Staatsolie Annual Report 2017

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Annual Report 2017 135 Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Loan Inventories SPCS are stated at the lower of cost and net realizable value. Net realizable value is the estimated In selling September price in 2013, the ordinary SPCS entered course of into business, a seven less year estimated loan with costs Credit of Suisse completion for the and expansion the estimated of the power costs to plant. sell. On November 17, 2014, SPCS restated and amended its credit agreement of US$ 74,000 to The US$ cost 120,000. of crude The outstanding oil refined loan balance products as is at the December purchase 31, cost, 2017 the amounted cost of to refining, US$ 80,064. including With the a grace appropriate period proportion of 4 quarters, of a depreciation, total of US$ 20 depletion million was and repaid amortization in 2017. and Repayment overheads of the based loan on is planned normal operating for 24 quarterly capacity, installments. determined The on a maturity weighted date average of the basis. loan is November 2021. The applicable annual interest rate is 5.50% plus 3 months LIBOR. The net realizable value of crude oil and refined products is based on the estimated selling price in the ordinary Staatsolie course acts as of business, guarantor less for this the loan estimated and will costs make of completion the repayments and the in estimated US dollars. costs As collateral necessary the to make bank requested the sale. 100% of SPCS’s fixed assets, all rights and benefits gained in the Power Purchase Agreement (PPA) as well as the establishment of various offshore collateral accounts. Materials and supplies are valued using the weighted average cost method. As at December 31, 2017, unamortized debt arrangement fees amounted to US$ 1,776 (2016: US$ Pipeline 2,234). The fill amortization of debt arrangement fees for 2017 amounted to US$ 458 (2016: US$ 460) and is Crude expensed oil, which in the is consolidated necessary to statement bring a pipeline of profit or into loss. working order, is treated as a part of the related pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is Loan necessary from the to the Government operation of of Suriname a facility during more than one operating cycle, and its cost cannot be In recouped November through 2016 sale Staatsolie (or is refinanced significantly the impaired). secured long This term applies bank even loan if with the part a secured of inventory loan from that the is GoS. deemed The to GoS be an garnered item of property, these proceeds plant and from equipment an international cannot bond be separated issued on physically October from 26, 2016. the rest One of coupon inventory. was It is sold valued for at US$ cost 100,000 and is depreciated each. The over loan the amounts useful life to US$ of the 261,534, related asset. disclosed in section 7, related party disclosures, bears 9.25% semi-annual interest payable in April and October and requires a bullet repayment n. Impairment in November of non-financial 2026. assets As The at Group December assesses 31, 2017, at each unamortized reporting date debt whether arrangement there fees is an amounted indication to that US$3,122 an asset (2016: may be US$3,475). impaired. The If any amortization indication exists, of debt or when arrangement annual impairment fees for 2017 testing amounted for an asset to US$353 is required, (2016: the US$ Group 55) estimates and is expensed the asset’s in recoverable the consolidated amount. statement An asset’s of profit recoverable or loss. amount is the higher of an asset’s or cash generating units (CGU) fair value less costs of disposal and its value in use. It is determined for an Loan individual receivables asset, unless the asset does not generate cash inflows that are largely independent of those In from accordance other assets with or the groups Power of Purchase assets. Agreement Where the dated carrying March amount 1, 2013 of (with an asset latest or amendment CGU exceeds in April its 2016) recoverable by and amount, between the SPCS asset and is considered the GoS, SPCS impaired constructed and is written a transmission down to line its recoverable to the grid of amount. EBS. The In aggregated assessing value cost in of use, US$27,293 the estimated was divested future cash in favor flows of GoS are discounted in 2016, and to accordingly their present derecognized value using a in pretax discount of SPCS. rate In that 2017 reflects and 2016, current US$ market 4,249 of assessments the principal of balance the time was value repaid of by money GoS. The and remaining the risks the books balance specific to is the to asset. be considered In determining as long fair term value loan less with costs interest of disposal, rate recent of 5.76% market p.a., transactions payable in are quarterly taken installment into account. with If no maturity such transactions date of November can be 2021. identified, As at an December appropriate 31, valuation 2017, the model short is term used. portion of this loan Impairment amounts losses to US$8,368 of continuing (2016: operations US$9,173) are and recognized the long in term the consolidated portion amounts statement to US$11,007 of profit or (2016: loss US$14,677). in those expense The loan categories receivable consistent disclosed with in the section function 7, related of the party impaired disclosures. asset, except for a property previously revalued where the revaluation was taken to OCI. In this case, the impairment is also recognized in OCI up to the amount of any previous revaluation. 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Confidence in Our Own Abilities 136 Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Available-for-sale In addition, the Group (AFS) previously financial investments issued an 8% loan of US$ 1,404 to N.V. Energie Bedrijven Suriname AFS (N.V. financial EBS) for investments the substation include at Tout equity Lui Faut. and debt The securities. outstanding Equity loan receivable investments balance classified at as December availablefor-sale 31, 2016 are was those US$ neither 805 which classified was repaid as held-for-trading the fourth nor quarter designated of 2017, at therefore fair value there through is no profit outstanding or loss. After balance initial as of measurement, December 31, AFS 2017. financial investments are subsequently measured at fair value with unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the cumulative Fair Value gain or loss is recognized in other operating income or expense, or the investment is determined The initial recognition to be impaired, of the at loans which and time, bonds the cumulative is fair loss value is while reclassified the subsequent to the consolidated measurement statement is of amortized profit cost, loss assuming finance costs the contractual and removed interest from rate the equals OCI. The the Group effective evaluates interest its rate. AFS The financial local financial assets to market determine consists whether of traditional the ability bank and loans intention for business, to sell them and in is the not near capable term to is provide still appropriate. for the capital needed for Staatsolie’s growth strategy. Staatsolie’s finance structure comprises financing by the GoS and (ii) bespoke Financial credit liabilities agreements by a consortium of international banks, which is considered the principal or most advantageous market. Recognition and measurement Financial Staatsolie liabilities uses valuation are classified, techniques at initial that recognition, are appropriate as financial the circumstances liabilities at fair and value for through which sufficient profit or loss, data are loans available and borrowings, to measure payables, fair value, as maximizing appropriate. the All uses financial of relevant liabilities inputs are and recognized minimizing initially the use at fair of value unobservable and, in the inputs. case of loans and borrowings and payables, net of directly attributable transaction costs. The All assets Group’s and financial liabilities, liabilities for which include fair trade value and is other measured payables, or disclosed loans and in borrowings the consolidated including financial bank overdrafts. statements, are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Loans • Level and 1 borrowings - Quoted (unadjusted) market prices in active markets for identical assets or liabilities; This is the category most relevant to the Group. After initial recognition, interest bearing loans and • Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value borrowings measurement are subsequently is directly or measured indirectly observable; at amortized cost using the EIR method. Gains and losses are recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as • Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value through the EIR amortization process. Amortized cost is calculated by taking into account any discount or measurement is unobservable. premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is For assets and liabilities that are recognized in the consolidated financial statements on a recurring basis, included in finance costs in the consolidated statement of profit or loss. This category generally applies to Staatsolie determines whether transfers have occurred between levels in the hierarchy by reassessing interest-bearing loans and borrowings. categorization (based on the lowest-level input that is significant to the fair value measurement as a whole) at the end of each reporting period. m. Inventories Petroleum 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 Page Page 136 62
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