2017 annual report - surinaamse brouwerij · 2 3 surinaamse brouwerij n.v. 2017 annual report a...

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2017 ANNUAL REPORT

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S U R I N A A M S E B R O U W E R I J N . V . 2 0 1 7 A N N U A L R E P O R T

A proud history

Suriname, which was a Dutch colony at the time, did not have its own brewery. The brewery was officially opened in October 1955 by His Royal Highness, Prince Bernhard (later the Queen’s Consort). At the end of December 1955 the company produced the first PARBO BIER. Shareholder of the first hour was Amstel brewery, which was acquired by HEINEKEN in 1968.

The Surinamese beer was of excellent quality right from the start, as evidenced by the Prix d’Excellence award during the World Beer Fair in Ghent, Belgium. Quality

has always played an important role in the company’s strategy, and still does to this day. Hence, Surinaamse Brouwerij was one of the first breweries in South and North America to achieve both the ISO and the HACCP certificate. Nowadays Surinaamse Brouwerij strives to produce and sell beer that meets international standards. The strategy is aimed at achieving profitable and sustainable growth in order to strengthen the position of the business. Surinaamse Brouwerij is thereby seeking an optimum return for shareholders, consistent satisfaction amongst customers and

consumers, optimum welfare for employees and socially responsible business practices and engagement.Surinaamse Brouwerij brews, produces, sells and distributes PARBO Bier, PARBO Radler, PARBO Light and PARBO Chiller for the Suriname market. Surinaamse Brouwerij also exports PARBO Bier, PARBO Chiller and PARBO Radler to a select number of countries. The company imports and distributes the products Heineken®, Desperados, Sol and Vitamalt in Suriname through its subsidiary.

The roots of Surinaamse Brouwerij N.V. lie in the Dutch province of Zeeland, where brothers Piet and Arthur Dumoleyn made the decision in around 1950 to continue their beer-brewing activities in Suriname.

Disclaimer This Annual Report is a translation of the original Dutch Annual Report. The Dutch Annual Report is adopted and approved by the General Meeting of shareholders on June 20th, 2018. This translation is for information purposes only and no rights can be derived from its content. In the case of any discrepancies between the English and the Dutch text, the latter will prevail.

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Contents

Foreword from the Managing DirectorManagement ReportFinancial resultsFive year consolidated key figuresDevelopments in the Supply Chain departmentCommercial insightsOur employeesManagement teamReport from the Supervisory BoardSupervisory BoardCorporate social responsibilitySustainability report

Financial StatementsConsolidated balance sheet at 31 DecemberConsolidated income statementConsolidated statement of changes in equityConsolidated Cash flow statementNotes to the consolidated financial statementsNotes to the consolidated balance sheetNotes to the consolidated income statementCompany balance sheet as at 31 DecemberCompany as atOther informationIndependent Auditor’s ReportRefernce Information

688

101214161820222428

3233343536424952535658

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A well-established tradition at Surinaamse Brouwerij is that every meeting involving three people or more starts with the topic of Safety. Surinaamse Brouwerij has a strong focus and a good reputation with regard to safety, both within HEINEKEN worldwide and in the region in which we operate. In 2017 we achieved a respectable number of 1,082 accident-free days, which is a record and an amazing achievement. Achieving a record is noteworthy, but it is not our goal. The goal is to work as safely as possible so that our employees can return home safely to their families at the end of the working day. Surinaamse Brouwerij works with external parties (contractors,

suppliers, partners with whom we do business) and from within our organisation we demand that they too comply with our rules and are constantly alert to the issue of safety. Unfortunately we suffered two accidents in 2017 that show yet again that accidents can happen despite our best efforts. Although regrettable, the two accidents have at least refocused our entire organisation.

2017 was a reasonably good year overall, and Surinaamse Brouwerij was able to achieve a reasonable operating result under the macro-economic conditions. The growth in our sales by 24% combined with our ability to limit the rise in costs has resulted in an increase in the Operating Profit result by 3.8%, and a reduction in the financial costs resulted in a 37% increase in the Net Profit.

As part of the masterplan to prepare our brewery for the future we launched a major Supply Chain project in 2017, namely the construction of a new brewhouse. This project will significantly expand our production capacity. We also started the expansion of our storage and warehousing capacity on the brewery site. We also continued to innovate in 2017 and launched new products including Radler Cherry and Ginger, the Mexican beer brand Sol and a new can pack type for the Heineken brand.

We implemented significant organisational changes in 2017 in order to make our company more effective, including splitting the Logistcs and Warehouse activities into two separate departments, introducing our Corporate Affairs & Facility Management department, and merging the Sales, Trade Marketing and Marketing departments into one department, namely the Commerce department.

These organisational changes have helped to strengthen our Leadership Team (LT) with additional responsibilities and empowerment. The LT now consists of 24 colleagues who all head a department. The LT, of which the Management Team (MT) is a part, providesthe the actual leadership of the brewery.

The LT has conducted a number of creative thought and discussion sessions over the past year in order to redefine our three year strategy. The aim was to do this together so that we are all committed to the changes that are needed in order to be able to successfully implement the new strategy. All change can offer something positive, and in this case it resulted in a new mission and vision and 2020 strategy entitled ‘Good to Great’ (GtG).

GtG consists of four pillars. Firstly we will invest in our staff by developing them and keeping them engaged with the business.

Foreword from the Managing Director2017 was a year of change for Surinaamse Brouwerij...

Secondly we will commit ourselves commercially to growing sales. This does not simply involve selling more product, but also increasing the quality of the sales by focusing on the premium segment of the market. Thirdly we will perform efficiently from start to finish. That means a cost-conscious operation, efficient production, better budget management and tighter supervision within the Supply Chain from everything that we put in through to what comes out. Fourthly we want to focus specifically on a better Suriname with our sustainability agenda ‘Brewing a Better World’ by doing business in our beautiful country in a socially responsible way.

We think it is worth emphasising that the discussions with the trade union over the past year have again

been constructive. We have mutually agreed to spread salary increase in alignment with the results achieved in view of the macro-economic situation. Our trade union recognises that it is sometimes necessary to take austerity measures. However, we have also agreed that if the opportunity arises we will also allow the employees to share in the good results that are achieved. We are also enabling our retired employees to share in this; respect for elders is one of the defining aspects of Surinamese culture.

2018Looking forward to 2018 the organization of Surinaamse Brouwerij will continue to develop, and we will also continue to launch new products. We hope to be able to sample the first brew from the new brewhouse in October. In this

way Surinaamse Brouwerij will continue to change and improve in close collaboration between all the departments with engaged and motivated employees.

E.H. Weggemans

Managing DirectorParamaribo, 14 May 2018

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Management ReportFinancial results

In macro-economic terms, the crisis in 2017 has not yet come to an end, but its ferocity has diminished somewhat. Gross National Product has developed as follows: -10.8% in 2016, -1.2% in 2017 and the expectation for 2018 is +1.2%. At the end of 2017 the average annual inflation was 22%. Although the USD/SRD exchange rate stabilised in 2017 at SRD 7.50, the average annual exchange rate compared to the average for 2016 rose by 21% from SRD 6.3 to SRD 7.6.

Despite the ongoing crisis, Surinaamse Brouwerij has again completed a reasonably good year. The net result rose by 37%, which can be explained by a number of factors.

The growth in our sales by 24% was partly driven by a total increase in volume of 2.1% and the ongoing effect of the price rises implemented in 2016, together with

one price increase with effect from 1 October 2017.

This increase was only part of our portfolio, namely Parbo Regular, the 1 litre returnable packaging and the 50cl and 33cl cans. The increased volume mainly resulted from the growth of the Parbo range and the Radler and Desperados innovations.

The total cost of ingredients, raw materials, consumables and services rose by a total of 39%. The increased cost mostly resulted from the average rise in the exchange rate of 22% and increased purchase prices on part of our imported beer range, partly offset by our cost-saving programme for ingredients and packaging materials.

The cost-saving programme entitled ‘Refuel for Growth’ is directed from the regional head office and is designed to stimulate profit growth.

Volume growth

2%

Relevant growth devolopments

Revenue growth

24%Growth of operating result

3.8%+3,8%

2016

109,4

113,5

2017

Growth of net result

37%+37%

2016 2017

The increase in costs for our services was driven by an average increase in marketing costs by 78%, the costs of energy and water by 45%, maintenance costs by 103% and other general costs by 23%.

The marketing costs mainly rose as a result of the costs of developing our new TV commercial (which was launched in 2018), supporting our innovation programme and the use of a new accounting rule whereby all POS materials are recorded as costs on arrival in the warehouse whilst previously, these materials were only entered as costs when they were used.

The maintenance costs doubled in 2017 versus 2016 as a result of the maintenance that was deferred in 2016 and exchange rate increase.

The higher costs of energy and water are a result of an increase in water charges by 100%, petrol and diesel costs by 25% and crude oil costs by 120%.

Revenue

Financial and operational highlights

in SRD/ M

20172016201520142013

353284

190220

205

Operating resultin SRD/ M

20172016201520142013

113109

11767

59

Net resultin SRD/ M

20172016201520142013

6649

4243

36

Personnel costs rose by 24%. This is partly explained by an average increase in salaries by 37%, the costs of expats rose by 12% and medical expenses rose by 40%.

The increase in the depreciation costs by 55% was mainly caused by the reduction of the lifespan of the 1 litre returnable bottle from 7 to 3 years. In line with our investment programme, we spent SRD 55 million on - amongst other things - safe operation in the production environment, expanding our warehouses, replacing part of the machinery and vehicle fleet, returnable packaging materials and sub-zero refrigerators. We also started the development of a new brewhouse, which will be completed in October 2018.

As a result of the growth in sales revenues on the one hand and the increase in costs on the other hand, our operating result rose by 3.8% compared to 2016, which resulted in a growth of the net result by 37%

as a result of a reduction in financial costs. This was caused by lower exchange rate differences (-75%) partly offset by higher interest costs (+104%). The lower exchange rate differences resulted from the application of the group accounting policies whereby unrealised exchange rate differences on group loans are included in the item ‘Shareholders’ Equity’ on the balance sheet.

The higher interest costs materialized partly from group loans for a total of EUR 12 million at the end of 2017, and partly from a higher amount of interest paid arising from the provision for medical expenses.

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Five year consolidated key figures

In euros

Balance sheet total

Revenue

Net profit

Cash dividend

Pay-out ratio in % of net profit

Cash dividend / ordinary shares SRD 5.00

Number of issued and paid-in ordinary shares

Net profit per SRD 5.00 share

Share price at year-end

Share price/earnings per share

EUR exchange rate (SRD/EUR)

Year-end

Average

USD exchange rate (SRD/USD)

Year-end

Average

2017

33,377,122

41,432,105

7,785,116

7,055,037

91%

74.37

94,860

82.07

316.77

3.9

9.000

8.524

7.520

7.564

2015

28,522,466

49,855,818

10,977,909

11,032,635

100%

116.30

94,860

115.73

583.88

5.0

4.590

3.818

4.200

3.446

2016

28,681,143

40,713,682

6,972,932

7,015,196

101%

73.95

94,860

73.51

387.43

5.3

7.920

6.969

7.500

6.311

2014

32,148,521

43,709,733

9,537,722

9,530,000

100%

100.46

94,860

100.55

649.51

6.5

4.080

4.460

3.350

3.350

2013

25,076,128

40,664,336

8,165,734

8,159,393

100%

86.01

94,860

86.08

336.01

3.9

4.610

4.450

3.350

3.350

In order to give a clear insight into the development of the operating results, the table below shows important data from the annual figures (expressed in EUR unless otherwise stated). For balance sheet accounts, the year-end exchange rate is used, while for income statement related accounts, the average exchange rate is used to convert SRD to EUR.

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Developments within theSupply Chain department

Many operational and staffing changes took place in the Supply Chain department in 2017. We worked hard on the introduction of new products together with new packaging materials. All the preparations have been made for the major construction work which will take place in 2018. There was intensive collaboration with other disciplines in order to improve the operating result in the short and long term. We also had a ‘reality check’ when we suffered two accidents in the brewery after 1,082 accident-free days. In short, it was a eventful year for the company.

Safety has the highest priority in the brewery, particularly in the Supply Chain. In 2017 we were well on our way to our third year without accidents, but unfortunately accidents occurred on 11 October and 30 December. Investigations into the cause found - as with most accidents - that human error was the most important underlying cause. We have used toolbox sessions to increase the employees’ alertness and one of the victims also shared his story with all employees during the brewery day. This has had a big impact.

The many construction activities in the brewery meant that we also had to put extra focus heavily on contractor safety in 2017. We invited all 16 parties working in the brewery to a number of meetings at which

we explained why safety has the highest priority and how we are implementing that. These sessions not only ensured that safety awareness increased, but also improved the collaboration with the contractors.

Quality is also very important to us. We are constantly measuring and analysing our products and processes so that we can offer our customers the best product. Every year we are audited by the prestigious lower case institute, which spends a week carefully evaluating our processes and quality during the brewing, fermentation, maturation, packaging, sale and distribution of beer. The outcome of the audit in November was that we meet the highest qualification criteria and have thereby extended our ISO 9001 and FSSC 22000 certificates. In addition to the audit, our quality department made a major contribution to the realisation of the two new Radler flavours that we launched in 2017.

We introduced the HEINEKEN ‘Sales & Operations Planning (S&OP) programme in 2017 with the aim of optimising the supply and demand between Sales and Supply Chain departments, with the prerequisites of looking 6 and 12 months ahead and never being ‘out of stock’. This programme also encourages us to collaborate more efficiently and

effectively in order to make the right decisions for the business.Our contribution to the ‘Refuel for Growth’ cost-saving programme was the considerable cost saving on ingredients and packaging materials which was achieved in collaboration with the Finance and Procurement departments. By making use of our regional contacts we were able to improve our contracts with current suppliers and/or switch to other suppliers in order to achieve cheaper purchase prices.

Although the Commerce and Support departments are operating

temporarily from the Ringweg location, the aforementioned multidisciplinary projects together with our 2020 strategy resulted in more regular collaboration, and this benefited the operating result in many areas.

Over recent years we have worked hard to draw up the Masterplan which describes all the construction work and production modifications required to get our brewery ready for the future. The first steps were taken in 2017 in realising the Masterplan, including preparations for the construction of a new

brewhouse in order to increase our production capacity and the expansion of our warehouse storage capacity for ingredients, materials and finished products. The plan is for Surinaamse Brouwerij to be fully equipped for the future with the new ‘state of the art’ brewhouse by the end of 2018.

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Commercial insights

Surinaamse Brouwerij is always innovating, and this year we have again launched new product innovations, namely Radler ginger and cherry and Radler lime in a new 33cl can packaging. The trick is to continue to surprise, innovate and to ensure that PARBO Bier maintains its brand value.

We have also introduced Sol, a refreshing Mexican beer, to Suriname, and we introduced the Heineken® 25cl can in order to offer the ‘premium’ segment a more affordable product.

Simultaneous to rolling out our innovation programme, we have devoted a lot of time to in-store promotions. We have invested substantially in the number of merchandisers in order to provide selected stores with the right promotional displays.

We have also rolled out our ‘Excellent Outlet Execution Strategy’ further, whereby the focus has been placed on the ‘Picture of Success’ in our sales outlets, often defined by brand. For example, this means that the PARBO brand is always visible in the same high quality manner in all stores, with features including sub-zero refrigerators.

Our existing programme to build sales outlets domestically continuedin 2017. Hence we have established another 4 outlets in partnership with local entrepreneurs in various

districts at strategic locations on the water or near the river which are also visited by many tourists. Apart from the fact that this enables us to provide local consumers with fresh and cold beer, Surinaamse Brouwerij is thereby also fulfilling its responsibility to collect the empty bottles that local residents can bring to these locations.

The ‘Revenue Management’ (RM) programme was launched from our regional head office in order to grow our revenue. The aim of this programme is to respond to consumer behaviour with price, packaging and availability of the right product in such a way that extra revenue is generated.

The RM and S&OP programme offer us the opportunity to predict much better from within Commerce what the expectations are so that we can achieve efficiency gains in procurement and stock control. This will result in predictability and structure and improved collaboration between Commerce, Finance and Supply Chain.

One of our GtG projects which was launched in 2017 is the ‘customer in our heart’ project. With this project we have started working in an even more service-oriented way, namely from ‘Good to Great’. We have carried out a lot of research in order to improve our service as perceived by customers. The first results of this will become visible in 2018.

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Our employees

Over the past few years, Surinaamse Brouwerij has adopted the ‘Performance Management’ cycle, in which every employee is given targets to achieve every year. We recognise that the targets are challenging, partly because we work in an environment which is constantly changing and requires adaptation.

In practice not everyone is able to meet the (new) expectations that are set. That is why this year we have introduced the personal improvement plan with the aim of helping employees with ongoing lagging performance to get on top of their job again.Surinaamse Brouwerij does not have an inherent clear ‘feedback’ culture. It is important to formalise both personal development and personal improvement.

The aim is positive: we are working to support people in a changing world and offer them the right tools for the future.

As a company, Surinaamse Brouwerij again achieved high scores in the Climate Survey study in 2017. Employees and management shape the work together, and both sides need to be engaged with the process. With an engagement index of 83% amongst all employees, we

EmployeeEngagement Index

Our score

83%

achieved a high score compared to other organisations within HEINEKEN worldwide. At 1.58% the absenteeism percentage is very low compared to other organisations. This figure is also fairly consistent as a result of good effective policies. Surinaamse Brouwerij implemented many changes in staffing of the organisation in 2017. The organisation has 112 employees and around 70 staff employed through contractors both of whom we want to offer the opportunity to continue to develop. Last year we were able to transfer 16 colleagues to another role internally, including 11 promotions.

Changes in the organisational structure and the departure of a number of people also allowed us to hire 13 new talented colleagues with the training, knowledge and experience needed to further strengthen our organisation.

We are enormously proud of the fact that for the first time in history we have been able to transfer two colleagues from Surinaamse Brouwerij to other HEINEKEN organisations outside Suriname, one to Curaçao and one to the Netherlands.

We have been able to fill many positions with young Surinamese talent, and employees can also continue to develop at their current level. The opportunities and possibilities for development offered to local Surinamese

colleagues at Surinaamse Brouwerij have a positive effect on these employees themselves and on the outside world.

Surinaamse Brouwerij has a good understanding with the trade union, which has also shown leadership with regard to the employees and organisation, and partly thanks to that attitude, we were able to conclude a good Collective Labour Agreement in May 2017.

A lot of time has been devoted to developing and positioning the LT over the past year. We have worked jointly on team-building, which has been supported by the Insights Discovery model amongst other things. This model is a simple colour model that provides insight into one another’s behavioural preferences and is intended to create mutual understanding about each

person’s way of working in order to strengthen the collaboration and further improve the results. We are very enthusiastic about the model and will roll it out further within the organisation in 2018.

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Management team

General Manager at Surinaamse Brouwerij N.V. since January 2016. Joined HEINEKEN in 1990. Occupied sales roles at HEINEKEN Netherlands and then commercial roles at HEINEKEN Export Group in Eastern Europe and Asia. Has occupied management positions in recent years in: Dubai (Commercial Manager), Nigeria (Commercial Manager), the Netherlands (General Manager Europe Export & Global Duty Free). Managing Director he has overall responsibility for all areas: Finance, Human Resources, Corporate Relations, Supply Chain, Marketing, Sales and Corporate IT.

Supply Chain Manager at Surinaamse Brouwerij N.V. since June 2017. Joined HEINEKEN in 2003, where he started as an Management Trainee and then worked as a Procurement Analyst, Logistics Supervisor and Maintenance Manager. In 2014 he and his family moved to Haiti, where he worked as Logistics and Production Manager at the local HEINEKEN Brewery.

Finance Manager at Surinaamse Brouwerij N.V. since May 2008. Joined Surinaamse Brouwerij N.V. in 2002 as Internal Financial Controller. Before joining HEINEKEN she worked as an associate auditor with Ernst & Young Accountants.

Sales Manager at Surinaamse Brouwerij N.V. since October 2014. Joined Surinaamse Brouwerij N.V. in 2012 as Global Information Services Manager.Before joining Heineken he worked on various projects as Business Developer in both the Netherlands and Suriname. Occupied various management roles with listed companies in the Netherlands (USG People, KPN, TPG).

Human Resources Manager at Surinaamse Brouwerij N.V. since October 2015.Joined HEINEKEN International in 2011, and has occupied various HR roles there. Before joining HEINEKEN she worked at organisational consultants Hay Group, where she carried out HR projects for various companies.

Ed Weggemans | Managing Director

Friso Lefeber | Supply Chain Manager

Zohrina Ramdjan Habieb | Finance Manager

Fayzal Abdoelrazak | Commercial Manager

Linda van Donk | Human Resourses Manager

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The consolidated net profit for the financial year 2017, including the actuarial results arising from provision for medical expenses after retirement and the exchange rate differences arising from the revaluation of group loans, is SRD 60,151,031. In accordance with article 18 paragraph 2 of the articles of association a sum of SRD 3.00 per preference share with a nominal value of SRD 50 of this will accrue to the preference shareholders, and a sum of SRD 0.25 per ordinary share with a nominal value of SRD 5 will accrue to the ordinary shareholders.These sums are 6% and 5% respectively of the issued and paid-in capital per share. The preference and ordinary shareholders thereby have a statutory entitlement to a payment of SRD 132 and SRD 23,715 respectively, after which a sum of SRD 60,127,184 will be at the disposal of the General Meeting of Shareholders.

The board’s proposal is to pay a dividend from this sum of SRD 630.75 per SRD 5 ordinary share and SRD 6,307 per SRD 50 preference share. This makes the total dividend including the statutory part SRD 631 per SRD 5 ordinary share and SRD 6,310 per SRD 50 preference share.

Report from the Supervisory BoardIn accordance with the provisions of article 17 paragraph 3 of the articles of association we are submitting the annual accounts prepared by the Directors of Management team for approval by the General Meeting of Shareholders. The annual report have been audited by Lutchman & Co. We ask you to approve this annual report together with the audit report from Lutchman & Co.

With our approval, the interim dividend of SRD 283 per SRD 5 share and SRD 2,830 per SRD 50 preference share was made payable in November 2017. Taking account of this, if our proposal is approved, the final dividend will be set at SRD 348 per SRD 5 ordinary share and SRD 3,480 per SRD 50 preference share. These sums include the aforementioned statutory dividend, and will be made payable with deduction of the dividend tax due.

The approval of the annual report serves to discharge the Management of responsibility for its management and the Supervisory Board of responsibility for its supervision.

Supervisory BoardThe composition of the Supervisory Board changed in 2017 with the appointment of Mr A. Ramdin as a Board Member at an Extraordinary Meeting of Shareholders on 26 October 2017. The Board has decided to appoint Mr M. Loor as Chairman.

MeetingsThe Supervisory Board met on 29 March, 21 June and 26 October 2017.Various topics were discussed at these meetings, including the strategy, investments and

construction works, the operating results, communication with the authorities concerning tax measures relating to the production of beer, the payment of interim dividend, the financial position, risk management and auditing of the business. Attention was also paid to changing market conditions and how to respond to these. The members actively participated in the discussions and decision-making in the Board’s meetings.

In addition to the meetings of Management, the Supervisory Board members had discussions with the Executive Board in preparation for meetings of the Board and to supervise the progress of the strategy.

Safety and EnvironmentThe Supervisory Board is satisfied with the commercial and financial strategy pursued, but also with the efforts being made by Surinaamse Brouwerij in the areas of safety and the environment. Substantial progress is being made with a high degree of employee engagement. This not only enhances the welfare of the employees, but also helps to safeguard the future of the business.

ThanksWe would like to express our gratitude for the way in which the Management and employees have again worked actively to cope with the challenging market conditions in 2017 and have again succeeded in ending the year on a positive note.

Supervisory Board members

Mr M. Loor (Chairman)

Mr L. Naarden

Mr H. Parson

Mr A. Ramdin

Paramaribo, 14 May 2018

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Supervisory Board

Company lawyer at HEINEKEN head office in Amsterdam since 2003 with overall legal responsibility for the HEINEKEN operations in the Americas region. Also a member of the HEINEKEN Americas Leadership Team. Director of Carib Development Company Ltd (Trinidad) and of Desnoes & Geddes Ltd. (Jamaica). Prior to his career with HEINEKEN he worked as an attorney with Allen & Overy LLP and Loef Claeys Verbeke in Amsterdam.

Following his return to Suriname in 1993, Albert Ramdin worked in various roles within the civil service, after which he worked as Marketing Manager with British American Tobacco Suriname. Between 1997 and 2015 he held the following positions, amongst others: Ambassador for Suriname with the Organisation of American States in Washington DC; Assistant Secretary General of the Caribbean Community in Georgetown, Guyana; Adviser to the Secretary General of the OAS; Assistant Secretary General of the OAS. Following his return to Suriname in 2015 he first worked as Adviser to the Minister of Foreign Affairs. Since April 2016 he has been a member of the Management Team of Newmont Suriname in the role of Senior Director External Relations. He also holds a host of advisory positions in regional and international organisations.

Retired from De Surinaamsche Bank N.V. in 2017, where he had worked since 1998, most recently in the role of Financial Director. Prior to his career with DSB he occupied management positions with companies including Volkskredietbank in Suriname and French accents Societe des Bois Tropicaux in French Guyana. His activities now involve consultancy on financial and economic matters.

Martin Loor

Employed with various profit and non-profit organisations in the Netherlands, the Netherlands Antilles, Suriname, the Caribbean and the United States as an occupational and organisational psychologist since 1981.Owner and Director of Naarden Advice and Management Enterprise, LLC., Suriname Yellow Pages N.V. and Master Licensee for Leadership Management International, Inc. for Florida and the Caribbean Region.

Lucien Naarden

Hemmo Parson

Albert Ramdin

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Corporate Social Responsibility

In all the disciplines within Surinaamse Brouwerij Corporate Social Responsibility (CSR) is a topic that is on the agenda every day, and also forms part of our business strategy. Respect for people and the environment is important in everything we do and how we do it, both now and in the future. Our sustainability strategy, Brewing a Better World, focuses on 6 areas where we can make the biggest difference and we take account of environmental and social issues when developing our strategy. These areas are Clean Water, Reducing Carbon Emissions, Sustainable Procurement, Responsible Alcohol Consumption, Promoting Health and Safety and Social Growth. We achieve progress in these areas every year. Although we know that there is still much to do, we are seeing a structural improvement in our sustainable growth combined with innovation.

Protecting water resourcesWater is used at various points during the brewing process in our Supply Chain. Beer consists of about 95% water, but water is also used - amongst other things - for cleaning returnable bottles and during the pasteurisation process.As demand for clean drinking water continues to rise worldwide, Surinaamse Brouwerij acknowledges its responsibility by using water as sparingly as possible during the production process and also by treating the waste water in our own water treatment plant.

Reducing CO2 emissionsClimate change is one of the biggest threats confronting us worldwide. As part of HEINEKEN, Surinaamse Brouwerij is also actively contributing to the reduction in CO2 emissions. Hence we are able to reuse 85% of our waste streams from production together with our recycling partners, and we have managed to export more than 60 metric tons of glass and plastic waste for reuse.

Local and sustainable procurement Sustainability is managed from within Finance by closely monitoring compliance with Supplier. The Supply Code is a crucial tool for communicating our values and expectations with regard to the environment, human rights and ethical business practices to our suppliers. The aim of this code is to stipulate requirements for the monitoring of and compliance with the Supplier Code. The implementation of the Supplier Code is one of the most

important elements of sustainable procurement in our ‘Brewing a Better World’ programme.We source Surinamese rice locally as part of the brewing recipe.

The programme also involves purchasing primarily local services, such as support with marketing and sales, point-of-sale material, financial services etc.

We are also contributing by purchasing only environmentally-friendly energy efficient refrigerators.

26 27


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Responsible consumptionSurinaamse Brouwerij is one of the three founders of Stichting Verantwoord Alcoholgebruik Suriname (Foundation for Responsible Alcohol Consumption Suriname - Stivasur). This is a self-regulating organisation in which we work with others to promote responsible alcohol consumption.

Hence we focused on road safety in 2017, with Stivasur through a billboard campaign. This campaign draws consumers’ attention to the negative consequences of misusing alcohol and the risks of drunk driving. It was the first road safety campaign conducted together with the Suriname Police Service during Road Safety Month. During the UEFA Champions League matches we promoted responsible alcohol consumption with the campaign

‘when you drive, never drink’. And during the busy month of December, we did this using a mini-documentary which showed what alcohol does to your body, how to be responsible with alcohol, and particularly that driving with alcohol is the wrong choice.

We hold water breaks during our Parbo events where alcohol is sold when we distribute free water over periods of around 20 minutes and encourage people to drink less (quickly) and to alternate with water.

As in previous years, we again had a partnership with Surinaamse Taxicentrale STC 1660 in 2017. Surinaamse Brouwerij provides the taxis with stickers with the text ‘Biertje op, laat je rijden’ (‘Had a beer, get a ride’), which is now a very recognisable campaign on the

bright yellow cars. At Surinaamse Brouwerij we are always thinking about the consumer when we develop our campaigns.

Hence we want to give something back to the people of Suriname with the Parbo Night events. These free events are attended by 15,000 visitors.

Health and safetyOur employees are close to the product in the Surinaamse Brouwerij. On the basis of ‘doing what you say’, we also encourage our people to consume alcohol responsibly, by utilizing the internal campaign Cool@Work which prohibits the consumption of alcohol during working hours.

Our employees are conscious of the fact that they work with alcoholic products and that model social behaviour is important with respect to our customers and consumers. We not only say it, we also monitor and measure it. Safety has the highest priority for us, and in this regard we introduced the HEINEKEN ‘Life Saving Rules’ in 2017 for employees including our drivers and sales representatives, whereby they were extensively instructed about issues including road safety ranging from defensive driving to checking tyre pressures. In this way we are taking responsibility together for a safe environment.

Growing with communitiesThe pillar ‘Growing with communities’ enables us to contribute to the communities in which we operate. We are growing along with local communities by - for example - creating jobs, paying taxes and supporting local suppliers.

One of the activities in that regard is our Community Service and our non-commercial sponsorships. Our policy in this area enables us to contribute to activities that benefit the Surinamese community, whereby that contribution is primarily driven by the social engagement that is felt by the employees of Surinaamse Brouwerij.

Activities that qualify for this have to comply with pre-defined stipulations, and the award is done on the basis of meeting these stipulations.

Our partnerships such as the one with Conservation International Suriname also contribute to the preservation and protection of nature. Within this partnership we are contributing to the ‘Friends of Green Suriname’ programme. We recently extended this partnership by another three years.

Surinaamse Brouwerij is a business that encourages sustainable entrepreneurship. In the interior of Suriname, the brewery is investing in partnerships with local

entrepreneurs which is contributing to the sustainable development of tourism in the interior. Over the past two years Surinaamse Brouwerij has been carrying out a project whereby sales outlets with terraces are being built along the rivers of Suriname in conjunction with local entrepreneurs with the aim of serving tourists, creating a meeting place for the local community and - very importantly - establishing a collection point for the returnable packaging materials (bottles and crates). The terraces that are being built are multifunctional and provide employment and structure in the area. They also enable the community to gather for social and cultural events. Six of these outlets have already been created, and we will expand this number further in 2018.

In order to tackle the challenges of the returnable bottle system, we established a collaboration with Organize Global in October 2017 to collect our Parbo deposit bottles from consumers’ homes. The returnable bottle system has much less impact on the environment than single-use packaging. However this system is still a challenge in Suriname because consumers do not optimally return the retuable bottles through the available channels.

28 29


Driving a sustainable business is essential to ensure that our company and brands succeed in the long term.

Surinaamse Brouwerij - Our efforts towards Brewing a Better World

Sustainability report

At Surinaamse Brouwerij we have put sustainability at the core of our activities. This is our progress in 2017.

Ensuring contractor safety at theSurinaamse BrouwerijAs we expand our brewery, safety remains a top priority. Ensuring our construction contractors follow the same strict safety standards as we apply within our breweries has been a key concern. To address it, we we conducted safety briefings with all of our contractors which have helped to improve both safety awarenessand collaboration.

Promoting growth and prosperity in SurinameIn 2017, we created a new venture with local entrepreneurs in the remote interior of Suriname.Our financial investment has a total of 10 new outlets which function as community meeting points to promote newbusiness in these regions. The outlets provide a focus for the local community and a hub for collecting emptybottles, thus also promoting our recycling initiatives.

Our partnership with Conservation InternationalWe’re committed to protecting and preserving our country’s unique natural heritage.For the last three years, Surinaamse Brouwerij has been a member of the Friends of Green Suriname. We’ve supported a number of

projects, for example Building withNature at Weg naar Zee which has tackled coastal erosion and restored part of the coastline, and the renovation of the Voltzberg Research Station which houses experts undertaking research on the Central Suriname Nature Reserve.

Our global commitmentSustainability has been fundamental to HEINEKEN for many years. Today, our global ambition is to Brew a Better World from barley to bar. It’s this commitment that unites our global brands in respecting people, planet and prosperity.

We focus on the six areas where we can make the biggest difference. This shapes our contribution towards delivering the UN Sustainable Development Goals for 2030. Overall we’re making good progress, putting us on track to reach most of our Brewing a Better World 2020 commitments with more to do in some areas.

CO2

Surinaamse Brouwerij - Our contribution towards Brewing a Better World

In 2017 As announced last year, we invested 10% of our Heineken® media budget in the campaign ‘When You Drive, Never Drink’

4.9 hl/hl Our water use in production increased by 5%, mainly due to introduction of new products; compared to baseline year 2008 our water intake was reduced by 26%

16.8 kg CO -eq/hlOur relative CO2 emissions fromproduction increased by 19%; we areinvestigating the cause and will takeactions to reverse this trend.

2

60 MTof glass cullet and HDPE (plastic), which is the material we use for crates, was exported for recycling for the first time, reducing our impact on the environment.

100%compliance in contractor safety.

LGBTWe signed the LGBT declaration ofParamaribo, aiming to support aLGBT-inclusive work environmentin Suriname.

€15 millioninvested (2017-2018) in expandingcapacity, upgrading facilities and othercapital investments.

€32,000donated to support the work of NGOs in environmental conservation, education and responsible consumption.

In 2018, we will initiate and drive collaborationwith stakeholders in the market forsustainable glass and can recycling.

Brewing a Better World focuses on six areas:

Protecting water resourses

Advocating responsible consumption

Promoting health and safety

Growing with communities

Reducing CO2 emissions

Sourcing sustainably

30 31

S U R I N A A M S E B R O U W E R I J N . V . 2 0 1 7 A N N U A L R E P O R TS U R I N A A M S E B R O U W E R I J N . V . 2 0 1 7 A N N U A L R E P O R T

Report on the 2017consolidated financial statements

32 33


Consolidated balance sheet as at 31 December(Before proposed profit appropriation)


Assets

Tangible fixed assets

Intangible assets

Long-term receivables

Deferred tax asset

Total non-current assets

Inventories

Securities

Income tax receivable

Receivables

Cash and cash equivalents

Total current assets

Total assets

Equity and liabilities

Shareholders’ equity

Deferred tax liabilities

Provision post-retirement medical benefit plan

Long term incentive plan

Long-term loans

Total non-current liabilities

Income tax payable

Other current liabilities

Total current liabilities

Total equity and liabilities

Note

1

2

3

4

5

6

7

8

9

10

11

12

13

2017

SRD

164,195,495

8,970,631

137,530

9,999,441

183,303,097

24,106,293

1

6,485,427

27,056,547

59,442,735

117,091,003

300,394,100

2016

SRD

132,107,774

9,697,990

275,059

4,025,903

146,106,726

30,419,873

1

6,070,900

8,960,040

35,597,111

81,047,925

227,154,651

62,923,019

3,016,620

8,574,476

1,120,604

108,000,000

120,711,700

29,984,993

86,774,388

116,759,381

300,394,100

64,923,507

3,686,288

5,699,161

670,963

31,680,000

41,736,412

22,011,635

98,483,097

120,494,732

227,154,651

Consolidated income statement for the year ended 31 December

Revenue

Other income

Raw materials, consumables and services

Personnel expenses

Depreciation and amortization

Total expenses

Results from operating activities

Net finance expense

Profit before income tax

Income tax expense

Net profit

Attributable to:

- Shareholders of Amstel Brouwerij B.V.

- Other shareholders

Note

14

15

16

17

18

2017

SRD

353,150,599

432,279

-174,754,335

-41,144,302

-24,192,285

-240,090,922

113,491,956

-9,808,832

103,683,124

-37,325,925

66,357,199

50,630,543

15,726,656

2016

SRD

283,733,642

10,630

-125,539,732

-33,260,216

-15,570,113

-174,370,061

109,374,211

-33,445,522

75,928,689

-27,334,328

48,594,361

37,077,497

11,516,864

34 35


Consolidated statement of changes in shareholders’ equity


Balance as at 1 January 2016

Distribution final dividend 2015

Distribution interim dividend 2016

Net profit 2016

Statutory dividend 2016

Actuarial results due to provision for

post-retirement medical benefits

Excess long term incentive

Balance as at 31 December 2016


Distribution final dividend 2016

Distribution interim dividend 2017

Net profit 2017

Statutory dividend 2017

Revaluation intercompany loan

Actuarial results due to provision for post-retire-

ment medical benefits

Excess Long term incentive plan


Issued and

paid-in capital

SRD

476,500

-

-

-

-

-

-

476,500

476,500

-

-

-

-

-

-

-

476,500

Retained

earnings

SRD

55,273,858

-25,516,553

-13,913,800

48,594,361

-23,847

42,133

-9,145

64,447,007

64,447,007

-34,951,253

-26,969,900

66,357,199

-23,847

-5,120,000

-1,391,309

98,622

62,446,519

Total

equity

SRD

55,750,358

-25,516,553

-13,913,800

48,594,361

-23,847

42,133

-9,145

64,923,507

64,923,507

-34,951,253

-26,969,900

66,357,199

-23,847

-5,120,000

-1,391,309

98,622

62,923,019

Consolidated cash flow statement

Cash flow from operating activities

Net profit


(Gain)/ loss on sale of tangible fixed assets

Interest (income)/ net

Income tax expense

Cash flow from operating activities before changes in

working capital and provision

Change in inventories

Change in receivables

Change in current liabilities

Total change in working capital

Change in provision post-retirement medical benefits

Cash flow from business activities

Interest paid and received

Income and dividend tax paid

Cash flow from operational activities

Investments in tangible fixed assets

Investments in intangible assets

Proceeds from sale of tangible fixed assets

Cash flow from investing activities

Free operational cash flow

Dividends paid

Change in long-term incentive plan

Long term loan receivable

Group loan from Heineken International B.V.

Cash flow from financing activities

Net cash flow

Cash and cash equivalents (including bank overdraft) as at 1 January

Cash and cash equivalents (including bank overdraft) as at 31 December

2016

SRD

48,594,361

15,570,113

-10,630

422,104

27,334,328

91,910,276

-18,253,537

-2,051,316

25,324,868

5,020,015

-469,674

96,460,617

-147,193

-19,151,336

77,162,088

-52,175,028

-10,004,983

65,297

-62,114,714

15,047,374

-39,110,732

261,872

-275,059

31,680,000

-7,443,919

7,603,456

-8,107,867

-504,411

2017

SRD

66,357,199

24,192,285

-432,279

942,949

37,325,925

128,386,079

6,313,580

-18,511,035

1,463,599

-10,733,856

631,267

118,283,490

-474,002

-36,761,702

81,047,786

-56,018,305

-

897,939

-55,120,366

25,927,420

-37,866,065

548,264

137,529

71,200,000

34,019,728

59,947,148

-504,412

59,442,736

36 37


Notes to the consolidated financialstatements

1. Reporting EntitySurinaamse Brouwerij N.V. (SBNV or the ‘Company’) is a limited liability company established and domiciled in Paramaribo, Suriname. The address of the Company’s registered office is Brouwerijweg 1, Paramaribo, Suriname. The company is 76.3% owned by Amstel Brouwerij B.V., a corporation established and registered in Amsterdam, the Netherlands, a wholly-owned subsidiary of Heineken N.V.

Group CompaniesSurinaamse Brouwerij N.V. is at the head of a group of legal entities (collectively referred to as ‘SBNV Group’). On July 4, 2016, Surinaamse Brouwerij N.V., as sole member of the board, acquired dominant control in the Stichting Super Trans Atlantic who has the economic ownership of the economic the intangible and tangible assets.

The consolidated financial statements of the company as at and for the year ended 31 December 2017 comprise of Surinaamse Brouwerij N.V., Parbo Centrale N.V., Stichting Super Trans Atlantic and Premium Beverage Suriname N.V. (together referred to as ‘SBNV Group’). Premium Beverage Suriname N.V. is a dormant company.

SBNV Group is primarily involved in the brewing, bottling, importation, selling, distributing and exportation of beer under the brand names PARBO Bier, PARBO Chiller, PARBO Light, PARBO Radler, Sranan Biri, Heineken ®, Desperados, SOL and Vitamalt.

2. Basis for the preparation of the financial statementsA. Statement of complianceThe consolidated financial statements of SBNV Group have been prepared in accordance with generally accepted accounting principles for financial reporting. These consolidated financial statements have been prepared by management of the company and will be submitted for adoption to the Annual General Meeting of Shareholders on 20 June 2018.

B. Basis of measurementThese consolidated financial statements have been prepared on the historical cost basis unless otherwise indicated.

C. Functional and presentation currencyThe consolidated financial statements are presented in Suriname dollars, which is the company’s functional currency. All financial information presented in SRD has been rounded to the nearest Suriname dollar unless stated otherwise.

D. Use of estimates, assumptions and judgmentsThe consolidated financial statements are prepared based on management making certain judgments, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Estimates in the financial statements are, amongst others, related to the estimated economic life span and residual values of the intangible and tangible fixed assets, provisions for deferred tax liabilities, post-retirement medical benefit plan, obsolete inventories and doubtful debtors. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The information about assumptions and estimation of uncertainties and critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements are described and disclosed within the notes, whenever necessary.


3. Significant accounting policiesGeneralThe accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements and have been applied consistently by SBNV subsidiaries, unless otherwise stated.

A. Basis of consolidation1. SubsidiariesSubsidiaries are entities controlled by SBNV. SBNV controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

2. Loss of controlUpon the loss of control, SBNV derecognizes the assets and liabilities of the subsidiary and the other components of equity related to the subsidiary. Any resulting gain or loss is recognized in the income statement.

3. Transactions eliminated on consolidationIntra-SBNV balances and transactions and any unrealized gains and losses or income and expenses arising from intra-SBNV transactions, are eliminated in preparing the consolidated financial statements.

B. Foreign currencyTransactions in foreign currencies are translated at the exchange rates at the dates of the transactions.Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate as at the balance sheet date using the reference rates ofDe Surinaamsche Bank NV. These exchange rates are as follows:

Foreign currency differences arising from transactions and retranslation are recognized in the income statement. C. Tangible fixed assets1. Owned assetsTangible fixed assets comprise of property, plant and equipment (PPE) which are measured at cost less accumulated depreciation and accumulated impairment losses. Cost comprises the initial purchase price increased with expenditures that are directly attributable to the acquisition of the assets (such as transport and non-recoverable taxes). The cost of self-constructed assets includes the cost of materials and direct labor and any other costs directly attributable to bringing the asset to a working condition for its intended use.

Spare parts that are acquired as part of an equipment purchase and only to be used in connection with this specific equipment that is integral to the functionality of the related equipment are capitalized and amortized as part of that equipment. In all other cases, spare parts are carried as inventory and recognized in the income statement as consumed. Where an item of PPE comprises major components having different useful lives, they are accounted for as separate items of PPE. Returnable packaging in circulation are recorded as PPE and a corresponding liability is recorded in respect of the obligation to repay the customers’ deposits. Deposits paid by customers for returnable items are reflected in the balance sheet within the current liabilities.

2. Subsequent expendituresThe cost of replacing a part of an item of PPE is recognized in the carrying amount of the item or recognized as a separate asset, as appropriate, if it is probable that the future economic benefits embodied within the part will flow to the company and its costs can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of day-to-day servicing of PPE are recognized in the income statement when incurred. 3. DepreciationDeprecation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual value.

USD 1 = SRD 7,52 (Ultimo 2016: USD 1 = SRD 7,50)

EURO 1 = SRD 9,00 (Ultimo 2016: EURO 1 = SRD 7,92)

38 39


Land is not depreciated as it is deemed to have an infinite life. Depreciation on other PPE is charged to the income statement on a straight-line basis over the estimated useful life of the items of PPE. Project in progress are not depreciated.

The estimated useful lives for the current and comparative years are as follows:• Buildings and premises 15-40 years• Plant and machinery 10-30 years• Other tangible fixed assets 5-15 years

4. Gains and losses on saleNet gains on sale of items of PPE are presented in profit and loss as other income. Net losses on sale are included in depreciation. Net gains and losses are recognized in profit and loss when the significant risks and rewards of ownership have been transferred to the buyer, recovery of consideration is probable, the associated costs can be estimated reliably, and there is no continuing management involvement with the PPE.

D. Intangible assets1. GeneralThe intangible assets comprise of the acquired brand name Sranan Biri and activated computer software. The intangible assets are measured at cost less accumulated amortization and possible impairments.

2. Subsequent expenditureSubsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is expensed when incurred.

3. Amortization Amortization is calculated over the cost of the assets, or other amount substituted, less its residual value. Intangible assets with a finite life are amortized on a straight-line basis over their estimated useful lives from the date they are available for use. The estimated useful life of software is three (3) years. Acquired brand names are amortized over a period of 15 years.

4. Gains and losses on sale Net gains on sale of intangible fixed assets are presented in the income statement as other income. Net losses

are included in amortization. Net gains and losses are recognized in the income statement when the significant risks and rewards of ownership have been transferred to the buyer, recovery of consideration is probable, the associated costs can be estimated reliably, and there is no continuing management involvement with the intangible asset.

E. Inventories1. GeneralInventories are measured at the lower of cost and net realizable value. The cost of inventories is based on average cost formula, and includes expenditures incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

2. Finished products and work in progressFinished products and work in progress are measured at manufacturing cost based on average cost and takes into account the production stage reached. Costs include an appropriate share of direct production overheads based on normal operating capacity.

3. Other inventories and spare partsThe cost of other inventories and spare parts is based on average cost price. Value reductions and usage of parts are charged to the income statement. Spare parts that are acquired as part of an equipment purchase and only to be used in connection with this specific equipment are initially capitalized and depreciated as part of the equipment. Where necessary, a provision is recorded for obsolete inventory, which is offset in the inventory value.

F. SecuritiesThe securities are valued at the acquisition cost.

G. Non-derivative financial instruments1. GeneralNon-derivative financial instruments comprise of trade and other receivables, cash and cash equivalents, loans and borrowings, and trade and other payables.Non-derivative financial instruments are recognized initially at fair value plus any directly attributable


transaction costs.

If SBNV Group has a legal right to offset financial assets with financial liabilities and if SBNV intends either to settle on a net basis or to realize the asset and settle the liability simultaneously, financial assets and liabilities are presented in the balance sheet as a net amount. The right of set-off is available today and not contingent on a future event and it is also legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.

2. Financial assetsA financial asset, mainly trade receivables, is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash flows of that asset that can be estimated reliably. All impairment losses are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.

3. Cash and cash equivalentsCash and cash equivalents comprise cash balances and call deposits. Bank overdrafts from an integral part of SBNV Group’s cash management and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.

H. Share capital1. Ordinary and preference sharesOrdinary and preference shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction of equity, net of any tax effects.

2. DividendsDividends are recognized as a liability in the period in which they are declared.

I. Employee benefits1. Defined contribution planA defined contribution plan is a post-employment benefit plan (pension plan) under which SBNV pays fixed contributions into a separate entity. SBNV has no legal or

constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods.

Obligations for contributions to the defined contribution plan are recognized as an employee benefit expense in the income statement in periods during which services are rendered by employees.

2. Defined benefit planA defined benefit plan is a post-employment benefit plan (pension plan) that is not a defined contribution plan. Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

SBNV’s net obligation in respect of defined benefit pension plan pertains to a provision for post-retirement medical benefits. This provision is formed based on commitments by the employer for free medical care for beneficiaries and their relatives entitled to these rights. The provision is determined based on actuarial valuations. The calculations are performed annually by a qualified actuary using the projected unit credit method. SBNV recognizes all actuarial gains and losses arising from defined benefit plans immediately in the equity (retained earnings), and all expenses related to defined benefit plans in personnel expenses, and other net finance income and expenses in the income statement.

3. Share-based payment planLiability for the Long Term Incentive Plan (LTIP) pertains to the remuneration scheme as maintained byHeineken International for certain expatriates.

The grant date fair value, adjusted for expected dividends, of the share rights granted is recognized as personnel expenses with a corresponding increase in equity over the period that the employee becomes unconditionally entitled to the share rights. The costs of the share plan are spread evenly over the performance period, during which vesting conditions are applicable and total amount to be expensed is determined taking into consideration the expected forfeitures.

40 41


At each balance sheet date, SBNV revises its estimates of the number of share rights that are expected to vest, recognizes the impact of the revision of original estimates in the income statement, with a corresponding adjustment to equity.

4. Short-term employee benefitsShort-term employee benefits are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid under short-term benefits if SBNV has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

J. Provisions1. GeneralA provision is recognized if, as a result of a past event, SBNV has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as part of net finance expenses.

K. RevenueRevenue from the sale of products in the ordinary course of business is measured at the fair value of the consideration received or receivable, net of sales tax, excise duties, returns, customer discounts and other sales-related discounts. Revenue from the sale of products is recognized in the income statement when the amount of revenue can be measured reliably, the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of products can be estimated reliably, and there is no continuing management involvement with the products.

L. Other incomeOther income includes gains from sale of PPE. They are recognized in the income statement when risks and

rewards have been transferred to the buyer.

M. ExpensesExpenses are recognized in the year incurred.

N. Interest income, interest expense and other net finance income and expenseInterest income and expenses are recognized as they accrue in the income statement, using the effective interest method.

Other net finance income and expense pertains to interest on the net defined benefit obligation, and foreign currency gains and losses which are reported on a net basis.

Dividend income on securities is recognized in the income statement on the date that SBNV’s right to receive payment is established.

O. Income tax1. GeneralIncome tax comprises current and deferred tax. Current tax and deferred tax are recognized in the income statement except to the extent that it relates to a business combination, or items recognized directly in equity.

2. Current taxCurrent tax is the expected income tax payable or receivable in respect of taxable income or loss for the year, using tax rates enacted or substantively enacted at the balance sheet date, and any adjustment to income tax payable in respect of previous years.

3. Deferred taxDeferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and their tax bases.

Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the balance sheet date and are expected to apply when the related deferred tax asset is realized or the deferred tax liability is settled.


Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different taxable entities which intend to settle current tax liabilities and assets on a net basis or to realize the assets and settle the liabilities simultaneously.

P. Earnings per shareSBNV presents basic earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the company by the weighted average number of ordinary shares outstanding during the year.

Q. Cash flow statementThe consolidated cash flow statement is prepared using the indirect method. Changes in balance sheet items that have not resulted in cash flows such as translation differences and other non-cash items have been eliminated for the purpose of preparing this statement.

Dividends paid to ordinary shareholders are included in financing activities. Dividends received are classified as operating activities. Interest paid is also included in operating activities.

42 43


Notes to the consolidated balance sheet


1. Tangible fixed assets

Cost


Additions

PIP Activation

Disposal



Additions

PIP Activation

Disposals


Accumulated depreciation


Depreciation charge for the year

Disposals



Depreciation charge for the year

Disposals


Net book value

As at 31 December 2016

As at 1 January 2017

As at 31 December 2017

Land and

buildings

SRD

33,294,852

-

22,326,795

-

55,621,647

55,621,647

93,230

5,503,369

-525,278

60,692,968

-17,250,988

-1,711,211

-

-18,962,199

-18,962,199

-1,611,082

525,276

-20,048,005

36,659,448

36,659,448

40,644,963

Plant and

machinery

SRD

119,940,336

-

6,546,285

-12,114

126,474,507

126,474,507

-

8,800,353

-10,067,405

125,207,455

-69,676,915

-5,706,939

-

-75,383,854

-75,383,854

-6,148,785

10,067,408

-71,465,231

51,090,653

51,090,653

53,742,224

Other tang-

ible assets

SRD

19,858,605

4,555,085

-

-73,950

24,339,740

24,339,740

6,901,506

-

-319,643

30,921,603

-14,311,545

-2,800,572

84,937

-17,027,180

-17,027,180

-3,562,943

319,643

-20,270,480

7,312,560

7,312,560

10,651,123

Returnable

packaging

SRD

30,894,745

4,962,243

-

-526,783

35,330,205

35,330,205

8,329,807

-

-

43,660,012

-19,780,226

-3,059,663

530,581

-22,309,308

-22,309,308

-9,595,656

-

-31,904,964

13.020.897

13.020.897

11.755.048

Vehicles

SRD

10,811,788

5,405,343

-

-313,432

15,903,699

15,903,699

3,778,470

-

-2,463,798

17,218,371

-6,936,607

-1,817,986

313,432

-8,441,161

-8,441,161

-2,546,460

1,998,139

-8,989,482

7,462,538

7,462,538

8,228,889

Projects in

progress

SRD

8,239,740

37,195,018

-28,873,080

-

16,561,678

16,561,678

36,915,292

-14,303,722

-

39,173,248

-

-

-

-

-

-

-

-

16,561,678

16,561,678

39,173,248

Total

SRD

223,040,066

52,117,689

-

-926,279

274,231,476

274,231,476

56,018,305

-

-13,376,124

316,873,657

-127,956,281

-15,096,371

928,950

-142,123,702

-142,123,702

-23,464,926

12,910,466

-152,678,162

132,107,774

132,107,774

164,195,495

2. Intangible assets

The movement is as follows:

Book value as at 1 January

Additions

Amortization

Book value as at 31 December

3. Deferred tax asset

The movement of this item is as follows:

Loss before income tax Surinaamse

Brouwerij and Stichting Super Trans Atlantic

Balance as at 1 January

Net loss (36% tax rate)

Actuarial result provision post-retirement

medical benefit

Release of deferred tax liabilities

Balance as at 31 December

2017

SRD

9,697,990

-

-727,359

8,970,631

2017

SRD

17,603,356

4,025,903

6,337,208

747,402

-1,111,072

9,999,441

2016

SRD

166,750

10,004,983

-473,743

9,697,990

2016

SRD

11,183,063

-

4,025,903

-

-

4,025,903

Depreciation is based on the estimated economic lives of the relevant assets. As of 1999, the estimated commercial and fiscal lives are no longer similar due to fiscally accelerated depreciation on specific production investments.

The Additions in intangibles fixed assets pertains to the purchase of the brand name Sranan Biri and the purchase of software for SEM and K-Store, two new

sales applications to support the new way of working within the sales organization.

The deferred tax asset pertains to a net loss carry over from Surinaamse Brouwerij (company) and Stichting Super Trans Atlantic. Management expects sufficient future taxable profit to enable the use of this net loss.

As no profit was realized at year-end, the release of deferred tax liability and the actuarial result from provision for post-retirement medical benefit is respectively subtracted and added to this account.

The fiscal depreciation for 2017 amounts to SRD 20,875,511 and the fiscal book value of property, plant en equipment as at 31 December 2017 amounts to SRD 134,254,508. The item ‘projects in progress, pertains to expenses that are capitalized for property, plant andequipment for which the relevant final status at balance sheet date has not yet been realized.

44 45


4. Inventories

Inventories comprise of:

Raw materials

Non-returnable packaging

Work in progress

Finished goods

Goods for resale

Other inventories and spare parts

Total

7. Receivables

The specification is as follows:

Trade and other receivables

Due from affiliated companies

Prepayments

Total

5. SecuritiesThis pertains to investment in one share of N.V. Hotelmaatschappij Torarica valued at acquisition cost. The market value as at 21 December 2017 amounts to SRD 80.

6. Income tax receivableThe income tax receivable pertains mainly to amounts recoverable from the tax authority for excess incometax payments for the fiscal years 2012, 2013 and 2016.

The increase in trade and other receivables is mainly driven by an increase in consignment sales at year-end and an import duty deposit for a de-palletizer pending import duty exemption for this item.

Increase in advance payments to suppliers is mainly driven by prepayments to suppliers related to our capital expenditures project ‘new brew house’.

2017

SRD

1,656,918

7,220,505

1,454,433

19,438

8,311,181

5,443,818

24,106,293

2017

SRD

8,531,719

494,818

18,030,010

27,056,547

2016

SRD

2,637,609

9,222,771

759,290

80,355

12,282,537

5,437,311

30,419,873

2016

SRD

3,942,433

234,475

4,783,132

8,960,040

8. Cash and cash equivalents

Cash and cash equivalents are comprised as follows:

Cash in bank

Cash on hand

Total

2017

SRD

58,874,346

568,389

59,442,735

2016

SRD

35,060,769

536,342

35,597,111

Cash and cash equivalents are at free disposal of the company.

9. Deferred tax liabilities The deferred tax liabilities relate to the items property, plant & equipment and inventories. With regard to property, plant & equipment, the difference is caused by, on the one hand, deviating principles of valuation for tax purposes and on the other hand

due to deviating economic lives resulting from fiscally accelerated depreciation on specific production assets. For the fiscal valuation of specific inventory groups, the base stock method is applied.

The provision for deferred tax liabilities is compiled as follows:

Lower fiscal book value of tangible fixed assets

Less: valuation difference of land for which, due to the

permanent nature, no deferred tax liability applies

Elimination intercompany profit in inventories of Parbo Centrale

Lower fiscal valuation inventories due to base stock method of

valuation

Valuation difference: commercial versus fiscal principles

Provision deferred tax liabilities, at income tax rate of 36%

2017

SRD

9,716,308

-2,298,169

-3,007,548

3,968,908

8,379,500

3,016,620

2016

SRD

11,517,853

-2,298,169

-3,086,310

4,106,316

10,239,690

3,686,288

46 47


The movement of Projected Benefit Obligation (PBO) is as follows:

PBO value of the liabilities as at 1 January

Withdrawals

Current service costs (including interest)

Past service costs

Actuarial results

PBO value of the liabilities as at 31 December

10. Provision for post-retirement medical benefit planThe calculation is based on current actuarial assumptions in Suriname at a discount rate (after correction for inflation) of 2.78% (2016: 1.9%).

The discount rate uncorrected for inflation is 15% (2016: 7.0%). The annual increase of the yearly medical expenses due to inflation is assumed to be 11.9% (2016: 5.0%).

11. Long-term loansSurinaamse Brouwerij N.V. has two (2) loan agreements with Heineken International. The details are as follows:

The 1st long term loan is a loan agreement between Surinaamse Brouwerij N.V. and Heineken International B.V. dated July 4, 2016 in the amount of Euro 4 milion with an annual interest rate of 1.75%. The loan is unsecured. Loan repayment date is July 5, 2021. Interest is payable from the effective date of the loan until the maturity date. The sole purpose of the loan is for Surinaamse Brouwerij N.V. to pay the purchase price to Transatlantic Group of Companies for certain assets

relating to the brewery “Sranan Biri”. The loan may not be applied for any other purpose.

The 2nd long term loan is a loan agreement between Surinaamse Brouwerij N.V. and Heineken International B.V. effective September 1, 2017 in the amount of Euro 8 milion with an annual interest rate of 1.80%. The loan is unsecured. Loan repayment date is September 1, 2022. Interest is payable from the effective date of the loan until the maturity date.

Interest paid over the book year 2017 for both loans amounts to SRD 962,786 (2016: SRD 276,756).

2017

SRD

5,699,161

-572,572

1,203,839

-

2,244,048

8,574,476

2016

SRD

6,234,668

-479,747

516,744

-506,671

-65,833

5,699,161


12. Income tax payableThis account pertains to income tax payable of Parbo Centrale for the financial year 2017.

OverdraftSBNV is a participant in the Heineken Group’s current account facility with BNP Paribas in Amsterdam withan allocated limit of 4.5 million Euro which consisted

of both EUR and USD facility. SBNV has not issued collaterals or guarantees for this facility. The balance as of 31 December consisted of:

At year-end BNP credit facility stands at zero as SBNV used part of the long term loan of Euro 8 milion to pay off the outstanding balance.

13. Other current liabilities

The specification is as follows:

Due to affiliated companies

Trade payables

Bank overdraft

Other payables and accrued liabilities

Total

Other payables and accrued liabilities

The account can be specified as follows:

Dividends payable

Personnel expenses payable (including expatriates)

Returnable deposit liabilities

Wage tax and Old Age Premiums (AOV) payable

Excise duties and sales tax payable

Other and accrued liabilities

Total

BNP in Euro

BNP in USD

Total

2017

SRD

5,473,062

28,691,215

-

52,610,111

86,774,388

2017

SRD

38,397,948

5,722,444

4,682,407

1,426,050

677,822

1,703,440

52,610,111

2017

SRD

-

-

-

2016

SRD

5,652,291

26,942,075

36,101,523

29,787,208

98,483,097

2016

SRD

13,372,976

5,825,277

2,184,400

644,000

3,609,170

4,151,385

29,787,208

2016

SRD

33,721,747

2,379,776

36,101,523

48 49


Notes to the consolidated income statement

15. Raw materials, consumables and services

Raw materials

Non-returnable packaging

Goods for resale - imported beer

Marketing and selling expenses

Inventory movements

Repair and maintenance

Energy and water

Other expenses

Total

2017

SRD

15,813,320

23,128,124

84,513,164

10,440,004

1,037,809

6,972,717

6,698,223

26,150,974

174,754,335

2016

SRD

12,262,673

18,166,761

61,088,655

5,863,479

-1,117,927

3,440,595

4,609,991

21,225,505

125,539,732

14. Revenue

Revenue is comprised as follows:

Domestic sales

Export sales

Discounts

Total revenue

2017

SRD

347,476,713

5,759,307

-85,421

353,150,599

2016

SRD

280,346,575

4,190,852

-803,785

283,733,642

50 51


Other expenses

Other expenses is composed of:

HEINEKEN Group service fees

Storage and demurrage expenses

Distribution expenses

Third party services

Extra costs returnable packaging liability

HEINEKEN Group IT costs

Production cleaning supplies and other materials

Automation and telecommunication

Security fees

Bank charges

Insurance expenses

Other

Total

2017

SRD

3,227,991

3,086,118

2,619,531

2,388,512

2,052,266

1,772,556

1,597,786

1,577,088

1,531,690

1,254,654

1,225,594

3,817,188

26,150,974

2016

SRD

2,413,346

2,909,766

2,070,006

2,035,122

2,244,000

3,281,396

1,072,890

704,750

1,108,624

728,534

701,317

1,955,754

21,225,505

17. Depreciation and amortization

Depreciation of tangible fixed assets (note 1)

Depreciation of intangible assets (note 1)

Total

2017

SRD

23,464,926

727,359

24,192,285

2016

SRD

15,096,371

473,742

15,570,113

18. Net finance expenses

Interest income

Interest expense

Interest post-retirement medical benefit plan

Net foreign exchange rate (loss)/ gain

Net finance expenses

2017

SRD

102,100

-1,045,049

-801,099

-8,064,784

-9,808,832

2016

SRD

63,007

-485,110

-418,500

-32,604,919

-33,445,522

16. Personnel expenses

The personnel expenses can be specified as follows:

Salaries, holiday allowances and bonuses

Expatriate employee benefits

Other employee benefits and allowances

Employer’s contribution to pension plan

Medical fees

Mutation provision for post-retirement medical benefit

Other personnel costs

Total

Number of employees employed

2017

SRD

18,381,990

10,514,293

3,730,852

2,604,379

1,034,878

402,740

4,475,170

41,144,302

112

2016

SRD

12,875,246

9,395,940

3,330,902

2,600,540

744,503

-408,427

4,721,512

33,260,216

105

52 53


Company balance sheet as at 31 December(Before profit appropriation)


Assets

Tangible fixed assets

Intangible assets

Financial assets

Long-term receivable

Deferred tax asset

Total non-current assets

Inventories

Securities

Income tax receivables

Receivables

Cash and cash equivalents

Total current assets

Total assets

Equity and liabilities

Issued and paid-in capital

Retained earnings

Total equity

Deferred tax liabilities

Provision for post-retirement medical benefit plan

Long term incentive plan

Long-term loans

Total non-current liabilities

Other current liabilities

Total current liabilities

Total equity and liabilities

Note

19

20

21

2017

SRD

143,970,813

8,970,631

98,660,626

63,700

9,537,464

261,203,234

12,787,564

1

6,485,427

18,307,822

38,695,905

76,276,719

337,479,953

2016

SRD

110,672,461

9,697,990

77,112,769

127,400

3,624,818

201,235,438

15,051,026

1

6,070,900

5,027,495

21,178,145

47,327,567

248,563,005

476,500

62,446,519

62,923,019

3,016,620

6,825,579

1,120,604

108,000,000

118,962,803

155,594,131

155,594,131

337,479,953

476,500

64,447,007

64,923,507

3,686,288

4,505,783

670,963

31,680,000

40,543,034

143,096,464

143,096,464

248,563,005

Company income statement for the year ended 31 December

Revenue

Other income

Raw materials, consumables and services

Personnel expenses


Total expenses

Results from operating activities

Net financial expenses

Loss before income tax

Income tax benefit / (expense)

Loss

Share in the net profit (after tax)

Parbo Centrale and Stichting Super Trans Atlantic

Net profit

2017

SRD

86,955,331

427,289

-53,145,715

-27,324,607

-23,447,310

-103,917,632

-16,535,012

-899,197

-17,434,210

6,276,315

-11,157,895

77,515,094

66,357,199

2016

SRD

81,672,252

10,630

-40,770,418

-22,438,254

-15,263,360

-78,472,032

3,210,850

-13,279,788

-10,068,938

3,624,818

-6,444,120

55,038,481

48,594,361

54 55



Dividend income received

100% profit during the year

Actuarial gains and losses

Initial investment in subsidiary



Dividend income received

100% profit during the year

Actuarial gains and losses


19. Financial assetsThe financial assets are related to the wholly owned sub-sidiaries Parbo Centrale N.V., Stichting Super Trans At-lantic and Premium Beverage Suriname N.V. and can be specified as follows:

20. Share capitalThe authorized share capital amounts to SRD 2,382,500 and consist of 476,060 authorized ordinary shares of

SRD 5 each and 44 preference shares at SRD 50 each. Of this amount, the following shares were issued and paid in full at the end of the reporting year:

Premium Beverage Suriname is a dormant company.

Parbo Centrale

N.V.

SRD

26,706,228

-26,706,059

55,751,521

15,815

-

55,767,505

55,767,505

-55,751,521

77,623,347

-215,715

77,423,616

Premium Beverage Suriname

N.V.

SRD

5

-

-

-

-

5

5

-

-

-

5

Stichting Super Trans

Atlantic

SRD

-731,040

-

22,058,299

21,345,259

21,345,259

-

-108,254

-

21,237,005

Total

SRD

26,706,233

-26,706,059

55,038,481

15,815

22,058,299

77,112,769

77,112,769

-55,751,521

77,515,093

-215,715

98,660,626

94.860 ordinary shares, each with a nominal value of SRD 5

44 preferential shares, each with a nominal value of SRD 50

Total

2017

SRD

474,300

2,200

476,500

2016

SRD

474,300

2,200

476,500

21. Retained earnings

The movement in retained earnings are as follows:

Balance as at 1 January

Dividend distribution final prior year

Dividend distribution interim current year

Net profit after tax for the year

Statutory dividend

Actuarial results due to provision for post-retirement

medical benefit plan

Excess long term incentive plan

Revaluation intercompany loan

Balance as at 31 December

2017

SRD

64,447,007

-34,951,253

-26,969,900

66,357,199

-23,847

-1,391,309

98,622

-5,120,00

62,446,519

2016

SRD

55,273,858

-25,516,553

-13,913,800

48,594,361

-23,847

42,133

-9,145

-

64,447,007

56 57


Other information


SharesThe preference shares are registered by name and the ordinary shares are bearer shares and if desired, byname.

Authority rights meeting of priority shareholdersThe Directors of the company are appointed by the General Meeting of Shareholders based on a binding nomination of two persons for each vacancy where by the nomination is established by the meeting of preference shareholders. This procedure also applies at the appointment of the Supervisory Board members.

Statutory stipulations appropriation of profitA statutory dividend is initially distributed out of the net profit at 6% of the paid-in preference shares, and subsequently, at 5% of the paid-in ordinary shares. The final dividend distribution of the remaining net profit, after the statutory dividend, is at the disposal of the General Meeting of Shareholders. If, according to the adopted profit and loss account in any year a loss was suffered, which is not covered by a reserve, no profit distribution shall take place in the subsequent years, as long as said loss has not been cleared.

Distribution of earnings 2016The General Meeting of Shareholders adopted the financial statements 2016 on June 21, 2017, and has approved below profit distribution of 2016, as follows:

Dividend on preference shares (44 shares with nominal value of SRD 50)

Dividend on ordinary shares (94,860 shares with nominal value of SRD 5)

Total

Statutory dividend (preference: SRD 132; ordinary: SRD 23,715)

Addition to retained earnings

Net profit 2016

Per share

5,127

512,75

SRD

225,588

48,639,465

48,865,053

23,847

10,603

48,899,503

Except for the 2017 interim dividend, the above proposed distribution of earnings is not processed in the financial statements 2017.

Net profit for 2017

Less: balance of accumulated actuarial results

Less: revaluation intercompany loan

Profit for 2017 available

Less: statutory profit appropriation:

On preference shares

On ordinary shares

Available to the General Meeting of Shareholders

The management team proposes the following distribution of earnings 2017 to be availa-

ble to the Shareholders as follows:

Cash dividend of SRD 6,307 on 44 preference shares with a nominal value of SRD 50

Cash dividend of SRD 630.75 on 94,860 ordinary shares with a nominal value of SRD 5

Addition to retained earnings

Total

In total

SRD

66,357,199

-1,086,168

-5,120,000

60,151,031

-132

-23,715

60,127,184

In total

SRD

277,508

59,832,945

16,731

60,127,184

Proposed profit appropriation for 2017

58 59


Accountants’ reportIndependent auditor’s report


A. Report on the audit of the financial statements 2017 included in the annual report

Our opinionWe have audited the financial statements 2017 included on pages 32 to 55 of Surinaamse Brouwerij N.V., based in Paramaribo.

IIn our opinion, the accompanying financial statements give a true and fair view of the financial position of Surinaamse Brouwerij N.V. as at 31 December 2017, and of its result and the cashflows for 2017 in accordance with generally accepted accounting principles.

The financial statements comprise: 1. The consolidated and company balance sheet as at 31 December 2017;2. The following statements for 2017: the consolidated and company income statement, the consolidated statement of changes in equity and the consolidated cashflow statement;3. The notes comprising a summary of the accounting policies and other explanatory information.

Basis for our opinionWe conducted our audit in accordance with the generally accepted auditing standards. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the financial statements’ section of our report.

We are independent of Surinaamse Brouwerij N.V. in accordance with the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO) and other relevant independence regulations to the assignment and we have fulfilled our other ethical responsibilities in accordance with these requirements. Furthermore, we have complied with the Verordening gedrags- en beroepsregels accountants

Independent auditor’s report

To the General Meeting of Shareholders of Surinaamse Brouwerij N.V.Paramaribo

(VGBA).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

B. Report on the other information included in the annual report In addition to the financial statements and our auditor’s report thereon, the annual report contains other information that consists of:• Management of the company;• other information.

Based on the following procedures performed, we conclude that the other information is consistent with the financial statements and does not contain material misstatements.

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. With our work, we have complied with the requirements of audit standard 720. This work is not as thorough as our audit work.

Management is responsible for preparing the other information, including the report of the management and the other information, in accordance with generally accepted principles for financial reporting. C. Description of responsibilities regarding the financial statementsResponsibilities of management and supervisory board for the financial statementsManagement is responsible for the preparation and fair presentation of the financial statements in accordance with generally accepted principles for financial

60 61


reporting. Furthermore, the management is responsible for such internal control as the management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, the management is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting framework mentioned, management should prepare the financial statements using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Management should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the financial statements.

The Supervisory Board is responsible for overseeing the company’s process of financial reporting.

Our responsibilities for the audit of the financial statements Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercise professional judgement and have maintained professional skepticism throughout the audit, in accordance with generally accepted auditing

standards, ethical requirements and independence requirements. Our audit included among others:

• identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;• obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control;• evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;• concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern; • evaluating the overall presentation, structure and content of the financial statements, including the disclosures; and• evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit.

Paramaribo, 14 May 2018

Lutchman & Co

On their behalf,signed by Drs. M.R.A. Lutchman RA

62 63


Reference InformationThis report is a publication of Surinaamse Brouwerij N.V. Brouwerijweg 1PO BOX 1854Paramaribo, Suriname

Telephone +597 402255Fax +597 404093www.parbobier.com

The full English annual report can be downloaded as a PDF from www.surinaamsebrouwerij.com

Editor in chiefEgbert H. Weggemans

Final editingBirdy Communicatie BV, Nederland

Production and editing Margarita van der ZwartLisa Thijm

Graphic design and electronic publication Linda Hofland, Birdy Communicatie BV, Nederland

PhotographyHelio PhoeliB-CreativeOwn collectionFabian Vas Experience (foto cover)

PrintingMultiforms N.V., Paramaribo, Suriname

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2017 ANNUAL REPORT

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