Staatsolie Annual Report 2017

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Annual Report 2017 147 Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Inventories Dividend to are related stated parties at the lower of cost and net realizable value. Net realizable value is the estimated selling The Group price made in the an ordinary interim payment, course of subject business, to approval, less estimated regarding costs dividend of completion to their shareholders, and the estimated GoS, of costs US$ to 6,000 sell. in 2017 regarding fiscal year 2017 (refer to note 6.2). The cost of crude oil and refined products is the purchase cost, the cost of refining, including the Trade appropriate receivables proportion from of / trade depreciation, payables depletion to shareholder and amortization (GoS) and overheads based on normal As operating December capacity, 31, determined 2017, the on Group a weighted had a average trade receivable basis. balance of US$ 82,394 due from their shareholders, while the trade payable balance due to their shareholders was US$ 63,087 (refer to notes The net realizable value of crude oil and refined products is based on the estimated selling price in the 6.2 and 6.4 respectively). ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. Terms and conditions of transactions with related parties The Materials sales and to and supplies purchases are valued from related using the parties weighted are made average in the cost ordinary method. course of business. There is an arrangement with GoS for the settlement of the trade receivables from EBS and GoS the outstanding payables Pipeline fill to GoS. Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related One guarantee has been provided to Ventrin in the amount of US$ 5,500. This guarantee is with the First pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is Caribbean International Bank. For the year ended December 31, 2017 and 2016, the Group has not necessary to the operation of a facility during more than one operating cycle, and its cost cannot be recorded any impairment of receivables relating to amounts owed by related parties, except for one recouped through sale (or is significantly impaired). This applies even if the part of inventory that is related party namely SAIL. The receivable amounted to US$ 1,952 as at December 31, 2017 of which the deemed to be an item of property, plant and equipment cannot be separated physically from the rest of amount is fully provided. The outstanding amount of Melkcentrale was paid in January 2018. inventory. It is valued at cost and is depreciated over the useful life of the related asset. Compensation of key management personnel of the Group: n. Impairment of non-financial assets xUS$ 1,000 2017 2016 The Short Group term employee assesses at benefits each reporting date whether there is an indication 2,432 that an asset 2,109 may be impaired. If Post-employment any indication exists, pension or when and medical annual benefits impairment testing for an asset is 827 required, the 892 Group estimates Total Compensation paid to key management personnel 3,259 3,001 the asset’s recoverable amount. An asset’s recoverable 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 There are no other related party transactions. individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In 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 specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses of continuing operations are recognized in the consolidated statement 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 revaluation. Page 147 63
Confidence in Our Own Abilities 148 Staatsolie Maatschappij Suriname N.V. Notes to to the the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Available-for-sale (AFS) financial investments Section 8. Other 8.1 Events after the reporting period 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. After On 25 initial May, measurement, 2018 Staatsolie AFS commenced financial its investments loan diversification are subsequently strategy by measured refinancing at its fair loan value portfolio with unrealized with a seven gains years or US$ losses 625 recognized million term as loan, OCI bearing until the 5.125% investment interest is derecognized, + 3 months LIBOR at which (comprising time, the a cumulative grace period gain of 18 or months). loss is The recognized outstanding other corporate operating term income loan balances or expense, were redeemed or the investment for US$ 298 is determined million (including to be SPCS impaired, loan at for which US$ time, 70 million), the cumulative and the loss loan is to reclassified the Government to the of consolidated Suriname was statement repaid of for profit US$ or 261.5 loss million. in finance Simultaneously costs and removed a new from seven-year the OCI. term The loan Group for US$ evaluates 625 million its AFS was financial executed assets on to the determine same date. whether The refinancing the ability and also intention included to the sell buyback them in of the the near 4.8% term stake is still of appropriate. the GoS related to their financial contributions made in 2016 on Staatsolie’s behalf to the limited partnership agreement with (ii) Newmont Financial Suriname liabilities LLC. Recognition and measurement 8.2 Standards issued but not yet effective Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, The standards loans and and borrowings, interpretations payables, that as are appropriate. issued but All not financial yet effective liabilities up are to recognized the date of initially issuance at fair of value Staatsolie’s and, in consolidated the case of loans financial and statements borrowings are and disclosed payables, below. net of These directly are attributable the changes transaction that Staatsolie costs. The reasonably Group’s expects financial will liabilities have an include impact on trade its disclosures, and other payables, financial position loans and or borrowings performance including when applied bank overdrafts. at a future date. Staatsolie intends to adopt these standards and interpretations, if applicable, when they become effective. Standards and interpretation that are issued but not yet effective as at year end that Loans are not and expected borrowings to have an impact to the Group consolidated financial statement have not been listed This below. is the category most relevant to the Group. After initial recognition, interest bearing loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized 1. IFRS in 9 the Financial consolidated Instruments statement of profit or loss when the liabilities are derecognized as well as through In July 2014, the EIR the amortization IASB issued process. the final Amortized version of cost IFRS is 9 calculated Financial by Instruments taking into that account replaces any IAS discount 39 and or premium all previous on versions acquisition of IFRS and fees 9. IFRS or costs 9 brings that are together an integral all three part aspects of the of EIR. the The accounting EIR amortization for financial is included instruments in finance project: costs classification in the consolidated and measurement, statement of impairment profit or loss. and This hedge category accounting. generally IFRS applies 9 to is interest-bearing effective for annual loans periods and borrowings. beginning on or after January 1, 2018, with early application permitted. Except for hedge accounting, retrospective application is required, but the provision of comparative information m. is Inventories not compulsory. Staatsolie plans to adopt the new standard on the required effective date. Petroleum products are valued at the lower of cost and net realizable value. During 2016, Staatsolie has performed a high-level impact assessment of all three aspects of IFRS 9. Raw This materials: preliminary assessment is based on currently available information and may be subject to changes • arising Purchase from further cost is detailed valued on analysis weighted or average additional method reasonable and supportable information being made Finished available goods to Staatsolie and work in the in progress: future. • Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs Page 148 62
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Staatsolie Annual Report 2017

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