Annual ReportN.V. VSH FOODS2020Together Everyone Achieves More

Together Everyone Achieves More“Great things in business are never done byone person. They are done by a team of people.”-Steve Jobs-

N.V. VSH FOODS ANNUAL REPORT 2020Table of contentsOur Products04Company Profile07Mission Statement07Core Values07Meet our Supervisory Board08Meet our Management09Report of the Supervisory Board10Salient Figures12Managing Director’s Report14Statement of Financial PositionAt 31 December 202020Statement of Profit and LossFor the year ended 31 December 202021Statement of Changes in EquityFor the year ended 31 December 202022Statement of Cash FlowsFor the year ended 31 December 202023Notes to the Financial Statements24Independent Auditor’s Report36Together Everyone Achieves More

N.V. VSH FOODS ANNUAL REPORT 2020Our ProductsGolden Brand MargarineIs our main brand in the retail segment. It has a creamy consistency, a full flavor and issuitable for cooking, spreading and baking. It is 100% vegetable-based, cholesterol free,trans fat free and enriched with vitamins A and D3. This product line was extendedconsiderably in the course of the years and now contains both refrigerated andnon-refrigerated products.The refrigerated product line contains the following products:Golden Brandmargarine,wrapper 227 gramGolden Brandmargarine,2 sticks box 227 gramGolden BrandSpreadablemargarine,tubs 227 gram 453 gramGolden Brand Slimmargarine,tubs 227 gram 453 gramGolden Brandmargarine,industrialedition Pail of 10 kgThe no refrigeration required product line contains the following products:Golden Brandmargarine,4 half sticks boxGolden Brandmargarine,tub 227 gram 453 gramGolden Brand margarine, pails 10 kg 4.5 kg 2.25 kg 900 gram04Together Everyone Achieves More

N.V. VSH FOODS ANNUAL REPORT 2020Marigold ButterIs widely known in Suriname for its refined flavor and is essential for any home, restaurant orcatering service.Because of its rich flavor, it is perfect for roasting meat and sautéing vegetables. It is alsogreat for baking cakes and cookies, and to make creamy garlic and herb butters.Marigold butter spread is a flavorful spread with the same buttery taste of Marigold butter.Marigold butter is available in:Marigoldbutter,spread tubsMarigoldbutter,wrapper 227 gram 453 gram 227 gramMarigoldbutter,industrialedition Pail of 10 kgGelebek MargarineIs the very first product that N.V. VSH FOODS ever produced. It is the second brand in theretail margarine segment. Gelebek margarine is suitable for cooking and baking. It is 100%vegetable-based, cholesterol free, trans fat free and enriched with vitamins A and D3.Gelebek Margarine is available in:Gelebekmargarine,wrapper 227 gramGELEBEKTogether Everyone Achieves MoreGelebekmargarine,industrialedition Box of 20 kg(4 x 5 kg)05

N.V. VSH FOODS ANNUAL REPORT 2020Bake ’n Fry ShorteningIs 100% vegetable-based. It contains only oils and fats and is cholesterol free and trans fatfree. This product is suitable for frying at a temperature of 180 C and baking bread andpastries. It is also suitable for greasing baking sheets and pans.Bake ’n Fry Shortening bakes dry and crispy and can be reused for at least 7 frying cycles.Bake ’n Fry Shortening is available in:Bake ’n Fryshortening,industrialeditionBake ’n Fryshortening,wrapper 225 gram Box of 20 kg(4 x 5 kg)Baker’s Choice Industrial MargarineIs perfect for baking bread, cakes and pastries. The Baker’s Choice products are made of100% vegetable oils and fats.The Baker’s Choice industrial margarine line consists of:BAKER’S CHOICEBAKER’S CHOICE06All purposemargarine(white)BAKER’S CHOICEAll purposemargarine(yellow) Box of 20 kg(4 x 5 kg) Box of 20 kg(4 x 5 kg)Puff pastrymargarineCreammargarine Box of 20 kg(4 x 5 kg)BAKER’S CHOICETogether Everyone Achieves More Box of 20 kg(4 x 5 kg)

N.V. VSH FOODS ANNUAL REPORT 2020Company ProfileN.V. VSH FOODS was founded in 1960 in Suriname, South Americaand produces margarine, butter and shortening.In 1963, the Company started with the production of Gelebek(Yellow Bird) margarine and today, Gelebek, Golden Brand, Marigold,Golden Brand Slim, Baker’s Choice and Bake ‘n Fry are establishedbrands in Suriname and in the Caribbean.The Company is a member of the VSH Group of Companies.N.V. Verenigde Surinaamse Holding mij.-/ United Suriname HoldingCompany (VSH United), holds 64.30% of the shares of N.V. VSHFOODS.Mission StatementWe commit ourselves to produce, market and distribute top qualitymargarine, butter and other foodstuff in a safe and hygienic mannerat competitive prices.To ensure growth, profitability and continuity of the Companyfor the benefit of our customers, shareholders, employees and thecommunity by producing these in an efficient manner from highquality raw materials with motivated and skilled employees and byguaranteeing supply to the market through aggressive marketing andsales channels.By continuously monitoring and improving, where possible, theproduction process with the help of our quality system and therebyguaranteeing the market hygienic and safe products that comply withapplicable legislation and the demands of our customers.Core ValuesTo be a Champion for our Customers, Partners, Shareholdersand in the Community we hold fast to these values: Your success is our desire. Trust in our relationships and personally responsible for all ouractions. Creating a better company for a better world.Together Everyone Achieves More07

N.V. VSH FOODS ANNUAL REPORT 2020Meet ourManagementMarlon TeltingManaging DirectorMelisa Kartokromo-EnsbergOperations ManagerMarif SastrodiwirjoSales ManagerTamira EsajasFinance ManagerStephanie SjauwPurchasing ManagerTogether Everyone Achieves More09

N.V. VSH FOODS ANNUAL REPORT 2020Report of the Supervisory BoardTo the shareholdersWe hereby present ourreport on the activities of theSupervisory Board in 2020The Supervisory Board performed its duties inaccordance with Suriname law, the company’sbylaws and Corporate Governance Code. We advisedmanagement on relevant issues and monitoredmanagement’s performance in relation to set goals.The Management regularly informed us, both verballyand in writing on material aspects of the business,major events, competitor activities, investments andtransactions. We kept abreast of results and thefinancial position, risks and risk management.Management changes andappointmentsIn 2020 there were no changes in the management.The net earningsamounts toSRD 688,768(2019: SRD 2,946,425)Financial Statements anddivision of earningsConsultation anddecision-makingThe Management has submitted the financialstatements 2020 to the Supervisory Board on12 March 2021.These financial statements can be found on pages20 to 23 of this annual report.Lutchman & Co audited the financial statements.Their report can be found on page 36 and 37.The net earnings amounts to SRD 688,768 (2019:SRD 2,946,425).No dividend was paid during the year.The Supervisory Board endorses the recommendationof the Management not to pay dividend for the year. Ifapproved the balance of the net earnings amountingto SRD 688,768 will be added to retained earnings.The Supervisory Board held regular monthly meetings,11 in total. The subjects discussed in the meetingsincluded the financial position and results, companystrategy, company policy, business plans, health,safety and environment, management developmentand succession.In the supervisory board meeting held on 17 January2020 the Internal Auditor reported on the activitiesof the Internal Audit Department in 2019 and hepresented his audit plan for 2020. In the board meetingheld on 13 November 2020 Management presentedthe operational plan for 2021 and the Board approvedcapital expenditures for 2021.Management remuneration was evaluated andapproved in the board meeting held on 11 December2020. The Board members regularly attended theboard meetings.Supervisory Board changesand appointmentsIn accordance with article 7.20 of the bylaws allSupervisory Board members step down in theAnnual General Meeting of Shareholders. Threemembers, Mr. S. Smit, Mr. A. Brahim and Mr. P. Healy,were re-elected as members of the SupervisoryBoard in the Annual General Meeting of Shareholdersheld on 24 Augustus 2020. In the same meeting, theshareholders approved the Board’s recommendationto appoint Mr. P. Brahim and Mr. A. Venetiaan asboard members. Being eligible the members,Mr. P. Healy, Mr. S. Smit, Mr. A. Brahim, Mr. P. Brahimand Mr. A. Venetiaan offer themselves for re-electionin the Annual General Meeting of Shareholders to beheld on 26 March 2021.10Together Everyone Achieves More

N.V. VSH FOODS ANNUAL REPORT 2020In the meeting of the Supervisory Board held on15 January 2021 the results of the internal audits2020 were presented to the Supervisory Board as wellas the audit plan for 2021. In the same meeting theManagement Letter regarding the interim audit 2020was discussed.The annual appraisal 2019 was presented by theManaging Director in the Supervisory Board meetingheld on 17 April 2020.The results of the annual appraisal 2020 waspresented by the Managing Director in the SupervisoryBoard meeting held on 5 March 2021.On 24 Augustus 2020 the Supervisory Board agreedto reduce the outstanding shares of 1,304,714 with23.877 shares through equity.As of 12 March 2021 from the total of 1.280.837outstanding shares 92.96% have been changed toregistered shares.Performance ofthe Supervisory BoardOn 11 December 2020 the performance of theSupervisory Board was evaluated through aself-assessment by the members. Based uponindividual appraisals by the members theperformance was found to be good. Areas requiringadditional attention were identified and includecompletion of investment in production andwarehouse facility, export growth, succession in keyfunctions and long term strategic planning.Dividend Policy andInterim DividendThe policy of the company is to pay a dividendbetween 40% and 50% of the net earnings. Asmentioned under ‘Financial Statements and divisionof earnings’ no dividend will be paid in order to allowManagement to retain and reinvest earnings for futuregrowth. Subject to unforeseen developments theSupervisory Board endorses the recommendationof the Management for the resumption of dividendpayments in 2021.Management performance andExecutive Performance PayOn 11 December 2020 the Supervisory Boardevaluated the overall performance of the ManagingDirector and found the performance to besatisfactory. Specific areas of improvements werediscussed with the Managing Director includingfurther export development, improving purchasingplanning, attention to long-term succession in keypositions and continued focus on challenges in thelocal market.Performance of the Managing Director is measuredagainst a yearly minimum target of 18% of Return onCapital Employed. Capital Employed at the beginningof the year amounted to SRD 25,726,602 and theReturn on Capital Employed achieved in 2020 was4.16 % (2019: 18.57%). The minimum return onCapital Employed was not achieved in 2020 so theManaging Director is not eligible to receive theshort-term bonus.Remuneration ofthe Supervisory BoardThe remuneration of the Supervisory Board amountsto SRD 120,000 per year effective 1 September 2020and was approved in the Annual General Meeting ofShareholders held on 24 Augustus 2020.AppreciationThe Supervisory Board is grateful for the contributionmade by Management and by all the employees of theCompany to the results of 2020.Paramaribo, 12 March 2021The Supervisory Board,P. Healy, ChairmanS. Smit, Vice ChairmanA. BrahimP. BrahimA. VenetiaanTogether Everyone Achieves More11

N.V. VSH FOODS ANNUAL REPORT 2020Salient 0341,315,07339,579,74529,897,814Earnings before t 5Cash aid-in ders’ 752,63714,148,705Total equity and 127,545,317Earnings0.542.261.611.601.04Cash dividend-0.300.450.450.10Market value17.0017.0017.0017.0017.00in SRDPer share of nominalSRD 0.1012Together Everyone Achieves More

N.V. VSH FOODS ANNUAL REPORT 2020The only way to make sense out of change is to plunge into it,move with it, and join the dance.- Alan Watts -Together Everyone Achieves More13

N.V. VSH FOODS ANNUAL REPORT 2020Managing Director’sReportBusiness environmentEarly 2020 Suriname was confronted with a sharp rise in the foreign exchangerates. This led to an immediate economic and monetary crisis which resulted inamongst others in high inflation and a shortage of foreign exchanges.Suriname’s first case of COVID-19 was diagnosed on 13 March 2020 and thecountry closed its borders completely the following day. A curfew and several(total) lockdowns since then were some of the measures that were implementedby the COVID-19 management team of Suriname.Parliamentary elections were held in Suriname on 25 May 2020. The electionsoccurred while Suriname was facing an economic crisis as well as the COVID-19crisis. The elected President, Mr. Chandrikapersad Santokhi, and Vice President,Mr. Ronnie Brunswijk were inaugurated on 16 July 2020.In November 2020 the Surinamese government requested financial support fromthe International Monetary Fund (IMF) for their macroeconomic reform plans tostabilize the economy. The official exchange rate was SRD 14.29¹ for theUS Dollar in December 2020 (December 2019: SRD 7.52). In September 2020the Suriname Dollar was officially depreciated to SRD 14.29. Foreign currencyfor international payments has become a significant challenge. In 2020,Suriname recorded a twelvemonth inflation rate of 61.0%² (2019: 4.2%).Annual General Meeting ofShareholdersOn 24 August 2020 the Annual General Meeting of Shareholders approved thefinancial statements 2019 and the proposed dividend 2019 of SRD 0.30 pershare.In accordance with article 7.20 of the bylaws all Supervisory Board membersretire in the Annual General Meeting of Shareholders. Three members,Mr. S. Smit, Mr. A. Brahim and Mr. P. Healy, were re-elected as members of theSupervisory Board in the Annual General Meeting of Shareholders held on24 Augustus 2020. In the same meeting, the shareholders approved theBoard’s recommendation to appoint Mr. P. Brahim and Mr. A. Venetiaan as boardmembers. They replaced Mr. J.J. Healy Jr., who stepped down because hehad reached the retirement age for board members and Mr. A. Tjin A Tsoi whostepped down because of personal reasons. We once again thank them fortheir contribution to the growth of the company.Source: Central Bank of SurinameSource: General Bureau of Statistics Suriname1214Together Everyone Achieves More

N.V. VSH FOODS ANNUAL REPORT 2020Performance HighlightsSALES (SRD ‘000)EARNINGS BEFORE TAX (SRD ‘000)Our financial performance in the reporting period was directly influenced by exchange rate losses amounting toSRD 7,171,498. Foreign currency was not available for the purchase of necessary raw and packaging material and if soagainst extreme high parallel market prices. As a result, in the first half of the year, we had to pay outstanding invoicesfor raw material that spiked in Suriname Dollars in a short period of time as a result of an unexpected increase of theexchange rate. Another impactor was the increase in shipping cost. Shipping cost quadrupled since June 2020.As a result the landed cost price for palm oil increased significantly versus 2019.For the first half year we reported a decline of earnings before tax to a loss for the amount of SRD 2,421,676 with apositive outlook for the second half of the year. The team’s creativity was the basis for turning the loss into a profit in thereporting period ending 31 December 2020 amounting to SRD 1,070,910 (2019: SRD 4,600,346).Overall sales revenue for 2020 grew by 47.5% versus 2019. In order to maintain our profitability we had to increase ourprices four times during the year. We faced COVID-19 sales volume challenges as restaurants, bakeries and catererscould not maximize their business because of the curfew and lockdown in Suriname. Export sales revenue made asignificant contribution to the revenue growth versus 2019.Our local sales volume was flat in 2020. A growth of 0.9% versus 2019 was achieved. The retail channel grew by 13.5%whilst the food service channel declined by 10.1%.EXPORT VOLUME 2020 - 2020 (KG ‘000)CuraçaoTrinidadJamaicaGuyanaOverallIn the reporting period volume growth was driven by our export markets. Our key strategic objectives in our exportmarkets led to a growth of the overall volume by 16.6% versus 2019 and contributed to 32.9% of total volume (2019:29.8%) The retail channel contributed to 83.1% of total export volume (2019: 78.5%). Golden Brand blocks pack-typevolume increased by 31.1% versus 2019 in the Trinidad & Tobago market. The 4 half sticks pack-type volume increasedby 28.2% in the Jamaica market. In November 2020 the contract with the distributor in Curaçao was terminated withmutual consent.Together Everyone Achieves More15

N.V. VSH FOODS ANNUAL REPORT 2020COVID-19 also demanded creativity from the team in the operationsdepartment as we had to adapt to the new normal. The team developed andimplemented special safety procedures to ensure continuity of productionwith skeleton teams. The new automated production line as part of our masterplan investment was commissioned by our technical department with remotesupport from the supplier as travel bans were in effect.In October 2020 operations started with the first automated production line.The new melting station increased melting capacity by 150% and the use ofoil storage tanks has increased the overall efficiency in emulsion preparation.Automation reduced the emulsion preparation time by approximately 50%.The investment progress is listed in the notes to the financial statements innote 4 Property, Plant and Equipment and intangible assets.The monthly Good Manufacturing Practice (GMP) audits with topics on HACCP,ISO, Safety and 5S (SORT, SET IN ORDER, SHINE, STANDARDIZE AND SUSTAIN)workplace organizational and housekeeping methodology increased theinvolvement and awareness of our personnel regarding our Food SafetyManagement System, as well as safety on the work floor.Due to COVID-19 performing GMP audits were a challenge as most of the workhad to be done remotely. The GMP target of 90% was surpassed with an overallscore of 91% (2019: 93%).Incidents, Accidents & Lost working days20202019pIncidents2224-2Accidents01-1Lost working days06-6N.V. VSH EnergyAs of 2015, N.V. VSH ENERGY is included in the statement of financial position asa subsidiary of N.V. VSH FOODS and is dormant.EmployeesAt the end of 2020 we employed 63 persons. We agreed to a general salaryincrease for our personnel amounting to a total increase of 25% for 2020.The total personnel expenses were SRD 8,420,153 which represented a 39,4%increase versus 2019.Our COVID-19 related costs were SRD 204,922 which include expendituresexpenses for employee safety protocols and allowances.Our employees are the backbone of our organization. We aim to further developour employees and offer necessary and relevant training.16Together Everyone Achieves More

N.V. VSH FOODS ANNUAL REPORT 2020In 2020 we conducted the following training programs:TrainingNumber ofparticipantsDepartment4 Sales Secretary11 Technical Department Warehouse HSEQ Production SalesEmergency services(BHV refreshment)6 HSEQ Production Warehouse FinanceRefreshment 5S, ISO, HACCP andBasic Hygiene14 Sales Lab15 Sales Finance Warehouse Extern contractors for technical department12 Warehouse Purchasing Sales Marketing Finance Lab HSEQ Technical department ManagementHACCP Traini