Annual Report • Apr 26, 2011
Annual Report
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| Financial highlights and business scope 2 | |
|---|---|
| The future looks good 3 | |
| Building a model company 4 | |
| Campine Group5 | |
| Lead7 | |
| Antimony9 | |
| Plastics 11 | |
| Support services 12 | |
| Perspectives for 2011 14 | |
| Corporate matters 15 | |
| Corporate Governance Statement 201017 | |
| Remuneration Report 201023 | |
| Consolidated financial statements 201025 | |
| Auditor's report50 | |
| Corporate Data 52 |
| 2010 | 2009 | ||
|---|---|---|---|
| Revenue | 137.663 | 80.778 | |
| Operating result | 8.523 | 696 | |
| Net financial result | - 1.020 |
- | 1.795 |
| Result before tax | 7.503 | - | 1.099 |
| Tax expense | - 1.751 |
- | 22 |
| Result after tax for the year | 5.752 | - | 1.121 |
| Earnings per share | 3,83 | - | 0,75 |
| Current assets | 62.108 | 36.489 | |
| Total assets | 71.888 | 45.673 | |
| Current liabilities | 41.230 | 18.483 | |
| Total liabilities | 46.338 | 25.875 | |
| Total shareholders' equity | 25.550 | 19.798 | |
| (*) Consolidated per year and as per 31 December in '000 EUR |
Campine is a leading specialist in fire retardancy and concentrates, masterbatches for plastics, PET catalysts and lead recycling. The company was founded in 1912 and has been listed on the stock exchange since 1936.
In its production process, Campine processes primarily antimony and lead.
Consistent application of its marketing strategy has enabled Campine to build up significant market positions in a number of specialist markets.
Antimony trioxide (Sb2O3) is used as a flame retardant in the textile, plastics and cable industries and is also used as a catalyst in PET production. It also has many and varied applications in the glass, pigments and varistor industries.
In its plastics division Campine produces ready-to-use masterbatches for the plastics industry. These masterbatches are delivered in granulated form to enable customers to dose them easily and dust-free.
In the lead recycling division, Campine Recycling converts lead from spent batteries and industrial waste into lead and lead alloys. These are sold to manufacturers of batteries and lead plates (e.g. for X-ray protection).
What we did not expect has happened in a positive way. We were optimistic for the first half of the last year and somewhat uncertain about the second half. But as it so happened, the whole year 2010 was a complete history of recovering. For Campine the production in all areas was at a high level and so were the sales.
The result can be seen in the figures. 2010 was not only quantity-wise but also financially a very good year.
Therefore the shareholders can be happy and content as a good dividend will be paid. But most of the profit will stay in the company for future risk covering and investments into new ideas and innovations.
The Board congratulates the management and all people working for Campine for the success which was jointly achieved. We not only obtained better results in the production process but also made good progress outside the company, in particular customer relationships have improved considerably.
However there are also some negative points to be mentioned. Especially the worsening in speculation world-wide in raw materials. We have lead at extremely high prices and even more so antimony. Even plastics are concerned due to the oil prices. There is no justification for the prices to be as high as they are presently for any of these products. Producers could live with far lower prices. It will be more and more difficult for our customers to finance these prices. So the management of Campine must pay great attention to a very careful purchasing policy as well as to the strength of customers.
It can be assumed that the first half of the current year will certainly be positive while doubts are allowed for the second half especially in view of the political disturbances in the Middle East and elsewhere. A certain portion of scepticism and prudence is recommendable.
In spite of what has been we have every reason to be optimistic.
F.-W. Hempel President
After two far-from-easy years, 2010 was a year of growth, with increased tonnage, revenue and profitability.
As the overall economic situation improved, so market demand increased significantly in the different business units (lead, antimony, plastics). Campine stayed consistent to its strategy. As a specialist company we are there to serve our customers through the added value of our products. Our raw materials suppliers also play an important role. They are our 'partners' having similar goals of providing quality in all its forms. This attitude clearly paid off in 2010, in which the company and its 167 employees produced a turnover of approximately EUR 140 million.
In the antimony market Campine is a global leader in the world top three of manufacturers. Our main concern is to guarantee security of supply to customers, most of them in the plastics industry. Campine antimony oxide is used primarily as a fire retardant or as a catalyst for certain products like PET bottles. In these markets, our company continued to grow in order to maintain our market position but with an emphasis on creating added value in the interest of the customer, with the help of innovation. Innovation has been a slow process in our industry. But we work steadily towards improving our quality and service and for the past five years we have been working resolutely on renewing our offering.
After several difficult years, the lead market continued its recovery in 2010. Production in Beerse is now smarter and more efficient. We got more out of our installations and our product through-time was faster.
There is a growing understanding that raw lead - in both its primary and secondary forms is a commodity in limited supply. The continuous recycling of used batteries and other lead containing scrap into pure lead benefits customers and the environment. The challenge is therefore to be more creative with the available sources.
Plastics, our third business unit, is doing better thanks to the greatly improved economic situation in the plastics industry, particularly in West-Europe. Demand recovered and new customers and projects brought sales volumes back and we are confident for 2011.
In 2012 Campine will be exactly one hundred years old. The centenarian plans to be a model company in all areas - from health, safety and environmental aspects to operating facilities and processes to management and innovation - in the interests of our stakeholders. Beerse and the surrounding area have suffered a number of economic hard blows in recent years. However, Campine wants to prove a solid haven in troubled waters, offering employment and a secure value for the local economy.
Geert Krekel Managing Director
In 2010, the Campine Group realized a turnover of EUR 137.66 million, compared with EUR 80.78 million in 2009 (+70%).
The first half net operating profit after net financial result was EUR 5.15 million. The second half also showed a profit of EUR 2.35 million - giving a pre-tax profit for the year of EUR 7.50 million. This compares with a pre-tax loss of EUR -1.10 million in 2009. This significant increase is amongst others due to the strong rise in metal prices since early 2010.
The operating profit amounted to EUR 8.52 million (2009: KEUR 696). Antimony prices rose dramatically while volume returned to a higher level. Lead prices too revived in 2010, while volume remained stable.
Net financial result amounted to a loss of EUR -1.02 million compared with a loss of EUR -1.80 million in 2009.
The lead hedging resulted in a net loss of KEUR -435 (compared with a net loss of EUR -1.40 million in 2009). The objective of hedging is to limit the fluctuations of Campine's results due to the impact of changes in lead prices on the value of purchases and sales and of inventories. These amounts include the fair value of the LME lead hedge at December 31, which is included in the income statement in accordance with the specific IFRS standards.
Profit after taxes was EUR 5.75 million, compared with a EUR -1.12 million loss in 2009. The better earnings figures are explained by the sharp rise in metal prices, the economic upswing and the lower tax charge due to losses carried forward from previous years.
The Board of Directors proposes that the company pays a dividend of EUR 2.25 million (EUR 1.50 gross per share). In 2010 no dividend was paid on the basis of the 2009 result.
| In '000 EUR | 2010 | 2009 | Difference | |||
|---|---|---|---|---|---|---|
| in EUR | in % | |||||
| Added value (1) | 21.767 | 11.844 | 9.923 | 84% | ||
| Relation towards turnover (%) | 16% | 15% | / | 1% | ||
| Average number employees | 155 | 160 | -5 | -3% | ||
| Added value per employee | 141 | 74 | 67 | 91% |
(1) We define added value as the difference between turnover and the value of the purchased goods + services which can be related to production (stock adjustment included).
| In '000 EUR | 2010 | 2009 | Difference | |
|---|---|---|---|---|
| in EUR | in % | |||
| Stocks | 36.997 | 21.427 | 15.570 | 73% |
| Trade debtors | 22.192 | 12.300 | 9.892 | 80% |
| Other receivables | 1.347 | 1.367 | -20 | -1% |
| Total | 60.536 | 35.094 | 25.442 | 72% |
| Trade creditors | 19.415 | 12.664 | 6.751 | 53% |
| Taxes | 1.490 | 280 | 1.210 | 432% |
| Other short term payables | 3.437 | 2.368 | 1.069 | 45% |
| Total | 24.342 | 15.312 | 9.030 | 59% |
| Working capital employed | 36.194 | 19.782 | 16.412 | 83% |
| In '000 EUR | 2010 | 2009 | Difference | ||
|---|---|---|---|---|---|
| in EUR | in % | ||||
| Result after taxes | 5.752 | -1.121 | 6.873 | 613% | |
| Result after taxes per share in EUR | 3,835 | -0,747 | 4,58 | 613% | |
| Gross dividend per share in EUR | 1,500 | - | 1,50 | 100% | |
| Net dividend per share in EUR | 1,125 | - | 1,13 | 100% | |
| Equity | 25.550 | 19.798 | 5.752 | 29% | |
| Return on equity | 23% | -6% | / | 29% |
| Antimony | Plastics Lead Total |
|||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 2010 | 2009 | % | 2010 | 2009 | % | 2010 | 2009 | % | 2010 | 2009 | % | |
| Volume | ||||||||||||
| in mT | 9.909 | 7.948 | 25% | 5.413 3.150 | 72% | 42.802 41.424 | 3% | |||||
| Turnover (1) | ||||||||||||
| in '000 EUR | 61.745 31.497 | 96% | 20.533 9.626 | 113% | 54.123 39.736 | 36% | 136.401 80.859 | 69% | ||||
| Unit price per | ||||||||||||
| mT in EUR | 6.231 | 3.963 | 57% | 3.793 3.056 | 24% | 1.264 | 959 | 32% | ||||
| Margin (2) | ||||||||||||
| in '000 EUR | 10.305 | 4.017 | 157% | 3.114 1.515 | 106% | 13.053 | 9.459 | 38% | 26.472 14.991 | 77% |
(1) Turnover as in the segment information of the Group, see note 5.4.1.
(2) The margin is the difference between the turnover and the direct cost + sales cost of the goods sold.
Direct costs include raw materials and direct salaries and wages.
Campine Recycling processes spent lead batteries and lead-containing waste such as cable sheathing, roofing and old pipes. From this waste Campine Recycling produces a whole range of useful applications such as lead alloys and soft lead. In so doing we protect the environment against contamination.
In the lead market Campine Recycling is a significant recycler of secondary lead in the group of European companies, in a market dominated by 'majors' like battery manufacturers. End customers are primarily the automotive industry (for battery production), medicine (X-ray protection) and construction (roofing).
Lead turnover rose strongly to EUR 54.12 million (EUR 39.74 million in 2009) (+36%) on a slightly higher delivered volume of 42,802 mT (41,424 mT in 2009) (+3%).
LME lead prices started the year at EUR 1,650 EUR/mT in January 2010. During the year they fluctuated between EUR 1,400 and 2,000/mT, ending the year at EUR 1,936/mT.
The hedging position on the LME - which falls under financial instruments - was 3,350 mT at 31 December 2009. This was gradually increased to 3,900 mT at 30 June 2010 and lowered again to 3,650 mT at 31 December 2010.
2010 was a good year with a focus on continuous production improvement.
Campine has always had battery producers as regular customers. There has been consolidation of battery producers. Hence, on the sales side, demand for refined lead (our final product) fell substantially, especially when compared with 2007. Even so Campine still processes over 40,000 tonnes of lead every year. Total European lead consumption is approximately 1.6 million tons.
In 2010 premiums were under pressure across the market.
The big challenge was to collect sufficient raw materials and lead waste at an acceptable price in the Benelux countries and in neighbouring Germany, France and England. There is a high demand for old batteries, both from primary producers and secondary lead producers. This produces upward price pressure on raw materials.
With our buying strategy and associated inventory management, we were able to schedule purchases so as to maintain our procurement prices at a reasonable level. In this way, together with our efficiency improvements, we nonetheless achieved an acceptable result.
From an environmental perspective recycling provides great added value. For almost 20 years Campine Recycling has made sure that waste lead (collected by battery collectors, scrap metal dealers and scrap processors) is practically one hundred percent recycled.
In the daily operation of the company the environmental aspect also plays a very important role. Campine goes further than strictly meeting the legal norms. With a wellfounded investment programme Campine once again progressed in 2010 in environment, health and safety. We maintained our continuous reduction of dust emissions, while gaining better control of the SO2.
In 2010 around EUR 1 million was made available for a new afterburner installation that improves process continuity and helps further reduce the already low emissions.
To anticipate possible more stringent standards in the future, Campine has already planned new investments for 2011.
In this way Campine has more than ever demonstrated to the outside world its will to operate safely and ecologically responsible.
Campine's antimony business unit converts antimony metal (Sb) into antimony trioxide (Sb2O2). This is used in flame retardant applications and in the production of PET bottles, films and industrial fibres.
2010 can best be described as year of strong profitability after the fluctuations in 2008 and 2009. Turnover rose sharply to EUR 61.75 million (EUR 31.50 million in 2009) (+96%), while volume increased to 9,909 mT (7,948 mT in 2009) (+25%).
Antimony free market 99.6% in USD/mT and in EUR/mT
Antimony metal prices more than doubled from EUR 4,300/mT in early January to almost EUR 9,650/mT at the end of December.
2008 and 2009 were particularly difficult years for Campine. The general economy was in a bad way and prices fell sharply in the antimony sector, causing a downward pressure on margins.
2010 was characterized by two trends: on the one hand increased market demand and on the other hand significantly higher prices. The increased demand was encouraging.
Particular attention was paid to controlling the 'impurities' in the raw materials received. The flow process is now monitored in its entirety online, and with good results to avoid all contamination in the final product.
We are reusing previously recycled waste materials, without compromising the quality of the finished product and at the same time reducing environmental impact.
The antimony business unit sought in 2010 to make progress in several areas and with excellent success.
Reducing waste / by-products was one of the priorities and the results are promising. In 2011, the company will continue its efforts undiminished.
In its plastics business unit Campine produces ready-to-use flame retardant masterbatches and compounds for the plastics industry. These masterbatches are supplied in granular form for easy and dust-free dispensing at customer premises.
The plastics business unit realized a turnover of EUR 20.53 million (EUR 9.63 million in 2009) (+113%). Volume increased to 5,413 mT (2009: 3,150 mT) (+72%).
This business unit experienced a major improvement. This reflects the greatly improved economic situation in the plastics industry, particularly in Germany and the Benelux. During the first half growth was tempered somewhat by the limited availability of raw materials on world markets. In the second half the situation improved in terms of polymer availability. The process and flame retardant additives used in the production process stayed tight while prices increased by 15 to 25%.
Campine produces mainly semi-finished products using a formula combining polymers and process and flame retardant additives. This preparation is then melted in an extruder into a homogeneous substance that is processed into a granulate after cooling and cutting. These masterbatches and compounds are used in the plastics industry that delivers end products to, for example, the construction industry. This includes fireretardant insulation panels, plastic pipes and foils that are used in buildings and which acquire fire retardant properties through the addition of Campine products. Another important application of Campine masterbatches and compounds is the plastic housings of electrical and electronic components, which have to comply with demanding fire standards.
The plastics business unit had a good year. Demand recovered, and new customers and projects brought sales volumes back.
To be able to operate even more effectively in the market, the sales channels were restructured in 2010. For the important German and French markets, sales are now organized almost entirely from Beerse rather than via distributors or agents. Maintaining direct relationships with these customers is paying off, as it permits faster service and better understanding of customers.
Internal improvement projects are also being implemented, which will lead to a higher capacity utilization of machinery. The results of these interventions will be visible in 2011.
The plastics business unit will also in the near future be focusing on expanding sales activities to Southern and Eastern European markets. If demand for our products continues to grow, production capacity will be adapted by investments in staff and machinery. We expect major steps forward in terms of both capacity and efficiency.
Concern for environment is becoming ever more marked in our rapidly changing world, and Campine is determined to take its responsibility in this area. As a token of goodwill, the 25-acre nature area has been leased to the Flemish Forest and Nature Agency. Campine continues to own the land but the Flemish government manages the woody area under a leasehold agreement. The official opening of this nature area has demonstrated Campine's commitment in the field of ecology and ecological environment.
In 2010, Campine carried out a further range of environmental measures, aware of just how essential this is in today's society. On and around the site, deposit jars are analysed every month to measure dust levels. Emissions from the plant chimney stacks are also carefully monitored.
In June 2010, relaying of the gardens around the plant was completed and approved by OVAM, the Flemish government's environmental control agency.
Concrete in and around the plant was carefully checked and replaced where necessary. Campine is keen to prove that a metallurgical activity and ecology can indeed go hand in hand.
Campine is considered a responsible partner that works exclusively on the basis of acceptable and manageable risk.
Campine is a very active partner in LOGO, a consultative body that works with local residents, local businesses and various Government agencies on common environment and health issues.
The company worked during the year towards obtaining a new operating license to cover the next twenty years. In January 2010 the safety report was approved by the competent safety authorities. Preparation of the MER (environmental impact report) is now in a decisive final phase. The government has given limited extensions to current permits to a lot of companies, Campine remains committed to a renewal of the license at the original 2011 deadline.
Campine also worked on a number of other related matters. It has investigated the construction of a new access road and a new canal bridge. Both would reduce the traffic pressure on the surrounding area and increase procurement and logistics efficiency. Noise barriers are also being erected on a voluntary basis around the industrial estate. Finally, a new masterplan is being developed for the entire site.
Europe is keeping an ever stricter eye on industry with a constant flow of new regulations. 2010 was no exception. The so-called Seveso Directives and the REACH program are becoming stricter and stricter, but have long-term pay-offs. At the end of 2010, the REACH programme comes into effect. Campine is thoroughly prepared for this. Anticipation is one aspect of good governance.
What Europe prescribes is being increasingly perceived in other parts of the world as a reasonable standard.
In 2010 we made progress in safety and health matters.
Reduction of frequency and severity of accidents is ongoing steadily due to
In the antimony business unit this year we had just two lost time accidents, and in the plastics business unit not a single accident. Only the lead department had too many fortunately minor and less serious - little accidents, mainly grouped in the first half of the year. This gives us the confirmation that the more thorough approach we shall be applying in 2011 will yield the desired result.
The continuous health monitoring of our personnel show very good results.
A number of investments made during the summer recess also benefit the health of directly involved employees. They include the new afterburner and expansion of our sprinkler systems to reduce floating dust on the site.
The positive economic climate enabled Campine to organize an optimal staffing level, with the workforce growing to 162 FTE (full-time equivalent), of which 55 white collar and 107 blue collar workers. Some people were recruited to strengthen the team.
2010 was a year of solid work in HR. Our people were given additional training to further improve their competences and skills.
More than ever we worked to fixed rules, accepted by everyone, employer and employee alike. These include mutual respect, constructive dialogue, a willingness to take initiatives and responsibility at all levels, and a consistent and purposeful approach to a common project. The realization has grown that all those values are in the interest of all employees, of the local community, of society at large and of the prosperity of the company.
The results will be strongly affected by the development of metal prices and the economic situation. There are definite signs of improvement in most sectors.
In spite of the high raw material prices, demand is steady. Campine succeeds well in satisfying the demand at an acceptable price. The high prices imply a higher financial risk due to the increased financing need of the raw material flow but if no drastic price changes occur we anticipate a good result.
The business in 2011 started quite well. The order intake is in line with expectations. Thanks to improved machine capacity utilization, we anticipate a positive year.
In 2011 there will remain a global overcapacity – in particular in Europe. However, Campine is well-positioned to keep its customers and to remain profitable.
The Board of Directors declares that to the best of their knowledge the financial statements, prepared in accordance with the IFRS, give a true and fair view of the assets, liabilities, financial position and the results of the company, including its consolidated subsidiaries, together with a description of the principal risks and uncertainties that they face.
The law of 17 December 2008 regarding the Audit committee in listed companies entered into force on 8 January 2009. The Group complies with the requirements of this law. In this respect the Group confirms that the independent director complies with the law as to independence and competence.
In February 2011 an additional long term investment credit (5 years) amounting to 7.500 KEUR was obtained.
Since 2006, Campine takes positions in LME lead futures where it sells forward lead via future contracts. The objective of this activity is to reduce the fluctuations of Campine's net income due to changes in lead prices. Despite hedging a specific risk in an economic manner, these derivative financial instruments do not respect the strict criteria for the application of hedging accounting under IAS 39.
From the beginning of 2009 the company has also started to hedge fixed price-sell contracts with specific customers. Future purchase contracts (with the same expiry dates and the same amounts) are closed on the LME. The objective is to reduce fluctuations in the result because of movements in the lead price. These derivatives are defined as "fair value hedge of firm commitment" and fulfil the criteria of IAS39 (hedge accounting).
From the beginning of 2009 the company has also started to hedge fixed price-purchase contracts with specific suppliers. Future sell contracts (with the same expiry dates and the same amounts) are closed on the LME. The objective is to reduce fluctuations in the result because of movements in the lead price. These derivatives are defined as "fair value hedge of firm commitment" and fulfil the criteria of IAS39 (hedge accounting).
The value of these fixed price contracts and the future LME commitments are both shown in the balance sheet; changes in the values will be shown in the profit and loss account.
There were no changes in circumstances which could substantially influence the development of the company.
Research and development is a constant theme in the improvement of the mastering of our production processes and the applicability of our products in specific markets. In each business unit research projects were started up in collaboration with customers to develop new innovative products.
Campine, together with all other companies, is confronted with a number of uncertainties as a consequence of worldwide developments. The management aims to tackle these in a constructive way.
Campine pays particular attention to:
The company is represented by 1.500.000 shares. There are no different kinds of shares and every share represents one vote. There are no specific legal nor statutory limitations regarding the transfer of these shares, no specific control nor shareholders agreements. For both, the appointment and substitution of Board members and the modification of the statutes, ordinary legislation is valid. Neither the Board of Directors, nor its individual members have a special power and / or agreement exercisable in case of a public take over bid.
The Board of Directors proposes that the company pays a dividend of EUR 2,25 million (EUR 1,50 gross per share). In 2010 no dividend was paid on the basis of the 2009 result.
In 2010 the statutory auditor fee for audit services reached 76.500 EUR for the Group. The non-audit services in 2010 amounted to 28.250 EUR and were related to:
The Board of Directors proposes granting discharge to all Directors and the Statutory Auditor in respect of the exercise of their mandates in 2010.
The mandate of the Statutory Auditor of Deloitte Bedrijfsrevisoren, represented by Luc Van Coppenolle, will end. The Board would like to thank Luc Van Coppenolle for his contribution over the last 6 years.
The Board proposes to the General Meeting of Shareholders to appoint Deloitte Bedrijfsrevisoren, represented by Kathleen De Brabander, as Statutory Auditor for a period of three years. Subject to renewal, the mandate will automatically expire after the General Meeting of Shareholders in 2014.
As a company incorporated under the laws of Belgium and listed on Euronext Brussels, Campine nv adheres to the principles and provisions of the Belgian Corporate Governance Code 2009, taking into account Campine's characteristics such as its specific business environment and its relatively limited size.
The existing Corporate Governance model of Campine structures the existing procedures and ensures the efficient and transparent operation of the Group in the interest of the Group and its stakeholders.
The Corporate Governance Charter has been adopted by the Board on March 9, 2006. It aims at providing a comprehensive and transparent disclosure of the rules and policies that together with applicable law constitute the governance framework within which the company operates. This Corporate Governance Charter has been established in accordance with the "comply or explain"-principle and mentions the parts of the Belgian Corporate Governance Code 2009 of which Campine differs and gives substantiated reasons.
This Corporate Governance Charter has been and will be further up-dated by the Board in case of further developments of, or changes to, the Belgian Corporate Governance Code 2009 or to Campine's Corporate Governance model.
The Corporate Governance Charter is mentioned on the website www.campine.be / Investor's relations.
| Name | Number of shares |
% of the share capital |
|---|---|---|
| 1. Camhold NV Nijverheidsstraat 2, 2340 Beerse |
540.000 | 36,00% |
| 2. F.W. Hempel Intermétaux SA Rue de la Servette 32, 1202 Genève, Switzerland |
537.900 | 35,86% |
The remaining shares are, as far as the company knows, held by private investors. The company has until now not received any notices from other shareholders, who are compelled to disclose their shareholdings pursuant to Belgian law governing the notification of major shareholdings.
The Board should consist of a minimum of three and a maximum of six members according to the Articles of Association. Currently the Board is composed of six members, being one executive director and five non-executive directors, of whom are two independent directors.
Shareholder and director of various private companies in Europe.
Shareholder and director of various private companies in Europe.
Chartered accountant.
DW Services Comm. V., Independent Board member represented by its permanent representative Mr A. De Witte
Board member with ICT and other companies in Belgium and abroad.
DELOX NV, Independent Board member represented by its permanent representative Mr P. De Groote
Board member of various companies.
Mr Geert Krekel, Managing Director of Campine nv and Chairman of the Board of Campine Recycling nv.
Campine applies to the independence criteria as mentioned in the Corporate Governance Charter.
The Belgian Corporate Governance Code 2009 requires that the Board should comprise at least three independent directors and gender diversity. Currently the company only has male directors and two independent directors. This is explained by the fact that the number and gender of the directors has to be seen in the perspective of the size of the Company. There is diversity in general. The Board is small enough for efficient decisionmaking and on the other side large enough for its members to contribute experience and knowledge from different fields and for changes to be managed without undue disruption. Each director has a specific and complementary role to play on the Board.
During the financial year which closed per 31 December 2010, the following Board meetings were held:
| Date of the Board meeting | Members present |
|---|---|
| 24 February 2010 | F.-W. Hempel, A. Hempel, R. Pearson, G. Krekel, DW Services Comm. V., DELOX NV |
| 12 May 2010 | F.-W. Hempel, A. Hempel, R. Pearson, G. Krekel, DW Services Comm. V., DELOX NV |
| 25 August 2010 | F.-W. Hempel, A. Hempel, R. Pearson, G. Krekel, DW Services Comm. V., DELOX NV |
| 24-25 November 2010 | F.-W. Hempel, A. Hempel, R. Pearson, G. Krekel, DW Services Comm. V., DELOX NV |
The Board of Directors intends to make official the main features of the procedure to evaluate the Board of Directors, its committees and its individual directors in working methods and procedures.
Pursuant to the Belgian Corporate Governance Code 2009 the Board should appoint a company secretary. Due to the size of the company and the relatively limited number of Board members, the company has not yet appointed a company secretary. The Managing Director, assisted by the management assistant, currently ensures that the Board procedures are complied with and that the Board acts in accordance with its obligations under the law, the Articles of Association and the internal rules and regulations.
Furthermore the Audit committee monitors the financial reporting process, the internal control and risk management systems and the functioning of the Executive Management Team. They report all matters in respect of which it considers that action or improvement is needed to the Board.
Composition Jan Keuppens Daniel Chéret Finance and Administration Manager General Manager Lead*
General Manager Plastics General Manager Antimony
The Board is advised by:
The Nomination & Remuneration committee assists the Board in all matters related to the appointment and remuneration of the directors and the Executive Management Team.
Up and including 2010 it consisted of the Chairman of the Board and the Managing Director.
Pursuant to the Belgian Corporate Governance Code 2009 the Board should set up a Nomination committee composed of a majority of independent non-executive directors and a Remuneration committee composed exclusively of non-executive directors of which at least a majority of members should be independent. However, due to
this committee could be composed of the Managing Director and Chairman of the Board without any conflict of interest.
However to comply with the adjusted Company Code the Board confirms the appointment of Mr F.-W. Hempel and appoints the two independent directors - being DW Services Comm. V. and DELOX NV - as new members of the Nomination & Remuneration committee as of 1 January 2011. The Managing Director will participate to the committee with an advising vote.
The Audit committee assists the Board in all matters related to the control of the financial reporting process, the annual and consolidated accounts as well as the internal control and risk management of the company.
It consists of Mr R. Pearson and the independent director DW Services Comm. V.
The law of 17 December 2008 regarding the Audit committee in listed companies entered into force on 8 January 2009. The Group complies with the requirements of this law and confirms that the independent director complies with the law as to independence and competence.
Pursuant to the Belgian Corporate Governance Code 2009 requires each committee should comprise at least three members. Currently the Audit committee only has two members. This is explained by the fact that the number of directors and hence the committee is to be seen in the perspective of the size of the company.
Pursuant to the Belgian Corporate Governance Code 2009 the majority of the members of the Audit committee should be independent. Currently only half of the Audit committee is independent as the Audit committee only has two members. The size of the Board and the committee is to be seen in the perspective of the size of the company.
The Strategy committee assists the Board in all matters related to the general management and general principals of the company and its subsidiaries. It consists of the independent director DELOX NV, the Managing Director and Mr A. Hempel.
During the financial year which closed per 31 December 2010 the following Board committees meetings were held:
| Board committee | Date of the meeting | Members present | ||
|---|---|---|---|---|
| Nomination & | 16 February 2010 | F.-W. Hempel, G. Krekel | ||
| Remuneration committee |
3 November 2010 | F.-W. Hempel, G. Krekel | ||
| 23 February 2010 | R. Pearson, G. Krekel, DW Services Comm. V. with Auditor |
|||
| Audit committee | 23 April 2010 | R. Pearson, G. Krekel, DW Services Comm. V. |
||
| 24 August 2010 | R. Pearson, G. Krekel, DW Services Comm. V. with Auditor |
|||
| 24 November 2010 | R. Pearson, G. Krekel, DW Services Comm. V. |
|||
| Strategy committee | 23 February 2010 | A. Hempel, DELOX NV, G. Krekel | ||
| 24 August 2010 | A. Hempel, DELOX NV, G. Krekel |
The committee's regulations can be found in annex of the Corporate Governance Charter. The Board intends to further officialise the working of the committees in compliance with the Belgian Corporate Governance Code 2009 in the coming years.
Campine organizes the management of internal control and corporate risks by defining its control environment (general framework), identifying and classifying the main risks to which it is exposed, analysing its level of control of these risks and organizing 'control of control'. It also pays particular attention to the reliability of the financial reporting and communication process.
All processes – from administration to effective production - are managed in our management house – a documented management system which is based on the different risk analyses systems. The risks regarding safety, health, environment & quality are inventorised, evaluated, managed and controlled in a dynamic way based on 'continuous improvement'.
The Audit committee reviews the risk analysis twice a year. These risks are described in the note "market risk" in the annual report.
The process of establishing financial information is organized as follows:
A retro planning chart sets out the tasks to be completed for the monthly, half-yearly and annual closures of the company and its subsidiary, with deadlines. Campine has a check list of actions to be followed up by the financial department. The accounts team produces the accounting figures under the supervision of the chief accountant. The controllers check the validity of these figures and produce the reporting. The figures are checked using the following techniques:
sample checks of transactions according to their materiality.
The Board of Directors supervises the performance of the duties of the Audit committee in that connection, notably through that committee's reporting.
The dealing code – part of our Code Conduct – stipulates the rules regarding transactions of shares of the company. It sets limitations for key-persons regarding transactions in specific periods ("closed periods") and "prohibited periods" and imposes a disclosure obligation to the Compliance Officer in case of transactions outside these periods. The Board of Directors has appointed Mr. Geert Krekel as Compliance Officer who monitors the key-persons' compliance with the dealing code.
All transactions with related parties are conducted at arm's length and in compliance with all legal requirements and the Corporate Governance Charter.
Non-executive directors do not receive a merit pay such as bonus or any advantage in kind nor advantage related to a pension plan.
Board members who are member of a specialised committee do not receive additional remuneration for that.
The director's remuneration granted to the non-executive directors is set in the Articles of Association and specified under point 2 below. The tantième granted to the non-executive directors is set in the Articles of Association and specified under point 2 below.
The Board of Directors decides upon the appointment, remuneration and removal of the Managing Director. The Managing Director's remuneration for the execution of his function consisting of both a fixed and a variable compensation is based on market references. The variable part is partly result related and partly related to a system of company, BU and personal objectives.
The Nomination and Remuneration committee advises on the nomination, remuneration and removal of the members of the Executive Management Team.
The remuneration of the members of the Executive Management Team, consisting of both fixed and variable compensation, is based on a market study, using reference functions. The variable part of the remuneration is partly result-related and partly linked to a system of company, BU and personal objectives.
The contractual terms of hiring and termination arrangements of the Managing Director and members of the Executive Management Team do not provide any specific compensation commitments, other than standard notice periods, in the event of early termination.
Based on the above mentioned policy, the following amounts were paid:
| 1. Consolidated income statement for the year ended 31 December 2010 | 26 |
|---|---|
| 2. Consolidated balance sheet at 31 December 2010 | 27 |
| 3. Consolidated statement of changes in equity for the year ended 31 December 2010 | 28 |
| 4. Consolidated cash flow statement for the year ended 31 December 2010 | 29 |
| 5. Notes to the consolidated financial statements for the year ended 31 December 2010 | 30 |
| 5.1. General information | 30 |
| 5.2. Significant accounting policies | 30 |
| 5.3. Judgement and use of estimates | 35 |
| 5.4. Business and geographical segments | 35 |
| 5.5. Other operating expense | 38 |
| 5.6. Finance costs | 38 |
| 5.7. Income tax expense | 38 |
| 5.8. Result for the year | 39 |
| 5.9. Dividends | 39 |
| 5.10. Property, plant and equipment | 40 |
| 5.11. Intangible assets | 41 |
| 5.12. Subsidiaries | 41 |
| 5.13. Inventories | 41 |
| 5.14. Financial assets | 42 |
| 5.15. Other financial assets and liabilities | 42 |
| 5.16. Share capital | 43 |
| 5.17. Bank borrowings (finance lease obligations not included) | 43 |
| 5.18. Deferred tax | 44 |
| 5.19. Obligations under finance leases | 44 |
| 5.20. Trade and other payables | 45 |
| 5.21. Liquidity risk | 45 |
| 5.22. Provisions | 45 |
| 5.23. Non-cash transactions | 45 |
| 5.24. Contingent liabilities | 46 |
| 5.25. Commitments | 46 |
| 5.26. Operating lease arrangements | 46 |
| 5.27. Share-based payments | 46 |
| 5.28. Retirement benefit plans | 46 |
| 5.29. Market risk | 47 |
| 5.30. Events after the balance sheet date | 48 |
| 5.31. Related parties | 48 |
| 5.32. Related party transactions | 48 |
| 5.33. Rights and obligations not included in the balance sheet | 49 |
| 5.34. Compensation of key management personnel | 49 |
| 5.35. Approval of financial statements | 49 |
| Auditor's Report | 50 |
| Year ended | Year ended | |||
|---|---|---|---|---|
| '000 EUR | Notes | 31/12/2010 | 31/12/2009 | |
| Revenue | 4 | 137.663 | 80.778 | |
| Other operating income | 1.204 | 701 | ||
| Changes in inventories of finished goods and work in progress | 7.722 | 1.120 | ||
| Raw materials and consumables used | - 115.418 |
- | 63.679 | |
| Employee benefits expense | - 11.243 |
- | 10.857 | |
| Depreciation and amortisation expense | - 3.205 |
- | 3.185 | |
| Changes in restoration cost | 22 | - | 2.193 | |
| Other operating expenses | 5 | - 8.200 |
- | 6.375 |
| Operating result | 8.523 | 696 | ||
| Investment revenues | - | 45 | ||
| Hedging results | 15 | - 435 |
- | 1.396 |
| Other gains and losses | - | - | ||
| Finance costs | 6 | - 585 |
- | 444 |
| Result before tax | 7.503 | - | 1.099 | |
| Income tax expense | 7 | - 1.751 |
- | 22 |
| Result for the year | 5.752 | - | 1.121 | |
| Result for the year | 8 | 5.752 | - | 1.121 |
| Attributable to: | ||||
| Equity holders of the parent | 5.752 | - | 1.121 | |
| Minority interest | - | - | ||
| 5.752 | - | 1.121 | ||
| RESULT PER SHARE (in EUR) | 9 | |||
| Basic | 3,83 | - | 0,75 | |
| Diluted | 3,83 | - | 0,75 |
* No consolidated statement of comprehensive income is presented as it is not relevant.
| Year ended | Year ended | ||
|---|---|---|---|
| '000 EUR | Notes | 31/12/2010 | 31/12/2009 |
| ASSETS | |||
| Non-current assets | |||
| Property, plant and equipment | 10 | 9.134 | 8.808 |
| Intangible assets | 11 | 346 | 68 |
| Cash restricted in its use | 300 | 308 | |
| 9.780 | 9.184 | ||
| Current assets | |||
| Inventories | 13 | 36.997 | 21.427 |
| Trade and other receivables | 14 | 23.471 | 13.537 |
| Derivatives | 15 | 68 | 130 |
| Cash and cash equivalents | 1.572 | 1.395 | |
| 62.108 | 36.489 | ||
| TOTAL ASSETS | 71.888 | 45.673 | |
| EQUITY AND LIABILITIES | |||
| Capital and reserves | |||
| Share capital | 16 | 4.000 | 4.000 |
| Translation reserves | - | - | |
| Retained earnings | 21.550 | 15.798 | |
| Equity attributable to equity holders of the parent | 25.550 | 19.798 | |
| Total equity | 25.550 | 19.798 | |
| Non-current liabilities | |||
| Retirement benefit obligation | 28 | 766 | 868 |
| Deferred tax liabilities | 18 | 326 | 285 |
| Bank loans | 17 | 1.800 | 3.466 |
| Obligations under finance leases | 19 | - | - |
| Provisions | 22 | 2.216 | 2.773 |
| 5.108 | 7.392 | ||
| Current liabilities | |||
| Retirement benefit obligation | 28 | 201 | 262 |
| Trade and other payables | 20 | 22.253 | 14.659 |
| Derivatives | 15 | 599 | 373 |
| Current tax liabilities | 1.490 | 280 | |
| Obligations under finance leases | 19 | - | - |
| Bank overdrafts and loans | 17 | 16.466 | 2.821 |
| Provisions | 22 | 221 | 88 |
| 41.230 | 18.483 | ||
| Total liabilities | 46.338 | 25.875 | |
| TOTAL EQUITY AND LIABILITIES | 71.888 | 45.673 |
| Share | Retained | Attributable to equity | ||
|---|---|---|---|---|
| '000 EUR | capital | earnings | holders of the parent | Total |
| Balance at 31 December 2008 | 4.000 | 17.719 | 21.719 | 21.719 |
| Result of the year | - | - 1.121 |
- 1.121 |
1.121 - |
| Dividends | - | - 800 |
- 800 |
- 800 |
| Balance at 31 December 2009 | 4.000 | 15.798 | 19.798 | 19.798 |
| Result of the year | - | 5.752 | 5.752 | 5.752 |
| Dividends | - | - | - | - |
| Balance at 31 December 2010 | 4.000 | 21.550 | 25.550 | 25.550 |
| '000 EUR | Notes | Year ended 31/12/2010 |
Year ended 31/12/2009 |
|---|---|---|---|
| OPERATING ACTIVITIES | |||
| Result for the year | 5.752 | - 1.121 |
|
| Adjustments for: | |||
| Other gains and losses (investment grants) | - 14 |
- 14 |
|
| Investment revenues | - | - 45 |
|
| Other gains and losses (hedging results) | 15 | 435 | 1.396 |
| Finance costs | 6 | 585 | 444 |
| Income tax expense | 7 | 1.751 | 22 |
| Depreciation of property, plant and equipment | 3.205 | 3.185 | |
| Gain on disposal of property, plant and equipment | - | - | |
| Change in provisions (incl. retirement benefit) | - 587 |
- 2.151 |
|
| Change in inventory value reduction | 13 | - 67 |
- 3.065 |
| Others | 14 | 14 | |
| Operating cash flows before movements in working capital | 11.074 | - 1.335 |
|
| Change in inventories | 13 | - 15.503 |
- 1.634 |
| Change in receivables | 14 | - 9.934 |
- 3.567 |
| Change in trade and other payables | 21 | 7.594 | 7.058 |
| Cash generated from operations | - 6.769 |
522 | |
| Hedging results | - 147 |
- 848 |
|
| Interest paid | 6 | - 585 |
- 444 |
| Income taxes paid | - 500 |
- 1.122 |
|
| Net cash (used in) / from operating activities | - 8.001 |
- 1.892 |
|
| INVESTING ACTIVITIES | |||
| Interest received Proceeds on disposal of property, plant and equipment |
- - |
45 - |
|
| Purchases of property, plant and equipment | 10 | - 3.483 |
- 1.209 |
| Purchases of intangible assets | 11 | - 326 |
- |
| Net cash (used in) / from investing activities | - 3.809 |
- 1.164 |
|
| FINANCING ACTIVITIES | |||
| Dividends paid | - | - 800 |
|
| Repayments of borrowings | 17 | - 2.121 |
- 2.108 |
| Repayments of obligations under finance leases | 19 | - | - 24 |
| New bank loans raised | 17 | - | - |
| Change in cash restricted in its use | 8 | - 25 |
|
| Change in bank overdrafts | 17 | 14.100 | 700 |
| Net cash (used in) / from financing activities | 11.987 | - 2.257 |
|
| Net change in cash and cash equivalents | 177 | - 5.313 |
|
| Cash and cash equivalents at the beginning of the year | 1.395 | 6.708 | |
| Effect of foreign exchange rate changes | - | - | |
| Cash and cash equivalents at the end of the year | 1.572 | 1.395 | |
| Bank balances and cash | 1.572 | 1.395 | |
Campine nv (the Company) is a limited liability company incorporated in Belgium. The addresses of its registered office and principal place of business are disclosed in the Corporate Data. The principal activities of the Company and its subsidiaries (the Group) are described in this annual report.
The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU at 31 December 2010.
The Group has adopted all new and revised standards and interpretations relevant for its activities and which became applicable for the financial year starting 1 January 2010.
At this stage, the Group does not expect first adoption of the amendments listed above to standards and new interpretations to have a material impact on the financial statements.
The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by other members of the Group.
All intra-group transactions, balances, income and expenses are eliminated on consolidation.
The acquisition of subsidiaries is accounted for using the purchase method. The cost of the acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. The acquiree's identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under IFRS 3 are recognised at their fair values at the acquisition date, except for non-current assets (or disposal groups) that are classified as held for sale, which are recognised and measured at fair value less costs to sell.
Goodwill arising on acquisition is recognised as an asset and initially measured at cost, being the excess of the cost of the business combination over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities recognised. If, after reassessment, the Group's interest in the net fair value of the acquiree's identifiable assets, liabilities and contingent liabilities exceeds the cost of the business combination, the excess is recognised immediately in profit or loss.
The interest of minority shareholders in the acquiree is initially measured at the minority's proportion of the net fair value of the assets, liabilities and contingent liabilities recognised.
Goodwill arising on the acquisition of a subsidiary or a jointly controlled entity represents the excess of the cost of acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary or jointly controlled entity recognised at the date of acquisition. Goodwill is initially recognised as an asset at cost and is subsequently measured at cost less any accumulated impairment losses.
On disposal of a subsidiary or a jointly controlled entity, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for goods and services provided in the normal course of business, net of discounts and sales related taxes. Sales of goods are recognised when goods are delivered and title has passed.
Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Assets held under finance leases are recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the balance sheet as a finance lease obligation. Lease payments are apportioned between finance charges and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability.
Finance charges are charged to profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group's general policy on borrowing costs (see further). Rentals payable under operating leases are charged to profit or loss on a straight-line basis over the term of the relevant lease. Benefits received and receivable as an incentive to enter into an operating lease are also spread on a straight-line basis over the lease term.
The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each entity are expressed in EUR, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.
In preparing the financial statements of the individual entities, transactions in currencies other than the entity's functional currency (foreign currencies) are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Non-monetary items that are measured in terms of historical cost in a foreign currency remain at historical rate.
Exchange differences arising on the settlement of monetary items, and on the retranslation of monetary items, are included in profit or loss for the period (within other operating income/expenses).
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group's foreign operations (including comparatives) are expressed in EUR using exchange rates prevailing on the balance sheet date.
Income and expense items (including comparatives) are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the Group's translation reserve. Such translation differences are recognised in profit or loss in the period in which the foreign operation is disposed of.
Since 2006, Campine takes positions in LME lead futures where it sells forward lead via future contracts.
The objective of this activity is to reduce the fluctuations of Campine's net income due to changes in lead prices. Despite hedging a specific risk in an economic manner, these derivative financial instruments do not respect the strict criteria for the application of hedging accounting under IAS 39.
From the beginning of 2009 the company has also started to hedge fixed price-sell contracts with specific customers. Future purchase contracts (with the same expiry dates and the same amounts) are closed on the LME. The objective is to reduce fluctuations in the result because of movements in the lead price. These derivatives are defined as "fair value hedge of firm commitment" and fulfil the criteria of IAS39 (hedge accounting).
From the beginning of 2009 the company has also started to hedge fixed price-purchase contracts with specific suppliers. Future sell contracts (with the same expiry dates and the same amounts) are closed on the LME. The objective is to reduce fluctuations in the result because of movements in the lead price. These derivatives are defined as "fair value hedge of firm commitment" and fulfil the criteria of IAS39 (hedge accounting).
Therefore these instruments are recognised on the balance sheet at fair value, while variations in the fair value of such instruments are directly recognised in the income statement.
Borrowing costs are recognised in profit or loss in the period in which they are incurred, unless they are directly attributable to qualifying assets, in which case they are capitalised.
Government grants are recognised in profit or loss (in other operating income) over the periods necessary to match them with the related costs.
Government grants related to later periods are presented in the financial statements as deferred income.
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at each balance sheet date. Actuarial gains and losses that exceed 10 per cent of the greater of the present value of the Group's defined benefit obligation and the fair value of plan assets are amortised over the expected average remaining working lives of the participating employees. Past service cost is recognised immediately to the extent that the benefits are already vested, and otherwise is amortised on a straight-line basis over the average period until the benefits become vested.
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and as reduced by the fair value of plan assets.
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group intends to settle its current tax assets and liabilities on a net basis.
Property, plant & equipment are stated at cost less accumulated depreciation and any accumulated impairment losses.
Properties in the course of construction for production, rental or administrative purposes, are carried at cost, less any recognised impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group's accounting policy. Depreciation of these assets commences when the assets are ready for their intended use.
Depreciation is charged so as to write off the cost or valuation of assets, other than land and properties under construction, over their estimated useful lives, using the straight-line method.
Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets or, where shorter, the term of the relevant lease.
The gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An internally-generated intangible asset arising from the Group's development is recognised only if all of the following conditions are met:
Internally-generated intangible assets are amortised on a straight-line basis over their estimated useful lives. Where no internally-generated intangible asset can be recognised, development expenditure is charged to profit or loss in the period in which it is incurred.
Patents, trademarks and software purchased are measured initially at purchase cost and are amortised on a straight-line basis over their estimated useful lives.
At each balance sheet date, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cashgenerating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
Inventories are stated at the lower of cost and net realisable value. Cost of raw materials is determined at the individual purchasing price (purchasing price increased by purchasing costs). Cost of work in progress and finished products comprises raw materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing the inventories to their present location and condition. Net realisable value represents the estimated selling price less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. Value reductions are made for the old and slow moving inventories.
Trade receivables are measured at initial recognition at fair value. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.
Cash and cash equivalents comprise cash on hand and demand deposits. Cash and cash equivalents are included at fair value.
Interest-bearing bank loans and overdrafts are measured at fair value. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the Group's accounting policy for borrowing costs (see above).
Trade payables are measured at fair value.
Provisions are recognised when the Group has a present obligation as a result of a past event, and it is probable that the Group will be required to settle that obligation. Provisions are measured at the directors' best estimate of the expenditure required to settle the obligation at the balance sheet date, and are discounted to present value where the effect is material.
The preparation of financial statements requires the use of estimates and assumptions to determine the value of assets and liabilities, to assess the positive and negative consequences of unforeseen situations and events at the balance sheet date, and to form a judgment as to the revenues and expenses of the fiscal year.
Significant estimates made by the Group in the preparation of the financial statements relate mainly to the evaluation of the recoverable amount of stocks, the valuation of sanitation provisions, provisions for litigation, provisions for doubtful debtors and for pension and related liabilities.
Due to the uncertainties inherent in all valuation processes, the Group revises its estimates on the basis of regularly updated information. Future results may differ from these estimates.
Other than the use of estimates, Group management also uses judgment in defining the accounting treatment for certain operations and transactions not addressed under the IFRS standards and interpretations currently in force.
Deferred tax assets are recognized for the carry-forward of unused tax losses and unused tax credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused tax credit scan be utilised. In making its judgment, management takes into account elements such as long-term business strategy.
For management purposes, the Group is organised into three operating divisions Antimony, Plastics & Lead. These divisions are the basis on which the Group reports its primary segment information. Principal activities as follows:
Segment information of the Group is presented hereafter.
| Elimination / | |||||
|---|---|---|---|---|---|
| '000 EUR | Antimony | Plastics | Lead | others | Total |
| Year ended | Year ended | Year ended | Year ended | Year ended | |
| 2010 | 31/12/2010 | 31/12/2010 | 31/12/2010 | 31/12/2010 | 31/12/2010 |
| REVENUE | |||||
| External sales | 61.745 | 20.533 | 54.123 | 1.262 | 137.663 |
| Inter-segment sales | 10.444 | - | - | 10.444 - | - |
| Total revenue | 72.189 | 20.533 | 54.123 | 9.182 - | 137.663 |
| Inter-segment sales are charged at prevailing market prices | |||||
| RESULT | |||||
| Segment operating result | 6.215 | 1.342 | 6.064 | 13.621 | |
| Unallocated expenses | - 5.098 |
||||
| Operating result | 8.523 | ||||
| Investment revenues | - | ||||
| Hedging results | - 435 |
- 435 |
|||
| Other gains and losses | - | ||||
| Finance costs | - 585 |
||||
| Result before tax | 7.503 | ||||
| Income tax expense | - 1.751 |
||||
| Result for the year | 5.752 | ||||
| '000 EUR | Antimony | Plastics | Recycling | Others | Total |
| 2010 | 31/12/2010 | 31/12/2010 | 31/12/2010 | 31/12/2010 | 31/12/2010 |
| OTHER INFORMATION | |||||
| Capital additions | 287 | 202 | 2.668 | 653 | 3.810 |
| Depreciation and amortisation | 453 | 298 | 1.932 | 522 | 3.205 |
| BALANCE SHEET | |||||
| Assets | |||||
| Fixed assets | 779 | 422 | 6.142 | 2.137 | 9.480 |
| Cash restricted in its use | - | - | 300 | - | 300 |
| Stocks | 23.441 | 2.821 | 9.961 | 774 | 36.997 |
| Trade and other receivables Derivatives |
12.639 - |
2.889 - |
6.269 68 |
1.674 - |
23.471 68 |
| Cash and cash equivalent | - | - | - | 1.572 | 1.572 |
| Total Assets | 36.859 | 6.132 | 22.740 | 6.157 | 71.888 |
| Liabilities | |||||
| Long term liabilities | |||||
| Retirement benefit obligation | - | - | - | 766 | 766 |
| Deferred tax liabilities | - | - | - | 326 | 326 |
| Bank loans | - | - | - | 1.800 | 1.800 |
| Obligations under finance leases | - | - | - | - | - |
| Provisions | - | - | 2.216 | - | 2.216 |
| Short term liabilities | |||||
| Retirement benefit obligation | - | - | - | 201 | 201 |
| Trade and other payables | 9.399 | 670 | 6.941 | 5.243 | 22.253 |
| Derivatives | - | - | 599 | - | 599 |
| Current tax liabilities | - | - | - | 1.490 | 1.490 |
| Obligations under finance leases | - | - | - | - | - |
| Bank overdrafts and loans | - | - | - | 16.466 | 16.466 |
| Provisions | - | - | 221 | - | 221 |
| Total liabilities | 9.399 | 670 | 9.977 | 26.292 | 46.338 |
| Elimination / | |||||
|---|---|---|---|---|---|
| '000 EUR | Antimony | Plastics | Lead | others | Total |
| Year ended | Year ended | Year ended | Year ended | Year ended | |
| 2009 | 31/12/2009 | 31/12/2009 | 31/12/2009 | 31/12/2009 | 31/12/2009 |
| REVENUE | |||||
| External sales | 31.497 | 9.626 | 39.736 | 81 - | 80.778 |
| Inter-segment sales | 3.519 | - | - | 3.519 - | - |
| Total revenue | 35.016 | 9.626 | 39.736 | 3.600 - | 80.778 |
| Inter-segment sales are charged at prevailing market prices | |||||
| RESULT | |||||
| Segment operating result | 312 | - 63 |
3.149 | 3.398 | |
| Unallocated expenses | - 2.702 |
||||
| Operating result | 696 | ||||
| Investment revenues | 45 | ||||
| Hedging results | - 1.396 |
- 1.396 |
|||
| Other gains and losses | - | ||||
| Finance costs | - 444 |
||||
| Result before tax | - 1.099 |
||||
| Income tax expense | - 22 |
||||
| Result for the year | - 1.121 |
||||
| '000 EUR | Antimony | Plastics | Recycling | Others | Total |
| 2009 | 31/12/2009 | 31/12/2009 | 31/12/2009 | 31/12/2009 | 31/12/2009 |
| OTHER INFORMATION | |||||
| Capital additions | 140 | 98 | 816 | 155 | 1.209 |
| Depreciation and amortisation | 550 | 319 | 1.739 | 577 | 3.185 |
| BALANCE SHEET | |||||
| Assets | |||||
| Fixed assets | 945 | 518 | 5.407 | 2.006 | 8.876 |
| Cash restricted in its use | - | - | - | 308 | 308 |
| Stocks | 7.879 | 1.767 | 11.064 | 717 | 21.427 |
| Trade and other receivables | 7.050 | 1.626 | 3.395 | 1.466 | 13.537 |
| Derivatives | - | - | 130 | - | 130 |
| Cash and cash equivalent | - | - | - | 1.395 | 1.395 |
| Total Assets | 15.874 | 3.911 | 19.996 | 5.892 | 45.673 |
| Liabilities | |||||
| Long term liabilities | |||||
| Retirement benefit obligation | - | - | - | 868 | 868 |
| Deferred tax liabilities | - | - | - | 285 | 285 |
| Bank loans | - | - | - | 3.466 | 3.466 |
| Obligations under finance leases | - | - | - | - | - |
| Provisions | - | - | 2.773 | - | 2.773 |
| Short term liabilities | |||||
| Retirement benefit obligation | - | - | - | 262 | 262 |
| Trade and other payables | 2.608 | 1.069 | 6.919 | 4.063 | 14.659 |
| Derivatives | - | - | 373 | - | 373 |
| Current tax liabilities | - | - | - | 280 | 280 |
| Obligations under finance leases | - | - | - | - | - |
| Bank overdrafts and loans | - | - | - | 2.821 | 2.821 |
| Provisions | - | - | 88 | - | 88 |
| Total liabilities | 2.608 | 1.069 | 10.153 | 12.045 | 25.875 |
The Group's manufacturing operations are located in Belgium.
The following table provides an analysis of the Group's sales by geographical market.
| Year ended | Year ended | |
|---|---|---|
| '000 EUR | 31/12/2010 | 31/12/2009 |
| Europe | 115.582 | 63.925 |
| North America | 16.647 | 8.762 |
| Asia | 3.139 | 1.412 |
| Others | 2.295 | 6.679 |
| 137.663 | 80.778 |
| Year ended | Year ended | |
|---|---|---|
| '000 EUR | 31/12/2010 | 31/12/2009 |
| Office expenses | 748 | 733 |
| Fees | 692 | 550 |
| Insurances | 226 | 278 |
| Transportation costs | 945 | 692 |
| Interim personnel | 970 | 311 |
| Carry-off of waste | 1.716 | 1.836 |
| Others | 2.903 | 1.975 |
| 8.200 | 6.375 |
| Year ended | Year ended | |
|---|---|---|
| '000 EUR | 31/12/2010 | 31/12/2009 |
| Interest on bank overdrafts and loans | 585 | 444 |
| Interest on obligations under finance leases | - | - |
| Total borrowing costs | 585 | 444 |
| Less amounts included in the cost qualifying assets | - | - |
| '000 EUR | Year ended 31/12/2010 |
Year ended 31/12/2009 |
|---|---|---|
| Current tax | 1.710 | 286 |
| Deferred tax | 41 | - 264 |
| Income tax expense for the year | 1.751 | 22 |
Domestic income tax is calculated at 33,99% (2009: 33,99%) of the estimated assessable result for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.
The total charge for the year can be reconciled to the accounting result as follows:
| Year ended | Year ended | |
|---|---|---|
| '000 EUR | 31/12/2010 | 31/12/2009 |
| Result before tax | 7.503 | - 1.099 |
| 7.503 | - 1.099 |
|
| Tax at the domestic income tax rate of 33,99% | ||
| (2009: 33,99%) | 2.550 | - 374 |
| Tax effect of expenses that are not deductible in determining | ||
| taxable result | 83 | 83 |
| Tax effect of Notional Interest Deduction (NID) | - 241 |
- 146 |
| Tax settlement previous years | - | 5 |
| Tax effect of utilisation of tax losses not previously recognised | - 666 |
436 |
| Tax penalty (unsufficient prepayments) | 25 | 18 |
| Effect of different tax rates of subsidiaries operating in other | ||
| jurisdictions | - | - |
| Tax expense and effective tax rate for the year | 1.751 | 22 |
Result for the year has been arrived at after charging:
| '000 EUR | Year ended 31/12/2010 |
Year ended 31/12/2009 |
||
|---|---|---|---|---|
| Net foreign exchange gains/(losses) | - | 280 | - | 3 |
| Lead hedging on LME-exchange (London Metal Exchange) (see note 15) |
- | 435 | - | 1.396 |
| Research & development costs | - | 313 | - | 295 |
| Amortisation of capital grants | 14 | 14 |
No dividend was paid in 2010.
In respect of the current year, the directors propose that a dividend of 1,50 EUR per share will be paid to the shareholders on 31 May 2011. This dividend is subject to approval by the shareholders at the General Meeting of Shareholders and has not been included as a liability in these financial statements. The proposed dividend is payable to all shareholders. The total estimated dividend to be paid is 2,25 million EUR.
As no potential shares – which could lead to dilution – were issued and no activities were ceased, the diluted result per share equals the basic result per share.
The calculation of the basic and diluted result per share attributable to the ordinary equity holders of the parent is based on the following data:
| Year ended | Year ended | |
|---|---|---|
| '000 EUR | 31/12/2010 | 31/12/2009 |
| RESULT | ||
| Result for purposes of basic and diluted results per share | ||
| (result for the year attributable to equity holders of the parent) | 5.752 | - 1.121 |
| NUMBER OF SHARES | ||
| Weighted average number of ordinary shares for the purposes of | ||
| basic and diluted results per share | 1.500.000 | 1.500.000 |
| Land and | Properties under | Fixtures and | ||
|---|---|---|---|---|
| '000 EUR | buildings | construction | equipment | Total |
| COST OR VALUATION | ||||
| At 31 December 2008 | 11.759 | - | 38.810 | 50.569 |
| Additions | 270 | 83 | 856 | 1.209 |
| Transfers | - | - | - | - |
| Disposals | - | - | - | - |
| At 31 December 2009 | 12.029 | 83 | 39.666 | 51.778 |
| Additions | 368 | 56 | 3.059 | 3.483 |
| Transfers | - | - 83 |
83 | - |
| Disposals | - | - | - | - |
| At 31 December 2010 | 12.397 | 56 | 42.808 | 55.261 |
| ACCUMULATED DEPRECIATION | ||||
| At 31 December 2008 | 7.626 | - | 32.208 | 39.834 |
| Deprecation charge for the year | 891 | - | 2.245 | 3.136 |
| Eliminated on disposals | - | - | - | - |
| At 31 December 2009 | 8.517 | - | 34.453 | 42.970 |
| Deprecation charge for the year | 880 | - | 2.277 | 3.157 |
| Eliminated on disposals | - | - | - | - |
| At 31 December 2010 | 9.397 | - | 36.730 | 46.127 |
| CARRYING AMOUNT | ||||
| At 31 December 2010 | 3.000 | 56 | 6.078 | 9.134 |
| At 31 December 2009 | 3.512 | 83 | 5.213 | 8.808 |
The following rates are used for the depreciation of property, plant and equipment:
| Industrial, administrative, commercial buildings | 5% |
|---|---|
| Furniture | 20% |
| Vehicles | 25% |
| Installations, machinery and equipment | min 10% – max 33% depending on the life time |
There are no assets based on finance leases. The Group has not pledged land and buildings to secure banking facilities granted to the Group.
| Patents, trademarks and | |
|---|---|
| '000 EUR | software purchased |
| COST | |
| At 31 December 2008 | 297 |
| Additions | - |
| At 31 December 2009 | 297 |
| Additions | 327 |
| At 31 December 2010 | 624 |
| AMORTISATION | |
| At 31 December 2008 | 180 |
| Charge for the year | 49 |
| At 31 December 2009 | 229 |
| Charge for the year | 49 |
| At 31 December 2010 | 278 |
| CARRYING AMOUNT | |
| At 31 December 2010 | 346 |
| At 31 December 2009 | 68 |
The intangible assets included in the table have finite useful lives, over which the assets are amortised.
In order to optimise the use of our data for our business we opted to transfer our data system to SAP. This transaction has already been prepared in 2010 and will effectively take place in 2011. In 2010 we incurred already a cost of 327 KEUR. This will be depreciated over a period of 10 years.
Details of the Group's subsidiaries at 31 December 2010 are as follows:
| Place of incorporation | Proportion of | Proportion of | ||
|---|---|---|---|---|
| (or registration) and | ownership | voting power | ||
| Name of subsidiary | operation | interest | held Principal activity | |
| Campine Recycling nv | Belgium | 99,99% | 100% | Lead recycling |
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Raw materials | 19.549 | 11.701 |
| Work-in-progress | 3.248 | 3.464 |
| Finished goods | 14.200 | 6.262 |
| 36.997 | 21.427 |
The inventory per year-end includes a value reduction of 682 KEUR (2009: 749 KEUR) to value inventory at the lower of cost and net realisable value.
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Amounts receivable from the sale of goods | 22.192 | 12.300 |
| Other receivables | 1.279 | 1.237 |
| 23.471 | 13.537 |
An allowance has been recorded for estimated irrecoverable amounts from the sale of goods of 598 KEUR (2009: 602 KEUR). This allowance has been determined on a case-by-case basis. Balances are written-off when sufficiently certain that the receivable is definitely lost. The Board of Directors confirms that the carrying amount of trade and other receivables approximates their fair value as those balances are short-term.
Bank balances and cash comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less. The carrying amount of these assets approximates their fair value.
The Group's principal financial assets are bank balances and cash, trade and other receivables.
The credit risk on liquid funds is limited because the counterparties are banks with high creditratings assigned by international credit-rating agencies.
The Group's credit risk is primarily attributable to its trade receivables. The amounts presented in the balance sheet are after allowances for doubtful receivables. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.
Concentrations of credit risk with respect to trade receivables are limited due to the Group's customer base being large and unrelated. Due to this, the Board of Directors believes that there is no further credit risk provision required in excess of the allowance for bad and doubtful debts.
Roll-forward of the allowances for doubtful debtors
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Opening allowance doubtful debtors | 602 | 681 |
| Additions | - | 11 |
| Reversals | - 4 |
- |
| Write-offs | - | - 90 |
| Closing allowance doubtful debtors | 598 | 602 |
Included in the Group's trade receivable balance are debtors with a carrying amount of 515 KEUR (2009: 508 KEUR) which are past due at the reporting date but for which the Group has not provided as there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group has taken out a credit insurance for these amounts. The average age of these receivables is 21 days past due (2009: 3 days).
Since 2006, Campine takes positions in LME lead futures where it sells forward lead via future contracts. The objective of this activity is to reduce the fluctuations of Campine's net income due to changes in lead prices. Despite hedging a specific risk in an economic manner, these derivative financial instruments do not respect the strict criteria for the application of hedging accounting under IAS 39.
From the beginning of 2009 the company has also started to hedge fixed price-sell contracts with specific customers. Future purchase contracts (with the same expiry dates and the same amounts) are closed on the LME. The objective is to reduce fluctuations in the result because of movements in the lead price. These derivatives are defined as "fair value hedge of firm commitment" and fulfil the criteria of IAS39 (hedge accounting).
From the beginning of 2009 the company has also started to hedge fixed price-purchase contracts with specific suppliers. Future sell contracts (with the same expiry dates and the same amounts) are closed on the LME. The objective is to reduce fluctuations in the result because of movements in the lead price. These derivatives are defined as "fair value hedge of firm commitment" and fulfil the criteria of IAS39 (hedge accounting).
The value of these fixed price contracts and the future LME commitments are both shown in the balance sheet; changes in the values will be shown in the profit and loss account.
The table below summarizes the net change in fair value – realised and unrealised – of -435 KEUR included in the income statement during the year ended 31 December 2010. (31 December 2009: -1.396 KEUR).
| '000 EUR | Fair value of current instruments |
Underlying open positions (tons) |
Change in fair value in income statement |
|---|---|---|---|
| At 31 December 2009 | - 243 |
3.350 | - 1.396 |
| At 31 December 2010 | - 531 |
3.650 | - 435 |
The fair value of the derivatives are included in the balance sheet as current assets – derivatives for 68 KEUR and current liabilities – derivatives for 599 KEUR. The amount of 68 KEUR is related to the open position of the fixed price contracts on 31 December 2010.
On the financial side this open position represents a loss of 68 KEUR whereas on the operational side the transaction represents a profit of 68 KEUR.
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Authorised | ||
| 1.500.000 ordinary shares of par value 2,67 EUR each | 4.000 | 4.000 |
| Issued and fully paid | 4.000 | 4.000 |
The Company has one class of ordinary shares which carry no right to fixed income.
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Bank loans | 3.466 | 5.587 |
| Bank overdrafts | 14.800 | 700 |
| 18.266 | 6.287 |
The borrowings are repayable as follows:
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Bank loans after more than one year | 1.800 | 3.466 |
| Bank loans within one year | 1.666 | 2.121 |
| Bank overdrafts on demand | 14.800 | 700 |
| 18.266 | 6.287 |
The average interest rates paid were as follows:
| Year ended | Year ended | |
|---|---|---|
| 31/12/2010 | 31/12/2009 | |
| Bank overdrafts | 2,90% | 2,82% |
| Bank loans | 5,50% | 5,41% |
To fulfill the potential increased need of working capital, the credit facilities amounting to EUR 10,5 million were increased again to EUR 15 million. In February 2011 an additional long term investment credit (5 years) amounting to 7.500 KEUR was obtained.
Bank loans are arranged at fixed interest rates. Other borrowings (bank overdrafts: 14.800 KEUR per 31 December 2010 (per 31 December 2009: 700 KEUR)) are arranged at floating rates, thus exposing the Group to an interest rate risk. At 31 December 2010, the Group had available 1.772 KEUR (31 December 2009: 11.195 KEUR) of undrawn committed borrowing facilities.
The credit agreements contain a number of covenants regarding solvability, liquidity and profitability. On 31 December 2010 the Group complied with the covenants as agreed upon with the financial institutions.
The following are the major deferred tax liabilities and assets recognised by the Group, and the movements thereon, during the current and prior reporting periods.
| Timing | |||||
|---|---|---|---|---|---|
| differences | Full | Retirement | |||
| on fixed | costing | benefit | |||
| '000 EUR | assets | inventories | obligations | Others | Total |
| At 31 December 2008 | 262 | 73 | - 19 |
232 | 548 |
| Charge/(credit) to result for the | |||||
| year | - 182 |
52 | 16 | 149 - | 263 - |
| At 31 December 2009 | 80 | 125 | - 3 |
83 | 285 |
| Charge/(credit) to result for the | |||||
| year | - 17 |
119 | - 62 |
1 | 41 |
| At 31 December 2010 | 63 | 244 | - 65 |
84 | 326 |
Certain deferred tax assets and liabilities have been offset in accordance with the Group's accounting policy.
The fiscal losses and notional interest deduction carried forward of Campine nv per 31 December 2009 amounted to 2.525 KEUR, of which 561 KEUR was recognised to compensate deferred tax liabilities related to this company. No deferred tax asset was recognised for the balance of 1.964 KEUR as the future realisation was uncertain.
In view of the strong result over 2010 all fiscal losses carried forward were used per 31 December 2010.
The Group has no finance leases at 31 December 2010.
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Trade creditors and accruals | 19.415 | 12.664 |
| Other payables and accruals | 2.838 | 1.995 |
| 22.253 | 14.659 |
Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The directors consider that the carrying amount of trade payables approximates their fair value as those balances are short-term.
The following table details the Group's remaining contractual maturity for its non-derivative financial liabilities. The table has been drawn based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be required to pay. The table includes both interest and principal cash flows.
| '000 EUR | 31/12/2010 | 31/12/2009 | ||||
|---|---|---|---|---|---|---|
| < 1 year | 1-5 years | > 5 years | < 1 year | 1-5 years | > 5 years | |
| Trade and other liabilities | 22.253 | - | - | 14.659 | - | - |
| Bank overdrafts | 14.800 | - | - | 700 | - | - |
| Bank loans | 1.824 | 1.936 | - | 2.377 | 3.760 | - |
| Finance lease obligations | - | - | - | - | - | - |
| '000 EUR | Soil sanitation cost |
Concrete plan sanitation cost |
Others | Total |
|---|---|---|---|---|
| At 31 December 2009 | 1.650 | 1.211 | - | 2.861 |
| Additional provision in the year | - | - | ||
| Utilisation of provision | - 300 |
- 124 |
- | - 424 |
| At 31 December 2010 | 1.350 | 1.087 | - | 2.437 |
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Analysed as: | ||
| Current liabilities | 221 | 88 |
| Non-current liabilities | 2.216 | 2.773 |
| 2.437 | 2.861 |
Status provisions at 31 December 2010:
No additions to fixtures and equipment were financed by new finance leases during the year.
The power to pledge the goodwill was granted to the banks for an amount of 3.850 KEUR.
In the normal course of business the Group has commitments to buy and sell metals in the future.
The Group as lessee:
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Minimum lease payments under operating leases recognised as | ||
| an expense in the year | 89 | 109 |
At the balance sheet date, the Group has outstanding commitments under non-cancellable operating leases, which fall due as follows:
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Within one year | 85 | 64 |
| In the second year to fifth year inclusive | 118 | 59 |
| After five years | - | - |
| 203 | 123 |
Operating lease payments represent rentals payable by the Group for vehicles and equipment. Leases are negotiated for an average term of four years.
During the financial year closed per 31 December 2010 none of the members of the Executive Management Team received any shares, share options or other rights to acquire shares of the company or Group.
The Group operates a funded defined benefit plan for qualifying employees of Campine and its subsidiary in Belgium. The defined benefit plan foresees a retirement benefit based on the salary and seniority attained at the retirement age of 60. For the financed plans, plan assets consist of mixed port-folio's of shares, bonds or insurance contracts. The plan assets do not contain direct investments in Campine shares or in fixed assets or other assets used by the Group.
Major actuarial assumptions in use at balance sheet date:
| Valuation at | ||
|---|---|---|
| 31/12/2010 | 31/12/2009 | |
| Discount rate | 5,0% | 5,5% |
| Expected return on plan assets | 3,6% | 3,6% |
| Expected rate of salary increases | 3,0% | 3,0% |
The amount recognised in the balance sheet in respect of the Group's defined retirement benefit plan is as follows:
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Present value of funded obligations | 1.571 | 1.579 |
| Fair value of plan assets | - 1.381 |
- 1.428 |
| Unrecognised actuarial results | 2 | 37 |
| Unrecognised past service cost | - | - 121 |
| Net liability recognised in the balance sheet | 192 | 67 |
Amounts recognised in profit or loss in respect of the defined benefit plan are as follows:
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Current service cost | 99 | 96 |
| Interest on obligation | 73 | 78 |
| Expected return on plan assets | - 50 |
- 52 |
| Actuarial losses recognised in the year | - | - |
| Past service cost | - | - |
| Net periodical benefit cost | 122 | 122 |
The charge for the year is included in the employee benefits expense in the income statement. The actual return on plan assets was 3,75% (2009: 3,75%).
Changes in the present value of the defined benefit obligation are as follows:
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Opening defined benefit obligation | 67 | 57 |
| Service cost | 99 | 96 |
| Interest cost | 73 | 78 |
| Calculated return on plan assets | - 50 |
- 52 |
| Actuarial losses | - | - |
| Exchange differences | - | - |
| Past service cost | 121 | - |
| Benefits paid | - 118 |
- 112 |
| Closing defined benefit obligation | 192 | 67 |
The Group expects to contribute approx. 120 KEUR to its defined benefit plan in 2011.
Early retirement provisions are set up based on agreements with those affected on amounts to be paid until the age of 65 year. The provision at 31 December 2010 amounts to 775 KEUR (at 31 December 2009 provision amounted to 1.063 KEUR).
Funding of the Company is done through bank loans and bank overdrafts. On 31 December 2010 bank loans amounted to 3.466 KEUR and bank overdrafts amounted to 14.800 KEUR. Bank loans are arranged at fixed rates whereas bank overdrafts are arranged at floating rates. As a result, the Company is not exposed to interest rate risk on the bank overdrafts.
The Group is managing its foreign currency risk by matching foreign currency cash inflows with foreign cash outflows.
An increase or decrease of the USD/EUR rate with 10% would have an impact on the income statement of +539 KEUR (in case of 10% increase) or -539 KEUR (in case of 10% decrease) based upon the assets and liabilities denominated in USD per 31 December 2010.
The value of these fixed price contracts and the future LME commitments are both shown in the balance sheet; changes in the values will be shown in the profit and loss account (see note 5.15.1. Derivatives).
There is no price risk on the fixed price contracts as the impact of price fluctuation on respective fixed purchase and sell contracts are compensated by the impact on the respective sell and purchase contracts on the LME.
A movement in 2011 of the LME lead futures price by 10% would have impacts on the income statement. The immediate effect based on the underlying open position at 31 December 2010 of a price fall of 10% would be +970 KEUR or of a price raise -970 KEUR.
In February 2011 an additional long term investment credit (5 years) amounting to 7.500 KEUR was obtained.
The controlling party of the Group is Camhold NV (incorporated in Belgium). F.W. Hempel Intermétaux SA (incorporated in Switzerland) is the other major shareholder. 71,86% of the company's shares are held by two companies as follows:
| Name | Number of shares |
% of the share capital |
|---|---|---|
| 1. Camhold NV | ||
| Nijverheidsstraat 2, 2340 Beerse | 540.000 | 36,00% |
| 2. F.W. Hempel Intermétaux SA | 537.900 35,86% |
|
| Rue de la Servette 32, 1202 Genève, Switzerland |
Transactions between the company and its subsidiary, which are related parties of the company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below.
During the year, Group entities entered into the following trading transactions with related parties that are not members of the Group:
Purchase of antimony metal from F.W. Hempel Intermétaux SA for an amount of 19.372 KEUR.
Sales of antimony metal to F.W. Hempel Intermétaux SA for an amount of 342 KEUR.
Camhold performed certain administrative/management services for the Campine Group, for which a management fee of 60 KEUR (2009: 60 KEUR) was charged and paid, being an appropriate allocation of costs incurred by relevant administrative departments.
AGW Commodity Holdings Ltd performed certain administrative/management services for the Campine Group, for which a management fee of 40 KEUR (2009: 40 KEUR) was charged and paid, being an appropriate allocation of costs incurred by relevant administrative departments.
Commercial commitments:
There are firm commitments to deliver or receive metals to customers or from suppliers at fixed prices.
| '000 EUR | 31/12/2010 | 31/12/2009 |
|---|---|---|
| Commercial commitments for commodities purchased (to be received) | 8.494 | 4.946 |
| Commercial commitments for commodities sold (to be delivered) | 17.794 | 12.279 |
For the financial year 2010, the total remuneration of the Executive Management Team including the Board members amounts to 1.107 KEUR (2009: 703 KEUR).
During the financial year closed per 31 December 2010 none of the above mentioned persons received any shares, share options or other rights to acquire shares of the company or Group. The remuneration of the members of the Executive Management Team is decided upon by the Nomination and Remuneration committee, based on market trends and individual performances.
The financial statements were approved by the Board of Directors and authorised for issue on 23 February 2011.
As required by law and the company's articles of association, we are pleased to report to you on the audit assignment which you have entrusted to us. This report includes our opinion on the consolidated financial statements together with the required additional comment.
We have audited the accompanying consolidated financial statements of Campine nv ('the company') and its subsidiary (jointly 'the group'), prepared in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Those consolidated financial statements comprise the consolidated balance sheet as at 31 December 2010, the consolidated income statement, the consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated balance sheet shows total assets of 71.888 (000) EUR and the consolidated income statement shows a consolidated profit (group share) for the year then ended of 5.752 (000) EUR.
The Board of Directors of the company is responsible for the preparation of the consolidated financial statements. This responsibility includes among other things: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of consolidated financial statements that are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with legal requirements and auditing standards applicable in Belgium, as issued by the 'Institut des Reviseurs d'Entreprises/Instituut der Bedrijfsrevisoren'. Those standards require that we plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free from material misstatement.
In accordance with these standards, we have performed procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we have considered internal control relevant to the group's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the group's internal control. We have assessed the basis of the accounting policies used, the reasonableness of accounting estimates made by the company and the presentation of the consolidated financial statements, taken as a whole. Finally, the Board of Directors and responsible officers of the company have replied to all our requests for explanations and information. We believe that the audit evidence we have obtained provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the group's financial position as of 31 December 2010, and of its results and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the EU and with the legal and regulatory requirements applicable in Belgium.
The preparation and the assessment of the information that should be included in the directors' report on the consolidated financial statements are the responsibility of the Board of Directors. Our responsibility is to include in our report the following additional comment which do not change the scope of our audit opinion on the consolidated financial statements:
• The directors' report on the consolidated financial statements includes the information required by law and is in agreement with the consolidated financial statements. However, we are unable to express an opinion on the description of the principal risks and uncertainties confronting the group, or on the status, future evolution, or significant influence of certain factors on its future development. We can, nevertheless, confirm that the information given is not in obvious contradiction with any information obtained in the context of our appointment.
Antwerp, 24 February 2011
The statutory auditor DELOITTE Bedrijfsrevisoren/Reviseurs d'Entreprises BV o.v.v.e. CVBA Represented by Luc Van Coppenolle
2340 Beerse Belgium
Tel: +32 14 60 15 11 Fax: +32 14 61 29 85 www.campine.be
Deloitte Bedrijfsrevisoren: Represented by Luc Van Coppenolle until 10 May 2011
| 10 May, 2011 | General Meeting of Shareholders |
|---|---|
| 31 May, 2011 | Payment of dividend |
| rd week of April, 2011 3 |
Announcement intermediate information 1st semester |
| Last week of August, 2011 | Announcement of half-year results |
| rd week of November, 2011 3 |
Announcement intermediate information 2nd semester |
| Last week of February, 2012 | Announcement of 2011 annual results |
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