AI Terminal

MODULE: AI_ANALYST
Interactive Q&A, Risk Assessment, Summarization
MODULE: DATA_EXTRACT
Excel Export, XBRL Parsing, Table Digitization
MODULE: PEER_COMP
Sector Benchmarking, Sentiment Analysis
SYSTEM ACCESS LOCKED
Authenticate / Register Log In

Campine nv

Annual Report Apr 10, 2015

3924_10-k_2015-04-10_f2bb9ad9-2395-476f-8bcf-c9d60ece50d9.pdf

Annual Report

Open in Viewer

Opens in native device viewer

ANNUAL FINANCIAL REPORT

2014

Financial highlights and business scope 2
Introduction 3
Report of the Board of Directors to the Annual Meeting of Shareholders on
Tuesday 12 May 2015, based on the consolidated annual financial statements 4
Campine Group 4
Lead 6
Antimony 7
Plastics 7
Support services 8
Perspectives for 2015 8
Corporate matters 9
Corporate Governance Statement & Remuneration Report 2014 11
Consolidated financial statements 2014 22
Auditor's report 51
Corporate Data 53

Financial highlights and business scope

Financial highlights *

2014 2013
Revenue 150.197 137.465
Operating result 1.422 -
1.703
Net financial result -
158
172
Result before tax 1.264 -
1.531
Income tax expense -
359
387
Result after tax 905 -
1.144
Result per share after tax 0,60 -
0,76
Current assets 49.389 43.352
Total assets 58.098 54.657
Current liabilities 33.279 29.391
Total liabilities 35.499 32.984
Total equity 22.599 21.673
(*) Consolidated per year and as per 31 December in € '000

Core activities

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).

Introduction

2014 was the 3rd year in a row with low economic growth and decreasing raw material prices. This, combined with increased competition due to overcapacity, has resulted in decreasing margins which put profitability under pressure. However, Campine succeeded to make a positive result in these difficult circumstances.

In order to regain competitiveness and profitability Campine has reduced the cost of the operations by

  • Smaller, more flexible and more competent organisation
  • Volume growth in lead recycling and plastics
  • Reworking antimony containing materials in a closed loop
  • Overall cost reduction

There is still room for further improvement of our processes. However, key to our success is a stable or increasing demand in the core industries for our businesses: automotive, building and construction and electronics as we benefit the most from our measurements when there is a consistent demand.

The weaker EURO increases our competitiveness in oversees markets whereas stable or less volatile raw material prices help to increase the competitiveness of our products compared to the alternatives.

The first semester of 2014 was difficult but there was a recovery in the second semester, particularly in lead recycling.

Our market is focussing on added value in applications and closing the loop in the supply chain. Campine is working together with its customers to satisfy this need. The complex regulations and uncertain economic situation make it difficult for some customers to introduce new products.

We believe that Campine is well-prepared for its future in the raw material business, which will continue to become more based on recycling and closed loops.

F.-W. Hempel Geert Krekel

President Managing Director

Group structure

Report of the Board of Directors to the Annual Meeting of Shareholders on Tuesday 12 May 2015, based on the consolidated annual financial statements

Campine Group

In 2014, the Campine Group realised a turnover of € 150.20 million, compared with € 137.46 million in 2013 (+9 %).

The pre-tax loss of the first semester was € -0.71 million. The second half year resulted in a profit before taxes of € 1.97 million - giving a pre-tax profit for the year of € 1.26 million. This compared with a pre-tax loss of € -1.53 million in 2013.

The operating result amounted to € 1.42 million (2013: € -1.70 million). 2014 was characterised by moderate demand and low margins in business unit antimony. The plastics unit remained stable. In business unit lead both demand and margins increased considerably.

Net financial result amounted to a loss of € -0.16 million compared with a profit of € 0.17 million in 2013.

The lead hedging resulted in a net profit of € 0.54 million (compared with a net profit of € 1.04 million in 2013). 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 on 31 December, which is included in the income statement in accordance with the specific IFRS standards.

Profit after taxes was € 0.90 million, compared with a € -1.14 million loss in 2013.

The Board of Directors proposes that the company will not pay a dividend for the year 2014. For 2013 no dividend was paid.

Added value

In € '000 2014 2013 Difference
in €
in %
Added value (1) 17.586 13.843 3.743 27%
Relation towards turnover (%) 12% 10%
Average number of employees 159 160 -1%
Added value per employee 110 86 24 28%

(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).

Working capital

In € '000 2014 2013 Difference
in € in %
Stocks 23.220 23.872 -652 -3%
Trade debtors 23.272 15.478 7.794 50%
Other receivables 2.221 2.801 -580 -21%
Total 48.713 42.151 6.562 16%
Trade creditors 11.665 11.759 -94 -1%
Taxes - - - -
Other short payables 1.874 1.858 16 1%
Total 13.539 13.617 -78 -1%
Working capital employed 35.174 28.534 6.640 23%

Return on equity

In € '000 2014 2013 in € Difference
in %
Result after taxes 905 -1.144 2.049 179%
Result after taxes per share in € 0,60 -0,76 1,36 179%
Gross dividend per share in € - - - -
Net dividend per share in € - - - -
Equity 22.599 21.673 926 4%
Return on equity 4% -5% 9%

Volume and turnover per business unit

Antimony
Plastics
Lead
Total
2014 2013 % 2014 2013 % 2014 2013 % 2014 2013 %
Volume
in mT 8.226 8.303 -1% 5.445 5.091 7% 50.636 43.551 16% 64.307 56.945 13%
Turnover (1)
in € '000 50.294 58.347 -14% 22.374 22.812 -2% 80.195 58.013 38% 152.863 139.172 10%
Unit price per
mT in € '000 6.114 7.027 -13% 4.109 4.481 -8% 1.584 1.332 19%
Margin (2)
in € '000 4.740 3.416 39% 2.624 2.302 14% 5.083 3.246 57% 12.447 8.964 39%

(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 as well as indirect production costs.

Lead

Campine Recycling processes spent lead batteries and lead-containing waste such as cable sheathing, roofing and old pipes. From this waste we produce a whole range of useful applications such as lead alloys and soft lead. In so doing we help to create a cleaner and safer environment.

In the lead market Campine Recycling is a significant recycler of secondary lead in Europe, 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).

Results and volumes

The business unit lead realised a turnover of € 80.20 million (€ 58.01 million in 2013) (+38 %) with a sales volume of 50,636 mT (43,551 mT in 2013) (+16 %). The higher proportion of direct sales, rather than tolling sales, was the main reason for the rise in our average sales price during the year.

Lead LME cash/mT in US\$ and in €

Market

LME lead quotations, the predominant basis of our sales prices, moved in the range € 1,400/mT – € 1,700/mT starting at € 1,619/mT at the beginning of January to € 1,559/mT at the end of June with a low around € 1,440/mT mid March. In the third quarter prices went gradually up to € 1,712/mT at the end of August, further fluctuating between € 1,700/mT and € 1,500/mT to close 2014 at € 1,525/mT on 31 December 2014.

Sales volume increased with better sales premiums. Total margin improved in the second half of the year as some order was restored to the scrap battery price.

The difficult raw material market of the first semester triggered a comprehensive recovery plan to improve operational efficiency and realise a turn-around during the second semester 2014 and we start from a better basis in 2015.

Product development programs focused on recycling of more complex waste streams. In 2015, further growth in volume is expected, with focus on diversification in supply and end markets.

Antimony

Campine's antimony business unit converts antimony metal (Sb) into antimony trioxide (Sb2O3). This is used in flame retardant applications and in the production of PET bottles, films and industrial fibres.

Results and volumes

Volume remained stable at 8,226 mT (8,303 mT in 2013) (-1 %). Average sales prices were lower than in 2013 because of a changing product mix and consequently turnover fell to € 50.29 million (€ 58.35 million in 2013) (-14 %).

Antimony free market 99.6% in US\$/mT and in €/mT

Market

Average antimony metal prices in 2014 were lower than in 2013, with reduced volatility over the year 2014; starting from € 7,023/mT and gradually down to € 6,857/mT at the beginning of May recovering to € 7,085/mT at the end of June 2014, finally ending at € 7,124/mT on 31 December 2014.

The lack of growth of the global antimony trioxide market, partially due to the weak global economic situation, and the past high antimony prices have led to substitution at some consumers and hence to an overcapacity in the market and a heavy competitive pressure.

A plan was implemented in order to improve our competitive position and to diversify our activity. A broad range of actions, from sourcing over operations to our sales activity, has led to a considerable improvement of our general cost position. This resulted in an improvement of our total performance during 2014 and has laid the ground for a solid performance in 2015.

Plastics

The plastics business unit produces ready-to-use flame retardant masterbatches and compounds for the plastics industry. Multiple applications include flame retardant insulation plates, dashboards, plastic pipes, foil for construction and home appliances. These masterbatches are supplied in granular form for easy and dust-free dispensing at customer premises.

Results and volumes

Turnover reduced slightly to € 22.37 million (€ 22.81 million in 2013) (-2 %) while volume increased to 5,445 mT (2013: 5,091 mT) (+7 %). Sales margins have generally been maintained.

Market

In spite of a relatively stable economic situation, customers remained particularly cautious about the outlook and reduced off-take towards year-end.

Continuous growth of the global demand of flame retardant masterbatches and the increasing sophistication of solutions remained the backbone of the growth of the business unit plastics.

Support services

Production

In all business units we used our capacity more efficiently and produced a higher volume. Installations, processes and the organisation proved capable to deal with these challenges professionally.

Safety, health and environment

The number of accidents and related absence days have reduced again in 2014. In 2015 we will continue to increase safety awareness by further training of our personnel.

The monitoring of employee's health again showed good results. Although Campine is already well within the permitted standards we used more stringent internal standards in 2014 to challenge personnel to improve even further.

We continued to invest in environmental measures, optimised working procedures and personal protection equipment in anticipation of new legislation in 2015.

Emissions are in line with our permit. The water treatment is followed up strictly and the results of the water effluent are in line with the permit. We aim to minimise waste water volume in 2015.

Our energy consumption is being reduced and energy saving measures were implemented.

Human Resources

External economic challenges imply internal ones for our personnel as Campine focuses on even more efficient processes and procedures.

At the same time we support our personnel to meet these challenges by means of clear communication, developing experience as well as training.

Finance and control

Regulatory affairs for finance combined with the current low margins require continuous working capital management in the raw material business. Campine responds to this need by using modern management tools and close follow-up of stocks and debtors levels.

Perspectives for 2015

Worldwide overcapacity in lead and antimony continues to put pressure on margins.

For the business unit lead we expect to realise a further volume increase. Profitability will be much influenced by the raw material market which is improving. Recycling overcapacity in the market remains a business risk.

In antimony we expect a slight volume increase compared with 2014, but margins will remain under pressure. However, lower antimony prices may increase consumption by our customers.

In plastics we expect volumes to grow.

Over the financial year 2015 we anticipate a positive result.

Corporate matters

Fairness statement

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;
  • The annual report gives a true and fair view of the development and results of the company, including its consolidated subsidiaries, together with a description of principal risks and uncertainties that they face.

Independence and competence criteria independent directors

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 directors comply with the law as to independence and competence criteria in the field of accounting and audit.

Significant events after the close of the year

No significant events – effecting Campine – occurred after the close of the financial year.

Use of financial instruments by the company, to the extent that these are significant in evaluating its assets, liabilities, financial situation and earnings

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 hedge accounting under IAS 39.

From the start 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 IAS 39 (hedge accounting).

From the start 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 IAS 39 (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 classification of the fair value of the hedge instruments is level 1 (unadjusted quoted prices in an active market for identical assets or liabilities) in the "fair value hierarchy" of IFRS 13.

Circumstances which could significantly influence the development of the company There were no changes in circumstances which could substantially influence the development of the company.

Research and development

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.

Risks and uncertainties

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 risks related and inherent to the sector:

  • Fluctuations of the prices of raw materials and metal. Prices fluctuate as a result of a changing supply and/or demand of raw materials and end products, but also because of pure speculation;
  • Fluctuations in availability and cost of the energy;
  • Changes in regulations (Flemish, Belgian, European and global) in the field of environment and safety/health including legislation related to sale (REACH) and storage (SEVESO) of chemical products;
  • Market risks include: interest risk, foreign exchange risk and price risk (note 5.29.).

Information concerning the possible effects of a public take-over bid

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 Articles of Association, 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.

Dividend

The Board of Directors proposes that the company will not pay a dividend for the year 2014. For 2013 no dividend was paid.

Statutory auditor

In 2014 the statutory auditor fee for audit and non-audit services reached € 102.810 for the Group. The non-audit services in 2014 amounted to € 18.325 and were related to:

  • Other attestation services (€ 13.350)
  • Tax advice (€ 4.975)

Discharge to directors and statutory auditor

The Board of Directors proposes granting discharge to all directors and the statutory auditor in respect of the exercise of their mandates in 2014.

Statutory appointments

  • a) The mandates of Mr F.-W. Hempel, Mr H.-R. Orgs and Mr G. Krekel expire. The Board of Directors will propose to the Annual Meeting to renew the mandates of Mr F.-W. Hempel, Mr H.-R. Orgs and Mr G. Krekel for a period of 3 years. The mandates will automatically end, unless renewed after the Annual Meeting of Shareholders of 2018.
  • b) The mandate of Mr A. Hempel expires. The Board of Directors will propose to the Annual Meeting to renew the mandate of Mr A. Hempel for a period of 4 years. The mandate will automatically end, unless renewed after the Annual Meeting of Shareholders of 2019.
  • c) The mandate of independent Board member DELOX BVBA, represented by its permanent representative Mr P. De Groote, expires. The Board of Directors will propose to the Annual Meeting to appoint DELOX BVBA, represented by its permanent representative Mr P. De Groote as an ordinary, not independent, Board member for a period of 4 years. The mandate will automatically end, unless renewed after the Annual Meeting of Shareholders of 2019.
  • d) Appointment of ZENDICS BVBA, Mussenstraat 37, 9600 Ronse, VAT 0894.851.724, represented by its permanent representative, Mr Willem De Vos as independent Board member for a period of 4 years. The Board has determined that ZENDICS BVBA, represented by its permanent representative, Mr W. De Vos complies with all criteria required by article 526ter of the Company Code and thus can be considered as an independent director in compliance with the law and the company's Corporate Governance Code. The Board of Directors will propose to the Annual Meeting to appoint ZENDICS BVBA, represented by its permanent representative, Mr W. De Vos, as independent Board member for a period of 4 years. The mandate will automatically end, unless renewed after the Annual Meeting of Shareholders of 2019.

The Directors' remuneration amounts to € 13.000 for 2015. According to the Articles of Association the amount is automatically increased by € 250 on the first day of each new financial year.

Corporate Governance Statement & Remuneration Report 2014

I. Introduction

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 Corporate Governance Statement 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. The recommendations 2.3, 5.5, 5.2./4 of the Corporate Governance Code 2009 are not or only partially followed. The explanation for these deviations is to be found further in this Corporate Governance Statement.

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 of Campine has been adopted by the Board of Directors on 9 March 2006 and has been amended by a decision of the Board of Directors on 26 February 2015. 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 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) at "Investors".

II. Corporate capital and shareholding

The corporate capital is set at € 4,000,000.00, represented by 1,500,000 shares without nominal value. The capital is fully paid up. There are no statutory nor legal restrictions regarding the transfer of shares.

Shareholding structure on balance sheet date

No changes were made to the known shareholder structure of Campine in 2014 as the company received no notifications in 2014.

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 Vallin 2, 1201 Genève, Switzerland
537.900 35,86%

The remaining shares (28,14%) 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.

Public take-over bid

Proceedings in case of public takeover bid are mentioned in articles 7 and 12 of the Articles of Association.

Rules regarding the exercise of the voting rights

Rules regarding the exercise of the voting rights are mentioned in article 10 of the Articles of Association. No shareholder has any special rights. There are no statutory restrictions regarding the exercise of voting rights.

III. The Board of Directors

Composition

Rules for the appointment and replacement of the Directors are mentioned in articles 13 and 14 of the Articles of Association.

The Board should consist of a minimum of three and a maximum of nine members according to the Articles of Association. The Board is composed of six members, being one executive director and five non-executive directors, of whom are two independent directors:

Mr Friedrich-Wilhelm Hempel, Chairman of the Board

  • Non-executive Board member (appointed for a period of 3 years on 8 May 2012);
  • Shareholder and director of various private companies in Europe.

Mr Andre Hempel

  • Non-executive Board member (appointed for a period of 3 years on 8 May 2012);
  • Shareholder and director of various private companies in Europe.

DELOX BVBA

  • Non-executive and independent Board member represented by its permanent representative Mr Patrick De Groote (appointed for a period of 3 years on 8 May 2012);
  • Board member of various companies.

Mr Hans-Rudolf Orgs

  • Non-executive Board member (appointed for a period of 3 years on 8 May 2012);
  • Managing Director of the holding company F.W. Hempel & Co Erze & Metalle.

Christulf BVBA

  • Non-executive and independent Board member represented by its permanent representative Mr Christian Dewulf (appointed for a period of 3 years on 13 May 2014);
  • Board member of various companies.

Mrs Martine Reynaers (until 26 February 2014)

  • Non-executive and independent Board member;
  • Managing Director of Reynaers Aluminium.

Mr Geert Krekel

  • Managing Director (appointed for a period of 3 years on 8 May 2012);
  • Chairman of the Board of Campine Recycling nv.

From left to right: F.-W. Hempel, A. Hempel, G. Krekel, C. Dewulf, P. De Groote, H.-R. Orgs

Campine applies to the independence criteria as mentioned in the Corporate Governance Charter. The independent directors declare that they comply with art. 526ter of the Company Code.

The Belgian Corporate Governance Code 2009 requires that the Board should comprise at least three independent directors and gender diversity (article 2.3). On 31/12/2014 the company only has male directors and two independent directors. This is explained by the fact that the number 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.

Functioning

The Board determines the company's strategy and at the same time monitors and controls the risks attached to the company's activities. The Board determines the company's annual budgets as well as the risk positions in metals and decides on investments and divestments of the Group and the composition of the Executive Management Team.

The Board meets on average four times a year, in February, May, August and November. This frequency enables the Board to keep regular and continuous track of the consolidated and unconsolidated results, the general state of business and developments at both Campine and its subsidiary; investment programmes, acquisitions and divestments by the Group, development of the management, etc.

Nevertheless, the Board shall be called by the Chairman or the Managing Director whenever the company's corporate interest so requires. Upon request of at least two directors additional meetings are convened.

During the financial year which closed per 31 December 2014, the following Board meetings were held:

Date of the Board meeting Present
26 February 2014 F.-W. Hempel, A. Hempel, G. Krekel, H.-R. Orgs, DELOX BVBA
13 May 2014 F.-W. Hempel, A. Hempel, G. Krekel, H.-R. Orgs, DELOX BVBA, Christulf BVBA
28 August 2014 F.-W. Hempel, A. Hempel, G. Krekel, H.-R. Orgs, DELOX BVBA, Christulf BVBA
26 November 2014 F.-W. Hempel, A. Hempel, G. Krekel, H.-R. Orgs, DELOX BVBA, Christulf BVBA

During the Board meetings, following subjects were – among others – discussed:

  • Results of Campine and its subsidiary Campine Recycling
  • Evaluation of last and current year's budget
  • Determination of next year's budget
  • Approval of new investments
  • Evaluation of running and completed investments
  • Determination of the annual accounts for approval by the Annual Meeting
  • Composition of the annual report to the Annual Meeting
  • Approval of the invitation of the Annual Meeting
  • Approval of press releases to be published
  • Proposal of the nominations to the Annual Meeting
  • Evaluation and determination of the risk position of lead and antimony, credit risk
  • Credit loans and bank balances
  • Status of the different departments (production, purchase, sales, personnel, …) of the different BU's
  • Status: personnel and organisation
  • Status: safety, health and environment

Evaluation of the Board of Directors and Board committees

The Board evaluates every two years its composition and its own performance as well as that of the specialised committees. The evaluation deals with (i) the operational efficiency, (ii) the relevance of the discussed topics, (iii) the preparation of the debates, (iv) the contribution of each director in the decision making process.

The evaluation is prepared by the Nomination & Remuneration committee and discussed with all Board members, under the leadership of the Chairman.

In 2014, an evaluation of the Board of Directors took place at the occasion of the appointment of the new independent director. Results of this evaluation showed that the Board of Directors of Campine in general functions well.

Furthermore, the performance of the individual directors is reviewed regularly by the Nomination & Remuneration committee. Specific topics are assessed, such as attendance at the Board meetings, degree of preparation, participation in the discussions and availability between two Board meetings.

Company secretary

The Company secretary works in close cooperation with the Managing Director and has the following tasks:

  • Support and advise the Chairman of the Board of Directors, the Chairmen of the Board committees and all Board members in the execution of the general and specific tasks and obligations;
  • Provide a good information flow within the Board of Directors and its committees and between the Executive Management Team and the non-executive directors;
  • Report regularly to the Board conducted by the Chairman on the way procedures, regulations and rules of the Board of Directors and the Corporate Governance Charter are executed and complied with and possibly give suggestions regarding required adjustments of these procedures, rules and regulations of the Board of Directors and the Corporate Governance Charter;
  • Act as a secretary of the Audit committee.

He has the authority and obligation to use suitable, necessary and proportional means to execute his tasks in an efficient way.

The function of Company secretary is executed by Mr R.P. Pearson.

IV. Executive Management Team

Composition

  • Geert Krekel Managing Director
  • Chief Operating Decision Maker (CODM)
  • Jan Keuppens Finance & Control Manager
  • Hilde Goovaerts Lean Plant Manager
  • Anne-Mie Van de Wiele HR & Administration Manager
  • Thierry De Loose Business Manager Antimony
  • Marc Liégeois Business Manager Plastics
  • David Wijmans Business Manager Lead
  • Ronny Van Britsom Site Facility Manager (Retired on 31/01/2015)

Functioning

The Managing Director's responsibilities include developing and monitoring of the business plans for each business unit, as approved by the Board, the implementation of the decisions of the Board and the setting up of the necessary investment programmes, which are then presented to the Board for approval. Furthermore the Managing Director ensures that valid legislation is respected and that the company works in compliance with all valid safety, health and environmental regulations.

The Managing Director is assisted by the Executive Management Team. The Executive Management Team reports to the Managing Director and enables the Managing Director to properly perform his duties of daily management.

V. Board committees

The Board has set up the following specialised committees:

1. The Nomination & Remuneration committee

The Nomination & Remuneration committee (that acts as a Remuneration committee within the meaning of article 526quater of the Company Code) assists the Board in all matters related to the appointment and remuneration of the directors and the Executive Management Team. The Nomination & Remuneration committee prepares the Remuneration report and clarifies it during the Annual Meeting.

The Managing Director will participate in the committee with an advisory vote, each time the Nomination & Remuneration committee is dealing with the remuneration of the members of the Executive Management Team and when the committee invites him.

The Nomination & Remuneration committee consists of the Chairman of the Board (Mr F.-W. Hempel) and the two independent directors (Christulf BVBA represented by its permanent representative Mr C. Dewulf and DELOX BVBA, represented by its permanent representative Mr P. De Groote). Both Mr C. Dewulf and Mr P. De Groote have the necessary expertise in the field of remuneration as a result of their year-long experience in the business environment and in business associations.

2. The Audit committee

In addition to the legal requirements to the Board, the Audit committee has, at least, the following tasks:

  • Monitoring the financial reporting process;
  • Monitoring the effectiveness of the company's internal control and risk management systems;
  • Monitoring the internal audit and its effectiveness;
  • Monitoring the statutory audit of the annual and consolidated accounts, including any follow-up on any questions and recommendations made by the statutory auditor;
  • Review and monitoring the independence of the statutory auditor, in particular regarding the provision of additional services to the company.

The Audit committee consists of Mr H.-R. Orgs and the independent director Christulf BVBA, represented by its permanent representative Mr C. Dewulf.

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 directors comply with the law as to independence and competence criteria in the field of accounting and audit.

Pursuant to the Belgian Corporate Governance Code 2009 requires each committee should comprise at least three members (article 5.5). 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 (article 5.2./4). Currently only half of the Audit committee is independent. This is explained by the fact that the Audit committee – seeing the size of the Board – only has two members at this moment.

3. The Strategy committee

The Strategy committee assists the Board in all matters related to the general management of the company and its subsidiary.

It consists of the independent director DELOX BVBA, represented by its permanent representative Mr P. De Groote, the Managing Director Mr G. Krekel and Mr A. Hempel.

4. Functioning of the committees

During the financial year which closed per 31 December 2014 the following Board committee meetings were held:

Board committee Date of the meeting Members present
Nomination & Remuneration 26 February 2014 F.-W. Hempel, Delox BVBA
committee 25 November 2014 F.-W. Hempel, Delox BVBA, Christulf
BVBA
19 February 2014 H.-R. Orgs, R.P Pearson (company
secretary with an advisory vote)
Audit committee 7 May 2014 H.-R. Orgs, R.P Pearson (company
secretary with an advisory vote)
21 August 2014 H.-R. Orgs, Christulf BVBA
19 November 2014 H.-R. Orgs, Christulf BVBA
Strategy committee 1 July 2014 A. Hempel, DELOX BVBA, G. Krekel

The Nomination & Remuneration committee discussed following subjects:

  • Nomination of new Board members
  • Remuneration policy: the attendance and working fees of non-executive Board members
  • Preparation of the Remuneration report for the Board
  • Confirmation of director's remuneration: tantièmes and director's remuneration
  • Composition and evaluation of the Executive Management Team
  • Remuneration 2015 of the Managing Director and of the key-personnel
  • Evaluation and functioning of the Board committees and Board members

The Audit committee discussed following subjects:

  • Evaluation results of the current year
  • Evaluation forecast of the current year
  • Preparation of the credit risk for the Board
  • Preparation of the risk position of lead and antimony for the Board
  • Internal control: contracts distributors, agents and consignment, inventories in external locations
  • Examination year and half-year figures and the evaluation of the accounting estimates and judgements as a result of the end of the financial year
  • Examination legal cases
  • Preparation of next year's budget for the Board
  • Evaluation of the current budget
  • Press releases to be published: year results, half-year results

The Strategy committee discussed following subjects:

  • Business development
  • Diversification of the supply of raw materials
  • Management of impurities

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.

VI. Main features of the internal control and risk management system

Campine organises 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 organising 'control of control'. It also pays particular attention to the reliability of the financial reporting and communication process.

    1. Control environment
  • a. Company organisation:
  • The company is organised into a number of departments as set out in an organisation chart. Each person has a job description. There is a power of attorney procedure. The company's representation in different areas like human resources, purchase, sales, … is integrated in the "internal powers" document. For fluctuating commitments due to price volatility of the product (energy, raw materials, foreign currency, …) specific procedures apply.
  • The support functions are being carried out by the departments of Finance & Control, IT, Personnel & Organisation, Logistics & Procurement, Lean Plant Management and Safety, Health & Environment.
  • Management control is the responsibility of the controllers. The Finance & Control Manager is in charge of organising risk management.
  • b. Organisation of internal control: The Audit committee has a specific duty in terms of internal control and corporate risk management. The role, composition and activities of the Audit committee are described above.
  • c. Ethics: The Board of Directors has drafted and approved a Corporate Governance Charter and a Code of Conduct (appendix of Corporate Governance Charter). They can be consulted on the website.
    1. Risk analysis and control activities

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.

  1. Financial information and communication

The process of establishing financial information is organised as follows:

A 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:

  • coherence tests by comparison with historical or budget figures;
  • sample checks of transactions according to their materiality.
    1. Persons involved in the supervision and assessment of internal control The quality of internal control is assessed over the fiscal year:
  • by the Audit committee. Over the fiscal year, the Audit committee reviewed the half-yearly closures and the specific accounting methods. It also reviewed the disputes and main risks facing the company.
  • by the auditor in the context of their review of the half-yearly and annual accounts. When appropriate, the auditor makes recommendations in particular concerning the keeping of the financial statements.
  • by the Board of Directors in the context of the day-to-day management.

The Board of Directors supervises the performance of the duties of the Audit committee in that connection, notably through that committee's reporting.

VII. Dealing code regarding to transactions of the company's shares

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.

VIII. Comments on the application of the policy for transactions not covered by the legal provisions on conflicts of interest

All related party transactions are conducted on a business base and in accordance with all legal requirements and the Corporate Governance Charter. During 2014 no conflict of interest (Article 523-524 Company Code) occurred.

IX. Remuneration Report

1. Remuneration policy

Directors

The remuneration policy is set in the Articles of Association of the Company.

Managing Director

The Board of Directors decides upon the appointment, remuneration and removal of the Managing Director.

The objectives linked to the variable part of the remuneration are set by the Nomination & Remuneration Committee. The performance of the Managing Director is assessed by the Nomination & Remuneration committee.

During a Board meeting – where the Managing Director is not present – the Chairman of the Nomination & Remuneration committee informs the members about this assessment which is consequently discussed.

Executive Management Team

The Nomination & Remuneration committee advises on the nomination, remuneration and removal of the members of the Executive Management Team.

The objectives linked to the variable part of the remuneration are set by the Managing Director. The performance of the Executive Management Team is assessed by the Managing Director – in consultation with the Nomination & Remuneration committee.

Remuneration policy

The Board – who finally decides upon the remuneration of the Managing Director and the Executive Management Team – oversees that the performance of the above is related to the continuity and long term results of the company and that their remuneration is in relation to their performance and in the interest of all stakeholders.

At remaining circumstances, this remuneration policy is also applicable for the next two financial years.

2. Statement on the remuneration policy applied during 2014

A. Non-executive directors

As set in the Articles of Association, the individual directors receive a director's remuneration which is paid during the corresponding financial year.

Directors who are member of a specialised committee do not receive additional remuneration for that.

If in a specific case, the Board of Directors requests the assistance of a director, the latter is entitled to a remuneration for actual working hours and expenses made.

Non-executive directors do not receive a merit pay such as bonus or any advantage in kind nor advantage related to a pension plan.

B. Managing Director

Fixed and variable

The Managing Director does not receive any compensation for his duty as mere 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, based on a comparison of companies of the same size whose remuneration is publicly available.

The variable part of the remuneration is partly result-related and partly linked to a system of company, BU and personal objectives.

The company and BU objectives can include profit to be realised, sales, purchase, environmental, health and safety targets as well as targets in the field of process control, innovation, maintenance and possibly other areas.

The objectives are set up annually and apply for the entire financial year and some possible over multiple financial years. The choice of objective areas can change every year depending on economic circumstances, regulations, organisation, strategy and other factors. The effective targets are not communicated in detail as this would reveal and make public confidential information on the strategy of the company.

According to the Articles of Association of the company, the obligation mentioned in article 520ter, second paragraph, and article 525, last paragraph of the Company Code does not apply to executive Directors, the persons who, alone or together, are charged with the day-to-day management and other leaders mentioned in article 96, §3, last paragraph of the Company Code of the company.

The criteria for an additional bonus are fixed by the Nomination & Remuneration committee. The additional bonus is paid – after approval of the Annual Meeting – in May following the close of the financial year to which the objectives relate.

Article 23 of the Articles of Association of Campine provide for an exception on the application of article 520ter, second paragraph, and article 525, 4th paragraph of the Company Code.

Pensions

The Managing Director participates in a pension plan based on fixed contributions.

Other benefits

The Managing Director participates – as do all employees of the company – in a group and health insurance. Other benefits are representation allowance, company car, internet connection, company phone in compliance with local market practices.

Terms of hiring and termination arrangements

The contractual terms of hiring and termination arrangements of the Managing Director do not provide any specific compensation commitments, other than standard notice periods as foreseen by the law, in the event of early termination. The term of notice is max 12 months, with a possible deviation until the Claeys formula in case of early termination.

The right to reclaim the variable remuneration in case of incorrect financial data The company has no right to reclaim the variable remuneration when the variable remuneration was granted to the Managing Director based on incorrect financial data.

C. Executive Management Team

Fixed and variable

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, based on a comparison of companies of the same size whose remuneration is publicly available.

The variable part of the remuneration is partly result-related and partly linked to a system of company, BU and personal objectives.

The company and BU objectives can include profit to be realised, sales, purchase, environmental, health and safety targets as well as targets in the field of process control, innovation, maintenance and possibly other areas.

The objectives are set up annually and apply for the entire financial year and some possible over multiple financial years. The choice of objective areas can change every year depending on economic circumstances, regulations, organisation, strategy and other factors. The effective targets are not communicated in detail as this would reveal and make public confidential information on the strategy of the company.

According to the Articles of Association of the company, the obligation mentioned in article 520ter, second paragraph, and article 525, last paragraph of the Company Code does not apply to executive Directors, the persons who, alone or together, are charged with the day-to-day management and other leaders mentioned in article 96, §3, last paragraph of the Company Code of the company.

The variable part of the remuneration is divided as follows: Max 1/3 linked to company objectives, max 1/3 linked to BU-objectives, max 1/3 linked to personal objectives.

The criteria for an additional bonus are fixed by the Nomination & Remuneration committee. The additional bonus is paid – after approval of the Annual Meeting – in May following the close of the financial year to which the objectives relate.

Article 23 of the Articles of Association of Campine provide for an exception on the application of article 520ter, second paragraph, and article 525, 4th paragraph of the Company Code.

Pensions

The members of the Executive Management Team participate in a pension plan based on fixed contributions.

Other benefits

The members of the Executive Management Team participate – as do all employees of the company – in a group and health insurance.

Other benefits are representation allowance, company car, internet connection, company phone in compliance with local market practices.

Terms of hiring and termination arrangements

The contractual terms of hiring and termination arrangements of the members of the Executive Management Team do not provide any specific compensation commitments, other than standard notice periods as foreseen by the law, in the event of early termination. The term of notice is max 12 months, with a possible deviation until the Claeys formula in case of early termination.

The right to reclaim the variable remuneration in case of incorrect financial data

The company has no right to reclaim the variable remuneration in favour of the company when the variable remuneration was granted to the Executive Management Team based on incorrect financial data.

3. Remuneration 2014

A. Non-executive Directors

  • During the financial year closed per 31 December 2014, the non-executive Directors (F.-W. Hempel, A. Hempel, H.-R. Orgs, DELOX BVBA) received each a gross compensation of € 12.750 for fulfilling their duties as directors.
  • During the financial year closed per 31 December 2014, the non-executive director M. Reynaers received a gross compensation of € 1.063 for fulfilling her duties as director pro rata 1 full month (January).
  • During the financial year closed per 31 December 2014, the non-executive director Christulf BVBA received a gross compensation of € 7.438 for fulfilling his duties as director pro rata 7 full months (June – Dec).
  • For the financial year closed per 31 December 2014, no tantièmes will be paid.
  • During the financial year closed per 31 December 2014, none of the non-executive directors (F.-W. Hempel, A. Hempel, H.-R. Orgs, DELOX BVBA, M. Reynaers, Christulf BVBA) received any shares, share options or other rights to acquire shares of the company or Group.

B. Managing Director

  • Geert Krekel, Managing Director on an independent base, is in charge of the daily management and did not receive any compensation for his duty as mere director.
  • As Managing Director, G. Krekel received a gross pay, including benefits of all kinds, of € 211.636 over 2014. This amount was made up of a fixed component of € 190.000, pension contributions and invalidity insurance of € 13.200 (on the basis of a "defined contribution" system) and benefits in kind (car, mobile phone, internet connection, representation costs) to the value of € 8.436. There is no variable component for 2014.
  • During the financial year closed per 31 December 2014, G. Krekel did not receive any shares, share options or other rights to acquire shares of the company or Group.

C. Executive Management Team

  • The members of the Executive Management Team (Hilde Goovaerts, Jan Keuppens, Ronny Van Britsom, Marc Liégeois, Thierry De Loose, David Wijmans, Anne-Mie Van de Wiele) together received a total gross pay of € 1.117.576 for 2014. This amount was made up of a fixed component of € 943.690, a variable component of € 76.544, pension contributions and invalidity insurance of € 52.590 (on the basis of a "defined contribution" system) and benefits in kind (car, mobile phone, internet connection, representation costs) to the value € 44.752.
  • During the financial year closed per 31 December 2014, none of the members of the Executive Management received any shares, share options or other rights to acquire shares of the company or Group.

The fixed and variable component include the total cost for the employer, all employer contributions included.

The Board of Directors requests the Annual Meeting of Shareholders to consider the annual report of the Board including the corporate governance statement and to approve the remuneration report.

Consolidated financial statements 2014

1. Consolidated income statement for the year ended 31 December 2014 23
2. Consolidated balance sheet on 31 December 2014 24
3. Consolidated statement of changes in equity for the year ended 31 December 2014 25
4. Consolidated cash flow statement for the year ended 31 December 2014 26
5. Notes to the consolidated financial statements for the year ended 31 December 2014 27
5.1. General information 27
5.2. Significant accounting policies 27
5.3. Judgement and use of estimates 33
5.4. Operating segments 33
5.5. Other operating expense and income 36
5.6. Finance costs 37
5.7. Income tax expense 37
5.8. Dividends and tantièmes 37
5.9. Property, plant and equipment 38
5.10. Intangible assets 39
5.11. Subsidiaries 39
5.12. Inventories 39
5.13. Financial assets 40
5.14. Other financial assets and liabilities 41
5.15. Share capital 41
5.16. Bank borrowings (finance lease obligations not included) 42
5.17. Deferred tax 42
5.18. Trade and other payables 43
5.19. Liquidity risk 43
5.20. Financial instruments 43
5.21. Provisions 44
5.22. Non-cash transactions 45
5.23. Contingent liabilities 45
5.24. Commitments 45
5.25. Operating lease arrangements 45
5.26. Share-based payments 45
5.27. Employee benefits expense 45
5.28. Retirement benefit plans 46
5.29. Market risk 48
5.30. Events after the balance sheet date 48
5.31. Related parties 49
5.32. Related party transactions 49
5.33. Rights and obligations not included in the balance sheet 50
5.34. Compensation of key management personnel 50
5.35. Approval of financial statements 50
Auditor's Report 51

1. Consolidated income statement for the year ended 31 December 2014

Year ended Year ended
'000 EUR Notes 31/12/2014 31/12/2013
Revenue 4 150.197 137.465
Other operating income 5 1.200 1.981
Raw materials and consumables used -
126.051
- 117.543
Employee benefits expense 27 -
12.807
- 12.008
Depreciation and amortisation expense 9 / 10 -
3.357
- 3.538
Other operating expenses 5 -
7.760
- 8.060
Operating result 1.422 - 1.703
Investment revenues - 2
Hedging results 14 541 1.042
Finance costs 6 -
699
- 872
Result before tax 1.264 - 1.531
Income tax expense 7 -
359
387
Result for the year 905 - 1.144
Result for the year 905 - 1.144
Attributable to:
Equity holders of the parent 905 - 1.144
Minority interest - -
905 - 1.144
RESULT PER SHARE (in EUR) 8
Basic 0,60 - 0,76
Diluted 0,60 - 0,76

Condensed consolidated overview of the total result

'000 EUR Notes Year ended
31/12/2014
Year ended
31/12/2013
Result for the year 905 -
1.144
Other comprehensive income:
Comprehensive income to be reclassified to the profit or loss
statement in the future - -
Comprehensive income not to be reclassified to the profit or loss
statement in the future (*) 28 21 -
94
(*) actuarial results of retirement benefit obligations
Total result for the year 926 -
1.238
Attributable to:
Equity holders of the parent 926 -
1.238
Minority interest - -

2. Consolidated balance sheet on 31 December 2014

'000 EUR Notes Year ended
31/12/2014
Year ended
31/12/2013
ASSETS
Non-current assets
Property, plant and equipment 9 7.109 9.223
Intangible assets 10 533 646
Deferred tax assets 17 792 1.161
Cash restricted in its use 275 275
8.709 11.305
Current assets
Inventories 12 23.220 23.872
Trade and other receivables 13 24.985 18.279
Derivatives 14 508 -
Cash and cash equivalents 676
49.389
1.201
43.352
TOTAL ASSETS 58.098 54.657
EQUITY AND LIABILITIES
Capital and reserves
Share capital 15 4.000 4.000
Translation reserves - -
Retained earnings* 18.599 17.673
Equity attributable to equity holders of the parent 22.599 21.673
Total equity 22.599 21.673
Non-current liabilities
Retirement benefit obligation 28 720 593
Deferred tax liabilities 17 - -
Bank loans 16 375 1.875
Provisions 21 1.125 1.125
2.220 3.593
Current liabilities
Retirement benefit obligation 28 137 120
Trade and other payables 18 13.534 13.546
Derivatives 14 5 71
Current tax liabilities - -
Bank overdrafts and loans 16 3.823 15.654
Advances on factoring 16 15.780 -
Provisions 21 -
33.279
-
29.391
Total liabilities 35.499 32.984
TOTAL EQUITY AND LIABILITIES 58.098 54.657

* Retained earnings consist of legal reserves (965 KEUR) and other reserves and retained results (17.634 KEUR).

3. Consolidated statement of changes in equity for the year ended 31 December 2014

'000 EUR Share
capital
Retained
earnings
Attributable to equity
holders of the parent
Total
Balance on 31 December 2012 4.000 18.911 22.911 22.911
Total result of the year
Dividends and tantièmes
-
-
-
1.238
-
-
1.238
-
1.238 -
-
Balance on 31 December 2013 4.000 17.673 21.673 21.673
Total result of the year - 926 926 926
Dividends and tantièmes - - - -
Balance on 31 December 2014 4.000 18.599 22.599 22.599

4. Consolidated cash flow statement for the year ended 31 December 2014

'000 EUR Notes Year ended
31/12/2014
Year ended
31/12/2013
OPERATING ACTIVITIES
Total result for the year 905 -
1.144
Adjustments for:
Other gains and losses (investment grants) - -
Investment revenues - -
2
Other gains and losses (hedging results) 14 -
541
-
1.042
Finance costs 6 699 872
(Deferred) tax expenses of the total result 7 370 -
435
Depreciation of property, plant and equipment 9/10 3.
357
3.538
Gain on disposal of property, plant and equipment - -
Change in provisions (incl. retirement benefit) 165 -
Change in inventory value reduction 12 -
246
-
81
Others -
1
-
2
Operating cash flows before movements in working capital 4.708 1.704
Change in inventories 12 898 12.047
Change in receivables 13 -
6.706
2.422
Change in trade and other payables 19 -
12
2.291
Cash generated from operations -
1.112
18.464
Hedging results -
33
679
Interest paid 6 -
699
-
872
Income taxes paid - -
2.059
Net cash (used in) / from operating activities
-
1.844
16.212
INVESTING ACTIVITIES
Interest received - 2
Proceeds on disposal of property, plant and equipment - -
Purchases of property, plant and equipment 9 -
1.130
-
2.036
Purchases of intangible assets 10 - -
Net cash (used in) / from investing activities -
1.130
-
2.034
FINANCING ACTIVITIES
Dividends paid and tantièmes paid - -
Repayments of borrowings 16 -
1.500
-
2.700
New bank loans raised 16 - -
Change in cash restricted in its use - -
Change in bank overdrafts 16 -
11.831
-
12.973
Change in advances on factoring 16 15.780 -
Net cash (used in) / from financing activities 2.449 -
15.673
Net change in cash and cash equivalents -
525
-
1.495
Cash and cash equivalents at the beginning of the year 1.201 2.696
Effect of foreign exchange rate changes - -
Cash and cash equivalents at the end of the year 676 1.201
Bank balances and cash 676 1.201

5. Notes to the consolidated financial statement for the year ended 31 December 2014

5.1. General information

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.

5.2. Significant accounting policies

The financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU.

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 2014.

Became applicable for 2014, but don't have a material impact on the presentation, notes or the financial statements of the Group.

  • IFRS 10 Consolidated Financial Statements (applicable for annual periods beginning on or after 1 January 2014).
  • IFRS 11 Joint Arrangements (applicable for annual periods beginning on or after 1 January 2014).
  • IFRS 12 Disclosures of Interests in Other Entities (applicable for annual periods beginning on or after 1 January 2014).
  • IAS 27 Separate Financial Statements (applicable for annual periods beginning on or after 1 January 2014).
  • IAS 28 Investments in Associates and Joint Ventures (applicable for annual periods beginning on or after 1 January 2014).
  • Amendments to IFRS 10, IFRS 12 and IAS 27 Consolidated Financial Statements and Disclosure of Interests in Other Entities: Investment Entities (applicable for annual periods beginning on or after 1 January 2014).
  • Amendments to IAS 32 Financial Instruments: Presentation Offsetting Financial Assets and Financial Liabilities (applicable for annual periods beginning on or after 1 January 2014).
  • Amendments to IAS 36 Impairment of Assets Recoverable Amount Disclosures for Non-Financial Assets (applicable for annual periods beginning on or after 1 January 2014).
  • Amendments to IAS 39 Financial Instruments Novation of Derivatives and Continuation of Hedge Accounting (applicable for annual periods beginning on or after 1 January 2014).

Issued but not yet effective for 2014

  • IFRS 9 Financial Instruments and subsequent amendments (applicable for annual periods beginning on or after 1 January 2018 but not yet endorsed in the EU).
  • IFRS 14 Regulatory Deferral Accounts (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in the EU).
  • IFRS 15 Revenue from Contracts with Customers (applicable for annual periods beginning on or after 1 January 2017, but not yet endorsed in EU).
  • Improvements to IFRS (2010-2012) (applicable for annual periods beginning on or after 1 February 2015).
  • Improvements to IFRS (2011-2013) (applicable for annual periods beginning on or after 1 January 2015).
  • Improvements to IFRS (2012-2014) (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in the EU).
  • Amendments to IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in EU).
  • Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in the EU).
  • Amendments to IFRS 11 Joint Arrangements Accounting for Acquisitions of Interests in Joint Operations (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in EU).
  • Amendments to IAS 1 Presentation of Financial Statements Disclosure Initiative (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in EU).
  • Amendments to IAS 16 and IAS 38 Property, Plant and Equipment and Intangible Assets Clarification of Acceptable Methods of Depreciation and Amortisation (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in EU).
  • Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in EU).
  • Amendments to IAS 19 Employee Benefits Employee Contributions (applicable for annual periods beginning on or after 1 February 2015).
  • Amendments to IAS 27 Separate Financial Statements Equity Method (applicable for annual periods beginning on or after 1 January 2016, but not yet endorsed in the EU).
  • IFRIC 21 Levies (applicable for annual periods beginning on or after 17 June 2014).

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. Regarding the application of IFRS 15, the Group is currently analysing the possible impact.

5.2.1. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities controlled by the Company (its subsidiaries). An investor controls an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

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.

Changes in the Group's interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under IAS 39 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

Non-controlling interests in subsidiaries are identified separately from the Group's equity therein. The interest of non-controlling shareholders may be initially measured either at fair value or at the non-controlling interests' proportionate share of the fair value of the acquiree's identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests' share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

5.2.2. Business combinations

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.

Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments (see below). All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant IFRS. Changes in the fair value of contingent consideration classified as equity are not recognised.

Where a business combination is achieved in stages, the Group's previously held interests in the acquired entity are remeasured to fair value at the acquisition date (i.e. the date the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

5.2.3. Goodwill

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.

5.2.4. Revenue recognition

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.

5.2.5. Leasing

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.

5.2.6. Foreign currencies

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.

5.2.7. Financial instruments

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 hedge accounting under IAS 39.

From the start 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 IAS 39 (hedge accounting).

From the start 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 IAS 39 (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.

The classification of the fair value of the hedge instruments is level 1 (unadjusted quoted prices in an active market for identical assets or liabilities) in the "fair value hierarchy" of IFRS 13.

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in profit or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk are recognised in the line of the income statement relating to the hedged item.

Hedge accounting is discontinued when the Group revokes the hedging relationship, the hedging instrument expires or is sold, terminated, or exercised, or no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortised to profit or loss from that date.

5.2.8. Borrowing costs

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.

5.2.9. Government grants

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.

5.2.10. Retirement benefit costs and termination benefits

Payments to defined contribution retirement benefit plans are recognised as an expense during the period of service which entitles employees to the contributions.

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 the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the statement of financial position with a charge or credit recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to profit or loss. Past service cost is recognised in profit or loss in the period of a plan amendment.

Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:

  • Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements)
  • Net interest expense or income
  • Remeasurement

The Group presents the first 2 components of defined benefit costs in profit and loss in the line item employee benefits expense. Curtailment gains and losses are accounted for as past service costs. The 3rd component is recognised directly to equity.

The retirement benefit obligation recognised in the consolidated statement of financial position represents the actual deficit or surplus in the Group's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

A liability for a termination benefit is recognised at the earlier of when the entity can no longer withdraw the offer of the termination benefit and when the entity recognises any related restructuring costs.

5.2.11. Taxation

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.

5.2.12. Property, plant and equipment

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.

5.2.13. Internally-generated intangible assets – research and development expenditure

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:

  • an asset is created that can be identified (such as software and new processes);
  • it is probable that the asset created will generate future economic benefits and;
  • the development cost of the asset can be measured reliably.

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.

5.2.14. Patents, trademarks and software purchased

Patents, trademarks and software purchased are measured initially at purchase cost and are amortised on a straight-line basis over their estimated useful lives.

5.2.15. Impairment of tangible and intangible assets excluding goodwill

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.

5.2.16. Inventories

Cost of the raw materials includes both the purchasing price (using the principle of First in First out ("FIFO")) and the direct purchasing costs, like import duties, transportation and completion costs. Cost of work in progress and finished products comprises all direct and indirect costs necessary that have been incurred in bringing the inventories to their present location condition on balance sheet date. Direct costs include, among others, the cost of the used raw materials and the direct labour costs. Indirect costs include a systematical impute of fixed and variable indirect production costs proceeded from the conversion of raw materials in end products. The impute of fixed indirect production costs is based on the normal capacity of the production facilities.

For the determination of the cost, the standard cost price method is used. The standard cost price takes into account the normal use of raw and auxiliary materials, labour, efficiency and capacity. The standard cost price is frequently being evaluated and, if necessary, revised in consideration with the present conditions. The standard cost price of the raw and auxiliary materials, as also the appreciation of it in work in progress and in raw materials, will be revised every month on the basis of the new determined FIFO value of these raw and auxiliary materials.

The inventories are valued at the lower of cost, determined as described above, or net realisable value. The net realisable value represents the estimated selling price in normal circumstances less estimated cost of completion and costs to be incurred to realise sales (marketing, selling and distribution). The estimated selling price is affected by the LME quotation (London Metal Exchange) for lead and the MB (Metal Bulletin) quotation for antimony.

Value reductions are made for the old and slow moving inventories.

5.2.17. Trade receivables

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. Based on a regular age analysis of the assets, it is determined case per case if a liability for doubtful debtors is needed.

Factoring

The Group entered into a factoring agreement with a credit institution, whereby the credit institution pays advances to the Group on trade receivables. As the credit risk of these receivables remains with the Group, not all risks and rewards of the transferred receivables are transferred. As a consequence, the receivables remain on the balance sheet of the Group and the advances received are recorded under the short term advances and loans received.

5.2.18. Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and demand deposits. Cash and cash equivalents are included at fair value.

5.2.19. Bank borrowings

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).

5.2.20. Trade payables

Trade payables are measured at fair value.

5.2.21. Provisions

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.

5.3. Judgement and use of estimates

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:

  • Valuation of the recoverable amount of stocks (see note 5.12.). The inventories are valued at cost, determined as described above, or at net realisable value, if the latter is lower.
  • Valuation of sanitation provisions (see note 5.21.). The Group has set up a provision for soil sanitation.
  • Provisions for doubtful debtors (see note 5.13.1.). Based on a regular age analysis of the assets, it is determined case per case if a provision for doubtful debtors is needed.
  • Pension and related liabilities (see note 5.28.). The estimated liability arising from defined contribution retirement benefit plans of the Group, is based on actuarial assumptions. The pre-tax discount rate and estimated salary expectations are actuarial assumptions which can significantly affect the liability.
  • Deferred tax assets (see note 5.7.).

Deferred tax assets are recognised 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 credits can be utilised. In making its judgement, the Board takes into account long-term business strategy. A major uncertainty in the determination of the future taxable result concerns the volatility and unpredictability of raw material prices.

• Others; litigation and lawsuits

The Group is, and can in the future become, involved in legal disputes. Until now, Campine is – as plaintive or defendant – involved in some legal proceedings which can have no important global impact on Campine – as to the information upon which the Group disposes on the date of this report: the probability of resulting assets or liabilities is particularly low and / or it concerns relatively insignificant amounts.

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.

As well as 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.

5.4. Operating segments

5.4.1. Business segments

For management purposes, the Group is organised into three operating divisions Antimony, Plastics and Lead. These divisions are the basis on which the Group reports its primary segment information. Principal activities as follows:

  • Antimony trioxide (Sb2O3) is used as a fire retardant in the textile, plastics, cable and pigment industries and is also applied as a high efficiency catalyst in PET-production.
  • Our plastics activities enable us to offer predispersed and ready to use flame retardant masterbatches for processors and compounders to provide a dust-free handling and increase production efficiency.
  • Our lead recycling business is based on converting lead from used car and truck batteries and industrial scrap into lead bullion and alloys that are marketed to battery and lead sheet producers (a.o. X-ray protection).

Actual information about the different divisions is mentioned in the report of the Board of Directors (page 5 until 10).

Geographical information of the Group is presented hereafter.

'000 EUR
2014
Antimony
Year ended
31/12/2014
Plastics
Year ended
31/12/2014
Lead
Year ended
31/12/2014
Elimination /
others
Year ended
31/12/2014
Total
Year ended
31/12/2014
REVENUE
External sales 50.294 22.374 80.195 - 152.863
Inter-segment sales - - - 2.666 - -
2.666
Total revenue 50.294 22.374 80.195 2.666 - 150.197
Inter-segment sales are charged at prevailing market prices
RESULT
Segment operating result 1.861 713 2.491 5.065
Unallocated expenses -
3.643
Operating result 1.422
Investment revenues -
Hedging results 541 541
Other gains and losses -
Finance costs -
699
Result before tax 1.264
Income tax expense -
359
Result for the year 905
'000 EUR
2014
Antimony
31/12/2014
Plastics
31/12/2014
Lead
31/12/2014
Others
31/12/2014
Total
31/12/2014
OTHER INFORMATION
Capital additions 204 132 601 193 1.130
Disposals - - - - -
Depreciation and amortisation 828 233 1.664 632 3.357
BALANCE SHEET
Assets
Fixed assets 1.656 531 3.217 2.238 7.642
Deferred tax assets 792 792
Cash restricted in its use - - 275 - 275
Stocks 7.297 3.420 12.169 334 23.220
Trade and other receivables 6.654 3.344 14.673 314 24.985
Derivatives - - 508 - 508
Cash and cash equivalent - - - 676 676
Total Assets 15.607 7.295 30.842 4.354 58.098
Liabilities
Long term liabilities
Retirement benefit obligation - - - 720 720
Deferred tax liabilities - - - - -
Bank loans - - - 375 375
Obligations under finance leases - - - - -
Provisions - - 1.125 - 1.125
Short term liabilities
Retirement benefit obligation - - - 137 137
Trade and other payables 1.123 1.111 9.892 1.408 13.534
Derivatives - - 5 - 5
Current tax liabilities - - - - -
Obligations under finance leases - - - - -
Bank overdrafts, loans and factoring - - - 19.603 19.603
Provisions - - - - -
Total liabilities 1.123 1.111 11.022 22.243 35.499
'000 EUR
2013
Antimony
Year ended
31/12/2013
Plastics
Year ended
31/12/2013
Lead
Year ended
31/12/2013
Elimination /
others
Year ended
31/12/2013
Total
Year ended
31/12/2013
REVENUE
External sales 58.347 22.812 58.013 - 139.172
Inter-segment sales - - - 1.707 - -
1.707
Total revenue 58.347 22.812 58.013 1.707 - 137.465
Inter-segment sales are charged at prevailing market prices
RESULT
Segment operating result 769 573 885 2.227
Unallocated expenses -
3.930
Operating result -
1.703
Investment revenues 2
Hedging results 1.042 1.042
Other gains and losses -
Finance costs -
872
Result before tax -
1.531
Income tax expense 387
Result for the year -
1.144
'000 EUR
2013
Antimony
31/12/2013
Plastics
31/12/2013
Lead
31/12/2013
Others
31/12/2013
Total
31/12/2013
OTHER INFORMATION
Capital additions 584 296 1.064 92 2.036
Disposals - - - - -
Depreciation and amortisation 808 213 1.785 732 3.538
BALANCE SHEET
Assets
Fixed assets 2.280 632 4.280 2.677 9.869
Deferred tax assets 1.161 1.161
Cash restricted in its use - - 275 - 275
Stocks 7.297 3.420 12.169 986 23.872
Trade and other receivables 8.174 2.246 7.231 628 18.279
Derivatives - - - - -
Cash and cash equivalent - - - 1.201 1.201
Total Assets 17.751 6.298 23.955 6.653 54.657
Liabilities
Long term liabilities
Retirement benefit obligation - - - 593 593
Deferred tax liabilities - - - - -
Bank loans - - - 1.875 1.875
Obligations under finance leases - - - - -
Provisions - - 1.125 - 1.125
Short term liabilities
Retirement benefit obligation - - - 120 120
Trade and other payables 1.453 897 8.697 2.499 13.546
Derivatives - - 71 - 71
Current tax liabilities - - - - -
Obligations under finance leases - - - - -
Bank overdrafts and loans - - - 15.654 15.654
Provisions - - - - -
Total liabilities 1.453 897 9.893 20.741 32.984

5.4.2. Geographical segments

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 31/12/2014 % 31/12/2013 %
Belgium 6.097 4% 5.578 4%
Germany 47.819 32% 36.659 27%
Switzerland 17.139 11% 5.632 4%
Italy 13.338 9% 13.571 10%
United Kingdom 8.928 6% 6.999 5%
The Netherlands 8.702 6% 10.478 8%
Romania 7.510 5% 8.138 6%
France 6.199 4% 9.300 7%
Other European countries 12.746 8% 19.240 14%
North America 16.785 11% 18.135 13%
Asia 2.407 2% 1.154 1%
Others 2.527 2% 2.581 2%
150.197 100% 137.465 100%

5.5. Other operating expense and income

Other operating expense:

Year ended Year ended
'000 EUR 31/12/2014 31/12/2013
Office expenses & IT 518 599
Fees 1.445 1.149
Insurances 434 365
Interim personnel 282 148
Carry-off of waste 1.456 1.529
Travel expenses 227 236
Transportation costs 1.947 1.650
Other sales expenses 352 558
Expenses on operational hedges - 53
Operational exchange rates - 320
Renting 227 237
Subscriptions 229 222
Other taxes (unrelated to the result) 173 142
Financial costs (other than interest) 120 210
Others 350 642
7.760 8.060

Other operating income:

Year ended Year ended
'000 EUR 31/12/2014 31/12/2013
Operating hedge results - 63
Employee subsidy 557 586
Finance income (other than interest) 12 5
Recuperation of waste materials 457 1.007
Claims 37 166
Gains - disposals of fixed assets - 10
Others 137 144
1.200 1.981

5.6. Finance costs

Year ended Year ended
'000 EUR 31/12/2014 31/12/2013
Interest on bank overdrafts, loans and factoring 699 872
Total borrowing costs 699 872

5.7. Income tax expense

'000 EUR Year ended
31/12/2014
Year ended
31/12/2013
Current tax - 2
Deferred tax 359 -
389
Income tax expense for the year 359 -
387

Domestic income tax is calculated at 33,99% (2013: 33,99%) of the estimated assessable result for the year. Taxation for other jurisdictions is calculated at the rates prevailing in the relevant jurisdictions.

Year ended Year ended
'000 EUR 31/12/2014 31/12/2013
Result before tax 1.264 - 1.531
1.264 - 1.531
Tax at the domestic income tax rate of 33,99%
(2013: 33,99%) 430 - 520
Tax effect of expenses that are not deductible in determining
taxable result 88 83
Tax effect of Notional Interest Deduction (NID) - 150 -
Tax settlement previous years - 2
Tax effect of utilisation of tax losses previously not recognised and
timing differences - 9 48
Tax penalty (unsufficient prepayments) - -
Effect of different tax rates of subsidiaries operating in other
jurisdictions - -
Tax expense and effective tax rate for the year 359 - 387

On 31/12/2014 deferred taxes amount to 792 KEUR (1.161 KEUR on 31/12/2013). Campine is confident that the deferred tax asset will be used in the foreseeable future.

Theoretically, a deferred tax asset of 1.014 KEUR can be set up. In compliance with the actual tax rate of the Group, it was decided to only set up 792 KEUR.

5.8. Dividends and tantièmes

No tantièmes were paid to the non-executive Board members in 2014.

The Board of Directors proposes that the company will not pay a dividend for the year 2014. For 2013 no dividend was paid.

5.8.1. Result per share

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:

'000 EUR Year ended
31/12/2014
Year ended
31/12/2013
RESULT
Result for purposes of basic and diluted results per share
(result for the year attributable to equity holders of the parent) 905 -
1.144
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

5.9. Property, plant and equipment

Properties
Land and under Fixtures and
'000 EUR buildings construction equipment Total
COST OR VALUATION
On 31 December 2012 13.107 91 49.339 62.537
Additions - 15 2.111 2.126
Transfers - -
91
- -
91
Disposals - - - -
On 31 December 2013 13.107 15 51.450 64.572
Additions 51 - 1.094 1.145
Transfers - -
15
- -
15
Disposals - - - -
On 31 December 2014 13.158 - 52.544 65.702
ACCUMULATED DEPRECIATION
On 31 December 2012 10.380 - 41.651 52.031
Deprecation charge for the year 563 - 2.755 3.318
Eliminated on disposals - - - -
On 31 December 2013 10.943 - 44.406 55.349
Deprecation charge for the year 479 - 2.765 3.244
Eliminated on disposals - - - -
On 31 December 2014 11.422 - 47.171 58.593
CARRYING AMOUNT
On 31 December 2014 1.736 - 5.373 7.109
On 31 December 2013 2.164 15 7.044 9.223

We always depreciate until residual value 0. The following depreciation rates are used for 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.

5.10. Intangible assets

Patents, trademarks and
'000 EUR software purchased
COST
On 31 December 2012 1.422
Additions -
On 31 December 2013 1.422
Additions -
On 31 December 2014 1.422
CUMULATED DEPRECIATION AND AMORTISATION
On 31 December 2012 557
Charge for the year 219
On 31 December 2013 776
Charge for the year 113
On 31 December 2014 889
CARRYING AMOUNT
On 31 December 2014 533
On 31 December 2013 646

The intangible assets included in the table have finite useful lives. Intangible assets are, depending on the category, depreciated over 3 to 8 years.

In 2014 there were no investments related to intangible assets. Our intangible assets mainly consist of the transfer of our data system to SAP and the extension of our server network.

5.11. Subsidiaries

Details of the Group's subsidiaries on 31 December 2014 are as follows:

Place of
incorporation (or Proportion of
registration) and Proportion of voting power
Name of subsidiary operation ownership interest held Principal activity
Campine Recycling nv
VATno: 0474.955.451 Belgium 99,99% 100% Lead recycling

There are no restrictions on the access to and use of the assets of the subsidiaries.

5.12. Inventories

'000 EUR 31/12/2014 31/12/2013
Raw materials 9.232 4.949
Work-in-progress 4.094 6.433
Finished goods 9.894 12.490
23.220 23.872

The inventory per year-end includes a value reduction of 466 KEUR (2013: 712 KEUR) to value inventory at the lower of cost and net realisable value.

The inventory value is related to the cost of completion of the products which is linked to the LME quotation (London Metal Exchange) for lead and the MB (Metal Bulletin) quotation for antimony.

5.13. Financial assets

5.13.1. Trade and other receivables

'000 EUR
Amounts receivable from the sale of goods
31/12/2014
23.272
31/12/2013
15.478
Other receivables 1.713 2.801
24.985 18.279

The increase of 6.706 KEUR is mainly due to the higher turnover realised in the 4th quarter of 2014 compared to the 4th quarter of 2013. This increased turnover is partly realised by the replacement of toll-work by outright sales in the business unit lead.

An allowance has been recorded for estimated irrecoverable amounts from the sale of goods of 666 KEUR (2013: 659 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.

The total amount from sales of goods of 23.272 KEUR includes 19.327 KEUR subject to commercial factoring by a credit institute. Based on these receivables the credit institute deposits advances on the account of Campine (15.780 KEUR per 31/12/2014, see note 16. Bank borrowings) and afterwards collects the receivables itself. The credit risk stays at Campine and is covered by a credit insurance.

The overdue amounts which are not provided for are not older than 30 days and / or fully covered by a credit insurance.

5.13.2. Bank balances and cash

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.

5.13.3. Credit risk

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 31/12/2014 31/12/2013
Opening allowance doubtful debtors 659 597
Additions 7 64
Reversals - -
2
Closing allowance doubtful debtors 666 659

Included in the Group's trade receivable balance are debtors with a carrying amount of 1.010 KEUR (2013: 719 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 35 days past due (2013: 27 days).

5.14. Other financial assets and liabilities

5.14.1. Derivatives

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 start 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 IAS 39 (hedge accounting).

From the start 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 IAS 39 (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 summarises the net change in fair value – realised and unrealised – of the positions on the LME lead futures where it sells forward lead via future contracts of +541 KEUR included in the income statement during the year ended 31 December 2014. (31 December 2013: +1.042 KEUR).

Fair value of Underlying open
'000 EUR current instruments positions (in mT)
On 31 December 2013 Per 31 december 2013 - 71 3.925
On 31 December 2014 Per 31 december 2014 503 5.975

The fair value of the derivatives are included in the balance sheet as current assets – derivatives for 508 KEUR and current liabilities – derivatives for 5 KEUR. The amount of 5 KEUR is related to the open position of the fixed price contracts on 31 December 2014.

On the financial side this open position represents a loss of 5 KEUR whereas on the operational side the transaction represents a profit of 5 KEUR.

The classification of the fair value of the hedge instruments is level 1 (unadjusted quoted prices in an active market for identical assets or liabilities) in the "fair value hierarchy" of IFRS 13.

5.15. Share capital

'000 EUR 31/12/2014 31/12/2013
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.

5.16. Bank borrowings (finance lease obligations not included)

'000 EUR 31/12/2014 31/12/2013
Bank loans 1.875 3.375
Bank overdrafts 2.323 14.154
Advances on factoring 15.780 -
19.978 17.529

The borrowings are repayable as follows:

'000 EUR 31/12/2014 31/12/2013
Bank loans after more than one year 375 1.875
Bank loans within one year 1.500 1.500
Bank overdrafts 2.323 14.154
Advances on factoring 15.780 -
19.978 17.529

The average interest rates paid were as follows:

Year ended Year ended
31/12/2014 31/12/2013
Bank overdrafts 1,88% 2,50%
Advances on factoring 1,78% -
Bank loans 4,65% 4,65%

The Group has concluded commercial finance agreements on 1 April 2014 to protect liquidity against possible price fluctuations.

Bank loans are arranged at fixed interest rates. Other borrowings (bank overdrafts and advances on factoring: 18.103 KEUR per 31 December 2014 (per 31 December 2013: 14.154 KEUR)) are arranged at floating rates, thus exposing the Group to an interest rate risk (see note 5.29.1.). On 31 December 2014, the Group had available 6.662 KEUR (31 December 2013: 6.897 KEUR) of undrawn committed borrowing facilities.

The credit agreements with our bankers contain a number of covenants, based on equity, solvability and stock rotation. On 31 December 2014 the Group complied with the covenants.

5.17. Deferred tax

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 Positive Retirement
on fixed fair value benefit Fiscal
'000 EUR assets derivatives obligations losses Others Total
On 31 December 2012 16 - -
58
-
750
68 -
724
Charge/(credit) to result for
the year - - 3 375 - 17 - 389 -
Charge/(credit) to other
comprehensive income - - -
48
- - 48 -
On 31 December 2013 16 - -
103
- 1.125 51 - 1.161
Charge/(credit) to result for
the year - 171 12 175 - 359
Charge/(credit) to other
comprehensive income - - 11 - - 11
On 31 December 2014 16 171 -
80
-
950
51 -
792

Certain deferred tax assets and liabilities have been offset in accordance with the Group's accounting policy.

5.18. Trade and other payables

'000 EUR 31/12/2014 31/12/2013
Trade creditors and accruals 11.665 11.759
Other payables and accruals 1.869 1.787
13.534 13.546

Trade creditors and accruals principally comprise amounts outstanding for trade purchases and ongoing costs. The Board of Directors consider that the carrying amount of trade payables approximates their fair value as those balances are short-term.

There are no trade payables older than 60 days (with the exception of disputes), hence an age analysis is irrelevant.

5.19. Liquidity risk

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 31/12/2014 31/12/2013
< 1 year 1-5 years > 5 years < 1 year 1-5 years > 5 years
Trade and other liabilities 13.534 - - 13.546 - -
Bank overdrafts 2.323 - - 14.154 - -
Advances on factoring 15.780 - - - - -
Bank loans 1.562 379 - 1.633 1.941 -
Finance lease obligations - - - - - -

5.20. Financial instruments

The major financial instruments of the Group are financial and trade receivables and payables, investments, cash and cash equivalents as well as derivatives.

Below is an overview of the financial instruments as on 31 December 2013:

'000 EUR Categories Book value Fair value Level
I. Fixed assets
Financial fixed assets C 2
Loans and receivables A 2
II. Current Assets
Trade and other receivables A 18.279 18.279 2
Cash and cash equivalents B 1.201 1.201 2
Total financial instruments on the assets 19.480 19.480
side of the balance sheet
I. Non-current liabilities
Interest-bearing liabilities A 1.875 1.943 2
Other non-current liabilities A - - 2
Other financial liabilities C - - 2
II. Current liabilities
Interest-bearing liabilities A 15.654 15.708 2
Current trade and other debts A 13.546 13.546 2
Derivatives C 71 71 1
Total financial instruments on the
liabilities side of the balance sheet
31.146 31.268

Below is an overview of the financial instruments as on 31 December 2014:

'000 EUR Categories Book value Fair value Level
I. Fixed assets
II. Current Assets
Trade and other receivables A 24.985 24.985 2
Cash and cash equivalents B 676 676 2
Derivatives C 508 508 1
Total financial instruments on the assets
side of the balance sheet 26.169 26.169
I. Non-current liabilities
Interest-bearing liabilities A 375 389 2
Other non-current liabilities A - - 2
Other financial liabilities C - - 2
II. Current liabilities
Interest-bearing liabilities A 19.603 19.657 2
Current trade and other debts A 13.534 13.534 2
Derivatives C 5 5 1
Total financial instruments on the
liabilities side of the balance sheet 33.517 33.585

The categories correspond with the following financial instruments:

  • A. Financial assets or liabilities (including receivables and loans) held until maturity, at the amortised cost.
  • B. Investments held until maturity, at the amortised cost.
  • C. Assets or liabilities, held at the fair value through the profit and loss account.

The aggregate financial instruments of the Group correspond with levels 1 and 2 in the fair values hierarchy. Fair value valuation is carried out regularly.

  • Level 1: unadjusted quoted prices in an active market for identical assets or liabilities.
  • Level 2: the fair value based on other information, which can, directly or indirectly, be determined for the relevant assets or liabilities.

The valuation techniques regarding the fair value of the level 2 financial instruments are the following:

  • The fair value of the other level 2 financial assets and liabilities is almost equal to their book value:
  • o either because they have a short-term maturity (like trade receivables and debts),
  • o or because they have a variable interest rate.
  • For fixed-income payables the fair value was determined using interest rates that apply to active markets.

5.21. Provisions

Soil sanitation
'000 EUR cost Other Total
At 31 December 2013 1.125 - 1.125
Additional provision in the year - - -
Utilisation of provision - - -
At 31 December 2014 1.125 - 1.125
'000 EUR 31/12/2014 31/12/2013
Analysed as:
Current liabilities - -
Non-current liabilities 1.125 1.125
1.125 1.125

Status provisions on 31 December 2014:

• The provisions remained equal in 2014. These mainly relate to the soil sanitation obligation on and around the site of the Group and were determined in compliance with the requirements of OVAM – by an independent study bureau.

5.22. Non-cash transactions

No additions to fixtures and equipment were financed by new finance leases during the year.

5.23. Contingent liabilities

The power to pledge the goodwill was granted to the banks for an amount of 15.614 KEUR (31/12/2013: 33.000 KEUR).

5.24. Commitments

In the normal course of business the Group has commitments to buy and sell metals in the future.

5.25. Operating lease arrangements

The Group as lessee:

'000 EUR 31/12/2014 31/12/2013
Minimum lease payments under operating leases recognised
as an expense in the year 171 157

At the balance sheet date, the Group has outstanding commitments under non-cancellable operating leases, which fall due as follows:

'000 EUR 31/12/2014 31/12/2013
Within one year 140 158
In the second year to fifth year inclusive 134 157
After five years - -
274 315

Operating lease payments represent rentals payable by the Group for vehicles and equipment. This concerns company cars, copiers and printers. There were no restrictions nor purchase obligations added to the agreements and these were not index related. Leases are negotiated for an average term of four years.

5.26. Share-based payments

During the financial year closed per 31 December 2014 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.

5.27. Employee benefits expense

'000 EUR 31/12/2014 31/12/2013
Long term
Pension cost (incl. early retirement) 311 201
Short term
Salaries 8.501 7.882
Contribution social security 2.701 2.575
Other employee benefits expense 1.294 1.350
12.807 12.008
Average number of FTE's 159 160

As a result of the reorganisation of the different business units of the Group Campine, a single reorganisation cost for an amount of 658 KEUR (from which 588 KEUR are employee benefits expenses) was recorded on 31/12/2014.

5.28. Retirement benefit plans

Following amounts with regard to the (early) retirement are booked on the balance sheet:

'000 EUR 31/12/2014 31/12/2013
Defined benefit plan 235 304
Early retirement provision 622 409
857 713

5.28.1. Defined benefit plan

The Group operates a funded defined benefit plan for qualifying employees of Campine and its subsidiary in Belgium. The defined benefit plan foresees an amount based on the salary and seniority payable at the age of 60. For the financed plans, plan assets consist of mixed portfolio'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.

The current value of the retirement benefit obligations and the assets has evolved as follows: * DBO: Defined Benefit Obligation

'000 EUR DBO
(IAS 19 R)
Plan Assets Deficit Net liability /
(asset)
On 31 December 2013 2.021 -
1.717
304 304
Components of defined benefit cost
Service cost in P/L
Current service cost (net of employee contributions) 159 159
Past service cost (incl effect of curtailments) - -
Settlement (gain)/loss - -
Service cost 159
Net interest on the net liability / (asset) in P/L
Interest cost on DBO 59 59
Interest income on plan assets -
53
-
53
Interest on effect of the asset ceiling -
Net interest 6
Administration costs paid from plan assets in P/L -
Components of defined benefit cost recognised in P/L 165
Remeasurements of the net liability / (asset) in OCI
Actuarial (gain) / loss arising from
- Changes in demographic assumptions - -
- Changes in financial assumptions 280 280
- Experience adjustments 14 14
Return on plan assets (excl. amounts in net interest) -
326
-
326
Change in effect of the asset ceiling (excl. amounts
in net interest) -
Total remeasurement recognised in OCI -
32
Defined benefit cost (total amount recognised
in P/L and OCI)
Cash Flows
Employee contributions - - -
Employer contributions to plan assets (incl. 4,4% taxes) -
201
-
201
Benefit payments from plan assets -
90
90 -
Direct benefit payments by employer - - - -
Taxes paid from plan assets (4,4%) -
8
8 -
Taxes paid directly by employer (8,86%) -
16
16 -
On 31 December 2014 2.419 -
2.184
235 235
'000 EUR DBO
(IAS 19R)
Plan Assets Deficit Net liability /
(asset)
On 31 December 2012 (restated IAS 19R) 2.198 -
1.717
482 482
Components of defined benefit cost
Service cost in P/L
Current service cost (net of employee contributions) 166 166
Past service cost (incl effect of curtailments) - -
Settlement (gain)/loss - -
Service cost 166
Net interest on the net liability / (asset) in P/L
Interest cost on DBO 58 58
Interest income on plan assets -
47
-
47
Interest on effect of the asset ceiling -
Net interest 11
Administration costs paid from plan assets in P/L -
Components of defined benefit cost recognised in P/L 177
Remeasurements of the net liability / (asset) in OCI
Actuarial (gain) / loss arising from
- Changes in demographic assumptions - -
- Changes in financial assumptions -
169
-
169
- Experience adjustments 17 17
Return on plan assets (excl. amounts in net interest) -
14
-
14
Change in effect of the asset ceiling (excl. amounts
in net interest) -
Total remeasurement recognised in OCI -
166
Defined benefit cost (total amount recognised
in P/L and OCI)
11
Cash Flows
Employee contributions - - -
Employer contributions to plan assets (incl. 4,4% taxes) -
173
-
173
Benefit payments from plan assets -
250
250 -
Direct benefit payments by employer -
Taxes paid from plan assets (4,4%) -
7
7
Taxes paid directly by employer (8,86%) -
15
-
15
On 31 December 2013 2.021 -
1.717
304 304

Major actuarial assumptions in use at balance sheet date:

Valuation at
31/12/2014 31/12/2013
Discount rate 1,85% 3,00%
Return on plan assets 1,85% 3,00%
Expected rate of salary increases 2,25% 2,25%
Inflation 1,25% 1,25%

The Group will possibly switch to a defined benefit plan with fixed costs in 2015.

The Group expects to contribute approx. 146 KEUR to its defined benefit plan in 2015.

Split of the plan assets on 31/12/2014 and the comparison with 2013:

'000 EUR 31/12/2014 31/12/2013
Equity securities, incl. cash - -
Fixed income securities - -
Real estate - -
Other 100% 100%

Sensitivity analysis of a percentage increase or decrease in the discount rate or an increase in salary to the retirement benefit obligation:

Discount rate -0,50% 0,50%
Assumptions 1,35% 1,85% 2,35%
DBO (KEUR) 2.567 2.419 2.286
Salary increase 0,50% -0,50%
Assumptions 2,75% 2,25% 1,75%
DBO (KEUR) 2.446 2.419 2.394

5.28.2. Disclosure regarding early retirement provision

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 on 31 December 2014 amounts to 622 KEUR (on 31 December 2013 provision amounted to 409 KEUR).

5.29. Market risk

5.29.1. Interest risk

Funding of the company is done through bank loans,bank overdrafts and factoring. On 31 December 2014 bank loans amounted to 1.875 KEUR, bank overdrafts and advances on factoring amounted to 18.103 KEUR. Bank loans are arranged at fixed rates. The bank overdrafts and advances on factoring are arranged at variable rates.

An increase or decrease of the interest with 10% would have an impact on the income statement of -30 KEUR (in case of 10% increase) or +30 KEUR (in case of 10% decrease) based upon the amount per 31 December 2014. The share capital will also be influenced.

5.29.2. Foreign Exchange risk

The Group is managing its foreign currency risk by matching foreign currency cash inflows with foreign cash outflows (USD is our main foreign currency).

An increase or decrease of the USD/EUR rate with 10% would have an impact on the income statement of +246 KEUR (in case of 10% increase) or -246 KEUR (in case of 10% decrease) based upon the assets and liabilities denominated in USD per 31 December 2014. The share capital will also be influenced.

5.29.3. Price risk

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 5.14.1. 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 2015 of the LME lead futures price by 10% would have impacts on the income statement. The immediate effect based on the underlying open position on 31 December 2014 of a price fall of 10% would be +913 KEUR or of a price raise of 10% would be -913 KEUR.

5.30. Events after the balance sheet date

No important events occurred after the close of the financial year.

5.31. Related parties

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
Rue Vallin 2, 1201 Geneva, Switzerland
537.900 35,86%

The remaining shares (28,14%) 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.

No changes were made to the known shareholder structure of Campine in 2014 as the company received no notifications in 2014.

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. Transactions between the Group and the management and key-management are disclosed in the remuneration report. Details of transactions between the Group and other related parties are disclosed below.

5.32. Related party transactions

All related party transactions are conducted on a business base and in accordance with all legal requirements and the Corporate Governance Charter.

5.32.1. Trading transactions

In 2014, 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 4.861 KEUR.

  • There was no open amount per 31/12/2014.

In 2013, 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 6.036 KEUR.

  • There was no open amount per 31/12/2013.

5.32.2. Other transactions

Camhold performed certain administrative/management services for the Campine Group, for which a management fee of 18 KEUR (2013: 18 KEUR) was charged and paid, being an appropriate allocation of costs incurred by relevant administrative departments.

Hempel Wire Ltd. performed certain administrative/management services for the Campine Group, for which a management fee of 18 KEUR (2013: 35 KEUR) was charged and paid, being an appropriate allocation of costs incurred by relevant administrative departments.

Christulf BVBA performed certain administrative/management services for the Campine Group, for which a management fee of 10 KEUR (2013: 0 KEUR) was charged and paid, being an appropriate allocation of costs incurred by relevant administrative departments.

DELOX BVBA performed certain administrative/management services for the Campine Group, for which a management fee of 43 KEUR (2013: 0 KEUR) was charged and paid, being an appropriate allocation of costs incurred by relevant administrative departments.

5.33. Rights and obligations not included in the balance sheet

Commercial commitments:

There are firm commitments to deliver or receive metals to customers or from suppliers at fixed prices.

'000 EUR 31/12/2014 31/12/2013
Commercial commitments for metals purchased (to be received) 5.460 3.259
Commercial commitments for metals sold (to be delivered) 9.702 4.812

5.34. Compensation of key management personnel

For the financial year 2014, the total remuneration of the Executive Management Team including the Board members amounts to 1.443 KEUR (2013: 756 KEUR). For further details, we refer to the remuneration report.

During the financial year closed per 31 December 2014 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.

5.35. Approval of financial statements

The financial statements were approved by the Board of Directors and authorised for issue on 26 February 2015.

Auditor's report

Statutory auditor's report to the shareholders' meeting on the consolidated financial statements for the year ended 31 December 2014

To the shareholders

As required by law, we report to you in the context of our appointment as the company's statutory auditor. This report includes our report on the consolidated financial statements together with our report on other legal and regulatory requirements. These consolidated financial statements comprise the consolidated balance sheet as on 31 December 2014, the consolidated income statement, the consolidated overview of the total result, 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.

Report on the consolidated financial statements – Unqualified opinion

We have audited the consolidated financial statements of Campine nv ("the company") and its subsidiaries (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.

The consolidated balance sheet shows total assets of € 58.098 (000) and the consolidated income statement shows a consolidated profit (group share) for the year then ended of € 905 (000).

Board of Directors' responsibility for the preparation of the consolidated financial statements

The Board of Directors is responsible for the preparation and fair presentation of consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Statutory auditor's responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing (ISA). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the statutory auditor's judgement, 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, the statutory auditor considers 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Board of Directors, as well as evaluating the overall presentation of the consolidated financial statements. We have obtained from the group's officials and the Board of Directors the explanations and information necessary for performing our audit.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Unqualified opinion

In our opinion, the consolidated financial statements of Campine NV give a true and fair view of the group's net equity and financial position as of 31 December 2014, and of its results and its cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium.

Report on other legal and regulatory requirements

The Board of Directors is responsible for the preparation and the content of the directors' report on the consolidated financial statements.

As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing applicable in Belgium, our responsibility is to verify, in all material respects, compliance with certain legal and regulatory requirements. On this basis, we make the following additional statement, which does not modify the scope of our opinion on the consolidated financial statements:

• The directors' report on the consolidated financial statements including the information required by law, is consistent with the consolidated financial statements and is free from material inconsistencies with the information that we became aware of during the performance of our mandate.

Antwerp, 27 February 2015

The statutory auditor

DELOITTE Bedrijfsrevisoren / Reviseurs d'Entreprises BV o.v.v.e. CVBA / SC s.f.d. SCRL Represented by Kathleen De Brabander

Corporate Data

Company

Nijverheidsstraat 2 2340 Beerse Belgium

VAT: BE0403.807.337 Tel: +32 14 60 15 11 Fax: +32 14 61 29 85 www.campine.be

Auditor

Deloitte Bedrijfsrevisoren: Represented by Kathleen De Brabander

Financial calendar

12 May 2015 General Meeting of Shareholders
Payment of dividend
Not applicable in 2015 Record date
Ex-date
Last week of August 2015 Announcement of half year results
Last week of February 2016 Announcement of 2015 year results

Headquarters Investor's relations Media relations Campine nv [email protected] [email protected]

Talk to a Data Expert

Have a question? We'll get back to you promptly.