted on financial market. Level 2 financial assets and liabilities consist of cross-currency swaps and forward foreign exchange contracts that are measured using quoted forward exchange rates and yield curves derived from quoted interest rates matching maturities of the contracts, of interest swaps that are measured using quoted interest rates and yield curves derived from quoted interest rates matching maturities of the contracts, and of corporate owned life insurance (COLI) that are measured on quoted instruments with similar credit ratings and terms in a mix of money market, fixed income and equity funds managed by unrelated fund managers. Level 3 financial assets consist of investment funds in venture capital that are measured quarterly by independent third parties using proprietary valuation models which are audited by qualified authorities. Furthermore, as disclosed in note 6, level 3 financial assets also include the b.kolor investment made by the Group as well as the option to acquire a controlling stake in the business. The value of the b.kolor investment was determined by performing a Discounted Cash Flow analysis on the basis of the latest business plan information available to the Group. On the other hand, the fair value measurement of the option was determined through a Monte Carlo valuation model which requires assumptions and inputs that can lead to volatility of the underlying value. The volatility used in the model was estimated based on a group of comparable quoted companies using their daily and monthly share prices over a period of three years. The total loss relating to level 3 financial assets recognized in other financial income (expenses), net amounted to CHF 2 million. The carrying amount of each class of financial assets and liabilities disclosed above approximates their fair value. There was no transfer between the level categories in the period. 6. Acquisitions and Investments Acquisitions 2021 During the year Givaudan made three acquisitions, Myrissi, DDW, and Custom Essence, as well as an investment in b.kolor. Myrissi As part of its long term strategy to expand its capabilities in artificial intelligence (AI), Givaudan acquired 100% of the share capital of Myrissi on 14 April 2021 for a purchase price of CHF 1.2 million. Founded in 2014 and based in France, Myrissi has developed a patented AI technology capable of translating fragrances into colour patterns and images, relevant to the consumer as well as predicting the end consumer’s emotional response. The identifiable assets and liabilities of Myrissi acquired are recorded at fair value at the date of acquisition and CHF 0.9 million goodwill has been recognised. The goodwill arising on the acquisition relates mainly to the value of the qualified workforce and expected synergies that do not meet the criteria for recognition as separable intangible assets. In compliance with IFRS 3, these values determined are provisional and the Group has twelve months from the date of acquisition to finalise the allocation of the acquisition price. b.kolormakeup & skincare On 30 June 2021 Givaudan acquired 25% of the share capital of b.kolormakeup & skincare, for a purchase price of CHF 89 million (EUR 80 million), of which CHF 83 million (EUR 75 million) was paid on 30 June 2021 and CHF 6 million (EUR 5 million) was paid on 12 October 2021. b.kolor is an innovative Italian company specialised in developing and producing end to end products in make-up and skin care for Consumer Packaged Goods (CPG) and luxury customers. Founded in 2000, b.kolor is headquartered close to Milan, Italy and employs around 250 employees. By joining forces, Givaudan Fragrance & Beauty and b.kolor will leverage their respective capabilities to provide creative and unique products and integrated solutions to customers. The terms of the agreement do not establish a significant influence for Givaudan and the investment has therefore been accounted for as a financial asset at fair value through income statement. Under the terms of the agreement, Givaudan has the option but not the obligation to acquire a controlling stake in b.kolor after a period of three years. 67 Givaudan — 2021 Governance, Compensation and Financial Report Governance Report Compensation Report Consolidated Financial Report Statutory Financial Report Appendix Notes to the consolidated financial statements