Staatsolie Annual Report 2017

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Confidence in Our Own Abilities 76 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) Available-for-sale (AFS) financial investments 18. Cost of sales Apart AFS financial from the investments profit or loss include presentation equity and reclassifications debt securities. (see Equity note investments 17), there classified was a decrease availablefor-sale are to the those refinery neither expenses classified amounting as held-for-trading to US$ 3,855. nor designated Furthermore at fair there value was through an increase profit or in loss. the with regards production After initial expenses measurement, of US$ AFS 1,957. financial The corresponding investments entries are subsequently for both items measured were recorded at fair through value cost with of unrealized sales. gains or losses recognized as OCI until the investment is derecognized, at which time, the cumulative gain or loss is recognized in other operating income or expense, or the investment is 19. determined Other income to be impaired, / expense at which time, the cumulative loss is reclassified to the consolidated statement The of profit decrease or loss of in US$ finance 389 costs relates and to removed a profit of from US$ the 2,742 OCI. in The SurGold Group GoS evaluates share and its AFS a (US$ financial 3,131) assets loss caused to determine by a write-off whether of the freight ability costs and intention and uncollectable to sell them down in the payments. near term There is still was appropriate. also a reclassification of foreign exchange gains of US$ 12,905 from finance cost to other income / expenses in 2016. (ii) Financial liabilities 20. Selling and distribution costs Recognition and measurement The increase of US$ 3,077 was mainly caused by a provision made for doubtful accounts for Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or prepayments to vendors. The total provision made as at December 31, 2016 amounted to US$ 3,699. loss, loans and borrowings, payables, as appropriate. All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. 21. The Other Group’s operating financial expenses liabilities include trade and other payables, loans and borrowings including bank The overdrafts. major part of the other operating expenses was reclassified to “Cost of sales”. 22. Loans General and borrowings and administrative expenses Within This is this the category the most Group relevant had a to release the Group. of a provision After initial with recognition, regards to study interest grants bearing of US$ loans 1,413. and The borrowings other changes are subsequently to general and measured administrative at amortized expenses cost were using mentioned the EIR method. above. Gains and losses are recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as 23. through Finance the EIR income amortization and costs process. Amortized cost is calculated by taking into account any discount or The premium increase on acquisition in finance income and fees of or US$ costs 30 is that caused are an by integral the currency part of translation the EIR. adjustment The EIR amortization from GOw2. is The included increase finance finance costs cost in the is caused consolidated by the statement accretion of expense profit or of loss. the This dismantlement category generally assets amounting applies to to interest-bearing US$ 6,516. In loans addition, and borrowings. there was an increase in finance cost due to the reclassification of foreign currency gains to other income / expenses of US$ 12,905 in 2016. m. Inventories 24. Petroleum Pensions products and other are postretirement valued at the lower benefits of cost – other and comprehensive net realizable value. income The restatement of US$ 4,396 in 2016 relates to evaluation of the pension plans and the introduction of Raw materials: the actuarial evaluation of other long term employee benefits such as jubilee plan, funeral grant plan, • Purchase cost is valued on weighted average method additional holiday allowance and pension gratuity plan. The other long term employee benefits plans are also Finished new goods for the and subsidiaries work in progress: SPCS and GOw2. The tax effect of US$ 1,162 is the 32.4% tax impact on the • restatement Cost of direct amount materials of US$ and 4,396 labor and and the a effect proportion of the of adjustment manufacturing of the overheads tax rate from based 36% on to 32.4% normal on the operating total unrealized capacity (gains) but excluding and losses borrowing on the costs short term investments. 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Annual Report 2017 77 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 25. Unrealized (gains) and losses short-term investments selling price in the ordinary course of business, less estimated costs of completion and the estimated The adjustment of US$ 43 relates to stock-dividend that was received on Hakrinbank shares. costs to sell. Furthermore the tax of US$ 114 relates to the effect of the adjustment of the tax rate from 36% to 32.4%. The cost of crude oil and refined products is the purchase cost, the cost of refining, including the 26. appropriate Currency proportion translation of adjustment depreciation, GOw2 depletion and amortization and overheads based on normal The operating adjustment capacity, of determined US$ 12,147 on relates a weighted to revaluation average basis. that was performed. Effective January 1, 2016, GOw2’s The net realizable functional value currency of crude changed oil and to SRD, refined however products this is change based on was the not estimated accurately selling reflected price in in the previously ordinary course reported of business, 2016 consolidated less the estimated financial costs statements of completion and accordingly and the estimated the amounts costs necessary have been to restated. make the sale. Materials and supplies are valued using the weighted average cost method. 27. Projects in progress The Group made a reclassification of the investment in the Uitkijk project from prepayments and other Pipeline fill current assets to projects in progress as at January 1, 2016 and December 31, 2016 for US$ 11,040 and Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related US$ 11,047, respectively. pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is The necessary Weg naar to the Zee operation exploration of project a facility was during evaluated more as than at December one operating 31, 2016. cycle, Based and its on cost this cannot evaluation be the recouped decision through was taken sale (or to impair is significantly this exploration impaired). project. This This applies resulted even in if a the decrease part of in inventory the projects that in is progress deemed to and be an an increase item of property, in exploration plant and expenses equipment of US$ cannot 5,030 be as separated at December physically 31, 2016. from Projects the rest of in progress inventory. of It is GOw2 valued has at cost been and decreased is depreciated by US$ over 4,394 the useful due to life the of the effects related of asset. the currency translation adjustment. n. Impairment of non-financial assets 28. The Loan Group Receivable assesses short-term at each reporting date whether there is an indication that an asset may be impaired. The If any outstanding indication exists, receivable or when relates annual to the impairment transmission testing line for phase an asset 1 that is required, one was the constructed Group estimates for the related the asset’s party recoverable EBS, which amount. was financed An asset’s by Staatsolie. recoverable From tThe amount outstanding is the higher loan receivable of an asset’s balance or cash US$ 992 generating was reclassified units (CGU) to prepayments fair value less at January costs of 1, disposal 2016 and and US$ its 805 value was in reclassified use. It is determined from prepayments for an to individual loan receivables asset, unless short-term the asset at does December not generate 31, 2016. 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 The recoverable following amount, IFRS conversion the asset adjustments is considered were impaired made and (in US$ is written thousands). down to its recoverable amount. In A assessing Property, value plant in use, and equipment the estimated future cash flows are discounted to their present value using a pretax i. discount An evaluation rate that of reflects the decommissioning current market assessments assets was performed of the time under value IFRS1 of money and the and Group the risks remeasured to the asset. the In decommissioning determining fair value liability, less which costs resulted of disposal, in revised recent market asset values. transactions The production are taken specific into account. field If and no such related transactions facilities can decommissioning be identified, an assets appropriate were valuation adjusted model for (US$ is used. 36,276) as at December 31, 2016; no remeasurement was needed as at January 1, 2016. The refinery Impairment losses of continuing operations are recognized in the consolidated statement of profit or loss decommissioning assets were adjusted for (US$ 2,047) and (US$ 3,611) as at January 1, 2016 in those expense categories consistent with the function of the impaired asset, except for a property and December 31, 2016 respectively. The power plant decommissioning assets were adjusted for previously revalued where the revaluation was taken to OCI. In this case, the impairment is also (US$ 277) and (US$ 109) as at January 1, 2016 and December 31, 2016 respectively. recognized in OCI up to the amount of any previous revaluation. Page 63 Page 77
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Contact Information Head Office Dr.
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Staatsolie Annual Report 2017

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