Staatsolie Annual Report 2017

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Confidence in Our Own Abilities 48 Staatsolie Maatschappij Suriname N.V. Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) Available-for-sale (AFS) financial investments 1.2. Group information 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. Staatsolie has four (4) subsidiaries of which three (3) are wholly owned: Paradise Oil Company N.V. (POC) and GOw2 Energy Suriname N.V. (GOw2) incorporated in the Republic of Suriname and Ventrin After initial measurement, AFS financial investments are subsequently measured at fair value with Petroleum Company Limited (Ventrin), a bunkering company incorporated in the Republic of Trinidad and unrealized gains or losses recognized as OCI until the investment is derecognized, at which time, the Tobago. cumulative gain or loss is recognized in other operating income or expense, or the investment is determined Staatsolie holds to be 102,999 impaired, out at of which 103,000 time, shares the cumulative of the Staatsolie loss is reclassified Power Company to the Suriname consolidated N.V. statement (SPCS), of incorporated profit loss in in the finance Republic costs of Suriname, and removed and from the local the OCI. electricity The Group company evaluates N.V. EBS its AFS holds financial one share. assets to determine whether the ability and intention to sell them in the near term is still appropriate. POC is, at the moment, a dormant company. In June 2015, POC’s operations were put on hold and the company did not have any major activity during the reporting period of 2017. (ii) Financial liabilities Furthermore, since November 2014, to date, Staatsolie has a participating interest of 25% in the Recognition and measurement Suriname Gold Project CV ('Surgold'), a limited partnership created between Newmont Suriname LLC Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or and Staatsolie. loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair Information on other related party relationships of Staatsolie and its subsidiaries is further provided in value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. section 7. The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. Loans and borrowings This 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 in the consolidated statement of profit or loss when the liabilities are derecognized as well as through the EIR amortization process. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance costs in the consolidated statement of profit or loss. This category generally applies to interest-bearing loans and borrowings. 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 62 Page 48
Annual Report 2017 49 Staatsolie Maatschappij Suriname N.V. Staatsolie Maatschappij Suriname N.V. Notes to the Consolidated financial statements for the years ended December 31, 2017 and 2016 (continued) 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 Section 2. Basis of preparation and other significant accounting policies selling price in the ordinary course of business, less estimated costs of completion and the estimated costs to sell. 2.1 Basis of preparation The cost of crude oil and refined products is the purchase cost, the cost of refining, including the appropriate The consolidated proportion financial of depreciation, statements of depletion Staatsolie and as a amortization group have and been overheads prepared in based accordance on normal with operating International capacity, Financial determined Reporting on Standards a weighted (IFRS) average as basis. issued by the International Accounting Standards Board (IASB). The net realizable value of crude oil and refined products is based on the estimated selling price in the ordinary The consolidated course of financial business, statements less the estimated have been costs prepared of completion on a historical and the cost estimated basis, except costs necessary for financial to make instruments the sale. that have been measured at fair value. The consolidated statements are presented in US dollars, and all values are rounded to the nearest thousand (US$ thousand), except when otherwise Materials and supplies are valued using the weighted average cost method. indicated. Pipeline fill 2.2 Basis of consolidation Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related The consolidated financial statements comprise the financial statements of Staatsolie and its controlled pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is subsidiaries as at December 31, 2017 and 2016. necessary to the operation of a facility during more than one operating cycle, and its cost cannot be recouped Control is achieved through sale when (or the is Group significantly is exposed, impaired). or has This rights, applies to variable even returns if the part from of its inventory involvement that with is deemed the investee to be and has item the of property, ability to affect plant and those equipment returns through cannot its be power separated over physically the investee. from Specifically, the rest of inventory. the Group It controls is valued an at investee cost and if, is and depreciated only if, the over Group the has useful all of life the of following: the related asset. • Power over the investee (i.e., existing rights that give it the current ability to direct the relevant n. activities Impairment of the investee); of non-financial assets The • Group Exposure, assesses or at rights, each to reporting variable date returns whether from its there involvement is an indication with the that investee; an asset may be impaired. If any • indication The ability exists, to use or its when power annual over impairment the investee testing to affect for its an returns. asset is required, the Group estimates the Generally, asset’s there recoverable is a presumption amount. An that asset’s a majority recoverable of voting amount rights is result the higher in control. of an To asset’s support cash this generating presumption units and (CGU) when the fair Group value has less less costs than of a disposal majority of and the its voting, value or in similar, use. It rights is determined of an investee, for an it individual considers asset, all relevant unless facts the asset and circumstances does not generate in assessing cash inflows whether that are it has largely power independent over an investee, of those from including: other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable • The amount, contractual the arrangement(s) asset is considered with the impaired other vote and holders is written of the down investee; 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 • Rights arising from other contractual arrangements; • The Group’s voting rights and potential voting rights. specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken The relevant activities are those which significantly affect the subsidiary’s returns. The ability to approve into account. If no such transactions can be identified, an appropriate valuation model is used. the operating and capital budget of a subsidiary and the ability to appoint key management personnel are Impairment decisions that losses demonstrate of continuing that operations the Group are has recognized the existing in the rights consolidated to direct the statement relevant of activities profit or of loss a in subsidiary. 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 63 Page 49
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Contact Information Head Office Dr.
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Staatsolie Annual Report 2017

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