Financial Report 2017

FINANCIAL
REPORT
02 SIMPLIFIED FINANCIAL STATEMENTS
04 CONSOLIDATED FINANCIAL
STATEMENTS 2017
84 REPORT OF THE BOARD OF

DIRECTORS ON THE CONSOLIDATED
FINANCIAL STATEMENTS
88 CORPORATE GOVERNANCE
93 REPORT OF THE EXTERNAL AUDITOR

ON CONSOLIDATED ACCOUNT
96 STATUTORY FINANCIAL
STATEMENTS 2017
100 REPORT OF THE BOARD OF

DIRECTORS ON THE STATUTORY
SIMPLIFIED FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENT

In thousands of euro 2O17 2O16
Revenue 3 083 004 2 725 702
EBITDA 541 429 428 146
REBIT 282 690 145 000
Net financing costs (51 534) (70 966)

Current tax (24 080) (42 276)
Share of profit of equity-accounted investees (net of tax) 2 028 1 317
Recurring net result 209 104 33 075
Non-recurring result after tax (109 205) (245 236)

Result from discontinued operations (688) (4 530)
Deferred tax asset write-down outside the normal course of business - (45 568)
Minority interests (3 393) 15 070
Profit (loss) for the period, Group share 95 818 (247 189)
CONSOLIDATED BALANCE SHEET

Assets
Net non-current assets (1) 2 178 118 2 426 379

Current assets 914 930 1 012 613
Other assets 301 709 331 909
Cash (2) 139 077 69 414
Total 3 533 834 3 840 315
Liabilities and shareholders' equity
Net worth (including minority interests) 1 485 635 1 646 660

Provisions 557 205 467 308
Gross financial debt (2) 785 697 960 587
Other liabilities 705 297 765 760
Total 3 533 834 3 840 315
(1) Of which mining assets 455 615 478 159

(2) i.e. net financial debt of 646 620 891 173
2 SIBELCO FINANCIAL REPORT 2017

CASH FLOW STATEMENT AND CHANGE IN NET FINANCIAL DEBT
REBIT 282 690 145 000
Depreciation, amortisation and depletion 258 739 283 146
EBITDA 541 429 428 146
Income taxes (paid)/received (72 859) (44 034)

Capex (204 229) (240 278)
Proceeds from sale of PPE 19 477 11 402
Working capital changes 53 356 79 556
Use of provisions (24 284) (45 429)
Additional provisions 7 368 60 115
Add back revisions of provisions (4 456) (9 097)
Cash contributions to defined benefit plans (19 187) (18 853)
Add back pension expenses in EBITDA 31 700 17 409
Acquisitions of subsidiaries / non controlling interests (3 065) -
Disposal of subsidiaries / associates 9 323 11 397
Other non-cash items (19 677) (73 430)
Free operating cash flow 314 896 176 904
Interest (paid)/received (39 520) (51 137)

Purchase of treasury shares - (410)
Dividends received 2 344 14
Dividends paid (63 979) (58 961)
Other items 1 937 2 742
Net debt decrease (increase) 215 678 69 152
Opening net financial debt at 1 January 891 173 957 749
Change in net financial debt (215 678) (69 152)

Scope changes - (5 898)
Exchange rate fluctuations and other (28 875) 8 474
Closing net financial debt at 31 December 646 620 891 173
3
CONSOLIDATED FINANCIAL
STATEMENTS 2017
CONSOLIDATED STATEMENT OF INCOME

FOR THE YEAR ENDED 31 DECEMBER
In thousands of euro Note 2O17 2O16

Continuing operations
Revenue 8 3 083 004 2 725 702
Cost of sales ( - ) 8 (2 461 289) (2 266 237)
Gross profit 621 715 459 465
Other operating income 9 35 517 50 012

SG&A expenses ( - ) 8 (355 838) (321 981)
Other operating expenses ( - ) 10 (143 945) (340 171)
EBIT 157 449 (152 675)
Financial income 13 12 483 991

Financial (expense) 13 (64 017) (71 957)
Share of profit of equity-accounted investees (net of tax) 18 2 028 1 317
Profit (loss) before income taxes 107 943 (222 324)
Income taxes 14 (8 044) (35 405)
Profit (loss) for the period from continuing operations 99 899 (257 729)
Profit (loss) from discontinued operations 11 (688) (4 530)
Profit (loss) for the period 99 211 (262 259)
Attributable to:
Owners of the Company 95 818 (247 189)
Non-controlling interests 5 3 393 (15 070)
99 211 (262 259)
The notes on page 11 to 83 are an integral part of these consolidated financial statements

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Profit (loss) for the period 99 211 (262 259)
Other comprehensive income:
Other comprehensive income to be reclassified to profit or loss in subsequent periods

Foreign currency translation differences (174 710) 45 340
Effective portion of changes in fair value of cash flow hedges (4 163) 2 800
Fair value reserves AFS 13 (31) (53)
Income tax on other comprehensive income 240 (810)
Other comprehensive income not to be reclassified to profit or loss in subsequent periods
Remeasurements employee benefits, net of tax (14 065) (22 711)
(192 729) 24 566
Total comprehensive income for the period (93 518) (237 693)
Attributable to:
Owners of the Company (96 603) (222 672)
Non-controlling interests 3 085 (15 021)
(93 518) (237 693)
5
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Assets 3 533 834 3 840 315
Non-current assets 2 479 827 2 758 288

Property, plant and equipment 16 1 980 629 2 191 783
Intangible assets other than goodwill 17 131 338 157 197
Goodwill 17 66 151 77 399
Equity-accounted investees 18 27 629 37 409
Deferred tax assets 20 259 865 274 024
Non-current financial assets 19 3 516 4 908
Employee benefit assets 27 - 716
Other non-current assets 21 10 699 14 852
Current assets 1 054 007 1 082 027
Inventories 22 334 671 376 626
Current financial assets 19 3 922 17 403
Trade receivables 23 458 523 482 016
Other receivables 23 82 933 80 475
Current tax assets 15 31 325 41 426
Cash and cash equivalents 24 139 077 69 414
Assets classified as held for sale 11 3 556 14 667
Equity and liabilities 3 533 834 3 840 315
Equity attributable to equity holders of the company 25 1 479 538 1 643 723
Share capital 25 000 25 000
Share premium 12 12
Retained earnings and reserves 1 454 526 1 618 711
Non-controlling interests 5 6 097 2 937
Total equity 1 485 635 1 646 660
Non-current liabilities 1 371 125 1 525 160

Interest bearing loans & borrowings 26 659 945 814 988
Non-current provisions 28 324 559 245 333
Employee benefits 27 183 342 181 335
Deferred tax liabilities 20 185 543 264 991
Trade and other payables (non-current) 29 1 784 5 395
Other non-current liabilities 30 15 952 13 118
Current liabilities 677 074 668 495
Bank overdrafts 26 38 693 50 087
Interest bearing loans & borrowings (current) 26 82 136 97 889
Current provisions 28 49 304 40 640
Trade and other payables 29 471 313 432 234
Current tax liabilities 15 24 669 26 739
Other current liabilities 30 10 394 10 093
Liabilities associated with disposal groups held for sale 11 565 10 813

CONSOLIDATED STATEMENT OF EQUITY
Non-
Share Translation Hedging Reserve for Retained controlling
In thousands of euro Share capital premium reserve reserve Fair value own shares earnings Total interests Total equity
Balance as at 25 000 12 24 992 560 0 (65 216) 1 658 375 1 643 723 2 937 1 646 659
1 January 2017
Profit for the period - - - - - - 95 818 95 818 3 393 99 211
Foreign currency - - (174 402) - - - - (174 402) (308) (174 710)

translation differences
Cash flow hedges, - - - (3 923) - - - (3 923) - (3 923)
net of tax
Fair value changes, - - - - (31) - - (31) - (31)
net of tax
Remeasurements - - - - - - (14 065) (14 065) - (14 065)
employee benefits,
net of tax
Total other comprehensive - - (174 402) (3 923) (31) - (14 065) (192 421) (308) (192 729)
income
Total comprehensive - - (174 402) (3 923) (31) - 81 753 (96 603) 3 085 (93 518)
income for the period
Dividends to equity - - - - - - (63 841) (63 841) (307) (64 148)

holders
Capital decreases - - - - - - - - (1 375) (1 375)
Total contributions by and - - - - - - (63 841) (63 841) (1 682) (65 523)
distributions to owners
Acquisition of non- - - - - - - (1 953) (1 953) (1 112) (3 065)

controlling interest (note 3)
Disposals of non- - - - - - - - - 368 368
controlling interest
Other movements - - (1) (468) (3 258) - 1 939 (1 788) 2 501 713
Total transactions with - - (1) (468) (3 258) - (63 855) (67 582) 75 (67 507)
owners
Balance as at 25 000 12 (149 411) (3 831) (3 289) (65 216) 1 676 273 1 479 538 6 097 1 485 634
31 December 2017
For more information on Capital and reserves see note 25 Capital and Reserves.
7
Non-
Share Translation Hedging Reserve for Retained controlling
In thousands of euro Share capital premium reserve reserve Fair value own shares earnings Total interests Total equity
Balance as at 25 000 12 (20 299) (1 864) (64 806) 1 987 085 1 925 128 18 295 1 943 423
1 January 2016
Profit for the period - - - - - - (247 189) (247 189) (15 070) (262 259)
Foreign currency - - 45 291 - - - - 45 291 49 45 340

translation differences
Cash flow hedges, - - - 1 937 - - - 1 937 - 1 937
net of tax
Remeasurements - - - - - - (22 711) (22 711) - (22 711)
employee benefits,
net of tax
Total other comprehensive - - 45 291 1 937 - - (22 711) 24 517 49 24 566

income
Total comprehensive - - 45 291 1 937 - - (269 900) (222 672) (15 021) (237 693)
income for the period
Own shares acquired - - - - - (410) - (410) - (410)

Dividends to equity - - - - - - (59 617) (59 617) (261) (59 878)
holders
Capital increases - - - - - - - - - -
Total contributions by and - - - - - (410) (59 617) (60 027) (261) (60 288)
distributions to owners
Acquisition of non- - - - - - - - - - -
controlling interest (note 3)
Non-controlling final - - - - - - - - - -
PPA adjustment (note 3)
Other movements - - - 487 - - 807 1 294 (76) 1 218
Total transactions with - - - 487 - (410) (58 810) (58 733) (337) (59 070)
owners
Balance as at 25 000 12 24 992 560 - (65 216) 1 658 375 1 643 723 2 937 1 646 659
31 December 2017

CONSOLIDATED STATEMENT OF CASH FLOW
Profit for the period 99 211 (262 259)
Adjustments for:
Amortisation, depreciation and impairment 16, 17 348 573 485 209
Provisions and employee benefits 27, 28 51 279 51 018
Loss/(gain) on sale of property, plant & equipment (7 676) (6 525)
Share of profit of equity accounted investees (net of tax) 18 (2 028) (1 317)
Financial result 13 51 534 70 966
Profit (loss) after tax from discontinued operations 688 -
Income taxes 14 8 044 35 405
Other non-cash items 5 268 41 123
Operating cash flow before working capital changes 554 893 413 620
Changes in inventories 8 171 44 155
Changes in trade and other receivables 10 236 9 719
Changes in trade and other payables 34 162 25 682
Proceeds/payments forex risk hedges 787 -
Working capital changes 53 356 79 556
Use of provisions 28 (24 284) (45 429)
Contributions pensions 27 (19 187) (18 853)
Operating cash flow 564 778 428 894
Income taxes (paid)/received (72 859) (44 034)
Interest received 2 866 -
Net cash from operating activities 494 785 384 860
Proceeds from sale of property, plant & equipment 19 218 8 073

Proceeds from sale of intangible assets 259 3 329
Sale of subsidiaries, net of cash disposed of 4 8 552 11 397
Sale of associates 18 771 -
Other proceeds 2 798 1 961
Dividends received 2 344 14
Investing cash inflows 33 942 24 774
Acquisition of property, plant and equipment 16 (195 180) (234 232)
Acquisition of intangible assets 17 (9 049) (6 046)
Changes in other non-current assets (176) 4 975
Investing cash outflows (204 405) (235 303)
Net cash used in investing activities (170 463) (210 529)
9
CONSOLIDATED STATEMENT OF CASH FLOW (CONTINUED)

Increase (decrease) of granted loans (435) 191
Drawing of borrowings 12 687 -
Repayment of borrowings (124 069) (56 523)
Increase (decrease) of finance lease liabilities (1 989) (2 389)
Increase of long term payables (1 724) 5 138
Interest paid (42 387) (51 137)
Purchase of non-controlling interests 3 (3 065) -
Purchase of treasury shares - (410)
Dividends paid to shareholders (63 979) (58 961)
Net cash used in financing activities (224 961) (164 091)
Net increase/(decrease) in cash and cash equivalents 99 362 10 240
Cash and cash equivalents at beginning of the period 69 414 64 791
Net increase/(decrease) in cash and cash equivalents 99 362 10 240

Scope changes 3 80 -
Disposal of subsidiaries and other businesses 8 739 (4 274)
Effect on exchange rate fluctuations on cash held (39 094) (1 343)
Difference in opening balance 576 -
Cash and cash equivalents at end of the period 24 139 077 69 414

1 SIGNIFICANT ACCOUNTING POLICIES
SCR-Sibelco N.V. (“the Company”) is a company domiciled in the period in which the estimate is revised if the revision affects only
Belgium, Plantin en Moretuslei 1a, BE-2018 Antwerp, Belgium. The that period, or in the period of the revision and future periods if the
consolidated financial statements of the Company comprise the revision affects both current and future periods.
Company and its subsidiaries (together referred to as the “Group”) Judgements made by management in the application of IFRSs that
and the Group’s interests in associated entities and jointly controlled have significant effect on the financial statements and estimates with
entities. The consolidated financial statements as at and for the year a significant risk of material adjustment in the next year are discussed
ended December 31, 2017 were authorized for issue by the Board of in each note whenever relevant.
Directors on 15 March 2018. Information about assumptions and estimation uncertainties that have
The Group is principally engaged in the exploration for, development a significant risk of resulting in a material adjustment within the next
of and production of industrial minerals and serves its customers financial year are included in the following notes:
in the glass, ceramics, energy, metal & casting, construction & Q note 17 – key assumptions used in the impairment test for cash
engineering, chemical, electronics and other industries. generating units;
Q note 20 – utilisation of tax losses;
Q note 27 – employee benefits;
A. STATEMENT OF COMPLIANCE Q note 28 – provisions for site restoration and plant demolition;
The consolidated financial statements have been prepared in Q note 31 – financial instruments.
accordance with International Financial Reporting Standards (IFRSs), Non-recurring items are those that in management’s judgement need
as adopted by the European Union. to be disclosed and are determined by the nature of the item or their
incidence. Such items are disclosed separately in the notes to the
financial statements (see note 9 Other operating income and note 10
B. BASIS OF PREPARATION Other operating expenses).
Non-recurring items are income or expense that arise from events
I. BASIS OF MEASUREMENT that are clearly distinct from ordinary activities, not expected to recur
The consolidated financial statements are presented in euro, which frequently and that are unpredictable and unusual. Events which may
is the Company’s functional currency, and are rounded to the nearest give rise to non-recurring items are principally:
thousand, except when otherwise indicated. They are prepared on Q Natural disasters and fire;
the historical cost basis except for derivative financial instruments, Q Decisions taken by local authorities which reduce or restrict the
financial liabilities at fair value through profit or loss and greenhouse Group’s rights on assets and which are out of the Group’s control;
gas emissions rights that have been measured at fair value (see Q Decisions to discontinue operations;
note 13 Net financing costs). Q Disposal of legal entities, cash-generating units or major parts of a
cash-generating unit; and
II. JUDGEMENTS, ESTIMATES AND ASSUMPTIONS Q Restructuring programmes.
The preparation of financial statements in conformity with IFRSs The accounting policies have been applied consistently to all periods
requires management to make judgements, estimates and presented in these consolidated financial statements and have been
assumptions that affect the application of policies and reported applied consistently by Group entities.
amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical III. CHANGES IN ACCOUNTING POLICIES AND DISCLOSURES
experience and various other factors that are believed to be
reasonable under the circumstances, the results of which form the RESTATEMENT OF REVISIONS AND REVERSALS OF PROVISIONS
basis of making the judgements about carrying values of assets and As from 2017 onwards, revisions to provisions for site restoration
liabilities that are not readily apparent from other sources. Actual and reversals of provisions are allocated to either the cost of
results may differ from these estimates. sales or SG&A function (see note 8 Revenue, Cost of sales and
The estimates and underlying assumptions are reviewed on an on- SG&A expenses) instead of other operating expense (note 10
going basis. Revisions to accounting estimates are recognised in Other operating expenses - for revisions site restoration provision
11
or operating income (note 9 Other operating income - for income or expenses (respectively note 9 Other operating
reversals of provisions). income or note 10 Other operating expenses).
Similarly, as from 2017, gains/(losses) on disposal of The impact of these restatements are as follows:
subsidiaries and equity companies are presented as financial
result (note 13 Net financing costs) instead of other operating
In thousands of euro 2O17 2O16 2O16

Other operating income Note Restated As reported
By-products 662 969 969
Royalties an rentals 86 1 088 1 088
Government grants 914 489 489
Gain on disposal of fixed assets 16,17 3 537 8 008 8 008
Non-recurring: disposal of assets held for sale 11 4 921 - -
Reversal of provisions 28 - 9 097 9 097
Non-recurring reversal of provisions 28 2 213 - -
Non-recurring: disposal of subsidiaries 4 - - 11 664
Other operating income 23 184 16 283 16 283
Other non-recurring - 2 113 2 113
Net foreign exchange gains - 301 301
Total 35 517 38 348 50 012

Other operating expense Note Restated As reported
Loss on disposal of fixed assets 16,17 782 1 483 1 483
Non-recurring impairment losses on property, plant and 16 77 295 165 241 165 241
equipment
Non-recurring impairment losses on intangible assets and 17 11 109 56 250 56 250
goodwill
Additions to provisions 28 - 20 580 20 580
Non-recurring additions to provisions 28 23 221 35 307 35 307
Non-recurring disposals of subsidiaries 4 - - 11 409
Other operating expense 28 9 489 6 254 6 254
Other non-recurring 4 20 750 43 245 43 245
Net foreign exchange losses 1 299 402 402
Total 143 945 328 762 340 171

Net financing costs Note Restated As reported
Interest income on cash and cash equivalents 1 412 - -
Dividend income 21 14 14
Net foreign exchange gains - 977 977
Gain on disposal/liquidation of financial assets 4 9 654 11 664 -
Other financial income 1 395 - -
Financial income 12 483 12 655 991
Interest expense on financial liabilities (29 967) (49 547) (49 547)
Net foreign exchange losses (4 658) - -
Change in fair value of net non-current assets classified 11 (719) - -
as held for sale
Net change in fair value of derivatives and financial (1 771) (1 469) (1 469)
assets
Unwinding of the discount rate provisions 28 (7 836) (8 119) (8 119)
Change in discount rate provisions 28 (10 334) (897) (897)
Net interest expense on defined benefit liability 27 (4 485) (4 994) (4 994)
Loss on disposal/liquidation of financial assets 4 - (11 409) -
Other financial expense (4 246) (6 931) (6 931)
Financial expense (64 017) (83 366) (71 957)
Net finance cost (51 534) (70 711) (70 966)
NEW AND AMENDED STANDARDS AND INTERPRETATIONS AMENDMENTS TO IAS 7 STATEMENT OF CASH FLOWS – DISCLOSURE
The Group applied for the first time certain standards and INITIATIVE
amendments, which are effective for annual periods beginning on The amendments require entities to provide disclosure of changes
or after 1 January 2017. The Group has not early adopted any other in their liabilities arising from financing activities, including both
standard, interpretation or amendment that has been issued but not changes arising from cash flows and non-cash changes (such as
yet effective. foreign exchange gains and losses). The Group has provided the
The Group only lists and addresses those new and amended information in Note 26 Interest-bearing loans and borrowings).
standards and interpretations that are relevant to the Group’s financial
position, performance and/or disclosures. Although these new AMENDMENTS TO IAS 12 INCOME TAXES – RECOGNITION OF
standards and amendments applied for the first time in 2017, they DEFERRED TAX ASSETS FOR UNREALISED LOSSES
did not have a material impact on the annual consolidated financial The amendments clarify that an entity needs to consider whether
statements of the Group. law restricts the sources of taxable profits against which it may make
The nature and the impact of each new standard and amendment is deductions on the reversal of deductible temporary difference related
described below: to unrealised losses. Furthermore, the amendments provide guidance
on how an entity should determine future taxable profits and explain
the circumstances in which taxable profit may include the recovery of
some assets for more than their carrying amount.
The Group applied amendments retrospectively. Their application has
no effect on the Group’s financial position and performance.
13
IV. PRESENTATION CURRENT AND NON-CURRENT ASSETS AND Q The Group’s voting rights and potential voting rights.
LIABILITIES The Group reassesses whether or not it controls an investee if facts
The Group has presented current and non-current assets, and and circumstances indicate that there are changes to one or more of
current and non-current liabilities, as separate classifications in the the three elements of control. Consolidation of a subsidiary begins
statement of financial position. The Group has elected to present when the Group obtains control over the subsidiary and ceases when
non-current assets and liabilities before current assets and liabilities. the Group loses control of the subsidiary. Assets, liabilities, income
An asset is current when it is either: and expenses of a subsidiary acquired or disposed of during the
Q Expected to be realized or intended to be sold or consumed in year are included in the consolidated statement of profit or loss and
the normal operating cycle; other comprehensive income from the date the Group gains control
Q Held primarily for the purpose of trading; until the date the Group ceases to control the subsidiary.
Q Expected to be realized within 12 months after the reporting Where the Group’s interest is less than 100 percent, the interest
period; attributable to outside shareholders is reflected as non-controlling
Q Cash or cash equivalent, unless restricted from being exchanged interests.
or used to settle a liability for at least 12 months after the reporting Losses applicable to the non-controlling interests in a subsidiary are
period. allocated to the non-controlling interests, even if doing so causes the
All other assets are classified as non-current. non-controlling interests to have a deficit balance.
A liability is current when either: A change in the ownership interest of a subsidiary, without a loss of
Q It is expected to be settled in the normal operating cycle; control, is accounted for as an equity transaction.
Q It is held primarily for the purpose of trading; If the Group loses control over a subsidiary, it derecognises the
Q It is due to be settled within 12 months after the reporting period. related assets (including goodwill), liabilities, non-controlling interest
The Group classifies all other liabilities as non-current. and other components of equity, while any resultant gain or loss is
Deferred tax assets and liabilities are classified as non-current assets recognised in profit or loss. Any investment retained is recognised at
and liabilities. fair value.
II. JOINT OPERATIONS

C. BASIS OF CONSOLIDATION The Group undertakes a number of business activities through joint
arrangements. A joint arrangement is an arrangement over which two
I. SUBSIDIARIESS or more parties have joint control. Joint control is the contractually
The consolidated financial statements comprise the financial agreed sharing of control over an arrangement, which exists only
statements of the Group as at 31 December 2017. Control is when the decisions about the relevant activities (being those that
achieved when the Group is exposed, or has rights, to variable significantly affect the returns of the arrangement) require the
returns from its involvement with the investee and has the ability to unanimous consent of the parties sharing control.
affect those returns through its power over the investee. Specifically, A joint operation is a type of joint arrangement whereby the parties
the Group controls an investee if, and only if, the Group has all of the that have joint control of the arrangement have rights to the assets
following: and obligations for the liabilities, relating to the arrangement.
Q Power over the investee (i.e., existing rights that give it the current In relation to its interests in joint operations, the Group recognises its:
ability to direct the relevant activities of the investee); Q Assets, including its share of any assets held jointly;
Q Exposure, or rights, to variable returns from its involvement with Q Liabilities, including its share of any liabilities incurred jointly;
the investee; Q Revenue from the sale of its share of the output arising from the
Q The ability to use its power over the investee to affect its returns. joint operation;
When the Group has less than a majority of the voting, or Q Share of the revenue from the sale of the output by the joint
similar, rights of an investee, it considers all relevant facts and operation;
circumstances in assessing whether it has power over an investee, Q Expenses, including its share of any expenses incurred jointly.
including:
Q The contractual arrangement(s) with the other vote holders of the III. EQUITY ACCOUNTED INVESTEES
investee; Associates are those entities in which the Group has significant
Q Rights arising from other contractual arrangements; influence, but not control or joint control, over the financial and

operating policies. Significant influence is presumed to exist when available-for-sale equity instruments or a financial liability designated
the Group holds, directly or indirectly through subsidiaries, twenty as a hedge of the net investment in a foreign operation (see o iii
percent or more of the voting power. Joint ventures are those entities below).
over whose activities the Group has joint control. Non-monetary items which are carried at fair value are converted
Associates and joint ventures are both accounted for by the Group using the exchange rates existing when the values were determined.
using the equity method of accounting. Under this method, the Non-monetary items which result from transactions which took place
investment is initially recorded at cost and adjusted thereafter for the in a foreign currency, but which are carried at historical cost, are
post-acquisition changes in the Group’s share of the net assets of the reported using the exchange rate at the date of the transaction.
associate or joint venture. The consolidated financial statements of
the Group include the Group’s share of the profit or loss and equity II. FOREIGN OPERATIONS
movements in the equity accounted investee. The consolidated The income and expenses of foreign operations are translated to
financial statements include the associates or joint venture from euro at average exchange rates. The assets and liabilities of foreign
the date that significant influence commences until the date that operations, including goodwill and fair value adjustments arising on
significant influence ceases. the acquisition of a foreign entity, are translated to euro at exchange
The Group’s investments in associates or joint venture include rates at the reporting date.
goodwill (net of impairment) on acquisition. Foreign exchange differences arising on translation are recognised in
When the Group’s share of losses exceeds the carrying amount of other comprehensive income, and presented in the foreign currency
the equity accounted investee, the carrying amount of the Group’s translation reserve (translation reserve) in equity. When a foreign
interest (including any long-term investments) is reduced to nil and operation is disposed of, in part or in full, the cumulative amount in
recognition of further losses is discontinued, except to the extent that the translation reserve is reclassified to profit or loss as part of the
the Group has incurred legal or constructive obligations or made gain or loss on disposal.
payments on behalf of the investee.
Goodwill on acquisitions of associates is included in the carrying
amount of investments in associates. E. INTANGIBLE ASSETS
IV. TRANSACTIONS ELIMINATED ON CONSOLIDATION I. RECOGNITION AND MEASUREMENT

Intra-group balances and transactions, and any unrealised income Intangible assets are recognised when the asset is identifiable,
and expenses arising from intra-group transactions, are eliminated in controlled by the Group, it is probable that future economic benefits
preparing the consolidated financial statements. specifically attributable to the asset will flow to the Group and when
Unrealised gains arising from transactions with equity accounted the cost of the asset can be measured reliably.
investees are eliminated against the investment to the extent of the All costs related to intangible resources which do not meet the
Group’s interest in the entity. Unrealised losses are eliminated in the recognition criteria are recognised as expenses and are not
same way as unrealised gains, but only to the extent that there is no subsequently reinstated as an asset.
evidence of impairment. Intangible assets which have been recognised as assets are not
subsequently revalued.
The carrying values of intangible assets are reviewed for impairment
D. FOREIGN CURRENCY TRANSLATION when events or changes in circumstances indicate that the carrying
value may not be recoverable (see accounting policy k).
I. FOREIGN CURRENCY TRANSACTIONS Subsequent expenditure on capitalised intangible assets is
Transactions in foreign currencies are recorded in the respective capitalised only when it meets the recognition criteria of intangible
functional currency at the spot rate ruling at the date of the assets (see above). All other expenditure is expensed as incurred.
transaction. Intangible assets acquired in a business combination are initially
Monetary assets and liabilities denominated in foreign currencies recognised at fair value.
are converted to the functional currency using the closing rate
at the balance sheet date. Foreign exchange differences arising II. INTANGIBLE ASSETS IN RESPECT OF MINING ACTIVITIES
on translation are recognised in profit or loss (as finance income Pre-acquisition prospecting, evaluation and exploration costs are
or expense), except for differences arising on the retranslation of charged to expense when incurred.
15
Acquisition of mineral rights includes legal rights to explore for, III. RESEARCH AND DEVELOPMENT COSTS
develop, and produce wasting resources on a mineral property. Costs relating to research activities, undertaken with the prospect of
Direct costs, license costs and all costs which are incurred in gaining new scientific or technical knowledge and understanding, are
acquiring legal rights to undeveloped mineral properties are expensed to the statement of income as incurred.
capitalised as intangible assets. Expenditure on development activities, whereby research findings are
Mineral rights and mineral properties shall be recognised as applied to a plan or design for the production of new or substantially
identifiable assets provided that the carrying value is expected to improved products and processes, is capitalised if development
be recovered through successful development and exploitation or costs can be measured reliably, the product or process is technically
exploration and evaluation activities have, at balance sheet date, and commercially feasible, future economic benefits are probable
reached a stage which permits a reasonable assessment of the and the Group intends to and has sufficient resources to complete
existence of reserves and resources and active significant operations development and to use or sell the asset. The expenditure capitalised
are continuing. includes the cost of materials, direct labour and an appropriate
Other potential reserves and resources and mineral rights, for which, proportion of overheads. Other development expenditure is
in the Exco’s opinion, values cannot reliably be determined, are recognised in profit or loss as incurred. Capitalised development
recognised as expense in profit or loss. expenditure is stated at cost less accumulated amortisation (see
Post-acquisition exploration and evaluation (E&E) costs are initially below) and impairment losses (see accounting policy k).
recognised as an intangible asset pending the determination of
whether commercially recoverable reserves have been found. IV. COMPUTER SOFTWARE
Post-acquisition E&E comprises following activities: Expenditure on development activities within an ICT project
Q Researching and analysing historical exploration data; are capitalised if the criteria for capitalisation of research and
Q Gathering exploration data through geophysical studies; development costs (see research and development costs) are met.
Q Exploratory drilling and sampling;
Q Determining and examining the volume and grade of the resource; V. AMORTISATION
Q Surveying transportation and infrastructure requirements; Intangible assets which have an indefinite useful life are not
Q Conducting market and finance studies. amortised but are subject to annual impairment testing.
To justify a continuing presumption of future economic benefits of Intangible assets which have a finite useful life are amortised from
deferred post-acquisition exploration and evaluation costs, costs the date they are available for use using the straight-line method over
can only be deferred while further activity in the mineral deposit is their useful lives. The estimated useful lives are as follows:
planned and the post-acquisition exploration and evaluation activities
are expected to result in commercial reserves within two years. Mineral rights and post-acquisition Physical unit-of-production
Amortisation of capitalised acquisition costs of mineral rights exploration and evaluation costs method
commences as soon as the first unit in a saleable form is produced Development expenses 5 years
and are amortised on a units of production basis. Marketing related intangible assets 5 years
Capitalised post-acquisition exploration and evaluation costs remain Customer related intangible assets 5 years or if acquired through
unamortized until commercially recoverable reserves are found. a business combination over
At the time of assessment of insufficient potential for commercial the DCF model horizon up to
exploitation capitalised costs are expensed (no reinstatement when a maximum of 10 years
subsequently reserves are found). Contract-based intangible assets Over estimated economic
Once exploitation, starts and the proven reserves are estimated or legal life (contract terms),
the capitalised amounts are amortised using the unit-of-production whichever is shorter, up to a
method, except for capitalised construction costs for which a maximum of 10 years
straight-line depreciation over useful live is applied. Computer software 3 years

F. EMISSION RIGHTS Goodwill is measured at cost less any accumulated impairment
losses. Goodwill is not amortised, but instead the Group tests it
Sibelco recognises a provision for emission in case it has caused for impairment annually or more frequently if events or changes in
emissions in excess of emission rights granted. The provision is circumstances indicate that it might be impaired (see accounting
measured at the fair value (market price) of emission rights necessary policy k).
to compensate for that shortfall. The carrying amount of goodwill is allocated to a plant or mineral
Emission rights held are accounted for as follows: deposit or groups of plants and mineral deposits (cash-generating
Q Emission rights allocated for free by national authorities are unit) that are expected to benefit from the synergies of the
accounted for as non-monetary government grants at its nominal combination. The manner in which the goodwill is allocated to each
value of nil; plant or mineral deposit or groups of plants and mineral deposits
Q Emission rights purchased from other parties are accounted for represents the lowest level within a Group’s entity at which the
at cost. If they are dedicated to offset a provision for in excess goodwill is monitored for internal management purposes.
emission, they are deemed to be “reimbursement rights” and are Acquisitions of non-controlling interests are accounted for as
accounted for at fair value; transactions with owners in their capacity as owners and therefore no
Q Proceeds from disposal of excess rights are recognised when goodwill is recognised as a result of such transactions.
incurred in current operating income at the sales price.
Deficits are measured based on an allocation that covers the entire
period of the scheme provided that the entity is unconditionally H. NON-DERIVATIVE FINANCIAL ASSETS
entitled to all the allowances for the period concerned.
Each category of non-derivative financial assets is accounted for
at trade date. Non-derivative financial instruments are recognised
G. GOODWILL initially at fair value plus, for instruments not at fair value through
profit or loss, any directly attributable transaction costs, except as
Business combinations are accounted for using the acquisition described below. Subsequent to initial recognition non-derivative
method as at the acquisition date, which is the date on which control financial instruments are measured as described below.
is transferred to the Group. The Group derecognizes a financial asset when the contractual rights
For acquisitions on or after 1 January 2010, the Group measures to the cash flows from the asset expire.
goodwill at the acquisition date as: Financial assets and liabilities are offset and the net amount
Q The fair value of consideration transferred; plus presented in the statement of financial position when, and only when,
Q The recognised amount of any non-controlling interests in the the Group has a legal right to offset the amounts and intends either
acquiree (for each business combination, the Group elects to settle on a net basis or to realise the asset and settle the liability
whether to measure the non-controlling interests in the acquiree simultaneously.
at fair value or at the proportionate share of the acquiree’s
identifiable net assets); plus I. INVESTMENTS IN EQUITY SECURITIES
Q If the business combination is achieved in stages, the fair value of Investments in equity securities are undertakings in which the Group
the existing equity interest in the acquiree; less does not have significant influence, joint control or control. This is
Q The net recognised amount (generally fair value) of the identifiable generally evidenced by ownership of less than 20 percent of the
assets acquired and liabilities assumed. voting rights. Such investments are designated as available-for-sale
When the excess is negative, a bargain purchase price is financial assets and are recorded at their fair value unless the fair
immediately recognised in profit or loss. value cannot be reliably determined in which case they are carried
Costs related to the acquisition, other than those associated with the at cost less impairment losses. Impairment losses are recorded in
issue of debt or equity securities, that the Group incurs in connection profit or loss. Changes in fair value other than impairment losses
with a business combination are expensed as incurred. (see above) and foreign exchange differences are recognised in
Any contingent consideration payable is recognised at fair value at other comprehensive income and presented in the fair value reserve
the acquisition date. Subsequent changes to the fair value of the in equity. On disposal of an investment, the difference between the
contingent consideration are recognised in profit or loss.
17
net disposal proceeds and the carrying amount, together with the I. PROPERTY, PLANT AND EQUIPMENT
cumulative gain or loss in equity, is reclassified to profit or loss.
I. RECOGNITION AND MEASUREMENT
II. INVESTMENTS IN DEBT SECURITIES All property, plant and equipment are recorded at historical cost less
Investments in debt securities classified as at fair value through accumulated depreciation (see below) and impairment losses (see
profit of loss or as being available-for-sale are stated at fair value, accounting policy k).
with any resulting gain or loss respectively recorded in profit or loss Safety and environmental expenditure is capitalised when the item is
or in other comprehensive income and presented in the fair value needed to obtain future economic benefits from other assets.
reserve in equity. The fair value of such investment is their quoted bid Items such as spare parts, stand-by equipment and servicing
price at the reporting date. Impairment losses are recognised in the equipment are recognised as property, plant and equipment if they
statement of income. When an investment in debt securities classified are expected to be used during more than one reporting period, their
as available-for-sale is derecognised, the cumulative gain or loss in cost can be measured reliably and it is probable that future economic
equity is transferred to profit or loss. benefits associated with the item will flow to the Group.
Investments in debt securities for which the Group has the positive The cost of an item of property, plant and equipment includes
intent and ability to hold them to maturity, are classified as held-to- expenditures that are directly attributable to the acquisition of the
maturity and stated at amortized cost, less any impairment losses. asset and where relevant, the costs of dismantling and removing
the asset and restoring the site on which that asset is located, and
III. OTHER INVESTMENTS capitalised borrowing costs.
Other investments held by the company are classified as being Property, plant and equipment are not subsequently revalued.
available-for-sale and are stated at fair value, with any resulting gain Where parts of an item of property, plant and equipment have
or loss, other than foreign exchange differences on available-for-sale different useful lives, they are accounted for as separate items of
monetary assets, recognised in other comprehensive income and property, plant and equipment.
presented in the fair value reserve in equity. Impairment losses are The Group recognizes in the carrying amount of an item of property,
recognised in profit or loss. At derecognition of any other investment, plant and equipment the cost of replacing part of such an item when
the cumulative gain or loss in equity is transferred to profit or loss. that cost is incurred, if it is probable that the future economic benefits
Investments in equity instruments that do not have a quoted price in embodied with the item will flow to the Group and when the cost of
an active market and whose fair value cannot be reliably measured, the item can be measured reliably. All other costs are recognised in
shall be measured at cost. profit or loss as an expense as incurred.
Property, plant and equipment acquired in a business combination is
IV. TRADE AND OTHER RECEIVABLES recognised at fair value at the acquisition date.
Trade and other receivables are stated at their amortised cost less
impairment losses (see accounting policy k). II. PROPERTY, PLANT AND EQUIPMENT IN RESPECT OF MINING
ACTIVITIES
V. CASH AND CASH EQUIVALENTS Acquisition of mineral property includes the costs incurred to
Cash and cash equivalents comprises cash balances and call purchase or lease mineral properties to explore for, develop, and
deposits with maturities of three months or less that are subject to an produce wasting resources.
insignificant risk of changes in their fair value, and are used by the Development activities include costs for the establishment of access
Group in the management of its short term commitments. to the mineral reserves and for other preparations before commercial
For the purpose of the consolidated statement of cash flows, cash production. In general all development costs are capitalised and
and cash equivalents consist of cash and short-term deposits, amortised on a units of production basis.
as defined above, net of outstanding bank overdrafts as they are Initial stripping costs at new mines and at operating mines outside
considered an integral part of the Group’s cash management. existing pit limits, that are expected to benefit future production
beyond a minimum of one year, are capitalised as part of the costs of
developing and amortised on a units of production basis.
Ongoing stripping costs to maintain production of operating mines
are expensed to the statement of income when the stripping ratio

(ratio of minerals extracted to overburden or waste material) over the Land which is not intended for mining activities is not depreciated.
life of the mine is expected to be relatively even. Depreciation methods, useful lives and residual values are
Ongoing stripping costs are deferred using a life-of-mine based reassessed at the reporting date.
accounting model when the stripping ratio varies substantially during
the life of a mine. It involves deferring costs when the actual stripping
ratio incurred exceeds the expected average life-of-mine stripping J. LEASES
ratio or recording a liability when the actual stripping ratio is less than
the expected average life-of-mine ratio. Finance leases, which transfer to the Group substantially all the
risks and rewards incidental to ownership of the leased item, are
III. DEPRECIATION capitalised at the inception of the lease at the fair value of the leased
Items of property, plant and equipment, other than mineral properties property or, if lower, at the present value of the minimum lease
and mining development costs, are depreciated in profit or loss as payments.
from the date the asset is available for use using the straight-line Capitalised leased assets are depreciated over the estimated useful
method over the estimated useful life of the asset. life of the asset, which is consistent with that of owned depreciable
Mineral properties are depreciated as from the start of production assets if there is reasonable certainty that the lessee will take
by the proportion that the mineral reserves extracted in a period, ownership at the end of the lease term; otherwise over the shorter of
correspond to total mineral reserves (physical unit-of-production the useful life and the lease term. Minimum lease payments made
method). Under the unit-of-production method the mineral reserves under finance leases are apportioned between the finance expense
base used to depreciate includes the proven (both developed and and the reduction of the outstanding liability.
undeveloped) and probable reserves. Mineral properties remain Leases where the lessor retains substantially all the risks and
undepreciated until commercially recoverable reserves are extracted. rewards of ownership of the asset are classified as operating leases.
The Group assesses the stage of each mine under development/ Operating lease payments are recognised as an expense in profit or
construction to determine when a mine moves into the production loss on a straight-line basis over the lease term.
phase, this being when the mine is substantially complete and ready
for its intended use. The criteria used to assess the start date are
determined based on the unique nature of each mine development/ K. IMPAIRMENT
construction project, such as the complexity of the project and
its location. At this point, all related amounts are reclassified from At each reporting date, the Group assesses the carrying amount
‘Assets under construction’ to ‘Mineral Properties’. of its assets, other than inventories (see accounting policy l) and
Capitalised development costs are also depreciated on a unit-of- deferred tax assets (see accounting policy t), to determine whether
production basis. there is any external or internal indication that those assets have
At the time of assessment of insufficient potential for commercial been impaired.
exploitation capitalised costs are expensed (no reinstatement when If any such indication exists, the recoverable amount of the asset is
subsequently reserves are found). estimated and compared to its carrying value in order to determine
Estimated residual salvage values are taken into account in the extent of the impairment loss (if any). For goodwill, and intangible
determining depreciation. assets that have indefinite useful lives or that are not yet available for
The estimated useful lives are as follows: use, the recoverable amount is estimated each year at the same time
Mineral property Physical unit-of-production in December.
method Where it is not possible to estimate the recoverable amount of an
Mining development costs Physical unit-of-production individual asset, the Group estimates the recoverable amount of the
method cash-generating unit to which the asset belongs.
Administrative buildings 30 years
Plant and processing equipment 5 and 12 years I. DETERMINATION OF RECOVERABLE AMOUNT
Mobile equipment 5 years A financial asset is impaired if objective evidence indicates that a
Laboratory equipment 7 years loss event has occurred after the initial recognition of the asset, and
Railroad equipment 10 – 25 years that the loss event had a negative effect on the estimated future cash
19
flows of that asset that can be estimated reliably. Objective evidence cash generating units) and then, to reduce the carrying amount of the
that financial assets (including equity securities) are impaired can other assets in the unit (cluster of cash generating units) on a pro rata
include default or delinquency by a debtor, restructuring of an basis. Impairment losses are immediately recognised in profit or loss.
amount due to the Group on terms that the Group would not consider After the recognition of an impairment loss, the depreciation
otherwise, indications that a debtor or issuer will enter bankruptcy, charge for the asset is adjusted in future periods to allocate the
the disappearance of an active market for a security. In addition, for asset’s revised carrying amount, less its residual value (if any), on a
an investment in an equity security, a significant or prolonged decline systematic basis over its remaining useful life.
in its fair value below its cost is objective evidence of impairment.
The recoverable amount of the Group’s investments in held-to- II. REVERSAL OF IMPAIRMENT
maturity securities and receivables carried at amortised cost is An impairment loss in respect of a held-to-maturity security or
calculated as the present value of estimated future cash flows, receivable carried at amortised cost is reversed if the subsequent
discounted at the original effective interest rate (i.e., the effective increase in recoverable amount can be related objectively to an event
interest rate computed at initial recognition of these financial occurring after the impairment loss was recognised.
assets). Receivables with a short duration are not discounted. The If the fair value of a debt instrument classified as available-for-sale
recoverable amount of available-for-sale financial assets is their increases and the increase can be objectively related to an event
current fair value. All impairment losses are recognised in profit or occurring after the impairment loss was recognised in profit or loss,
loss. Any cumulative loss in respect of an available-for-sale financial the impairment loss shall be reversed, with the amount of the reversal
asset recognised previously in equity is transferred to profit or loss. recognised in profit or loss. However, any subsequent recovery
Individually significant financial assets are tested for impairment on in the fair value of an impaired available-for-sale equity security is
an individual basis. The remaining financial assets are assessed recognised in other comprehensive income.
collectively in groups that share similar credit risk characteristics. An impairment loss in respect of goodwill is not reversed.
The recoverable amount of other assets is the greater of their fair In respect of other assets, where an impairment loss subsequently
value less costs of disposal and value in use. reverses as a result of a change in the estimates used to determine
The fair value less costs of disposal is the amount obtainable the recoverable amount, the carrying amount of the asset (cash-
from the sale of an asset in an arm’s length transaction between generating unit) is increased to the revised estimate of its recoverable
knowledgeable, willing parties, less the costs of disposal. amount, but so that the increased carrying amount does not exceed
In assessing value in use, the estimated future cash flows generated the carrying amount that would have been determined (net of
by the asset are discounted to their present value using a pre-tax depreciation) if no impairment loss had been recognised for the asset
discount rate that reflects current market assessments of the time (cash-generating unit) in prior years.
value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows,
the recoverable amount is determined for the cash-generating unit or L. INVENTORIES
a cluster of cash generating units to which the asset belongs.
Estimated future cash flows are based on proven and probable I. RECOGNITION AND MEASUREMENT
reserve quantities as per the most recent life of the mine plan in Inventories are measured at the lower of cost and net realisable
determining the value in use of mineral properties. Future cash flows value.
of mineral properties include estimates of recoverable minerals, Cost of raw materials comprises the purchase price (less discounts
mineral prices (considering current and historical prices and price and rebates), import and other duties, non-refundable purchase
trends), production levels, capital and reclamation costs, all based on taxes, transport and handling costs and other costs directly
detailed engineering life of mine plans. attributable to the acquisition of the inventories.
If the recoverable amount of an asset (or cash-generating unit) is Cost of finished goods and work-in-progress comprises costs directly
estimated to be less than its carrying amount, the carrying amount related to the units of production, such as labour and an appropriate
of the asset (cash-generating unit) is reduced to its recoverable proportion of variable and fixed production overheads.
amount (impairment loss). Impairment losses recognised in respect Cost is determined on the weighted average cost basis for mining
of cash-generating units are allocated first to reduce the carrying inventories and a first-in, first-out (FIFO) basis for trading inventories.
amount of any goodwill allocated to cash-generating units (cluster of

Inventories are written down to net realisable value when the cost N. DERIVATIVE FINANCIAL INSTRUMENTS
of the inventories exceeds that value. Net realisable value is the
estimated selling price in the ordinary course of business, less the The Group uses derivative financial instruments to hedge its
estimated costs of completion and selling costs. exposure to foreign exchange and interest rate risks arising from
operational, financing and investment activities. The Group’s policy
II. INVENTORIES IN RESPECT OF MINING ACTIVITIES prohibits the use of derivatives for speculation and does not hold or
The cost of finished products comprises all costs related to the issue derivative financial instruments for trading purposes. However,
mineral reserves extracted and made ready for use or sale during the derivatives that do not qualify for hedge accounting are accounted
period. for as trading instruments.
The conversion costs include costs of direct labour in the mine Derivative financial instruments are recognised initially at fair value.
and at the plant, both variable and fixed production costs and an Subsequent to initial recognition, derivative financial instruments are
appropriate portion of fixed and variable overhead costs. stated at fair value. Recognition of any resultant gain or loss depends
Joint products are products having significant relative values on the nature of the item being hedged (accounting policy o).
emerging from a common production process. The cost of conversion Derivative financial instruments that are either hedging instruments
is allocated between the joint products on the basis of physical that are not designated or do not qualify as hedges are carried at fair
measures such as weight, volume and energy content. value with changes in fair value included in profit or loss.
Ordinary spare parts (that are regularly replaced) and consumables The fair value of the derivative instruments is determined based on
are stated at cost less any write-down for obsolescence. the applicable fair value hierarchy. Fair value is the price that would
be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
M.CONSTRUCTION CONTRACTS The fair value of derivative interest rate swaps are estimated by
discounting expected future cash flows using current market interest
Where the outcome of a construction contract can be estimated rates and yield curve over the remaining term of the instrument.
reliably, revenue and expenses are recognised by reference to the The fair value of other derivative financial instruments is either the
stage of completion of the contract activity at the reporting date, as quoted market price or is calculated using pricing models taking into
measured by the proportion that contract costs incurred for work account current market rates.
performed to date bear to the estimated total contract costs. Embedded derivatives are separated from the host contract and
When it is probable that total contract costs will exceed total contract accounted for separately if the economic characteristics and risks
revenues, the expected loss is recognised immediately in profit or of the host contract and the embedded derivative are not closely
loss as an expense. related, a separate instrument with the same terms as the embedded
Where the outcome of a construction contract cannot be estimated derivative would meet the definition of a derivative, and the combined
reliably, contract revenue is recognised to the extent that it is instrument is not measured at fair value through profit or loss.
probable that the contract costs incurred will be recoverable. Changes in the fair value of separable embedded derivatives are
Contract costs are then recognised as expenses in the period in recognised immediately in profit or loss.
which they are incurred. Contract costs include all expenditure
related directly to specific projects and an allocation of fixed and
variable overheads incurred in the Group’s contract activities O. HEDGE ACCOUNTING
based on normal operating capacity. Construction work in progress
represents the gross unbilled amount expected to be collected from Specific accounting treatment is related to derivatives designated as
customers for contract work performed to date. Construction work in cash flow hedges, fair value hedges and hedge of a net investment in
progress is presented as part of trade and other receivables in the foreign operation.
statement of financial position. If payments received from customers On initial designation of the hedge, the Group formally documents the
exceed the income recognised, then the difference is presented as relationship between the hedging instrument(s) and hedged item(s),
deferred income in the statement of financial position. including the risk management objectives and strategy in undertaking
the hedge transaction, together with the methods that will be used
to assess the effectiveness of the hedging relationship. The Group
21
makes an assessment, both at the inception of the hedge relationship II. FAIR VALUE HEDGES
as well as on an ongoing basis, whether the hedging instruments are For fair values hedges, in which derivative financial instruments
expected to be “highly effective” in offsetting the changes in the fair hedge the change in fair value of assets and liabilities or an
value or cash flows of the respective hedged items during the period unrecognised firm commitment, changes in the fair value of derivative
for which the hedge is designated, and whether the actual results financial instruments are recognised in profit or loss, together with
of each hedge are within a range of 80-125 percent. For a cash flow changes in the fair value of the related hedged item in respect of the
hedge of a forecast transaction, the transaction should be highly risk that is hedged.
probable to occur and should present an exposure to variations in
cash flows that could ultimately affect reported net income. III. HEDGE OF NET INVESTMENT IN FOREIGN OPERATION
Where a foreign currency liability hedges a net investment in a
I. CASH FLOW HEDGES foreign operation, foreign exchange differences arising on translation
Where a derivative financial instrument is designated as a hedge of the liability to euro are recognised directly in other comprehensive
of the variability in cash flows of a recognised asset or liability or a income.
highly probable forecasted transaction, the effective part of any gain Where a derivative financial instrument hedges a net investment in a
or loss on the derivative financial instrument is recognised directly in foreign operation, the portion of the gain or the loss on the hedging
other comprehensive income and presented in the hedging reserve instrument that is determined to be an effective hedge is recognised
in equity. A hedge of the foreign currency risk on a firm commitment directly in other comprehensive income and presented within equity
is also accounted for as a cash flow hedge. When the forecasted in the translation reserve, the ineffective portion is reported in the
transaction subsequently results in the recognition of a non-financial statement of income. When the hedged net investment is disposed
asset or non-financial liability, the associated cumulative gain or of, in part or in full, the cumulative amount in the translation reserve is
loss is removed from equity and included in the initial cost or other transferred to the statement of income as an adjustment to the gain or
carrying amount of the non-financial asset or liability. If a hedge of a loss on disposal.
forecasted transaction subsequently results in the recognition of a
financial asset or a financial liability, the associated gains and losses
that were recognised directly in equity are reclassified into profit or P. SHARE CAPITAL
loss in the same period or periods during which the hedged cash
flows affect profit or loss (i.e., when interest income or expense is I. REPURCHASE OF SHARE CAPITAL (TREASURY SHARES)
recognised). For cash flow hedges, other than those covered by The Group’s ordinary shares are classified as equity. Incremental
the preceding two policy statements, the cumulative gain or loss is costs directly attributable to the issuance of ordinary shares are
removed from equity and recognised in profit or loss at the same time recognised as a deduction from equity, net of any tax effects.
as the hedged cash flows affect profit or loss. When share capital recognised as equity is repurchased, the
The ineffective part of any gain or loss is recognised in profit or loss amount of the consideration paid, including directly attributable
immediately. Any gain or loss arising from changes in the time value costs, net of any tax effects, is recognised as a change in equity.
of the option contracts and interest element of forwards are excluded Repurchased shares are classified as treasury shares and presented
from the measurement of hedge effectiveness and is immediately as a deduction from total equity. When treasury shares are sold
recognised in profit or loss. or reissued subsequently, the amount received is recognised as
When the hedging instrument or hedge relationship is terminated an increase in equity, and the resulting surplus or deficit on the
but the hedged transaction still is expected to occur, the cumulative transaction is transferred to/from retained earnings.
gain or loss at that point remains in equity and is recognised in
accordance with the above policy when the transaction occurs. II. DIVIDENDS
If the hedged transaction is no longer expected to take place, Dividends are recognised as a liability in the period in which they are
the cumulative unrealised gain or loss recognised in other declared.
comprehensive income and presented in the hedging reserve in
equity, is immediately recognised in profit or loss.

Q. PROVISIONS IV. PROVISIONS FOR SITE RESTORATION THAT RESULTS FROM
MINERAL EXTRACTION
I. RECOGNITION AND MEASUREMENT The Group provides for site restoration costs resulting from mining
Provisions are recognised when the Group has a present obligation activities where a legal or constructive obligation exists.
(legal or constructive) as a result of past events, it is probable A provision for the full cost expected to be incurred at the end of
(i.e. more likely than not) that an outflow of resources embodying the life of the mine on a discounted to net present value basis is
economic benefits will be required to settle the obligation, and a recognised when post-acquisition exploration and appraisal activities
reliable estimate of the amount of the obligation can be made. commence and is capitalised as part of the cost of the asset. The full
The amount recognised as a provision is the best estimate of the provision for site restoration costs does not exceed the period of the
expenditure required to settle the obligation at the reporting date. mining permission.
Provisions are reviewed at each reporting date and adjusted to reflect Initial measurement is determined based on the best estimate of the
the current best estimate. site restoration obligation taken into account advances in technology,
Where the effect of the time value of money is material, provisions are productivity improvement and the particular circumstances faced by
determined by discounting the expected future cash flows at a pre- the operations or mines.
tax rate that reflects current market assessments of the time value of Subsequently the amount capitalised is depreciated over the time
money. The discount rate is based on long term market interest rate of the concession or permit, adopting a straight-line method not
for a risk similar to the risk of the Group. When discounting is used, exceeding twelve years (see accounting policy i). The effect of a
the increase of the carrying amount of the provision in each period change in the discount and inflation rate is allocated to the remaining
to reflect the unwinding of the discount by the passage of time is asset component. In case the asset component is fully depreciated
recognised as an interest expense. the effect of a change in the discount and inflation rate is recognised
as a finance income/expense.
II. RESTRUCTURING
A provision for restructuring is recognised when the Group has
approved a detailed and formal restructuring plan, and the R. INTEREST-BEARING LOANS AND BORROWINGS
restructuring has either commenced before the reporting date or has
been announced to those affected by it (constructive obligation). Interest-bearing loans and borrowings are recognised initially at
Costs relating to the on-going activities of the Group are not provided fair value, less attributable transaction costs. Subsequent to initial
for. recognition, interest-bearing loans and borrowings are stated at
amortized cost with any difference between cost and redemption
III. PROVISIONS FOR DISMANTLING AND REMOVING ASSETS value being recognised in profit or loss over the period of borrowings
A provision for the full cost expected to be incurred at the end of on an effective interest rate basis.
the life of the asset on a discounted to net present value basis is If the measurement of interest-bearing loans and borrowings at
recognised at the beginning of each project and is capitalised as amortised cost would lead to an accounting mismatch these interest-
part of the cost of the asset. bearing loans and borrowings are designated as financial liabilities
Where discounting is used, the increase in the provision due to at fair value through profit or loss in accordance with the fair value
the passage of time is recognised as part of finance costs in the option of IAS 39.
statement of profit or loss.
Initial measurement is determined based on the best estimate of the
obligation taken into account advances in technology, productivity S. TRADE AND OTHER PAYABLES
improvement and the particular circumstances faced by the
operations or mines. Trade and other payables are stated at cost.
Subsequently the amount capitalised is depreciated over its useful
life of that particular asset based on the straight-line method (see
accounting policy i). The effect of a change in the discount and
inflation rate is allocated to the remaining asset component. In case
the asset component is fully depreciated the effect of a change in
the discount and inflation rate is recognised as a finance income/
expense.
23
T. INCOME TAXES U. EMPLOYEE BENEFITS
Income tax expense represents the sum of current tax and deferred Short-term employee benefits are measured on an undiscounted
tax. Current tax and deferred tax expense is recognised in profit or basis and are expensed as the related service is provided. A liability
loss except to the extent that it relates to a business combination, or is recognised for short-term employee benefits is recognised for the
items recognised directly in equity or in other comprehensive income. amount expected to be settled wholly within 12 months after the end
Current tax expense is recognised as an expense in the same period of the reporting period under short-term cash bonus or profit sharing
as the related accounting profit. plans if the Group has a present legal or constructive obligation to
Current tax asset is recognised when the Group expects recovering pay this amount as a result of past service provided by the employee,
income taxes paid in respect of the current or previous period. The and the obligation can be estimated reliably.
Group’s current tax liabilities (assets) for the current and prior periods Termination benefits are recognised as an expense when the Group
is measured at the amount expected to be paid to (recovered from) is demonstrably committed to either terminate the employment of
the taxation authorities, using the tax rates and tax laws that have employees before the normal retirement date or when an employee
been enacted or substantively enacted by the reporting date. decides accepting an offer of benefits from the Group in exchange
Deferred tax is recognised in respect of all temporary differences at for the termination of employment. Termination benefits for voluntary
the reporting date between the tax bases of assets and liabilities and redundancies are recognised as an expense if the Group has made
their carrying amounts for financial reporting purposes. an offer of voluntary redundancy, there is a restriction on the Group’s
Deferred tax liabilities and assets are not recognised if the temporary ability to withdraw the offer, and the number of acceptances can be
differences arise from the initial recognition of goodwill and from the estimated reliably.
initial recognition of assets or liabilities in a transaction that is not a Post-employment benefits are formal or informal arrangements
business combination and that affects neither accounting nor taxable under which the Group provides post-employment benefits for one
profit. or more employees and which are payable after the completion of
Deferred tax liabilities are recognised for taxable temporary employment.
differences arising on investments in subsidiaries and associates, The Group operates defined contribution and defined benefit plans.
except where the Group is able to control the reversal of the Defined contribution plans are post-employment benefit plans under
temporary difference and it is probable that the temporary difference which an entity pays fixed contributions into a separate entity (a
will not reverse in the foreseeable future. fund) and will have no legal or constructive obligation to pay further
Deferred tax assets are recognised for all deductible temporary contributions if the fund does not hold sufficient assets to pay all
differences, the carry-forward of unused tax credits and any unused employee benefits relating to employee service in the current and
tax losses, to the extent that it is probable that taxable profit will be prior periods. Defined benefit plans are post-employment benefit
available against which the deductible temporary differences, and plans other than defined contribution plans.
the carry-forward of unused tax credits and unused tax losses can Contributions to defined contribution plans are recognised as an
be utilized. Subsequently, the carrying amount of deferred tax assets expense as incurred. Any amount unpaid at the end of the period is
is reviewed at the end of each reporting period and reduced to the recognised as a liability. The liability is discounted using the discount
extent that it is no longer probable that sufficient taxable profit will be rate specified for defined benefit plans when the contributions are not
available to allow all or part of the deferred income tax asset to be expected to be settled wholly within 12 months after the end of the
utilized. period. Contributions already paid exceeding contributions due for
Deferred tax is calculated at the tax rate that is expected to apply in service before the reporting date are recognised as an asset to the
the period when the asset is realised or the liability is settled, using extent that the prepayments are recoverable.
tax rates enacted or substantively enacted at the reporting date. Following IAS 19R, defined contribution plans with a minimum
Deferred tax assets and liabilities are offset when they relate to funding guarantee are accounted for as defined benefit pension
income taxes levied by the same taxation authority and the Group plans.
intends to settle its current tax assets and liabilities on a net basis or Under a defined benefit plan, actuarial risks and investment risks are
their tax assets and liabilities will be realised borne by the Group. The determination of the defined benefit liability
simultaneously. is based on demographic and financial assumptions which are
unbiased and mutually compatible. The discount rate is determined

by reference at the balance sheet date to high quality corporate Where the grant relates to a depreciable asset, the grant is credited
bonds that have maturity dates approximating to the terms of the to a deferred income account and is recognised as other operating
Group’s obligations and that are denominated in the same currency income over the periods and in the proportions in which depreciation
in which the benefits are expected to be paid. The Group’s net on those assets is charged.
obligation in respect of defined benefit pension plans is calculated
separately for each plan by estimating the amount of future benefit
that employees have earned in return for their service in the current W. REVENUE
and prior periods; that benefit is discounted to determine its present
value. Revenue is recognised to the extent that it is probable that the
The Projected Unit Credit Method is used to determine the present economic benefits will flow to the Group and the revenue can be
value of the defined benefit obligation, the related current service reliably measured.
cost and any past service cost. The valuations are carried out with Revenue is measured at the fair value of the consideration received
sufficient regularity by a qualified actuary. or receivable. Trade discounts and volume rebates allowed by the
Plan assets held by a long-term employee benefit fund including Group are deducted from revenue.
qualifying insurance policies are measured at fair value.
Current service cost which is the actuarial cost of providing benefits I. SALE OF GOODS
in respect of service rendered is recognised as an expense in profit Revenue from the sale of goods is recognised when the significant
or loss for the current period. risks and rewards of ownership of the goods have passed to the
Interest cost which arises as a result of the unwinding of the discount buyer, there is no continuing managerial involvement with the goods
in the present value calculation is recognised in net finance cost nor effective control and the amount of revenue can be measured
in profit or loss for the current period (see accounting policy x). It reliably. Transfers of risks and rewards vary depending on the
is determined by multiplying the net defined benefit liability (asset) individual terms of the contract of sale.
with the discount rate, both as determined at the start of the annual By-products are ignored until they are sold, at which time revenues
reporting period, taking account of any changes in the net defined are recognised in profit or loss and classified as other income.
benefit liability (asset) during the period as a result of contribution
and benefit payments. II. RENDERING OF SERVICES
Re-measurements, comprising of actuarial gains and losses Revenue from the rendering of services is recognised by reference to
and the return on plan assets (excluding net interest), are the stage of completion of the transaction at the reporting date.
recognised immediately in the statement of financial position with a
corresponding debit or credit to retained earnings through OCI in the III. COMMISSIONS
period in which they occur. Re-measurements are not reclassified to Amounts collected on behalf of, and passed on to, the seller in an
profit or loss in subsequent periods. agency relationship are not revenue of the agent. In such relationship,
All past service costs are recognised at the earlier of when the the revenue of the agent is the amount of commission which is
amendment/curtailment occurs or when the related restructuring or deducted from the selling price plus any other charges made by the
termination costs are recognised. agent to the seller and other parties.
In case of a principal in an agency relationship, the revenue is the
gross amount charged to the ultimate customer. Any commissions
V. GOVERNMENT GRANTS paid to (or deducted by) agents is accounted for as an expense.
Government grants are recognised where there is reasonable IV. ROYALTIES

assurance that the grant will be received and all attaching conditions Royalties are recognised on an accrual basis in accordance with the
will be complied with. substance of the relevant agreement unless it is more appropriate to
When the government grant relates to an expense item, it is recognise them on some other systematic and rational basis.
recognised as income on a systematic basis in the same periods in
which the expenses are incurred.
25
X. FINANCE INCOME / EXPENSE subsequent remeasurement, but gains are not recognised in excess
of any cumulative impairment loss.
I. INTEREST A discontinued operation is a component of the Group’s business that
Interest revenue and expense is recognised on a time proportion represents a separate major line of business or geographical area
basis that takes into account the effective yield on the asset and of operations that has been disposed of or is held for sale, or is a
liability. The effective yield is the rate of interest required to discount subsidiary acquired exclusively with a view to resale.
the stream of future cash receipts expected over the asset’s life to Classification as a discontinued operation occurs upon disposal or
equate to the initial carrying amount of the asset. when the operation meets the criteria to be classified as held-for-sale,
if earlier. A disposal group that is to be abandoned may also qualify.
II. DIVIDEND INCOME When an operation is classified as a discontinued operation, the
Dividends are recognised on a cash basis or when they are declared, comparative statement of comprehensive income is re-presented
which is usually the earliest time at which it is probable that they will as if the operation had been discontinued from the start of the
flow to the holder of the investment. comparative period.
III. FINANCE EXPENSE

Finance expenses comprise interest expense on borrowings, Z. NEW STANDARDS AND INTERPRETATIONS NOT
unwinding of the discount on provisions, the interest cost of employee YET EFFECTIVE
benefits, changes in the fair value of financial assets at fair value
through profit or loss, impairment losses recognised on financial The standards and interpretations that are issued, but not yet
assets, and losses on hedging instruments that are recognised in effective, up to the date of issuance of the Group’s financial
profit or loss. Borrowing costs that are not directly attributable to statements are disclosed below. The Group considered to only list
the acquisition, construction or production of a qualifying asset are and address the ones expected to have an impact on the Group’s
recognised in profit or loss using the effective interest method. financial position, performance, and/or disclosures. The Group
intends to adopt these standards, if applicable, when they become
effective.
Y. NON-CURRENT ASSETS HELD-FOR-SALE AND
DISCONTINUED OPERATIONS IFRS 9 FINANCIAL INSTRUMENTS
The final version of IFRS 9 replaces IAS 39 Financial Instruments:
Non-current assets, or disposal groups comprising assets and Recognition and Measurement [and all previous versions of IFRS
liabilities, are classified as held-for-sale if it is highly probable that 9]. IFRS 9 brings together all three aspects of the accounting for
they will be recovered primarily through sale rather than through financial instruments project: classification and measurement,
continuing use. Immediately before classification as held for sale, the impairment and hedge accounting. IFRS 9 is effective for annual
measurement of the assets (and all assets and liabilities in a disposal periods beginning on or after 1 January 2018, with early application
group) is brought up-to-date in accordance with the applicable permitted. Except for hedge accounting, retrospective application
Group accounting policies. Then, on initial classification as held-for- is required but providing comparative information is not compulsory.
sale, non-current assets and disposal groups are recognised at the For hedge accounting, the requirements are generally applied
lower of carrying amount and fair value less costs of disposal. prospectively, with some limited exceptions.
A disposal group is a group of assets, possibly with some associated IFRS 9 requires the Group to record expected credit losses on all of
liabilities, which the Group intends to dispose of in a single its debt securities, loans and trade receivables, either on a 12-month
transaction. The measurement basis required for non-current assets or lifetime basis. The Group already applies the simplified approach
classified as held for sale is applied to the group as a whole, and any and record lifetime expected losses on all trade receivables in line
resulting impairment loss reduces the carrying amount of the non- with IFRS 9.
current assets in the disposal group in the order of allocation required A high-level first time application-impact assessment of IFRS 9 has
by IAS 36. been carried out on the financial statements of the Group during
Impairment losses on initial classification as held-for-sale are 2017:
included in profit or loss. The same applies to gains and losses on

Q The Group believes that all existing hedge relationships that revenue recognition requirements under IFRS. Adoption of IFRS
are currently designated in effective hedging relationships will 15 is not mandatory until annual periods beginning on or after
still qualify for hedge accounting under IFRS 9. As IFRS 9 does 1 January 2018. Early adoption is permitted. IFRS 15 has been
not change the general principles of how an entity accounts for endorsed by the EU.
effective hedges, the Group does not expect a significant impact Based on an initial assessment, IFRS 15 may have the next impact:
as a result of applying IFRS 9. The Group will assess possible Q The impact on the Group’s financial statements will not be
changes related to the accounting for the time value of options, materially different from applying IAS 18 Revenue.
forward points or the currency basis spread in more detail in the Q Incremental costs for obtaining a contract: these incremental
future. costs for obtaining a specific contract should be capitalised and
Q The Group believes that the further refinements identified in the deferred over the contract term if the contract is beyond one year.
current impairment methodology for trade receivables will not lead Deferral related to contracts with shorter terms is allowed but not
to a material impact at the first time application of IFRS 9. The mandatory. The Group currently does not capitalize such costs.
methodology which will be applied for the expected credit loss The potential impact depends on the mix between short-term and
impairment methodology for trade receivables will be as follows: long-term contracts, to what extent these costs are “incremental”,
• Improved recognition and distinction between specific etc. and will be analyzed further.
(individual) and collective impairments Q Financing: if the period between payment and transfer of goods
• Individual impairments (on an invoice-by-invoice basis) will be: and services is beyond one year, adjustments for the time value
- Recorded for all balances overdue for more than 90 days; of money should be made at the prevailing interest rates in the
- Minimal 50 percent of the invoice amount, for any balance relevant market. The Group currently applies discounting, using
overdue between 90 and 364 days and 100 percent of the the Group’s average borrowing rate. This discount rate might have
invoice amount, for any balance overdue for more than to be adjusted. The potential effects will be analyzed further.
364 days; Q Disclosures: IFRS 15 includes a number of additional disclosures.
- Considered for any other outstanding invoice (current or Q IFRS 15 allows two transition methods: a full retrospective
overdue) for the same or a connected counterparty having approach with adjustments to all periods presented or a modified
at least one invoice overdue more than 90 days; approach with only adjustment to the current period. However, the
• Collective impairments will be calculated, using a methodology modified approach requires disclosures of all financial statement
similar than today, but refined by: line items in the year of adoption as if prepared under current
- Another bucketing of the ageing balance, implying a default standards. The Group did not yet decide which method to apply.
definition of 90 days; The Group has completed its assessment and does not expect a
- An (at least) annual update of the net flow rates (between significant impact as a result of applying IFRS 15.
these buckets) with the figures for the past year, averaging
historical figures for the last 5 years; IFRS 16 LEASES
- Loss rates, i.e. the multiplication of the net flow rate for that IFRS 16 sets out the principles for the recognition, measurement,
specific bucket and a loss given default of 100 percent presentation and disclosure of leases and requires lessees to
applied to respectively any current and balance overdue account for all leases under a single on-balance sheet model
between 1 and 90 days. similar to the accounting for finance leases under IAS 17 Leases.
• In addition to this, the impairment methodology for trade The standard includes two recognition exemptions for lessees –
receivables, will specify that balances overdue for more than 2 leases of ’low-value’ assets (e.g., personal computers) and short-
years are written-off. term leases (i.e., leases with a lease term of 12 months or less).
Q The Group believes that the classification and measurement At the commencement date of a lease, a lessee will recognise a
requirements will impact the trade receivables that are sold in a liability to make lease payments (i.e., the lease liability) and an
factoring transaction but the impact is assessed not significant. asset representing the right to use the underlying asset during the
lease term (i.e., the right-of-use asset). Lessees will be required to
IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS separately recognise the interest expense on the lease liability and
The IASB issued in May 2014 IFRS 15, the new international financial the depreciation expense on the right-of-use asset.
reporting standard on revenue recognition. IFRS 15 establishes a Lessees will be also required to remeasure the lease liability upon
new five-step model that will apply to revenue arising from contracts the occurrence of certain events (e.g., a change in the lease term, a
with customers. The new revenue standard will supersede all current change in future lease payments resulting from a change in an index
27
or rate used to determine those payments). The lessee will generally The Modified A approach results in the lowest expense on average
recognise the amount of the remeasurement of the lease liability as with a fade-out effect in future years. The Modified B approach will
an adjustment to the right-of-use asset. result in the largest total expense due to higher depreciation costs as
IFRS 16 also requires lessees to make more extensive disclosures the assets are inflated to equal the liability on transition. The Group
than under IAS 17. intends to apply the Modified A approach.
The new standard is effective for annual periods beginning on or Consistent with IAS 17, leases to explore for or use minerals, oil,
after 1 January 2019. Early application is permitted, but not before natural gas and similar non-regenerative resources are excluded from
an entity applies IFRS 15 Revenue from Contract with Customers. the scope of IFRS 16. The Group decided it is appropriate to continue
A lessee can choose to apply the standard using either a full to exclude royalty contracts with regard to mineral extraction from the
retrospective or a modified retrospective approach. The standard’s scope of IFRS 16 (unchanged compared to IAS 17 current treatment).
transition provisions permit certain reliefs.
In 2017, the Group assessed the potential effect of IFRS 16 on its IFRIC 22 FOREIGN CURRENCY TRANSACTIONS AND ADVANCE
consolidated financial statements. The estimated impact of each CONSIDERATION
transition option on the financial statements is outlined below. This IFRIC 22 addresses the exchange rate to use in transactions that
assessment focuses on transition (1st January 2019) and period involve advance consideration paid or received in a foreign currency.
ending 31st December 2019. This impact assessment is made for the The Interpretation is effective 1 January 2018. The Group is in
leasing contracts that exist today, with the assumption that no new process of assessing the impact of IFRIC 22.
leasing contracts will be entered into 2018. Consequently, the lease
liability will be underestimated. A lessee can choose to apply the IFRIC 23 UNCERTAINTY OVER INCOME TAX TREATMENT
standard using either a full retrospective or a modified retrospective The Interpretation addresses the accounting for income taxes when
approach. The Group intends to apply the modified retrospective tax treatments involve uncertainty that affects the application of IAS
approach (IFRS 16.C.8(b)): 12 and does not apply to taxes or levies outside the scope of IAS 12,
nor does it specifically include requirements relating to interest and
penalties associated with uncertain tax treatments. The Interpretation
In thousands of euro Modified A Modified B
specifically addresses the following:
Financial Statements at transition (1st January 2019) Q Whether an entity considers uncertain tax treatments separately;
Lease liability 200 400 200 400 Q The assumptions an entity makes about the examination of tax
Right-of-use asset 177 900 200 400 treatments by taxation authorities;

Q How an entity determines taxable profit (tax loss), tax bases,
Financial Statements for year-end 2019
unused tax losses, unused tax credits and tax rates;
Lease liability 155 200 155 200
Q How an entity considers changes in facts and circumstances.
Right-of-use asset 134 500 152 000 An entity must determine whether to consider each uncertain tax
Depreciation charge 43 400 48 500 treatment separately or together with one or more other uncertain
tax treatments. The approach that better predicts the resolution of
Interest expense 5 800 5 800
the uncertainty should be followed. The Interpretation is effective
Deferred tax expense 700 (1 200)
for annual reporting periods beginning on or after 1 January 2019,
but certain transition reliefs are available. The Group will apply
The lease liability on transition date is the same for Modified A and interpretation from its effective date. Since the Group operates in a
Modified B approach. When taking the Modified B approach, there complex multinational tax environment, applying the Interpretation
is no difference in net assets on the date of transition. However, the may affect its consolidated financial statements and the required
increased asset value results in a larger adverse profit or loss impact disclosures. In addition, the Group may need to establish processes
in subsequent years as the depreciation charge will be higher than and procedures to obtain information that is necessary to apply the
with the other transition approaches. Interpretation on a timely basis.
Under Modified A approach, there is a difference between the asset The Group is still in process of assessing the impact of this
and liability at the date of transition. This will lead to an adverse Interpretation.
adjustment in equity on transition. This has been estimated at €14.1
million, net of taxes.

2 FINANCIAL RISK MANAGEMENT
OVERVIEW The Group adopted in 2007 a policy with regard to the management
The Group has exposure to the following risks from its use of financial of these risks.
instruments: Economical exposure can be hedged at entity level under strict
Q credit risk conditions and within a limited time frame. Cash flow hedge
Q currency risk accounting is then applied.
Q interest rate risk Transactional exposures are systematically hedged when material.
Q liquidity risk
This note presents information about the Group’s exposure to each INTEREST RATE RISK
of the above risks, the Group’s objectives, policies and processes Interest rate risk is managed for the Group’s consolidated net
for measuring and managing risk, and the Group’s management financial debt with the primary objective of guaranteeing medium-
of capital. Further quantitative disclosures are included throughout term cost.
these consolidated financial statements. To do so, the Group manages this risk centrally, based on trends in
the Group’s consolidated net financial debt. Knowledge of this debt
CREDIT RISK is provided by a regular reporting, that describes the financial debt of
Credit risk is the risk of financial loss to the Group if a customer or each entity and indicates its various components and characteristics.
counterparty to a financial instrument fails to meet its contractual The Group Treasury department issues regular advices to the
obligations. Executive Committee in this respect.
No material exposure is considered to exist by virtue of the possible For the Interest Rate swaps, only the contractual outflows were
non-performance of the counterparties to financial instruments, other considered. The incoming flows, related to the floating leg, are not
than trade and other receivables held by the Group. reported as they are compensated by the interests on floating bank
Given the large number of internationally dispersed customers, the borrowings, which are also not reflected.
Group has limited concentration of credit risk with regard to its trade
and other receivables. LIQUIDITY RISK
This kind of financial risk is managed in a decentralised way. To ensure liquidity and financial flexibility at all times, the Group,
The Group establishes an allowance for impairment that in addition to its available cash, has several uncommitted and
represents its estimate of incurred losses in respect of trade and committed credit lines at its disposal in several currencies and in
other receivables (see accounting policy k & note 31 Financial amounts considered adequate for current and near-future financing
instruments). needs. Further the Group has the option to use factoring as a
supplementary source of liquidity.
CURRENCY RISK
The Group is exposed to different types of currency risks:
Q translation
Q economical
Q transactional
The Group has currently no documented hedges in a net investment
in a foreign operation.
Economical exposure is the risk that the company’s competitive
position is affected by foreign exchange rate movements.
Transactional exposure refers to contractual obligations in foreign
currencies other than the functional currency.
29
3 BUSINESS COMBINATIONS AND ACQUISITION OF NON-CONTROLLING
INTERESTS
A. BUSINESS COMBINATIONS
In March 2017, the Group acquired 100 percent of the voting shares Revenues (rental income €6.7 million) and net loss (€2.3 million) for
of Ecopiave S.r.l., a company based in Italy and specialised in the this acquisition has been included in the Group’s consolidated 2017
treatment of waste glass, for a consideration of €2.2 million. The financial statements.
Group acquired Ecopiave S.r.l. because this acquisition would The financial statements for a 12 month period has been included in
significantly secure the Group’s future waste glass sourcing. the Group’s consolidated 2017 financial statements for the full year as
The Group did not recognise any provisional goodwill. The the Group was already entitled to govern the company as from 1st of
consideration paid has been entirely allocated to the fair values of January 2017.
the identifiable assets and liabilities. A provisional purchase price The above acquisition had the following effect on the Group’s assets
allocation has been conducted in line with IFRS and will be finalised and liabilities:
in 2018 after a 12 month time horizon.
PROVISIONAL PURCHASE PRICE ALLOCATION:
Pre-acquisition Fair value Recognised values

In thousands of euro Note carrying amounts adjustments on acquisition
Property, plant and equipment 16 189 6 799 6 988

Intangible assets 17 1 135 (1 135) -
Trade and other receivables 156 1 017 1 173
Cash and cash equivalents 80 - 80
Provisions 28 (45) (1 654) (1 699)
Trade and other payables (450) (3 444) (3 894)
Deferred tax liabilities 20 - (441) (441)
Net identifiable assets and liabilities 1 065 1 142 2 207
Cash (acquired) - - (80)

Consideration paid (in previous years as advance payments) - - 2 207
Total net purchase consideration - - 2 127
Ecopiave S.r.l. has entered into two property finance leases in 2007 include improvements for the leased assets for €1.1 million and are
expiring in 2024. Fair value of the underlying property (industrial derecognised as they are already part of the fair value adjustment of
buildings) was measured for €6.6 million and has been recognised the industrial buildings (see fair value adjustment intangible assets).
as a fair value adjustment under property, plant and equipment (as The net present value of the lease liability is €3.4 million, applying
part of the €6.8 million). Ownership of the underlying property is a discount rate of 2.28 percent and is included as a fair value
reasonably certain to transfer to the Group at the end of the lease adjustment under trade and other payables.
term in 2024. The pre-acquisition amounts of the intangible assets

A contingent liability at fair value of €1.0 million was recognised for the same amount (see fair value adjustment under trade and
as a fair value adjustment (as part of the fair value adjustment other receivables).
of provisions) resulting from a work injury claim. The claim is Deferred taxes were recognised on all fair value adjustments,
subject to legal arbitration and is only expected to be finalised in resulting in a net deferred tax liability of €0.4 million.
2018. A compensation is expected from the insurance company
B. ACQUISITION OF NON-CONTROLLING INTERESTS
In February 2017, SCR-Sibelco NV acquired an additional 20.48 Group’s effective interest to 100 percent. Following is a schedule of
percent of PT Bhumiadya for approximately €2.5 million bringing the additional interest acquired in PT Bhumiadya:
In thousands of euro 2O17

Cash consideration paid to non-controlling shareholders 2 465
Carrying value of the additional interest (20.48%) in PT Bhumiadya (1 373)
Difference recognised in retained earnings 1 092
In February 2017, Sibelco Italia SPA acquired an additional 30 has been concluded for the remaining 10 percent. Following is a
percent of Ecopaté S.r.l. for approximately €0.6 million bringing the schedule of additional interest acquired in Ecopaté S.r.l.:
Group’s effective interest to 90 percent. A call/put option contract

Cash consideration paid to non-controlling shareholders 600
Carrying value of the additional interest (30.00%) in Ecopaté S.r.l. 261
Difference recognised in retained earnings 861
31
4 DISPOSAL OF SUBSIDIARIES OR OTHER BUSINESS
In 2017, the Group has disposed its interest in MCS Mining Industry Lao Co. Ltd (Laos – owned 60 percent) and
Mineraalbewerkingsindustrie Uikhoven NV (Belgium – owned 100 PT Bhumidana LTD (Indonesia – owned 65 percent). Following
percent), Sibelco Colombia SAS (Colombia – owned 100 percent), schedules reflect the effects of the disposals:
DISPOSAL MINERAALBEWERKINGSINDUSTRIE UIKHOVEN NV
In thousands of euro Note 2O17

Cash consideration received from buyers 4 172
Carrying value of the disposed interest in Mineraalbewerkingsindustrie Uikhoven NV 245
Gain recognised in net financing costs 13 3 927
DISPOSAL SIBELCO COLOMBIA SAS

Cash payment selling costs (136)
Carrying value of the disposed interest Sibelco Colombia SAS (7 569)
DISPOSAL MCS MINING INDUSTRY LAO CO. LTD.

Carrying value of the disposed interest MCS Mining Industry Lao Co. Ltd (1 106)
DISPOSAL PT BHUMIDANA LTD

Carrying value of the disposed interest PT Bhumidana LTD 955
During 2017, the Group has liquidated following subsidiaries: Trading House Hercules Saint Petersburg LLC (Russian Federation), Italsafin
SPA (Italy), Zao-Shpat (Russian Federation), Atécé NV (Belgium) and Max Blees GmbH (Germany).

5 NON-CONTROLLING INTERESTS
Financial information of subsidiaries that have non-controlling
interests is provided below. This information is based on amounts
before intercompany eliminations:
PROPORTION OF EQUITY INTEREST HELD BY NON-CONTROLLING INTERESTS:

Country of
incorporation
Name and operation 2O17 2O16
Minérale SA Belgium 50.00% 50.00%
High Five NV Belgium 50.00% 50.00%
LLC Silica Holdings The Netherlands 49.00% 49.00%
France Pare-Brise Recyclage SA France 50.00% 50.00%
Eco Paté SPA Italy 10.00% 40.00%
Ecopiave S.r.l. Italy 10.00% 0.00%
Ramensky GOK CJSC Russian Federation 0.96% 0.96%
Kvarsevye peski CJSC Russian Federation 0.96% 0.96%
Novoselovskoe Gok Ukraine 51.65% 51.65%
Sibelco Japan Ltd Japan 30.00% 30.00%
PT Bhumidana Ltd (*) Indonesia 0.00% 35.00%
PT Bhumiadya Indonesia Ltd Indonesia 0.00% 20.48%
Fineplus (M) Sdn Bhd Malaysia 12.00% 12.00%
Unichamp Mineral Philippines Inc Philippines 20.00% 5.00%
Unichamp Laos Ltd Lao PDR 30.00% 30.00%
MCS Mining Industry Lao Co. Ltd (*) Lao PDR 0.00% 40.00%
(*) Disposed in 2017
SUMMARISED STATEMENT OF PROFIT OR LOSS AT 100%:

Revenue 89 363 121 812
Transportation costs (10 196) (14 037)
Cost of Sales (69 074) (93 574)
SG&A-expenses (12 325) (10 537)
Other operating income/(expenses) (27 009) (28 667)
Finance income/(expenses) (5 101) (6 319)
Profit/(loss) before income taxes (34 341) (31 322)
Income taxes 8 973 1 888
Profit/(loss) for the period (25 368) (29 434)
Total comprehensive income (25 368) (29 434)
Attributable to non-controlling interests 3 393 (15 070)

Dividends paid to non-controlling interests 378 48
33
SUMMARISED STATEMENT OF PROFIT OR LOSS AT 100%

Inventories and cash and bank balances (current) 35 764 58 360
Property, plant and equipment and other non-current financial assets (non-current) 88 868 157 713
Total assets 124 632 216 073
Trade and other payable (current) 36 641 92 231

Interest-bearing loans and borrowing and deferred tax liabilities (non-current) 47 629 66 397
Total liabilities 84 270 158 628
Total equity 40 362 57 445
Attributable to non-controlling interests

Equity holders of parent 34 265 54 508
Non-controlling interest 6 097 2 937
SUMMARISED CASH FLOW INFORMATION AT 100%:

Operating 12 713 (2 201)
Investing (11 717) (34 363)
Financing (392) 34 913
Net increase/(decrease) in cash and cash equivalents 604 (1 651)

6 INTEREST IN JOINT ARRANGEMENTS
A. JOINT VENTURES Group’s interest in Dansand A/S is accounted for using the equity
method in the consolidated financial statements.
The Group has a 50 percent share in Ficarex SRO, a joint venture In June 2017, the Group has disposed its 35 percent interest in EDK
involved in the extraction and processing of silica sand in the Czech Mineraçao S.A. – see note 18 Equity accounted investees.
Republic. The Group’s interest in Ficarex SRO is accounted for using Summarised financial information of the joint ventures, based on its
the equity method in the consolidated financial statements. IFRS financial statements, and reconciliation with the carrying amount
The Group has a 50 percent in Dansand A/S, a joint venture involved of the investment in consolidated financial statements are set out
in the extraction and processing of silica sand in Denmark. The below:
SUMMARISED STATEMENT OF FINANCIAL POSITION:

Current assets, excluding cash and cash equivalents and prepayments 29 440 31 347
Cash and cash equivalents 658 (1 646)
Prepayments 1 778 1 803
Non-current assets 44 219 55 449
Total assets 76 095 86 953
Current liabilities, excluding tax payable 11 410 7 538

Tax payable - 1 316
Non-current liabilities, excluding deferred tax liabilities and long-term borrowing 376 12 668
Deferred tax liabilities 500 461
Long-term borrowing 1 766 3 299
Proportion of the Group's ownership

Carrying amount of the investment 17 193 26 420
SUMMARISED STATEMENT OF PROFIT OR LOSS:

Revenue 35 668 64 605
Transportation costs (6 518) (6 012)
Cost of Sales (15 981) (34 717)
SG&A-expenses (5 382) (9 839)
Other operating income/(expenses) (9) (2 384)
Finance income/(expenses) 1 312 28
Profit before income taxes 9 089 11 681
Income taxes (1 558) (3 203)
Profit for the period 7 531 8 478
Group's share of profit for the period 2 434 2 935
Ficarex SRO and Dansand A/S had no contingent liabilities or capital commitments as at 31 December 2017 and 2016.
More information of these related parties can be found in note 35 Related parties.
35
B. JOINT OPERATION
The Group has a material joint operation, Jundu Mineração Ltda classify this joint arrangement. The Group assessed their rights and
involved in the extraction and processing of silica sand in Brazil. The obligations arising from the arrangement and concluded that the joint
Group has a 50 percent share in the ownership and is entitled to a arrangement in Jundu Mineração Ltda qualifies as a joint operation.
proportionate share in the profits/losses. Judgement is required to
7 INVESTMENTS IN ASSOCIATES
The Group has interests in a number of associates, of which two accounted for using the equity method in the consolidated financial
associates are considered material: Maffei Sarda Silicati SRL in Italy statements.
and Glassflake Limited, a company in the United Kingdom. Both The Group has a 25.10 percent interest in Glassflake Limited, a
associates are private entities which are not listed on any public company in the United Kingdom involved in the manufacturing of an
exchange. innovative silica based product for potential use in painting, coatings
The Group has a 49.90 percent interest in Maffei Sarda Silicati SRL, and plastic. The Group’s interest in Glassflake Limited is accounted
an Italian company involved in the production of feldspathic sand for using the equity method in the consolidated financial statements.
and feldspar. The Group’s interest in Maffei Sarda Silicati SRL is The following table illustrates the summarised financial information of
the Group’s investments:
SUMMARISED STATEMENT OF FINANCIAL POSITION:

Current assets 22 040 22 725
Non-current assets 16 509 16 704
Total assets 38 549 39 429
Current liabilities 5 441 1 996

Non-current liabilities 9 973 12 807
Group’s share 10 436 10 989

SUMMARISED STATEMENT OF PROFIT OR LOSS:

Revenue 18 392 27 195
Cost of Sales (15 951) (21 359)
SG&A-expenses (2 759) (4 283)
Finance income/(expenses) (99) (86)
Profit before income taxes (1 353) (5 979)
Income taxes 227 (569)
Profit/(loss) for the period (1 126) (6 548)
Group's share of profit for the period (406) (1 618)
Restrictions:
The Group cannot distribute its profits from its investments in access or use the assets and settle its liabilities of its investments in
associates, until it obtains the consent from the other partners. associates.
There are no further restrictions which impact the Group’s ability to
8 DETAILED INFORMATION ON REVENUE, COST OF SALES AND SG&A
REVENUE

Sale of goods 3 042 626 2 669 711
Services 38 761 55 315
Commissions 241 139
Construction contracts 1 376 537
Total 3 083 004 2 725 702
COST OF SALES

Production expenses 2 214 800 2 019 736
Changes in provisions 28 3 551 3 104
Revisions site restoration and plant demolition provisions (1 440) -
Depreciation and impairment property, plant and equipment 16 235 146 230 909
Amortisation and impairment intangible assets 17 9 232 12 488
Total 2 461 289 2 266 237
37
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

Administrative expenses 337 410 299 367
Changes in allowance for uncollectible receivables 31 1 837 1 169
Changes in provisions 28 801 1 124
Depreciation and impairment property, plant and equipment 16 4 978 19 109
Amortisation and impairment intangible assets 17 10 812 1 212
Total 355 838 321 981
9 OTHER OPERATING INCOME

By-products 662 969
Royalties and rentals 86 1 088
Government grants 914 489
Gain on disposal of fixed assets 16,17 3 537 8 008
Non-recurring: disposal of assets held for sale 11 4 921 -
Reversal of provisions 28 - 9 097
Non-recurring reversal of provisions 28 2 213 -
Non-recurring: disposal of subsidiaries 4 - 11 664
Other operating income 23 184 16 283
Other non-recurring - 2 113
Net foreign exchange gains - 301
Total 35 517 50 012
Gain on disposal of property, plant and equipment mainly relates to insurance company (€6.8 million), and several amounts including
the sale of multiple properties and mobile equipment in Europe and some income from insurance refunds and income generated from
North America. backfilling activities in Germany.
Other operating income for the year is €23.2 million (2016: €16.3 In July 2017, the Lilydale property in Australia was sold resulting in a
million), and mainly relates to the release of a provision for excess gain on sale of €4.9 million.
railcars in the US (€3.4 million), the income from our Sibelux

10 OTHER OPERATING EXPENSES
Loss on disposal of fixed assets 16,17 782 1 483
Non-recurring impairment losses on property, plant and equipment 16 77 295 165 241
Non-recurring impairment losses on intangible assets and goodwill 17 11 109 56 250
Additions to provisions 28 - 20 580
Non-recurring additions to provisions 28 23 221 35 307
Non-recurring disposals of subsidiaries 4 - 11 409
Other operating expense 9 489 6 254
Other non-recurring 20 750 43 245
Net foreign exchange losses 1 299 402
Total 143 945 340 171
Foreign exchange differences result from the revaluation of assets programs mainly in Australia (€1.2 million), South America (€0.8
and liabilities related to operational activities expressed in foreign million), Asia (€0.8 million) and for some smaller programs (€0.4
currencies and results generated by derivatives used for hedging million) - see note 28 Provisions.
these operational activities as well as the result of the recycling of Non-recurring impairment losses in 2017 relate to impairments
the cash flow hedge in place for the economic risk. In this respect based on internal or external indicators and amount to €88.4 million.
an additional negative cash flow hedge reserve was recognised for Impairments were incurred across different regions of which €37.6 in
€5.5 million and €1.6 million was recycled through profit or loss as Asia, €28.0 million in South America, €13.9 in Europe and €9.2 million
an expense in 2017 (see Consolidated statement of equity). This in Australia.
opposed to FX differences reported under net financing costs (see
note 13 Net financing costs), which result from financing transactions. Other non-recurring in 2017 is €20.8 million (2016: €43.3 million) and
Other operating expenses of €9.5 million (2016: €6.3 million) mainly mainly relates to the transaction costs associated with our intended
relate to property expenses, disposal of waste, various property taxes merger with Fairmount Santrol.
and expenses from our Sibelux insurance company (€1.9 million).
A total of €23.2 million of additional non-recurring provision has
been recognised in 2017. More information is included in note 28
Provisions.
In 2017 restructuring provisions (included in non-recurring additions
to provisions) have been recognised in respect of restructuring
39
11 ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE
In 2017, the Group has disposed its discontinued operations in In July 2017, the Lilydale property in Australia formerly reported as
Colombia consisting of Sibelco Colombia S.A.S., a wholly owned assets held for sale, was sold for €13.2 million resulting in a gain on
subsidiary (see note 4 Disposal of subsidiaries or other business). sale of €4.9 million (see note 9 Other operating income).
Other individual assets and liabilities classified as held for sale mainly The major classes of assets and liabilities classified as held for sale
relate to Australia, of which €2.5 million on assets and €0.5 million as at 31 December are as follows:
on liabilities, related to the associated site restoration provision (€0.5
million).
REVENUE

Inventory - 882
Trade and other receivables - 1 421
Cash and cash equivalents - 172
Assets held for sale disposal group Colombia - 2 475
Assets held for sale Australia 2 518 11 154

Assets held for sale Europe 1 038 1 038
Total assets held for sale 3 556 14 667
Creditors - 1 134
Other current liabilities - 3 251
Interest-bearing liabilities - 4 661
Non-current liabilities - 38
Liabilities directly associated with assets held for sale disposal group Colombia - 9 084
Liabilities held for sale Australia 565 1 729
Total liabbilities held for sale 565 10 813
THE RESULTS FOR THE YEAR FOR THE DISPOSAL GROUP COLOMBIA, UNTIL THE OPERATION WAS SOLD, ARE PRESENTED BELOW:

Revenue 2 181 6 603
Transportation costs (269) (895)
Cost of Sales (1 823) (5 242)
SG&A-expenses (247) (996)
Finance income/(expenses) (330) (861)
Profit/(loss) before income taxes (688) (4 530)
Income taxes - -
Profit/(loss) for the period from disposal group Colombia (688) (4 530)
The statement of profit and loss of our discontinued operations are

presented above and correspond to the 2017 profit/(loss) after tax
from discontinued operations line item in the consolidated statement
of profit or loss.

12 PERSONNEL EXPENSES
Wages and salaries 437 628 422 111
Compulsory social security contributions 55 084 57 982
Other personnel costs 77 042 61 571
Contributions to defined contribution plans 9 993 10 405
Expenses for post employment benefits 27 12 271 11 624
Expenses for termination benefits 27 175 791
Expenses for other defined benefits 27 98 -
Expense for other employee benefits (non DBO related) 14 815 -
Total 607 105 564 484
Full time equivalents (FTE) at 31 December 9 411 9 378

Personnel expenses are recognised in the following line items in the statement of income: 9 411
Cost of sales 387 550 372 072
Sales, administrative and general expenses 219 555 192 412
607 105 564 484
13 NET FINANCING COSTS

Interest income on cash and cash equivalents 1 412 -
Dividend income 21 14
Net foreign exchange gains - 977
Gain on disposal/liquidation of financial assets 4 9 654 -
Other financial income 1 395 -
Financial income 12 483 991
Interest expense on financial liabilities (29 967) (49 547)

Net foreign exchange losses (4 658) -
Net change in fair value of derivatives and financial assets (1 771) (1 469)
Change in fair value of net non current assets classified as held for sale 11 (719) -
Unwinding of the discount rate provisions 28 (7 836) (8 119)
Change in discount rate provisions 28 (10 334) (897)
Net interest expense on defined benefit liability 27 (4 485) (4 994)
Other financial expense (4 246) (6 931)
Financial expenses (64 017) (71 957)
Net finance cost (51 534) (70 966)
41
Financial income was €12.5 million, which is an increase by €11.5 The decrease in the interest expenses (€19.6 million) on financial
million, mainly resulting from disposal or liquidation of financial liabilities was driven by internal refinancing in which the Group
assets (€9.7 million). Moreover the Group has disposed its interests converted intercompany loans in high interest rate currencies
in Mineraalbewerkingsindustrie Uikhoven NV, Sibelco Colombia into equity. The Group was able to continue to change its funding
SAS, MCS Mining Industry Lao Co. Ltd, PT Bhumidana, Trading costs from high interest currencies into a low interest currency,
House Hercules Saint Petersburg LLC and EDK Mineraçao S.A. primarily Euro, and the maturity and replacement of an IRS swap
(see note 4 Disposal of subsidiaries or other business and note 18 of €200 million with a fixed exchange rate into a lower three-month
Equity accounted investees). As of 2017 gain/(losses) on disposal of floating rate.
subsidiaries and equity companies are presented as financial result. The increase of €9.4 million with regard to “Change in discount rate
In 2016 these gain/(losses) were still included in the other operating provisions” relates to the change in discount/inflation rates with
income and other operating expenses (note 9 Other operating respect of provisions for site restoration and plant demolition (see
income and 10 Other operating expenses). note 28 Provisions).
Financial expenses were €64.0 million. This decrease by €8.0 million Other financial expense mainly includes bank charges and contract
compared to 2016 is explained by a decrease in interest expenses, transaction costs.
partly offset by an increase due to a change in discount rate/inflation
rates in provisions.
14 INCOME TAXES
RECOGNISED IN THE STATEMENT OF INCOME

Current year 73 831 42 074
Adjustments for prior years 3 345 2 975
Current tax expense 77 177 45 049
Origination and reversal of temporary differences (20 784) (50 384)
Utilization previously recognised tax losses 1 704 4 429
Recognition current year's losses (8 657) (6 852)
Change in tax rate (43 317) 21
Change in unrecognised temporary differences 7 666 43 817
Recognition of previously unrecognised tax losses (5 745) (675)
Deferred tax expense (income) 20 (69 132) (9 644)
Income taxes in the statement of income 8 044 35 405

RECONCILIATION OF EFFECTIVE TAX RATE
In thousands of euro 2O17 % 2O16 %
Profit before income taxes 107 943 (222 324)

Profit (loss) from discontinued operations (688) (4 530)
Share of profit of associates (net of tax) (2 028) (1 317)
Profit before income taxes and share of profit of equity accounted investees 105 227 (228 171)
Income tax using the domestic corporate tax rate 35 767 33.99% (77 555) (33.99%)
Effect of tax rates in foreign jurisdictions (6 976) (6.63%) 2 675 1.17%
Change in tax rate (43 317) (41.16%) 21 0.01%
Effect of tax rate on specific gains (18 973) (18.03%) 99 0.04%
Non-deductible expenses 11 180 10.62% 37 857 16.59%
Withholding taxes and non-exempt part of dividends 3 271 3.11% 4 373 1.92%
Tax exempt revenues (1 812) (1.72%) (652) (0.29%)
Tax allowances (12 632) (12.00%) (10 920) (4.79%)
Utilisation of tax losses not previously recognised (4 396) (4.18%) (1 011) (0.44%)
Recognition previously unrecognised tax losses (5 745) (5.46%) (675) (0.30%)
Current year losses for which no deferred tax asset recognised 36 901 35.07% 36 562 16.02%
Under (over) provided in prior years 3 345 3.18% 2 975 1.30%
Change in unrecognised temporary differences 7 666 7.29% 43 817 19.20%
Other 3 763 3.58% (2 161) (0.95%)
Total 8 044 7.64% 35 405 15.52%
Change in tax rate mainly relates to the impact of the US tax reform. This led to a net gain (see note Disposal of subsidiaries or other
The US congress passed the Tax Cut and Jobs act which was signed business) which is not taxable.
into law at the end of 2017. Under this Act, US corporate tax rate will Current year losses not recognised are mainly due to impairments
be significantly reduced. Our US subsidiaries had a net deferred for which there is no immediate or deferred tax deduction, due to
tax liability, which resulted into a favorable €48.3 million deferred tax insufficient future profit expectations.
income. Tax allowances include the depletion allowances in the US.
The effect of tax rate on specific gains relates to a number of Group Income taxes (current and deferred) are €8.0 million compared to
companies which were liquidated or sold in 2017. At such time the €35.4 million in 2016.
reserves for foreign currency translation differences are reversed.
15 CURRENT TAX ASSETS AND LIABILITIES
The current tax assets of €31.3 million (2016: €41.4 million) represent The current tax liabilities of €24.7 million (2016: €26.7 million)
the amount of income taxes recoverable in respect of current and represent the estimated additional charges for income taxes.
prior periods that exceed payments.
43
16 PROPERTY, PLANT AND EQUIPMENT
Land and Mineral Processing Assets under
In thousands of euro Note buildings properties equipment construction 2O17 2O16
Balance at end of previous period as reported 947 236 813 071 3 194 422 379 768 5 334 497 5 097 407
Acquisition of a subsidiary (Final PPA 2016 restated) 3 - - - - - 4 785
Balance at end of previous period restated 947 236 813 071 3 194 422 379 768 5 334 497 5 102 192
Additions 2 323 2 279 12 689 177 889 195 180 240 684
New finance leases - - 2 315 107 2 422 -
Acquisitions through business combinations 3 (44) - 7 033 (2 208) 4 781 -
(provisional PPA 2017)
Disposals & retirements (10 893) (6 778) (54 176) (7 432) (79 279) (62 788)
Transfers 73 472 (11 697) 139 409 (204 622) (3 438) 650
Asset component change site rest /plant dem 28 - 45 153 50 502 - 95 655 36 252
Exchange differences (84 106) (52 901) (217 451) (37 566) (392 024) 52 083
Other changes 889 (951) 3 541 (221) 3 258 (34 576)
Balance at end of period 928 877 788 176 3 138 284 305 715 5 161 052 5 334 497
Depreciation and impairment losses
Balance at end of previous period as reported (400 586) (412 725) (2 316 264) (13 139) (3 142 714) (2 762 689)
Depreciation 8 (31 799) (22 287) (173 199) - (227 285) (250 449)
Impairment losses recognised 8.10 (30 755) (1 024) (31 321) (27 034) (90 134) (164 810)
Disposals & retirements 10 182 6 441 50 696 6 399 73 718 47 729
Transfers (1 345) 3 608 (11 195) 1 305 (7 627) 879
Exchange differences 33 147 22 785 149 482 2 805 208 219 (18 243)
Other changes 1 775 7 159 (2 484) (1 050) 5 400 4 869
Balance at end of period (419 381) (396 043) (2 334 285) (30 714) (3 180 423) (3 142 714)
Carrying amounts at 1 January as reported 546 650 400 346 878 158 366 629 2 191 783 2 334 718
Carrying amounts at 1 January as restated 546 650 400 346 878 158 366 629 2 191 783 2 339 503
Carrying amounts at 31 December 509 496 392 133 803 999 275 001 1 980 629 2 191 783
ADDITIONS ASSET COMPONENT CHANGE

Additions throughout the year mainly relate to additions of assets As from 2015, detailed closure planning requirements were
under construction and include the construction for new plants in the introduced through our closure plan policy, with each asset required
US, Brazil and Indonesia as well as the construction of a new kilns to develop a closure plan as part of their life of asset plan. Additional
in Belgium and Australia. Furthermore, assets under construction closure plans for the site restoration and plant demolition were set up
consist out of upgrades to existing processing lines, major road in 2017, mainly relating to sites in North America and Europe (Italy,
realignment work and overall plant expansions. Russia, France and Germany). As at the end of 2017 all sites have
now established a closure plan for both the site restoration and the
plant demolition in order to maintain the sustainability the Group
strives for.

EXCHANGE DIFFERENCES compared to the euro. Out of the total exchange differences in 2017,
Large fluctuations can be found relating to exchange differences. three-fourth can be explained by the weakening of the US dollar
These can be explained by the weakening of several currencies versus euro.
DEPRECIATION AND IMPAIRMENT LOSSES RECOGNISED

Impairment test for cash-generating units containing goodwill - (122 126)
Impairment based on internal and external impairment indicators (90 134) (42 684)
Total impairment on tangible assets (90 134) (164 810)
During the year the Group tested property, plant and equipment for Q Management has a plan to discontinue or to realign the strategic
impairment (see note 17 Intangible assets and goodwill) as a result of direction of individual assets or group of assets (operating plant/
the required yearly test on cash-generating units containing goodwill. plants) because economic performance is unsatisfactory;
No impairment losses were recognised for 2017 based on this test. Q Decisions taken by local authorities which reduce or restrict the
Further every year the Group assesses if there are indicators that Group’s rights on assets impacting market values.
assets need to be impaired. Individual assets (operating plants, a mill Based on the occurrence of internal and external impairment
or kiln etc.) might be subject to impairment testing when following indicators the Group impaired a total of €90.1 million on tangible
triggering events happen: assets (2016: €42.7 million). Out of these impairments €38.5 million
Q An individual asset or group of assets (operating plant/plants) are occurred in Asia, €35.5 million in South America, €9.2 in Australia and
physically damaged (e.g. fire or natural disaster); €7.0 million in Europe.
Q An individual asset or group of assets (operating plant/plants) is
idle;
THE DEPRECIATION AND IMPAIRMENT CHARGE IS RECOGNISED IN THE FOLLOWING LINE ITEMS IN THE STATEMENT OF INCOME:

Cost of Sales 8 235 146 230 909
SG&A expenses 8 4 978 19 109
Other operating expenses 10 77 295 165 241
Total 317 419 415 259
LEASED ASSETS
RESTRICTIONS
The Group leases land and buildings, plant and processing Restrictions on title and property, plant and equipment pledged
equipment and mobile equipment under a number of finance lease as security for liabilities at 31 December 2017 amounts to zero
agreements. At 31 December 2017, the carrying amount for leased compared to €3.1 million per 31 December 2016. This movement is
land and buildings was €0.6 million (2016: €1 million), plant and explained by our divestments of MCS Mining Industry Lao Co. Ltd. in
processing equipment €0.9 million (2016: €1.1 million) and mobile Asia.
equipment €4.1 million (2016: €2.8 million). The increase of leased
mobile equipment is mainly due to new finance lease contracts in
Germany.
45
17 INTANGIBLE ASSETS AND GOODWILL
Mineral Rights Development
In thousands of euro Note and E&E costs Goodwill Costs Other 2O17 2O16
Balance at end of previous period as reported 199 815 257 518 5 910 153 295 616 538 680 366
Acquisition of a subsidiary 3 - - - - - 6 651

(Final PPA 2016 restated)
Balance at end of previous period restated 199 815 257 518 5 910 153 295 616 538 687 017
Additions 98 - 119 8 832 9 049 6 046

Transfers 7 945 (23 661) - (123) (15 839) 25
Disposals (12 717) (4 221) (119) (244) (17 301) (27 613)
Exchange differences (13 376) (20 301) (67) (10 520) (44 264) 1 582
Other changes - - 1 048 998 2 046 (50 519)
Balance at end of period 181 765 209 335 6 891 152 238 550 229 616 538
Depreciation and impairment losses
Balance at end of previous period (122 002) (180 119) (5 813) (74 008) (381 942) (388 069)
Amortisation (2 451) - (371) (16 562) (19 384) (13 847)

Impairment losses recognised (7 928) (3 731) - (110) (11 769) (56 103)
Transfers (4 723) 23 655 1 1 195 20 128 1 790
Disposals 12 487 3 648 119 212 16 466 23 841
Exchange differences 6 334 13 363 59 4 001 23 757 (357)
Other changes - - - 4 4 50 803
Balance at end of period (118 283) (143 184) (6 005) (85 268) (352 740) (381 942)
Carrying amounts at 1 January as reported 77 813 77 399 97 79 287 234 596 292 297
Carrying amounts at 1 January as restated 77 813 77 399 97 79 287 234 596 298 948
Carrying amounts at 31 December 63 482 66 151 886 66 970 197 489 234 596
GOODWILL EXCHANGE DIFFERENCES

Goodwill decreased from €77.4 million as at December 2016 to Large fluctuations can be found relating to exchange differences.
€66.2 million as at December 2017. This can mainly (€6.9 million) These can be explained by the weakening of several currencies
be explained by exchange differences, as the US dollar weakened compared to the euro. Out of the total exchange differences in 2017,
compared to the euro during the year 2017, by impairments recorded more than eighty-five percent can be explained by the devaluation of
in South America (€3.7 million) and by the divestments of entities that the US dollar against the euro.
contained goodwill.

AMORTISATION AND IMPAIRMENT LOSSES RECOGNISED
Based on the outcome of the yearly impairment testing on cash-generating units containing goodwill, there were no impairment losses
recognised for 2017 (see further).
Every year the Group assesses if there are indicators that assets million on intangible assets and €3.7 million on goodwill. They were
need to be impaired. Based on the occurrence of internal and recognised in Europe and Asia (€7.9 million) and in South America
external impairment indicators the Group impaired a total of €8.1 (€3.7 million) respectively.
THE AMORTISATION AND IMPAIRMENT CHARGE IS RECOGNISED IN THE FOLLOWING LINE ITEMS IN THE STATEMENT OF INCOME:

Cost of Sales 8 9 232 12 488
SG&A expenses 8 10 812 1 212
Other operating expenses 10 11 109 56 250
Total 31 153 69 950
IMPAIRMENT TEST FOR CASH-GENERATING UNITS CONTAINING GOODWILL

The carrying amount of goodwill is as follows per cluster of cash-generating unit (CGU):
Clusters of CGU’s 2O17 2O16

North America 38 824 44 172
Europe 22 048 23 056
Australia - -
Asia 5 279 5 994
South America - 4 177
Total 66 151 77 399
For impairment testing, the carrying amount of a cluster of cash- Q Several operating plants form a portfolio of similar or
generating units including goodwill is compared with the recoverable complementary assets that are operating in the same active
amount of this cluster of cash-generating units. On the basis of the market presenting homogeneous macroeconomic characteristics
management structure a cluster of cash-generating units is defined (subject to the same economic and commercial influences).
generally as a Region (or in IFRS terms Operating Segments) Notwithstanding, individual assets (operating plants, a mill or kiln
whereas the cash-generating units equals the Strategic Business etc.) might be subject to impairment testing when following triggering
Segments within the five Regions. events happen:
Whenever a business combination takes place the carrying amount Q An individual asset or group of assets (operating plant/plants) are
of goodwill is allocated to each individual plant or mineral deposit or physically damaged (e.g. fire or natural disaster);
groups of plants and mineral deposits (cash-generating units) that Q An individual asset or group of assets (operating plant/plants) is
are expected to benefit from the synergies of the combination. idle;
A cash-generating unit consists of an operating plant including the Q Management has a plan to discontinue or to realign the strategic
mineral deposit or a group of operating plants if: direction of individual assets or group of assets (operating plant/
Q The performance of the cash inflow-generating assets of one plants) because economic performance is unsatisfactory;
operating plant interact with the performance of other operating Q Decisions taken by local authorities which reduce or restrict the
plants because of homogeneous or complementary production Group’s rights on assets impacting market values.
processes in terms of portfolio of minerals, transformation The Group has defined 5 clusters of cash-generating units and
processes and applications; impairment tests are annually conducted in September.
47
The recoverable amount of all the cash-generating units is based Q The period over which management used projected cash flows
on value in use calculations. Those calculations use cash flow based on financial budgets/forecasts approved by management
projections based on budget/forecast plans. The key judgments, generally follows the useful life of the mineral deposit attached to
estimates and assumptions used in the value in use calculations are the cash-generating unit, because extractive industries is a long-
as follows: term business. For cash-generating units not having their own
Q The first year of the model is based on budgeted free operating resources, the cash flow projection is limited to a ten-year period
cash flows for the next year; and a terminal value is determined on the basis of a multiple
Q In the second to third years of the model, free operating cash applied on the tenth year discounted cash flow.
flows are based on the Group’s three years forecast plan. Q The projections are made in the functional currency of the
Sibelco’s forecast plan is based on external sources in respect cash-generating unit and discounted at the unit’s after-tax
of macro-economic assumptions, industry, inflation and foreign weighted average cost of capital (WACC). The discount rates are
exchange rates, past experience and identified initiatives in determined by reference to an assessment of the WACC of groups
terms of market share, revenue, variable and fixed cost, capital present in the sector; adjusted per country. The discount factors
expenditure and working capital assumptions; are reviewed annually. The WACC ranged between 7.68 percent
Q Free operating cash flows after the first three-year period and 16.68 percent in nominal terms for goodwill impairment
are extrapolated generally using expected annual long-term testing conducted for 2017:
consumer prices indices and based on external sources;
DISCOUNT RATES FOR IMPAIRMENT TESTING

North America Europe Australia Asia South America
Group target ratio’s
% debt 25.00%
% equity 75.00%
Cost of Sibelco debt 4.51% 4.46% 4.56% 6.21% 14.21%
Risk free rate = Rt 2.51% 2.46% 2.56% 4.21% 12.21%

Default spread (BBB) 2.00% 2.00% 2.00% 2.00% 2.00%
Corporate tax rate 34.16% 25.16% 30.00% 24.48% 32.02%
Cost of debt after tax 2.97% 3.33% 3.19% 4.69% 9.66%
Cost of Sibelco equity = Rt + ß . Em 9.24% 9.35% 9.37% 11.12% 19.02%
Risk free rate = Rt 2.51% 2.46% 2.56% 4.21% 12.21%

Beta = ß 1.12 1.25 1.13 1.15 1.13
Market equity risk premium = Em 6.00% 6.00% 6.00% 6.00% 6.00%
Balance at end of period 7.68% 7.85% 7.82% 9.51% 16.68%
Expected inflation 2.42% 2.29% 2.43% 3.02% 6.09%

Cost of debt after tax adjusted by inflation 1.38% 1.62% 1.49% 2.41% 5.52%
Cost of equity adjusted by inflation 6.82% 7.07% 6.93% 8.10% 12.90%
WACC in real terms 5.46% 5.70% 5.57% 6.68% 11.05%
These above calculations are corroborated by valuation multiples.

An increase of 1.0 percent in the rate used to discount the future cash flows and terminal values would not have led to an additional
impairment.

18 EQUITY ACCOUNTED INVESTEES
Carrying amount at 1 January 37 409 37 414
Result of the period 2 028 1 317

Dividends (2 324) (2 575)
Disposal to third parties - EDK Mineraçao S.A. (9 801) -
Exchange differences 612 1 256
Other (295) (3)
Carrying amount at 31 December 27 629 37 409
Attributable to:
Interests in joint arrangements 6 17 193 26 420
Investments in associates 7 10 436 10 989
The Group’s share recognised in profit or loss in its associates and In 2017, the Group has disposed its interest in EDK Mineraçao S.A.
joint-ventures (see notes 6 Interest in joint arrangements and 7 (Brazil – owned 35 percent). Following schedule reflects the effect of
Investments in associates) for the year ended 31 December 2017 the disposal:
was €2.8 million profit (2016: €1.3 million profit).

Cash consideration received from buyers 771
Carrying value of the disposed interest 9 801
Difference recognised in net financing costs 13 (9 030)
19 FINANCIAL ASSETS
NON-CURRENT FINANCIAL ASSETS:

Loans to third parties at amortised cost 40 248
Loans to associates 35 887 1 064
Other receivables non-current, 3rd parties - 453
Derivatives forex 31 - 429
Other 2 588 2 714
Non-current financial assets 3 516 4 908
CURRENT FINANCIAL ASSETS

Derivatives forex 31 3 833 15 598
Other 89 1 805
Current financial assets 3 922 17 403
49
20 DEFERRED TAX ASSETS AND LIABILITIES
RECOGNISED DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets and liabilities are attributable to the following items:
Net
Assets 2017 Assets 2016 Liabilities 2017 Liabilities 2016 2017 Net 2016
Property, plant and equipment (44 287) (68 929) 135 114 246 546 90 827 177 617
Leased assets - (145) - 358 - 213
Intangible assets (50 748) (55 285) 28 198 34 566 (22 549) (20 719)
Financial assets (8 007) (3 342) 27 336 658 19 329 (2 684)
Inventories (6 957) (12 661) 2 908 1 321 (4 048) (11 340)
Trade and Other Receivables (4 260) (2 154) 521 264 (3 738) (1 890)
Interest bearing loans & borrowings (7 380) (565) 3 891 - (3 490) (565)
Provisions (79 299) (71 288) 8 496 4 007 (70 802) (67 281)
Employee benefits (25 127) (38 976) 19 (781) (25 108) (39 757)
Trade and Other Payables (6 360) (3 049) 2 355 (537) (4 005) (3 586)
Deferred government grants - - - 869 - 869
Other items (1 778) (25 533) 11 594 48 950 9 816 23 417
Tax loss carry-forwards (60 555) (63 327) - - (60 555) (63 327)
Tax (assets) / liabilities (294 756) (345 254) 220 433 336 221 (74 322) (9 033)
Set off of tax 34 891 71 230 (34 890) (71 230) - -
Net tax (assets) / liabilities (259 865) (274 024) 185 543 264 991 (74 322) (9 033)

MOVEMENT IN TEMPORARY DIFFERENCES DURING THE PERIOD
Acquired
Balance 31, Recognised in Recognised in in business Translation Balance 31,
In thousands of euro Dec. 2015 profit or loss equity/OCI combinations Divestments Reclasses differences Dec. 2016
Property, plant and equipment 226 850 (48 745) - 1 525 - (4 490) 2 476 177 616
Leased assets 182 25 - - - - 6 213
Intangible assets (10 912) (12 792) - 6 939 - (3 401) (553) (20 719)
Financial assets (959) (2 925) 810 - - 381 9 (2 684)
Inventories (12 232) 1 138 - - - 57 (302) (11 339)
Trade and other receivables (1 048) (868) - - - 1 25 (1 890)
Interest bearing loans & borrowings (613) 52 - - - - (4) (565)
Provisions (55 518) (9 388) - (550) - (790) (1 036) (67 282)
Employee benefits (35 657) 15 (6 395) - - 1 649 631 (39 757)
Trade and other payables (9 804) 6 275 - - - - (57) (3 586)
Deferred government grants 854 34 - - - (2) (18) 868
Other items 4 052 10 432 - - - 8 365 570 23 419
Tax loss carry-forwards (96 346) 47 103 - - - (12 824) (1 260) (63 327)
Total 8 849 (9 644) (5 585) 7 914 - (11 054) 487 (9 033)
Recognised Acquired
Balance in profit or Recognised in business Translation Balance 2017
In thousands of euro Note 31, Dec. 2016 loss in equity/OCI combinations Divestments Reclasses differences December
Property, plant and equipment 177 616 (35 896) - 1 897 - (36 263) (16 527) 90 827
Leased assets 213 - - - - (213) - -
Intangible assets (20 719) (3 421) - (317) - (675) 2 583 (22 549)
Financial assets (2 684) (2 896) (240) - - 25 148 1 19 329
Inventories (11 339) 1 220 - - - 5 415 655 (4 048)
Trade and other receivables (1 890) (32) - 284 - (2 308) 208 (3 738)
Interest bearing loans & borrowings (565) (3 358) - - - 352 81 (3 490)
Provisions (67 282) (14 882) - (462) - 7 776 4 048 (70 802)
Employee benefits (39 757) (16 025) 10 827 - - 17 612 2 235 (25 108)
Trade and other payables (3 586) 4 385 - (961) - (4 144) 301 (4 005)
Deferred government grants 868 - - - - (868) - -
Other items 23 419 (641) - - (21) (11 542) (1 397) 9 816
Tax loss carry-forwards (63 327) 2 415 - - 638 (1 716) 1 436 (60 555)
Total 3,14 (9 033) (69 132) 10 587 441 616 (1 426) (6 375) (74 322)
UNRECOGNISED DEFERRED TAX ASSETS AND LIABILITIES

On 31 December 2017, a deferred tax liability relating to investments Deferred tax assets have not been recognised in respect of tax
in subsidiaries and equity accounted investees has not been losses for €99.0 million (2016: €99.3 million), because it is not
recognised for future dividend streams to the parent company, probable that future taxable profit will be available against which the
because management believes that this liability will not be incurred Group can utilise the benefits there from.
in the foreseeable future. Considering that in 2018 the participation The majority of the tax losses have no legal expiry date and the legal
exemption on qualifying dividends in Belgium will increase from expiry term of the rest is on average 5 years.
95 percent to 100 percent, there is in fact no longer an unrecognised
deferred tax liability (2016: €4.3 million).
51
21 OTHER NON-CURRENT ASSETS
Cash guarantees, at cost 1 234 1 009
Other 9 465 13 843
Other Non-current assets 10 699 14 852
Total other non-current assets amount to €10.7 million in 2017 (€14.9

million in 2016) and consist out cash guarantees, cash deposits and
royalty advances.
22 INVENTORIES
Raw materials 75 950 79 120
Consumables 14 982 15 414
Work in progress mining & industrial treatment 19 672 22 335
Finished goods mining & industrial treatment 164 788 197 665
Goods purchased for resale 35 108 35 608
Spare Parts 47 240 47 187
Write-downs (23 069) (20 703)
Inventories 334 671 376 626
The cost of raw materials and consumables was €326.7 million Write-downs are related to slow moving inventories as they may be
(€370.3 million in 2016) and of goods purchased for resale €102.1 an indicator that the net realisable value is likely to be less than cost,
million (2016: €91.4 million), both recognised as an expense in profit i.e. it is likely to become obsolete before it can be sold. Write-downs
or loss. are triggered whenever inventory exceeds twelve months production
or sales volumes.

23 TRADE AND OTHER RECEIVABLES
CURRENT TRADE AND OTHER RECEIVABLES
Trade receivables 31 467 368 493 500
Construction contracts receivables 695 1 256
Impairment losses 31 (9 540) (12 740)
Trade Receivables 458 523 482 016
Other receivables 15 192 8 425

Other receivables - Impairment loss - (261)
Interest receivables 66 68
Tax receivables, other than income taxes 37 665 31 148
Amounts due from customers for contract work 1 919 1 761
Advance payments, prepayments and prepaid expenses 22 119 22 458
Cash guarantees, at cost 485 463
Other current assets 5 486 16 413
Other Receivables 82 933 80 475
Total 541 456 562 491
24 CASH AND CASH EQUIVALENTS

Deposits with banks 24 219 10 904
Cash equivalents 74 843 8 314
Bank balances - Current accounts 39 870 50 041
Cash at hand 145 155
Cash and cash equivalents in the statement of cash flows 139 077 69 414
Cash equivalents comprise cheques received and invoices sold

under a factoring program that are readily convertible into known
amounts of cash.
53
25 CAPITAL AND RESERVES
CAPITAL AND RESERVES SHARE CAPITAL AND SHARE PREMIUM
The various components of capital and reserves and the changes The issued capital of the Company as per 31 December 2017
therein from 31 December 2016 to 31 December 2017 are presented amounts to €25.0 million, represented by 470 170 fully paid ordinary
in the Consolidated Statement of Changes in Equity. shares without par value.
In thousands of euro
Ordinary shares issued and fully paid Number Amount
At 1 January 2016 470 170 25 000 000

Changes - -
At 31 December 2016 470 170 25 000 000
Changes - -
At 31 December 2017 470 170 25 000 000
TRANSLATION RESERVE instruments related to hedged transactions that have not yet affected
The translation reserve comprises all foreign exchange differences profit or loss.
arising from the translation of the financial statements of foreign
entities of the Company. RESERVE FOR TREASURY SHARES
At 31 December 2017 the Group held 34 994 (2016: 34 994) of the
HEDGING RESERVES Company’s shares. Throughout the year no new treasury shares were
The hedging reserve comprises the effective portion of the acquired.
cumulative net change in the fair value of cash flow hedge
Treasury shares Number Amount
At 1 January 2016 34 944 64 806

Changes 50 410
At 31 December 2016 34 994 65 216
Changes - -
At 31 December 2017 34 994 65 216
DIVIDENDS
In March 2018 a dividend of €72.7 million (€154.56 per ordinary recognised in the accounts. The difference between the proposed
share) has been recommended by the Board of Directors, but has not dividend and the interim dividend has not yet been recognised.
yet been approved by the General Meeting of Shareholders of SCR- The following dividends were declared and paid by the Group on the
Sibelco NV. On 10 October, 2017 an interim dividend of €26.9 million Company’s shares, excluding dividends paid for treasury shares, for
gross (€57.14 per ordinary share) has already been declared and the year ended 31 December:

Final dividend 97.42 euro per ordinary share for 2017 (85.71 euro per ordinary share for 2016) 42 393 37 301
Interim dividend 57.14 euro per ordinary share for 2017 (54.79 per ordinary share for 2016) 24 867 23 845

26 INTEREST-BEARING LOANS AND BORROWINGS
A. INTEREST BEARING LOANS & BORROWINGS

Bank borrowings 12 217 69 990
Syndicated loans 148 140 187 266
Amortizing Syndicated Loan at fixed rate 71 428 85 714
Amortizing Syndicated Loan at floating rate 76 712 101 552
Finance lease obligations 3 260 2 465
Private placements 488 763 545 699
Private placement Unimin USD 100 million 83 382 95 794
Private placement Silfin USD 100 million 83 275 94 685
Private placement SCR-Sibelco NV USD 230 million 191 779 218 196
Private placement SCR-Sibelco NV AUD 200 million 130 327 137 024
Other loans & borrowings 7 566 9 568
Non-current 659 945 814 988
Bank borrowings, current portion 37 434 51 607

Syndicated loans 39 126 39 126
Amortizing Syndicated Loan at fixed rate, current portion 14 286 14 286
Amortizing Syndicated Loan at floating rate, current portion 24 840 24 840
Finance lease obligations, current portion 1 284 1 719
Other loans & borrowings 4 292 5 437
Bank overdrafts 38 693 50 087
Current 120 829 147 976
Total 780 774 962 964
The principle finance agreements do contain financial covenants. of December 2017, the Group was well below any of these financial
The Group’s financial covenants have been set to provide the Group covenants.
with a very strong buffer in case of further cash needs driven by At 31 December 2017, the Group had available €575.0 million of
working capital, Capex, acquisitions or pressure on its EBITDA. End undrawn committed borrowing facilities.
55
B. RECONCILIATION BETWEEN THE OPENING AND CLOSING BALANCES FOR LIABILITIES ARISING FROM
FINANCING ACTIVITIES
In thousands of euro 2O16 Cash flows Non-cash changes 2O17

Foreign exchange
Acquisition / Foreign exchange revaluation in
disposal translation (profit) or loss
Bank borrowings 121 597 (63 895) (771) (7 280) - 49 651

Syndicated loans 226 392 (34 162) - 1 (4 965) 187 266
Finance lease obligations 4 184 (1 989) 2 423 (84) 10 4 544
Private placements 545 699 (3 291) - (11 485) (42 159) 488 764
Other loans & borrowings 15 005 723 (897) (1 606) (1 369) 11 856
Bank overdrafts 50 087 (10 757) - (782) 145 38 693
Gross debt 962 964 (113 371) 755 (21 236) (48 338) 780 774
C. TERMS AND DEBT REPAYMENT SCHEDULE
In thousands of euro 2017 2016

Nominal Year or Face Carrying Nominal Year or Face Carrying
Interest Rate maturity value Amount Interest Rate maturity value Amount
Bank loans Bank loans

ARS 13.57% 2017 - - ARS 36.50% 2016 1 726 1 726
BRL 13.64% 2017 12 146 12 146 BRL 12.00% 2016 38 948 38 948
CLP 5.36% 2017 16 724 16 724 CLP 6.70% 2016 12 787 12 787
CNY 3.93% 2017 27 464 27 464 CNY 7.57% 2016 8 243 8 243
EUR 1.95% 2019-2023 465 166 465 166 EUR 2.48% 2019-2023 636 581 636 581
GBP 3.40% 2017 30 751 30 751 GBP 4.66% 2016 54 720 54 720
IDR 10.08% 2017 33 015 33 015 IDR 13.38% 2016 3 211 3 211
INR 8.88% 2017 8 617 8 617 INR 32.51% 2016 4 753 4 753
MYR 8.63% 2017 12 730 12 730 MYR 8.79% 2016 3 139 3 139
NOK 3.91% 2017 28 726 28 726 NOK 5.49% 2016 17 241 17 241
PHP - - - - PHP 12.60% 2016 1 868 1 868
PLN - - - - PLN 5.53% 2016 9 595 9 595
RUB 10.71% 2017 14 660 14 660 RUB 12.26% 2016 17 929 17 929
SEK 3.19% 2017 11 893 11 893 SEK 3.97% 2016 32 902 32 902
THB 3.20% 2017 7 269 7 269 THB 5.49% 2016 9 326 9 326
TRY 5.95% 2017 3 814 3 814 TRY 4.24% 2016 3 136 3 136
USD 5.20% 2019 91 471 91 471 USD 4.64% 2019 88 833 88 833
Total 764 446 764 446 944 938 944 938
Fin Lease obligations 4 470 4 470 4 184 4 184

Loans with Non-Fin Ctparties 7 566 7 566 8 405 8 405
Other 4 292 4 292 5 437 5 437
Total 780 774 780 774 962 964 962 964

D. FINANCE LEASE OBLIGATIONS

Minimum lease Minimum lease
Note payments Interest Principal payments Interest Principal
Less than one year 1 284 74 1 210 1 798 79 1 719

Between one and five years 3 260 - 3 260 2 579 114 2 465
More than five years - - - - - -
Total 31 4 544 74 4 470 4 377 193 4 184
27 EMPLOYEE BENEFITS
Sibelco Group companies maintain retirement, post-retirement, results as at 31 December 2016. Any agreed changes to the recovery
medical and long-term benefit plans in several countries in which the plan and contributions will be reflected during 2018.
Group operates. Closure to future accrual will limit future growth in the defined
benefit obligation. Scheme designed trigger points will automatically
POST-EMPLOYMENT DEFINED BENEFIT PLANS switch growth assets to matching assets when their values have
reached pre-agreed targets. If the Scheme becomes fully funded
UNITED KINGDOM and in surplus, “deficit” contributions to the Scheme would cease
United Kingdom represents 45 percent of the obligations as per and ultimately it is possible the surplus could be refunded to the
31 December 2017. The Sibelco UK Final Salary Pension Scheme sponsoring employers once all benefits have been secured.
is closed to new entrants and future accrual. All previous active
members of the Scheme entered a new defined contribution section UNITED STATES
of the Scheme from 1 January 2014, while all new employees United States represents 24 percent of the obligations as per 31
hired since 1 January 2003 have been offered entry to a separate December 2017. In the United States (“U.S.”), the Company sponsors
defined contribution plan. The Scheme is formally governed by a a defined benefit plan, the Unimin Corporation Pension Plan (hourly
consolidated Trust deed and rules, which ensures the assets of the and salaried) (the “Pension Plan”) and a nonqualified supplemental
Scheme are segregated from those of the sponsoring employers. benefit plan, the Unimin Corporation Pension Restoration Plan (the
The Scheme has a statutory funding objective to ensure that it has “Restoration Plan”). The Pension Plan is a funded plan. Minimum
sufficient and appropriate assets to cover its technical provisions funding and maximum tax-deductible contribution limits for the
(Pension Act 2004). Liabilities are exposed to interest rate risk, Pension Plan are defined by the Internal Revenue Service. The
inflation risk and demographic risk (mortality, turnover). Assets are Restoration Plan is unfunded. Salaried participants accrue benefits
exposed to interest rate risk, market risk, and credit risk. The Trustee based on service and final average pay. Hourly participants’
has agreed that Scheme’s defined benefit Section should have a benefits are based on service and benefit formula. The Pension
strategic asset allocation. Plan was closed to new entrants effective on 1 January 2008, and
With the value of the UK Scheme’s assets being less than the union employee participation in the Pension Plan at the last three
Trustee’s technical provisions, a recovery plan has been agreed unionized locations participating in the Plan was closed to new
between the sponsoring companies and the Trustees of the Scheme entrants effective on 1 November 2017. Until the Restoration Plan
to eliminate the difference by payment of additional “deficit” was amended to exclude new entrants on 15 August 2017, all
contributions. The aim is to eliminate the deficit by 31 October 2024 salaried participants eligible for the Pension Plan were also eligible
by making deficit contributions of £4.94 million in 2017, increasing for the Restoration Plan. An independent trustee has been appointed
by 3 percent each first of January thereafter. This is in addition to a for the Pension Plan whose responsibilities include custody of plan
contribution towards the Scheme administration of £0.4m per annum. assets as well as recordkeeping. A pension committee consisting of
At the latest, the next triennial valuation will be based on the Scheme members of senior management provides oversight through quarterly
meetings. In addition, an independent advisor has been engaged to
57
provide advice on the management of the plan assets. The primary The Belgian defined-contribution pension plans are by law subject
risk of the Pension Plan is the volatility of the funded status. Liabilities to minimum rates of return to be guaranteed by the employer.
are exposed to interest rate risk and demographic risk (e.g., mortality, Pension legislation was amended at the end of 2015. This amended
turnover, etc.). Assets are exposed to interest rate risk, market risk, legislation defines the minimum guaranteed rate of return on an
and credit risk. In addition to these retirement plans in the U.S., annual basis as a variable percentage linked to the 24 month
the Company offers a retiree medical plan that is exposed to risk average of the Belgian government bond yields (OLO 10Y).
of increases in health care costs. The retiree medical plan covers Minimum rates can however not be lower than 1.75 percent and
certain salaried employees and certain groups of hourly employees. not be higher than 3.75 percent. For 2016 and 2017 the minimum
guaranteed rate of return is 1.75 percent on employer contributions
CANADA AND MEXICO and employee contributions. The previous rates (3.25 percent on
Canada and Mexico represent 13 percent of the obligations as per 31 employer contributions and 3.75 percent on employee contributions)
December 2017. In Canada, the Company sponsors three retirement continue to apply to the accumulated past contributions in the Group
plans. Two of the retirement plans are for hourly employees and insurance per 31 December 2015. As a consequence of the legal
one is for salaried employees. The plan for salaried employees has change the defined contribution plans have been reclassified as
been closed to new entrants since 1 January 2008. In addition, there defined benefit plans during 2016.The net liability equals €1.3 million
are two post-retirement medical plans. In the case of the Canadian per 31 December 2017 (€0.9 million as per 31 December 2016).
pension plans, minimum funding is required under the provincial Benefits in Italy and France relate to the mandatory retirement
Pension Benefits Act (Ontario) and regulations and maximum funding benefits of the defined benefit type.
is set in the Federal Income Tax Act of Canada and regulations.
The pension plan is administered by Unimin Canada. A pension ASIA & AUSTRALIA
committee exists to ensure proper administration, management and Australia represents 1 percent of the obligations as per 31 December
investment review with respect to the benefits of the pension plan 2017. The Australian defined benefit pension plan is a closed final
through implementation of governance procedures. The medical salary plan for Australian employees, which requires contributions
plan is administered by an insurance company, with Unimin Canada to be made to a separately administered fund. The level of benefits
having the ultimate responsibility for all decisions. provided depends on the member’s length of service and salary at
In Mexico, the Company sponsors four retirement plans of which two retirement age. The pension plans are exposed to Australia’s inflation,
are seniority premium plans as defined by Mexican Labour Law. The interest rate risks and changes in the life expectancy for pensioners.
remaining plans are defined benefit plans with a minimum benefit As the plan assets include investments in quoted equity shares of
equal to severance payment by unjustified dismissal according to entities across a number of sectors, Australian pension plan is also
Mexican Labour Law. Minimum funding is not required, and maximum exposed to equity market risks.
funding is defined according to the actuarial cost method registered The Group has complementary retirement plans in Taiwan and Japan.
with the Mexican Tax Authority. Investment decisions are made by an The plan in Taiwan is closed for new entrants.
administrative committee of Grupo de Materias Primas pension plans. The reported liabilities for Thailand, India, Indonesia, Malaysia, the
All plans in Mexico pay lump sums on retirement and pension plans Philippines and Korea mainly relate to mandatory retirement benefits
pay benefits through 5 annual payments conditioned on compliance of the defined benefit type.
with non-compete clauses. Liabilities in Asia account in total for 0.3 percent of the obligations as
per 31 December 2017.
EUROPE
Other plans in Europe represent 17 percent of the obligations per 31 TERMINATION BENEFITS
December 2017. The main defined benefit plans are located in the The termination benefit plans (3) are early retirement plans mainly in
Netherlands, Germany and Sweden. These are all retirement plans Belgium.
that generally provide a benefit related to years of service and rates
of pay close to retirement. The plans in the Netherlands are insured
and are closed for future salary accruals and to new entrants. In
case of Germany, the Netherlands and Sweden, the benefit is also
paid in case of death or disability. All plans have been established in
accordance with common practice and legal requirements in each
country.

OTHER LONG-TERM EMPLOYEE BENEFITS
In 2011, the Board of Directors decided to set up long term incentive KPI’s. At the end of 2017, the provision for all these plans has been
plans (LTI) for a selected number of key executives. Today the LTI estimated to be €19.1 million.
plans of 2013, 2014 and 2015 and 2016 are still in force with potential The other long-term benefit plans are jubilee plans (5) in The
cash payments in future years based on the evolution of financial Netherlands and Belgium.
EXPLANATION OF AMOUNTS IN THE FINANCIAL STATEMENTS

Defined benefit liabilities

Post- Post-
employment Termination employment Termination
benefits benefits Other Total benefits benefits Other Total
Present value of funded obligations 592 667 48 29 592 744 604 230 121 751 605 102
Fair value of plan assets (467 038) (38) - (467 076) (487 914) (33) (795) (488 742)
Present value of net funded obligations 125 629 10 29 125 668 116 316 88 (44) 116 360
Present value of unfunded obligations 36 692 1 617 19 365 57 674 56 223 1 874 6 162 64 259
Total defined benefit liabilities / (assets) 162 321 1 627 19 394 183 342 172 539 1 962 6 118 180 619
Liabilities 162 321 1 627 19 394 183 342 172 539 1 962 6 834 181 335
(Assets) - - - - - - (716) (716)
Net liability at 31 December 162 321 1 627 19 394 183 342 172 539 1 962 6 118 180 619
MOVEMENTS IN THE NET LIABILITY FOR DEFINED BENEFIT OBLIGATIONS RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION

Post- Post-
benefits benefits Other Total benefits benefits Other Total
Net liability at 1 January 172 539 1 962 6 118 180 619 147 904 1 434 6 334 155 672
Contributions by employer (17 928) (330) (929) (19 187) (18 337) (351) (165) (18 853)
Expense recognised in the statement 16 737 176 14 931 31 844 16 525 855 29 17 409
of income
Remeasurments loss (gain) included 3 238 - - 3 238 29 105 - 1 29 106
in OCI
Other movements 535 (180) (763) (408) 1 581 - (74) 1 507
Exchange differences (12 800) (1) 37 (12 764) (4 239) 24 (7) (4 222)
Net liability at 31 December 162 321 1 627 19 394 183 342 172 539 1 962 6 118 180 619
59
CHANGES IN THE PRESENT VALUE OF THE DEFINED BENEFIT OBLIGATIONS

Post- Post-
Note benefits benefits Other Total benefits benefits Other Total
At 1 January 660 453 1 995 6 913 669 361 654 371 1 457 7 161 662 989
Service cost 11 383 10 14 927 26 320 10 218 25 20 10 263
Interest cost 13 17 604 1 18 17 623 21 450 4 25 21 479
Benefits paid (27 949) (283) (929) (29 161) (50 386) (333) (160) (50 879)
Actuarial losses (gains) 11 329 (108) (20) 11 201 77 783 14 (16) 77 781
Tax on contributions paid - - - - (152) - - (152)
Past service cost 77 234 - 311 689 812 - 1 501
Liabilities extinguished on - - - - (20 834) - - (20 834)
settlement
Other movements 1 015 (180) (1 400) (565) 2 195 14 (79) 2 130
Exchange differences (44 514) (4) 31 (44 487) (34 881) 2 (38) (34 917)
At 31 December 629 398 1 665 19 540 650 603 660 453 1 995 6 913 669 361
THE SPECIFICATION OF THE ACTUARIAL GAINS AND LOSSES FOR 2017 IS THE FOLLOWING:

Experience adjustments (4 140)
Changes in demographic assumptions (6 519)
Changes financial assumptions 21 860
Total 11 201
Total actuarial gains and losses were €11.2 million, mainly arising from the change in financial assumptions in the UK and US (€22.0 million).

CHANGES IN THE FAIR VALUE OF PLAN ASSETS

Post- Post-
At 1 January (487 914) (33) (795) (488 742) (506 467) (23) (827) (507 317)
Return on plan assets 13 (13 138) - - (13 138) (16 485) - - (16 485)
Actuarial (gains) losses (8 091) (1) 5 (8 087) (48 678) 1 - (48 677)
Administration costs 815 40 - 855 653 - - 653
Assets distributed on settlements (4) - - (4) 20 834 - - 20 834
Contributions by employer and (17 586) (330) (1 271) (19 187) (18 357) (351) (158) (18 866)
employee
Benefits paid 27 607 283 1 271 29 161 50 538 341 158 51 037
Other movements (480) - 638 158 (593) - 1 (592)
Exchange differences 31 714 3 6 31 723 30 641 (1) 31 30 671
At 31 December (467 077) (38) (146) (467 261) (487 914) (33) (795) (488 742)
EXPENSE RECOGNISED IN PROFIT OR LOSS

Post- Post-
Current service cost (net of 12 11 379 10 14 927 26 316 10 218 25 20 10 263

employee contributions)
Administrative costs 12 815 40 - 855 653 - - 653
Interest cost 13 17 604 1 18 17 623 21 450 4 25 21 479
Return on plan assets 13 (13 138) - - (13 138) (16 485) - - (16 485)
Actuarial (gains) losses 12 N/A (109) (14) (123) N/A 14 (16) (2)
recognised in the period
Past service cost 12 77 234 - 311 689 812 - 1 501
Total 16 737 176 14 931 31 844 16 525 855 29 17 409
61
COMMENT ON RESULTS POST-EMPLOYMENT BENEFITS
During 2017, both Defined Benefit Obligations on post-employment exchange difference (€31.7 million). The amounts at both sides are
benefits and Plan Assets have been decreased. The funded position, therefore not similar taking into account the amounts involved (plan
i.e. ratio of Plan Assets to Defined Benefit Obligation, has remained assets of about €467.0 million against a DBO of about €629.0 million).
the same to around 74 percent (2016: 74 percent). This results from The Defined Benefit Liability has decreased during the year from
the evolution of the DBO and is due to the interest cost and service €172.5 million to €162.3 million which is mainly due to the positive
cost during 2017 (€29.0 million), the negative effect of actuarial gains effect of the contribution of employer (€17.9 million), the exchange
(€11.3 million) and a positive exchange difference (€44.5 million), differences (€12.8 million) offset by the expenses recognised in
while the evolution of the assets is mainly due to the real return on the income statement (€16.7 million) and the re-measurement loss
plan assets (amounting to a total of €21.2 million), the employer included in OCI (€3.2 million).
contributions (amounting to a total of €17.6 million) and a positive
DISAGGREGATION FAIR VALUES PLAN ASSETS

The average weighing of the assets by the various asset categories
are shown below (89.4 percent of the assets are quoted):
2O17 2O16
Government bonds 9.38% 9.48%
Corporate bonds 15.99% 17.59%
Equity 15.73% 15.65%
Cash 3.62% 3.64%
Property 3.64% 3.30%
Insurance contracts 16.58% 16.94%
Other 35.05% 33.40%
Total 100.00% 100.00%
In the plan assets there are no own equity instruments and no amounts to €21.2 million or 4.3 percent (2016: €65.2 million or 12.9
property used by the Group. The real return on assets over 2017 percent).
SIGNIFICANT ACTUARIAL ASSUMPTIONS

The following are the principal actuarial assumptions at the reporting date (expressed as weighted averages):
2O17 2O16
Discount rate 2.83% 3.06%
Rate of salary increases 2.24% 2.21%
Inflation rate 2.61% 2.66%
Medical trend rate 4.67% 4.70%
Pension increase rate 2.69% 1.61%
The discount rate and the rate of salary increases were weighted by pensions rather than lump sums on retirement. The medical rate
the defined benefit obligation, the expected return on assets by the shown is the ultimate rate, which is used for periods over five years.
assets, the medical trend rate is weighted by the Defined Benefit The best estimate of the employer contributions which the Group
Obligation of the medical plans and the pension increase rate is expects to pay for 2017 amounts to €14.3 million.
weighted by the Defined Benefit Obligation of the plans paying The average duration of the defined benefit plan obligation at the end
of the reporting period is 16 years (2016: 17 years).

SENSITIVITY ANALYSIS
A 0.25 percent change in the actuarial assumptions would have the following effects (note that a positive amount refers to a decrease in the
obligations or cost while a negative amount refers to an increase in the obligations or cost):

25 basis 25 basis 25 basis 25 basis
Discount rate points increase points decrease points increase points decrease
Effect on the aggregate of the service cost and finance cost 622 (611) 744 (870)
Effect on the defined benefit obligation 23 406 (24 792) 25 491 (27 084)

Inflation rate points increase points decrease points increase points decrease
Effect on the defined benefit obligation 10 482 (10 251) 11 498 (11 223)

Medical cost trend rate
points increase points decrease points increase points decrease
Effect on the defined benefit obligation 585 (560) 1 010 (967)
The sensitivity analyses are based on a change in an assumption (present value of the defined benefit obligation calculated with the
while holding all other assumptions constant. In practice, this is projected unit credit method at the end of the reporting period) has
unlikely to occur, and changes in some of the assumptions may be been applied as when calculating the pension liability recognised
correlated. When calculating the sensitivity of the defined benefit within the statement of financial position.
obligation to significant actuarial assumptions, the same method
HISTORICAL INFORMATION
2012
In thousands of euro 2017 2016 2015 2014 2013 Restated
Present value of the defined benefit obligations (650 603) (669 361) (662 989) (630 060) (527 855) (555 707)
Fair value of plan assets 467 261 488 742 507 317 472 594 405 916 388 862
Deficit in the plans (183 342) (180 619) (155 672) (157 466) (121 939) (166 845)
Experience adjustments: (increase)/decrease plan liabilities 4 140 (9 213) (4 161) 6 299 (1 842) 1 359
Experience adjustments: increase/(decrease) plan assets 8 087 48 677 (14 802) 23 132 17 836 14 347
63
28 PROVISIONS
Warranties and Restructuring Site restoration and Penalties, legal

In thousands of euro Note onerous contracts plans plant demolition claims and other 2O17 2O16
Balance at 1 January 14 126 27 282 225 222 19 343 285 973 231 464
Movements through P&L 5 390 41 088 607 42 090 60 034
- Additional provision 8.10 5 3 207 26 190 1 187 30 589 60 115

- Unused amounts reversed 8 - (3 095) (3 068) (506) (6 669) (9 097)
- Revisions due to change of discount 13 - - 10 265 69 10 334 897
and inflation rate
- Unwinding of discount 13 - 278 7 701 (143) 7 836 8 119
Other movements (12 965) (15 432) 71 854 2 342 45 800 (5 525)
Business combinations 3 - - - 1 699 1 699 2 294

Disposals (3 099) (4 378) (206) - (7 684) (1 896)
Addional provisions (variation of the asset 16 - - 95 655 - 95 655 36 252
component)
Provision used during the period (2 239) (6 925) (8 746) (6 374) (24 284) (45 429)
Exchange difference (340) (1 435) (11 990) (1 416) (15 180) 2 027
Transfers (7 287) (2 694) (2 859) 8 433 (4 407) 1 227
Balance at 31 December 1 166 12 240 338 164 22 293 373 863 285 973
Current 40 3 757 38 883 6 623 49 304 40 640

Non-current 1 126 8 483 299 281 15 670 324 559 245 333
provision arises on initial recognition of an asset, the corresponding

RESTRUCTURING debit is treated as part of the cost of the related asset and is not
In 2017 additional restructuring provisions have been recognised for recognised immediately in profit or loss but gradually through the
€3.2 million in respect of restructuring programs mainly in Australia, depreciation of the related asset. Changes in the estimate of the
South America and Asia - see note 10 Other operating expenses. provision generally are adjusted against the carrying amount of the
The decrease in provisions for restructuring plans can be mainly asset.
explained by usage of provisions during 2017, mainly in Australia, Because of the long-term nature of the liability, the biggest
North America and Asia. Disposals relate to the provisions included uncertainties in estimating the provision are the costs that will be
in our disposed entity PT Bhumidana and Industriele Maatchappij incurred. The provision is measured at the best estimate of costs
Geertruidenberg BV. to be incurred. This takes the time value of money into account,
if material. The best estimate typically will be based on the single
SITE RESTORATION AND PLANT DEMOLITION most likely cost of mine closure and takes uncertainties into account
The Group is subject to numerous environmental requirements in in either the cash flows or the discount rate used in measuring the
various countries in which it operates, including restoration and provision.
clean-up of its quarries and demolition of its plants. In order to In particular, the Group has assumed that its quarries will be restored
comply with regulations, the Group has made significant expenditure using technology and materials that are currently available. The
and has set up provisions. corresponding provisions have been calculated taking into account
The obligation to restore the environment or dismantle an asset is future price increases and discount factors.
provided in full at the time of the start of the operations. When the

2017 Currancy Discount rates 10 Year Inflation rates
Argentina ARS 26.34 13.5
Australia AUD 4.56 2.43
Belgium EUR 2.65 1.81
Brazil BRL 12.94 4.46
Canada CAD 3.56 1.68
Finland EUR 2.39 1.81
France EUR 2.71 1.61
Germany EUR 2.28 2.05
Italy EUR 3.96 1.37
Malaysia MYR 5.98 2.93
Mexico MXN 8.94 3.28
Netherlands EUR 2.42 1.50
Norway NOK 3.55 2.52
Portugal EUR 5.47 0.93
Russia RUB 10.08 4.07
Spain EUR 3.45 1.64
Sweden SEK 2.52 1.85
Turkey TRY 12.43 8.09
UK GBP 3.15 2.24
Ukraine UAH 17.98 6.34
United States USD 4.21 2.37
There are many complexities in calculating an estimate of the - jeopardize the Group’s long term viability (expected lifetime
expenditure to be incurred. Technological advances may reduce of the operation), or;
the ultimate cost of mine closure and may also affect the timing by - risk renewal or prolongation of necessary permits and rights
extending the existing expected recoveries from the reserves. The to exploit, or;
estimate is updated at each reporting date. Q Every year when the operation has an expected lifetime of less
Our active and inactive managed facilities are required to have than 5 years.
closure plans. As from 2015, detailed closure planning requirements In the light of this process the Group has made additional provisions
were introduced through our Closure Plan Policy, with each asset for site restoration and plant demolition to the amount of €121.8
required to develop a closure plan as part of their life of asset plan. In million out of which €26.2 million was charged to profit or loss and
addition, a new sustainability process was implemented focusing on €95.7 million has been capitalised as part of the cost of mineral
closure planning, cost estimation and closure objectives at operating assets (mainly in Europe for €71.8 million, North America €16.6
assets. Integrating closure planning in the early stages of project million, Australia €4.3 million) – see note 16 Property, plant and
development and through an asset’s lifecycle helps us to leave equipment. At the end of 2017 all our managed facilities have closure
a positive legacy of sustainable development, minimize financial plans in place.
impacts and ensure stakeholder expectations are met. Closure plans During 2017, one of our subsidiaries in the Netherlands has been
provide the basis for estimating the financial costs of closure and the confronted with accidental external contamination, with a recall of
associated accounting closure and rehabilitation provisions. product as a consequence. Therefore the Group was confronted
Closure plans are reviewed at the following frequency: with customer complaints and in this respect a provision has been
Q Every 5 years, or; recognised in 2017 which relates to the direct operating costs of
Q When significant changes occur: product contamination. These include costs for removal of product,
• In the operation, cleaning costs and professional fees.
• in local regulatory requirements or constructive obligations, In 2018 the Group will further follow up the different aspects of
• in stakeholder interests or the local environment that: the direct and indirect consequences. In case new information is
received, the Group will update its current best estimate.
65
PENALTIES, LEGAL CLAIMS AND OTHER an additional provision of €1.7 million relating to the acquisition of
Provisions for penalties, legal and other claims are mainly related Ecopiave S.r.l. (see note 3 Business combinations) and various small
to Europe and South America. In 2017 the Group has recognised additions have been recognised for fines and litigation.
29 TRADE AND OTHER PAYABLES
NON-CURRENT TRADE AND OTHER PAYABLES

Deferred consideration on acquisitions 169 1 044
Other payables 1 615 4 351
Trade and Other Payables - Non-current 31 1 784 5 395
CURRENT TRADE AND OTHER PAYABLES

Trade payables 279 050 261 146
Unearned revenues and advances 4 131 1 491
Other payables 56 295 49 243
Interest payable 2 200 2 116
Non-income tax payables 13 823 12 746
Accrued liabilities 115 814 105 492
Trade and Other Payables - Current 31 471 313 432 234
30 OTHER CURRENT AND NON-CURRENT LIABILITIES
OTHER NON-CURRENT LIABILITIES

Cash flow hedge, negative fair value 31 854 970
Other, negative fair value 31 105 -
Derivative financial instruments 959 970
Government grants 12 304 12 148

Other 2 689 -
Other Liabilities - Non-current 15 952 13 118

OTHER CURRENT LIABILITIES
Cash flow hedge, negative fair value 31 - -
Other, negative fair value 31 8 220 8 892
Derivative financial instruments 8 220 8 892
Government grants - -
Other 2 174 1 201
Other Liabilities - Non-current 10 394 10 093
Other non-current liabilities of the Group were €16.0 million, mainly Other current liabilities of the Group were €10.4 million (2016: €10.1
relating to government grants (€12.3 million) for railroad works in million) and mainly consist of fair value derivatives for hedging
the US and to Health and safety, Production improvement and R&D operational risk.
grants. The Group has still interest rate swaps (IRS) for the nominal value
of €50 million, all non-current which will mature in 2019 (see note 31
Financial instruments).
31 FINANCIAL INSTRUMENTS
The Group uses derivate financial instruments to hedge the exposure The Group has decided to fix the interest rate for the majority of
to fluctuations in foreign exchange rates and interest rates. Some its debt. Following this decision, the interest rate risk is hedged by
hedges qualify for hedge accounting, others are treated as ‘free- means of interest rate swaps for which cash flow hedge accounting
standing instruments held for trading’ for hedging financial assets is applied.
and liabilities in foreign currencies compliant with the Group’s FX The FX risk related to the AUD Private Placement of SCR-Sibelco NV
policy. is hedged by cross currency swaps.
CREDIT RISK
EXPOSURE TO CREDIT RISK IMPAIRMENT LOSSES

At the reporting date there were no significant concentrations of The ageing of trade receivables at the reporting date was:
credit risk. The maximum exposure to credit risk is represented by the
carrying amount of each financial asset.

Note Gross Impairment Gross Impairment
Not past due 353 110 2 469 388 507 1 918

Past due 0 - 120 days 101 328 811 90 872 1 488
Past due 120 days - one year 13 624 6 260 9 037 2 494
More than one year 2 473 2 473 6 340 6 840
Trade Receivables 23 470 535 12 013 494 756 12 740
The Group believes that, apart from the above, no additional impairment allowance is necessary in respect of trade receivables not past due.
The movement in the allowance for impairment in respect of trade receivables during the period was as follows:
67
Balance at 1 January 12 740 15 915
Adjustments on prior year 258 -

Impairment loss recognised 8 1 837 1 169
Allowances used during the period (2 055) (3 605)
Exchange differences (701) (5)
Scope changes (66) (734)
Balance at 31 December 23 12 013 12 740
LIQUIDITY RISK
For the Interest Rate Swaps only the contractual outflows were reported as they are compensated by the interests on floating bank
considered. The incoming flows, related to the floating leg, are not borrowings, which are also not reflected.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting
agreements:

Contractual
Note Carrying amount cash flows Less than 1 year 1-5 years More than 5 years
NON-DERIVATIVE FINANCIAL LIABILITIES

Bank borrowings 26 49 651 (53 504) (23 952) (17 426) (12 126)
Amortizing Sydicated Loan 26 187 266 (189 309) (39 876) (120 791) (28 642)
Finance lease obligations 26 4 544 (4 544) (1 284) (3 260) -
Private placement 26 488 763 (578 264) (24 952) (553 312) -
Other loans & borrowings 26 11 858 (12 186) (2 763) (8 712) (711)
Bank overdrafts 26 38 693 (38 693) (38 693) - -
Total 780 775 (876 500) (131 519) (703 502) (41 478)
DERIVATIVE FINANCIAL LIABILITIES

Interest rate swaps - hedge accounting 30 854 (942) (338) (604) -
Other forward exchange contracts - no 30 8 325 (2 508) - - -
hedge accounting
Outflow (107 824) (107 824) - -
Inflow 105 316 105 316 - -
Total 9 179 (5 958) (2 846) (604) -
OTHER FINANCIAL LIABILITIES

Trade and other payables 29 473 097 (473 097) (471 313) (1 784) -
Total 473 097 (473 097) (471 313) (1 784) -

Contractual
NON-DERIVATIVE FINANCIAL LIABILITIES

Bank borrowings 26 121 597 (121 620) (62 521) (59 099) -
Amortizing Sydicated Loan 26 226 392 (229 195) (40 092) (160 461) (28 642)
Finance lease obligations 26 4 184 (4 377) (1 913) (2 456) (8)
Private placement 26 545 699 (687 734) (27 565) (296 366) (363 803)
Other loans & borrowings 26 15 005 (14 230) (12 529) (1 701) -
Bank overdrafts 26 50 087 (50 087) (50 087) - -
Total 962 964 (1 107 243) (194 707) (520 083) (392 453)
DERIVATIVE FINANCIAL LIABILITIES

Interest rate swaps - hedge accounting 30 970 (941) (337) (604) -
Other forward exchange contracts - 30 8 892 (6 700) - - -
no hedge accounting
Outflow - (54 754) (54 754) - -
Inflow - 48 054 48 054 -
Total 9 862 (7 641) (7 037) (604) -
OTHER FINANCIAL LIABILITIES

Trade and other payables 29 437 629 (437 629) (429 637) (7 992) -
Total 437 629 (437 629) (429 637) (7 992) -
The following table indicates the period in which the cash flows to occur. They will be recycled through profit or loss in the same
associated with derivatives that are cash flow hedges are expected periods:

Contractual
IRS & FORWARD EXCHANGE CONTRACTS:

Assets - forward exchange contracts 19 - - - - -
Liabilities - IRS 30 (854) (942) (338) (604) -
Total (853) (942) (338) (604) -
2016
Contractual
IRS & FORWARD EXCHANGE CONTRACTS:

Assets - forward exchange contracts 19 429 617 617 - -
Liabilities - IRS 30 (970) (941) (337) (604) -
Total (541) (324) 280 (604) -
69
CURRENCY RISK
EXPOSURE TO CURRENCY RISK

The Group is exposed to currency risk on sales, purchases and The Group uses forward exchange contracts to hedge the foreign
borrowings that are denominated in a currency other than the exchange risk compliant with the policy as detailed under ‘Financial
respective functional currency of the Group entities, primarily the US risk management’ (see note 2 Financial risk management).
Dollar (USD), the euro (EUR), the British Pound (GBP) but also the The Group’s exposure to foreign currency risk was as follows based
Australian Dollar (AUD). The currencies in which these transactions on notional amounts:
primarily are denominated are EUR and USD.

EUR USD GBP AUD Other EUR USD GBP Other
Transactional Exposure
Trade, other receivables and 23 256 (198 252) (57 363) (101 812) (28 273) 17 659 126 024 3 937 -
cash & cash equivalents
Interest bearing loans and - (15 466) 89 890 (131 101) 116 136 (1 221) (100 057) (1 107) -
borrowings
Trade and other payables (28 707) (44 582) (5 541) (2 134) (6 862) (25 260) (29 660) (5 480) -
Gross balance sheet exposure (5 451) (258 300) 26 986 (235 046) 81 001 (8 822) (3 693) (2 650) -
Forward exchange contracts 4 350 230 719 (24 720) 235 792 (73 476) 6 898 29 476 3 050
Total (1 101) (27 581) 2 266 746 7 526 (1 924) 25 783 400 -
Economical Exposure
Estimated forecast sales/ 2 422 50 775 - - 10 448 - - - -
receivables
Estimated forecast pur- (497) (28 659) - - (248) - (14 836) - -
chases
Gross exposure 1 925 22 116 - - 10 200 - (14 836) - -
Forward exchange con- (2 000) (21 294) - - (10 200) - 14 836 - -

tracts
Total (75) 822 - - - - - - -
SENSITIVITY ANALYSIS INTEREST RATE RISK

A 10 percent change of the euro against the other currencies at 31 The interest rate risk of the Group is hedged by interest rate swaps
December would have an insignificant impact on the hedge reserve for a total nominal value of €50.0 million. In addition to this, the Group
included in equity nor on net profit (economical exposure), (2016: no also has US private placements at a fixed interest rate for a total
risks on equity nor on net profit). nominal value of USD 430.0 million and AUD 200.0 million. Since
almost all debt is directly or indirectly at a fixed interest rate a change
in interest rates will have a minor impact.

FAIR VALUES
FAIR VALUES VERSUS CARRYING AMOUNTS

The fair values together with the carrying amounts shown in the statement of financial position are as follows:
Carrying amount Fair value 2017 Carrying amount Fair value 2016
Note 2017 Level 2 2016 Level 2
PRIVATE PLACEMENT:
Non-current 26 (488 763) (506 318) (545 699) (571 539)
FIXED RATE FINANCIAL LIABILITIES :
Non-current 26 (71 428) (71 428) (85 714) (85 714)
Current 26 (14 286) (14 286) (14 286) (14 286)
FLOATING RATE FINANCIAL LIABILTIES:
Non-current 26 (96 495) (96 495) (184 324) (184 324)
Current 26 (105 259) (105 259) (128 757) (128 757)
INTEREST RATE SWAPS:
Liabilities (2017: IRS €50 million - 2016: IRS €50 million) 30 (854) (854) (970) (970)
FORWARD EXCHANGE CONTRACTS:
Assets - hedge net financial position 19 3 539 3 539 7 991 7 991
Assets - hedge transactional and economical exposure 19 294 294 8 036 8 036
Liabilities - hedge net financial position 30 (7 439) (7 439) (3 261) (3 261)
Liabilities - hedge transactional and economical exposure 30 (886) (886) (5 631) (5 631)
Total (781 576) (799 132) (952 615) (978 455)
HIERARCHY AND DETERMINATION OF FAIR VALUES In the context of IFRS 13, the Group has made an assessment of non-
All above fair values have a Level 2 nature, meaning that inputs used performance risk in respect of derivatives. The Group assessed that
for measurement are other than quoted prices within Level 1 that no value adjustments are required, taken into account the financial
are observable for the asset or liability, either directly (as prices) or strength of the counterparties (investment grade and the short term
indirectly (derived from prices). nature of the current portfolio).
The fair value of forward exchange contracts is determined using For the valuation and testing of derivative financial instruments
money market interest rates and the foreign exchange spot rates at for which hedge accounting is applied, the Group is using a fair
the balance sheet date. value model which meets the IFRS requirements regarding hedge
The fair value of interest rate swaps and cross currency interest rate effectiveness testing. For hedge effectiveness testing the dollar-offset
swaps are calculated as the net present value of the future cash method is applied.
flows.
71
32 OPERATING LEASES
The Group leases railway equipment, operating equipment, mineral agreements. The future minimum lease payments under non-
properties and buildings under a number of operating lease cancellable operating leases are due as follows:

Less than one year 70 998 46 163
Between one and five years 173 655 165 988
More than five years 125 351 127 848
Total 370 004 339 999
In 2017, €77.7 million was recognised as an expense in profit or loss Under IFRS the railcar lease agreements in the US are classified
in respect of operating leases (2016: €68.2 million). as operating leases as at the inception of the lease, management
Sibelco leases mainly railcars, operating equipment and buildings concluded that the agreement did not transfer substantially all the
under a number of operating lease/rental agreements (both non- risks and rewards incidental to ownership. The leases also include an
cancellable and cancellable short-term contracts). option to buy the railcars towards the end of the lease term at its then
fair value.
33 COMMITMENTS
CAPITAL COMMITMENTS Under the terms of the merger agreement, at the closing of the
At 31 December 2017, the Group had commitments relating to transaction, Fairmount shareholders, including equity award holders,
property, plant and equipment amounting to €12.4 million (2016: will receive $170.0 million in cash, or approximately $0.74 per share
€35.9 million), of which €4.3 million in North America, €2.7 million in based on Fairmount’s current diluted share count, and will own 35
Europe, €5.4 million in Australia and €0.1 million in Asia. percent of the combined company, with Sibelco owning the remaining
65 percent. The transaction is structured to be tax-free to Fairmount
OTHER COMMITMENTS shareholders. Sibelco will maintain ownership of Unimin’s high-purity
On 12 December 2017, one of the Groups’ wholly owned subsidiaries quartz business, which mainly serves electronics manufacturers in Asia.
Unimin Corporation announced a definitive agreement under which it In connection with the transaction, the Group has secured fully
will combine in a tax-free, cash and stock transaction with Fairmount committed financing from Barclays Bank PLC and BNP Paribas to
Santrol (NYSE: FSMA), which has been approved by the Board of refinance both companies’ outstanding debt obligations and certain
Directors of both companies. transaction expenses. The companies believe that the strong and
The new company, which will list on the New York Stock Exchange, diversified cash flow resulting from the combination will allow the
will combine the two organizations’ strong product portfolios and combined company to pay down debt expeditiously.
asset footprints to create an industry-leading proppant and industrial Concurrent with closing, the combined company intends to list its
materials solutions provider, serving both energy and industrial shares on the New York Stock Exchange, while Fairmount will be
customers. delisted from the New York Stock Exchange.
The transaction is expected to close mid-2018, subject to the
approval of Fairmount shareholders, the receipt of regulatory
approvals and the satisfaction of other customary closing conditions

34 CONTINGENCIES
The Group is defendant in a number of lawsuits filed in several During 2017, one of our subsidiaries in the Netherlands has been
jurisdictions where it operates. The Group has strong defence in confronted with external contamination, with a recall of product as a
these cases and the risk of material cash outflows is considered consequence. Although we are confronted with customer complaints,
remote. the Group does not have a view on the contingencies at this moment
in time and any possible outflow.
35 RELATED PARTIES
IDENTITY OF RELATED PARTIES TRANSACTIONS WITH EQUITY ACCOUNTED INVESTEES

The Group has a related party relationship with its subsidiaries (see All outstanding balances with these related parties are priced at
note 39 Group entities), equity accounted investees (see note 18 arm’s length basis.
Equity accounted investees) and with its directors and executive
officers.
Dividends
Accounts Accounts Granted loans received from
In thousands of euro Sales Purchases Other costs receivable payable to associates associates
Glassflake Ltd 11 - - 5 2 - -
SCI Les Granet 17 6 3 38 3 330 -
Maffei Sarda Silicati SRL - - 27 - 631 544 -
Ficarex SRO - - - - - - 722
Sklopisek Strelec AS - 73 - - 11 - -
Dansand A/S 216 60 - 10 6 13 1 602
Total 245 139 30 53 652 887 2 324
The Group has outstanding loans to associates for an amount of €0.9 Committee amounts to €16.3 million in 2017 (2016: €9.8 million), of
million (see note 19 – Financial assets) and has received dividends which €15.6 million for the members of the Executive Committee and
from its associates for a total amount of €2.3 million (see note 18 €0.7 million to board members (2016: €9.2 million and €0,6 million
Equity accounted investees). respectively). The total expense includes bonus and accruals for long
term incentives to be potentially paid over the next years (see note
TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL 27 Employee Benefits) for the members of the Executive Committee.
The total remuneration expense recognised in profit or loss in relation None of key management personnel are granted share options or
to the members of the Board of Directors and to the Executive share based payment.
73
36 EXCHANGE RATES
The following exchange rates have been used in preparing the financial statements:
CLOSING RATE AVERAGE RATE
1 EURO EQUALS : 2017 2016 2017 2016
AED 4.4045 3.8711 4.1476 4.0503

ARS 22.2998 16.7117 18.7303 16.4818
AUD 1.5346 1.4596 1.4734 1.4706
BRL 3.9729 3.4305 3.6060 3.6548
CAD 1.5039 1.4188 1.4651 1.4485
CHF 1.1702 1.0739 1.1118 1.0866
CLP 737.1500 705.5000 732.2800 736.0600
CNY 7.8044 7.3202 7.6297 7.4006
COP 3 576.3100 3 163.8800 3 332.8200 3 293.2200
CZK 25.5350 27.0210 26.3248 27.0329
DKK 7.4449 7.4344 7.4387 7.4399
EGP 21.2636 18.9738 20.1023 12.1189
GBP 0.8872 0.8562 0.8765 0.8432
HKD 9.3720 8.1751 8.8056 8.5561
HUF 310.3300 309.8300 309.2051 311.0776
IDR 16 248.1200 14 162.8876 15 119.1700 14 599.4600
INR 76.6055 71.5935 73.5181 74.1006
JPY 135.0100 123.4000 126.6976 116.9665
KRW 1 284.9296 1 273.8799 1 276.6100 1 264.0600
LAK 9 955.3893 8 609.6991 9 308.3795 8 948.7540
MAD 11.2230 10.6606 10.9442 10.8101
MXN 23.6612 21.7719 21.3254 21.0766
MYR 4.8536 4.7287 4.8524 4.5897
NOK 9.8403 9.0863 9.3299 9.1974
NZD 1.6850 1.5158 1.5901 1.5490
PGK 3.8553 3.7685 3.6198 3.5787
PHP 59.8811 52.4099 56.9743 52.6550
PLN 4.1770 4.4103 4.2563 4.3670
RUB 69.3920 64.3000 65.9299 70.7728
SEK 9.8438 9.5525 9.6362 9.5704
SGD 1.6024 1.5234 1.5588 1.5181
THB 39.1210 37.7260 38.2927 38.7830
TND 2.9454 2.4227 2.7196 2.4412
TRY 4.5464 3.7072 4.1203 3.3989
TWD 35.5736 34.1939 34.3323 35.1486
UAH 33.4954 28.4226 30.0389 28.3522
USD 1.1993 1.0541 1.1294 1.1028
VEF 133 617.8867 3 335.9300 27 675.5181 1 430.8200
VND 27 224.1100 24 001.8600 25 551.0510 24 657.7300

37 SUBSEQUENT EVENTS
No significant subsequent events happened after the balance sheet date.
38 INFORMATION ON THE AUDITOR’S ASSIGNMENTS AND RELATED FEES

The worldwide audit and other fees in respect of services provided by EY and its network can be detailed as follows:

Total audit fees for SCR-Sibelco N.V. and its subsidiaries 5 256 2 406
Other audit-related services 1 190 27
Tax 436 97
Balance at 31 December 6 882 2 530
Total audit fees for 2017 were €5.3 million of which €3.0 million relates to the audit work on the restatement of the financials (to US GAAP) of
our wholly owned subsidiary Unimin Corporation for the upcoming transaction with Fairmount Santrol.
Other audit-related services mainly relate to transaction advisory services performed by EY.
39 GROUP ENTITIES
CONTROL OF THE GROUP

The Group’s ultimate parent company is SCR-Sibelco N.V., Antwerp / Belgium.
CONSOLIDATED COMPANIES, 31 DECEMBER 2017 REGISTERED SEAT/LOCATION EFFECTIVE INTEREST %
Argentina
El Volcan S.A. San Juan (AR) 100.00%
Minera Mercedes S.A.M.I.C.A. y F. San Juan (AR) 100.00%
Minera Tea S.A.M.I.C.A. y F. Buenos Aires (AR) 100.00%
Australia
David Mitchell Lime Pty Ltd North Sydney (AU) 100.00%
Excelsior Quarry Pty Ltd North Sydney (AU) 100.00%
Frost Enterprises Pty Ltd North Sydney (AU) 100.00%
Lara Lime Pty Ltd North Sydney (AU) 100.00%
Mole Creek Limestone Pty Ltd North Sydney (AU) 100.00%
QMAG Pty Ltd Victoria (AU) 100.00%
QMC (Kunwarara) Pty Ltd North Sydney (AU) 100.00%
QMC REFMAG Pty Ltd North Sydney (AU) 100.00%
75
QMCH Pty Ltd Victoria (AU) 100.00%
Queensland Construction Materials Pty Ltd North Sydney (AU) 100.00%
Rutile Ltd Consolidated North Sydney (AU) 100.00%
Sibelco Asia Pacific Pty Ltd North Sydney (AU) 100.00%
Sibelco Australia Ltd North Sydney (AU) 100.00%
Sibelco Lime (NSW) Pty Ltd North Sydney (AU) 100.00%
Sibelco Lime (Tasmania) Pty Ltd North Sydney (AU) 100.00%
Sibelco Lime (Victoria) Pty Ltd North Sydney (AU) 100.00%
Sibelco Services Pty Ltd North Sydney (AU) 100.00%
Sibelco Talc Pty Ltd North Sydney (AU) 100.00%
South Burnett Lime Pty Ltd North Sydney (AU) 100.00%
Stradbroke Rutile Pty Ltd North Sydney (AU) 100.00%
Tamaree Lime Pty Ltd North Sydney (AU) 100.00%
Westcal Pty Ltd (Hyrock) North Sydney (AU) 100.00%
Belgium
Cofisa NV Antwerpen (BE) 100.00%
High Five NV Antwerpen (BE) 50.00%
Limburgse Berggrinduitbating NV Antwerpen (BE) 100.00%
Minérale SA Lodelinsart (BE) 50.00%
NZM Grit NV Dessel (BE) 100.00%
NZM NV Dessel (BE) 100.00%
Sablières de Mettet SA Mettet (BE) 100.00%
Silfin NV Antwerpen (BE) 100.00%
Brazil
Caulim Do Nordeste SA Ipojuca-Recife (BR) 96.46%
Mineração Jundu Ltda Descalvado (BR) 50.00%
Tansan Industria Quimica Ltda Pedra do Indaiá (BR) 100.00%
Unimin do Brasil Ltda São Paulo (BR) 100.00%
Unimin Mineração São Paulo (BR) 100.00%
Canada
909273 Ontario Inc Toronto (Ontario. CA) 100.00%
Unimin Canada Ltd Toronto (Ontario. CA) 100.00%
Chile
Cales El Volcan Limitada Santiago (CL) 100.00%
Sibelco Chile Ltda Santiago (CL) 100.00%
Transportes Cal SpA Santiago (CL) 100.00%

Transportes Sibelco Limitada Santiago (CL) 100.00%
China
Sibelco Changsu Minerals Co Ltd Suzhou City (CN) 100.00%
Sibelco China Limited Hong Kong (CN) 100.00%
Sibelco Shanghai Minerals Co Ltd Shanghai (CN) 100.00%
Sibelco Shanghai Minerals Trading Co Ltd Shanghai (CN) 100.00%
Wollastonite Minerals (Hong Kong) Co Ltd Hong Kong (CN) 100.00%
Czech Republic
Kaolin Hlubany AS Podborany (CZ) 100.00%
Denmark
Sibelco Nordic A/S Rönne (DK) 100.00%
Egypt
Sibelco Egypt JSC Cairo (EG) 100.00%
SinaBel for extracting and processing minerals Cairo (EG) 49.00%
Finland
Kalke Oy AB Espoo (FI) 100.00%
Sibelco Nordic Oy AB Espoo (FI) 100.00%
France
CERES SCEA Paris (FR) 100.00%
France Pare-Brise Recyclage SA Crouy (FR) 50.00%
Minerais de la Mediterranée SA Balaruc-les-Bains (FR) 100.00%
Sibelco France SAS Paris (FR) 100.00%
Sibelco Green Solutions SAS Crouy (FR) 100.00%
Georgia
Georgian Minerals Ltd Tbilisi (GE) 80.00%
Germany
Sibelco Deutschland GmbH Ransbach-Baumbach (DE) 100.00%
Greece
Sibelco Hellas Mining SA Thessaloniki (GR) 100.00%
India
Adarsh India Mining Pvt Ltd Hyderabad (IN) 100.00%
Sibelco India Minerals Pvt Ltd Hyderabad (IN) 100.00%
Indonesia
PT Bhumiadya Bandung (ID) 100.00%
PT Sibelco Lautan Minerals Bekasi (ID) 100.00%
77
Italy
Ecopate Robilante (IT) 90.00%
Ecopiave Venice (IT) 100.00%
Sibelco Italia SPA Robilante (IT) 100.00%
Japan
Sibelco Japan Ltd Nagoya (JP) 70.00%
Laos
Unichamp Laos Ltd Sorm Village (LA) 70.00%
Luxembourg
NZM Lux 1 SA Strassen (LU) 100.00%
Sibelco Laos Invest SARL Strassen (LU) 100.00%
Sibelux SA Luxembourg (LU) 100.00%
Madagascar
Ambilobe Minerals SRLU Antananarivo (MA) 100.00%
Malaysia
Fineplus Sdn Bhd Petaling Jaya (MY) 88.00%
Ikatan Usaha Sdn Bhd Petaling Jaya (MY) 100.00%
Pancing Quarry Sdn Bhd Petaling Jaya (MY) 93.57%
Sera Kekal Sdn Bhd Petaling Jaya (MY) 100.00%
Sibelco Malaysia Sdn Bhd Petaling Jaya (MY) 100.00%
Sri Jaya Limestone Sdn Bhd Petaling Jaya (MY) 100.00%
Superior Lime Sdn Bhd Petaling Jaya (MY) 100.00%
Tinex Kaolin Corporation Sdn Bhd Petaling Jaya (MY) 100.00%
Tinjau Makmur Sdn Bhd Petaling Jaya (MY) 100.00%
Unichamp Mineral Sdn Bhd Petaling Jaya (MY) 100.00%
Unichamp Resources Sdn Bhd Petaling Jaya (MY) 100.00%
Mexico
Grupo Materias Primas de Mexico S. de RL de CV Monterrey (MX) 100.00%
Mat Prim Min de Ahuazotepec S de RL de CV Monterrey (MX) 100.00%
Materias Primas de Lampazos S de RL de CV Monterrey (MX) 100.00%
Materias Primas Minerales Benito Juarez S de RL de CV Monterrey (MX) 100.00%
Materias Primas Minerales de San Jose S de RL de CV Monterrey (MX) 100.00%
Materias Primas Monterrey S de RL de CV Monterrey (MX) 100.00%

Minerales Industriales El Lechugal de RL de CV Monterrey (MX) 100.00%
Servicios Integrales Benito Juarez S de RL de CV Monterrey (MX) 100.00%
Servicos Intergrales Lampazos S.A. de CV Monterrey (MX) 100.00%
Unimin Specialty Minerals S de RL de CV Monterrey (MX) 100.00%
Netherlands
Ankerpoort NV Maastricht (NL) 100.00%
Ankersmit Maalbedrijven BV Maastricht (NL) 100.00%
Ecomineraal BV Maastricht (NL) 100.00%
Eurogrit BV Papendrecht (NL) 100.00%
Filcom BV Papendrecht (NL) 100.00%
Grondbezit Bemelen BV Maastricht (NL) 100.00%
Handelsonderneming Elvers BV Geertruidenberg (NL) 100.00%
Industriele Maatschappij Geertruidenberg BV Geertruidenberg (NL) 100.00%
Jan de Poorter BV Geertruidenberg (NL) 100.00%
Janssen Eggels Holding BV Maastricht (NL) 100.00%
Maasgrit NV Maastricht (NL) 100.00%
Sibelco Benelux BV Heerlen (NL) 100.00%
Sibelco Nederland NV Maastricht (NL) 100.00%
Watts Blake Bearne International Holdings BV Maastricht (NL) 100.00%
Winterwijksche Steen-en Kalkgroeve BV Winterswijk (NL) 100.00%
World Ceramic Minerals BV Maastricht (NL) 100.00%
New Zealand
Sibelco New Zealand Ltd Auckland (NZ) 100.00%
Norway
Olivin AS Sandvika (NO) 100.00%
Sibelco Nordic AS Sandvika (NO) 100.00%
Philippines
Unichamp Mineral Philippines Inc Manila (PH) 80.00%
Poland
Badger Mining sp.z.o.o. Tomaszów Mazowiecki (PL) 100.00%
Sibelco Poland sp.z.o.o. Gdańsk (PL) 100.00%
Portugal
Sibelco Portuguesa Lda Rio Maior (PT) 100.00%
Russian Federation
GOK Nebolchi LLC Nebolchi (RU) 100.00%
79
Kvarsevye peski CJSC Eganovo (RU) 100.00%
Nebolchi Quarry Entreprise CJSC Nebolchi (RU) 100.00%
Ramenskiy GOK OJSC Eganovo (RU) 99.04%
Russian Mining Company CJSC Nebolchi (RU) 100.00%
Sibelco Latnya LLC Posyolok Strelitsa (RU) 100.00%
Sibelco Rus LLC Eganovo (RU) 100.00%
Trading House Hercules Moscow LLC Moscow (RU) 100.00%
Velikodvorskie peski LLC Gus-Khrustalny (RU) 100.00%
Voronezhskoe Rudoupravlenije OJSC Posyolok Strelitsa (RU) 100.00%
Singapore
Sibelco Asia Pte Ltd Singapore (SG) 100.00%
SIKO Pte Ltd Singapore (SG) 100.00%
South Korea
Sibelco Korea Co. Ltd (South Korea) Nonsan (SK) 99.96%
Spain
Sibelco Inversiones Argentina SL Bilbao (ES) 100.00%
Sibelco Minerales Ceramicos Bilbao (ES) 100.00%
Sibelco Minerales SA Bilbao (ES) 99.93%
Sibelco Participaciones SL Bilbao (ES) 100.00%
Sibelco Ukrainian Trading SL Núles (ES) 100.00%
Sweden
Sibelco Nordic AB Mölndal (SE) 100.00%
Sibelco Nordic Region AB Mölndal (SE) 100.00%
Switzerland
Sibelco Switzerland AG Birsfelden (CH) 100.00%
Taiwan
Sibelco Asia Pte Ltd, Bao Lin Branch Taichung (TW) 100.00%
Sibelco Bao Lin Co Ltd Taichung (TW) 100.00%
Thailand
GTT Holdings Ltd Amphur Muang (TH) 100.00%
Niyom and Son Ltd (Thailand) Amphur Muang (TH) 100.00%
Ratthathum Mining Company Ltd (Thailand) Amphur Muang (TH) 100.00%
Sibelco Minerals (Thailand) Ltd Amphur Muang (TH) 100.00%

Turkey
Alabanda Madencilik Dis Ticaret AS Aydin (TR) 100.00%
Alinda Madencilik Sanayi Ve Ticaret AS Aydin (TR) 100.00%
Cine Akmaden Madencilik Tic AS Aydin (TR) 100.00%
Ukraine
Donbas Clays JSC Donetsk (UA) 100.00%
LLC Silica Holdings Kyiv (UA) 51.00%
PJSC Novoselovskoe Gok Kharkiv (UA) 47.65%
United Kingdom
Blubberhouses Moor Ltd Sandbach (UK) 100.00%
Devon & Courtenay Clay Ltd Sandbach (UK) 100.00%
Ellastone Investments Sandbach (UK) 100.00%
Fordath Ltd Sandbach (UK) 100.00%
Ilamian Ltd Sandbach (UK) 100.00%
North Devon Clay Ltd Sandbach (UK) 100.00%
Sibelco Minerals & Chemicals (Holdings) Ltd Sandbach (UK) 100.00%
Sibelco UK Ltd Sandbach (UK) 100.00%
The Newton Abbot Clays Ltd Sandbach (UK) 100.00%
Viaton Industries Ltd Sandbach (UK) 100.00%
Watts Blake Bearne & Co Ltd Sandbach (UK) 100.00%
WBB Eastern Europe Ltd Sandbach (UK) 100.00%
United States
Acquila Mineral Company Wilmington (Delaware, US) 100.00%
Blue Earth Properties LLC Chicaco (Illinois, US) 100.00%
Blue Stem Property Holdings LLC Chicago (Illinois, US) 100.00%
Patriot Proppants Arkansas LLC Wilmington (Delaware, US) 100.00%
Polymorphous Minerals Investment Corp Wilmington (Delaware, US) 100.00%
Tinaco Feldspar Company LLC Wilmington (Delaware, US) 100.00%
Unimin Corporation Wilmington (Delaware, US) 100.00%
Unimin Finance Company LLC Wilmington (Delaware, US) 100.00%
Unimin Lime Corporation Wilmington (Delaware, US) 100.00%
Unimin Minnesota Corporation Wilmington (Delaware, US) 100.00%
Unimin Patriot Holdings LLC Wilmington (Delaware, US) 100.00%
81
Unimin Specialty Minerals Inc Wilmington (Delaware, US) 100.00%
Unimin W Services Corp. Wilmington (Delaware, US) 100.00%
Unimin Wisconsin Equipment Corp Wilmington (Delaware, US) 100.00%
Unisil Corp Jersey City (New Jersey, US) 100.00%
Winchester & Western Railroad Co Wilmington (Delaware, US) 100.00%
EQUITY ACCOUNTED INVESTEES, 31 DECEMBER 2017 REGISTERED SEAT/LOCATION EFFECTIVE INTEREST %
BRAZIL
Jundu Nordeste Mineracao Ltda Descalvado (BR) 49.54%
Portsmouth Participaçöes Ltda Descalvado (BR) 49.54%
Czech Republic
Ficarex SRO Teplice (CZ) 50.00%
Sklopisek Strelec AS Mladejov (CZ) 32.55%
Denmark
Dansand A/S Braedstrup (DK) 50.00%
France
SCI Les Granet Cayeux Sur Mer (FR) 33.33%
Italy
Maffei Sarda Silicati SRL Florinas (IT) 49.90%
Malaysia
Coremax Malaysia Sdn Bhd Petaling Jaya (MY) 40.00%
United Kingdom
Exilica Covnetry (UK) 30.70%
Glassflake Ltd Sandbach (UK) 25.10%
Prestige Sports Surfaces Ltd Birmingham (UK) 50.00%

40 GLOSSARY OF NON-GAAP TERMS
Capex Expenditure for the acquisition of property, plant and equipment and intangible assets
Capital employed Working capital plus intangible assets, property, plant and equipment, leased assets and investment
properties
Earnings per share Net profit (share of the Group) divided by the number of ordinary shares outstanding during the period,
net of treasury shares
EBIT Operating result
Free cash flow Free operating cash flow less interest paid, purchase of treasury shares, dividends paid and plus non-
recurring result, interest received and dividends received
Free operating cash flow EBITDA less income taxes paid, capex, changes in working capital, use of provisions and cash
contributions to defined benefit plans, plus income tax received, proceeds from sale of PP&E, revisions
and pension expenses recorded in EBITDA
Growth Capex Capital investments which are aimed at creating growth by increasing final output of existing products,
expanding outlets or distribution facilities in products and markets already served, and investments in
new minerals, new products, new markets segments or new geographic area
Net (financial) debt Non-current and current interest bearing loans & borrowings, bank overdrafts, non-current and current
deferred considerations on acquisitions, non-current derivative financial liabilities (both hedge and non-
hedge accounting for interest rate swaps) and non-current derivative financial assets, minus cash and
cash equivalents
Net profit (loss) (share of the Group) Profit of the period attributable to owners of the Company
Non-recurring result Operating income or expenses that do not occur regularly as part of ordinary activities (mainly
restructuring and business disposals)
Pay out ratio (%) Gross dividend per share divided by Earnings per share
Region A region is an “operating segment” as defined under IFRS 8 Operating Segments
Return on capital employed (%) REBIT/average capital employed during the period
Strategic Business Segment A Strategic Business Segment equals to a Cash Generating Unit (CGU)
Working capital Inventories, current trade and other receivables (excl. interest receivables), less current and non-
current trade payables, current other payables (excl. dividends and interest payables and deferred
considerations on acquisitions)
83
REPORT OF THE BOARD OF DIRECTORS
ON THE CONSOLIDATED
In accordance with Art. 119 of the Belgian Company Code - Financial Year 2017
To the Statutory General Meeting of Shareholders of SCR-Sibelco NV to be held on 18 April 2018.
Ladies and Gentlemen,
We have the pleasure of submitting for your approval the financial SCR-Sibelco NV is a Belgian industrial company with a mixed
statements for the financial year ended 31 December 2017 and character. On the one hand, it is a local Belgian industrial operator
reporting on the activities of the Company and its subsidiaries. with three major silica sand production facilities and, on the other
For the financial year 2017, the consolidated financial statements were hand, a holding company with subsidiaries which are all specialized
established and published according to the International Financial in the extraction, production and distribution of a broad range of high
Reporting Standards (IFRS) as adopted by the European Union. quality industrial minerals, located in 43 countries worldwide.
FINANCIAL RESULTS OF THE GROUP

% difference 2017
In thousands of euro 2O17 2O16 vs 2016
Consolidated results
Revenue 3 083 004 2 725 702 13%

EBITDA* 541 429 428 146 26%
Recurring EBIT 282 690 145 000 95%
EBIT 157 449 (152 675) 203%
Net result (share of the Group) 95 818 (247 189) 139%
Recurring net result 212 544 33 075 543%
Cash flows 6 882 2 530
Free operating cash flow 314 896 176 904 78%

Recurring free operating cash flow 409 004 299 194 37%
Balance at 31 December 6 882 2 530
Net debt 646 620 891 174 (27%)

Net debt EBITDA ratio 1.19 2.08 (43%)
*As of 2017 EBITDA includes the income on government grants which was not the case in prior years. Total income on governments grants for the year was €0.9 million.
This year we made good headway with our Vision 2020 transformation improvements in all regions and business segments, supported by the
programme and the implementation of the new strategy we defined positive impact of our global Value 150 optimisation Programme.
at the end of 2016. After two challenging years we paved the way As a result, we generated EBITDA of EUR 541 million on total Revenue
to sustainable revenue, EBITDA growth and value creation, driven of almost EUR 3.1 billion. Free operating cashflow was EUR 315
mainly by the recovery of the US energy market (frac sand for shale oil million, or EUR 409 on a recurring basis.
and gas), improved results in mineral sands in Australia and a better Also during 2017, we launched our new organisational model which
performance in the industrial and electronics segments in Asia. Europe will support success in our chosen markets and help us to become
had another excellent year, even outperforming 2016 results, whilst South more market-driven. As of 2018, our strategy will move from a region
America was significantly better than last year. Overall, we achieved focused to a market segment focused organisation.

REGIONAL PERFORMANCE & REVENUE
Our group consolidated revenue reached EUR 3.1 billion compared NET RESULT
to EUR 2.7 billion for the same period last year, an increase of EUR Operational results were partly offset by non-cash impairments and
357 million or 13%. At constant scope and foreign currency impact one-off elements such as transaction costs related to the upcoming
the increase was 16%. merger with Fairmount Santrol and provisions related to the external
contamination case in the Netherlands. The impairments of certain
NORTH AMERICA assets are non-cash in nature and include plants in Indonesia, Brazil,
Revenue in North America was EUR 1 291 million, an improvement India and Australia as a result of lower than expected performance,
of EUR 316 million or 32% compared to last year. This increase was upcoming closures or a weaker outlook.
mainly driven by higher demand in the energy segment as a result Net result for the year was EUR 99 million. However, on a “recurring”
of increased frac drilling activities. This was amplified by a good basis (excluding one-off events) we would show a net profit of EUR
performance in our electronics business thanks to increased volumes 213 million. The share of the group in the net profit was EUR 96 million.
in the photovoltaic market.
CASH FLOW AND FUNDING
EUROPE Free Operating Cash Flow (FOCF) was EUR 315 million, which is
Europe enjoyed another excellent year with revenues of EUR 1 187 significantly better than last year. FOCF on a recurring basis was
million, a 5% increase compared to EUR 1 146 million last year. The EUR 409 million, again an increase compared to last year. More
improvement was mainly driven by increased volumes of cristobalite specifically, on top of our improved EBITDA, the group generated
and olivine, and by a stronger performance in ceramics (Ukrainian cash from the sale of assets, including EUR 13 million cash from the
clay and Turkish feldspar). sale of land in Australia (Lillydale).
As a consequence, our net financial debt of the Group decreased to
AUSTRALIA EUR 647 million with a net debt ratio of 1,19.
Thanks to the mineral sands segment, revenue in Australia was 6% In 2017, the group divested its shareholdings in
higher than 2016 with a total of EUR 300 million. Higher demand for Mineraalbewerkingsbedrijf Uikhoven (Belgium), Sibelco Colombia,
mineral sands products was evident from the start of the year, hence we MCS Mining Industry Lao Co (Laos) and EDK (Brazil) for a total
took the decision to cancel the foreseen closure of our Enterprise mine. consideration of EUR 9 million.
The group invested EUR 121 million in growth capex amongst - but
ASIA not limited to - the construction of a new cristobalite kiln in Dessel
Revenue in Asia decreased by 9% from EUR 244 million to EUR 223 (Belgium), some frac expansion projects in North America and a new
million, which is fully explained by the disposal of our Gilfair Clay hydrator in Galong. Additionally, we have spent EUR 5 million for the
operations at the end of 2016. Under constant scope, revenue was acquisition of additional shares in PT Bhumiadya (Indonesia), Eco-
in line with 2016. Throughout the year the main market dynamics Paté (Italy) and Ecopiave (Italy).
remained consistent. Electronics (display glass) and industrial (lime
exports) remain the main contributors to the robust performance of LOOKING AHEAD
our Asian business. As of 2018, our strategy will move from a region focused to a market
segment focused organisation and we anticipate organic growth in
SOUTH AMERICA all business units/business lines across the Group. We believe that
South America’s revenue was EUR 118 million, 5% higher than 2016 there will be further growth in the energy market in North America
thanks to an improved performance in the lime segment. with volume and margin improvements, additionally strengthened by
contributions from our Value 150 Optimisation Programme.
EBITDA A key milestone in the implementation of our new strategy was
2017 EBITDA for the Sibelco Group reached EUR 541 million, EUR reached in December when we announced the forthcoming merger
113 million better than in 2016. EBITDA in all regions and business of Unimin Corporation (our North American business) and Fairmount
segments improved, although the increase was largely driven by the Santrol, a leading US provider of high-performance silica sand. This
recovery of the energy market in North America and higher demand for exciting deal, which we expect to be completed by mid-2018 subject
mineral sands in Australia. These robust results were also supported by to regulatory review and customary closing conditions, will create a
the positive impact of our Value 150 Optimisation Programme. leading new company through which we will deliver unique value.
85
TECHNOLOGY AND INNOVATION Digitalization is another focus area that T&I drives together with
IT and Operational Optimization teams. Here we are aiming for
Technology & Innovation (T&I) was established in June 2016. Since automation, big data analysis, resource exploration and mine
then a lot of discussions, initiatives and projects have been started. management. To support our internal efforts, the Global Excellence
First successes working with overarching teams have been achieved. Teams (GET), virtual networks of experts in a specific field, were
T&I has started the creation of a cross functional / cross regional established. Examples are the GET “Lime Technology” and the
personal development program, the Sibelco Innovation Development GET “Smart Plant” aiming for new process technologies and plant
Program (SIDP), together with our HR partner. This program aims to concepts, like mobile or modular plants.
develop leaders for cross functional / cross regional collaboration. T&I is working together with many internal functional groups and
Furthermore, equipment and resources of all integrated laboratories people scattered across the whole group and globe regardless of
have been mapped. Together with our IT business partner, T&I reporting lines and regions.
has launched the Sibelco Innovation Portal (SIP) to make all this In order to utilize external knowledge to gain new insights and
information transparently available for the Sibelco Innovation experiences, T&I has started cooperation with Universities and
Community (SIC). The SIP provides further features to manage and is aiming to acquiring start-up companies to complement our
utilize our global knowledge (knowledge management). The T&I technology base. Responsible for this is the T&I “Technology
project portfolio has been reviewed, narrowed down and aligned with Partnering” team. Besides technology feasibility (technology push)
the business strategies of our Strategic Business Segments (SBSs). it is very important to also assess the space of market opportunities
This work was conducted together with all Segment Leaders and our (market pull). Therefore, T&I teams up with Strategic Marketing
PMO business partner. to evaluate markets and business cases for short- and mid-term
After release of the new Business Unit (BU) / Business Line (BL) horizons. Long-term opportunities will be handled by the “Strategic
structure together with all the business leaders, T&I has conducted Innovation” team. Based on the exhaustive mega trend analysis many
a concluding workshop to sign-off the projects, assign T&I business areas of opportunities have been identified by strategic marketing.
partners to each BU and BL and agree on the basic governance for These now need to be broken down into Sibelco’s arenas of
cooperation and partnering. In a subsequent workshop the T&I team business. T&I will support BU/BL immediate business objectives but
together with the HR business partner has immediately started to also challenge their future ambitions.
design a flexible, efficient and hence effective T&I organization fitting All these efforts are made to do our projects faster and with
the needs of our BUs. increasing success. A few quick wins were already realized with this
From the business strategies, T&I has established two new approach. The customer plays a key role in innovation. Therefore, T&I
overarching technology platforms: “Green Solutions”, aiming for together with the commercial team is establishing a new Technical
secondary raw materials and circular economy, and another one for Support function in order to assure that voice of customer is well
“Synthetic Minerals” aiming for production of high purity minerals received and understood utilizing our global T&I pool to meet their
and for geopolymers due to surface activation of inorganic waste needs and to explore new opportunities. T&I wants to become a true
materials. customer centric organization.
RISK MANAGEMENT REPORT
FINANCIAL RISK MANAGEMENT This note presents information about the Group’s exposure to each
of the above risks, the Group’s objectives, policies and processes
OVERVIEW for measuring and managing risk, and the Group’s management
The Group has exposure to the following risks from its use of financial of capital. Further quantitative disclosures are included throughout
instruments: these consolidated financial statements.
Q credit risk
Q currency risk CREDIT RISK
Q interest rate risk Credit risk is the risk of financial loss to the Group if a customer or
Q liquidity risk counterparty to a financial instrument fails to meet its contractual
obligations.

No material exposure is considered to exist by virtue of the possible LIQUIDITY RISK
non-performance of the counterparties to financial instruments, other To ensure liquidity and financial flexibility at all times, the Group,
than trade and other receivables held by the Group. in addition to its available cash, has several uncommitted and
Given the large number of internationally dispersed customers, the committed credit lines at its disposal in several currencies and in
Group has limited concentration of credit risk with regard to its trade amounts considered adequate for current and near-future financing
and other receivables. needs. Further the Group has the option to use factoring as a
This kind of financial risk is managed in a decentralised way. supplementary source of liquidity.
The Group establishes an allowance for impairment that
represents its estimate of incurred losses in respect of trade and OPERATIONAL RISK MANAGEMENT
other receivables (see accounting policy k & note 31 Financial
instruments). For the protection of our assets and earnings against insurable
risks, different international insurance programs are in place. These
CURRENCY RISK international covers enable us to benefit from optimal terms and
The Group is exposed to different types of currency risks: conditions while optimising its costs. All the international insurance
Q translation covers are of the “all risks except” type and are taken out with
Q economical financially sound insurance companies of outstanding reputation.
Q transactional The main group insurance programs are:
The Group has currently no documented hedges in a net investment Q General and product liability insurance, covered by a basket of
in a foreign operation. different insurers
Economical exposure is the risk that the company’s competitive Q Property damage and business interruption insurance, placed
position is affected by foreign exchange rate movements. with an A-rated insurer, covering all major production plants
Transactional exposure refers to contractual obligations in foreign worldwide.
currencies other than the functional currency. Q Directors’ and Officers’ insurance, covering the Directors and
The Group adopted in 2007 a policy with regard to the management Officers of Sibelco and all its affiliates
of these risks. Q Marine cargo insurance, covering all transport over water.
Economical exposure can be hedged at entity level under strict
conditions and within a limited time frame. Cash flow hedge Sibelco also reaches out to the insurance market to cover the specific
accounting is then applied. risks of some of our non – recurring activities and to cover risks for
Transactional exposures are systematically hedged when material. which insurance is compulsory.
We also have some risks partially insured through Sibelco’s
INTEREST RATE RISK reinsurance captive, as we consider those thereby to be better
Interest rate risk is managed for the Group’s consolidated net controlled and managed than market average. Some of the property,
financial debt with the primary objective of guaranteeing medium- liability, workers’ compensation and marine cargo exposures below a
term cost. relevant threshold are retained within the captive.
To do so, the Group manages this risk centrally, based on trends in The Group relies on information technology systems to process,
the Group’s consolidated net financial debt. Knowledge of this debt transmit, and store electronic information. Although Sibelco takes
is provided by a regular reporting, that describes the financial debt of various actions to prevent cyber-attacks and to minimize potential
each entity and indicates its various components and characteristics. technology disruptions, such disruptions could impact our business.
The Group Treasury department issues regular advices to the For further information on Enterprise Risk Management and the
Executive Committee in this respect. way risks are identified and assessed, we refer to the Internal Audit
For the Interest Rate swaps, only the contractual outflows were section of the Corporate Governance report.
considered. The incoming flows, related to the floating leg, are not
reported as they are compensated by the interests on floating bank
borrowings, which are also not reflected.
87
CORPORATE GOVERNANCE
This report covers information on governance relevant to the

reporting year 2017, at the level of the different corporate bodies of
the company.
NEW GOVERNANCE CHARTER

During its meeting of September 2017, the Board of Directors of the
company adopted a revised set of Board and Governance Rules.
BOARD OF DIRECTORS
The Board of Directors of SCR-Sibelco NV is the highest corporate
body within the Sibelco Group and it is assisted by an Audit
Committee and a Nomination and Remuneration Committee.
POWERS AND MEETINGS

The Board of Directors performs all the powers conferred upon it by the law and the company by-laws. Furthermore, according to the new
Board and Governance Rules, the following power are specifically reserved to the Board:
Q the determination/approval of the general strategy of the Company. Q the election of the Chairman of the Board, and the approval of the
This includes the authority to determine the important strategic division of responsibilities between the Chairman and the CEO;
issues within the Company, to approve plans, yearly and other Q defining the mission, powers, composition and remuneration of the
budgets and important structural changes (including any Audit Committee, Remuneration and Nomination Committee and
acquisition or disposal of shares, activities, strategic assets, a other Board Committees they decide to create, and appointing and
company or business), and the responsibility for the relationship dismissing the members of these Board Committees;
between the Company and its shareholders. The general strategy Q the monitoring and review of the effectiveness of the Board
shall be formulated in close co-operation with the Exco under the Committees;
leadership of the CEO; Q the determination of the structure, powers and duties of the
Q the adoption/establishing of the statutory and consolidated annual Company’s ExCo. This includes primarily the appointment,
accounts of the Company for approval by the General Meeting, dismissal and remuneration of the CEO and the other members of
and the approval of the annual report. In connection herewith, the the ExCo and the formulation of the criteria according to which the
Board should: ExCo will manage the Group;
Q approve a framework of internal control and risk management Q the supervision of the performance of the ExCo: the Board will in
for the Company and the Group set up by the ExCo, and monitor its supervisory task be guided by the Chairman with the help of the
the implementation of the framework and the use of available Board Committees. The CEO shall inform the Board, in great detail,
resources thereto; at the end of each quarter, about the evolution and prospects
Q ensure the integrity and timely disclosure of the financial of the Company. The CEO shall provide the Board at least two
statements of the Company and the Group; and times per year with follow-up reports regarding the major strategic
Q supervise the performance of the Statutory Auditor and supervise programs of the Company;
the internal audit function; Q The co-optation of new Directors in case of vacancy.
Q the calling and organization of the Company’s General Meetings;
During 2017, the Board of Directors convened seven times.

ELECTION OF BOARD MEMBERS AND COMPOSITION OF THE BOARD
Members of the Board are appointed for a period of three years. van Poecke resigned as a Board Member which resignation ended
In April 2017, the mandate of M. Alexandre Grosjean was not renewed his mandate. During the meeting of 26 June 2017, Calavon Finance
and came to an end during the Ordinary General Assembly. The SAS, with as permanent representative M. Jean-Pierre Labroue, was
mandates of Messrs Hans-Josef Grehl, Christoph Grosspeter, Evrard co-opted as a Board Member for a mandate until the next Ordinary
van Zuylen and Michel Verhaeghe were renewed for another term of General Meeting.
3 years. M. Pascal Emsens was newly elected as a Board Member Due to these changes, the composition of the Board of Directors of
for a term of 3 years. After the Ordinary General Meeting, M. Marcel SCR-Sibelco NV as per 31 December 2017 was as follows:
Bert DE GRAEVE (perm. repr. of IDw Consult bvba) Non-Executive Chairman

Frans CORPELEIJN
France de SADELEER
Michel DELLOYE (perm. repr. of Cytifinance SA)
Jacques EMSENS
Pascal EMSENS
Walter EMSENS
Hans-Josef GREHL
Christoph GROSSPETER
Jean-Pierre LABROUE (perm. repr. of Calavon Finance SAS)
Paul de LASTEYRIE du SAILLANT
Jean-Marc UEBERECKEN
Evrard van ZUYLEN VAN NYEVELT
Michel VERHAEGHE van de NAEYER
HONO CHAIRMEN
HONORARY CHAIRMEN
Stanislas EMSENS (+ 19/01/2018)
Gaëtan EMSENS
To our regret, M. Stanislas Emsens Sr., passed away in his home in Stanislas Emsens Sr. continued the work of his ancestors as pioneers
Lommel, on Friday 19 January 2018, at the age of 91. in sustainable development with a long-term vision, recognizing
Baron Stanislas Emsens Sr. was responsible for the international social responsibility towards people and nature. Under his decade-
expansion of Sibelco as a market player of world renown in the global long influence and inspiration, his philosophy of sustainability has
markets of industrial minerals and mineral solutions. As such, he is pervaded all Sibelco companies world-wide as from their start or
considered the father of Sibelco. from the moment they entered Sibelco. The concept of operational
A son of Walter Emsens, he started his career within the company in excellence characterizing Sibelco quarries and plants, finds its root
1949, at the age of 23, when he was appointed general manager. In in this vision which is the corner stone of Sibelco’s success. This, his
1958, he was nominated member of the Board and managing director. life’s work was crowned in 2006, when he received the title of Baron, a
Some decades later, in 1990, when the international expansion of well-deserved honour for this visionary and entrepreneur pur sang.
Sibelco was a fact, he would succeed to Baron Louis de Sadeleer as Until the very last moment, Mr. Emsens talked enthusiastically about
Chairman of the Board. the importance and the future of Sibelco, its workers and its goal, with
Stanislas Emsens Sr. pursued the tradition of the Belgian family the same passion and pride. Sibelco was his life.
enterprise of renown in an impressive way, a tradition shaped by The brilliant career he accomplished and the life he lived, would not
stable relations with the work force, special care for health and safety have been possible without the unconditional and steady support of
of the workers, respect and care for the environment long before these his spouse and pillar, Marie-Claire Boël.
became an integral part of entrepreneurship, as is the case today.
89
AUDIT COMMITTEE
The Audit Committee’s primary duties and responsibilities are to: permanent representative (Chairman of the Committee), Jacques
Q monitor the financial reporting process; Emsens and Michel Verhaeghe de Naeyer, and with this composition
Q monitor the effectiveness of the company’s system of internal it has the financial knowledge and experience required by the Charter
control and risk management; of the Audit Committee.
Q monitor the internal audit function and its effectiveness; The following persons attended these meetings on a regular basis:
Q monitor and assess the statutory audit of the company’s annual IDw Consult bvba having M. Bert De Graeve as permanent
and consolidated accounts and follow up on questions and representative, Jean-Luc Deleersnyder, Group CEO; Kurt Decat,
recommendations made by the external auditors; Group CFO; Frederic Guilmin, VP Group Internal Audit and Risk
Q review the independence of the external auditor in particular where Management and Patrick Rottiers as permanent representative of the
he is providing the company with additional services. external auditor, Ernst & Young Bedrijfsrevisoren.
The three non-executive Board members who composed the Audit In 2017, the Audit Committee convened four times.
Committee are: Cytifinance SA having M. Michel Delloye as a
NOMINATION AND REMUNERATION COMMITTEE

This Committee advises the Board in connection with: The Nomination and Remuneration Committee was composed of
Q the appointment and re-appointment of Board members and ExCo the following Board members: Frans Corpeleijn (Chairman of the
members, after due evaluation; Committee), Walter Emsens, Paul de Lasteyrie du Saillant and Evrard
Q the most appropriate remuneration policy and benchmarking as van Zuylen.
well as compensation of Board members and ExCo members The Committee convened three times during the year. The persons
including rules on bonuses and long-term incentives and main attending these meetings on a regular basis were: IDw Consult BVBA
terms of employment and termination of employment; having M. Bert De Graeve as a permanent representative, Chairman
Q the disclosure on the amounts of Directors’ and Executives’ of the Board, Jean-Luc Deleersnyder, Group CEO, and Phil Dibley,
compensation; Group HR.
Q the appropriate budget for training of employees and follow
up of career development and succession planning applied in
the company.
EXECUTIVE COMMITTEE
Since 2006, the Board has delegated its management and operational
powers to the Executive Committee (ExCo) or Directiecomité as Q the development and monitoring of the short and long term plans,
defined in Article 524 of Belgian corporate law. The ExCo operates and the monitoring of the results of the various business segments
under the leadership of the CEO. and regional operations of the Group;
The objectives of the ExCo are: Q the implementation of internal controls based on the internal control
Q To maximize the return to our shareholders; and risk management framework approved by the Board;
Q To ensure the continued growth of the Group. Q the preparation of the annual accounts for presentation to and
The responsibilities of the ExCo include, among others: timely disclosure by the Board.
Q the development, implementation and monitoring of the strategy of The ExCo acts under the supervision of the Board, and is in charge of
the Group and each of its components and business segments; implementing the decisions of the Board.
The CEO functions as the prime interface between the Board and the
ExCo.

The composition of the Executive Committee remained the same during the year, so that it was composed of the following members as per 31
December 2017:
Jean-Luc DELEERSNYDER Chief Executive Officer
Laurence BOENS Group General Counsel & Company Secretary
Tom CUTBUSH Managing Director Asia Pacific
Kurt DECAT Chief Financial Officer
Campbell JONES Chief Operations Officer & Managing Director North America
John VAN PUT Chief Commercial Officer & Managing Director Europe
All meetings of the ExCo were attended by Phil Dibley, Group HR, as a For matters belonging to the authority of the ExCo, the Company shall
permanent invitee. be validly represented towards third parties by the joint signature of
The ExCo exercises the powers of management of the company and two members of the ExCo.
the Group’s components within the limits of the corporate purpose and The ExCo convened either in Antwerp, on site or via teleconferences
subject to the powers expressively vested by law in the Shareholders’ for a total of sixteen times during the commented year.
General Meeting and Board of Directors. The CEO is supported in the
exercise of his duties by the other members of the Exco.
INTERNAL AUDIT
The Internal audit and risk approach has been revisited in 2016 and INTERNAL CONTROLS FRAMEWORK
Frédéric Guilmin was appointed as VP Group Internal Audit and Risk At the request of the Board of Directors and the Audit Committee,
Management. management, in collaboration with internal audit, has designed
Sibelco Group’s external auditors are BCBVA ERNST & YOUNG a global internal controls framework. The global internal controls
(IRE N° B00160), with permanent representative Patrick Rottiers framework consist of 6 core fundamentals:
(IRE N° A01365). Q Group Policies and Standards,
Q definition of roles and responsibilities,
ENTERPRISE RISK MANAGEMENT Q segregation of Duties (SOD),
At the request of the Board of Directors and the Audit Committee, Q documented processes and related controls in procedures
management has developed a permanent global enterprise risk Q execution and evidencing of a defined set of control activities
management (ERM) framework and transposed it into a global Risk covering specific risks and periodic monitoring
Management Policy. A Global Risk Management function has been Q and documentation of compliance with these 6 core fundamentals
created to ensure that the ERM framework is implemented and In addition, Minimum Internal Control Standards (MICS) have been
becomes embedded in the day to day operations across the different defined for every function. Minimum Internal Control Standards are
functions (e.g. legal risk assessments, HS&E risk assessments…). The currently roll out and assessed across the organisation.
framework consists in the identification, assessment and prioritisation
of the key risks for Sibelco and the continued monitoring and reporting GLOBAL INTERNAL AUDIT
of those risks. At the request of the Audit Committee, a new global internal audit
The identified risks have been organised on a global and functional strategy has been defined in 2016. The global internal audit strategy
level into four different categories: strategy, operations, legal and is focussing on:
financial/reporting. Key risks are then classified by impact and Q improvement of the internal controls and risk management maturity;
likelihood on basis of a standardised scale. Ownership is assigned Q adding value and improving Sibelco’s operations through sharing
and action plans (including deadlines) defined to further mitigate the best practices based on internal and external experiences /
identified risks. The identification and evaluation of risks, and the competencies;
definition of the mitigating actions was done through interviews and a Q continuous communication and sharing with all stakeholders within
workshop with ExCo and the respective functional heads. the organisation;
Q focus on key company activities and increase risk based auditing;
91
Q embedding ‘cost-benefit realisation’ in its audit missions and plant reviews, process audits and ad hoc management requests.
advisory approach : pragmatic with focus on risk mitigation, Based upon the group risk assessment (see ERM section) a global
internal controls, process standardization/harmonisation and internal audit plan has been defined and validated by the Audit
efficiency. Committee.
In order to realise the strategy, four different types of audits have
been defined on top of the advisory role: theme/functional audits,
EVENTS AFTER THE CLOSING OF THE FINANCIAL YEAR
After the closing of the financial year 2017, no notable events have occurred.
The Members of the Board wish to thank all Sibelco Group staff and employees all over the world for their dedicated efforts in achieving the
commented results during this year.
Antwerp, 15 March 2018

Signed by the Members of the Board

STATUTORY FINANCIAL
STATEMENTS 2017
BALANCE SHEET
as per 31 December 2017
ASSETS
FIXED ASSETS 2 255 685 2 283 476
Intangible assets 18 780 16 370
Tangible assets 42 147 32 118
Land and buildings 16 270 17 723

Plant, machinery and equipment 16 414 2 814
Furniture and vehicles 1 085 918
Other tangible assets 1 895 2 086
Assets under construction and advance payments 6 483 8 577
Financial assets 2 194 758 2 234 988
Affiliated enterprises 2 194 612 2 234 839

Participating interests 2 193 643 2 187 538
Amounts receivable 969 47 301
Other financial assets 146 149
Shares 97 97
Amounts receivable and cash guarantees 49 52
CURRENT ASSETS 153 036 172 575
Stocks and contracts in progress 3 853 4 046
Stocks 3 853 4 046

Raw materials and consumables 1 626 1 625
Work in progress 125 120
Finished goods 1 994 1 971
Goods purchased for resale 38 33
Advance payments 70 297
Amounts receivable within one year 121 606 74 057
Trade debtors 78 685 65 695

Other amounts receivable 42 921 8 362
Investments 5 673 5 907
Own Shares 3 971 3 971

Other investments and deposits 1 702 1 936
Cash at bank and in hand 7 536 1 563
Deferred charges and accrued income 14 368 87 002
TOTAL ASSETS 2 408 721 2 456 051

BALANCE SHEET
as per 31 December 2017
LIABILITIES
CAPITAL AND RESERVES 1 093 110 1 160 775
Capital 25 000 25 000
Issued capital 25 000 25 000
Share premium account 12 12
Revaluation surplus 641 641
Reserves 1 066 457 1 134 122
Legal reserve 2 500 2 500

Reserves not available for distribution 4 223 4 223
For own shares 3 971 3 971
Other 252 252
Untaxed reserves 19 348 19 348
Reserves available for distribution 1 040 386 1 108 051
Investment grants 1 000 1 000
PROVISIONS AND DEFERRED TAXATION 4 147 4 282
Provisions for liabilities and charges 4 147 4 282
Pensions and similar obligations 1 481 1 616

Environmental liabilities 2 666 2 666
CREDITORS 1 311 464 1 290 994
Amounts payable after more than one year 385 099 436 662
Financial debts 385 099 436 662

Other loans 385 099 436 662
Amounts payable within one year 915 847 844 792
Current portion of amounts payable after more than one year 679 426 685 384
Financial debts 109 110 7 352
Other loans 109 110 7 352
Trade debts 60 950 53 940
Suppliers 60 950 53 940
Taxes, remuneration and social security 16 473 11 223
Taxes 1 908 2 366
Remuneration and social security 14 565 8 857
Other amounts payable 49 888 86 893
Accrued charges and deferred income 10 518 9 540
TOTAL LIABILITIES 2 408 721 2 456 051
97
INCOME STATEMENT
From 1 January 2017 to 31 December 2017

Operating income 193 997 181 307
Turnover 115 526 111 215

Increase (+), decrease (-) in stocks of finished goods, 22 (262)
work and contracts in progress
Produced fixed assets 4 399 4 148
Other operating income 73 818 66 149
Non-recurring operating income 232 57
Operating charges (192 152) (166 680)
Raw materials, consumables and goods for resale 15 680 15 834

Purchases 15 735 16 178
Increase (-), decrease (+) in stocks (55) (344)
Services and other goods 85 526 79 069
Remuneration, social security costs and pensions 43 110 31 760
Depreciation of and other amounts written off formation 10 433 10 900
expenses, intangible and tangible fixed assets
Increase (+), decrease (-) in amounts written off 189 (46)
stocks, contracts in progress and trade debtors
Increase (+), decrease (-) in provisions for liabilities and charges (136) (1 267)
Other operating charges 37 350 30 429
Non-recurring operating charges 0 1
Operating profit 1 845 14 627
Financial income 150 861 146 125
Income from financial fixed assets 81 884 105 989

Income from current assets 18 899 19 672
Other financial income 50 078 1 867
Non-recurring financial income 0 18 597
Financial charges (147 135) (110 434)
Interest and other debt charges 41 097 46 547

Other financial charges 50 075 1 674
Non-recurring financial charges 55 963 62 213
Profit on ordinary activities before taxes 5 571 50 318
Profit for the period before taxes 5 571 50 318
Income taxes 110 (132)
Income taxes (27) (137)

Adjustment of income taxes and write-back of tax provisions 137 5
Profit for the period 5 681 50 186
Profit for the period available for appropriation 5 681 50 186

NOTES
SUMMARY OF THE VALUATION REGULATIONS VI. ACCOUNTS RECEIVABLE
Accounts receivable are valued at nominal value.
The valuation regulations were determined in accordance with the Downward value adjustments for doubtful debtors are entered and
provisions of the Royal Decree of 30/01/2001 with regard to the deducted from the items of the asset to which they relate.
annual accounts of the company.
VII. CONVERSION OF FOREIGN CURRENCY
I. INTANGIBLE FIXED ASSETS Outstanding accounts receivable and debts in foreign currency are
Q Software: is entered at purchase value. Depreciation is entered valued at the exchanges rates that apply on the balance sheet date.
according to the linear method over a period of 5 years. Transactions in foreign currency included in the profit and loss
Q Emission rights: according to the Belgian annual accounts law, account are converted using rates that approximate the actual
the emission rights assigned or obtained are entered as intangible exchange rates at the time of the payment.
fixed assets. Exchange rates results are booked as net financial results.
Q If they were purchased on the market, they are valued at their
purchase value. If they were obtained at a lower value or
free of charge, they may be entered at nominal value or zero VIII. PROVISIONS.
value. No depreciation is entered. However, an impairment test In order to fulfil the statutory obligations, provisions are made for
is performed. pensions and similar obligations.
Restructuring of the quarry: various authorities impose obligations on
II. TANGIBLE FIXED ASSETS: ARE VALUED AT PURCHASE VALUE. us to restore operated sites to their original condition; provisions are
DEPRECIATION IS ACCORDING TO THE LINEAR OR DEGRESSIVE made for these restorations based on a very detailed estimate.
METHOD.
The annual depreciation percentages are: IX. CASH POOLING: MOST AVAILABILITIES (CURRENT ACCOUNT) ARE
Q Buildings: 5 – 14.28% SUBJECT TO DAILY ZERO BALANCING. THEY ARE PRESENTED ON
Q Sites for development: 7.14% THE BALANCE SHEET 41 AND 439 ACCOUNTS.
Q Machines and installations: 10 – 14.28%
Q Computer equipment: hardware 20% X. FINANCIAL INSTRUMENTS:
Q Furniture and office equipment: 20% Financial instruments are used to cover interest risks and exchange
Q Rolling stock: 20 – 33.33% rate risks.
Q Furnishing leased property: 5% With regard to interest hedging, in accordance with the accounting
Q Advance operating costs for running quarry: 7.14% principles of hedging transactions, neither positive nor negative
fluctuations in the market value of the hedging instrument at the
III. FINANCIAL FIXED ASSETS end of the period are included in the result. Where free-standing
Participating interests are valued at purchase price. Losses are (speculative) financial instruments are concerned, only the deferred
applied in the case of sustained downward value adjustments. debts are included in the result according to the lower of cost or
market method. These deferred losses are entered on the accrued
IV. IN ABSENCE OF LEGAL CRITERIA WHICH ALLOW TO IDENTIFY liabilities and other financial costs account. Taking into account the
THE TRANSACTIONS WITH RELATED PARTIES OUTSIDE NORMAL principle of caution, deferred surplus values are not qualified as fixed
MARKET CONDITIONS, NO INFORMATION COULD BE INCLUDED income and are consequently not included in the result.
UNDER VOL.6.15.
The forward contracts to hedge exchange rate fluctuations of foreign
V. STOCKS: currencies are revalued at the end of the financial year in line with the
Q Finished products: are valued at direct production costs except if official exchange rate at the end of the financial year.
these are higher than the net selling price.
Q Consumer goods, ancillary materials and commercial goods are
entered at purchase value (FIFO), except if this is higher than the
market price.
99
REPORT OF THE BOARD OF DIRECTORS
ON THE STATUTORY
In accordance with Art. 96 of the Belgian Company Code - Financial Year 2017
To the Annual General Meeting of Shareholders of 18 April 2018 of NV SCR-Sibelco
Ladies and Gentlemen,

We have the pleasure of submitting for your approval the statutory extraction, production and distribution of a broad range of high quality
financial statements for the financial year ending 31 December industrial minerals, located in 43 countries worldwide.
2017 and of the reporting on the activities of the Company and its The financial year 2017 ends with a net profit of € 5 680 685 compared
subsidiaries. For the financial year 2017, the consolidated financial to € 50 185 868 in 2016. The decrease in net profit is explained by
statements were established and published according to the higher operating charges and lower income on ordinary activities. The
International Financial Reporting Standards (IFRS) as adopted by increase in operating charges relates to higher personnel expenses.
the European Commission. The statutory financial statements were Other income on ordinary activities decreased as a result of lower
established according to Belgian GAAP. income on received dividends compared to prior year. On top of that,
SCR-Sibelco NV is a Belgian company which combines its domestic we generated an exceptional income on some redemption of shares
industrial operations in three major silica sand production facilities and of Unimin in 2016 which was not the case in current year.
its shareholding and management of subsidiaries all specialized in the
BELGIAN OPERATING RESULT (EXCLUDING CORPORATE ACTIVITIES)
Revenue of 2017 increased by 3,88% to € 115 526 189 compared to During 2017 we invested an amount of € 22 976 902 mainly in a new
€ 111 214 646 in 2016. kiln and IT projects.
REAL ESTATE TRANSACTIONS
During the financial year 2017, no notable real estate

transactions occurred.
TECHNOLOGY & INNOVATION
During the year, the global T&I function booked its first successes with Business Unit/Business Line, strategic marketing, technology and
overarching teams developing multiple cross functional and cross digitalization. The programs were Furthermore, our efforts in the
regional T&I development programs in the fields of HR, knowledge field of cooperation with universities were pursued by a Technology
management, basic governance for cooperation and partnering Partnering team. All programs were developed with special aims to
within the new commercial organization structured along the lines of markets and businesses for the short and mid-term horizons.
PORTFOLIO AND FINANCIAL INCOME
During 2017 an increase of € 2.9 million occurred in the portfolio Our dividend income amounted to € 81 884 281 in 2017, compared to
of financial investments of the mother company (SCR-Sibelco NV € 105 988 677 in 2016.
or Sibelco) mainly related to subscription of capital increases in The disposal of Fairland International Pte Ltd. led to a loss of € 8 365 764.
subsidiaries across different regions. The total financial debts increased with € 44.2 million to € 1 173.6 million.

FINANCIAL INSTRUMENTS
SCR-Sibelco uses derivative financial instruments – such as interest does not use derivative financial instruments for speculative trading,
swaps and foreign exchange swaps – exclusively to manage the nor issues them for that purpose.
exposure to interest rates and foreign exchange rates. SCR-Sibelco
FINANCIAL RISK MANAGEMENT
Other than the credit risk related to trade and other receivables foreign currency. Currency exposures are systematically hedged
held by the Company, no material exposure is considered to exist when material.
by virtue of the possible non-performance of the counterparties to Interest rate risk is managed for the Company’s net financial debt with
financial instruments. the primary objective of guaranteeing medium-term cost.
The Company establishes an allowance for impairment that To ensure liquidity and financial flexibility at all times, the Company,
represents its estimate of incurred losses in respect of trade and in addition to its available cash, has several credit lines at its
other receivables). disposal in amounts considered adequate for current and near-future
The Company is exposed to currency risks resulting from trade financing needs.
and other receivables/payables and loans received/granted in
CIRCUMSTANCES WHICH CAN HAVE A SIGNIFICANT INFLUENCE ON THE DEVELOPMENT OF THE COMPANY
We do not see any notable conditions which may have an important

impact on the future evolution of the company.
RISK PROFILE
The mixed character of SCR-Sibelco, its activities as a holding The board of directors has no knowledge of any material risk or
company and as an industrial Group, the geographical spread of material uncertainty the company is confronted with, for which no
its participations and investments, together with the broad product provision or clarification has been included in the annual accounts
portfolio and diversification, result in a healthy and well-balanced risk of 31 December 2017. We refer to the risk management report that is
profile, notwithstanding the volatility in the US oil and gas market. No part of the consolidated accounts for a more detailed description of
changes have occurred in this situation during 2017. the risk analysis and risk management.
101
EVENTS AFTER THE CLOSING OF THE FINANCIAL YEAR
After the closing of the financial year 2017, no notable events

have occurred.
PORTFOLIO OF OWN SHARES
At the end of December 2017, the total number of own shares held to 34 994 shares or 7.44 % of the outstanding share capital, equal to
by the company, either directly or through 100 % subsidiaries of the the previous year.
Sibelco Group incorporated in Belgium and in Luxemburg, amounted
PAYMENTS TO GOVERNMENTS
A report on Payments to Governments has been established in

accordance with legal provisions and was approved and signed by
the members of the Board.
CONVENING ORDINARY GENERAL MEETING
Article 25 of the company’s by-laws stipulates that the Ordinary The Board of Directors of SCR-Sibelco NV invites the shareholders
Annual Meeting of Shareholders will be held on the penultimate for the Annual General Meeting of Shareholders to be held on
Wednesday of April, at 2.00 pm. For the financial year 2017, the 18 April 2018 at 14.00h in the corporate seat in Antwerp, Plantin en
Ordinary Annual Meeting of Shareholders will as a consequence take Moretuslei 1A.
place on Wednesday 18 April 2018.
AGENDA
1. Report of the Board of Directors and the company auditor to the shareholders
2. Approval of the audited statutory financial statements of the year 2017 and presentation of the consolidated results
3. Attribution of the profit and declaration of the dividend
4. Discharge to the directors
5. Discharge to the auditors
6. Nomination of directors
7. Approval according to art. 556 of the Code on Companies
For the conditions of admission to the ordinary general meeting of 18 April 2018, we refer to p. 104 of this Financial Report.

ATTRIBUTION OF THE PROFIT OF SCR-SIBELCO N.V.
The shareholders will be asked to vote for the attribution of the profit of SCR-Sibelco NV, along with the following proposal:
2017 2016
Reserves available for distribution € (67 664 643) (16 479 648)
Gross dividend € 72 669 328 66 063 016
Directors share of profit € 676 000 602 500
Net income for the financial year € 5 680 685 50 185 868
The proposed gross dividend amount of € 72 669 328 corresponds to a total dividend per share of EUR 154.5597 which is higher than the
dividend paid in 2017 for the 2016 financial year.
On 10 October 2017, an interim dividend of € 57.1428 gross per share was payable. Once approved at the shareholders meeting, the balance
of the dividend of € 97.4168 gross per share will be paid out as of 26 April 2018. The record date has been set on 25 April 2018. The System
Paying Agent designated for the payment of the 2017 final dividend is ING Bank, Marnixlaan 24, 1000 Brussels with Bank Degroof Petercam,
Nijverheidsstraat 44, 1000 Brussels as co-agent.
DISCHARGE IN FAVOR OF BOARD MEMBERS AND AUDITORS
After approval of the annual accounts, shareholders will be asked to be granted individually to the members of the Board of Directors and
pronounce themselves by means of a special vote on the discharge to to the auditor.
NOMINATIONS OF DIRECTORS
The mandates of the following Board members will expire at this The following Board members will present themselves to be re-elected
Ordinary General Meeting: Calavon Finance SAS, perm. repr. M. Jean- as a Board member for a mandate of 3 years: Calavon Finance SAS,
Pierre Labroue, Mrs. France de Sadeleer, M. Frans Corpeleijn, IDw perm. repr. M. Jean-Pierre Labroue, Mrs. France de Sadeleer, IDw
Consult BVBA, perm. repr. M. Bert De Graeve and M. Walter Emsens. Consult BVBA, perm. repr. M. Bert De Graeve and M. Walter Emsens.
The mandate of Mr. Frans Corpeleijn will not be renewed and comes Their renewed mandates will expire at the General Meeting of 2021.
to an end at this Annual General Meeting. Mr. Marcel van Poecke
having given his resignation as a Board member on 20 April 2017, this It is proposed to elect Mrs. Lilia Jolibois as a new Board member for a
resignation will also have to be formalised by the shareholders at the mandate of 3 years which will expire at the General Meeting of 2021.
upcoming Annual General Meeting.
The Members of the Board wish to thank all SCR-Sibelco staff and employees all over the world for their dedicated efforts in achieving our
goals during this year.
Antwerp, 15 March 2018
Signed by the Members of the Board
103
CONDITIONS FOR ADMISSION TO THE ORDINARY GENERAL MEETING OF 18 APRIL 2018
Pursuant to Article 536 of the Belgian Companies Code and to Article 28 of the articles of association, the board of directors has decided
that the shareholders will be admitted to, and can vote at, the ordinary general meeting of 18 April 2018 if the company can determine, on
the basis of the evidence submitted in accordance with the procedure described below, that they were holding on Friday 13 April 2018,
before the close of business (Belgian time) (the “Record Date”), the shares of which they intend to exercise the voting rights at the ordinary
general meeting.
In order to establish towards Sibelco that they hold their shares on the Record Date, the shareholders must proceed as follows:
FOR HOLDERS OF REGISTERED SHARES:

A confirmation of the number of shares for which they want their shareholding to be established on the Record Date, must reach SCR-Sibelco
NV at the latest on Friday 13 April 2018 at close of business (Belgian time) by ordinary letter.
The holding of the shares on the Record Date will be assessed by SCR-Sibelco NV on the basis of the entries in the register of
registered shares.
FOR HOLDERS OF DEMATERIALIZED SHARES:

Holders of dematerialized shares will have to notify one of the banks listed below of the number of shares for which they want their
shareholding to be established on the Record Date, at the latest on Friday 13 April 2018 at close of business (Belgian time). The holding of the
dematerialized shares on the Record Date will be established on the basis of a confirmation sent to SCR-Sibelco NV by the below banks.
ING BANK
BANK DEGROOF PETERCAM

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FINANCIAL

84 REPORT OF THE BOARD OF

93 REPORT OF THE EXTERNAL AUDITOR

100 REPORT OF THE BOARD OF

CONSOLIDATED INCOME STATEMENT

EBITDA 541 429 428 146

REBIT 282 690 145 000

Net ﬁnancing costs (51 534) (70 966)

Recurring net result 209 104 33 075

Non-recurring result after tax (109 205) (245 236)

Proﬁt (loss) for the period, Group share 95 818 (247 189)

CONSOLIDATED BALANCE SHEET

Net non-current assets (1) 2 178 118 2 426 379

Total 3 533 834 3 840 315

Liabilities and shareholders' equity

Net worth (including minority interests) 1 485 635 1 646 660

Total 3 533 834 3 840 315

(1) Of which mining assets 455 615 478 159

2 SIBELCO FINANCIAL REPORT 2017

Depreciation, amortisation and depletion 258 739 283 146

EBITDA 541 429 428 146

Income taxes (paid)/received (72 859) (44 034)

Free operating cash ﬂow 314 896 176 904

Interest (paid)/received (39 520) (51 137)

Net debt decrease (increase) 215 678 69 152

Opening net ﬁnancial debt at 1 January 891 173 957 749

Change in net ﬁnancial debt (215 678) (69 152)

Closing net ﬁnancial debt at 31 December 646 620 891 173

CONSOLIDATED STATEMENT OF INCOME

In thousands of euro Note 2O17 2O16

Revenue 8 3 083 004 2 725 702

Cost of sales ( - ) 8 (2 461 289) (2 266 237)

Gross proﬁt 621 715 459 465

Other operating income 9 35 517 50 012

EBIT 157 449 (152 675)

Financial income 13 12 483 991

Proﬁt (loss) before income taxes 107 943 (222 324)

Income taxes 14 (8 044) (35 405)

Proﬁt (loss) from discontinued operations 11 (688) (4 530)

Proﬁt (loss) for the period 99 211 (262 259)

99 211 (262 259)

4 SIBELCO FINANCIAL REPORT 2017

In thousands of euro Note 2O17 2O16

Other comprehensive income:

Other comprehensive income to be reclassified to profit or loss in subsequent periods

(192 729) 24 566

(93 518) (237 693)

Non-current assets 2 479 827 2 758 288

Total equity 1 485 635 1 646 660

Non-current liabilities 1 371 125 1 525 160

6 SIBELCO FINANCIAL REPORT 2017

Proﬁt for the period - - - - - - 95 818 95 818 3 393 99 211

Foreign currency - - (174 402) - - - - (174 402) (308) (174 710)

Dividends to equity - - - - - - (63 841) (63 841) (307) (64 148)

Acquisition of non- - - - - - - (1 953) (1 953) (1 112) (3 065)

Foreign currency - - 45 291 - - - - 45 291 49 45 340

Total other comprehensive - - 45 291 1 937 - - (22 711) 24 517 49 24 566

Own shares acquired - - - - - (410) - (410) - (410)

8 SIBELCO FINANCIAL REPORT 2017