Staatsolie Annual Report 2017

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Confidence in Our Own Abilities 98 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 Depreciation of PPE and amortization of intangible assets AFS financial investments 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 profit 2016 or loss. After initial measurement, AFS financial investments are subsequently measured at fair value with Included in cost of sales unrealized Depreciation gains and or amortization losses recognized upstream as OCI until the investment is derecognized, (40,455) at which (37,957) time, the cumulative Depreciation gain downstream or loss is recognized in other operating income or (54,000) expense, or the investment (56,163) is Sub total (94,455) (94,120) determined to be impaired, at which time, the cumulative loss is reclassified to the consolidated statement of Included profit or in loss Exploration in finance costs expenses and removed including from dry the holes OCI. The Group evaluates its AFS financial assets Depreciation upstream-exploration (17) (59) to determine whether the ability and intention to sell them in the near term is still appropriate. Sub total (17) (59) (ii) Included Financial in liabilities Selling and distribution expenses Depreciation downstream (65) (130) Recognition Sub total and measurement (65) (130) Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or Included in General and administrative expenses loss, Depreciation loans and and borrowings, amortization payables, corporate as appropriate. All financial liabilities (1,535) are recognized initially (4,112) at fair value Depreciation and, in the downstream case of loans and borrowings and payables, net of directly attributable (38) transaction (19) costs. Sub total (1,573) (4,131) The Group’s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts. Included in Other operating expenses Depreciation downstream (6) (5) Sub total (6) (5) Loans and borrowings This Grand is the total category most relevant to the Group. After initial recognition, (96,116) interest bearing (98,445) loans and borrowings are subsequently measured at amortized cost using the EIR method. Gains and losses are recognized Finance income 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 x US$ 1,000 on acquisition and fees or costs that are an integral part of the 2017 EIR. The EIR amortization 2016 is Interest income on loans 959 3,460 included in finance costs in the consolidated statement of profit or loss. This category generally applies to Other interest income 1,059 1,380 interest-bearing loans and borrowings. Total finance income 2,018 4,840 m. Inventories Petroleum Finance products costs are valued at the lower of cost and net realizable value. x US$ 1,000 2017 2016 Raw Interest materials: on borrowings • Accretion Purchase expenses cost is valued on weighted average method Bank and other finance charges (63,800) (4,697) (280) (58,600) (6,067) (455) Finished Total finance goods and costs work in progress: (68,777) (65,122) • Cost of direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs Page 62
Annual Report 2017 99 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 Other (expense)/income selling price in the ordinary course of business, less estimated costs of completion and the estimated costs x US$ to 1,000 sell. 2017 2016 Sales tax provision (6,389) - The Government cost of crude of Suriname oil and share refined SurGold products is the purchase (11,985) cost, the cost of refining, 2,742 including the appropriate Settlement proportion of BNIS claim of depreciation, depletion and amortization (9,440) and overheads - based on normal Third party claims (1,486) - operating capacity, determined on a weighted average basis. Interest on late payments (2,619) - The Insurance net realizable claim income value of crude oil and refined products is 2,000 based on the estimated - selling price in the (Loss) / Gain on foreign currency transactions (1,364) 8,445 ordinary Disposal course of fixed of assets business, less the estimated costs of completion - and the estimated (618) costs necessary to make Sale of the lease sale. data package - (1,200) Other income 7,646 4,088 Materials Total other and (expense)/income supplies are valued using the weighted average (23,637) cost method. 13,457 Pipeline Other (expense) fill / income as at December 31, 2017 and 2016 comprise income / (expense) from several Crude sources. oil, The which significant is necessary items in to 2017 bring relates a pipeline to: 1) into management working order, evaluated is treated the sales as a tax part receivable of the related taken pipeline. in the sales This tax is returns on the for basis previous that it years is not and held based for sale on communication or consumed in and a confirmation production process, received but from is necessary the tax authority, to the operation recognized of a provision facility during of US$ more 6,389; than 2) one the operating GoS share cycle, in SurGold and its cost which cannot was be an recouped expense of through US$ 11,985 sale (or for is significantly Staatsolie because impaired). the This revenues applies which even if GoS the earned part of inventory with their that 4.8% is deemed participating to be interest, an item exceeded of property, their plant part and of equipment the cash cannot calls paid be separated and 3) BNIS physically had a from claim the against rest of inventory. Staatsolie It regarding is valued civil at cost technical and is tasks depreciated they performed over the for useful the life refinery of the expansion related asset. project. The claim was settled with a net impact of US$ 9,440. n. Impairment of non-financial assets The significant items in 2016 relate to: 1) a gain on foreign currency transactions on sales and purchases The Group assesses at each reporting date whether there is an indication that an asset may be impaired. executed in SRDs and 2) the GoS’ share in SurGold which was an income of US$ 2,742 because the If any indication exists, or when annual impairment testing for an asset is required, the Group estimates cash calls exceeded the 4.8% participating interest in SurGold. the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash generating units (CGU) fair value 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 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 99
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Contact Information Head Office Dr.
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Staatsolie Annual Report 2017

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