b'STAATSOLIE MAATSCHAPPIJ SURINAME N.V.NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2018 (Continued)Gross margins factors.Thebetafactorsareevaluatedannuallybased on publicly available market data.Gross margins are based on average values achieved in the three years preceding the start ofOil pricesthebudgetperiod.Theseareincreasedoverthebudget period for anticipated improvements in theLong term forecasted oil prices are based on efficiencyofoperations.Anincreaseof2%(2017: managementsestimatesandavailablemarket2%) per annum was applied based on economicdata.growth(quantities)oftheCGU. Market share assumptionsDiscount ratesTheseassumptionsareimportantbecauseaswellDiscount rates represent the current marketas using industry data for growth rates (as noted assessmentoftherisksspecifictoeachCGU, below),managementassesseshowtheCGUstaking into consideration the time value of moneyposition,relativetoitscompetitors,mightchangeand individual risks of the underlying assets thatovertheforecastperiod.Managementexpectsthehavenotbeenincorporatedinthecashflow Groupsshareoftheoilretailproductsmarkettoestimates.Thediscountratecalculationisbased be stable over the forecast period.onthespecificcircumstancesoftheGroupand Growth rate estimatesits operating segments and is derived from its WACC,withappropriateadjustmentsmadeto Ratesarebasedoneconomicgrowthrates,growthreflecttherisksspecifictotheCGU.TheWACC domestic product and relevant published research.takesintoaccountbothdebtandequity,weighted46.68%(2017:47.21%)debtversus53.32% Sensitivity to changes in assumptions(2017:52.79%)equity,duetothedebttoequitystructureoftheGroup.Thecostofequityis WithregardtotheassessmentofVIUforthederived from the expected return on investmentGOw2CGU,managementbelievesthattherebytheGroupsinvestors.Thecostofdebtis are no reasonably possible changes in any of basedontheinterest-bearingborrowingsthe the above key assumptions that would cause the Groupisobligedtoservice.Segment-specific carrying value of the CGU to materially exceed its risk is incorporated by applying individual betarecoverable amount.4.6 INVESTMENT PROPERTIES A valuation of the investment properties was Staatsolie purchased the land situated incarriedoutbyanexternalindependentqualifiedWageningen,DistrictNickeriein2009.The assessoronJune26,2019andthecarryingvalueinvestment property is carried at historic cost lessdoes not materially differ from the fair value.accumulated impairment losses. Initially the landOnethousandtwohundredandtwo(1202)would accommodate the Ethanol Business ofhectares of the investment property is leased Staatsoliewhichwascancelledin2015. outunderoperatinglease,amountingtoUS$32thousandannualincome.Therearenodirectoperating expenses arising from the rental agreement on account for Staatsolie. (X US$ 1,000) 2018 2017Reconciliation of carrying amountBalance at 1 January 17,762 -Acquisitions - -ReclassificationfromProperty,PlantandEquipment* - 17,762Impairment loss (880) -Balance at 31 December16,882 17,762 *Refertoparagraph2.5Reclassification79'