Staatsolie Annual Report 2017

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Annual Report 2017 141 Staatsolie Maatschappij Suriname N.V. N.V. Notes to the Consolidated financial statements for for the the years years ended ended December December 31, 2017 31, 2017 and 2016 and 2016 (continued) Inventories Section 6. are Working stated at capital the lower of cost and net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs This section to sell. provides additional information that the directors consider is most relevant in understanding the composition and management of the Group’s working capital: The cost of crude oil and refined products is the purchase cost, the cost of refining, including the • Cash and short-term deposits (Note 6.1) appropriate proportion of depreciation, depletion and amortization and overheads based on normal • Trade and other receivables (Note 6.2) operating capacity, determined on a weighted average basis. • Inventories (Note 6.3) The • net Trade realizable payables, value accruals of crude and oil other and liabilities refined products (Note 6.4) is based on the estimated selling price in the ordinary 6.1 Cash course and of business, short–term less the deposits estimated costs of completion and the estimated costs necessary to make the sale. As at January 1, Materials x US$ 1,000 and supplies are valued using the weighted 2017 average cost 2016method. 2016 Cash at banks and on hand 41,005 11,787 25,048 Short-term deposits 5,516 5,584 5,584 Pipeline fill 46,521 17,371 30,632 Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related pipeline. Cash at banks This earns is on interest the basis at floating that it rates is not based held on for daily sale interest or consumed rates. Short-term in a production deposits process, are made but is necessary for varying to periods the operation of between of a one facility day during and more three than months, one depending operating cycle, on the and immediate its cost cash cannot be recouped requirements through of the Group, sale (or and is earn significantly interest at impaired). the respective This short-term applies even deposit if rates. the part of inventory that is deemed For the purpose to be an of item the consolidated of property, statement plant and of equipment cash flows, cannot cash be and separated cash equivalents physically comprise from the the rest of inventory. following: It is valued at cost and is depreciated over the useful life of the related asset. As at January 1, x US$ 1,000 2017 2016 2016 n. Impairment of non-financial assets The Cash Group at banks assesses and on at hand each reporting date 41,005 whether there is 11,787 an indication that an 25,048 asset may be impaired. Short - term deposits 5,516 5,584 5,584 If Cash any and indication short -term exists, deposits or when annual impairment 46,521 testing for 17,371 an asset is required, 30,632 the Group estimates the Bank asset’s overdrafts recoverable amount. An asset’s (3,713) recoverable amount (3,713) is the higher (2,560) of an asset’s or cash Cash and cash equivalents 42,808 13,658 28,072 generating 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 independent of those Restricted cash of US$ 27,462 as at December 31, 2017 of which US$ 10,611 is current (December 31, from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its 2016 of US$ 19,220 of which US$ 7,370 is current and January 1, 2016 of US$ 20,856 of which US$ recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In 6,444 is current) relates to: assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks • Collateral with reference to Staatsolie’s long term loans and funding for interest and loan (re)payment US$ 11,351. specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken • Collateral with reference to the SPCS loan and funding of interest and loan (re)payment of US$ into account. If no such transactions can be identified, an appropriate valuation model is used. 10,611. Impairment • Corporate losses parent of guarantees continuing of operations Staatsolie are to secure recognized Ventrin’s the operational consolidated activities statement US$ 5,500. of profit or loss in those expense categories consistent with the function of the impaired 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 Page 141 revaluation. Page 63
Confidence in Our Own Abilities 142 Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Available-for-sale (AFS) financial investments 6.2 Trade and other receivables AFS financial investments include equity and debt securities. Equity investments classified as availablefor-sale x US$ 1,000 are those neither classified as held-for-trading 2017 nor designated at fair 2016value through profit 2016or loss. As at January 1, After initial measurement, AFS financial investments are subsequently measured at fair value with Trade receivables 107,248 101,878 118,319 unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the Prepayments and other current assets 27,175 44,472 43,304 cumulative gain or loss is recognized in other 134,423 operating income or 146,350 expense, or the 161,623 investment is determined to be impaired, at which time, the cumulative loss is reclassified to the consolidated statement of profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets For terms and conditions relating to related party receivables, refer to Note 7. Trade receivables are noninterest bearing and are generally on terms of 30–90 days net of provisions. to determine whether the ability and intention to sell them in the near term is still appropriate. (ii) Movements Financial in liabilities the provision for impairment of receivables: Recognition x US$ 1,000and measurement 2017 2016 Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or As at January 1 11,288 6,690 loss, Addition loans and borrowings, payables, as appropriate. 813All financial liabilities 5,203are recognized initially at fair value Amounts and, written in the case off of loans and borrowings and (687) payables, net of directly (127) attributable transaction costs. Unused amounts reversed (3,433) (478) The As at Group’s December financial 31 liabilities include trade and 7,981 other payables, loans 11,288 and borrowings including bank overdrafts. The ageing analysis of the trade receivables (net of provision for impairment) is, as follows: Loans and borrowings This is the category most relevant to the Group. After Past initial due recognition, but not impaired interest bearing loans and Neither past borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are due nor 61-90 91-120 recognized x US$ 1,000in the Total consolidated impaired statement < 30 of days profit 30-60 or loss days when days the liabilities days are >120 derecognized days as well as through 2017 the EIR amortization 107,248 process. 30,490 Amortized 8,845 cost 9,614 is calculated 1,339 by taking 2,674 into account 54,286 any discount or premium 2016 on acquisition 101,878and fees 28,588 or costs 11,330 that are an 3,680 integral 1,679 part of the 4,971 EIR. The 51,630 EIR amortization is included As at January in finance costs in the consolidated statement of profit or loss. This category generally applies to 118,319 14,338 22,933 2,712 5,159 5,099 68,078 interest-bearing 1, 2016 loans and borrowings. Included in the accounts receivable amount of US$ 107,248 as at December 31, 2017 is a balance of m. Inventories US$ 82,394 for the delivery of electricity to GoS and oil deliveries to N.V. EBS. The outstanding payable Petroleum products are valued at the lower of cost and net realizable value. to PDVSA Petróleo, S.A. (“PDVSA”) amounting to US$ 49,658 has been used as a settlement with GoS, Raw based materials: on the written confirmation from GoS that all payment obligations of Staatsolie due to PDVSA • pursuant Purchase to the cost contract is valued will on be weighted assigned average to GoS. method The remainder of US$ 32,736 will be settled by applying the amounts payable to GoS at December 31, 2017. After these settlements, the net payable Finished goods and work in progress: balance to GoS amounts to US$ 11,230. • Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs Page 142 62
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Staatsolie Annual Report 2017

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