Staatsolie Annual Report 2017

Confidence in Our Own Abilities
114
Staatsolie Maatschappij Suriname N.V.
Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016
(continued)
Pensions Available-for-sale (AFS) financial investments
Employee pension plan
AFS financial investments include equity and debt securities. Equity investments classified as availablefor-sale
are those neither classified as held-for-trading nor designated at fair value through profit or loss.
The employee pension plan provides entitlements to retirement and disability pension for the benefit of
the participant and widow’s, widower's and orphans’ pension for the benefit of the survivors. The pension
After initial measurement, AFS financial investments are subsequently measured at fair value with
entitlements are accrued time-proportionately.
unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the
The pension entitlements are determined according to a formula based on the pensionable salary and an
cumulative gain or loss is recognized in other operating income or expense, or the investment is
employee accrual rate of 2% per annum. The last pensionable salary also applies to past service. Hence,
determined to be impaired, at which time, the cumulative loss is reclassified to the consolidated statement
increase of pensionable salary in future years will lead to an increase of accrued pension entitlements.
of profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets
According to the formal terms of the plan, for every year the pensionable salary is determined by the
to determine whether the ability and intention to sell them in the near term is still appropriate.
Board of the pension fund according to a formula.
The (ii) Financial pension liabilities base percentage for financial year 2016 has been set at l00% of the base salary. The
pension base percentage for financial year 2017 has not yet been determined by the Board of the
Recognition and measurement
pension fund. The annual actuarial valuation, taking into account the funding as at December 31, 2016
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or
and the salary increased as at January 1, 2017, has led to the conclusion that a pension base percentage
loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair
of 100% is possible for financial year 2017. Therefore, it is assumed that pensionable salary for 2017 will
value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
be set at 100% of the salary as at January 1, 2017.
The Group’s financial liabilities include trade and other payables, loans and borrowings including bank
The overdrafts. retirement pension commences upon reaching the retirement age of 60. However, a retirement age
of 55 applies to employees in certain special categories. The retirement pension amounts to a maximum
of Loans 70% and of the borrowings pension base on the retirement date. The pension accrual rate is 2%.
This is the category most relevant to the Group. After initial recognition, interest bearing loans and
Annually, the pensions in payment and deferred pensions are adjusted on the basis of excess interest,
borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are
which is the difference between the return on the pension assets and the actuarial interest of 4%, which is
recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as
used to determine the present value of the pension obligations of the fund.
through the EIR amortization process. Amortized cost is calculated by taking into account any discount or
The
premium
employee
on acquisition
pension
and
plan
fees
is administered
or costs that are
by the
an integral
“Stichting
part
Pensioenfonds
of the EIR. The
voor
EIR
Werknemers
amortization
of
is
Staatsolie Maatschappij Suriname N.V.” (Pension Fund for Employees of Staatsolie Maatschappij
included in finance costs in the consolidated statement of profit or loss. This category generally applies to
Suriname N.V.), for which Staatsolie has entered into an agreement with the fund.
interest-bearing loans and borrowings.
The plan is financed by contributions and by the returns on the plan assets. The employer’s and
employee’s m. Inventories
contributions are limited to a maximum percentage of the participant’s salary as set by the
labor Petroleum agreement. products are valued at the lower of cost and net realizable value.
Raw materials:
• Purchase cost is valued on weighted average method
Finished goods and work in progress:
• Cost of direct materials and labor and a proportion of manufacturing overheads based on normal
operating capacity but excluding borrowing costs
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