2004 2003
x € 1,000 x € 1,000
Interest
This item includes all revenues and expenses pursuant to lending and borrowing funds that can be classed as interest, as well as interest revenues and expenses on outstanding bank balances or short-term current-account credit facilities, excepting loans taken out for the sole purpose of financing trading positions.
This item includes the following:
Interest revenue
Interest from deposits in the money market 1,657 1,226
Interest loans 1,498 371
Other interest revenues 782 776
3,937 2,373
Interest expense
Interest client accounts 738 349
Other interest expenses 235 317
973 666
Revenues from securities and participating interests 2,754 20
Shares in any participating interests where Binck N.V. exerts no significant influence are taken to the net operating income.
Moreover, this item includes the dividends received and other revenues from other participating interests, insofar these do not represent a value adjustment of financial fixed assets. The amount for 2004 also includes € 2.7 million in revenues pursuant to dividends and sale of shares on the London Stock Exchange.
Commissions
Commissions represent fees for services regarding securities transactions and related services provided for and by third parties. This item is specified as follows:
Commissions retail market 17,850 10,686
Commissions wholesale market 7,155 13,219
25,005 23,905
Less: Commission expenses 9,604 8,629
15,401 15,276
The commission expenses include commissions paid as well as stock exchange and clearing charges.
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Annual report200462
2004 2003
x € 1,000 x € 1,000
Results from financial transactions
This result is specified as follows:
Transaction result 23,138 11,736
Interest pursuant to financing positions 4,277 4,318
Coupon interest on trading portfolio bonds 230 175
19,091 7,593
The transaction result comprises exchange rate differences on securities, options and other contracts, dividends and currency differences.
Staff costs
Regular salaries 11,617 14,383
Profit shares and bonuses 6,455 3,145
Pension charges 486 390
Social insurance 1,346 1,610
Redundancy pay staff 1,079 550
Other staff costs 887 535
21,870 20,613
The pension charges represent contributions paid for staff under the defined contribution system.
The average number of members of staff, including Directors, came to 234 (2003: 271). At the end of 2004, staff number amounted to 187 (end of 2003: 272).
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Annual report200463 As per 31 December 2004, the remuneration of members of the Board of Directors and Supervisory Board
in 2004 (x € 1.000) and shares held in the company was as follows:
Fixed Variable Shares
remuneration remuneration held in
component component Binck
A.E. Teeuw 300,0 100,0
-T.C.V. Schaap 150,2 50,0 1,303,251
(Appointed 6 May 2004)
K.J. Bagijn 150,2 50,0 1,303,251
(Appointed 6 May 2004)
600,4 200,0 2,606,502
C.J.M. Scholtes 14,9 -
-(Appointed 6 May 2004)
J.K. Brouwer 12,1 -
-(Appointed 6 May 2004)
Ch.J. Langereis 18,2 - 678,341
A.M. van Westerloo 12,1 -
-(Appointed 6 May 2004)
A.H.J. Risseeuw 7,9
-(resigned 6 May 2004)
F.E. Delbaen 6,3
-(resigned 6 May 2004)
71,5
As per 31 December 2003, the remuneration of members of the Board of Directors and Supervisory Board in 2004 (x € 1.000), and shares these members held in the company, were as follows:
Fixed Variable Shares
remuneration remuneration held in
component component Binck
A.E. Teeuw 75,0 -
-(Joined the company as of 1 October 2003, appointed on 28 October 2003)
S.L de Boer 125,4
(resigned 1 August 2003)
-M.C.M. Wiegmans 271,8
(resigned 1 November 2003,
left the company as of 1 January 2004)
472,2 -
-A.H.J. Risseeuw 22,7 -
-Ch.J. Langereis 18,2 - 678,341
F.E. Delbaen 18,2
-59,1 - 678,341
Annual report200464
Binck does not currently have a remuneration policy approved by the General Meeting of Shareholders. The current employment conditions of the Directors entail the following:
Mr. A.E. Teeuw (CEO)
Mr. Teeuw’s employment contract was concluded for a period of two years. Naturally, this employment con-tract may be renewed after the specified termination date, under conditions to be agreed at the time.
Mr. Teeuw’s gross annual salary amounts to € 300,000. Furthermore, it has been agreed that Mr.
Teeuw will be eligible for a € 200,000 bonus if it is apparent from Binck N.V.’s adopted 2004 annual accounts that Binck N.V.’s net profit from normal busi-ness operations is at least equal to the budgeted net profit as stated in the annual plan approved by the Supervisory Board; as well as an additional € 200,000 bonus if this budgeted net profit is exceeded by at least 25% for the financial year 2004. If this net profit is at least equivalent to 80% of the above-mentioned budgeted net profit, the bonus will amount to € 100,000. A similar arrangement is effective for the financial year 2005. However, since Mr. Teeuw’s employment agreement shall expire on 1 October 2005 (rather than 31 December 2005), the level of the bonus to be allocated to Mr. Teeuw, if any, for the financial year 2005 will be adjusted proportionally. A further explanation of the remuneration policy can be found in the remuneration paragraph in this annual report.
The company does not contribute to any pension or health care schemes for Mr. Teeuw.
In the event of a change of control over Binck N.V.
whereby the Chairman of the Board’s position is sub-ject to substantial changes, or the composition of the Supervisory Board is subject to changes that prevent smooth cooperation, Mr. Teeuw shall be allowed to terminate his employment contract subject to a three-month notice period. In this event, Mr. Teeuw shall remain entitled to payment of the agreed salary until 1 October 2005.
Upon joining the company, 100,000 options were allo-cated to Mr. Teeuw. These options may be exercised between 1 October 2004 and 10 October 2007, at an exercise price of € 2.24. This exercise price was deter-mined after expiry of the closed period in view of dis-cussions and subsequent negotiations with the minority shareholders of BinckBank N.V. Approval of the exercise price included the approval for the options to be exercised immediately.
In the event where Mr. Teeuw’s employment is termi-nated at the Supervisory Board’s request before the contract expiry date, Mr. Teeuw is entitled to a one-off
€ 100,000 bonus.
Mr. T.C.V. Schaap (CFO) and Mr. K.J. Bagijn (CCO) With Mr. T.C.V. Schaap (CFO) and Mr. K.J. Bagijn (CCO), employment contracts have been concluded for a period of four years, ending on 6 May 2008.
Intermediate termination of these employment con-tracts is possible for both parties as per the end of a calendar month. A 6-month notice period applies to Binck N.V., whilst Mr. Schaap and Mr. Bagijn must comply with a 3-month notice period.
The gross annual salary of Mr. Schaap and Mr. Bagijn amounts to € 210.600. On an annual basis, Binck N.V.
determines if these two board members are eligible for a bonus, and if yes, for which amount. This is based on annual targets, results and forecasts, the board members’ performance and all other relevant circum-stances.
For 2004, Binck N.V. granted a bonus to Mr. Schaap and Mr. Bagijn. The amount of this bonus was dependent on realisation of targets as laid down in the Management Base Plan 2004/2006 (Retail sec-tion). These agreements include the provision that, if more than 100% or 125% of the Management Base Plan 2004/2006 (Retail section) targets are achieved, Binck N.V. shall, in principle, grant both Mr. Schaap and Mr. Bagijn a € 50,000 bonus for 2004 (in the event of over 100%) or a ¤ 100,000 bonus (in the event of over 125%).
Mr. Schaap and Mr. Bagijn are not entitled to any (por-tion of) the above-men(por-tioned bonus if their employ-ment - irrespective of the reasons or initiator - is ter-minated, or if termination is announced, before 31 December of the relevant year, or if the relevant per-son is suspended, even if the cause for suspension is long-term incapacity for work during the relevant year. The company does not contribute to any pension or health care schemes for Mr. Schaap and Mr. Bagijn.
In the event of intermediate termination of Mr.
Schaap and/or Mr. Bagijn’s employment contract by Binck N.V., other than for the urgent reasons as described in Article 7:677 of the Netherlands Civil Code, Binck N.V. shall be liable for payment of a com-pensation amounting to the equivalent of, but shall never exceed, 12 months of their regular salary.
Calculation of such compensation shall be based on the starting date of their employment, which was 6 May 2004.
Annual report200465
2004 2003
x € 1,000 x € 1,000
Exceptional value adjustments 282 935
This item consists of:
Exceptional value adjustments to property and equipment 623 677
Exceptional value adjustments to other assets (permits) 341 258
282 935
The reversal of exceptional value adjustments to other assets that took place in 2002 and 2003 relates to the (indirect) revenues as yet received and to be received.
Other administrative expenses 10,606 14,739
Other costs include costs relating to accommodation, information provision, ICT, membership charges, office expenses and advisors, and other general expenses:
Reorganisation expenses
The costs of closing down and the related costs of the derivatives activities and further costs relating to the adjustments to the Amsterdam organisation are recorded in the income statement as follows:
Staff costs 1,079 550
Exceptional value adjustments to property and 282 935
equipment and other assets
Other expenses 262 1,372
1,099 2,857
Corporate tax (2003 revenue item) 1,606 5,259
The nominal tax rate in the Netherlands amounts to 34.5 % (2003: 34.5 %).
The effective total tax rate, however, amounts to 30.6% (2003 revenue item: 35.9 %).
This can be explained as follows:
Nominal tax rate 34,5% 34,5%
Lower nominal tax rates on foreign results 1,9% 0,1%
Foreign tax-exempted profit elements - 0,2%
Dutch tax-exempted profit elements 2,0% 1,1%
Effective tax rate 30,6% 35,9%
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Annual report200466
2004 2003
x € 1,000 x € 1,000
Earnings per share
The calculation basis for earnings per share is:
Results of financial year 3,151 10,277
Average number of outstanding shares 28,522,191 24,368,949
Less: repurchased shares 296,855 296,855
28,225,336 24,072,094
All outstanding option rights at the end of 2004 will not lead to dilution as the average price of the Binck shares has moved around the execution price of the allocated options. The diluted earnings per share does not deviate form the realised earnings per share.
Memorandum items
The company concluded a lease agreement for the office building at Vijzelstraat (Amsterdam) with a remaining term of six years and eight months, at an annual rent of € 1 million. In addition, operational lease contracts have been concluded with a maximum duration of 48 months.
Commitments in order of remaining contract period:
Within one year 1,029
After one year and within five years 4,247
After five years 686
Announcement concerning Appendix x of the Securities Regulations
In the joint opinion of Binck N.V. and the Directors of Stichting Prioriteit AOT, the provisions of Article 10 of Appendix X of the Securities Regulations of Euronext N.V.
Amsterdam have been fulfilled
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Annual report200467 Breakdown of results by business unit
Retail Wholesale Trading Total
2004 2003 2004 2003 2004 2003 2004 2003
Interest 2,844 1,558 59 (31 61 180 2,964 1,707
Revenue from securities and 2,754 (20 2,754 (20
participating interests
Commissions 11,389 7,468 4,012 7,808 15,401 15,276
Result from financial transactions 19,091 7,593 19,091 7,593
Revenues 14,233 9,026 4,071 7,777 21,906 7,753 40,210 24,556
Wages and salaries (3,814 (2,958 (1,843 (3,223 (16,213 (14,432 (21,870 (20,613
Depreciation (623 (731 (202 (198 (1,370 (1,970 (2,195 (2,899
Exceptional value adjustments to assets (282 (935 (282 (935
Other management expenses (3,916 (2,883 (1,322 (2,087 (5,368 (9,769 (10,606 (14,739 Operating expenses (8,353 (6,572 (3,367 (5,508 (23,233 (27,106 (34,953 (39,186
Operating result before tax 5,880 2,454 704 2,269 (1,327 (19,353 5,257 (14,630
Tax (2,036 (957 (131 (436 561 6,652 (1,606 5,259
Operating result after tax 3,844 1,497 573 1,833 (766 (12,701 3,651 (9,371
Minority interests (500 (906
Net profit 3,151 (10,277
Breakdown of financial data by region
Domestic Abroad Total
2004 2003 2004 2003 2004 2003
Total revenues 28,902 11,864 11,308 12,692 40,210 24,556
Investments in property and equipment 1,875 487 107 169 1,982 656
Depreciation 1,867 2,475 328 424 2,195 2,899
)
Annual report200468