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Staatsolie Annual Report 2017

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Confidence in Our Own Abilities<br />

114<br />

<strong>Staatsolie</strong> Maatschappij Suriname N.V.<br />

Notes to the Consolidated financial statements for the years ended December 31, <strong>2017</strong> and 2016<br />

(continued)<br />

Pensions Available-for-sale (AFS) financial investments<br />

Employee pension plan<br />

AFS financial investments include equity and debt securities. Equity investments classified as availablefor-sale<br />

are those neither classified as held-for-trading nor designated at fair value through profit or loss.<br />

The employee pension plan provides entitlements to retirement and disability pension for the benefit of<br />

the participant and widow’s, widower's and orphans’ pension for the benefit of the survivors. The pension<br />

After initial measurement, AFS financial investments are subsequently measured at fair value with<br />

entitlements are accrued time-proportionately.<br />

unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the<br />

The pension entitlements are determined according to a formula based on the pensionable salary and an<br />

cumulative gain or loss is recognized in other operating income or expense, or the investment is<br />

employee accrual rate of 2% per annum. The last pensionable salary also applies to past service. Hence,<br />

determined to be impaired, at which time, the cumulative loss is reclassified to the consolidated statement<br />

increase of pensionable salary in future years will lead to an increase of accrued pension entitlements.<br />

of profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets<br />

According to the formal terms of the plan, for every year the pensionable salary is determined by the<br />

to determine whether the ability and intention to sell them in the near term is still appropriate.<br />

Board of the pension fund according to a formula.<br />

The (ii) Financial pension liabilities base percentage for financial year 2016 has been set at l00% of the base salary. The<br />

pension base percentage for financial year <strong>2017</strong> has not yet been determined by the Board of the<br />

Recognition and measurement<br />

pension fund. The annual actuarial valuation, taking into account the funding as at December 31, 2016<br />

Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or<br />

and the salary increased as at January 1, <strong>2017</strong>, has led to the conclusion that a pension base percentage<br />

loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair<br />

of 100% is possible for financial year <strong>2017</strong>. Therefore, it is assumed that pensionable salary for <strong>2017</strong> will<br />

value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.<br />

be set at 100% of the salary as at January 1, <strong>2017</strong>.<br />

The Group’s financial liabilities include trade and other payables, loans and borrowings including bank<br />

The overdrafts. retirement pension commences upon reaching the retirement age of 60. However, a retirement age<br />

of 55 applies to employees in certain special categories. The retirement pension amounts to a maximum<br />

of Loans 70% and of the borrowings pension base on the retirement date. The pension accrual rate is 2%.<br />

This is the category most relevant to the Group. After initial recognition, interest bearing loans and<br />

<strong>Annual</strong>ly, the pensions in payment and deferred pensions are adjusted on the basis of excess interest,<br />

borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are<br />

which is the difference between the return on the pension assets and the actuarial interest of 4%, which is<br />

recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as<br />

used to determine the present value of the pension obligations of the fund.<br />

through the EIR amortization process. Amortized cost is calculated by taking into account any discount or<br />

The<br />

premium<br />

employee<br />

on acquisition<br />

pension<br />

and<br />

plan<br />

fees<br />

is administered<br />

or costs that are<br />

by the<br />

an integral<br />

“Stichting<br />

part<br />

Pensioenfonds<br />

of the EIR. The<br />

voor<br />

EIR<br />

Werknemers<br />

amortization<br />

of<br />

is<br />

<strong>Staatsolie</strong> Maatschappij Suriname N.V.” (Pension Fund for Employees of <strong>Staatsolie</strong> Maatschappij<br />

included in finance costs in the consolidated statement of profit or loss. This category generally applies to<br />

Suriname N.V.), for which <strong>Staatsolie</strong> has entered into an agreement with the fund.<br />

interest-bearing loans and borrowings.<br />

The plan is financed by contributions and by the returns on the plan assets. The employer’s and<br />

employee’s m. Inventories<br />

contributions are limited to a maximum percentage of the participant’s salary as set by the<br />

labor Petroleum agreement. products are valued at the lower of cost and net realizable value.<br />

Raw materials:<br />

• Purchase cost is valued on weighted average method<br />

Finished goods and work in progress:<br />

• Cost of direct materials and labor and a proportion of manufacturing overheads based on normal<br />

operating capacity but excluding borrowing costs<br />

Page 114 62

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