Staatsolie Annual Report 2017

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Confidence in Our Own Abilities 90 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 The Group applied amendments retrospectively. However, the amendments have no effect on the Group’s AFS financial financial investments position and include performance equity and as debt the securities. Group has Equity no deductible investments temporary classified differences as availablefor-sale that are are those in the neither scope classified of the amendments. as held-for-trading nor designated at fair value through profit or loss. or assets After initial measurement, AFS financial investments are subsequently measured at fair value with Amendments unrealized gains to or IFRS losses 12 recognized Disclosure as of OCI Interests until the in Other investment Entities: is derecognized, Clarification at of which the scope time, the of disclosure cumulative requirements gain or loss is in recognized IFRS 12 in other operating income or expense, or the investment is The determined amendments to be impaired, clarify that which the disclosure time, the cumulative requirements loss in is IFRS reclassified 12, other to the than consolidated those in paragraphs statement B10–B16, of profit or apply loss in to finance entity’s costs interest and removed in a subsidiary, from the OCI. a joint The venture Group or evaluates an associate its AFS (or financial a portion assets of its interest to determine a whether joint venture the ability or an and associate) intention to that sell is them classified in the near (or included term is still in appropriate. a disposal group that is classified) as held for sale. As at December 31, 2017 the Group classified its interest in Suriname Gold Project (ii) Financial CV, a liabilities 25% participating interest, as a joint venture (see Note 4.4), but these amendments did not affect Recognition the Group’s and measurement consolidated financial statements. Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or 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. 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 90
Annual Report 2017 91 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 3. Results for the year selling price in the ordinary course of business, less estimated costs of completion and the estimated costs to sell. This section provides additional information that is most relevant in explaining the Group’s consolidated The cost of crude oil and refined products is the purchase cost, the cost of refining, including the performance during the year. appropriate proportion of depreciation, depletion and amortization and overheads based on normal • Segment information (Note 3.1) operating capacity, determined on a weighted average basis. • Information about key items comprising operating profit/loss (Note 3.2) The • net The realizable calculation value of of income crude tax oil (Note and refined 3.3) products is based on the estimated selling price in the ordinary • Earnings course of per business, share (Note less 3.4) the estimated costs of completion and the estimated costs necessary to make • the sale. Dividends paid and proposed (Note 3.5) 3.1 Segment information Materials and supplies are valued using the weighted average cost method. For management purposes, Staatsolie is organized into reportable segments that include three operating Pipeline fill segments and a corporate segment. Crude oil, which is necessary to bring a pipeline into working order, is treated as a part of the related pipeline. The three This operating is on segments the basis are: that it is not held for sale or consumed in a production process, but is necessary • Upstream: to the operation this segment of a facility is responsible during more for exploring, than one operating developing, cycle, producing and its and cost transporting cannot be recouped crude through oil to sale the refinery. (or is significantly impaired). This applies even if the part of inventory that is deemed • Downstream: to be an item is of responsible property, plant for and refining equipment the crude cannot oil, be marketing, separated selling, physically and from distributing the rest the of inventory. related It is valued oil products. at cost and Furthermore, is depreciated trading over which the useful is related life of to the trading related fuel asset. products and selling these products to wholesale, retail and bunkering customers. Lastly, part of this segment is also n. the Impairment 96 megawatt of thermal non-financial power plant assets operation, which delivers the electric power to the single The Group source assesses customer, at each the reporting national electricity date whether company there EBS. is an indication that an asset may be impaired. If any • indication Gold Mining: exists, the or Group when annual has impairment investment testing a joint for venture an asset that is required, is involved the in Group the exploration, estimates the asset’s development recoverable and amount. exploitation An asset’s of the Merian recoverable Gold amount mine which is the regularly higher reviewed of an asset’s by the or Chief cash generating Operating units (CGU) Decision fair Maker value (“CODM”). 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 from These other functions assets have or groups been defined of assets. Where the operating the carrying segments amount of the of an Group asset because or CGU they exceeds are the its recoverable segments: amount, the asset is considered impaired and is written down to its recoverable amount. In assessing 1. That value engage in use, in business the estimated activities future from cash which flows revenues are discounted are earned to their and present expenses value are using incurred. a pretax discount 2. Whose rate operating that reflects results current are regularly market assessments reviewed by of the the board time of value executive of money directors and the to make risks specific to decisions the asset. about In determining resources to fair be value allocated less to costs the segment of disposal, and recent assess market its performance. transactions are taken into 3. account. For which If no such discrete transactions financial information can be identified, is available. an appropriate valuation model is used. Impairment losses of continuing operations are recognized in the consolidated statement of profit or loss The corporate segment are the functional departments of the Group that consists of Petroleum Contracts in those expense categories consistent with the function of the impaired asset, except for a property and all other corporate administrative functions. previously revalued where the revaluation was taken to OCI. In this case, the impairment is also The board of executive directors (which collectively is considered to be the Chief Operating Decision recognized in OCI up to the amount of any previous revaluation. Maker) monitors the operating results of its business units separately for the purpose of making decisions Page 63 Page 91
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Contact Information Head Office Dr.
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Staatsolie Annual Report 2017

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