Staatsolie Annual Report 2017

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Confidence in Our Own Abilities 94 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 Geographic information AFS Revenues financial from investments external customers include equity and debt securities. Equity investments classified as availablefor-sale x US$ 1,000 are those neither classified as held-for-trading nor designated at fair 2017 value through 2016 profit or loss. After Suriname initial measurement, AFS financial investments are subsequently 234,178 measured at fair 175,426 value with unrealized Guyana gains or losses recognized as OCI until the investment is derecognized, 79,838 at which 54,408 time, the Other Caribbean Territories 54,650 41,876 cumulative gain or loss is recognized in other operating income or expense, or the investment is Trinidad and Tobago 45,673 68,572 determined United States to be impaired, at which time, the cumulative loss is reclassified to 11,355 the consolidated 9,431 statement Europe 3,984 4,715 of profit or loss in finance costs and removed from the OCI. The Group evaluates its AFS financial assets Middle East and Asia 4,000 3,277 to Total determine revenue whether per consolidated the ability and intention statement to sell of them profit in or the loss near term is 433,678 still appropriate. 357,705 (ii) Financial liabilities The revenue information above is based on the location of the customers. In addition, revenue from one Recognition customer domiciled and measurement in Guyana amounted to US$ 57,884 (2016: US$ 44,431), arising from sales by the Financial downstream liabilities operating are segment. 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 Non-current and, in operating the case assets of loans and borrowings and payables, net of directly attributable transaction costs. The x US$ Group’s 1,000financial liabilities include 2017trade and other 2016 payables, loans As and at January borrowings 1, 2016 including bank overdrafts. Suriname 1,624,306 1,603,972 1,734,571 Trinidad and Tobago 2,669 2,744 2,795 Total 1,626,975 1,606,716 1,737,366 Loans and borrowings This is the category most relevant to the Group. After initial recognition, interest bearing loans and Non-current assets for this purpose consist of property, plant and equipment and intangible assets. Only borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are Ventrin, the subsidiary domiciled in Trinidad and Tobago, has non-current operating assets outside of recognized in the consolidated statement of profit or loss when the liabilities are derecognized as well as Suriname. 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 94
Annual Report 2017 95 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 Components of Revenue selling price in the ordinary course of business, less estimated costs of completion and the estimated costs to sell. xUS$ 1,000 2017 2016 The Own cost refined of products crude oil (gross) and refined products 368,595 is the purchase 259,800 cost, the cost of refining, including the appropriate Intersegment proportion sales of depreciation, (129,923) depletion and amortization (103,464) and overheads based on normal Local refined products (net) 238,672 156,336 operating capacity, determined on a weighted average basis. The Trading net activities realizable (gross) value of crude oil and 156,899 refined products 170,598 is based on the estimated selling price in the Intersegment sales (10,581) (12,067) ordinary course of business, less the estimated costs of completion and the estimated costs necessary to Trading activities (net) 146,318 158,531 make the sale. Materials Electric energy and supplies (gross) are valued using the 64,189 weighted average 50,094 cost method. Intersegment sales (15,801) (11,059) Electric energy (net) 48,388 39,035 Pipeline fill Crude Other revenues oil, which (gross) is necessary to bring a pipeline 307 into working 5,066 order, is treated as a part of the related Intersegment sales (7) (1,263) pipeline. This is on the basis that it is not held for sale or consumed in a production process, but is Other revenues (net) 300 3,803 necessary to the operation of a facility during more than one operating cycle, and its cost cannot be recouped Total revenues through sale (or is significantly 433,678 impaired). This 357,705 applies even if the part of inventory that is deemed to be an item of property, plant and equipment cannot be separated physically from the rest of Revenues inventory. It consist valued of at the cost sales and of is petroleum depreciated products, over the electric useful life energy of the and related trade asset. activities of petroleum products. Petroleum products are generally being sold at prevailing market prices. Revenues are recognized n. Impairment when products of non-financial are delivered, assets which occurs when the customer has taken title and has assumed The Group the assesses risks and at each rewards reporting of ownership, date whether prices there are is an fixed indication or determinable that an asset and may collectability be impaired. is If reasonably any indication assured. exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash Sales between group companies (intersegment sales) are based on prices generally equivalent to generating units (CGU) fair value less costs of disposal and its value in use. It is determined for an commercially available prices. 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 63 Page 95
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Contact Information Head Office Dr.
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Staatsolie Annual Report 2017

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