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Contents
3
Board of Directors, Management and Subsidiaries
5
The VSH-United Group
6
Manager's Report
12
Auditor's Report
13
Salient Figures
14
Balance Sheet
15
Profit and Loss Account
16
Consolidated Balance Sheet
17
Consolidated Profit and Loss Account
18
Changes in Shareholders’ Equity
19
Consolidated Statement of Source and Use of Funds
20
Notes to the Financial Statements
2
Board of Directors, Management and Subsidiaries
N.V. Verenigde Surinaamse Holdingmij.United Suriname Holding Company Established in Paramaribo
H. Lim A Po, Chairman
R. Khodadin, Vice Chairman
M. Waaldijk
P. Healy
E. Brakke-Geer
Board of Directors
J. Healy Jr., Managing Director
K. Lieuw-Kie-Song, Deputy Managing Director
O. de Vries, Assistant Managing Director / Financial Controller / Secretary
M. Ramsundersingh, Assistant Managing Director/ Legal and HRM Affaires
Management
Subsidiaries
N.V. VSH-Scheepvaartmij.United Suriname Shipping Company
R. Steenland, Managing Director
D. Glans, Assistant Managing Director
Shipping
N.V. VSH-Transportmij.United Suriname Transport Company
R. Steenland, Managing Director
D. Glans, Assistant Managing Director
VSH-UNITED (USA) L.L.C.
Miami, United States of America
R. Steenland, Managing Director
J. Liong A San, Operations Manager
N.V. Uniblue Shipping
K. Lieuw-Kie-Song, Managing Director
N.V. VSH-Staalmij.United Suriname Steel Company
D. Baptist, Managing Director
Manufacturing
Margarine- en Vettenfabriek nv
Margarine, Fats and Oil Company Ltd.
K. Wong Fong Sang, Managing Director
N.V. VSH-Handelmij.United Suriname Trading Company
W. D’Leon, Managing Director
Trading
Real Estate
N.V, VSH-Eigendomsmij.United Suriname Real Estate Company
J. Healy Jr., Acting Managing Director
W. D’Leon, Assistant Managing Director
Investment
N.V. VSH-Beleggingsmij.United Suriname Investment Company
J. Healy Jr., Managing Director
3
The VSH-United Group
The VSH-United Group comprises a holding company and nine subsidiaries, eight of
which are operating in Suriname and one in Miami, Florida, USA.
The Group is forty-seven years old. Its major activities include shipping, trading, and
manufacturing. Other activities include real estate development and management and
investments in other local companies.
The main office of the VSH-United Group is located in a modern office building adjacent to the harbor in Paramaribo.
SURINAME
Suriname a country of 166,000 square kilometers on the northeast shoulder of South
America and home of the VSH-United Group. While a Babylonian profusion of some
seven languages are in everyday use, the official language is Dutch. The population of
some 500,000 souls is one of the most polyglots in the world and includes indeginous
Indians, African descendents, Hindustanis, Javanese, Chinese, Lebanese, Jews and
Europeans. Almost half of the population is concentrated in and around the capital
city of Paramaribo.
Suriname has a strong democratic tradition dating back some 140 years. Legislative
powers are in the hands of the National Assembly composed of 51 members elected
by popular vote for a period of five years. The President is the Head of Government
and is elected for five years by a two thirds majority vote in the National Assembly or
by a common majority vote in the United Peoples Assembly comprised of national,
regional and municipal representatives. The Council of Ministers chaired by the
Vice President consists of 17 member ministers and exercises the highest executive and
administrative power.
Mining is the backbone of the economy. Bauxite is mined and processed into
alumina, an intermediate product for the production of aluminum. Gold is mined in
large, medium and small scale operations and provides employment to hinterland
communities and migrant workers from Brazil.
Crude oil production and refining contributes significantly to the fuel requirements of
industry and electric power generating. Energy requirements are further
complemented by a hydro-electric dam located 90 km south of Paramaribo.
Rice, bananas, shrimp, fish and timber comprise the other traditional export products.
Suriname is the proud guardian of one of the largest expanses of pristine tropical
rainforests in the world. The Central Suriname Nature Reserve (1.6 million hectares) is
the largest of 15 protected areas encompassing 12% of the total land surface of the
country.
Since its establishment in 1958 the VSH-United Group has grown steadily and is well
positioned to participate in the further development of this young nation.
5
Manager’s Report
The parliamentary election held in May 2005 has signaled a significant shift in
Suriname’s political landscape. After the vote was counted the 33 seats previously held
by the incumbent coalition, New Front, were reduced to 23. The NDP headed by
former military leader D. Bouterse won 15 seats, an increase of 5. The other seats went
to VVV (5), A-1 (3) and 5 seats went to a newly formed association of Maroon parties
called A- Combinatie. The New Front swiftly moved to expand the coalition and a new
government headed by President R. Venetiaan was formed with the backing of
A- Combinatie and one member of A-1. The coalition controls 29 of the 51 seats in
Parliament and consists of 8 parties. On the one hand one can expect a continuation of
prudent monetary and budgetary policies from the third Venetiaan government but on
the other hand the reduced number of seats in Parliament and an unwieldy coalition
may affect political stability.
Economic stability and growth were sustained in 2005. Ongoing investment in new
bauxite mines and favorable world market prices for gold, alumina and oil contributed
to growth. Crude oil production increased by 6.6% to 4.38 million barrels. Gold
production amounted to 21.7 ton compared to 13 ton in 2004. Alumina production
was slightly lower than in 2004 and amounted to 1.9 million ton. The construction and
tourist sectors also contributed to economic activity. Tourist arrivals increased by 15%
and hotel occupancy averaged above 75%. Rice production was adversely affected by
weather conditions and declined to 123,000 tons. The banana sector which has been
rehabilitated with assistance from the European Union had to cope with the extra
financial burden of buying quota licenses for entry to the European market. As a result
privatization plans were delayed and financial constraints inhibited further growth in
production. The quota system has been replaced by a tariff only system in 2006 which
will give Suriname bananas a fighting chance on the European market. An important
development was the investment in power generating and distribution capacity by EBS,
the government owned utility company. In addition, a new power line was built from
Paranam to Paramaribo thereby increasing the transmission capacity of electricity from
the hydro-power installation at Afobakka. Meanwhile, State Oil Company commenced
construction of a 15 megawatt power generating plant next to the oil refinery at Tout
Lui Faut. This facility will come on-stream in May 2006. Despite the sharp rise in world
market prices for gasoline and diesel, prices at the pump were kept at constant low
levels until September 2005 when the government doubled prices. Pump prices are
now adjusted on a monthly basis. This sudden and drastic increase in the cost of fuel
had a ripple effect on the cost structure of households and businesses. Inflation rose
sharply in the last quarter and ended the year at 15.9%.
In the annual general meeting of shareholders held on 24 July 2005 the financial
THE COMPANY AND GROUP
accounts for the year 2004 including a dividend of SRD 0.30 per share, were approved
HIGHLIGHTS
and all members of the Board of Directors were re-elected.
In extraordinary general meetings of shareholders convened on 21 December 2005
Richard Steenland was appointed Managing Director of United Suriname Shipping
Company, United Suriname Transport Company and of VSH-United (USA) L.L.C.
effective 01 January 2006. Wayne D’Leon, Managing Director of United Suriname
Trading Company was given additional responsibility when he was appointed Assistant
6
Manager’s Report
Managing Director of United Suriname Real Estate Company on 01 October 2005.
Effective the same date Karen Wong Fong Sang was appointed Assistant Managing
Director of Margarine, Fats and Oil Company Ltd. In the annual meeting of
shareholders of Margarine, Oil and Fats Company Ltd. held on 22 March 2006, Karen
was subsequently appointed Managing Director, effective 01 April 2006 replacing
Kathleen Lieuw-Kie-Song who managed the Company during the restructuring period
which commenced in 2000. On the same date Kathleen was appointed a member of
the Supervisory Board of Directors. Kathleen will manage Uniblue Shipping on a full
time basis and from time to time fulfill her duties as Deputy Managing Director of the
Holding Company.
Renovation of the head office at Van ‘t Hogerhuysstraat was for the most part
completed in 2005. Illustrations in this report give an impression of the newly
renovated head office. Restoration of the historic Benz building on Kromme
Elleboogstraat commenced in September. The Trading Company opened a retail
outlet called VSH Solutions in the Kersten Mall in the center of town.
RESULT AND FINANCIAL
Following ample discussions between management and the Board of Supervisory
POSITION
Directors it was decided to list the shares of United Suriname Holding Company on
the Suriname Stock Exchange. Our application was accepted by the Exchange and the
listing was effected on 01 January 2006. In order to establish a market price and since
the shares of the Company are closely held it was decided to issue 10,000 shares of
SRD 0.01 each and offer them for sale on the Stock Exchange. At the writing of this
report 8,823 shares had been sold at SRD 21.00 per share. The number of outstanding
shares of SRD 0.01 each increased to 1,803,265 as of 06 April 2006.
Consolidated Group income increased from SRD12,497,812 to SRD 15,173,388 or by
21%. At all operating subsidiaries income increased. Industry contributed more than
half the increase, while Real Estate and Investments also made an important contribution to income growth. Shipping income increased only marginally. Consolidated profit after tax amounted to SRD 2,420,112 an increase of 33.6% over 2004. The performance of the Group Companies will be discussed on the following pages of this report.
Quarterly interim dividend amounted to SRD 413,084 or SRD 0.23 per share.
Management proposes a final dividend of SRD 0.25 per share on the new share capital
stated above. Total dividend then amounts to SRD 863,900. Management further recommends that the balance of the profit amounting to SRD 1,556,212 be transferred to
the surplus account. Increase in shareholders’ equity from SRD 26,793,222 to
SRD 33,730,599 is attributable to this transfer and to revaluation of lands, buildings,
machinery and financial assets.
Consolidated working capital amounted to SRD 6,921,230 and is considered
sufficient to finance group operations.
7
Manager’s Report
SHIPPING
Shipping income includes income from: United Suriname Shipping Company, United
Suriname Transport Company, VSH- United (USA) L.L.C. and Uniblue Shipping.
The Group shipping companies represent liner services to and from ports in Latin
America, the Caribbean, North America, the Far East and Europe. Our range of service
includes consolidation, stevedoring, cargo handling, warehousing, surveying, customs
brokerage and local transport.
The table of vessels and cargo handled presented below shows 177 vessels handled.
2005
2004
2003
177
191
166
Incoming
3,460
3,548
3,029
Outgoing
12
196
400
Incoming
141,274
123,928
37,269
Outgoing
730,969
686,122
594,060
Incoming
83,394
78,146
71,832
Outgoing
927
148
793
Vessels handled
Cargo handled
Containers (teus)
Bulk Cargo (metric tons)
General Cargo (revenue tons)
Container volume handled at Paramaribo decreased by 7.3% while general cargo
handled increased by 7.7% and incoming and outgoing bulk cargoes increased by
14% and 6.5% respectively. LCL cargo volume generated by our subsidiary in Miami
increased by 14.5% to 161,250 cubic feet. As a result of increased costs shipping
income remained essentially unchanged at SRD 4,333,479. A new feeder service from
Jamaica initiated in March 2006 by one of our principals transships cargo from the
Far East and other regions to Paramaribo. Logistic support to oil companies doing
exploration off-shore Suriname and increased container volume are expected to raise
shipping income in 2006.
The rehabilitation of the New Harbor facility at Paramaribo with financial assistance
from the European Union is expected to commence in March 2007. This project is long
overdue and while shipping will experience some congestion during the construction
phase, upon completion cargo handling efficiency will improve.
An initiative by the bauxite companies and State Oil Company to deepen the channel of
the Suriname River by 2 meters is under discussion with the authorities. A deeper
channel will provide for substantial savings in transport cost of alumina and oil exports
and will allow larger container ships and cruise vessels to enter the Port of Paramaribo.
8
Manager’s Report
INDUSTRY
Industry income is stated after deduction of the cost of raw materials and packaging
and includes revenue from United Suriname Steel Company and Margarine, Oil and
Fats Company Ltd. Industry income increased by 26% to SRD 6,271,909.
United Suriname Steel Company produces prefabricated steel structures such as
buildings, warehouses, masts, water towers, storage tanks and barges. Production
income increased by 42% to SRD 2,939,024. Production volume amounted to 1,207
tons and export sales to countries in the region accounted for 19% of production.
Gross margin on production was 39%. As was the case in 2004 we were confronted
with collection problems and as a result a provision of SRD 318,097 was taken up.
A program called Opo Mi was put in place to closely monitor turnover, gross margins
and productivity. This program was successful in improving turnover and productivity.
Gross margins on production income still need improvement. The company
contributed positively to Group results after posting a loss in 2004. An important
decision was taken in 2005 to purchase a CNC driven drill and saw line which will
further automate the production process and increase capacity. Installation of the new
machine will be completed in May 2006. Prospects are good for further improvement
of profitability.
The Margarine, Fats and Oil Company Ltd. (56%) produces margarine, butter and
shortening. Sales volume increased marginally from 1,194 tons to 1,205 tons. Revenue
increased by 7% to SRD 7,688,479. Gross margin was 43% and income amounted to
SRD 3,332,885 an increase of 12%. In 2005, Jamaica was added as an export market.
For the production department it was a challenging year. Productivity declined from
0.52 tons per hour to 0.39 tons per hour. Several measures were taken including the
installation of a second emulsion tank which allows for running two production lines
simultaneously. This and other improvements will lead to increased productivity in 2006.
The outfitting of the micro biological laboratory was completed in July. All quality
controls can now be performed in-house. After deduction of minority interest
contribution to Group profit after tax amounted to SRD 178,579, a decline of 15%.
The focus in 2006 will be on productivity. Together with expected growth in sales
considerably better results are expected in 2006.
TRADING
Trading income is stated after deduction of cost of goods sold and consists of income
from United Suriname Trading Company and United Suriname Steel Company.
Trading income increased by 26% to SRD 2,503,103.
United Suriname Trading Company’s activities include the sale of office machines,
safety equipment for the workplace. As the distributor for Canon office equipment
and computer peripherals United Suriname Trading Company holds an important
share of the market for copiers, fax machines, printers and scanners. As distributor for
Red Wing and Worx we supply a broad range of the market with quality footwear for
the workplace. Income from the sale of office machines, safety equipment and from
other activities amounted to SRD 1,723,886 an increase of 6% compared to the
previous year. Gross margins were unchanged at 35%.
9
Manager’s Report
Other income related to our trading activities includes income from service of office
machines and trading commissions.
United Suriname Steel Company’s contribution to trading income includes the sale of
accessories and steel stock which amounted to SRD 702,433 representing an increase
of 95%. Gross margin was 35% and is considered adequate.
INVESTMENTS
Investments involve ownership of shares in local companies. In three of these
enterprises the Company holds a substantial interest. Shares are valued at the share
price established on the Suriname Stock Exchange during the last trading session in
December 2005.
N.V. Consolidated Industries Corporation (42%) manufactures a wide range of
industrial and household detergents and plastic packaging material. The company's
products command an important share of the local market while exports to
neighboring French Guiana, Guyana, Trinidad and Barbados continue to grow steadily.
At the end of 2005 this investment was valued at SRD 12,831,576 compared to
SRD 6,836,495 at the end of 2004. Dividend receipts amounted to SRD 215,379.
Assuria N.V. (24.1%) is the largest insurance company in Suriname offering a broad
range of life, casualty and health insurance products. Assuria’s growth is generated by
acquisitions and product innovation. Assuria also holds a 49% share position in
DSB Bank N.V., the largest retail bank in Suriname. The value of this investment
increased from SRG 7,099,966 at the end of 2004 to SRD 9,772,968 at the end of 2005.
Dividend payments amounted to SRD 257,581.
N.V. Hotelmaatschappij Torarica (13%) operates a 132 room first class hotel and casino
in Paramaribo and a fine 122 room no frills hotel called Eco Resort Inn, at walking
distance from Torarica. These hotels provide state of the art accommodation to mainly
business visitors. In order to meet the growing demand for upscale rooms the new 109
room Royal Torarica will be built next to the existing hotel. Construction will
commence in July 2006 and completion is planned for December 2007. Total project
cost is budgeted at US$ 8,200,000. Of this amount US$ 3,300,000 will be financed by a
share issue which was successfully completed on 30 April 2006. We participated in the
share issue for US$ 407,000. At the end of the year this investment was valued at
SRD 3,362,287 compared to SRD 3,178,890 at the end of 2004. Dividend income
amounted to SRD 110,039.
Other investments include shares in other local production companies and financial
institutions. Dividend income amounted to SRD 661,054 compared to SRD 438,877 in
2004. Total income from investments increased from SRD 438,877 in 2004 to
SRD 917,106 in 2005. Included in this amount is SRD 256,052 derived from the sale of
shares in Self Reliance, a local insurance company.
United Suriname Investment Company operates as broker on the Suriname Stock
Exchange. The Suriname Stock Exchange meets every other week and 10 companies are
listed. Turnover on the stock exchange increased substantially to SRD 831,000 in
10
Manager’s Report
2005 compared to SRD 163,899 in 2004. The Index also increased from 1,002.3 to 1,184
or by 18%.
REAL ESTATE
United Suriname Real Estate Company owns, develops and manages real estate
objects for use by the Group Companies or for rent. United Suriname Trading
Company owns the historic apartment building at Waterkant.
Rental income amounted to SRD 627,211 in 2005 compared to SRD 396,965 in 2004.
Occupancy levels for office and warehouse space remained high and spaces being
renovated became available for rent during the course of the year. Renovation of the
office building on Van ‘t Hogerhuysstraat was for the most part completed by the end
of the year. The apartment building at Waterkant was fully rented during the year.
Restoration of the historic building on the Kromme Elleboogstraat is now underway.
Upon completion in July 2006 three additional offices will be available for rent.
PERSONNEL
At the end of the year the Group employed 155 persons compared to 147 at the end
of 2004. Pension Fund membership increased from 126 to 142 persons. The Company
contributes 12% of base salary towards the pension fund and members contribute
5%. Pension liabilities as of 31 December 2005 amounted to SRD 5,647,046.
Total equity of the fund amounted to SRD 7,098,810 at the end of the year.
THE COMING YEAR
Industry and Shipping will be the drivers of growth in 2006. Consolidated income is
expected to increase by 5% and profit before provisions and taxes by 9%.
We thank our customers, contractors and suppliers for their continued support. We
APPRECIATION
appreciate the dedication and loyalty of our co-workers and we are thankful for
guidance received from members of the Board of Directors.
Paramaribo, 22 May 2006
Managing Director
James J. Healy Jr.
11
Auditor’s Report
INTRODUCTION
We have audited the 2005 financial statements as shown on pages 13 to 24 of the
N.V. VERENIGDE SURINAAMSE HOLDINGMIJ.-/UNITED SURINAME HOLDING COMPANY
established at Paramaribo, Suriname. These financial statements are the responsibility
of the company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
SCOPE
Those standards require that we plan and perform the audit to obtain reasonable
assurance that the financial statements are free of material misstatements. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
OPINION
In our opinion the financial statements referred to above give a true and fair view of
the financial position at 31 December 2005 and of the result for the year then ended
in accordance with generally accepted accounting principles.
Paramaribo, 22 May 2006
HIRALAL LUTCHMAN & Co.
12
Salient Figures
2001
PER SHARE OF SRD 0.01
N.V. Verenigde
Surinaamse Holdingmij.United Suriname Holding
Company
13
2003
2004
2005
Income
8,059,430
9,616,862
11,700,612
12,497,812
15,173,388
Profit after Tax
1,284,790
1,366,568
1,566,069
1,811,099
2,420,112
Cash Flow
2,003,820
2,262,589
2,639,348
3,039,666
3,812,450
Working Capital
3,388,153
3,331,831
4,333,111
5,636,825
6,921,230
Shareholders’ Equity 14,200,334
17,273,664
20,170,939
26,793,222
33,730,599
Paid-in Capital
17,944
17,944
17,944
17,944
17,944
Cash Dividend
0.17
0.20
0.20
0.30
0.48
Intrinsic Value
7.91
9.63
11.24
14.93
18.80
-
-
-
-
21.00
Year Average
2.20
2.35
2.65
2.80
2.80
Per End of Year
2.20
2.50
2.80
2.80
2.80
Share Price
US$ RATE
2002
Balance Sheet
31-Dec
ASSETS
2005
2004
Fixed Assets
101,402
49,285
Subsidiary Interests
19,251,907
17,806,491
Investments
28,716,910
19,995,752
47,968,817
37,802,243
Furniture and Equipment
Financial Assets
Current Assets
Receivables
Subsidiary Receivables
Income Tax
Other
Cash and Banks
LIABILITIES / EQUITY
167,086
43,888
36,528,127
27,525,158
-
11,506
230,162
288,016
1,845,041
1,221,834
38,770,416
29,090,402
86,840,635
66,941,930
17,944
17,944
Shareholders' Equity
Paid-in Capital
Surplus
Revalution Reserve
8,097,326
6,541,114
25,615,329
20,234,164
33,730,599
26,793,222
9,983,379
6,987,389
445,200
529,200
Provisions
Deferred Taxes
Term Liabilities
Loans
Current Liabilities
Commercial Creditors
Subsidiary Payables
Income Tax
Other
N.V. Verenigde
Surinaamse Holdingmij.United Suriname Holding
Company
14
71,959
6,631
41,236,644
31,854,535
97,887
-
1,274,967
770,953
42,681,457
32,632,119
86,840,635
66,941,930
Profit and Loss Account
INCOME FROM
2005
2004
Subsidiaries
1,538,982
1,354,354
Investments
917,106
438,877
Other
87,817
27,918
2,543,905
1,821,149
-
-
2,543,905
1,821,149
123,793
10,050
2,420,112
1,811,099
COSTS 1)
Profit Before Tax
Income Tax
PROFIT
1) All costs have been
charged to the 100% owned
consolidated operating subsidiary
companies, located
in Suriname.
DIVISION OF PROFIT
2005
Interim Dividend
Final Dividend
Surplus
N.V. Verenigde
Surinaamse Holdingmij.United Suriname Holding
Company
15
413,084
2004
358,888
450,816
179,432
1,556,212
1,272,779
2,420,112
1,811,099
Consolidated Balance Sheet
2005
ASSETS
Fixed Assets
Land and Buildings
Machinery
Furniture and Equipment
Financial Assets
Investments
Current Assets
Merchandise Stocks
Receivables
Investments in Progress
Other
Cash and Banks
LIABILITIES / EQUITY
Shareholders’ Equity
Paid-in Capital
Surplus
Revaluation Reserve
Third Party Interest
Provisions
Deferred Taxes
Warranties
Postponed Maintenance
Term Liabilities
Loans
Current Liabilities
Commercial Creditors
Income Tax
Other
N.V. Verenigde
Surinaamse Holdingmij.United Suriname Holding
Company
16
2004
13,795,508
2,726,934
1,287,903
17,810,345
14,279,848
2,765,222
1,167,698
18,212,768
28,967,492
20,218,494
6,460,620
4,595,379
1,801,944
676,116
2,144,949
15,679,008
4,974,909
3,051,751
806,844
788,054
1,496,197
11,117,755
62,456,845
49,549,017
17,944
8,097,326
25,615,329
33,730,599
17,944
6,541,114
20,234,164
26,793,222
3,151,978
36,882,577
3,085,317
29,878,539
15,984,616
370,923
15,751
16,371,290
13,308,027
298,238
54,083
13,660,348
445,200
529,200
4,058,569
559,245
4,139,964
8,757,778
2,506,673
250,612
2,723,645
5,480,930
62,456,845
49,549,017
Consolidated Profit and Loss Account
INCOME FROM
COSTS
2005
2004
Trading
2,503,103
1,982,118
Industry
6,271,909
4,994,018
Shipping
4,333,479
4,371,494
Real Estate
627,211
396,965
Investments
917,106
438,877
Other
520,580
314,340
15,173,388
12,497,812
Personnel Costs
5,061,235
4,486,325
Other Overhead Costs
4,680,700
3,557,927
45,699
47,256
1,392,338
1,228,567
437,070
402,293
11,617,042
9,722,368
3,556,346
2,775,444
996,226
799,307
2,560,120
1,976,137
Interest
Depreciation
Provisions
PROFIT
Profit Before Tax
Income Tax
Profit After Tax
Third Party Interest
NET PROFIT
-140,008
-165,038
2,420,112
1,811,099
Income 2005
41%
N.V. Verenigde
29%
17%
4%
6%
3%
Real Estate 4 %
Investments 6 %
Other 3 %
Surinaamse Holdingmij.United Suriname Holding
Company
17
Trading 17 %
Industry 41 %
Shipping 29 %
Changes in Shareholders’ Equity
2004
2005
SHAREHOLDERS’
Paid-in Capital
EQUITY AT
Surplus
BEGINNING OF YEAR
Revaluation Reserve
17,944
17,944
COMPRISING
6,541,114
5,268,335
20,234,164
14,884,660
26,793,222
20,170,939
2,420,112
1,811,099
Increased with/
Reduced by
Profit After Tax
Dividend
Revaluation
-863,900
-538,320
5,381,165
5,349,504
6,937,377
6,622,283
33,730,599
26,793,222
SHAREHOLDERS’
EQUITY
AT END OF YEAR
Allocation of Income 2005
0%
9%
10%
3%
7%
Provisions 3%
Income Tax 7%
Dividend 6%
Surplus 10%
Third Party Interest 1%
N.V. Verenigde
Surinaamse Holdingmij.United Suriname Holding
Company
18
33%
31%
1%
6%
Personnel 33%
Other Overhead Costs 31%
Interest 0%
Depreciation 9%
Consolidated Statement of Source
and Use of Funds
2005
SOURCE OF FUNDS
Net Profit
2,420,112
Depreciation
1,392,338
Third Party Interest
Financial Assets
Revaluation Reserve
5,381,165
Provision Deferred Taxes
2,676,589
Warranties
FUNDS AVAILABLE
USE OF FUNDS
Fixed Assets
989,915
Financial Assets
512,919
Repayment of Loans
Working Capital
FUNDS USED
United Suriname Holding
Company
19
12,118,811
863,900
Postponed Maintenance
Surinaamse Holdingmij.-
72,685
Dividend
Revaluations
N.V. Verenigde
66,661
109,261
8,345,340
38,332
84,000
1,284,405
12,118,811
Notes to the Financial Statements
GENERAL
These notes refer to the financial statements. The amounts mentioned below are in
Suriname dollars.
The foreign currency exchange rates used lie within the range of the official and free
market rates. At the end of the year these rates stood at:
2005
2004
US Dollar
2.80
2.80
EURO
3.33
3.69
Included in the financial statements are the figures of the
N.V. VERENIGDE SURINAAMSE HOLDINGMIJ.-/UNITED SURINAME HOLDING COMPANY,
as well as the subsidiary interests which comprise 100% ownership of:
1. N.V. VSH-SCHEEPVAARTMIJ.-/UNITED SURINAME SHIPPING COMPANY
2. N.V. VSH-TRANSPORTMIJ.-/UNITED SURINAME TRANSPORT COMPANY
3. N.V. VSH-HANDELMIJ.-/UNITED SURINAME TRADING COMPANY
4. N.V. VSH-STAALMIJ.-/UNITED SURINAME STEEL COMPANY
5. N.V. VSH-EIGENDOMSMIJ.-/UNITED SURINAME REAL ESTATE COMPANY
6. N.V. VSH-BELEGGINGSMIJ.-/UNITED SURINAME INVESTMENT COMPANY
7. VSH MARKETING COMPANY LTD.
8. N.V. UNIBLUE SHIPPING
9. VSH-UNITED (USA) L.L.C.
and 56.05% ownership of:
10. MARGARINE- EN VETTENFABRIEK N.V./ MARGARINE, FATS AND OIL COMPANY LTD.
Valuation of real estate and machinery of the consolidated companies is based on the
acquisition price adjusted for inflation, using the above stated exchange rates.
Furniture and Equipment is valued at acquisition price. Straight-line depreciation is
applied over the economic life span. The following depreciation percentages are
applied on an annual basis:
- Buildings
2% - 20%
- Machinery
5% - 10%
- Furniture and Equipment 10% - 33.3%
Shares listed on the Suriname stock exchange are valued at the official share price
established during the last trading session in December 2005. The value of
other securities has been estimated as best as possible. The investment portfolio has
increased in value in 2005.
20
Notes to the Financial Statements
The shares held in VSH Marketing Company Ltd. and VSH-United (USA) L.L.C. are
stated in US dollars and are valued at the US dollar exchange rate stated above.
The changes in valuation have been booked to the revaluation reserve after deduction of deferred taxes at 36%. Unless otherwise mentioned other assets and liabilities
are stated at face value.
FIXED ASSETS
Changes in tangible fixed assets during 2005 were as follows:
Land and
Total
Bookvalue 1 Jan.
Machinery
Equipment
18,212,768
14,279,848
2,765,222
1,167,698
989,915
63,086
322,467
604,362
Investment
Depreciation
Bookvalue 31 Dec.
Furniture and
Buildings
1,392,338
547,426
360,755
484,157
17,810,345
13,795,508
2,726,934
1,287,903
Consists of
Current Value
27,474,121
19,557,504
4,884,126
3,032,491
Acc. Depreciation
9,663,776
5,761,996
2,157,192
1,744,588
Bookvalue 31 Dec.
17,810,345
13,795,508
2,726,934
1,287,903
Buildings, machinery and furniture and equipment are insured against fire damage.
In 2006 the coverage amounts to US$ 7,994,399.
INVESTMENTS
The investments consist of shares in other companies and term deposits. Valuation of
and changes in financial fixed assets during 2005 were as follows:
Funds
N.V. Consolidated Industries
Corporation
Assuria N.V.
DSB Bank N.V.
N.V. Hotelmaatschappij Torarica
Surinaamse Brouwerij N.V.
Self Reliance N.V.
Total Value
ABN / Amro Holding
Shares
BRC shares
Nominal Value
Per share
Share price
Value
31-Dec-05
SRD
SRD
SRD
SRD
SRD
SRD
SRD
21,035.370
39,091.870
139.275
12,226.500
64.350
138.850
0.010
0.010
0.025
0.100
0.050
0.010
6.10
2.50
7.68
27.50
51.00
9.30
12,831,576
9,772,968
42,785
3,362,287
65,637
129,130
26,204,383
EURO
EURO
5,192.88
1,124.48
0.560
0.560
19.49
0.56
601,833
3,745
26,809,961
Term deposit US$
Term deposit EURO
21
2,072,000
85,531
28,967,492
Notes to the Financial Statements
Book value as at 1 January
20,218,494
Investments
512,920
-109,262
Desinvestments
Revaluation
8,345,340
Book value as at 31 December
MERCHANDISE STOCKS
28,967,492
Merchandise stocks consist principally of raw materials, packaging materials, finished
goods, safety and office equipment, parts and other trading merchandise. With the
exception of the finished goods inventory they are valued at cost after a deduction of
a provision for unmarketable items. The finished goods inventory is valued based on
the raw materials and packaging materials used after a deduction of a provision for
unmarketable items. Merchandise stocks are insured against fire damage. In 2006 the
coverage amounts to US$ 1,232,173.
RECEIVABLES
Where necessary a provision has been deducted for doubtful debts.
INVESTMENTS IN PROGRESS
Investments in progress consist of renovation of buildings.
REVALUATION RESERVE
This represents changes in values of fixed and financial assets.
Balance as at 1 January
20,234,164
Changes in 2005 as a result of revaluation:
Investments
5,346,889
Subsidiary Interests
-1,510
Third Party Interest
35,786
5,381,165
Balance as at 31 December
25,615,329
PROVISON FOR DEFERRED
This provision is formed for liabilities which may arise after year-end, due to
TAXES
differences between valuation for accounting and for taxation purposes. A request for
the application of two facilities from the investment code, an investment interest
credit and accelerated depreciation for a part of the investments made during the
year was submitted to the Ministry of Finance. In the financial statements it is
assumed that the request will be granted. This year financial assets have been written
up. Merchandise stocks have been written down as a result of the "Iron Stock"
valuation method and have been adjusted in 2005 based on the actual
situation. A tax rate of 36% is used for the determination of the provision.
22
Notes to the Financial Statements
Balance as at 1 January
13,308,027
Changes in 2005 as a result of revaluation:
Investments
3,007,625
Subsidiary interests
-850
Stocks
-30,762
Investments in tangible fixed assets
Correction Investments in tangible fixed assets
140,256
-187,419
2,928,850
Reduction in 2005
-195,673
Accelerated depreciation 2003 and 2002
-56,588
Balance as at 31 December
15,948,616
PROVISION FOR
Pertains to contactual liabilities for delivered steel structures and products liability of
WARRANTIES
margarine and butter.
PROVISION FOR POSTPONED
Provision for postpone maintenance pertains to costs associated with postponed
MAINTENANCE
maintenance of buildings.
LOANS
In 2001 DSB Bank N.V. issued a loan on behalf of the Holding Company. The loan
amounts to US$ 300,000 and was used to finance the purchase of shares issued by
Margarine- en Vettenfabriek N.V. / Margarine, Fats and Oil Company Ltd. in May 2001.
The term of the loan is five years with a balloon payment at the end of the term.
The intention is to refinance the balance of the loan at the end of the term for an
additional five years. The fixed rate is 8.5% per annum. Monthly repayments amount
to US$ 2,500.
INCOME TAX
In June 2003 the Tax Authorities commenced an audit on income tax over the years
1999 through 2001 and a wage and social security withholding tax audit over the
years 1999 through 2002. The income tax audit concerns the following companies:
United Suriname Holding Company, United Suriname Shipping Company, United
Suriname Trading Company, United Suriname Real Estate Company, United Suriname
Steel Company, United Suriname Transport Company and Uniblue Shipping. The audit
on withholding tax on wages and social security premium concerns United Suriname
Holding Company. These audits were to date not completed. The audits at Margarine,
Fats and Oil Company Ltd were finalized in February 2003.
Income tax obligations for 2005 are specified as follows:
Due as at 1 January
250,612
Paid
995,397
Due over 2005
Deferred taxes on stocks
Deferrals due
Investments in tangible fixed assets
Correction previous years
996,226
30,760
287,136
-140,260
130,168
1,304,030
Due as at 31 December
23
559,245
Notes to the Financial Statements
OTHER CURRENT LIABILITIES
Other current liabilities include mainly transitional payables.
SECURITY FOR LOANS AND
Some of the real estate is mortgaged for the protection of the lenders listed under
GUARANTEES
"Loans" above. Furthermore receivables and stocks are assigned to lenders as
additional security. For a total of SRD 56,500 bank guarantees have been provided to
the customs authorities as security for payment of duties. Counter guarantees have
been given to the issuing bank.
INCOME
Income includes:
- merchandise sales after the deduction of costs of goods sold,
- maintenance and brokerage services,
- the revenues from shipping and port activities,
- rental income from real estate,
- dividend income from investments,
- other income includes income from sale of assets.
PROVISIONS
Provisions include
- Receivables
24
2005
2004
363,583
238,444
- Merchandise Stocks
-31,676
61,261
- Warranties
105,163
102,588
437,070
402,293