Annual Report 2013

CONTENTS

Message from the CEO

Report of the Supervisory Board

Macroeconomic perspective in 2013

2013 Operations: A Year in Review

Condensed Consolidated Financial Statements

Independent Auditor’s Report

Financial Performance

C. Kersten en Co. N.V.

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We successfully completed a group-wide strategic plan to adjust our oper-ations in an effort to leverage synergies and optimize growth opportunities. In this framework, a new online archi-tecture and E-Commerce strategy was developed. Despite a tremendously volatile and challenging business en-vironment, we were once again suc-cessful in achieving record sales and profits. As we continued to modern-ize our operations to better serve our customers and improve compliance with global environmental and social standards, we played a pivotal role in facilitating economic growth in Su-riname. Solid progress was achieved with our strategic objectives which are aimed at addressing the challenges we face as a company. These objectives are to ensure we continue to uniquely po-sition ourselves to help our customers succeed in the future, while creating a more productive and capital efficient organization. We re-balanced our port-folio through organic growth, acquisi-tions, and divestitures. This is demon-strated by our entry into the gold trade via Smaragd Mining N.V., the acquisi-tion of the Caterpillar dealership for French Guiana, divestment of non-per-forming assets, and the funding and implementation of our capital expen-diture program. Our overall health and safety performance has improved con-siderably, while we continue to make a positive and long-lasting difference through our community programs.

Looking ahead, we will improve our cost competitiveness and gain a great-er market share, by offering even more solutions tailored to the needs of our customers. Further growth in revenues will depend on a number of external factors, e.g., recovery of the global economy and the execution of capital investment programs by the mining industry and the government of Su-riname. We will continue to invest in activities that provide the basis for cre-ating sustainable shareholder value.

Thanks to our partners, financiers, suppliers and customers for their un-ceasing trust and support. I also thank and acknowledge our over 900 employ-ees for their continued commitment to our group of companies, our values and our vision.

Shirley Sowma-Sumter Chief Executive Officer and Chief Financial Officer

Message from the CEOThe year 2013 has in many respects been special. On the 29th of June 2013, Kersten celebrated 245 years as a company built on a solid growth strategy, which has stood the test of time. During these 245 years, we repeatedly demonstrated the courage, commitment and spirit to face the challenges of survival and growth, and secure the long term viability of our business. We have proudly celebrated this memorable anniversary in appropriate fashion, by giving back to the society to which we owe our entire existence. To mark this unique milestone in our history, Kersten, together with our joint venture partners Cementos Argos S.A., and SNT Kersten N.V., established the Kersten Foundation Scholarship Fund. This fund aims at strengthening one of the most significant foundations of our society, namely, the educational level of our youth and, by extension, the future of Suriname as a country.

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Report of the Supervisory Board In compliance with the provisions of articles 9 and 12 of the Articles of Association we have the honor of submitting the annual report and accounts for the financial year 2013, 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 Section 12.6 of the Articles of Association, we recommend that you adopt the annual accounts as presented, and discharge the Board of Management of their responsibility in respect of the management executed 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 1,500,000 and to add USD 6,184,873 of the Net Profit of USD 7,684,873 to the general reserves.

Kersten again showed a strong perfor-mance in its 245th year of existence. Most of our companies are ISO and OSHAS certified. Motors added new brands to its portfolio. Surmac exceed-ed the record turnover of 2012. The in-troduction of the new brand for our cement products was a success. To-gether with Spanbeton ready mix was successfully introduced and BEM de-veloped new products such as the an-ti-parking pickets. The renovation and upgrading of Hotel Krasnapolsky was completed and a number of events attracted many visitors. SNT Kersten continues to grow as does Corfa. Our Health Care division shows a strong performance and in particular the Healthy Lifestyle Program amongst our staff is successful.

In spite of its age, the oldest company in the Western hemisphere, Kersten is more alive and kicking than ever and we all strive for it to continue for an-other 245 years. Our success can only be realized with the support and com-mitment of all our employees. For this we would like to express our gratitude. We thank them for their valuable con-tribution and unrelenting efforts. We also would like to thank our custom-ers and suppliers for their continued confidence in us. And last but not least we would like to compliment manage-ment with the results achieved.

David A.Voûte Chairman

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www.adayinthelife.sr

Macroeconomic Perspective in 2013 A challenging macro-economic environment Stagnating world economic recovery affected commodity markets The world economy is slowly recovering from the recession that erupted some 5 years ago. Data from the International Monetary Fund indicate in 2013 the growth in world Gross Domestic Product remained at a modest 3 per cent. In advanced economies, consumers were reluctant to spend, due to the uncertain situation on the labor market. Private investments were subdued, given the existing overcapacity. Several emerging economies with weak fundamentals, including Brazil, Turkey, India and South-Africa, were confronted with a change in market sentiment triggered by an anticipated raise in interest rates by the American monetary authorities. Subsequently, there were capital outflows and currency depreciations.

In Latin America and the Caribbean average growth decelerated to 2.6 per cent from 3.0 per cent in 2012. Gener-ally speaking, fragilities continued and downside risks remained, making it necessary to push ahead with reducing financial imbalances and structural re-forms. Fortunately, during the second half of the year, encouraging signs of recovery were detected in some coun-tries, particularly in the United States and Japan.

The stagnating growth in general busi-ness activities was reflected in decreas-ing commodity prices. On the London Metal Exchange, the average gold price fell by 16 per cent to USD 1,411 per troy ounce, following a decade of strong in-creases. Demand for gold was also dis-couraged, inter alia, by signs that the ad-vanced economies are gradually making progress in restoring financial stabil-ity; this reduced the perceived safe- haven function of gold. Demand was de-pressed as inflation remained low, and interest rates showed some upward ten-dency, making gold less attractive as an inflation hedge. At the same time, sup-ply increased, despite higher production costs, putting strong pressure on the profitability of the gold companies. Brent oil prices fell by a modest 3 per cent. The average annual price remained at a rel-atively high level of about USD 109 per barrel, due to geopolitical tensions and a reduction in supply. The highly cyclical sensitive price of aluminum increased only marginally, after it fell by 15 per cent in 2012. Food commodities were 11 per cent cheaper.

WEAK COMMODITY PRICES REDUCED THE EXPORT PERFOR-MANCE OF SURINAME The disappointing developments on the commodity markets caused an 11 per cent decline in the value of Suriname’s merchandise exports. The mining sector accounts for an ample 95 per cent of to-tal exports. On the other hand, imports grew by 9 per cent, resulting in a sharp reduction in the trade balance. Also, less net income transfers were received. These deteriorations were only partly compen-sated for by improvements in the services and income accounts, by inflows of direct investments, and loan proceeds. On bal-ance, a quite large overall balance-of-pay-ments deficit was recorded. Consequently, international reserves held by the Cen-tral Bank of Suriname shrank by 23 per cent. At the end of 2013, these reserves amounted to USD 775 million; equivalent to about 5 months of imports of goods and services.

The decline in exports was also brought about by a reduction in the production volume of the mining sector, which (in-cluding industrial processing) accounts for an estimated one third of gross do-mestic product. Additionally, this sec-tor exerts strong spin-off effects on the rest of the economy. There are indica-tions that these effects were not fully compensated for by a surge in public spending, a further rise in consumption caused by an increase in bank lending, and the ongoing investments, particu-larly, in the expansion of the oil refin-ery. On the basis of presently available information, it is expected that in 2013

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growth in the volume of general busi-ness had decelerated somewhat to less than the 4 per cent annual average of the past few years.

REDUCED EXPORTS AND IN-CREASED SPENDING WEIGHED ON PUBLIC FINANCES The decline in merchandise exports also put pressure on government revenues, since about one third of these revenues originate from the mining sector. On the other hand, there was a continuous upsurge in current spending. The rapid execution of a social program and fur-ther salary increases for public servants, clearly weighed on the budget. Accord-ing to estimates based on provisional data, the cash deficit surged to at least 6 per cent of Gross Domestic Product. This deficit was mainly financed by taking re-course on the credit facilities of the bank-ing sector, including the Central Bank of Suriname. Foreign loans were also mobi-lized. Total government debt increased by 7 percentage points to 37 per cent of Gross Domestic Product, excluding pay-ment arrears to suppliers which, appear to have increased in recent years. Government financial operations con-tributed to a sharp increase in money creation by the banking sector. Its net domestic assets grew notably by 46 per cent to about half of the sector’s balance sheet total at the end of 2013. Almost 40 per cent of this growth re-sulted from government transactions. The remaining 60 per cent was main-ly caused by a further 20 per cent expansion in banking credit to the private sector. Part of the excessively

created domestic liquidity was used to buy foreign goods, contributing to the net outflow of funds to overseas, referred to earlier. On balance, the domestic liquidity supply grew by 11 per cent, down from 21 per cent in the preceding two years. Its ratio to Gross Domestic Product increased somewhat, to 47 per cent. The outflow of funds to overseas, also contributed to a remarkable decrease of the annual consumer price index to 1.9 per cent from 5.0 per cent in 2012. Due to the existing overcapacity in the world economy, import prices were attractive. Inflation was also modest as the depre-ciation of the Suriname currency vis-à-vis the US dollar on the free market, caused by the excessive domestic mon-ey creation, could be contained within a 5 percent band, by the Central Bank of Suriname’s currency interventions. Moreover, prices of some basic products were supervised by the government.

SHORT-TERM OUTLOOK REDUCED TO STABLE DUE TO INCREASED RISKS The rather uncertain situation on world commodity markets may continue to adversely affect the mining compa-nies and the economy of Suriname in the near future. Additionally, there are financial stability risks ensuing from the deterioration of the public finances and institutional constraints that limit the capacity to execute projects. Other domestic sectors are confronted with diseconomies of scale and structur-al bottlenecks, resulting in low factor productivity. Against this background,

Moody’s decided in February 2014 to re-duce the rating outlook for Suriname’s government debt from positive to sta-ble, while affirming its BB-status. More-over, IAMGOLD postponed the building of a new gold mine for one year but con-tinued sustaining investments.

Thus, the short-term outlook is some-what clouded and challenging. How-ever, from a medium term perspective, the prospects are much more encour-aging. After all, economic activity will be stimulated, and the balance-of-pay-ments will be strengthened, when the expanded oil refinery is put into full op-eration during 2015. Production growth rate will accelerate notably when the planned investments in the gold sector are eventually realized. Therefore, we should now be prepared to meet the challenges ahead. Both the private and public policymakers should institute well-balanced actions aimed at expand-ing the local project execution capabil-ity, improving our competitive position, broadening the economic base, and up-grading institutional and administrative frameworks.

Suriname 2009E 2010E 2011P 2012P 2013P 2014P

Real GDP growth (%) 3.0 4.1 4.2 4.0 4.5 4.5

GDP per capita (USD) 7,490 8,329 8,087 9,010 9,451 9,839

Overall fiscal balance (% of GDP) -3.0 -3.1 -3.0 -4.0 -3.0 -2.0

Total public debt (% of GDP) 27 28 29 30 32 33

Gross international reserves (months) 5.2 4.9 5.0 5.2 4.5 5.0

Investments incl. informal sector (% of GDP) 25 23 25 27 24 22

Macroeconomic Perspective in 2013

Sources: Central Bank of Suriname, International Monetary Fund

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2013 operations: a year in review > Motors and Industrial EquipmentBuilding and ConstructionHospitalityHealthcareReal Estate and PropertiesCommunication ServicesHolding Services

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2 PMIt’s 2 pm and we are busy

with our training in the simulation training center of

Surmac, to ensure we keep our skills up to date.

Motors and Industrial Equipment

SURMACIn spite of a delayed implementation of expansion investments in the gold mining industry, Surmac continued its impressive performance. This re-sulted in the company becoming one of the best performers in the group of 32 Caterpillar dealers operating in the Caribbean region, Latin America and Central America. Although sales in 2013 again reached record heights, the bottom line was lower than in 2012, due to higher costs. From an opera-tional point of view, considerable prog-ress was evident from investments in people, systems, customer service, safety and quality. We will continue to upgrade our operations, especially in the area of technology enabled solu-tions and customer experience man-agement.

The Allied Products Department was established in fiscal 2013 and the Per-kins and IConcentrator agencies add-ed to the already broad portfolio of agencies. The IConcentrator agency is expected to help shape our policy of boosting “green gold mining”, and bring about a positive impact on the industry as a whole. Our entry into the gold trade in fiscal 2013 with Smaragd Mining N.V. and our positioning closer to the artisanal gold mining segment must in the long run yield a positive effect for Surmac. Sales, product sup-port, financing and rental of industrial equipment also surpassed expecta-tions. Our strategy with respect to fur-ther penetration into the power gen-eration and energy sector is beginning to bear fruit. The basis has been laid for our first Private Public Partnership in the energy sector which must con-clude in 2014.

We obtained the Caterpillar dealership for French Guiana. This dealership anticipates increasing economic co-operation between our two countries, especially in the area of mining and construction. It will result in better diversification in our portfolio of cus-tomers and markets, and increased leverage of our synergies. At the mo-

ment, the energy, building and con-struction sectors are interesting areas of growth in French Guiana. These pos-itive growth expectations have partly resulted in the recent establishment in French Guiana of our joint venture partner Cementos Argos S.A.

Surmac opened a Training Center, focused on developing the human capabilities of those using heavy equipment in the production sector. It turned out that the Training Cen-ter meets an enormous need, both for our customers as well as the general public. It also supports our communi-ty goals, by contributing to Stichting Lotjeshuis Suriname, a home for ne-glected children.

The construction of our new dealer facility commenced and will be opera-tional by the end of 2014. The Compo-nent Repair Center, however, will, as of mid-2014 be operational to serve our clients even better, especially those in the mining sector. At Dijkveld, on a site next to the facilities of BEM and Span-beton, a location has been designated as a bonded warehouse for storage and display of imported heavy equip-ment. Surmac was recertified for ISO 9001-2008, ISO 14001-2007 and OSHAS 18000.

The rice sector is still the most im-portant agricultural export of Surina-me. However, the industry is coping with problems including an outdated infrastructure and a relatively low world market price. Despite these cir-cumstances, a record sow was realized in 2013. Our branch in the district of Nickerie has experienced much com-petition from government-to-govern-ment deals, enabling the importation of heavy equipment financed through bilateral loans. The Stichting Machina-le Landbouw, a state-owned company located in Wageningen in the district of Nickerie, with still one of the best rice acreages in Suriname, has applied for external financing in an effort to re-start operations. If granted, this will lead to rehabilitation of

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4 AMI am proud to be a member of

the maintenance team that works at Rosebel gold mine of our customer IAMGOLD who we offer

24/7 worldclass support.

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“ I started here without knowing anything about earth moving equipment. Now I am a professional. We work day & night, day in day out with a dedicated team. Everyday I celebrate the passion for my job.”

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7 AM

production facilities, which have been out of use for a considerable time. Staatsolie Maatschappij Suriname N.V. is developing a sugarcane plantation, a sugarcane-ethanol and sugar process-ing and energy plant in Wageningen. This project offers good market per-spectives. The expected completion in 2014 of the privatization of the state-owned banana company SBBS also cre-ates interesting business opportunities.

MOTORSThe business environment for motor vehicles continues to be volatile, chal-lenging, and with an increasingly un-even playing field. As in 2012, Motors also met with fierce competition in the rental segment as well as in the mar-ket for new and second-hand vehicles. Much competition is being encountered in the rental market, notably from pri-vate individuals and small businesses often operating in a grey area, with lit-tle regard for standards. The competi-tion invested in the modernization of their operations including remodeling of showrooms. New car brands entered the market, especially in the SUV cat-egory. The average age of vehicles on our roads is seven years; consequent-ly, there is a high demand for replace-ment cars. Moreover, with the general economic situation improving in 2013, lenders, including Motors, are offering more car loans in combination with attractive financing conditions, with increased focus on maintenance and repairs.

The decision by the government to recall the Tax Exempt status on ve-hicles had a negative impact on the business community. 2013 turnover deteriorated compared to 2012. One of the underlying causes was a delay of expansion investments in the gold mining sector because of a declining international gold price, and mining agreements with the government had yet to be concluded. However, the com-position of 2013 sales volume has been much healthier. There were more sales of new motor vehicles to individuals and relatively less to businesses, partly

due to greater access to credit facilities offered by lenders. The fierce competi-tion in the pickup segment had mar-gins under enormous stress, resulting in our company having to settle for slim profit margins.

The portfolio of car dealerships which comprises Toyota, Chevrolet, Mitsubi-shi, Mahindra, JAC, Ankai, Joy Long and Jin Bei was further expanded to include Toyota Lexus and Hino. Motors also in-troduced the Toyota Prius hybrid mod-el. Consequently, our market share in the passenger car and bus segments continued to improve. Growth in the pickup and truck segment, however, remained below expectation and is cause for great concern. Motors con-tinue to invest strongly in training and development of staff and management in the areas of customer service, man-agement and leadership. The modern-ization and expansion of the parts, sales and service departments have begun. Investments were made in a new showroom and a visible enhance-ment of onsite support to clients in the mining sector. Meanwhile, negotiations have started for expansion in the num-ber of sales locations. In 2013 Motors has been recertified for ISO 9001-2008 and ISO 14001-2007.

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3 PMServing one more

satisfied customer

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2013 operations: a year in review Motors and Industrial Equipment>Building and ConstructionHospitalityHealthcareReal Estate and PropertiesCommunication ServicesHolding Services

Building and Construction

ARGOS SURINAMEThe year 2013 was defined by trans-formation and unification. All forces joined together to make the transfor-mation from the Vensur brand to the Argos brand a successful one. Thor-ough preparation and full commit-ment by all stakeholders ensured a top-notch launch in Suriname, which we will always reminisce about with feelings of excitement and harmony. In order to expand our product port-folio and better suit the needs of our customers, we launched a new pro-duction unit in 2013, Argos Concrete, as part of our business strategy. The concrete unit which produces ready-mix concrete for ready-mix produc-tion is in train at a second location in Paramaribo-North.

Next to the introduction of this busi-ness unit, and the launch of the ‘new’ brand in Suriname, 2013 was also characterized by increasing storage capacity, improving the efficiency of the production process and drastic cost reduction. Important develop-ments were made in this field and will be followed up in 2014. The renovation of the clinker storage warehouse was finalized and with this another big improvement was accomplished in creating an environmentally friendly facility. The focus on cost reduction re-sulted in a significant margin improve-ment. We also laid the foundation to further increase our market share in 2014, namely, through negotiations with Van Alen’s Beton Industrie (VABI) to conclude a clinker grinding agree-ment. VABI is an important concrete products producer in Suriname.

The local cement market in Surina-me showed a slight decrease in 2013, as opposed to 2012, mainly caused by adverse weather conditions as well as fewer government and private sector housing and infrastructure projects. Our market share dropped slightly in 2013, due to the lack of government construction projects, as well as the Staatsolie Refinery Expansion Project winding down on the procurement of concrete. An interesting 2013 proj-ect for Argos Suriname has been a joint-initiative housing project of Ker-sten, the Ministry of Public Works and the Ministry of Finance, with the goal of building 160 affordable houses at Hanna’s Lust. The Argos brand is cur-

rently represented in 110 retail stores throughout Suriname. These retailers form approximately 34 per cent of our customer base, whereas, producers ac-count for an approximate 58 per cent, and contractors approximately 6 per cent. An important activity we orga-nized in 2013 was the business trip to the Argos home ground, Colombia. We invited a select group of existing and prospective customers, as well as press representatives, to join us in a trip to Colombia to get acquainted with the company and get a better un-derstanding of what Argos is all about.

The launch of Argos Suriname in July 2013 was the main marketing activity of the year, positioning our company as an innovative, professional and sol-id multi-domestic company. Next year Argos Suriname will be ISO 9001-2008 certified. Our joint venture partner Cementos Argos S.A. has recently ac-quired Ciments Guianais, cement as-sets of Lafarge and Holcim in French Guiana. This acquisition certainly of-fers more opportunities for strength-ening of cooperation between our companies, and it will create logistical synergies with the operations of Argos Suriname.

BEM Competition continued to be intense, both in terms of pricing, as well as products and services offerings. Al-though 2013 overall sales dropped compared to 2012, margins improved significantly. This was due to the im-pact of a lower-yielding housing proj-ect on 2012 sales, and better work-ing capital management, resulting in lower financing costs. 2013 saw an increase in sales for tailor-made prod-ucts for our customers Ballast Nedam (Staatsolie Refinery Project) and Tjon-galanga (Parking Pole designed for downtown Paramaribo road re-devel-opment). In April 2013 an agreement was concluded between Kersten and the government of Suriname for the construction of approximately 160 affordable houses at Hanna’s Lust. This affected BEM positively, and more building blocks and pavers were sold. Although severe rainfall since June caused great delays of many building and construction projects, our Building and Construction Division was still ac-tive in constructing houses at various locations. The “House in a Bag” models

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of BEM attracted much interest from the Dutch market initially, but there is an increasing interest in Suriname, especially among newlyweds who are first-time homeowners. Accelerated in-vestment is being made to improve the efficiency and reliability of the MASA machine, new industrial equipment, safety, as well as construction of new office facilities. BEM was ISO 9001-2008 recertified.

SPANBETONIn line with the product diversification previously initiated by Argos Suriname, a new production unit, namely, Vensur Concrete was started at the beginning of 2013. Vensur Concrete produces ready-mix, utilizing the factory facili-ties of Spanbeton. Spanbeton’s sale of channel plates in 2013 was lower com-pared with 2012. The gross margin was considerably higher, however, resulting in a significant improvement of the net operating profit.

Extreme rainfall negatively affected building and construction activity as a whole, which contributed to the de-crease in revenues. Also, 2013 saw few-er large projects executed. The delay in execution of a project of one of our subsidiaries was also a contributing factor in lower turnover. The quality of the factory and technical equipment was upgraded and further expanded. Spanbeton was ISO 9001-2008 recer-tified. Argos Suriname has plans in place for the installation of a mobile batch plant in Paramaribo-North, so that ready-mix can now be obtained at more than one location.

Like father like son

Because working at Argos, means working daily alongside my father while being able to make a significant contribution to the construction sector in Suriname by producing high quality products, I start every single working day with a smile.

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ALGINCOAlginco is clearly on the rise. 2013 was characterized by a remarkable growth in sales and excellent results com-pared to 2012. This growth, among oth-er things, is attributed to the overflow of projects dating back to pre-2013. Alginco also had substantial inter-company sales. The strongly improved managing of cost and working capital, supported by the use of new software, resulted in a substantial improvement of the profit margin.

Alginco continued shifting its focus from retail servicing offered to the gen-eral public, to being an exclusive ser-vice provider to the “business-to-busi-ness” segment of the market. Alginco is constantly positioning itself in the market as a high quality service pro-vider, capable of executing large and technically complicated electro-tech-nical orders. This is not only possible because of the in-house high level of technical expertise, but of equal im-portance, because of the quality of the portfolio of agencies. This policy has consequently resulted in even larg-er projects currently being executed. Another successful Alginco policy is to especially attract retainer private corporate clients, which, to an increas-ing extent, has provided for a constant and predictable flow of income. Algin-co has been recertified in 2013 for ISO 9001-2008 and simultaneously made significant improvements to its facili-ty, in order to better serve its customer base. The positive trend in sales and net profits set in 2013 is expected to continue in 2014.

“Working at Alginco, means being able to excel at your job on both large and smaller projects.”

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KRASNAPOLSKY HOTEL According to figures from the World Travel and Tourism Council the di-rect contribution of Travel and Tour-ism to Gross Domestic Product in 2013 amounted to merely 0.9 per cent or SRD 160 million. This was just 64 per cent of the level of 2008. Measured in real terms, 2013 in fact was marked by a de-crease of the direct contribution of Trav-el and Tourism to Gross Domestic Prod-uct of 0.4 per cent. Total contribution of Travel and Tourism to Gross Domestic Product amounted to only 56 per cent of the level of 2008. These developments are also reflected in the revenues of Hotel Krasnapolsky coming from the hotel business. Apart from those of the hotel business and

the franchises, the revenues of the ho-tel consist also of rental income of SNT Kersten. The economic recession in Eu-rope is still noticeable and the hospital-ity industry is going through a decline, despite the growing number of travelers to Suriname. 2013 Visitor exports were at 77 per cent of the 2008 level; domestic expenditure at 76 per cent. The majori-ty of visitors were “visiting friends and relatives” and other groups that do not stay in hotels. Another noticeable trend is the growing demand for apartments and/or holiday homes. This trend may also be observed with tourists coming from French Guiana looking for cheaper accommodation. This target group espe-cially, constitutes an important part of the visitor’s pool of Hotel Krasnapolsky.

2013 operations: a year in review Motors and Industrial EquipmentBuilding and Construction>HospitalityHealthcareReal Estate and PropertiesCommunication ServicesHolding Services

Hospitality

These developments have resulted in a large number of promotional activities being initiated in order to increase the occupancy rate. Special prices during the holiday fair in the Netherlands, trav-el packages aimed at both the local and the French Guianese market are some of these initiatives. The competition also is experiencing the same problems which have resulted in an apparent price war. Marketing activities aimed at tourists from other parts of the world have not yet yielded the desired effect. Despite these developments the hotel managed to realize an overall growth in reve-nues of 25 per cent. This overall growth was realized through a better perfor-mance by the franchises and increased rental income from the premises. Ef-

forts to comply with the international standards are being pursued. The hotel was ISO 9001-2008 recertified in 2013; the ISO 14001-2007 recertification will take place next year.

BERGENDAL, ECO- AND CULTURAL RIVER RESORT (BERGENDAL)On the 20th of December 2013 Berg- endal commemorated the 5th anniver-sary of the resort. The cable-lift at the Adventure Center had been taken into use a few months earlier. The resort, consisting of 45 first class, freestand-ing and beautifully decorated lodges and other facilities, has been integrated into the nature of the Brokopondo Dis-trict. Bergendal also suffered from the prolonged recession in the Netherlands

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It’s noon and lunch is almost ready. At Krasnapolsky, we take pride in the way we carefully prepare our courses and continuously surprise our guests with the most tasteful culinary delicacies that keeps them coming back for more.

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Noon

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because of its dependency on the Dutch tourist market. The decline in occupancy had a direct influence on the activities and revenues from the Adventure Cen-ter. The number of corporate functions also decreased considerably. Together, these developments have resulted in ex-tra promotional activities geared towards increasing the occupancy rate. Marketing activities aimed at tourists from other parts of the world, such as the collaboration with Sunny Land Tours USA and Surinam Airways have not yet yielded the desired result. The strong focus on costs has resulted in higher cost efficiency and labor productivity. Arrangements with suppliers have pro-duced better price-fixing. For the third time in a row “Bergendal Amazon Fla-vors” was organized. The kick-off for this event was marked by an “Extravaganza Star Dinner” in Hotel Krasnapolsky. A number of renowned chefs and a som-melier from the Netherlands, together with Surinamese chefs, gave luster to this event. The funds generated with Berg- endal Amazon Flavors will benefit the Stichting Kersten Toerisme Ontwikkeling (Kersten Tourism Foundation). Bergendal will be ISO 9001-2008 and ISO 14001-2007 certified in 2014.

FRANCHISESAverage franchise revenues in 2013 rose by 34 per cent compared with 2012 and continued to be an important contribut-ing factor to the positive performance of Hotel Krasnapolsky. The continuing ex-pansion of the Popeye’s network remains our great priority.

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“We enjoy catering to our guests and ensuring their stay at Bergendal allows them to fully experience the plea-sures of the beautiful environment in a way that is both comfortable and luxurious.”

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2013 operations: a year in review Motors and Industrial EquipmentBuilding and ConstructionHospitality>HealthcareReal Estate and PropertiesCommunication ServicesHolding Services

Healthcare

INCOMFiscal year 2013 brought little change in the continuing dire financial po-sition of the hospitals. This is pri- marily caused by a discrepancy be-tween actual patient costs and reim-bursements received for patients with health insurance provided by the SZF, the State Health Insurance Company and the largest health care insurer in Suriname. Also these reimbursements are not made in a timely manner. Set-tlement on the basis of real incurred costs is only effectuated for a relative-ly small group of non-SZF patients, in-sured by private insurance companies. Against this background, it is remark-able that hospitals in Suriname have nevertheless made great progress. The available expertise, medical equip-ment and specializations bear witness to this. Incom, as one of the major ser-vice providers in this industry, is also impacted by these developments. In-com mainly offers medical consum-ables, pharmaceuticals, raw materials, medical devices, instruments and con-trast media. Overall turnover in 2013 experienced a growth of over 6 per cent, however, margins narrowed due to stiff price competition from com-petitive products of lesser quality. We also extended financing solutions to the market.

Incom is furthermore involved in the import and distribution of consumer products, i.e. the non-medical segment of the business. Incom has been certi-fied ISO 9001-2008 and ISO 14001-2007 in 2013. In addition, it acts as clearing agent for Surmac and income from these activities has also made a con-tribution to the company’s financial performance.

SURLABSurlab produces Alcolado Glacial un-der the license of Curaçao Labora-tories Ltd. In 2013 we experienced a growth in turnover of well over 10 per cent associated with a volume growth of 6 per cent. Surlab is now involved in negotiations regarding the produc-tion of a liquid-based hand sanitizer focused on markets outside Suriname.

MEDICAREMedicare offers high-quality health care services (curative and preven-tive care), especially for the staff and pensioners of Kersten and members of their families. The company also provides first line medical care such as physicians, laboratory services and medical examinations. In 2010 Medi-care started to transfer the risk of the Kersten population to SZF. Revenues increased significantly in 2013 as pre-miums were adjusted competitively to market tariffs and higher lease income from its real estate was generated. As part of our healthy lifestyle pro-gram, with a shift from disease treat-ment to disease prevention, a medical survey was conducted among 482 em-ployees. Preventive healthcare is espe-cially important given the worldwide rise in prevalence of chronic diseases and deaths from these diseases. We en-courage our personnel to visit health-care providers for regular check-ups, to perform disease screening, identify risk factors for disease, and formulate a plan of action for a healthy and bal-anced lifestyle. Also in the framework of health and safety promotion, ongo-ing drugs and alcohol tests were per-formed and our anti-smoking policy enforced. The foregoing policy has so far resulted in historically low levels of absenteeism.

33 Annual 2013

Annual 2013Page 36

6 Annual 2013

2013 operations: a year in review Motors and Industrial EquipmentBuilding and ConstructionHospitalityHealthcare>Real Estate and Properties>Communication ServicesHolding Services

SNT KERSTEN N.V. (SNT KERSTEN) The nearly doubling in sales achieved by SNT Kersten could be attributed to the increasing diversification of, and the growth in the clients’ portfo-lio. SNT Kersten has been particularly successful in providing a comprehen-sive range of export-oriented custom-er management solutions, through an integrated partnership with the Netherlands-based Customer Con-tact Management Group B.V. In fiscal 2013, strong emphasis was placed on upgrading the efficiency of personnel. Concurrently, the pool of employees was further increased and profession-alized. The number of projects and workplaces doubled while the amount of employees tripled.

As part of our Corporate Social Responsibility policy, SNT Kersten provided support to the campaign of “Giro 555 Philippines” by handling incoming calls of sponsors. The cam-paign was conducted in the Nether-

lands in connection with the immense natural disaster in the Philippines. The campaign raised well over € 35 million.

In 2014, further growth in the activities of SNT Kersten is expected, directly resulting in demand for more office space in the Krasnapolsky Building, where its operations are currently located. In terms of employment creation, SNT Kersten is the fastest growing subsidiary of the Kersten Group. SNT Kersten is also considered a powerful strategic instrument devoted to developing the international growth trajectory of Kersten, with a laser-focus on the global economy.

Real Estate and Properties

KERSTEN FINANCE N.V., FORMERLY CKC WARENHUIS N.V. In 2013 the Articles of Association of CKC Warenhuis N.V. were amended, changing the name to Kersten Finance N.V. The main activities of Kersten Finance N.V. are that of a Holding company, the trade in movables and real estate, investment advisor as well as financier and financial intermediary. In October 2013 the land and buildings of the former Warenhuis (Department Store) were divested following the unanimous decision approved by the shareholder of Kersten in October 2010. The sale took place under certain stipulations which relate to the preservation of the histor-ical value of the location. Furthermore, these stipulations take into account the presence of the adjacent Grote Stadskerk (Church) of the Evangelische Broeder

Gemeente Suriname. The first mission-aries of the Unitas Fratrum started their work in Suriname at the end of 1735, at the plantation Berg en Dal, and conduct-ed their first commercial activities in Paramaribo at the site on the corner of Steenbakkerijstraat and Maagdenstraat. However, many people in the communi-ty perceive the Warenhuis as the place where the firm Kersten was established 245 years ago, in 1768. The Warenhuis building had been a non-performing as-set for over twenty years, during which time it ceased to be part of the core busi-ness of Kersten. Apart from being an un-acceptable business risk, the building was no longer commercially viable, but more importantly, the decision to sell the prop-erty, was driven by the need to redirect the capital to secure the growth and sustain-ability of the rest of the Kersten Group.

NEPTUNE FINANCIËLE DIENSTVERLENING (NFD) Again in this reporting year no devel-opments took place worthy of men-tioning. As stated before, as of 2009 NFD holds a 40 year lease on 53.4 hectares of the Belle A Soir property in the district of Commewijne. The proj-ect was intended for the development of affordable housing with the In-ter-American Development Bank and De Surinaamsche Bank N.V.; however, it had to be put “on hold” due to infra-structural deficiencies of the area. To-gether with our strategic partners, we are committed to explore sustainable business initiatives geared to satisfy-ing the needs of the low income hous-ing market, while at the same time making a positive social impact on the community.

Kersten Communication Services

35 Annual 2013

“Working at SNT Kersten is fun and challenging. Fun, because I enjoy the variety of the many customers I am in contact with. Challenging, because every customer has a different set of specific needs I aim tofully meet. I wouldn’t want any other job.”

10 PMAt 10 pm, SNT Kersten has

been operational for 20 hours to cater to its

customers abroad.

Annual 2013Page 40

2013 operations: a year in review Motors and Industrial EquipmentBuilding and ConstructionHospitalityHealthcareReal Estate and PropertiesCommunication ServicesHolding Services

Holding Services

SMARAGD MINING N.V. (SMARAGD)Venturing into the gold trade business was a logical next step in our custom-er-focused segment based “Mining Strategy” which includes input from product support, heavy and green gold equipment sales and rental, financing and purchasing of the output. Our Mining Strategy is geared towards fur-ther penetrating and increasing our market share in the small-scale gold mining segment, which contributes almost 60 per cent of total country gold exports. This strategy includes working effectively with strategic part-ners and stakeholders to leverage our strengths and to enhance coverage by providing a total, one-stop-solution to the market. Smaragd provides its customer base of local artisanal gold producers, a total package of convenience, quick payments, and settlements. It start-ed operations in October 2013 at one location, Waterkant 80, Paramaribo. Next year we will continue our net-work expansion by purchasing more locations. “Greening” our operations through ISO 9001-2008 certification will be one of our top priorities, along with increasing cost efficiencies and creating more diversification in our portfolio of buyers.

KERSTEN LEASE N.V. (KERSTEN LEASE) Kersten Lease provides innovative and optimal business solutions by way of various services. In the year under re-view Kersten Lease clearly capitalized on growth opportunities as evidenced by the exuberant growth of the loans under management. Contracts were completed with top management and staff of companies that are particular-ly active in mining, construction and forestry. Measured in units, growth amounted to 35 per cent; in terms of turnover almost 55 per cent.

CKC CORPORATE FACILITIES N.V. (CORFA) Completely in line with expectations, the activities of CORFA in 2013 expe-rienced vibrant growth. Turnover and results respectively have more than doubled per the end of 2013 compared with 2012. The growth could primar-ily be attributed to the provision of services to the hospitality division and the Holding company. CORFA is an important service provider of SNT Kersten. In the reporting year activi-ties, aimed at further professionaliza-tion of the organization continued. In 2014 CORFA will relocate to the histor-ic and renovated building at Domine-straat 36. One key priority will be the expansion of services to the external labor market as well as teaming with a strategic partner.

N.V. HANDELMAATSCHAPPIJ S.M. LEVIE (LEVIE)Levie was divested in 2013. The activ-ities of this company were no longer part of the core business of Kersten.

NEAL & MASSY KERSTEN ENERGY SERVICES N.V. (NMKES) The joint venture in 2013 with Neal & Massey Holdings Ltd., establishing NMKES further implemented our En-ergy Strategy. The vision of NMKES is “to be the leading energy and utility sector service provider, delivering a range of high quality technical ser-vices in Suriname”. The company’s purpose is to pursue business oppor-tunities in the oil and gas, industrial and utility sectors. NMKES brings to the market a “one stop shop” basket of services with capabilities that include: engineering, project and construction management, technical training, in-strumentation and controls, insula-tion, industrial gases, fireproofing and scaffolding as well as plant mainte-nance.

HUMAN RESOURCES SHARED SERVICE CENTER (HR SSC) The Human Resources Shared Ser-vice Center has since 2011 been sup-plying the divisions of Kersten with specialized operational and admin-istrative services. The rationale for setting up a HR SSC was to trans-form the role of HR, enabling a more strategic function at the corporate level and more cost-efficiency at the level of operations. Since the intro-duction of HR SSC an increase in the quality and professionalism of sup-port processes is apparent, but most of all, there is greater cost flexibility, and a higher degree of strategic flex-ibility. Reduction of costs of services organized in HR SSC is reported to be fluctuating around 20 per cent of the original costs. HR SSC, therefore, convincingly contributes to the com-petitiveness of the group as a whole and promotes efficiency, value gen-eration and cost savings. In 2014, in cooperation with the IT Department, a new HR system will be developed which will serve as sup-port for the activities carried out by the HR SSC. This system will also be introduced at other operating com-panies in the group, contributing to uniformity and efficiency. HR SSC is expected to extend future services to the operating companies to ensure that its objectives are realized.

39 Annual 2013

QHSEOur Quality, Safety, Health and En-vironment Team is responsible for ensuring a safe and healthy work-place, committed to minimizing the impact of our environmental foot-print. Maintaining our current ISO and OSHAS certifications is essen-tial in achieving these goals. Incom and Surlab have been certified for ISO 9001-2008 as well as ISO 14001-2007. All of the other subsidiaries of our group which earned their ISO and OSHAS certificate in 2012 were recertified in 2013. Krasnapolsky, Smaragd Mining N.V., SNT Kersten, Bergendal and Argos Suriname re-spectively, will be recertified and cer-tified in 2014. We strive to reach the highest standards in human health and safety; therefore, a healthy lifestyle is being promoted. In this framework, several medical cam-paigns are being conducted to en-sure prevention, early detection and effective treatment of diseases. We also executed our safety, non-smok-ing and alcohol and drugs policy. As a result of these campaigns, absen-teeism and the number of workplace accidents in 2013 dropped signifi-cantly compared to the year before.

COMMUNITY DEVELOPMENT Our Community Development Pol-icy ensures that our activities have

a significant impact on our staff, customers, society and the envi-ronment. This impact needs to be a positive one and we believe that this plays a vital role in the success of our business. Our dividends are in-tended to support community proj-ects of our ultimate shareholder and additionally, we have contributed significant amounts of money, time and effort to improve the capabilities of our community. We are proud to be a driving force and binding factor in the grouping of different stake-holders for these causes. In the year under review Kersten undertook a wide range of activities in the areas of empowering women and youth, entrepreneurship, NGO support and personal development. In 2013, in this context specifically, the follow-ing causes should be mentioned:

1. EDUCATION Capacity building of our human resources in Suriname is an im-portant aspect of our policy. We are upgrading the technical knowledge and skills of our workforce together with the Technical Training Insti-tutes in Suriname, so that the grow-ing demand for skilled workers is adequately met. In the year under review the “Heavy Equipment Ap-plied Technology Program” (HEATP) was further implemented, with the

painstaking support of the Minis-try of Education. To mark Kersten’s 245th anniversary in June 2013 a scholarship fund at the tertiary level was launched to benefit students of economically challenged segments of society.

2. KERSTEN TOURISM FOUNDATION (KTF) KTF was founded in 2007 with the goal to promote poverty reduction and social stability through ca-pacity building and by creating in-come-generating opportunities for disadvantaged groups in Suriname. Apart from the opening of Broko-pondo Vocational & Training Center (BVTC) in 2011, KTF has not com-pleted new community projects. The management of BVTC has been en-trusted to KTF and, as such, it has continued to play a vital role in the preservation of BVTC. By the end of 2013, three groups of students have completed their training in hospi-tality services, and found employ-ment in Paramaribo as well as in the district of Brokopondo. However, technical vocational training at a secondary level, which is also part of the curriculum offered by BVTC, has so far not gotten off the ground sufficiently. KTF continues to engage stakeholders, especially the govern-ment of Suriname, in the process of

Quality, Health, Safety, Environment & Community (GHSE & community)

40 Annual 2013

establishing technical education in Brokopondo.

3. STICHTING STUDIE FONDS KERSTEN (KERSTEN FOUNDATION SCHOLARSHIP FUND) On 29 June 2013, Kersten celebrated its 245th anniversary in Suriname. In keeping with our goal to develop the community through education, the Kersten Foundation Scholarship Fund was formed with an initial con-tribution of USD 245,000. Students of the socially challenged segment of society have the opportunity to further their tertiary education in Suriname. The foundation caters to students who are interested in study-ing and exploring careers in techni-cal sciences, business and manage-ment. On 15 July 2013, Kersten signed agreements of cooperation with the Faculty of Technical Sciences of the Anton de Kom University of Surina-me and the FHR School of Business. The Board of the Kersten Foundation Scholarship Fund comprises repre-sentatives of C. Kersten en Co. N.V. and our joint venture partners, SNT Kersten N.V. and Cementos Argos S.A. In addition to making scholarships available, Kersten offers internships and it will present an award annual-ly to the scholar with the best grades or to the scholar who has made a substantial contribution to society.

By investing in the next generation, the foundation is laid for a better and sounder Suriname. Kersten has the moral duty to contribute and in this regard a first group of 17 students were granted scholarships last Sep-tember.

4. STICHTING LOTJESHUIS SURINAME (SLS) For more than 46 years SLS has oper-ated a home for neglected children. Its mission is to legally protect and provide professional care to neglect-ed and malnourished toddlers in Su-riname. Kersten has contributed to the sustainability of the operation of SLS by entering into a lease agree-ment with this foundation. The Sur-mac Training Center is located in the building of SLS.

5. OTHER COMMUNITY PROJECTS Several of our subsidiaries have made donations in kind to; inter alia, projects in Paramaribo and the hin-terland of Suriname.

41 Annual 2013

Annual 2013Page 44

“The responsibility of Kersten Holding for the adequate supervision of all its subsidiaries means ensuring we constantly have relevant and up-to-date information and carefully plan all our activities. Having regular meetings that enables us to keep ourselves in-formed of our companies’

Annual 2013Page 0

6 PM

Annual 2013Page 46

Our strategic and joint venture partnersPart of our growth and community strategy and one of our goals, is to constantly seek cooperation with strategic partners. These partners share our values and vision and bring complementary strengths to the partnerships. A key priority of Kersten is to build winning collab-orations to realize our corporate and community goals.

CEMENTOS ARGOS S.A. (ARGOS)The 2010 joint venture between Cementos Argos and Kersten has demonstrated most tangibly a rap-id improvement in the soundness of our production process, the product quality and, most of all, growth of our market share for cement and ready-mix. Together with Argos we worked diligently to develop new commercial initiatives to strengthen the base of our Building and Construction Divi-sion and our community. Argos is rep-resented on the board of the Kersten Foundation Scholarship Fund estab-lished on the occasion of the 245th an-niversary of Kersten.

IAMGOLD CORPORATION (IAMGOLD)IAMGold is an important partner of Kersten in the area of community de-velopment by jointly strengthening the capabilities of several disadvantaged groups in the district of Brokopondo.

CUSTOMER CONTACT MANAGEMENT GROUP B.V. (CCMG) In 2010 a joint venture agreement was concluded with the Dutch communi-cations services company, CCMG, un-der the name SNT Kersten N.V.

THE NEAL & MASSY GROUP (NEAL & MASSY) Neal & Massy is the largest publicly traded conglomerate in the Caribbean with over 80 years of experience. Both Neal & Massy and Kersten are commit-

ted to human resource development in Suriname towards national capability and capacity building. In 2013 a joint venture agreement between Kersten and Neal & Massy was concluded. The first area of collaboration in this joint venture is the development of business opportunities in the oil and gas, man-ufacturing, and utilities industries, simultaneously developing capacity building.

THE GREEN COALITION The Suriname Conservation Founda-tion (SCF) is the sustainable Surinamese Environmental Fund that works for the protection of biodiversity in gen-eral but particularly in protected areas of Suriname. SCF in 2010 launched a program for the greening of the econ-omy of Suriname. Together with other big companies, Kersten among them, a partnership was concluded to initi-ate, apart from the top-down approach of the government, a bottom-up ap-proach in which the greening of the Surinamese economy is pursued; a strategy was developed that may serve as a model for other businesses and the objectives of the SCF may have the support of the members.

45 Annual 2013

Annual 2013Page 48

Condensed consolidated financial statementsCondensed consolidated statement of financial position (in USD).

Property, plant and equipment 53,067,558 49,231,929

Intangible assets 362,646 246,934

Receivables - 1,153,148

Investment property - 6,432,176

Deferred tax assets 360,000 2,159,106

Other financial assets 137,982 3,214,077

Total non-current assets 53,928,186 62,437,370

Inventories 31,322,550 24,150,416

Trade and other receivables 30,578,702 33,209,438

Income tax receivable 441,775 317,385

Other current assets 9,543,252 5,312,158

Cash and cash equivalents 10,658,168 10,248,450

Assets classified as held for sale 6,353,732 -

Total current assets 88,898,179 73,237,847

Total assets 142,826,365 135,675,217

Equity

Share capital 218,182 218,182

Share premium reserve 420,050 420,050

Retained earnings 51,744,044 45,573,761

Equity attributable to equity holders 52,382,276 46,211,993

Non-controlling interest -112,421 -372,707

Total equity 52,269,855 45,839,286

Loans and borrowings 8,600,000 10,143,751

Deferred tax liabilities 8,163,523 8,447,613

Employee benefits 5,487,714 5,654,818

Total non-current liabilities 22,251,237 24,246,182

Loans and borrowings 26,772,615 15,813,574

Trade and other payables 26,939,572 28,719,114

Short term provisions 572,948 4,580,809

Income tax liabilities 973,871 1,497,056

Other current liabilities 13,046,267 14,979,196

Total current liabilities 68,305,273 65,589,749

Total liabilities 90,556,510 89,835,931

Total equity and liabilities 142,826,365 135,675,217

ASSETS

EQUITY AND LIABILITIES

LIABILITIES

20122013

Annual 2013Page 0

Revenue 169,239,630 159,346,139

Cost of sales 123,904,089 116,901,266

Gross profit 45,335,541 42,444,873

Other income 346,235 532,275

Total income 45,681,776 42,977,148

Employee benefit expenses 10,846,184 10,897,150

Depreciation 4,280,179 4,424,383

Other operational expenses 15,333,998 18,790,403

Total expenses 30,460,361 34,111,936

Income from operations 15,221,415 8,865,212

Financial income 1,361,547 1,288,071

Financial expenses -4,376,015 -4,261,245

Net financial expenses -3,014,468 -2,973,174

Share of profit of associates -1,416,844 241,606

Income before taxation 10,790,103 6,133,644

Income taxes 3,105,230 1,050,598

Profit from continuing operations 7,684,873 5,083,046

Profit for the year 7,684,873 5,083,046

Condensed consolidated financial statementsCondensed consolidated Statement of comprehensive income (in USD)

2013 2012

Income from operations 15,221,415 8,865,212

Adjustments for:

- Depreciation 4,280,179 4,215,623

- Change in provisions -4,174,965 5,570,629

- Foreign exchange differences 185,869 -46,281

Changes in working capital

- Inventories -7,172,134 2,686,913

- Trade and other receivables 2,630,736 -6,628,731

- Other current assets -4,231,094 1,994,008

- Current loans and borrowings 10,959,041 -1,150,543

- Trade and other payables -1,779,542 -1,778,940

- Other current liabilities -1,932,929 4,174,653

Cash generated from operations 13,986,576 17,902,543

Interest received 963,243 975,668

Interest paid -4,163,580 -3,902,561

Income tax paid -2,237,789 -1,702,282

Cash flows from operating activities 8,548,450 13,273,368

Net investments in property, plant and equipment -11,257,787 -7,328,311

Correction due to reclass rental fleet Surmac - -1,854,582

Proceeds from sale of property, plant and equipment 2,325,611 821,686

In/decrease in investment property 5,790,175 -577,423

Asset classified as held for sale -6,353,732 -

Net investment in intangible assets -197,566 -86,986

In/decrease non-current receivables 1,153,148 -66,667

In/decrease non-current financial assets 3,076,095 37,895

Cash flows used in investing activities -5,464,056 -9,054,388

Result from purchase own shares Bergendal -1,130,925 -

In/decrease non-current loans and borrowings -1,543,751 102,285

Cash flows from financing activities -2,674,676 102,285

Net in/decrease of cash and cash equivalents 409,718 4,321,265

Cash and cash equivalents at beginning of year 10,248,450 5,927,185

Cash and cash equivalents at end of year 10,658,168 10,248,450

Consolidated statement of financial positionConsolidated statement of cash flows (in USD).

2013 2012

Notes to the condensed consolidated Financial StatementsCorporate information C. Kersten en Co. N.V., hereafter referred to as “the Company” is a corporation domiciled at Dominestraat 36-38, Paramaribo, Suriname. The sole parent company is the Moravian Church Foundation (MCF) Business Enterprises B.V., domiciled in Amsterdam, The Netherlands. The single shareholder of the parent company is The Moravian Church Foundation. This is a non-profit corporation created under the authority of the Unity Synod of the Moravian Church (Unitas Fratrum) for the financial support of the work of the Moravian Church.

THE PRINCIPAL ACTIVITIES OF C. KERSTEN EN CO. N.V. AND ITS SUBSIDIARIES (TOGETHER “THE GROUP”) ARE:

heavy equipment including parts;

vehicles and heavy equipment;

medicines and other healthcare products;

cement and concrete products;

machine building, electronic parts and systems;

buildings and

INTEREST IN JOINT VENTUREAs of December 31, 2013 the company participates in two joint ventures being Surcol Houdstermaatschappij N.V. and SNT Kersten N.V. The principal activity of Surcol Houdstermaatschappij N.V. is administering the shares of Vensur N.V. as of that date. That of SNT Kersten is handling customer contact for various companies and organizations in The Netherlands and Suriname in order to build and maintain good contact with their customers

PURCHASE OF OWN SHARESAs of December 31, 2013 Bergendal owns 100 per cent (2012: 58.33 per

cent) of its shares. In 2013 the Board of Directors of C. Kersten en Co. N.V de-cided to purchase these shares of the Moravian Church Foundation Business Enterprises B.V. for the amount of USD 1,130,925.83. An amount of USD 416,667 has been added to the share capital. The purchase of the shares was settled with the loan as stated in note 8.

PURCHASE AND EXPORT OF GOLDOn May 1, 2013 the company received an ordination from the Exchange Com-mission to purchase and export gold. These activities are carried out through its subsidiary Smaragd Mining N.V. Its registered office is domiciled at Domi- nestraat 36-38, Paramaribo, Suriname. Its office is domiciled at Waterkant 80, Paramaribo, Suriname. The company first started its activities in October 2013.

BASIS OF PREPARATIONSTATEMENT OF COMPLIANCEThe consolidated financial statements for the year 2013 have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). The consolidated financial statements of the Group for the year ended December 31, 2013, have been prepared by the Board of Directors and authorized for issue on April 18, 2014 and will be submitted for approval to the Annual General Meeting of Share-holders on April 29, 2014.

49 Annual 2013

BASIS OF MEASUREMENTThe consolidated financial statements have been prepared on a historical cost basis, unless otherwise indicated.

FUNCTIONAL AND PRESENTATION CURRENCYThese consolidated financial statements are presented in United States Dollars (USD), which is the Company’s function-al currency. All financial information is presented in USD except when other-wise indicated. All financial information presented in USD has been rounded to the nearest dollar, except when other-wise indicated.

USE OF ESTIMATES AND JUDGMENTSThe preparation of the consolidated fi-nancial statements in conformity with IFRSs require management to make judgments, estimates and assumptions that affect the application of account-ing policies and the reported amounts of assets and liabilities, income and ex-penses. Actual results may differ from these estimates. Estimates and under-lying 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 sig-nificantly impact assets and liabilities from employee benefit plans, other pro-visions and tax and other contingencies. Actuarial assumptions are established to anticipate future events and are used in calculating pension and other postre-tirement benefit expense and liabilities. These factors include assumptions with respect to interest rates, expected in-vestment return of plan assets, rate of increase in health care costs, turnover rates and life expectancy.

BASIS OF CONSOLIDATIONThe consolidated financial statements comprise the financial statements of C. Kersten en Co. N.V. and its subsidiaries as at December 31 of each year. Subsid-iaries are those companies over which the Company has control, defined as the power to govern the financial and operating policies so as to obtain ben-efits from their activities. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, until the date of disposal when such control ceases. The financial statements of the subsid-iaries are prepared for the same report-ing year as the parent company, using consistent accounting policies. All in-

ter-company balances and transactions, including unrealized profits arising from intra-group transactions, have been eliminated upon consolidation.

A joint venture is a contractual arrange-ment whereby the Group and the oth-er party undertake an economic activ-ity that is subject to joint control. Joint venture arrangements that involve the establishment of a separate entity in which each venture has an interest are referred to as jointly controlled entities.

The Group reports its interest in the jointly controlled entities using propor-tionate consolidation. The Group’s share of the assets, liabilities, income and ex-penses of jointly controlled entities is combined with the equivalent items in the consolidated financial statements on a line-by-line basis.Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are present-ed separately in the consolidated state-ment of comprehensive income and within equity in the consolidated state-ment of financial position.

3. CHANGES IN ACCOUNTING POLICY AND DISCLOSURESExcept for the changes below, the Company has consistently applied the accounting policies set out in note 4 “Significant accounting policies” to all periods presented in these financial statements.

The Company has adopted the follow-ing new standards and amendments to standards, including any consequential amendments to other standards, with a date of initial application of 1 January 2013.

IFRS 7 Disclosures: offsetting Financial Assets and Financial Liabilities

IFRS 10 Consolidated Financial Statements (2011)

IFRS 11 Joint Arrangements

IFRS 12 Disclosure of Interests in Other Entities

IFRS 13 Fair Value Measurements

IAS 1 Presentation of items of Other Comprehensive Income

IAS 19 Employee Benefits (2011)

IAS 36 Recoverable Amount Disclosures for Non- Financial Assets (2013)

These new standards have no significant impact on these financial statements for the year 2013.

50 Annual 2013

Annual 2013Page 0

NEW STANDARDS AND INTERPRETA-TIONS NOT YET ADOPTEDA number of new standards, amend-ments to standards and interpretations are effective for annual periods begin-ning after 1 January 2013, and have not been applied in preparing these financial statements. Those which may be rele-vant to the Company are set out below. The Company does not plan to adopt these standards early.

IFRS 9 FINANCIAL INSTRUMENTS (2010), IFRS 9 FINANCIAL INSTRU-MENTS (2009) (EFFECTIVE JANUARY 1, 2015)IFRS 9 (2009) introduces new requirements for the classification and measurement of financial assets. Under IFRS 9 (2009), fi-nancial assets are classified and measured based on the business model in which they are held and the characteristics of their contractual cash flows. IFRS 9 (2010) intro-duces additional changes relating to finan-cial liabilities. The IASB currently has an ac-tive project to make limited amendments to the classification and measurement re-quirements of IFRS (and new requirements to address the impairment of financial assets and hedge accounting. IFRS 9 (2010) and (2009) are effective for annual periods beginning on or after 1 January 2015, with early adoption permitted. The adoption of these standards is expected to have an impact on the Company’s financial assets, but no impact on the Company’s financial liabilities.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIESThe accounting policies set out below have been applied consistently to all pe-riods presented in these financial state-ments.

FOREIGN CURRENCY TRANSACTIONSTransactions in foreign currencies are translated to the functional currency at the exchange rates on the date of the transaction. Monetary assets and liabil-ities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. Non- monetary asset and liabilities that are measured at fair value denominated in foreign currencies are translated to the functional currency at the exchange rate at the date that the fair value was determined. Non-mone-tary items that are measured based on historical cost in a foreign currency are translated using the exchange rate at the date of the transaction.

Foreign currency differences arising on translation are generally recognized in profit or loss. However, foreign curren-cy differences arising from translation of the following items are recognized in other comprehensive income:

(except on impairment in which case foreign currency differences that have been recognized in the other compre hensive income are reclassified to profit or loss);

hedge of the net investment in a foreign operation to the extent that the hedge is effective; or

extent the hedge is effective.

FOREIGN OPERATIONSThe assets and liabilities of foreign oper-ations, including goodwill and fair-value adjustments arising on acquisition, are translated into the functional currency at exchange rates at the reporting date. The income and expenses of foreign op-erations are translated into functional currency at weighted average exchange rates for the year. Foreign currency dif-ferences arising on the translation are taken directly to a separate component of equity. Since January 1, 2007, the date of transition to IFRS, such differences have been recognized in the translation reserve. The cumulative currency differ-ences at the date of transition to IFRS were deemed to be zero.

NON-DERIVATIVE FINANCIAL INSTRUMENTSThe Group classifies non-derivative fi-nancial assets into the following cat-

egories: financial assets at fair value through profit or loss, held to-maturity financial assets, loans and receivables and borrowings. The Group classifies non-derivative financial liabilities into other financial liabilities category.

PROVISIONSA provision is recognized when: the Group has a present legal or construc-tive obligation as a result of past events; it is probable that an outflow of resourc-es will be required to settle the obliga-tion; and the amount has been reliably estimated. Provisions are determined by discounting the expected future cash flows at pre-tax rate that reflects cur-rent market assessments of the time value of money and the risks specific to the liability. The increase in the provi-sion due to passage of time is recognized as interest expense.

PROPERTY, PLANT AND EQUIPMENTRECOGNITION AND MEASUREMENTUntil the adoption of IFRS, property, plant and equipment are accounted at revalu-ated amounts. This value is considered as property’s deemed cost as per the date of first-time adoption of IFRS. Items of prop-erty, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment loss-es. If significant parts of an item of prop-erty, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.

SUBSEQUENT EXPENDITURESubsequent expenditure is capitalized only if it is probable that the future eco-nomic benefits associated with the ex-

penditure will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to profit and loss during the period in which they are incurred.

DEPRECIATIONDepreciation is calculated to write off the cost of items of property, plant and equip-ment less their estimated residual values using the straight-line basis over their es-timated useful lives, and is generally rec-ognized in profit or loss. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Land is not depreciated.

DE-RECOGNITIONThe carrying amount of an item of property, plant and equipment shall be derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains and losses on disposals are determined by compar-ing proceeds with the carrying amount and are recognized within ‘Other gains/ (losses)’ in the profit or loss.

INTANGIBLE ASSETSIntangible assets that have a finite use-ful life are amortized over the useful eco-nomic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortiza-tion method for an intangible asset with a finite useful life are reviewed at least at each financial year end. Changes in the expected useful life or the expected

pattern of consumption of future eco-nomic benefits embodied in the asset is accounted for by changing the amorti-zation period or method, as appropriate, and treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the statement of compre-hensive income under depreciation and impairment.

INVESTMENT PROPERTYInvestment property is property held ei-ther to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Until the adoption of IFRS, investment properties are accounted at revaluat-ed amounts. This value is considered as property’s deemed cost. Investment properties are measured initially at cost, including transaction costs. The carrying amount includes the cost of replacing part of an existing investment prop-erty at the time that cost is incurred if the recognition criteria are met, and ex-cludes the costs of day to day servicing of an investment property. Subsequent to initial recognition, investment properties are stated at cost less depreciation.

LEASED ASSETSLeases in terms of which the Company assumes substantially all of the risk and reward of ownership are classified as finance lease. The leased asset is mea-sured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.

OTHER FINANCIAL NON-CURRENT ASSETSOther financial non-current assets are re-corded at their historical cost, being the values at which they were acquired or lower realizable value.

INVENTORIESInventories are measured at the lower of cost and net realizable value. The cost of inventories is determined using the first-in, first-out principle. Cost of inventories com-prise all costs of purchase, costs of conver-sion and other costs incurred in bringing the inventories to their present location and condition. In the case of finished goods and work in progress, cost includes raw mate-rials, direct labor, other direct costs and an appropriate share of production overheads based on normal operating capacity. Net re-alizable value is the estimated selling price in the ordinary course of business, less ap-plicable variable selling expenses.

CONSTRUCTION CONTRACTS IN PROGRESSConstruction contracts in progress repre-sent the gross amount expected to be col-lected from customers for contract work performed to date. It is measured at cost plus profit recognized to date less progress billings and recognized losses. Cost includes all expenditure related directly to specific projects and an allocation of fixed and vari-able overheads incurred in the Company’s contract activities based on normal oper-ating capacity. Construction contracts in progress is presented as part of trade and other receivables in the statement of finan-cial position for all contracts in which costs incurred plus recognized profits exceed progress billings and recognized losses. If

progress billings and recognized losses ex-ceed costs incurred plus recognized profits, the difference is presented as deferred in-come/ revenue in the statement of financial position. Customer advances are presented as deferred income/ revenue in the state-ment of financial position.

TRADE AND OTHER RECEIVABLESTrade receivables are amounts due from customers for merchandise sold in the ordinary course of business, which gener-ally have 30-day terms. Trade receivables are recognized and carried at original in-voice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified.

CASH AND CASH EQUIVALENTSCash and cash equivalents in the state-ment of financial position comprise cash on hand, deposits held at call with banks and other short-term highly liquid invest-ments with an original maturity of less than 3 months.

TRADE AND OTHER PAYABLESTrade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are recognized initially at fair value and subsequently measured at amortized cost using the ef-fective interest method.

INTEREST-BEARING LOANS AND BORROWINGSAll loans and borrowings are initially rec-ognized at cost, being the fair value of the consideration received net of issue costs as-

54 Annual 2013

sociated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective in-terest method. Amortized cost is calculat-ed by taking into account any issue costs, and any discount or premium on settle-ment. Gains and losses are recognized in net profit or loss when the liabilities are no longer deemed to exist or impaired, as well as through the amortization process. Borrowing costs are recognized as an ex-pense when incurred.

PENSIONS AND OTHER POST-EMPLOYMENT BENEFITSThe cost of providing benefits under the plans is determined using the projected unit credit actuarial valuation method, with actuarial valuations carried out at each year-end.

REVENUERevenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration re-ceived or receivable, net of returns, trade discounts and volume rebates. Revenue is recognized when significant risks and rewards of ownership have been trans-ferred to the customer, recovery of the consideration is probable, the associ-ated costs and the possible return of goods can be estimated reliably, there is no continuing management involve-ment with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reli-ably, then the discount is recognized as a reduction of revenue as the sales are recognized.

INTEREST INCOMEInterest income is recognized using the effective interest method.

OTHER INCOME Other income is recorded in the period in which they are earned.

CONSTRUCTION CONTRACTSContract revenue includes the initial amount agreed in the contract plus any variations in contract work, claims and incentive payments, to the extent that it is probable that they will result in revenue and can be measured reli-ably. When the outcome of a construc-tion contract can be estimated reliably, contract revenue is recognized in prof-it or loss in proportion to the stage of completion of the contract. The stage of completion is assessed by reference to surveys of work performed. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized only to the ex-tent of contract costs incurred that are likely to be recoverable.

EXPENSESExpenses are recognized in the period in which they are incurred. Cost of sales is recorded in the same period as sales are recognized.

CURRENT AND DEFERRED INCOME TAXIncome tax expense comprises current and deferred tax. Current tax and de-ferred tax is recognized in profit or loss except to the extent that it relates to a business combination, or items recog-nized directly in equity or in other com-

55 Annual 2013

prehensive income. Current income tax payable comprises the expected tax liabil-ity on the taxable income for the year, and any adjustment to the tax payable in re-spect of previous years for which the final tax assessment has been received. Income tax receivable comprises the amount re-coverable from the tax authority. If recov-ery is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets. The cur-rent income tax charge is calculated using tax rates enacted or substantively enacted at the reporting date. Deferred tax is recog-nized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting pur-poses and the amounts used for taxation purposes. Deferred tax is not recognized for:

recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss

investments in subsidiaries, associates and jointly

Company is able to control the timing of the temporary differences and it is probable that they will not reverse in the foreseeable future and

arising on the initial recognition of goodwill.Deferred tax assets are recognized for un-used tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future tax-able profits will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer

probable that the related tax benefit will be realized. Deferred income tax is deter-mined using tax rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. Deferred tax assets and liabilities are offset only when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes as-sets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

DIVIDEND DISTRIBUTIONDividend distribution to the company’s shareholders is recognized as a liability in the company’s financial statements in the period in which the dividends are approved by the company’s shareholders.

DISCONTINUED OPERATIONSA discontinued operation is a component of the Group’s business that represents a separate major line of business that has been disposed of or is held for sale or distribution, or is a subsidiary acquired exclusively with the view to resale. Clas-sification as a discontinued operation oc-curs upon disposal or when the operation meets criteria to be classified as held for sale, if earlier.

CONSOLIDATED STATEMENT OF CASH FLOWSThe consolidated statement of cash flows is prepared using the indirect method. Cash consists of current accounts with banks and cash in hand. Payments of in-terest and income taxes are included in cash flows from operating activities.

RISK MANAGEMENT AND INTERNAL CONTROLWithin our group Risk Management and Internal Control systems are de-signed to provide reasonable assurance that the Group’s business objectives are achieved. Our group Risk Management and Internal Control framework is con-sidered in balance with our risk profile, although such systems can never pro-vide absolute assurance that material errors, losses, fraud or violation of laws or regulations will not occur.

RISK PROFILE AND RISK RESPONSIBILITIESManaging operational risk and other risks form an integral part of the Group business operations. The Board of Man-agement of the Group is responsible for the design, implementation and oper-ation of the Group Risk Management and Internal Control framework. The Board of Management of the Group ac-tively manages, to the extent possible, the strategic, financial, compliance and operational risks facing the Group. The Board of Management of the Group is supervised by the Supervisory Board and supported by a Governance Committee, an Audit Committee and a Risk Com-mittee. Our group Risk Management and Internal Control framework in-cludes a comprehensive and coordinat-ed risk management approach through oversight and prioritization. It includes setting of objectives, event identifica-tion, risk assessment and risk response, such as the implementation of business continuity plans and adjustments of fi-nancial structures. All material findings of our group Risk Management and In-ternal Control systems are shared with the Supervisory Board and, where rele-vant, with the Audit Committee.

RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORKTo ensure risks are identified and man-aged and that objectives are met in compliance with applicable law and reg-ulations, a risk assessment framework (RAF) is in place. This control framework is based on policy documents, standards and procedures. The main elements of the control framework, our control ac-tivities, and monitoring into our busi-ness practices are:

COMPANY OBJECTIVESCompany objectives form the basis risk for the group Risk Management and control framework. They are formulated and communicated to the organization by the Executive Board. All operating companies must operate in accordance with these objectives. The company objectives are reviewed at regular inter-vals and amended where necessary.

RISK EVALUATION AND MONITORINGA risk management infrastructure is in place, which includes periodical risk identification reviews and trough plan of the Group. Our business strategy is reg-ularly evaluated by the Executive Board, Audit Committee and the Supervisory Board; this also includes financial, stra-tegic, compliance and operational risks.

CODE OF CONDUCTOur Code of Conduct is based on Ker-sten’s core values. It is intended to help each employee understand and follow relevant compliance and integrity rules, and know when to ask for advice. The code applies to C. Kersten en Co. N.V. and its operating companies and all man-agement-level employees, as well to third parties hired by or acting for and on behalf of the Group.

PLANNING AND CONTROL CYCLEStrategic plans, budgets and forecasts are prepared at fixed times during the year for all entities of the Group. Finan-cial results and other key performance indicators are reviewed monthly. The performance is compared with the pre-vious year and tested against the bud-geted targets. This planning and con-trol cycle, which is based on financial and non-financial reporting, enables management to direct and control the operational activities in an efficient manner.

ACCOUNTING AND REPORTING INSTRUCTIONS The accounting and reporting instruc-tions consist of instructions and guide-lines for management reporting and external financial reporting. These instructions also include a standard format for accounts to ensure consis-tent and uniform reporting. In addi-tion to the accounting and reporting instructions there are several other instructions, relating to aspects such as treasury, insurance and capital ex-penditure.

HEALTHY, SAFETY AND ENVIRONMENTThe Group’s framework for Environmen-tal, Health and Safety includes policies, standards, guidance materials, tools and activities to support and assist their op-erating companies who manage environ-

ment, health and safety at their sites and throughout key Group’s business opera-tions. The Group employs an HSE officer, who is responsible for the enforcement of HSE policies and monitoring of sustain-able improvements. The Health, Safety and Environment standards and policies of the Group meet or exceed our nation-al HSE regulations whilst in compliance with the Inter-American Development Bank Environmental and Social Require-ments and meeting World Bank HSE stan-dards. A safe workplace will also enhance the Group’s ability to recruit and keep high quality people. Minimizing our foot print on the environment and conserving resources will demonstrate the Group’s commitment to meeting our social and environmental responsibilities. In 2011 the Group started with the process for ISO 9001-2008, ISO 14001-2007 and OSHAS 18000 certification of seven operating companies and strives to achieve certifi-cation within one year. To date the Group has completed 100% of the HSE work plan agreed with Inter-American Development Bank in 2007.

INFORMATION MANAGEMENT AND SECURITY MEASURESInformation management is decentralized at Operating Company level. At holding level coordinating measures and instruc-tions are issued to assure univocal ap-proach of information management and security measures.

58 Annual 2013

LEGALC. Kersten en Co. N.V. has a retainer rela-tionship with Lim A Po Law Firm under which the latter provides legal services to C. Kersten en Co. N.V. and its Operat-ing Companies. This arrangement is built with a view of pursuing a longer term re-lationship, and stresses the commitment of both the Group and the law firm to manage potential risk exposures from a legal perspective as part of their ordinary course of business.

TAXThe tax positions of C. Kersten en Co. N.V. and the Operating Companies are man-aged centrally. There are 2 external tax consultants for the Group, who regular-ly deliver advices. Every year these con-sultants issue a fiscal clearance for all Companies of the Group.

INSURANCEThe Kersten Group has an agreement with an insurance broker and an insur-ance company. The insurance policy cov-ers risks resulting from property damage, business interruption, employers’ liabili-ty and a number of other specific risks. The insurance risk process and monitor-ing for all Operating Companies is man-aged centrally by C. Kersten en Co. N.V.

INTERNAL AUDITThe Internal Audit Department carries out operational audits for the main Op-

erating Companies based on the yearly Audit Plan. The Audit Plan is based on the risk profile of Kersten and is approved by both management and Audit Commit-tee. The Internal Auditor reports directly to the management of respective Operat-ing Company, the Board of Management of the Company, the Audit Committee and the external auditor.

AUDIT COMMITTEEThe 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.

59 Annual 2013

Report of the independent auditor on the condensed consolidated financial statements

The accompanying condensed consolidated financial statements of C. Kersten en Co. N.V. for the year ended

December 31, 2013 on page 46 to 59, which comprise the condensed consolidated statement of financial position

as at December 31, 2013, the condensed consolidated statement of comprehensive income and cash flow for

the year then ended, and the related notes, are derived from the audited consolidated financial statements of

C. Kersten en Co N.V. for the year ended December 31, 2013.

We expressed an unqualified audit opinion on those consolidated financial statements in our report dated

April 28, 2014. Those consolidated financial statements and the condensed consolidated financial statements,

do not reflect the effect of events that occurred subsequent to the date of our report on the financial statements.

The condensed consolidated financial statements do not contain all the disclosures required by the financial

reporting framework applied in the preparation of the audited consolidated financial statements of C. Kersten en

Co N.V. Reading the condensed consolidated financial statements, therefore, is not a substitute for reading the

audited consolidated financial statements of C. Kersten en Co N.V.

MANAGEMENT’S RESPONSIBILITY FOR THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Management is responsible for the preparation of the condensed consolidated financial statements in accordance

with International Financial Reporting Standards.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on the condensed consolidated financial statements based on our

procedures, which were conducted in accordance with International Standards on Auditing.

OPINION

In our opinion, the condensed consolidated financial statements derived from the audited consolidated financial

statement of C. Kersten en Co N.V. for the year ended December 31, 2013 are consistent, in all material respects,

with those consolidated financial statements, in accordance with the International Financial Reporting Standards.

Curaçao,

August 11, 2014

KPMG Accountants B.V.

Nicole Baptisa RA

Independent Auditor’s Report

60 Annual 2013

Financial performanceFortunately, the decline in production and export of the mining indus-try and the delay in expansion investments in the mining industry did not reflect on our 2013 financial performance. The group continued on a positive growth trajectory, with healthy growth being delivered in all divisions, with the lone exception being the Building and Construction Division, which experienced an overall decline in sales of 5 per cent.

Financial performance again was re-cord-setting in the history of our compa-ny. Sales and revenues for full-year 2013 were USD 169.2 million, up 6.2 per cent from USD 159.3 million in 2012. From 2012 to 2013 pre-tax profit rose from USD 6.1 million to USD 10.8 million. The growth in consolidated revenues was primarily driven by an increase in revenues of hospitality, healthcare, communication and electro-technical services, as well as higher sales of gold and heavy equipment. Total operational expenses decreased from USD 34.1 mil-lion in 2012 to USD 30.6 million in 2013. The falling costs are primarily the result of e.g. the re-classification of royalties in 2013 and also of provisions that were taken in 2012 but in fiscal 2013 did not come off to that extent. Fiscal 2013 also brought costs of an incidental nature related to the 245th anniversary of our company and the establishment in this connection of the Kersten Foundation Scholarship Fund. Net profit and EBIT-DA respectively, were almost 68 per cent and 59 per cent above their 5-year aver-age compared to 34 per cent and 87 per cent respectively, in 2012. The equity ra-tio stood at 37 per cent at year-end 2013 up from 34 per cent in 2012. ROE went from 11% in 2012 to 14.7% in 2013.

At the end of 2013 the “Cash and Cash Equivalents” position reflected a mod-erate growth of USD 0.4 million to USD 10.7 million. The positive cash position, which has been manifesting itself for some years already, facilitated early payment of the term loan we had con-cluded with the Inter-American Devel-

opment Bank in 2007. Financing is one of our most distinctive competitive ad-vantages, and has again proven to be a powerful tool in expanding our custom-er base. In 2013 financing facilities for customers were extended to a higher level. The improved quality of our busi-ness and risk profile warranted a shift in our funding sources towards more flexible, longer term and cost effective forms of financing; thereby creating even more opportunities to add value to our customers’ businesses. In 2013 steps were taken to further optimize the capital efficiency to finance com-pany growth, by rationalization of our asset portfolio by means of some divest-ments. We also secured low-priced long term financing to safeguard the capital expenditure program of the Group.

The Cash Conversion Cycle per the end of 2013 continued to remain on the lev-el of 2012, i.e. 36 days. Total assets in-creased compared to 2012 from USD 135.7 million to USD 142.9 million. The strength of the balance sheet continued to show progress. The Long Term Debt to the EBITDA-ratio improved from 109 per cent in 2012 to 101 per cent in 2013. The EBITDA Interest Coverage Ra-tio showed a slight improvement from 521 per cent in 2012 to 524 per cent in 2013. The Funded Debt to EBITDA-ratio dropped from 84 per cent in 2012 to 50 per cent in 2013, the lowest level in the last eight years.

61 Annual 2013

C. Kersten en Co. N.V.C. Kersten en Co. N.V., incorporated on June 29, 1768, 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 245 years, we deliver value consistently and responsibly while continuously adapting to change.

OUR VISIONOur vision is to be the company in Suriname most respected for its people, excellence and core values.

OUR MISSIONWe are committed to be the best in our industries in Suriname while continuously protecting the environment and people and achieving superior shareholder value.

CORPORATE HEADQUARTERSAddress: Dominestraat 36-38, Paramaribo, SurinameAddress: P.O. Box 1808, Paramaribo, SurinameTelephone: + (597)471150Facsimile: + (597)478524Email: holding@kersten.srWebsite: www.kersten.sr

SUPERVISORY BOARDMr. David Voûte ChairmanMrs. Annemarie Hiralal-Norden Mr. David Roth Mr. Johan Stam Mr. Hugo Fernandes Mendes

BOARD OF DIRECTORSMrs. Shirley Sowma-Sumter Chief Executive OfficerMr. Richard Tjon A Joe Chief Operations OfficerMrs. Shirley Sowma-Sumter Chief Financial Officer

62 Annual 2013

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Division structure and business activitiesC. Kersten en Co. N.V

MOTORS AND INDUSTRIAL 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 con-struction, agriculture and mining equipment, diesel and natural gas engines, and industrial gas turbines

BUILDING AND CONSTRUCTION (Division Manager: Mr. Richard Tjon A Joe)

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 and ready mix production and trade of cement products

6. Spanbeton N.V., Production of pre-stretched concrete plates

HOSPITALITY (Division Manager: Mr. Hans Huiskes)

7. CKC Hotel Maatschappij N.V., Hotel operation and franchises

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. Kersten Finance N.V., Holding company, trade in mov-ables and real estate, investment advisor as well as finan-cier and financial intermediary

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. Smaragd Mining N.V., Gold trading company

16. Kersten Lease N.V., Lease company

17. CKC Corporate Facilities N.V. (CORFA), Temporary employment agency

18. Neal & Massy Kersten Energy Services N.V. (NMKES), Energy sector services

COMMUNITY DEVELOPMENT

1. Stichting C. Kersten en Co. Toerisme Ontwikkeling (Kersten Tourism Foundation), Community development

2. Stichting Studie Fonds Kersten (Kersten Foundation Scholarship Fund), Student financing

65 Annual 2013

A Dominestraat 36-38, Paramaribo T +597 471150 F +597 478524 E holding@kersten.sr W www.kersten.sr