Staatsolie Annual Report 2017

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Confidence in Our Own Abilities 66 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 r. Pensions and other post–employment benefits AFS The Group financial operates investments defined include benefit equity pension and plans. debt securities. Re-measurements, Equity investments comprising classified of actuarial as gains availablefor-sale losses, the are those effect neither of asset classified ceiling as held-for-trading (excluding amounts nor designated included in at net fair interest value through on the profit net or defined loss. and After benefit initial liability) measurement, and the return AFS on financial plan assets investments (excluding are amounts subsequently included measured in net interest at fair on value the with net unrealized defined benefit gains liability), or losses are recognized as immediately OCI until the in the investment consolidated is derecognized, statement of at financial which time, position the cumulative with a corresponding gain loss debit is or recognized credit to retained other earnings operating through income OCI or in expense, the period or in the which investment they occur. is determined Re-measurements to be impaired, are not at reclassified which time, to the profit cumulative or loss loss in subsequent is reclassified periods. to the consolidated In addition, the statement Group of operates profit or other loss in long-term finance costs employee and removed benefit plans, from the of which OCI. The the Group re-measurements evaluates its are AFS recognized financial assets in the to profit determine or loss. whether Furthermore, ability for both and intention the defined to sell benefit them pension in the near plans term and is the still other appropriate. long-term employee benefit plans past service costs are recognized in profit or loss on the earlier of: (ii) Financial - The date liabilities of the plan amendment or curtailment Recognition And and measurement Financial - The liabilities date on are which classified, the Group at initial recognizes recognition, related as restructuring financial liabilities costs at fair value through profit or loss, Net interest loans and is calculated borrowings, by payables, applying as the appropriate. discount rate All to financial the net liabilities defined are benefit recognized liability or initially asset. at The fair value Group and, recognizes in the case the of following loans and changes borrowings the and net payables, defined net benefit of directly obligation attributable under transaction ‘cost of sales’, costs. The ‘administration Group’s financial expenses’ liabilities and ‘selling include and trade distribution and other expenses’ payables, in the loans consolidated and borrowings statement including of profit bank or overdrafts. loss (by function): - Service costs comprising current service costs, past-service costs, gains and losses on Loans and curtailments borrowings and non-routine settlements This - is the Net interest category expense most relevant or income 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 2.4 Restatements and First-time adoption of IFRS recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as through These consolidated the EIR amortization financial process. statements, Amortized for the cost year is ended calculated December by taking 31, 2017 into account and 2016, any are discount the first or premium Staatsolie on has acquisition prepared and in accordance fees costs with that IFRS. are For an integral periods part including of the the EIR. year The ended EIR amortization December 31, is included 2016 and in finance prior, Staatsolie costs in the prepared consolidated its consolidated statement of financial profit or loss. statements This category in accordance generally with applies U.S. to interest-bearing generally accepted loans accounting and borrowings. principles (US GAAP). During the preparation of the December 31, 2017 and 2016 consolidated financial statements, the Group identified errors in the opening balance as at January m. 1, 2016 Inventories and the ending balance as at December 31, 2016, which have been restated as part of Petroleum the IFRS conversion products are procedures. valued at the lower of cost and net realizable value. Raw Accordingly, materials: Staatsolie has prepared its consolidated financial statements that comply with IFRS as at • December Purchase 31, cost 2017, is valued together on with weighted the comparative average method period data for the year ended December 31, 2016, as described in the summary of significant accounting policies. In preparing the consolidated financial Finished goods and work in progress: statements, Staatsolie’s opening statement of consolidated financial position was prepared as at January • Cost of direct materials and labor and a proportion of manufacturing overheads based on normal 1, 2016, Staatsolie’s date of transition to IFRS. This note explains the principal adjustments made by operating capacity but excluding borrowing costs Staatsolie in restating its US GAAP financial statements, including the consolidated statement of financial Page 62 Page 66
Annual Report 2017 67 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 Notes (continued) 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 position as at January 1, 2016 and the consolidated financial statements for the year ended December selling price in the ordinary course of business, less estimated costs of completion and the estimated 31, 2016. costs to sell. The Exemptions cost of applied crude oil and refined products is the purchase cost, the cost of refining, including the appropriate IFRS 1, First-time proportion Adoption of depreciation, of International depletion Financial and Reporting amortization Standard, overheads allows certain based elective on normal and mandatory operating capacity, exemptions determined where on costs a weighted of implementing average basis. exceed the benefits of reporting. After thorough examination The net realizable and analysis, value of Staatsolie crude oil applied and refined the following products elective is based exemptions: the estimated selling price in the ordinary 1. Goodwill course of – business, the carrying less value the estimated of goodwill costs at transition of completion date is and not restated. the estimated costs necessary to make 2. the Oil sale. assets - were valued at deemed costs and are not revalued. 3. Property plant and equipment – the Group elected to measure PPE at transition date at deemed Materials and supplies are valued using the weighted average cost method. cost (using historical costs). 4. Intangible assets – the Group elected to measure capitalized software at transition dated at Pipeline fill deemed cost (using historical costs). Crude oil, which is necessary to bring a pipeline into 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 Estimates necessary to the operation of a facility during more than one operating cycle, and its cost cannot be The estimates at January 1, 2016 and at December 31, 2016 are consistent with those made for the recouped through sale (or is significantly impaired). This applies even if the part of inventory that is same dates in accordance with US GAAP (after adjustments to reflect any differences in accounting deemed to be an item of property, plant and equipment cannot be separated physically from the rest of policies) apart from the following items: inventory. It is valued at cost and is depreciated over the useful life of the related asset. Under US GAAP, a weighted average for the useful lives of the different property, plant and equipment components n. Impairment was calculated, of non-financial whereas IFRS assets requires the useful lives of the separate assets (varying 10, The 15, 30 Group years). assesses The change at each in reporting useful life date estimates whether also there impacted is an indication the provision that an for asset decommissioning, may be impaired. as If set any out indication the notes exists, to the or reconciliation when annual of impairment equity as at testing January for an 1, 2016 asset and is required, December the 31, Group 2016 estimates and total the comprehensive asset’s recoverable income for amount. the year An ended asset’s December recoverable 31, 2016. amount is the higher of an asset’s or cash generating The estimates units used (CGU) by the fair Group value less to present costs of the disposal estimation and balances its value in in accordance use. It is determined with IFRS for reflect an individual conditions asset, at January unless 1, 2016, the asset the date does of not transition generate to IFRS cash inflows and as that December are largely 31, independent 2016. 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 63 Page 67
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Contact Information Head Office Dr.
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Staatsolie Annual Report 2017

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