Staatsolie Annual Report 2017

Annual Report 2017 133
Staatsolie Maatschappij Suriname N.V.
Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016
(continued)
Inventories are stated at the lower of cost and net realizable value. Net realizable value is the estimated
5.2 Capital management
selling price in the ordinary course of business, less estimated costs of completion and the estimated
For the purpose of the Staatsolie’s capital management, capital includes issued capital and all other
costs to sell.
equity reserves attributable to the equity holders. The main objective of the capital management of
The cost of crude oil and refined products is the purchase cost, the cost of refining, including the
Staatsolie is to ensure a financial structure that optimizes the cost of capital, maximizes the performance
appropriate proportion of depreciation, depletion and amortization and overheads based on normal
of its shareholder and allows access to financial markets at a competitive cost to cover its financing needs
operating capacity, determined on a weighted average basis.
that supports sustainable growth and ensuring healthy capital ratios to be in compliance with the financial
The covenants net realizable to support value the of business. crude oil and refined products is based on the estimated selling price in the
ordinary In order to course achieve of business, this overall less objective, the estimated the Group’s costs of capital completion management, and the amongst estimated other costs things, necessary aims to
make ensure the that sale. it meets the financial covenants attached to its interest-bearing loans and borrowings that
Materials form part and of its supplies capital are structure valued using requirements. the weighted Breaches average in cost the method. financial covenants would permit the
lenders to immediately call interest-bearing loans and borrowings. There have been no breaches in the
Pipeline financial fill covenants of any interest-bearing loans and borrowings in the current or prior period.
Crude The two oil, main which financial is necessary covenants to monitored bring a pipeline by the into Group working are: order, is treated as a part of the related
pipeline. • The interest This is coverage on the basis ratio that which it is is not calculated held for by sale dividing or consumed the consolidated in a production EBITDA by process, the financial but is
necessary expenses to the and operation income. For of 2017 a facility this ratio during was more 4.60 than (2016: one 2.84); operating the minimum cycle, and permitted its cost is 3.50. cannot be
recouped • Consolidated through leverage sale (or is ratio significantly which is impaired). calculated This by dividing applies the even consolidated if the part of Total inventory Debt by that the is
deemed
consolidated
to be an
EBITDA.
item of property,
For 2017
plant
this ratio
and
was
equipment
1.58 (2016:
cannot
3.28);
be separated
the maximum
physically
permitted
from
is
the
2.50.
rest of
inventory. It is valued at cost and is depreciated over the useful life of the related asset.
In 2016 Staatsolie requested lenders to waive any default or event of default arising from such failure to
deliver the audited consolidated financial statements and the compliance certificate with the covenants. A
n. Impairment of non-financial assets
waiver was executed to the credit agreement to reflect the requests.
The Group assesses at each reporting date whether there is an indication that an asset may be impaired.
If any indication exists, or when annual impairment testing for an asset is required, the Group estimates
5.3 Financial instruments
the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash
Interest-bearing loans and borrowings
generating Bond units (CGU) fair value less costs of disposal and its value in use. It is determined for an
individual asset, unless the asset does not generate cash inflows that are largely As at independent January 1, of those
x US$ 1,000 Maturity 2017 2016 2016
from Local other Bond assets or groups of assets. May-20 Where the carrying 98,668 amount 98,475 of an asset or CGU 98,281exceeds its
recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In
Term loans
assessing value in use, the estimated future cash flows are discounted to their present As at January value 1, using a pretax
x US$ discount 1,000 rate that reflects current Maturity market assessments 2017of the time 2016 value of money 2016 and the risks
Loan facility DSB Jan-18 9,657 8,468 -
specific Corporate to term the loan asset. In determining fair Nov-19 value less costs 259,844 of disposal, 296,353 recent market transactions 570,686 are taken
Loan SPCS Nov-21 78,288 97,798 117,306
into account. If no such transactions can be identified, an appropriate valuation model is used.
Loan Government of Suriname Oct-26 258,412 258,058 -
Impairment Balance as at losses December of continuing 31 operations are recognized 606,201 in the consolidated 660,677 statement 687,992 of profit or loss
in Current those portion expense of the categories loans consistent with the function 105,361 of the impaired 69,031 asset, except 64,801 for a property
previously revalued where the revaluation was taken to OCI. In this case, the impairment is also
Non current portion of the loans 500,840 591,646 623,191
recognized in OCI up to the amount of any previous revaluation.
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