our solutions drive customer value

YEARS CATERPILLAR IN SURINAME
KERSTEN 2011 ANNUAL REPORT
OUR SOLUTIONS DRIVE CUSTOMER VALUE
243 YEARS OF KERSTEN ANNUAL REPORT 2011
CONTENTS
Message from the CEO
5
Report of the Supervisory Board
7
2011 In Perspective
8
2011 Operations: A Year in Review
10
Condensed Consolidated Financial Statements
23
Independent Auditor’s Report
32
Financial Performance in 2011
34
About C. Kersten en Co. N.V.
36
Our Solutions Drive Customer Value
39
243 YEARS OF KERSTEN ANNUAL REPORT 2011
Message from the CEO
The year under review was one of great opportunities which were seized by deploying our distinctive advantages:
our customers and partners, performance culture and capacity, liquidity and funding capabilities, balance sheet
strength, product portfolio as well as our core values.
Change is the only constant in a turbulent world. Our almost 244 years of history, during which we continuously
reinvented our future, represents a proud legacy of leadership, learning, industry firsts, social responsibility,
integrity and delivering value consistently and responsibly. We continue to expand the current core business while
simultaneously inventing a new future by entering new markets and maintaining profitable growth. Significant
challenges for the near future are to strengthen these competative advantages, keeping and attracting the right
educated people, capturing more market share while keeping our company’s risk profile at moderate levels.
The theme of this report, “Our Solutions Drive Customer Value” is appropriate for our performance in 2011.
Kersten achieved record financial results. Our growth was driven by the deepening of our already solid relationships
with valued partners, financiers, suppliers and customers. Our partners and suppliers increasingly share in our risks.
“Change is the only constant
in a turbulent world”
We continued to offer the market unparalled solutions, driving our customers’ value and enabling them to take their
businesses to the next stage. By offering compelling and differentiating value, we applied our unique capabilities to
make them stronger by giving them the opportunity to profit from our competative advantages. Our sales growth was,
inter alia, supported by tailored financial solutions offered to our customers which no other competitor could match.
Our strategy is also geared towards identifying and capturing business opportunities beyond Suriname’s borders.
In 2011 Kersten joined the CATERPILLAR-Newmont Alliance Team. We became the youngest CATERPILLAR dealer
working together in a creative, innovative and productive way to achieve common goals that collectively benefit all
three parties of the Alliance. The Alliance creates a secure base for growth in the heavy equipment business, however,
we will offer other solutions of the group as well and, in this way, enhance the solidity of our revenue base.
Against this background, I remain highly optimistic for 2012. Kersten is well positioned to maximize profitable growth
through a disciplined execution and supported by a strong financial discipline and, most of all, a committed workforce.
We will step up our efforts to hire and retain the right people and continue to build talent through leadership
development, succession planning and strategic talent acquisition. We will keep on working diligently to realize our
vision “To be the company in Suriname most respected for its people, excellence and core values”. Key to any of our
operations is our social license to operate. This goal encompasses the issues of health, safety and social responsibility.
I would like to take this opportunity to thank our partners, financiers, suppliers and customers for their unceasing trust
and our employees for their continuing outstanding performance and unrelenting dedication.
Shirley Sowma-Sumter
Chief Executive Officer and Chief Financial Officer
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5
243 YEARS OF KERSTEN ANNUAL REPORT 2011
Report of the Supervisory Board
In compliance with the provisions of articles 9 and 12 of the Articles of Association we have the honour of submitting
the annual report and accounts for the financial year 2011, as approved by us. The annual accounts have been audited by
KPMG Accountants B.V. and their report is included herein. Pursuant to article 12 clause 12.6 of the Articles of Association, we recommend that you adopt the present annual accounts, and discharge the Board of Management of their responsibility in respect of the management carried out during the reporting period and that you discharge the Supervisory
Board of its responsibility in respect of their supervision. We agree with the proposal of the Board of Management to pay
out a dividend of USD 1,000,000 and to add USD 3,764,575 of the net profit of USD 4,764,575 to the general reserves.
“The steps taken in the past
year to improve our service
to our customers proved to
be mutually beneficial. “
Kersten again showed a good performance in 2011. The steps taken in the past year to improve our service to our
customers proved to be mutually beneficial. Also the continuous development of our company made it possible to
benefit from new commercial opportunities.
Within the Motors and Heavy Equipment division, the successful introduction of the two new car brands, JAC and Mahindra,
at Motors proved that these answered the demand for vehicles in these market segments. The growing activities in the
mining sector translated into a rising need for CATERPILLAR products resulting in increased sales at Surmac.
The Hospitality division is making good progress. Our call centre joint venture with Customer Management Contact
Group B.V. is developing rapidly. The renovation and upgrading of Hotel Krasnapolsky will be completed according
to plan and the move of Popeyes Louisiana Kitchen (Popeyes) to street level also proved to be a success. BergenDal
attracts an increasing number of tourists from Suriname and abroad.
BEM, within the Building and Construction division, is focussing on new products and services. An example of this is
the “House in a Bag” concept. Vensur increased its production capacity considerably and introduced a second grade
of cement. The construction division in general is facing fierce competition but we are confident that we will continue
to increase our fair share of the markets.
Incom showed again better results contributing to the continuing good performance of our Health Care division. In
2011, Medicare successfully outsourced its activities in order to better service its customers.
Last but not least we would like to express our gratitude to all our employees for their continued commitment and
devotion without which, we would not have been able to realize the excellent results. We thank them for their
valuable contribution and unrelenting efforts. We also would like to thank our customers and suppliers for their
continued confidence in us and compliment management with the results achieved.
David A. Voûte
Chairman
6
7
243 YEARS OF KERSTEN ANNUAL REPORT 2011
BENEFITS, OPPORTUNITIES AND RISKS
imperative to improve
the absorption capacity of our economy
As a country rich in natural resources, conditions on international
The bonanza in the gold and oil industries stimulated business activities in
commodity markets dominantly affect the level of production, the general
almost all other sectors of the economy, particularly in supply companies
business climate, the net outcome of foreign transactions and, last but
where actual sales and even more so orders for future delivery grew
not least, the rate of inflation in Suriname. During a period of more than
strongly. This tendency was accentuated by acceleration in the execution
a decade, we are benefitting from structurally higher prices as a result of
of public infrastructure projects. Consumption remained high, due to
rapidly growing physical and investment demand. From time to time, this
salary increases and a further expansion in bank lending. The trade and
These measures, combined with higher salary payments to civil servants,
In addition, according to the Multi-Annual Development Program 2011-
tendency has been accentuated by uncertainties originating, inter alia,
building sectors grew rapidly, while growth in the hospitality and tourism
the doubling of public capital spending in order to improve the physical
2012, the government intends to strongly increase its investment in the
from geopolitical tensions, as well as from economic and financial crises.
industry was steadier. On the other hand, the agriculture, fishery and
infrastructure, and the settlement of arrears in suppliers’ loans, resulted
technical and social infrastructure. It is obvious, that this major investment
forestry sectors could only modestly take advantage of higher global
in an expansion of public expenditure by 33%. Expenditure exceeded
push will give a strong extra impetus to the other sectors of the economy.
During 2011, this market pattern again prevailed. Prices surged in the
prices, due to structural and institutional weaknesses, as well as
revenue by some 6%; thus, eventually, the positive effects of the revenue
Benefitting from the opportunities created by the international commodity
first half of the year as the world economy continued to recover from the
insufficient competitive advantages.
generating measures virtually perished. The resulting cash deficit
boom, while taking due account of related risks and uncertainties, require
was financed by drawings on foreign loans. Additionally, loans were
wisely preparation and execution of the ambitious investment plans. A
2009 recession. Thereafter, a strong downward correction occurred due
to a renewed cyclical weakening in the developed countries and less
On balance, the estimated increase in gross domestic product
contracted to finance on-going and future projects. As a result, total
comprehensive and well-balanced package of policy instruments should
buoyant growth in emerging market economies, particularly in China, the
amounted to some 4.5%, about the same as in 2010. The growth of our
government debt rose by 6% points to 39% of gross domestic product.
be applied. In order to derive as much as possible benefits from these
major consumer of raw materials. Simultaneously, prices were pushed
economy compares favorably to the average of the Caribbean region.
At first sight, this percentage appears to be quite low; however, the debt
plans, the risk of taking excessive recourse on our limited implementation
upwards by the social unrest in North-Africa and the Middle-East, the
This development, and the reaching of an agreement to settle a long
repaying capability of the government is accordingly weak.
capacity should be mitigated. After all, a possible overheating of
uncertainty ensuing from the public debt crises in Europe, and supply
outstanding debt arrear with the USA, induced rating agencies to
Future developments on the world’s commodity market appear to be
our economy by exhausting our limited capacity to execute projects
side constraints. Due to this mixture of factors, average commodity
increase our country´s long-term foreign currency debt rating to “BB-“
quite promising on the long-run. As in the past, disturbing factors will
may undermine monetary stability and eventually also the process of
prices (deflated by the consumer price index in the USA) surged by
from “B” with a stable outlook. The former rating was assigned earlier to
undoubtedly occur from time to time due to inter alia cyclical fluctuations
sustainable development.
almost 30% on an annual basis. However, at the end of 2011 the
the domestic currency debt.
and changes in the geopolitical climate. It is still expected, that in particular
increase was much less pronounced compared to a year earlier, i.e. 9%,
due to the correction referred to above.
gold and oil prices will continue to fluctuate around historical high levels.
Simultaneously, we should aim at increasing the share of the domestic
Much better operational results of the gold and oil companies were
Demand will increase structurally, particularly in the fast growing emerging
value added in the total production by broadening and deepening the
reflected in corresponding higher transfers to the National Treasury. On
market economies. On the other hand, supply side constraints will become
linkages between the core sectors and local suppliers’ companies. This
a cash basis, government revenue increased by a notable 40%, also as
more pronounced due to increasing marginal production costs.
implies that these companies should alertly increase their capability
a result of a package income generating measures introduced at the
2011 In Perspective
to deliver more goods and services to the core sectors at competitive
beginning of 2011. The government take on fuels was increased by 40%,
Companies engaged in exploiting Suriname’s natural resources are
conditions. The government should create a favorable investment climate,
while taxes on tobacco, alcoholic beverages, and casinos were also
anticipating on the positive prospects, and are planning to invest a
but should also endeavor to acquire a fair share of the operational results
raised. The exchange rate of the Suriname dollar (SRD) was devaluated
total of almost USD 3.5B; an amount roughly equal to the estimated
of the foreign companies. The proceeds should be used to diversify and
by 20% vis-à-vis the American dollar (USD), the currency used to settle
present value of our annual gross domestic product. The search for gold
strengthen our economy, to create safety nets for the financially weak, and
the bulk of our foreign transactions. The latter measure was taken in
and oil will be intensified; the oil refinery will be extended, while large
to save part of the additional income for future generations. Policy makers
order to broaden the tax base, and to restore tranquility on the foreign
investments will be made to ensure the availability of sufficient local
in both the private and public sectors should therefore be well-prepared to
exchange markets by unifying the official and the informal exchange rate.
bauxite to be able to continue to operate the alumina smelter efficiently.
a wise preparation of the mixture of challenges and risks facing us.
2009E
2010E
Real GDP growth (%)
3.1
4.4
almost 7% in 2010. At the end of 2011, the index was 15.2% higher than
Overall fiscal balance (% of GDP)
-3
total exports. Export earnings rose by 15% in US dollar terms, despite
a year earlier. To some extent foreign factors, such as rising import prices
Total public debt (% of GDP)
roughly unchanged production volumes. Most other balance-of-payments
for fuels and foodstuff, also contributed to the higher inflation. Almost
accounts closed with a deficit. The banking sector´s international gold and
overnight, a broad spectrum of goods and services became much more
foreign exchange reserves increased by 15% measured in US dollar terms
expensive. To alleviate the corresponding loss in purchasing power for
to an equivalent of more than 5 months of imports of goods and services.
the financially weak, the government increased some subsidies.
The economy of Suriname benefitted from buoyant world markets prices. In
The goals of these measures were, initially, largely reached. However,
2011, average prices of our major export products, gold and crude oil, rose
the higher taxes and the devaluation caused a disquieting acceleration
by about 30% and 40% respectively. Prices for alumina increased relatively
in the inflation rate. The annual consumer price index rose to 17.7% from
modestly, i.e. by 10%. These three products represent an ample 95% of
SURINAME
2011P
2012P
2013P
2014P
2015P
2016P
5
5
5.5
7.7
5.6
5.4
-3.6
-1.7
-1.5
-1.2
-0.1
0.4
0.6
19
22
20
19
19
17
16
14
Gross international reserves (months)
5
4.4
4.6
5
5.7
6.3
7.5
7.5
Investment in % of GDP incl. informal sector
25
23
25
27
24
22
22
22
Sources: Central Bank of Suriname, International Monetary Fund
8
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243 YEARS OF KERSTEN ANNUAL REPORT 2011
Technician Recruitment and Development Program trainees
Motors and Heavy Equipment
Surmac In 2011 Surmac developed important initiatives for growth and achieved the highest turnover of the group. By attracting agencies such as
Wacker Neuson, AK Purifiers, 3M, Mecano International, DAF (for service and parts), Mast Explorer, Manitowoc Cranes and JLG Lift Equipment, our goal
“To provide solutions that drive customer value” could further be attained. Surmac participated in the Trade Fair for entrepreneurs in the Gold Sector and
the Consumer Fair of the Chamber of Commerce and Industries. A rental operation, SurmacRent, was launched and a Training Center for operators of
heavy equipment opened. We celebrated 70 years CATERPILLAR dealership with pride by launching, inter alia, a credit facility of USD 20M for buyers of
CATERPILLAR equipment. The Line of Credit has been utilized almost fully as at end 2011. We are delighted to note that the banking sector wants to be
engaged more intensively in the financing of our customers by offering them innovative financing solutions.
One of Suriname’s biggest challenges is to diversify our economy and to find other avenues for growth in order to avoid brutal slow-downs caused by
declining commodity prices. Surmac faces the same challenge in solidifying our revenue base. We are in the process of diversifying our activities more
among industries, customers and products. In 2011 Surmac pursued a winning strategy to make more inroad in several sectors including small-scale gold
mining, construction, power generation and forestry. Gold mining companies placed large orders for heavy equipment - some are new to Suriname to be delivered within the next two years. We continued to unlock the potential of the small-scale gold mining sector. This was done by teaming with
leading companies in this segment of the industry, providing the market unprecedented financing arrangements but, most of all, by offering product support
2011 Operations: A Year In Review
capabilities even in very remote and inaccessible regions of the country to safeguard full compliance with our customers’ operational requirements.
Given the impact of large capital projects on the labor market Suriname faces another major challenge, which is to develop the country’s human capital
and maximize our absorptive capacity. Surmac needs to hire and retain the right people. In this context, we have launched a Technician Recruitment and
Development Program in 2010, which is already beginning to bear fruit. It is critical to systematically upgrade the technical knowledge and skills of our
workforce, customers and technical institutes. Next year we will execute a “Heavy Equipment Applied Technology Program” in collaboration with the
Ministry of Education to achieve a closer alignment of the current technical curriculum with the newest technologies.
As a CATERPILLAR dealer Surmac is required to continually create operating and business efficiencies and exhibit world-class, globally benchmarked
operations, processes and capabilities. The current dealer facility requires an upgrade to support future customer requirements. By mid 2012 the design
of a new facility will be finalized. Construction is scheduled to be completed in the first quarter of 2014. The new facility will guarantee customer service
according to ongoing world-class product support requirements. In 2012, the further improvement of asset management systems as well as the leveraging
of standardized and documented business practices will gain priority.
In Nickerie the renovation of our branch was completed and the Massey Ferguson (MF) brand reintroduced. The USD 2M credit facility for the purchase of
MF equipment which was launched in the fiscal year has been under-utilized thus far, to a certain degree, reflecting structural and institutional
weaknesses and imbalances of the rice industry.
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243 YEARS OF KERSTEN ANNUAL REPORT 2011
KERSTENLEASE:VEHICLESANDHEAVYEQUIPMENT
Motors Although the earthquake in Japan in early 2011 had significant consequences for the
WE MAKE IT MATCH
lease
import of vehicles, Motors was successful in the sale of new vehicles, namely to the government, the
to a boost in construction activity in the near term and a rise in Suriname’s growth potential in the medium to long run. Some of our customers are
construction and the mining sectors. Despite the heavy contraction in import of Japanese brands, Motors
scored a higher turnover and volume than in 2010 and a growth in the market share of new vehicles. The
JAC and Mahindra brands which were introduced in 2010 were able to fill the gap caused by the fall of
Toyota imports. The market welcomed the important financial solution presented by Kersten Lease, the
newly established lease company of Kersten. Motors opened a showroom in Nickerie and the facilities
in Paramaribo were extended and underwent a facelift. Motors realized the second largest turnover growth
within the Kersten Group in 2011 and an 18% growth in pre-tax result.
Continuation of this growth is expected in 2012. Major private and public capital projects in mining, energy, transportation and housing will lead
KERSTEN LEASE
involved in these large investment projects. In 2012 investment will take place, in collaboration with our joint venture partner, Cementos Argos S.A.
(Argos), in optimizing of production and storage and in the development of new business opportunities, such as aggregates and ready mix concrete.
CKC MOTORS
Kersten Lease is gespecialiseerd in het leasen en managen van voertuigen en zwaar
materieel. Kersten Lease is een dochteronderneming van C. Kersten en Co. N.V.,
één van de grootste en oudste conglomeraten van bedrijven in Suriname.
Simultaneously the human resources will be enhanced. Overall restructuring and investment programs are beginning to bear fruit.
Kersten lease heeft een zeer divers en gerespecteerde klantenbestand, waaronder
multinationals en lokale ondernemingen.
Wij hebben de voordelen van leasen voor u op een rij gezet:
• Gegarandeerd altijd een rijdende voertuig tot uw beschikking
• Onderhoud gegarandeerd
• Lagere “upfront” cash uitgaven
• Altijd een nieuwe veilige voertuig ter beschikking
Voor informatie kunt u terecht bij:
Richard G.M. Tjon A Joe – Directeur Kersten Lease N.V.
(rick.tjonajoe@kersten.sr) | Tel: 471150
Danny William – Directeur C.K.C. Motors Company N.V. /
Account Executive Kersten Lease N.V.
(danny.william@ckcmotors.com)| Tel: 402833
BEM and Spanbeton Although BEM and Spanbeton had no easy year as a result
of the elevated competition and the associated price war, we are not dissatisfied with the
recent developments and the indications of opportunities and a favorable prospect in 2012.
Real turnover and sales volumes were higher in 2011 for both BEM and Spanbeton, despite
the fierce competition. In terms of turnover, BEM was the fifth largest operating company in
2011. The results were slightly better than in 2010. Spanbeton scored a substantially better
In 2012 an ongoing diversification of the product line, further development of the Toyota Customer Satisfaction concept and upgrading of the staff will
result than in 2010.
be implemented. The fuel-efficient JAC passenger car will be brought on the market in an effort to capture a larger part of the second hand market
In the year under review new products were developed with a higher gross margin. One
for small passenger cars. Also, the Toyota Prius Hybrid - the green car - will be introduced. The Prius is rated as among the cleanest vehicles sold
of these products is the “House in a Bag” (HIAB). Against this background, our marketing
in the USA based on smog-forming emissions. Motors will also offer newcomers in the mining industry onsite maintenance solutions to drive their
efforts in 2012 will be stepped up. HIAB is a turnkey designed home. BEM guarantees
efficiencies, leading to greater revenue, cost savings and profitability.
construction within the budget and timeframe set and offers a series of models from which
can be selected, varying from a low budget one bedroom home to more upscale luxury
three bedroom bungalows. Next year BEM will focus on, inter alia, construction of houses
for the consumer and the corporate market including in a Public Private Partnership with
the government. BEM will also focus on capturing opportunities beyond Suriname’s borders
Building and Construction
and product development in collaboration with our partners, the Neal and Massy Group and
Argos, in particular for the energy and mining sectors.
Vensur In 2011 Vensur became the leader in the cement industry in Suriname with more than 50% of total market share. Vensur scored third in
terms of turnover of the operating companies of the Kersten Group. The renovation of the factory was completed within the budget and timeframe
Alginco Alginco further strengthened its position in the corporate market in refrigeration, water and electrical installations. The relationship
set. This went unnoticed to the customers, other than that the quality of our products improved immensely. Vensur is now capable to produce all types
with existing and large customers was extended and intensified and the orders became larger and more challenging in nature. The relationship with
of cement of the highest quality and at par with international standards. The production capacity has been increased from 8 tons to more than 16 tons
foreign suppliers was strengthened and firm arrangements have been made for more favorable payment terms and new and continuing training of
per hour. Investment has also been made in storage and distribution and - as already mentioned - various qualities of cement can be produced. The
senior and junior staff. As a result of the aforementioned, the staff has grown, both in terms of knowledge, efficiency and scope. Safety is important
capacity of the conveying belt used for delivery of the raw material has been increased by 35%. The risk of demurrage has been decreased
and we can gladly look back to a year without any significant accident. With these measures accompanied by other planned improvements, a sound
considerably. Housekeeping, health and safety have been elevated to international standard through training, education and investment in PPE
basis is laid for further sustainable growth of Alginco in 2012. The 2011 results showed a marked improvement.
material. Turnover and profit growth were therefore exponential.
2011 Operations: A Year In Review
12
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243 YEARS OF KERSTEN ANNUAL REPORT 2011
Hospitality
Krasnapolsky According to the World
Travel & Tourism Council direct contribution of
Travel and Tourism to the economy of Suriname
deteriorated significantly (in 2011 prices) from
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Key factors contributing to the downturn
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corresponding period while, on the other hand,
Hotel Rooms Nights Supply soared as casino
owners added rooms to the industry to meet
legal requirements to operate a casino. Although a slight reverse in this trend was noted in 2011 and direct contribution to
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the economy went up with 6.3% to SRD 208M, this was only at 60% of the 2006 level. Given these developments, overall
Travel and Tourism, amplified by the lingering economic recession in the Netherlands, is expected to continue its weak
and a growing interest from the business community, especially
the IADB will sign the contracts for two loans totaling USD 20M. The
product package of BergenDal was further extended in 2011 with an 800
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adhering to the principles of sustainable development, will continue to
position itself as “One of the Faces of Suriname”.
statistics show that only 11% of visitors use hotels, while 40% and 49% stay in independent homes and with family and
friends; the latter because half of the tourists come from the Netherlands. Maximum average hotel occupancy, defined as
Franchises Popeyes Louisiana Kitchen (Popeyes) realized an
Total Hotel Room Nights Demand to Total Hotel Room Nights Supply, showed a consistent downward trend from almost
exuberant growth in sales of 40% as opposed to 2010, to a certain
90% in 2006 to an estimated 48% in 2011
degree, thanks to the relocation of the restaurant early 2011 to the
ground floor of Hotel Krasnapolsky.
End 2011 the government relaxed its visa policy for tourist purposes and introduced the Tourist Card, an important and
In 2011, Popeyes gained the first and second place for revenue growth in
long advocated instrument for the promotion of tourism. In November Kersten concluded an agreement with Sunny Land
the South American region and the Caribbean. At present, expansion of
Tours USA, a tour operator in the USA. Sunny Land and our partner Surinam Airways (SLM) will approach the market in the
the number of Popeyes restaurants in Paramaribo is subject of research.
USA. One of the conditions for success in penetrating this, onto now, non-traditional tourist market is the availability of
Rituals Coffee House and Pizza Boys experienced a​​ more modest growth,
sufficient and especially affordable airlift. SLM will expand the number of flights to the USA in April 2012. The first group
however, their performance can be considered good. The franchises
of visitors from the USA is expected in Suriname in January 2012. Penetration of the huge USA market will be beneficial
initiated various successful sales promotions in collaboration with
to the entire travel and tourism sector in Suriname. As known, this market is characterized by significantly higher spending
Kirpalani’s Ltd. and it is foreseeable that these will be repeated in 2012.
rates compared to those from other countries and a considerably higher percentage of hotel occupancy. In April 2012 a
seminar will be organized of 25 travel agents of the USA together with SLM and Kersten on the theme of further strategies
for penetrating the USA market. In 2012 efforts will be intensified in further promotion towards the French Guyanese market
since a heightening of the competition from Suriname is observed.
Our Hospitality Division can consider 2011
a fairly good year. On average, each property
realized an almost 15% point higher occupancy,
achieving a level far above the estimated
maximum industry average for 2011 of 48%.
The renovation of the hotel rooms in Hotel
Krasnapolsky was completed by the end of
2011. In May 2012, the total renovation of
the hotel shall be finished. Pretax result of
Krasnapolsky improved considerably in 2011
as opposed to 2010.
2011 Operations: A Year In Review
14
15
243 YEARS OF KERSTEN ANNUAL REPORT 2011
Health Care
Incom Incom’s medical segment is its core business with a contribution of more than 70% to total sales. In 2010
Medicare Medicare transferred a large portion of its group of eligible
Incom became representative of Novartis International AG (Novartis). Novartis is one of the largest international
recipients to SZF to continue the strategy of risk and cost mitigation,
pharmaceutical manufacturers and a trendsetter in the field of, inter alia, oncology and dialysis. In 2011 Incom registered
ongoing improvement of the medical care and higher insurance
locally a few products of Novartis and tests were conducted for the Dialysis Center and the State Health Insurance
coverage. After a year under SZF insurance, Medicare will evaluate
Company in Suriname (SZF). SZF is the largest health care insurer in Suriname. In the year under review, agency
this cooperation. The envisioned development for expansion of medical
agreements were formalized with Pharmix Laboratories (Pvt.) Ltd., Hansel Pharmaceuticals (Pvt.) Ltd., Micro Labs Limited
services was not realized in this fiscal year; this will be resumed in
and FYNK Pharmaceuticals (Pvt.) Ltd. Of importance for the expansion of the medical branch are the constant growth
2012. We are currently in the process of finalizing a feasibility study for
of the package of innovative products and the maintenance of a portfolio, which covers the national medical needs.
the introduction of an endoscopic center for stomach, colon and throat
In 2011, the healthcare industry was confronted with a financial crunch of the hospitals and also the policy of the SZF,
examination. In 2012 the mining sector will be approached with creative
who opted to provide more specialist care and, as an extension, to execute its own imports and distribution through its
custom-made solutions regarding medical management to generate
own chain of decentralized pharmacies. This resulted in the decline of the market share of other drugs importers. Due to
greater efficiencies for this industry. Next year Medicare will relocate to
long lead times of IDA Foundation, our largest supplier of generic drugs, Incom was forced to hold substantially higher
the location where Incom and Surlab are presently housed so that the
inventories of its generic medications in the year under review. Incom, as a representative of IDA Foundation, treaded
entire Health Care Group will be in one location.
beyond our borders for the first time in 2011. This policy will be continued in 2012. The projected collaboration with
the Guyana-based company, Scientific Sales Meditron, will come into fruition. A biomedical department will be added
to Incom. Meditron in Guyana concentrates on sales, marketing, maintenance and repair of medical instruments and
Real Estate and Properties
apparatus. Incom will continue to add agencies to its existing brand portfolio.
Warenhuis Since late 2005 the Warenhuis building is leased to a third party. The financial results improved
In the consumer segment Incom represents
in comparison with 2010.
a number of pesticides, household and body
care products as well as perfumes. There is
Neptune Financiële Dienstverlening (NFD) NFD holds a 40 year lease on 53.4 hectares of the
increasing competition and a visible loss of
Belle A Soir property in the district of Commewijne, to be developed for affordable housing with the IADB and DSB Bank
purchasing power in the market. The turnover of
N.V. as partners. The Belle A Soir project, which is adjacent to the Richelieu public housing project, was put on hold last
the fastest moving product, Baygon, recorded
year due to poor drainage of the area. Large public investments will be required to improve the infrastructure. Kersten is still
an associated slight decrease. Next year, an
in the starting blocks for the development of this project, however, discussions with the current administration to improve
improved formula of Baygon will be introduced
the infrastructure have not yet produced the desired results leaving the status quo of this project unchanged.
with which the manufacturer targets to be the
regional market leader again in 2013.
Although Incom’s 2011 turnover was more or less the same as in 2010, through an excellent cost management and higher
Kersten Communication Services
gross profit margins a significantly higher pre-tax result was recorded.
SNT Kersten N.V. (SNT Kersten)
Surlab Sales and pre-tax results declined modestly compared with 2010. Surlab successfully developed Alcolado Glacial
SNT Kersten is a joint venture of the
hand sanitizers. In 2012 this new product will be introduced in collaboration with Curaçao Laboratories Ltd., the brand owner of
largest customer contact organization in
Glacial Alcolado. Surlab will continue with the planned product line extension and the entry into across border markets with its
the Netherlands, Customer Management
new products.
Contact Group B.V., and C. Kersten and Co.
N.V. Activities started in 2010, however the
joint venture was formalized in late 2011. SNT
Kersten, the principal tenant of Krasnapolsky,
will offer its services to the Hospitality Division
2011 Operations: A Year In Review
16
in order to optimize the quality of customer
contacts by Krasnapolsky and BergenDal.
17
243 YEARS OF KERSTEN ANNUAL REPORT 2011
KERSTENLEASE:VEHICLESANDHEAVYEQUIPMENT
WE MAKE IT MATCH
lease
Holding Services
Health, Safety, Environment and Community (HSE&C)
Kersten Lease N.V. (Kersten Lease) Kersten Lease was launched in 2011 and at
HSE The purpose of our healthy lifestyle program is to make a meaningful impact in improving the health of our employees and the quality of
the end of 2011 lease contracts were signed with three of the largest companies in Suriname. The
their life. In 2011 several actions were conducted which included medical surveys on, prevention and treatment of cardiovascular diseases, alcohol
prospects for growth of this activity are substantial.
and drug awareness, the CATERPILLAR Surmac-walk, celebrating 70 years CATERPILLAR dealership in Suriname, the Srefidensi Marathon and our
Family Sports Day, held at BergenDal. Next year the emphasis will be on creating awareness and prevention of the most common cancers as well as
CKC Corporate Facilities N.V. (CORFA) Since 1999 Kersten is involved in
execution of alcohol and drugs policies. In March 2012 we will start by participating in breast cancer awareness and testing campaigns, which start
the recruitment and selection of skilled workers from all over the world, in particular for our
nationwide.
CATERPILLAR dealership. Since 2011 these activities are done through a separate legal entity
CKC MOTORS
Kersten Lease is gespecialiseerd in het leasen en managen van voertuigen en zwaar
materieel. Kersten Lease is een dochteronderneming van C. Kersten en Co. N.V.,
één van de grootste en oudste conglomeraten van bedrijven in Suriname.
Kersten lease heeft een zeer divers en gerespecteerde klantenbestand, waaronder
multinationals en lokale ondernemingen.
Wij hebben de voordelen van leasen voor u op een rij gezet:
• Gegarandeerd altijd een rijdende voertuig tot uw beschikking
• Onderhoud gegarandeerd
• Lagere “upfront” cash uitgaven
• Altijd een nieuwe veilige voertuig ter beschikking
under the name of CORFA, which is in charge of the recruitment, training and employment of local
and foreign employees on a permanent or temporary contract. CORFA also offers expertise in areas
as HR management and administration, work permits, pay rolling, sickness absence management,
medical screening and labor law. CORFA facilitates companies in mitigating their risks and in
focusing on their core business. The activities of CORFA were so far exclusively oriented towards
Voor informatie kunt u terecht bij:
Richard G.M. Tjon A Joe – Directeur Kersten Lease N.V.
(rick.tjonajoe@kersten.sr) | Tel: 471150
recruitment for companies of or dealing with the Kersten Group, such as Customer Management
Danny William – Directeur C.K.C. Motors Company N.V. /
Account Executive Kersten Lease N.V.
(danny.william@ckcmotors.com)| Tel: 402833
Contact Group B.V. and Krasnapolsky, however, as of next year, CORFA will expand to other
businesses. This highly profitable activity shows favorable growth prospects.
N.V. Handelmaatschappij S.M. Levie (Levie) After several years of almost
stationary activities of Levie, the acquisition of new customers and cleanup of the database of
existing customers was successfully implemented.
Human Resources Shared Service Center (HR SSC) The HR SSC
became operational in 2011. The HR SSC is a business unit of the holding company that supports
the operating companies with various operational and administrative HR services.
Kersten’s head office illuminated as endorsement of Breast Cancer Awareness Campaign
In 2011 we continued our relentless commitment to zero harm. Our goal is to maintain a safe working environment. Safety performance is a
precondition for growth. It should not in any way be subordinated to our growth and profit objectives. Protecting our employees, our most valuable
asset, is one of our core values. It elevates maintaining a safe workplace to clearly a high priority. A safe workplace will also enhance our ability to
recruit and keep highly qualified people. Minimizing our footprint on the environment and conserving our resources demonstrates our commitment
to adhere to our social and environmental responsibilities. 5S quality improvement processes and Business Excellence Programs were implemented
company-wide. With regard to the ISO 9001-2008 and 14000 certification process, activities were focused on preparing operating companies for
2011 Operations: A Year In Review
18
certification in 2012 and 2013. Overall there was a general improvement in housekeeping, the quality of buildings, shops, offices, warehouses and
yards of all operating companies thru periodic inspections, reports and hands-on support.
19
243 YEARS OF KERSTEN ANNUAL REPORT 2011
Community Development
At Kersten we often achieve success, inter alia, through close collaboration with partners
Our dividends are intended to fund community projects of our ultimate
who share a common vision, our values and complementary strenghts. A key priority of
shareholder. In addition, Kersten contributes significant amounts and
Kersten is to build winning collaborations in realizing corporate and community goals.
devotes time and effort to improve the environment, prepare our youth
for careers in several industries and enhance the communities we
Cementos Argos S.A. (Argos) Since 2010 Argos and Kersten are joint
work in. We are proud to be a driving force and binding factor in the
venture partners. The collaboration has resulted in improving the soundness of our
grouping of different stakeholders for these causes. In 2011, in this
production process, product quality and, most of all, growth of our market share for
context, specifically the following should be mentioned:
cement. We continue to work on the development of new commercial initiatives to
strengthen the foundation of our Building and Construction division.
1. Kersten Tourism Foundation (KTF) In October 2011
the Brokopondo Vocational & Training Center (BVTC) was officially
The Neal and Massy Group (Neal and Massy) The Letter of
opened after a long period of preparation as a result of lengthy
Interest between Kersten and Neal and Massy, which was signed in 2010, was elevated
discussions with the Ministry of Education. On behalf of Kersten, KTF
to a Memorandum of Understanding. Growth opportunities have been identified for both
“OUR PARTNERS SHARE OUR VISION
AND VALUES AND HAVE
COMPLEMENTARY STRENGTHS”
is responsible for the material execution of the project. The BVTC is
at par with international standards, so that the business community
can rely on well-trained youths. KTF is funded by a number of donors
including Kersten. Its mission is “To promote tourism, to eliminate
Our strategic partners
poverty and to promote economic development of the people of
short as well as long term, especially in the areas of energy and mining. Commercial
activities have been initiated such as the co-distributorship of PPE material of the world
renowned brand 3M and the foundation has been laid for the new Kersten “Energy
Division”. In this regard various business initiatives will be developed in 2012.
the Brokopondo district”. Brokopondo has a population in excess
Customer Management Contact Group B.V. In 2010 a joint-venture
of 12,000 with over 60% younger than 16 years and profound and
agreement was concluded with the Dutch communications services company,
multiple social and economic problems. Non-enrollment, dropout
Customer Management Contact Group B.V. under the name SNT Kersten N.V. This
and crime rates as well as teenage pregnancies are extremely high.
joint-venture enables us to enter into a new sector to achieve the so necessary
diversification of our company.
There are few educational and sustainable employment opportunities.
Since 2008, KTF executed several supply chain strenghtening projects in
Over 20 different donors, including KTF, the Dutch-based Zeister
the district of Brokopondo as part of the BergenDal Ecotourism Project.
Zendingsgenootschap and UTSN, as well as IAMGold/Rosebel Gold
Funding is provided by Kersten and the Multilateral Investment Fund
Surinam Airways (SLM) and Sunny Land Tours USA SLM
Mines, contributed an estimated USD 850,000 and committed funds to
of the Inter-American Development Bank Group. BergenDal, which
is the national airline of Suriname with 50 years of experience in the airline business.
secure the operations of the school until 2016. In addition, Kersten and
impacts more than 10% of the population of Brokopondo in terms of
Sunny Land Tours USA is a USA based tour company with over 40 years of experience
IAMGold/Rosebel Gold Mines will make internships and jobs available. newly established businesses, sustainable employment, education and
and with awards by the governments of numerous countries for its help in developing
poverty alleviation, continues to provide continuous education, coaching
travel and tourism to these countries. Kersten, SLM and Sunny Land Tours USA have
In 2012 the main focus of the BVTC will be to recruit pupils from the sec-
and employment opportunities. KTF has also committed itself to the
joined forces in November 2011 to implement a strategy aimed at penetration in the
ond grade of the LBGO (Junior Vocational School) for a technical voca-
full restoration and rehabilitation of the old Village at BergenDal and
so-far non traditional USA travel and tourism market.
tional orientation. Also technical training will commence in 2012, among
the preservation of its rich cultural and historical legacy. BergenDal is
which a welding course for dropouts. There are also project proposals
an integrated sustainable tourism project that combines in complete
The Green Coalition In 2010 Kersten joined Suriname Conservation
for training of mechanics and operators of heavy equipment. The ulti-
harmony and for the first time in Suriname People, Planet, Profit and
Foundation (SCF), a foundation established by Conservation International, and a growing
mate goal of the BVTC is to become a regional training center, providing
Poverty Reduction.
number of local companies, organizations and the government of Suriname in promoting
and implementing a “green economy” in Suriname. At the heart of the “green economy”
vocational education in professions that are and will be in great demand
2. Stichting Lotjeshuis Suriname (SLS) SLS, a
movement lays a heightened focus on sustainable development and sustainable
foundation established in 1967, operates a shelter for children to legally
entrepreneurship, two concepts that are embedded in our social license to operate.
One of our challenges is to hire and retain the right people. This creates
protect and provide professional care to neglected and malnourished
In 2010 Kersten and SCF/Conservation International worked together on renewable
also one of our biggest opportunities, which is to further connect our
toddlers in Suriname. SLS is crucial for the care of children, who are
energy and carbon lab initiatives which were put on hold due to the low feasibility.
businesses to the communities we work in. KTF does not have any
abandoned every year and whose parents are often disqualified by the
project in execution momentarily. We have submitted projects in the
court of their parental authority. In the fiscal year Kersten has contributed
IAMGold/Rosebel Gold Mines Kersten sells heavy equipment, vehicles and
small-scale gold mining industry that are pending approval from the
to the operation of SLS. By leasing a newly renovated building owned by
hospitality solutions to IAMGold/Rosebel Gold Mines. As of 2010 we have stepped up our
government. The goal is to teach and to promote sustainable gold mining
this foundation to accommodate our employees Kersten will continue to
efforts to jointly strengthen the capabilities of several disadvantaged groups in the district
techniques while simultaneously creating job opportunities.
support this foundation in 2012 and thereafter.
of Brokopondo by establishing the Brokopondo Vocational & Training Center in 2011.
in the near future. The BVTC is unique in its kind in Brokopondo.
20
21
243 YEARS OF KERSTEN ANNUAL REPORT 2011
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (IN USD)
2011
2010
Revenue
Cost of sale
99,110,203
70,197,293
64,814,546
42,354,038
Gross profit
Other income
Total income
28,912,910
261,191
29,174,101
22,460,508
810,129
23,270,637
Employee benefit expenses
Depreciation
Other operational expenses
Total expenses
8,007,970
4,089,008
11,334,639
23,431,617
8,219,864
4,401,951
10,237,675
22,859,490
“Our solutions
drive customer value”
Income from operations
5,742,484
411,147
Financial income
Financial expenses
Net financial expenses
2,522,214
-2,587,247
-65,033
2,303,421
-2,258,362
45,059
Share of profit of associates
Income before taxation
Income taxes
Profit from continuing operations
294,105
5,971,557
1,206,982
4,764,575
237,088
693,294
-615,709
1,309,003
Discontinued operations
Profit (loss) from discontinued operations
(net of income tax)
Profit for the year
252,665
4,764,575
1,561,668
Condensed Consolidated Financial
Statements
22
23
243 YEARS OF KERSTEN ANNUAL REPORT 2011
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (IN USD)
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (IN USD)
ASSETS
12-31-11
12-31-10
ASSETS
2011
2010
Property, plant and equipment
Intangible assets
Receivables
Investment property
Deferred tax assets
Other financial assets
45,128,548
241,061
1,086,481
6,907,218
1,795,639
3,251,972
45,170,937
289,316
1,019,815
10,570
1,672,151
3,446,440
Income from operations (including discontinued operations)
Adjustments for:
- Depreciation
- Change in provisions
- Foreign exchange differences
5,742,484
663,812
3,870,022
-151,912
2,245,548
4,776,172
404,313
888,006
Changes in working capital
- Inventories
- Trade and other receivables
- Other current assets
- Current loans and borrowings
- Trade and other payables
- Other current liabilities
-16,156,232
-16,418,135
-3,712,113
7,714,769
17,796,057
5,843,991
-1,249,352
1,565,428
-773,841
3,143,959
5,470,359
-297,925
Cash generated from operations
Interest received
Interest paid
Income tax paid
6,774,479
276,666
-2,587,247
-2,192,582
14,590,931
392,002
-2,258,362
-2,324,817
Total non-current assets
58,410,919
Inventories
Trade and other receivables
Income tax receivable
Other current assets
Cash and cash equivalents
Assets classified as held for sale
26,837,330
26,580,707
250,677
7,306,165
5,927,185
0
10,681,097
10,162,572
171,004
3,594,053
8,983,361
6,539,229
Total current assets
66,902,064
40,131,316
Total assets
125,312,983
EQUITY AND LIABILITIES
Equity
Share capital
Share premium reserve
Retained earnings
Equity attributable to equity holders
Non-controlling interest
Liabilities
Loans and borrowings
Deferred tax liabilities
Employee benefits
Other liabilities
26,345,758
16,964,117
30,498,054
480,935
1,541,070
10,804,542
9,249,348
12,701,997
606,710
173,374
4,960,551
60,288,718
83,139,356
125,312,983
Cash flows from operating activities
Net investments in property, plant and equipment
Proceeds from sale of property, plant and equipment
In/decrease Investment Property
Net investments in intangible assets
In/decrease non-current receivables
Proceeds from disposals of investments
In/decrease non-current financial assets
In/decrease non-current other liabilitiesReceipt of government grant
27,691,980
2,271,317
10,399,754
-5,730,967
1,760,732
-55,688
-110,873
-66,666
194,468
-135,000
-
-5,006,805
3,723,177
617,097
-39,203
984,663
1,023,413
54,408
17,672
Cash flows used in investing activities
-4,143,994
1,374,422
Disposal of partial interest in Vensur N.V.
In/decrease non-current loans and borrowings
In/ decrease non-current liabilities
Dividends non-controlling interests
-1,183,848
-
-504,470
-7,224,769
35,000
-2,999,965
Cash flows from financing activities
-1,183,848
-10,694,204
Net in/decrease of cash and cash equivalents
Cash and cash equivalents at beginning of year
Adjustment previous year
-3,056,525
8,983,361
350
1,079,972
7,903,389
-
11,225,315
10,775,243
4,210,200
135,000
22,850,638
Total current liabilities
Total liabilities
Total equity and liabilities
37,702,807
218,182
420,050
36,877,199
37,515,431
187,376
10,041,467
8,625,108
4,184,063
0
Loans and borrowings
Trade and other payables
Short term provisions
Income tax liabilities
Other current liabilities
Liabilities directly associated with assets classified as held for sale
91,740,545
42,173,627
Total non-current liabilities
218,182
420,050
41,643,435
42,281,667
108,040
Total equity
24
51,609,229
Cash and cash equivalents at end of year
Cash and cash equivalents at end of year classified as assets held for sale
Cash and cash equivalents at end of year financial position
5,927,185
5,927,185
8,983,361
8,983,361
54,037,738
91,740,545
25
243 YEARS OF KERSTEN ANNUAL REPORT 2011
Notes to the
Condensed Consolidated
Financial Statements
Functional and presentation currency
These consolidated financial statements are presented in United States Dollars (USD), which is
the Company’s functional currency. All financial information is presented in USD except when
otherwise indicated.
Use of estimates and judgments
The preparation of the consolidated financial statements in conformity with IFRSs require management
to make judgments, estimates and assumptions that affect the application of accounting policies and
the reported amounts of assets and liabilities, income and expenses. Actual results may differ from
these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions
to accounting estimates are recognized in the period in which the estimate is revised and in any future
periods affected. Estimates significantly impact assets and liabilities from employee benefit plans, other
provisions and tax and other contingencies. Actuarial assumptions are established to anticipate future
events and are used in calculating pension and other postretirement benefit expense and liabilities.
These factors include assumptions with respect to interest rates, expected investment return of plan
assets, rate of increase in health care costs, turnover rates and life expectancy.
1. Corporate information
The principal activities of C. Kersten en Co. N.V. and its subsidiaries (together “the Group”) are:
Basis of consolidation
1. the trade in motor vehicles and heavy equipment including parts;
The consolidated financial statements comprise the financial statements of C. Kersten en Co. N.V.
2. the production of and trade in medicines and other healthcare products;
and its subsidiaries as at December 31 of each year. Subsidiaries are those companies over which
3. the production of and trade in cement and concrete products;
the Company has control, defined as the power to govern the financial and operating policies
4. the trade in air-conditioning, machine building, electronic parts and systems;
so as to obtain benefits from their activities. Subsidiaries are fully consolidated from the date
5. the leasing of land and buildings and
of acquisition, being the date on which the Company obtains control, until the date of disposal
6. hospitality and franchises.
when such control ceases. The financial statements of the subsidiaries are prepared for the same
reporting year as the parent company, using consistent accounting policies. All inter-company
Interest in joint venture Alexios N.V.
balances and transactions, including unrealized profits arising from intra-group transactions, have
On November 12, 2008 a share purchase agreement between the Company and Cementos Argos
been eliminated upon consolidation.
S.A., a corporation established in Colombia has been signed. This agreement has been settled
on February 16, 2010. The Company sold on that date its ownership of 84.24% in Vensur N.V.
3. Changes in accounting policy and disclosures
to Alexios N.V., domiciled in Suriname. At the same date the Company sold 50% of the shares
From 1 January 2011 the Company has applied the following changes in accounting policy and
in Alexios N.V. to Corporaciones e Inversiones del Mar Caribe S.A.S, a subsidiary company of
disclosures:
Cementos Argos S.A., domiciled in Medellín, Colombia. The principal activity of Alexios N.V. is
1. IFRS 3 Business Combinations (2008)
administering the shares of Vensur N.V. as of that date. Due to the sale of the shares of Vensur
2. Improvements to IFRSs 2010
N.V. in 2010, the assets, liabilities and results are proportionately consolidated in the consolidated
financial statements of the Group compared to full consolidation in previous years.
New standards not yet adopted
Other than those adopted as mentioned in note 3, a number of new standards, amendments to
2. Basis of preparation
Statement of compliance
standards and interpretations are effective for annual periods beginning after 1 January 2011,
The consolidated financial statements for the year 2011 have been prepared in accordance with
expected to have a significant effect on the consolidated financial statements, except for IFRS 9
International Financial Reporting Standards (IFRS) as issued by the International Accounting
Financial Instruments, which becomes mandatory for the Company’s 2013 financial statements and
Standards Board (IASB).
could change the classification and measurement of financial assets. The Company does not plan
and have not been applied in preparing these consolidated financial statements. None of these is
to adopt this standard early and the extent of the impact has not been determined.
Basis of measurement
The consolidated financial statements have been prepared on a historical cost basis, unless
otherwise indicated.
26
27
243 YEARS OF KERSTEN ANNUAL REPORT 2011
4. Summary of significant accounting policies
Foreign currency transactions
Inventories
Inventories are valued at the lower of average cost and net realizable value.
Transactions in foreign currencies are translated to the functional currency at the exchange rates
on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
Trade and other receivables
at the reporting date are translated to the functional currency at the exchange rate at that date.
Trade receivables, which generally have 30 day terms, are recognized and carried at original
Foreign currency differences are recognized in the statement of comprehensive income. Non-
invoice amount less an allowance for any uncollectible amounts.
monetary asset and liabilities denominated in foreign currencies that are measured a fair value
are translated to the functional currency at the exchange rate at the date that the fair value was
Cash and cash equivalents
determined. Non-monetary assets and liabilities in a foreign currency that are measured based on
Cash and cash equivalents in the consolidated statement of financial position comprise cash at
historical cost are translated using the exchange rate at the date of the transaction.
bank and in hand and short-term deposits with an original maturity of less than 3 months.
Non-derivative financial instruments
Interest-bearing loans and borrowings
The Group only uses non-derivative financial instruments. Non-derivative financial instruments
Interest-bearing loans and borrowings are measured at amortized cost using the effective interest
comprise investments in equity, securities, trade and other receivables, cash and cash equivalents,
method. Amortized cost is calculated by taking into account any issue costs, and any discount or
loans and borrowings, and trade and other payables.
premium on settlement.
Property, plant and equipment
Provisions
Owned assets
Provisions are recognized if, as a result of a past event, the Group has an actual obligation (legal or
Property, plant and equipment are stated at cost less accumulated depreciation. For the valuation
constructive) and it is probable that an outflow of resources embodying economic benefits will be
of buildings, all significant parts with a cost that is significant in relation to the total cost, are
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
recognized separately.
Pensions and other post-employment benefits
Leased assets
The cost of providing benefits under the plans is determined using the projected unit credit
All leased assets are operational leases and are not recognized on the Company’s statement of
actuarial valuation method, with actuarial valuations carried out at each year-end.
financial position.
Revenue
Intangible fixed assets
Revenue is recognized to the extent that it is probable that the economic benefits will flow to
Intangible assets that have a finite useful life are amortized over the useful economic life and
the Company and the revenue can be reliably measured. Net sales represent the invoiced value
assessed for impairment whenever there is an indication that the intangible asset may be
of manufactured products and services delivered to customers net of allowances and sales tax.
impaired. The amortization period and the amortization method for an intangible asset with a finite
Revenue is recognized when the significant risks and rewards of ownership of the goods have
useful life are reviewed at least at each financial year end.
passed to the buyer and can be reliably measured. Cost of sales is recorded in the same period as
sales are recognized. Other revenues are recorded in the period in which they originate.
Investment property
Until the adoption of IFRS, investment properties are accounted at revaluated amounts. This
Expenses
value is considered as property’s deemed cost. Investment properties are measured initially at
Expenses are determined based on the aforementioned accounting principles and allocated to the
cost, including transaction costs. The carrying amount includes the cost of replacing part of an
year to which they relate.
existing investment property at the time that cost is incurred if the recognition criteria are met;
and excludes the costs of day to day servicing of an investment property. Subsequent to initial
Income tax
recognition, investment properties are stated at cost less depreciation.
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized
in profit or loss except to the extent that it relates to a business combination, or items recognized
Other financial non-current assets
directly in equity or in other comprehensive income. Current tax is the expected tax payable or
Other financial non-current assets are recorded at their historical cost, being the values at which
receivable on the taxable income or loss for the year using tax rates enacted at the reporting date,
they were acquired or lower realizable value.
and any adjustments to tax payable in respect of previous years. The tax rates and tax laws used to
calculate the amount are those that are enacted or substantively enacted at the balance sheet date.
28
29
243 YEARS OF KERSTEN ANNUAL REPORT 2011
- Health, Safety and Environment
Discontinued operations
The Group’s framework for Health, Safety and Environment includes policies,
A discontinued operation is a component of the Group’s business that represents
standards, guidance materials, tools and activities to support and assist their
a separate major line of business that has been disposed of or is held for sale
operating companies who manage environment, health and safety at their sites and
or distribution, or is a subsidiary acquired exclusively with a view to resale.
throughout key Group’s business operations. The Health, Safety and Environment
Classification as a discontinued operation occurs upon disposal or when the
standards and policies of the Group meet or exceed our national HSE regulations
operation meets the criteria to be classified as held for sale, if earlier.
whilst in compliance with the Inter-American Development Bank’s Environmental and
Social Requirements and meeting World Bank HSE standards.
Consolidated statement of cash flows
The consolidated cash flow statement is prepared using the indirect method. Cash
-I nformation management and security measures
consists of current accounts with banks and cash in hand. Payments of interest and
Information management is decentralized at Operating Company level. At holding
income taxes are included in cash flows from operating activities.
level coordinating measures and instructions are issued to assure univocal approach
of information management and security measures.
5. R ISK MANAGEMENT AND INTERNAL CONTROL
Within our group Risk Management and Internal Control systems are designed to
- Insurance
provide reasonable assurance that the Group’s business objectives are achieved. Our
The insurance policy covers risks resulting from property damage, business interruption,
group Risk Management and Internal Control framework is considered in balance
employers’ liability and a number of other specific risks. The insurance risk process and
with our risk profile, although such systems can never provide absolute assurance
monitoring for all Operating Companies is managed centrally by C. Kersten en Co. N.V.
that material errors, losses, fraud or violation of laws or regulations will not occur.
- Internal Audit
Risk profile and risk responsibilities
The Internal Audit Department carries out operational audits for the main Operating
Managing operational risk and other risks form an integral part of the Group business
Companies based on the yearly Audit Plan. The Audit Plan is based on the risk profile
operations. The Board of Management of the Group is responsible for the design,
of Kersten.
implementation and operation of the Group Risk Management and Internal Control
framework. The Board of Management of the Group actively manages, to the extent
- Audit Committee
possible, the strategic, financial, compliance and operational risks facing the Group.
The role of the Audit Committee is to advise the Board of Directors regarding internal
control affairs based on the reports of the Internal Auditor and its own observation.
Risk Management and Internal Control framework
- Code of Conduct
To ensure risks are identified and managed and that objectives are met in compliance
Our Code of Conduct is based on Kersten’s core values.
with applicable law and regulations, a risk assessment framework (RAF) is in place.
It is intended to help each employee understand and
This control framework is based on policy documents, standards and procedures. The
follow relevant compliance and integrity rules, and
main elements of the control framework, our control activities, and monitoring into
know when to ask for advice.
- Planning and control cycle
Subsequent Events
CKC BEM N.V.
- Company objectives
Strategic plans, budgets and forecasts are prepared at
Against the background of a highly competitive core business with concrete products, BEM
Company objectives form the basis risk for the group Risk Management and control
fixed times during the year for all entities of the Group.
is active in diversifying its product range. In August 2011, BEM launched its latest product
framework. They are formulated and communicated to the organization by the Executive
Financial results and other key performance indicators
“House in a Bag” (HIAB) on the local “Building and Living” fair. HIAB is a turnkey designed
Board. All operating companies must operate in accordance with these objectives. The
are reviewed monthly.
home. BEM guarantees construction within the budget and timeframe set and offers a se-
our business practices are:
ries of models from which can be selected, varying from a low budget one bedroom home
company objectives are reviewed at regular intervals and amended where necessary.
- A ccounting and reporting
- Risk evaluation and monitoring
instructions
to more upscale luxury three bedroom bungalows. Apart from the local need for housing
in Suriname, there is a trend that people of Surinamese origin living in the Netherlands
A risk management infrastructure is in place, which includes periodical risk identification
The accounting and reporting instructions consist of
are looking for a home in Suriname for their retirement or as an investment. To reach that
reviews and trough plan of the Group. Our business strategy is regularly evaluated by the
instructions and guidelines for management reporting
market, BEM not only participates in fairs in Suriname, but also in the Netherlands to
Executive Board, Audit Committee and the Supervisory Board; this also includes financial,
and external financial reporting.
promote this newest product. With the introduction of HIAB, BEM realized a first and major
strategic, compliance and operational risks.
step towards diversification. In the meantime HIAB sales are projected to reach an amount
of USD 2M in 2012 with a promising outlook for the years thereafter.
30
31
243 YEARS OF KERSTEN ANNUAL REPORT 2011
To the Board of Directors
C. Kersten en Co. N.V.
INDEPENDENT AUDITOR’S REPORT
We have audited the consolidated financial statements of C. Kersten en Co. N.V. and its
subsidiaries (the ‘Company’) for the year ended December 31, 2011, from which these condensed
consolidated financial statements consisting of the condensed consolidated statement of financial
position, the condensed consolidated statement of comprehensive income, the condensed
consolidated statement of cash flows and explanatory notes on page 23 up to and including page
31 were derived, in accordance with International Standards on Auditing.
Management is responsible for the preparation of the condensed consolidated financial
statements. In our auditors’ report dated April 22, 2012 we expressed an unqualified opinion
on those consolidated financial statements from which these condensed consolidated financial
Independent Auditor’s Report
highlights were derived.
In our opinion, the accompanying condensed consolidated financial highlights as of December
31, 2011 are consistent, in all material respects, with the consolidated financial statements from
which they have been derived.
For a better understanding of the Company’s financial position and the results of its operations for
the period and of the scope of our audit, the condensed consolidated financial highlights should be
read in conjunction with the consolidated financial statements from which they have been derived
and our auditors’ report thereon.
Suriname
April 22, 2012
KPMG ACCOUNTANTS B.V.
Nicole Baptista RA
32
33
243 YEARS OF KERSTEN ANNUAL REPORT 2011
Decline in Funded Debt, Improving Funded
Debt to Equity, Declining Equity Ratio
Financial performance in the year under review was outstanding.
80
30
Consolidated revenues achieved a 53% increase to almost USD 100M.
The strong growth was driven by the performance of the divisions Motors and Heavy Equipment, Building and Construction and Other. Overall
there was a compression of gross profit margins resulting from the shift
in the composition of the products and services sold. We have been
70
25
60
20
50
40
15
driving operational efficiencies successfully by managing costs. Although
major commercial initiatives were undertaken in 2011 due to the intro-
30
10
20
duction of a series of new products and services total operating costs
were more or less stationary at the 2010 level. The operating expense
margin was almost 24% of total revenues compared with 35% in 2010.
Net profit respectively EBITDA were almost 60% and 26% above their
5
0
10
0
2008
2009
2010
2011
total funded debt (USD M)
equity ratio (%)
funded debt to equity (%)
4-year average. The equity ratio stood at 34% in 2011 from 41% in 2010.
Rise in Cash Conversion Cycle
Financial Performance in 2011
Our sales growth and product repertoire expansion was supported by
80
a considerable rise in the Cash Conversion Cycle. The number of Days
70
Working Capital increased from 40 days in 2010 to 79 days in 2011.
60
The increase in the accounts receivable and inventory cycle was not
50
adequately offset by the growth in the accounts payable cycle, although
40
suppliers’ credit was significantly raised. This is one of the factors result-
30
ing in a reduction in “Cash on Hand” from USD 9M at year-end 2010 to
20
approximately USD 6M at year-end 2011. Credit facilities offered to our
10
customers by banks and our suppliers have also supported our growth.
0
Our funding capabilities, one of our distinctive advantages, contribute
2008
significantly to our growth.
2009
2010
2011
cash conversion cycle (days)
Higher Debt Service Coverage
We deployed excess cash to finance our growth and create maximum
value for our shareholders while improving balance sheet strength and
debt service coverage. Our balance sheet with total assets of USD
600
500
125.3M at year-end 2011, up from USD 91.7M at year-end 2010, con-
400
tinued to show an even stronger debt service coverage. The Long Term
300
Debt (LTD) to EBITDA Ratio improved sharply from 209% in 2010 to 97%
in 2011. The EBITDA Interest Coverage Ratio progressed as evidenced by
the increase from 238% in 2010 to 402% in 2011
200
100
0
2008
2009
2010
2011
EBITDA interest coverage ratio (%)
LTD to EBITDA ratio (%)
34
35
243 YEARS OF KERSTEN ANNUAL REPORT 2011
About C. Kersten en Co. N.V.
C. Kersten en Co. N.V. is one of the largest privately-owned and diversified group of companies in Suriname. Our history
represents a proud legacy of leadership, learning, industry firsts, social responsibility and integrity. For more than 243 years, we
deliver value consistently and responsibly while continuously adapting to change.
Our Vision
Our vision is to be the company in Suriname most respected for its people, excellence and core values.
Our Mission
We are committed to be the best in our industries in Suriname while continuously protecting the environment and people and
achieving superior shareholder value.
Incorporation Date
June 29, 1768
Corporate Headquarters
About C. Kersten en Co. N.V.
Address: Domineestraat 36-38, Paramaribo, Suriname
Address: P.O.Box 1808, Paramaribo, Suriname
Phone: +(597) 471150
Fax: +(597) 478524
Website: www.kersten.sr
Leadership
Supervisory Board
Mr. David Voûte Chairman
Mrs. Annemarie Hiralal-Norden Member
Mr. David Roth Member
Mr. Johan Stam Member
Mr. Hugo Fernandes Mendes Member
Board of Directors
Mrs. Shirley Sowma-Sumter Chief Executive Officer
Mr. Richard Tjon A Joe Chief Operations Officer
Mr. Antoine Brahim Chief Commercial Officer
Mrs. Shirley Sowma-Sumter Chief Financial Officer
36
37
243 YEARS OF KERSTEN ANNUAL REPORT 2011
Division Structure and Business Activities
MOTORS AND HEAVY EQUIPMENT (Division Manager: Mrs. Shirley Sowma-Sumter)
1. CKC Motors Company N.V. and subsidiaries, Automotive sales, rental, lease and financing
2. CKC Machinehandel Surmac N.V. and subsidiary, Sale, product support, rental, lease and financing of construction,
agriculture and mining equipment, diesel and natural gas engines, and industrial gas turbines
Building and Construction (Division Manager: Mr. Antoine Brahim)
3. CKC Bouwmaterialen Exploitatie Maatschappij BEM N.V., Manufacturing of concrete products
and building materials business
4. Algemene Installatie Maatschappij N.V. (Alginco), Electro-technical-, air-condition-, machine building-,
electronic parts and systems sale, installation and finance
5. Vensur N.V., Cement production and trade of cement products
6. Spanbeton N.V., Production of pre-stretched concrete plates
Hospitality (Division Manager: Mr. Richard Tjon A Joe)
7. CKC Hotel Maatschappij N.V., Hotel operation and franchises
“We deliver value consistently
and responsibly”
8. BergenDal, Eco- en Cultural River Resort N.V., Eco Resort and Adventure Center
Health Care (Division Manager: Mr. Glenn Wormer)
9. CKC International Commodities N.V. (Incom), Trade in medicines, medical supplies and
medical equipment as well as consumer products
10. Surinam Laboratories (Surlab) N.V., Production and trade of chemical products
11. CKC Medicare N.V., Health care services
Real Estate and Properties (Division Manager: Mr. Richard Tjon A Joe)
12. CKC Warenhuis N.V., Lease of real estate
13. Neptune Financiële Dienstverlening N.V., Financial services
Kersten Communication Services (Division Manager: Mr. Richard Tjon A Joe)
14. SNT Kersten N.V., Communication services
Holding Services (Division Manager: Mrs. Shirley Sowma-Sumter)
15. N.V. Handelmaatschappij S.M. Levie, Registration of trademarks and intellectual property
16. Kersten Lease N.V., Lease company
17. CKC Corporate Facilities N.V. (CORFA), Temporary employment agency
Community Development
1. Stichting C. Kersten en Co. Toerisme Ontwikkeling (Kersten Tourism Foundation), Community development
3
39