3rd … · XLS file · Web view · 2017-11-08Obagi_Flow_Station_Installations_communes_OML_58 ......

MRS Oil Nigeria Plc

3rd Quarter 2017 Financial Statements

MRS Oil Nigeria PlcFinancial Statements - 30 September 2017

Contents Page

Corporate information 1

Statement of directors’ responsibilities 2

Statement of financial position 3

Statement of profit or loss and other comprehensive income 4

Statement of changes in equity 5

Statement of cash flows 6

Index to notes to the financial statements 7

Notes to the financial statements 8


1

Corporate informationRC 6442

Board of directors Mr. Patrice Alberti ChairmanMr. Andrew O. Gbodume Managing Director Dr. Paul Bissohong Non Executive DirectorDr. Samaila M. Kewa Non Executive DirectorAlhaji Dahiru Barau Mangal Non Executive Director Mr. Lawal Mangal Alternate DirectorMs. Amina Maina Non Executive Director Mr. Mattew Akinlade Non Executive Director Sir. Sunday Nnamdi Nwosu Non Executive Director Mr. Amobi Daniel Nwokafor Non Executive Director

Registered office 8, Macarthy StreetOnikanLagos

Company secretary Mrs. O.M. Jafojo8, Macarthy StreetOnikanLagos

Registrar First Registrars and Investor Services LimitedPlot 2, Abebe Village Road,Iganmu LagosPMB 12692 MarinaLagos

Auditor KPMG Professional ServicesKPMG TowerBishop Aboyade Cole StreetVictoria IslandLagos

Principal bankers Access Bank PlcFirst Bank of Nigeria LimitedFirst City Monument Bank PlcSkye Bank PlcStandard Chartered Bank Nigeria LimitedSterling Bank PlcUnity Bank PlcZenith Bank Plc

Leadership team Andrew O. Gbodume Oghenekaro OlogeManaging Director Information Technology Manager

Oluwakemi M. Jafojo Timipiri OduCompany Secretary Human Resources Manager

Kamil Bello Andrew Onum Chief Finance Officer Chief Legal Counsel

Peter Z. Dia Abdullahi MasanawaAviation Manager Operations Manager

Tara Ajibulu Moruf SobowaleSales & Marketing Manager Consumer & Industrial Manager

Michael Ayewa Adebayo OlusodoHealth, Safety and Enviroment Manager Engineering/Marketing Support Manager

Jubril Hassan Jah'swill OmoluTreasury Manager Procurement Manager

Daniel Chukwuazawom Ismaila AlabiChief Internal Auditor Lubes Operation Manager


2

Statement of Directors’ responsibilities in relation to the financial statements for the period ended

The directors accept responsibility for the preparation of the 3rd quarter 2017 financial statements t

The directors further accept responsibility for maintaining adequate accounting records as required b

The directors have made an assessment of the Company’s ability to continue as a going concern and h

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

Signature Signature

Mr. Andrew Gbodume (Managing Director) Mr. Paul Bissohong (Director)Name Name

FRC/2012/ICAN/00000000534 FRC/2013/IOD/00000003841FRC FRC

Date Date


3

Statement of financial position as at 30 September 2017 ###

Notes September 2017 December 2016

AssetsProperty, plant and equipment 12 17738503 18402454###Intangible assets 13 25473 29920###Prepayments 30 648345 578073###Trade and other receivables 15 347922 347922###Total non-current assets 18760243 19358369###

Inventories 17 4208652 7004173###Loans and receivables 14 294825 445193###Trade and other receivables 15 36752222 43244878###Witholding tax receivables 16 54334 68287.92419###Prepayments 30 413708 333130###Cash and cash equivalents 18 808886 10910784###Total current assets 42532627### 62006445.92419###

Total assets 61292870### 81364814.92419######

Equity ###Share capital 19 126994 126994###Retained earnings 22406602 22036847.11###

###Total equity 22533596### 22163841.11###

###Liabilities ###

Employee benefit obligations 20 18391 13891.24483###Deferred tax liabilities 11(d) 5116904 5116904###Total non-current liabilities 5135295### 5130795.24483###

Security deposits 21 1876550 1766967###Dividend payable 22(a) 408668 411317.54237###Trade and other payables 23 20999521.01211 32156838###Short term borrowings 24 9488890 18526556###Tax payable 11(c) 850350 1208500.16906###Total current liabilities 33623979.01211### 54070178.71143###

Total liabilities 38759274.01211### 59200973.95626######

Total equity and liabilities 61292870.01211### 81364815.06626###

Approved by the Board of Directors on 26 October 2017 and signed on its behalf by: ###

###

###

₦’000 ₦’000

)Mr. Andrew Gbodume (Managing Director)FRC/2012/ICAN/00000000534

) Dr. Paul Bissohong (Director) FRC/2013/IOD/00000003841

) Mr. Kamil Bello (Chief Finance Officer) FRC/2013/ICAN/00000000951


4

The notes on pages 7 to 41 are an integral part of these financial statements.


4

Statement of profit or loss and other comprehensive income for the Period ended 30 September 2017

Notes July - Sept. 2017 Cumm. YTD Sept. 2 July - Sept 2016 Cumm. YTD Sept. 2016

Revenue 5 19467760 81948195 28558299 82335324Cost of sales 7(b) -17946453 -75856500 -26553159 -74994539

Gross profit 1521307### 6091695### 2005140### 7340785

Other income 6 21814 122579 249985 1095225Selling and distribution expenses 7(b) -259950 -966655 -426386 -1212180Administrative expenses 7(b) -1274728 -4008574 -1400956 -4048444

Operating profit 8443### 1239045### 427783### 3175386

Finance income 8 9419 104521 128512 421891Finance costs 8 152596 -38477 -132807 -1636646

Net finance costs 8 162015 66044 -4295 -1214755

Profit before income tax 9 170458 1305089 423488 1960631

Income tax expense 11(a) -64774 -495934 -162935### -790332

Profit for the Period 105684### 809155### 260553### 1170299

Total comprehensive income for the period 105684 809155 260553 1170299

Earnings per share (EPS) Basic and diluted earnings per share (Naira) 10(a) 0.41609729744167 3.1857916625054 1.0258449434736 4.6076817463191


₦’000 ₦’000 ₦’000 ₦’000


5

Statement of changes in equityfor the period ended 30 September

Notes Share capital Retained earnin Total equity₦’000 ₦’000 ₦’000

Balance as at 1 January 2016 126994 20850330 20977324Total comprehensive income: Profit for the period 0 1170299 1170299Other comprehensive income 0 0 0Total comprehensive income for the period 0### 1170299###### 1170299

Transactions with owners of the CompanyContributions and DistributionsDividends declared 22(a) -279388 -279388Unclaimed dividend written back 22(a) 0 -211 -211

Total transactions with owners of the Company 0 -279599 -279599

Balance as at 30 September 2016 126994 21741030###### 21868024

Notes Share capital Retained earnin Total equity

₦’000 ₦’000 ₦’000Balance as at 1 January 2017 126994 22036847 22163841Total comprehensive income: Profit for the period 0 809155 809155

Total comprehensive income 0 809155 809155

Transactions with owners of the CompanyContributions and DistributionsDividends declared 22(a) 0 -439400 -439400

Total transactions with owners of the Company 0 -439400 -439400

Balance as at 30 September 2017 126994 22406602###### 22533596

*


Included in retained earnings is ₦14.40 billion (2016: ₦14.40 billion) which represents revaluation surplus on Property, plant and equipment transferred at IFRS transition date. The Company has opted not to distribute this amount.

MRS Oil Nigeria PlcFiancial Statements - 30 September 2017

6

Statement of cash flows for the period ended 30 September 2017

Notes September 2017 September 2016 March 2016Cash flows from operating activities:Profit after tax 809155 1170299

Adjustments for:Depreciation 12(a) 1089750 1176123Amortisation of intangible assets 13 4447 4099 Loss on DisposalFinance income 8 -104521 -421891 NBVFinance costs 8 305272 127289 ProceedsGain on sale of property, plant and equipment 9(a) -3715 -70000 LossWrite off of property, plant and equipment 12 0 0Provision/(Write-back) for long-term service award 20 4500 4500Impairment loss on trade receivables and Truck lease 7 61579.515 0Impairment loss on non-current assets 7 0Impairment loss on employee and other receivables 7 -1141 -500Net increase in impairment loss on inventory 17 0 0Tax expense 11(a) 495934 790332

2661260.515###### 2780251######Changes in: - Inventories 2795521 266521###- Trade, other receivables and prepayments 6356900.92418999 -18584687###- Security deposits 109583 133060###- Trade and other payables -11157316.98789 11480110###Cash (used)/ generated from operating activities 765948.451299995 -3924745

Income taxes paid 11(c) -829458 -671461###Withholding tax credit notes utilised 11(c) -24626 0###Long-term service award paid 20 0 -344###

Net cash (used)/ generated from operating activities -88135.5487000048 -4596550

Cash flows from investing activities:Proceeds from sale of property, plant and equipment 4656 70000Purchase of property, plant and equipment 12(a) -426740 -260563Purchase of intangible assets 13 0 -9022Amounts paid on behalf of transporters 14 -44049 -54448

Principal repayment received on amounts advanced to transporte 14 132837.485 166766Interest received 8 104521 397390

Net cash (used)/ generated from investing activities -228774.515 310123

Cash flows from financing activities:Short term borrowing repayment -15480323 5560738Dividends paid 22(b) -442049.54237 -284268Interest paid -305272 -127289

Net cash generated in financing activities -16227644.54237 5149181

Net change in cash and cash equivalents -16544555.05737 862754Cash and cash equivalents at 1 January 10910784 19774397Effect of movements in exchange rates on cash held 0 0

Cash and cash equivalents at 30 September 2017 18 -5633771.05737 20637151



7

Index to Notes to the financial statements for the period ended 30 September 2017

Page

1 Reporting entity 82 Basis of preparation 83 Significant accounting policies 94 Standards and Interpretations not yet effective 185 Revenue 216 Other income 217 Expenses by nature 218 Finance income and costs 229 Profit before income tax 22

10 Earnings per share (EPS) and dividend declared per share. 2311 Income Taxes 2412 Property, plant and equipment 2613 Intangible assets 2714 Loans and receivables 2715 Trade and other receivables 2816 Witholding tax receivables 2917 Inventories 2918 Cash and cash equivalents 2919 Share capital 3020 Employee benefit obligations 3021 Security deposits 3022 Dividends 3123 Trade and other payables 3124 Short term borrowings 3225 Financial risk management & financial instruments 3226 Related party transactions 3827 Segment reporting 4028 Subsequent events 4029 Contingencies 4130 Prepayments 41

Notes to the financial statements


8

1. Reporting entity

The Company was incorporated as Texaco Nigeria Limited (a privately owned Company) on 12 August 1969 an

On 20 March, 2009 there was an acquisition of Chevron Africa Holdings Limited, (a Bermudian Company) by

The new management of the Company announced a change of name of the Company from Chevron Oil Nigeria

The Company is domiciled in Nigeria and has its registered office address at:

The Company is principally engaged in the business of marketing and distribution of refined petroleum prod

2 Basis of preparation

(a) Statement of compliance

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis except for recognition of the follS/N Items Measurement bases

1 Property, plant and equipment Refer to Note 3 (c)2 Inventories Refer to Note 3 (f)3 Other long-term employee benefits Refer to Note 3 (h)4 Loans and borrowings Refer to Note 3 (b)

(c) Functional and presentation currency

These financial statements are presented in Nigerian Naira, which is the Company’s functional currency. Al

8, Macarthy StreetOnikanLagos Nigeria

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as issued by the International Accounting Standards Board (IASB) and in the manner required by the Companies and Allied Matters Act of Nigeria and the Financial Reporting Council of Nigeria Act, 2011.The financial statements were authorised for issue by the Company's Board of Directors on 26 October 2017. Details of the Company's significant accounting policies are included in Note 3.



9

(d) Use of judgements and estimates ###

The preparation of annual financial statements in conformity with IFRS requires management to make judgem

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recogni

i Judgements, assumptions and estimation uncertainties

Information about judgements, assumptions and estimation uncertainties that have a significant risk of resuNote 12(b) - Impairment test- recoverable amounts are higher than carrying amounts.Note 15(b) - Recoverability of foreign exchange differential and interest on PSF receivables.Note 25(a) - Recoverability of trade and other receivables.

Note 29(a) - Recognition of contingencies: key assumptions about the likelihood and magnitude of an outf

ii Measurement of fair values

3 Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these fina

Some of the Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. The Chief Finance Officer has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports to the Board of Directors through the Managing Director. The Chief Finance Officer regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the Chief Finance Officer assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of IFRS, including the level in the fair value hierarchy in which such valuations should be classified. Significant valuation issues are reported to the Board of Directors.When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

• Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).•Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.



10

(a) Foreign currency transactions

Transactions denominated in foreign currencies are translated and recorded in Nigerian Naira at the actual e

Foreign currency differences arising on translation are recognized in profit or loss. Non-monetary items tha

(b) Financial instruments

The Company classifies non-derivative financial assets into loans and receivables.The Company classifies non-derivative financial liabilities into the other financial liabilities category.

i. Non-derivative financial assets and financial liabilities - recognition and derecognition

The Company initially recognises loans and receivables on the date when they are originated. Financial liabili

The Company derecognises a financial asset when the contractual rights to the cash flows from the asset expire

Financial assets and financial liabilities are offset and the net amount presented in the statement of financi

ii Non-derivative financial assets - measurement

The Company has only loans and receivables, trade and other receivables, cash and cash equivalents as non-

Loans and receivables

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash balances with banks and call deposits with origina

The Company initially recognizes loans and receivables at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at amortised cost using the effective interest method.

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market.Short term receivables that do not attract interest are measured at original invoice amount where the effect of discounting is not material.



11

iii Non-derivative financial liabilities - measurement

(c) Property, plant and equipment (PPE)

i Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated

Cost includes expenditure that is directly attributable to the acquisition of the asset. Property, plant and

Purchased software that is integral to the functionality of the related equipment is capitalized as part of t

If significant parts of an item of property, plant and equipment have different useful lives, they are acco

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the

ii Subsequent expenditure

The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amoun

iii Depreciation

Depreciation is calculated to write off the depreciable amount, which is the cost of an asset, or other amount

Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of eac

Non-derivative financial liabilities are initially recognized at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortised cost using the effective interest method. The Company has the following non-derivative financial liabilities: loans and borrowings, trade and other payables.Short term payables that do not attract interest are measured at original invoice amount where the effect of discounting is not material.



12

The estimated useful lives for the current and comparative periods are as follows:

Land and Buildings: - Leasehold Land Lease period - Buildings 10 to 25 yearsPlant and Machinery 10 to 20 yearsFurniture and Fittings 5 years Automotive equipment 4 to 10 years

Computer equipment 3 years

Office equipment 5 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if

Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred to the releva

(d) Intangible assets

Intangible assets that are acquired by the Company and have finite useful lives are measured at cost lessThe Company’s intangible assets with finite useful lives comprise acquired software.

Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the spe

Amortisation of intangible assets

Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if a

(e) Leases

i Determining whether an arrangement contains a lease

At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease.



13

ii Leased assets

Assets held by the Company under leases that transfer to the Company substantially all of the risks and rewa

Assets held under other leases are classified as operating leases and are not recognised in the Company's st

iii Lease payments

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term

Minimum lease payments made under finance leases are apportioned between the finance expense and the reduc

(f) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories includes ex

The basis of costing inventories are as follows:

Product Type Cost Basis

Weighted average costs incurred (for regulated products reduced by the va

First in First Out (FIFO)

Packaging materials , lubricants Weighted average cost

Inventories-in-transit Purchase cost incurred to date

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated co

(g) Impairmenti Non-derivative financial assets

Financial assets not classified at fair value through profit or loss are assessed at each reporting date to dObjective evidence that financial assets are impaired includes:

. default or delinquency by a debtor;

. restructuring of an amount due to the Company on terms that the Company would not consider oth

. indications that a debtor or issuer will enter bankruptcy;

. adverse changes in the payment status of borrowers or issuers;

Refined petroleum products (i) AGO, ATK, PMS , DPK

Refined petroleum product (ii) LPG



14

. the disappearance of an active market for a security; or

. observable data indicating that there is measurable decrease in expected cash flows from a group offinancial assets

The Company considers evidence of impairment for these assets at both an individual asset and collective leve

In assessing collective impairment, the Company uses historical information on timing of recoveries and the

An impairment loss is calculated as the difference between an asset's carrying amount and the present value

ii Non-financial assets

At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than in

For impairment testing, assets are grouped together into the smallest group of assets that generates cash f

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair val

An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recovera

Impairment losses are recognised in profit or loss. An impairment loss is reversed only to the extent that

(h) Employee benefitsi Defined contribution plan

A defined contribution plan is a post-employment benefit plan (pension fund) under which the Company pays f

In line with the provisions of the Pension Reform Act 2014, the Company has instituted a defined contribution pension scheme for its permanent staff. Employees contribute 6% each of their basic salary, transport and housing allowances to the Fund on a monthly basis. The Company’s contribution is 12% of each employee’s basic salary, transport and housing allowances. Staff contributions to the scheme are funded through payroll deductions while the Company’s contribution is recognised in profit or loss as employee benefit expense in the periods during which services are rendered by employees.



15

ii Other long-term employee benefits

The Company’s other long-term employee benefits represents a Long Service Award scheme instituted for all

iii Termination benefits

Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer of t

iv Short-term employee benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the re

A liability is recognized for the amount expected to be paid under short-term cash bonuses if the Company h

(i) Provisions and contingent liabilitiesProvisions

A provision is recognized if, as a result of a past event, the Company has a present legal or constructive ob

A provision for restructuring is recognised when the Company has approved a detailed and formal restructu

A provision for onerous contracts is recognized when the expected benefits to be derived by the Company fro



16

Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will be con

Contingent liabilities are only disclosed and not recognised as liabilities in the statement of financial positio

(j) Revenue

Revenue from the sale of non-regulated products in the course of ordinary activities is measured at the fai

Revenue for regulated products is measured at the regulated price of the products. The timing of the tran

(k) Finance income and finance costs

Finance income comprising of interest income on funds invested, foreign currency gain on financial assets an

Finance costs comprises interest expense on borrowings, bank charges, foreign currency loss on financial assetForeign currency gains and losses are reported on a net basis.

(l) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit

i Current tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax r

The Company offsets the tax assets arising from WHT credits and current tax liabilities if, and only if, the en



17

ii Deferred tax

Deferred tax is recognised in profit or loss except to the extent that it relates to a transaction that is reco

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they

Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liab

(m) Earnings per share (EPS)

The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is

(n) Segment reporting

(o) Statement of cash flows

The statement of cash flows is prepared using the indirect method. Changes in statement of financial position

(p) Government grants

Petroleum Products Pricing Regulatory Agency (PPPRA) subsidies which compensate the Company for losses m

An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses. All operating segments’ operating results are reviewed regularly by the Managing Director to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Managing Director include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.



18

(q) Joint arrangement

The Company’s joint arrangement is in respect of its interests in joint aviation facilities held with other p

(r) Share capital

4(a) Standards and Interpretations not yet effective (but available for early adoption)

Effective for the financial year commencing 1 January 2018

• Classification and measurement of Share-based Payment Transactions (Amendments to IFRS 2)• Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4)

• Transfers of Investment Property (Amendments to IAS 40)

• Annual improvements to IFRSs 2014 - 2016 Cycle

Effective for the financial year commencing 1 January 2019

Standard available for optional adoption

The Company has only one class of shares, ordinary shares. Ordinary shares are classified as equity. When new shares are issued, they are recorded in share capital at their par value. The excess of the issue price is recorded in the share premium reserve.Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects are recognised as a deduction from equity.

• IFRS 15 Revenue from Contracts with Customers• IFRS 9 Financial Instruments

• IFRIC 22 Foreign currency transactions and advance consideration

• IFRS 16 Leases

• Sale or contribution of Assets between an investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28)

All Standards and Interpretations will be adopted at their effective date (except for those Standards and Interpretations that are not applicable to the entity).

Classification and measurement of Share-based Payment Transactions (Amendments to IFRS 2), Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4), Recognition of deferred Tax Assets for Unrealised Losses (Amendments to IAS 12), Transfers of Investment Property (Amendments to IAS 40), Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts (Amendments to IFRS 4), Sale or Contribution of Assets between an Investor and its Associate or Joint Venture (Amendments to IFRS 10 and IAS 28) are not applicable to the business of the entity and will therefore have no impact on future financial statements.



19

IFRS 15 Revenue from contracts with customers

IFRS 9 Financial Instruments

Disclosure Initiative (Amendments to IAS 7)

IFRIC 22 Foreign currency transactions and advance consideration

The interpretation applies when a Company:• pays or receives consideration in a foreign currency; and

• recognises a non-monetary asset or liability – eg. non-refundable advance consideration – before recogni

The Company will adopt the amendments for the year ending 31 December 2018.

This standard replaces IAS 11 Construction Contracts, IAS 18 Revenue, IFRIC 13 Customer Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfer of Assets from Customers and SIC-31 Revenue – Barter of Transactions Involving Advertising Services.

The standard contains a single model that applies to contracts with customers and two approaches to recognising revenue: at a point in time or over time. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. This new standard will most likely have a significant impact on the Company, which will include a possible change in the timing of when revenue is recognised and the amount of revenue recognised.

The Company is yet to carry-out an assessment to determine the impact that the initial application of IFRS 15 could have on its business; however, the Company will adopt the standard for the year ending 31 December 2018.

On 24 July 2014, the IASB issued the final IFRS 9 Financial Instruments Standard, which replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement.

IFRS 9 includes revised guidance on the classification and measurement of financial instruments, a new expected credit loss model for calculating impairment on financial assets, and new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39.

The Company is yet to carry-out an assessment to determine the impact that the initial application of IFRS 9 could have on its business; however, the Company will adopt the standard for the year ending 31 December 2018.

The amendments provide for disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flow and non-cash changes. This inlcudes providing a reconciliation between the opening and closing balances arising from financing activities.

The Company will adopt the amendments for the year ending 31 December 2017.

The amendments provide guidance on the transaction date to be used in determining the exchange rate for translation of foreign currency transactions involving an advance payment or receipt.

The amendments clarifies that the transaction date is the date on which the Company initially recognises the prepayment or deferred income arising from the advance consideration. For transactions involving multiple payments or receipts, each payment or receipt gives rise to a separate transaction date.



20

For the lessor, IFRS 16 substantially carries forward the lessor accounting requirements in IAS 17. Accordingly

The Company is yet to carry out an assessment to determine the impact that the initial application of IFR

4(b) The following Standards and amendments to Standards applicable to the business of the entity and which be• Disclosure Initiative (Amendments to IAS 1)• Accounting for Acquisition of Interests in Joint Operations (Amendments to IFRS 11)

• Clarification of Acceptable Methods of Depreciation and Amortistion (Amendments to IAS 16 and IA• Equity Method in Separate Financial Statements (Amendments to IAS 27)• Annual Improvements to IFRSs 2012-2014 Cycle - various standards

• Investment Entities: Applying the Consolidation Exception (Amendments to IFRS 10, IFRS 12 and IAS

IFRS 16 Leasees

IFRS 16 replaces IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases – Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease.The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract, i.e. the customer (‘lessee’) and the supplier (‘lessor’). IFRS 16 eliminates the classification of leases as operating leases or finance leases as required by IAS 17 and introduces a single lessee accounting model. Applying that model, a lessee is required to recognise:

a. assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value; andb. depreciation of lease assets separately from interest on lease liabilities in the profit or loss.



21

5 Revenue September 2017 September 2016₦’000 ₦’000

Premium Motor Spirit (PMS) 46058579 62852550Aviation Turbine Kerosene (ATK) 7455000 5748641Automotive Gas Oil (AGO) 13866896 7632048Lubricants and greases 3095594 2351860Dual Purpose Kerosene (DPK) 11472126 3750225

0 081948195 82335324

6 Other income September 2017 September 2016₦’000 ₦’000

Rental and lease income (Note 6(a)) 7261 24158Sundry income (Note 6(b)) 31673 503547Gain on sale of property, plant & equipment 3715 70000Income on storage services 79930 497520

Total 122579 1095225

(a) Rental and lease income relates to income earned on assets that are on lease (finance and operating leases) to third parties. Assets on lease include filling statio

(b) Sundry income represents service fees for handling and other fees earned in the delivery of products.

7(a) Expenses by nature September 2017 September 2016₦’000 ₦’000

Depreciation 1089750 1176123Amortization of intangible assets 4447 4099Changes in inventories of lubes, greases and refined products 75873390 75007094Rental of service stations, buildings and equipment 174668 174675Advertising expense 234031 213769Consultancy expense 296118 246995Maintenance expense 503057 245808Throughput expense 42125 37940Freight expense 281073 809241Management fees (Note 26 (c)) 249321 670205Director's remuneration 1250 1350Employee benefit expense (Note 9 (b)) 565946 464978Auditor's remuneration 23625 22500Impairment loss on employee and other receivables 0 -500Impairment loss/write back on trade receivables 0 - Write off of other receivables -1141 - Write off of property, plant & equipment 0 0Local and international travel 100360 103583Office expenses and supplies 270222 137322Communication and postage 238632 121100Fines and penalties 6224 3099Insurance premium 129675 100341Contract labour 425918 408769Sponsorships and donations 25248 7814Licenses and Levies 40249 50864Utilities 26319 27922Subcriptions 4563 2899Board meetings and AGM expenses 93509 51526Security 38213 31889Other expenses 94937 133758Total cost of sales, selling and distribution and administrative expenses 80831729 80255163

Liquidified Petroleum Gas (LPG)



22

7(b) Expenses by functionSeptember 2017 September 2016₦’000 ₦’000

Cost of sales 75856500 74994539Selling and distribution expenses 966655 1212180Administrative expenses 4008574 4048444

80831729 80255163

8 Finance income and finance costs September 2017 September 2016₦’000 ₦’000

Finance incomeInterest income on short-term bank deposits 92717 397390PPPRA reimbursement on interest and foreign exchange differential (a) 0 0Interest income on loans to transporters (Note 14) 11804 24501Total finance income 104521 421891

Finance costInterest expense 258627 77663Bank charges 46645 49626Net foreign exchange loss/(Gain) -266795 1509357Total finance costs 38477 1636646

Net finance costs 66044 -1214755

9 Profit before income tax September 2017 September 2016 (a) Profit before income tax is stated after charging/(crediting):

₦’000 ₦’000Depreciation (Note 12) 1089749 1176123Amortisation of intangible assets (Note 13) 4447 4099Management fees (Note 26(c)) 249321 670205Director's remuneration (Note 9(b)(iv)) 1250 1350Employee benefit expense (Note 9(b)(i)) 565946 464978Auditor's remuneration 23625 22500Gain on disposal of property, plant and equipment -3715 -70000Write off of property, plant and equipment 0 - PPPRA reimbursement on interest and foreign exchange differential 0 0Net foreign exchange loss (Note 8) -266795 1509357

(b) Directors and employees

i Employee costs during the period comprise:September 2017 September 2016₦’000 ₦’000

Salaries and wages 402099 310347Other employee benefits 122343 115917Employer's pension contribution 37004 34214Other long term employee benefit charge 4500 4500

565946 464978



23

ii The average number of full-time persons employed during the period (other than executive directors) was as follows:NumberSeptember 2017 September 2016

Administration 49 39Technical and production 21 11Operations and distribution 26 40Sales and marketing 35 44

131 134

iii Higher-paid employees of the Company and other than directors, whose duties were wholly or mainly discharged in Nigeria, rece NumberSeptember 2017 September 2016

₦ ₦2000001 3000000 0 73000001 4000000 3 394000001 5000000 45 595000001 6000000 38 116000001 7000000 5 97000001 8000000 18 58000001 9000000 13 -9000001 10000000 2 -

Above 10000000 7 4

131 134

iv Directors' remuneration for directors of the Company charged to profit or loss account are as follows:September 2017 September 2016₦’000 ₦’000

Fees 1000 1100Other emoluments 250 250 1250 1350

The directors' remuneration shown above includes:

Chairman 0 0

Highest paid director 1250 1350

Other directors received emoluments in the following ranges: Number

September 2017 September 2016₦ ₦Nil 2 2

1000001 2000000 1 12000001 3000000 1 1

10 Earnings per share (EPS) and Dividend declared per share(a) Basic EPS

Basic earnings per share of ₦3.19 (Sept. 2016: ₦4.61 ) is based on profit attributable to ordinary shareholders of ₦809,155,00

September 2017 September 2016

Profit for the period attributable to shareholders (expressed in Naira) 809155000 1170299000Weighted average number of ordinary shares in issue 253988672 253988672Basic earnings per share (expressed in Naira per share) 3.18579168759148 4.60768187330811



24

(b) Diluted Earnings per share

The Company had no dilutive ordinary shares to be accounted for in these financial statements. Consequently, diluted and basic

11 Income taxesIncome tax expense

The tax charge for the period has been computed after adjusting for certain items of expenditure and income, which are not ded

(a) Amounts recognized in profit or lossSeptember 2017 September 2016₦’000 ₦’000

Current tax expense:Income tax 469832 751119Tertiary education tax 26102 39213Capital gains tax 0 0Prior year under-provision 0 0

495934 790332Deferred tax expense:Origination and reversal of temporary differences 0 0

Tax expense on operations 495934 790332

(b) Reconciliation of effective tax ratesThe tax on the Company's profit before tax differs from the theoretical amount as follows:

% September 2017 % September 2016

Profit before income tax 1305089 1960631

Income tax using the statutory tax rate 35.99999694 469832 38.8157770617308 751119

Effect of:Impact of capital gains tax 0 0 0Impact of tertiary education tax 2.000016857### 26102 2.00000910780585 39213Effect of tax incentives 0 0 0 0Non deductible expenses 0### 0 0 0Tax exempt income 0 0 0 0Changes in estimates related to prior year 0 0 0 0Prior year under-provision 0### 0 0 0Other differences 0### 0 0 0

Total income tax expense in income state 38.00001379 495934 40.8157861695366 790332

(c) Movement in current tax liability

September 2017 September 2016₦’000 ₦’000

Balance at beginning of the period 1208500 991830Payments during the period -829458 -701883Net provision for the period 495934 1016638Withholding tax credit notes utilized -24626 -98085

850350 1208500

The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of many fact



25

(d) Recognised deferred tax assets and liabilitiesDeferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net43008 42735 43008 42735 43008 42735

₦’000 ₦’000 ₦’000 ₦’000 ₦’000 ₦’000Property, plant and equipment 0 0 -5188135 -5188135 -5188135 -5188135Employee benefits 4445 4445 0 0 4445 4445Impairment loss 131269 131269 0 0 131269 131269Inventories 19382 19382 0 0 19382 19382Net unrealised exchange difference 0 0 -83865 0 -83865 -83865

155096 155096 -5272000 -5188135 -5116904 -5116904

The Company does not have any unrecognized deferred tax assets or liabilities

(e) Movement in temporary differences during the period

Balance Recognized in Balance Recognized in Balance42370 profit or loss 42735 profit or loss 43008

₦’000 ₦’000 ₦’000 ₦’000 ₦’000Property, plant and equipment -5494533 306398 -5188135 0 -5188135Employee benefits 3785 660 4445 0 4445Impairment loss 137106 -5837 131269 0 131269Inventories 8800 10582 19382 0 19382Net unrealised exchange difference 32743 -116608 -83865 0 -83865

-5312099 195195 -5116904 0 -5116904



26

12 Property, Plant and Equipment(a) The movement on these accounts was as follows:

Leasehold Land Building Plant & Machiner Automotive EquipmeComputer & OffFurniture & Fitting Capital Work in Pr Total₦’000 ₦’000 ₦’000 ₦’000 ₦’000 ₦’000 ₦’000 ₦’000

CostBalance as at 1 January 2016 8460233 6108018### 10770226 1913021### 864556### 210101 79828 28405983Additions 605509 11420 217615 68195 17558 8735 44400 973432Transfers 0 -21827 -79017 -142322 -2148 -1095 0 -246409Disposal 0 -124000 -808772 -1608 -3805 0 -938185Balance as at 31 December 2016 9065742 6097611### 10784824### 1030122### 878358### 213936### 124228### 28194821 CostBalance at 1 January 2017 9065742 6097611### 10784824 1030122### 878358### 213936 124228 28194821Additions 36496 68390 45675 199649 71702 4178 650 426740Write off 0 0 0 0 0 0Disposal 0 0 -672 -13780 0 -14452

Balance as at 30 September 2017 9102238 6166001### 10829827 1215991### 950060### 218114 124878### 28607109 ### ###Accumulated depreciation and impairment

Balance as at 1 January 2016 439808 1650503 4831360 1506204 743354 181049 0 9352278Charge for the period 86476 232441 1033403 102581 32757 10776 0 1498434Write off -7678 -46211 -135206 -2041 -679 0 -191815Disposal 0 -55741 -805587 -1527 -3675 0 -866530Balance as at 31 December 2016 526284 1875266### 5762811### 667992### 772543### 187471### 0 9792367

Accumulated depreciation and impairment

Balance as at 1 January 2017 526284 1875266 5762811 667992 772543 187471 0 9792367Charge for the period 0 175593 773517 104504 31799 4337 0 1089750Scrap 0Write off 0 0 0 0 0 0 0Transfer 0 0 0 0 0 0 0

Disposal 0 0 -628 -12883 0 0 0 -13511

Balance as at 30 September 2017 526284 2050859 6535700 759613 804342 191808 0 10868606

Carrying amountsBalance as at 30 September 2017 8575954 4115142 4294127 456378 145718 26306 124878### 17738503Balance as at 31 December 2016 8539458 4222345 5022013 362130 105815 26465 124228 18402454



27

(b) Impairment assessment

The carrying amount of the Company's net assets exceeded its market capitalization as at 2016 year end. As a result of this,

(d) Capital commitmentsCapital expenditure commitments at the period end authorised by the Board of Directors comprise:

September 2017 December 2016₦’000 ₦’000

Capital commitments 775075 393422.822

13 Intangible assets

Intangible assets relate to the Company's accounting, software application package and license. The movement on these accoun


CostBalance as at 1 January 276683 234088Additions 0 42595Balance as at 30 September 276683 276683

Accumulated amortisationBalance as at 1 January 246763 232944Charge for the period (Note 7(a)) 4447 13819Balance as at 30 September 251210 246763

Carrying amount 25473 29920

14 Loans and receivablesSeptember 2017 December 2016₦’000 ₦’000

Balance as at 1 January 445193 606985Insurance 44049 54448Interest accrued (Note 14(a)) 11804 26095Principal and interests repayments received during the period -144641.485 -180755Impairment on Truck lease (Note 14(b)) -61579.515 -61580Balance as at 30 September 294825 445193

(a) Interest income earned with respect to these loans was ₦11.80 million (Dec. 2016: ₦26.10 million) and has been included as part



28

(b) The movement in the allowance for impairment in respect of loans and receivables during the period was as follows:


Balance as at 1 January 61579.515 0Impairment loss recognised 0 61579.515Balance as at 30 September 61579.515 61579.515

15 Trade and other receivables September 2017 December 2016₦’000 ₦’000

Trade receivables (Note 15(a)) 5746010 5295575Petroleum Equalisation Fund (PEF) 2620012 2972340Petroleum Support Fund (PSF) (Note 15(b) 16652347 12229750Loans to employees 46533 35466Due from joint operation partners 33116 30670Receivables from registrar 70812 70812.40087Receivables from related parties 6911359 20035831Advances paid to suppliers 4871304 2713092Other debtors 148651 209263.59913

37100144 43592800Less: non-current portion -347922 -347922Current portion 36752222 43244878

For receivables that are classified as 'current', due to their short-term maturities, the fair value approximates their carrying val

(a) Trade receivables September 2017 December 2016₦’000 ₦’000

Gross trade receivables 6327083 5876648Impairment -581073 -581073Net trade receivables 5746010 5295575

The Company, entered into an arrangement with some of its transporters to provide tankers to them. The transporters are to repay the Company the cost of the tankers plus an interest of 17% per annum. The transporters were expected to repay their obligations to the Company from freight costs charged to the Company for services rendered. The repayment periods range from 12 to 24 months. The transporters made a 20% contribution at the commencement of the arrangement. The outstanding balance on the receivable from the transporters are secured by the Company's retention of title to the tankers. Legal title will only be passed to the transporters once they have settled the outstanding balance.In addition, in 2015, the arrangement was revised and the interest on outstanding payments was increased to 20% per annum and the tenor was extended for another 12 months and the insurance payments on the trucks for the current period was included as part of the new principal amount. The Company did not record any impairment during the period. (Dec. 2016: N61.58 million) in respect of certain transporters whose recoverables are doubtful of recovery. On the basis of retention of title as well as historical payment behaviours of the respective transporters (including continuing business as of date, repayments during the year and adequate insurance cover on the tankers), the Company believes that the outstanding balances are recoverable.



29

(b) Included in the Petroleum Support Fund is an amount of ₦15.03 billion (Dec. 2016: ₦10.98 billion) receivable from Petroleum

The Company's exposure to credit risk and impairment losses related to trade and other receivables are disclosed in Note 25 (a

16 Witholding tax receivablesThe movement on the witholding tax receivable account was as follows:


Balance at 1 January 68287.92419 32348Additions 10672.07581 134024.75513Withholding tax credit note utilised -24626 -98084.83094Balance at 30 September 54334 68287.92419

17 InventoriesSeptember 2017 December 2016₦’000 ₦’000

Premium Motor Spirit (PMS) 859397 2780005Lubricants and greases 2165231 1898422Aviation Turbine Kerosene (ATK) 717140 1863232Automotive Gas Oil (AGO) 61224 71301Dual Purpose Kerosene (DPK) 257154 261669Packaging materials and other sundry items 148506 129544Goods in Transit 0 0

4208652 7004173

Inventory amounting to ₦304.78 million (Dec. 2016 : ₦315.99 million) was held in a facility owned by MRS Oil and Gas Limited, a

The value of changes in products, packaging materials and work-in-progress included in cost of sales amounted to ₦75.87 billion


Gross inventory 4286857 7082378Impairment -78205 -78205Net inventory 4208652 7004173

18 Cash and cash equivalentsSeptember 2017 December 2016₦’000 ₦’000

Cash at bank and on hand 642286 2059224Short term deposits with banks 166600 8851560Cash and cash equivalents in the statement of financial position 808886 10910784Bank overdrafts used for cash management purposes (Note 24) -6442657 0Cash and cash equivalents in the statement of cash flows -5633771 10910784



30

19 Share capital

September 2017 December 2016Authorised: ₦’000 ₦’000271,657,230 Ordinary shares of 50k each 135828.615 135828.615

Issued and fully paid:253,988,672 Ordinary shares of 50k each 126994 126994.3362

Issued and fully allotted:253,988,672 Ordinary shares of 50k each 126994 126994.3362

All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares are entitled to dividend

20 Employee benefit obligations

(a) The amounts outstanding at the end of the period with respect to employee benefit obligations is shown below:


Year end obligations for:Other long term employee benefits 18391 13891.24483Total employee benefit liabilities 18391 13891.24483

(b) The movement on the provision for other long term employee benefits is as follows:


Balance as at 1 January 13891 12618Provision for the period : 4500 0Current service cost 0 4582Interest cost 0 1418Discontinued benefits due to contract change 0 0Remeasurement gains (net) 0 -3176Benefits paid by the employer 0 -1551Balance as at 30 September 18391 13891

21 Security depositsSeptember 2017 December 2016₦’000 ₦’000

Security deposits 1876550 1766967

These are collateral deposits paid by dealers who maintain credit facilities with the Company. These amounts are set-off on a pThe Company's exposure to liquidity risks related to security deposits is disclosed in Note 25 (b).



31

22 Dividends(a) Declared dividends

The following dividends were declared and paid by the Company during the period.September 2017 December 2016₦’000 ₦’000

₦1.73 kobo per qualifying ordinary share (Dec. 2016: ₦1.10 kobo) 439400 279387.539


xx kobo per qualifying ordinary share (2016: 173 kobo) 0 439400

Dividend payableSeptember 2017 December 2016₦’000 ₦’000

Balance as at 1 January 411317.54237 399889Declared dividend 439400 279388Payments -442049.54237 -267959.45763Unclaimed dividend written back to retained earnings (see 22(i) below) 0 0Balance as at 30 September 408668 411317.54237

(i) Unclaimed dividends transferred to retained earnings represents dividends which have remained unclaimed for over twelve (12)

(ii) As at 30 September 2017, dividend payable held by the Company amounted to ₦337.86 million (Dec. 2016: ₦340.51 million). The b

23 Trade and other payablesSeptember 2017 December 2016₦’000 ₦’000

Trade payables 10673547 8303391Accrued expenses 576131 602618Amounts due to joint arrangement partners 317666 134381Advances received from customers 1155728.03211 644551Bridging allowance 281607 4023064Amounts due to related parties 7622473.98 18029888Pension payable (Note 23(a)) 881 9903Statutory deductions (Note 23(b)) 371487 409042

20999521.01211 32156838

(a) The balance on the pension payable account represents the amount due to Pension Fund Administrators which are yet to be re


Balance as at 1 January 9903 752Contributions during the Period 66977 73736Payments during the period -75999 -64585Balance as at 30 September 881 9903



32

(b) This represents statutory deductions which are mandated by law or statute. They include Value Added Tax (VAT) and Withholding T

24 Short term borrowingsSeptember 2017 December 2016₦’000 ₦’000

Bank overdraft (Note 18 and Note 24(a)) 6442657 0Bank borrowings (Import Finance and Short term Facilities) 3046233 18526556Total Borrowings 9488890 18526556

(a) Interest rates on these overdraft ranged between 19% to 23.5% per annum (Dec. 2016: 18% to 20%). Where the fixed deposit held

The fair value of current borrowings closely approximates their carrying amount, as the impact of discounting is not significant.

(c) Reconciliation of short term borrowings received to statement of cashflows is as follows:September 2017 December 2016₦’000 ₦’000

Changes in borrowings 0 2126090Repayments 15480323 28099488Exchange loss on borrowings 0 -10172195

15480323 20053383

25 Financial Risk Management & Financial Instruments

The Company has exposure to the following risks from its use of financial instruments:

This note presents information about the Company’s exposure to each of the above risks, the Company’s objectives, policies a

Risk management framework

The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk management framew

The Company’s risk management policies are established to identify and analyze the risks faced by the Company, to set appropr

· Credit risk· Liquidity risk· Market risk



33

The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies an

(a) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its

Trade and other receivables

Management has credit policies in place and the exposure to credit risk is monitored on an ongoing basis by an established cr

The Credit Committee reviews each customer’s credit limit in line with the customers’ performance, feedback from sales team

In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are

The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect of trade and oth

The maximum exposure to credit risk for trade and other receivables at the reporting date by type of counterparty was:


Trade receivables5707168 3735012

619915 2141636-581073 -5810735746010 52955756911359 20035831

19272359 15202090299112 346212

32228840 40879708

* Excludes advances paid to suppliers and withholding tax receivables

All the Company's trade receivables are due from customers within Nigeria.

As at period, the aging of trade receivables that were not impaired was as follows:

- Major customers- Others- Impairment

- Due from related parties- Due from regulators (Government entities)- Others*



34


Neither past due nor impaired 3832565 3161740.66512Past due 0-30 days 513099 838519.92535Past due 31-90 days 291068 18924Past due 91 days and above 1109278 1276389.81481

5746010 5295574.40528

The movement in the allowance for impairment in respect of trade receivables during the period was as follows:


Balance as at 1 January 581073.485 423154Impairment loss recognised 0 342609.485Bad debt written-off 0 0Reversal of impairment losses 0 -184690Balance as at 30 September 581073.485 581073.485

The Directors have applied judgement in the Company's assessment of the recoverability of its trade and other receivables whi

Due from Government entities

This comprises amount due from PPPRA with respect to subsidies/PSF receivable on imported products as well as amounts recei

Determination of amounts due are based on existing regulations/ guidelines and impairment is only recognized when changes occur

Due from related parties

The Company has transactions with its parent and other related parties who are related to the Company by virtue of being me

Other receivables

Other receivables includes staff debtors and other sundry receivables. The Company reviews the balances due from this categor

Loans and receivables

Loans receivable comprise amounts loaned to some of the Company's transporters. See Note 14. All the transporters still carry



35

Cash and cash equivalents

The Company held cash and cash equivalents of ₦808.89 million as at 30 September 2017 (Dec 2016: ₦10.91 billion), which re

(b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial lia

The Company has a clear focus on ensuring sufficient access to capital to finance growth and to refinance maturing debt oblig

Typically the credit terms with customers are more favourable compared to payment terms to its vendors in order to help provid

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the i

Notes Carrying amount Contractual cash flows6 months or less₦’000 ₦’000 ₦’000

Non-derivative financial liabilities

30 September 2017Overdraft and other short-term borrowings 24 9488890 9488890 9488890Dividend payable 22 408668 408668 408668Trade and other payables* 23 19472305.98 19472305.98 19472305.98Security deposits 21 1876550 1876550 1876550

31246413.98 31246413.98 31246413.98

31 December 2016Overdraft and other short-term borrowings 24 18526556 18526556 18526556Dividend payable 22 411318 411318 411318Trade and other payables* 23 31103245 31103245 31103245Security deposits 21 1766967 1766967 1766967

51808086 51808086 51808086

* Excludes advances received from customers and tax liabilities

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will af

The Company manages market risks by keeping costs low through various cost optimization programs. Moreover, market develo



36

Currency risk

The Company is exposed to currency risk on sales and purchases and borrowings that are denominated in a currency other than the

In managing currency risk, the Company aims to reduce the impact of short-term fluctuations on earnings. The Company has no

The following significant exchange rates were applied during the period

Average rate Reporting date spot rate

Sept. 2017 Dec. 2016 2015Sept. 2017 Dec. 2016

₦ ₦ ₦ ₦

US Dollar 305.24 252.69 305.25 304.5

Interest rate risk profile

In managing interest rate risk, the Company aims to reduce the impact of short-term fluctuations in earnings. Dividend pay-ou

At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments was:

Carrying amount

September 2017 December 2016

₦’000 ₦’000

Fixed rate instruments

Bank overdraft and borrowings 9488890 18526556

The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or loss. Therefore a

(c) Capital risk management

The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to susta

The Company’s adjusted net debt to equity ratio at the end of the reporting period was as follows:


Total borrowings (Note 24) 9488890 18526556Less: Cash and cash equivalents (Note 18) -808886 -10910784Adjusted net debt 8680004 7615772Total equity 22533596 22163841.11Total capital employed 31213600 29779613.11

Adjusted net debt to equity ratio 0.38520278787283 0.343612461495398

There were no changes in the Company's approach to capital management during the period.



37

The Company is not subject to externally imposed capital requirements.



38

(d) Fair valuesFair values versus carrying amounts

The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include f

The Company's financial instruments are categorised as follows:

Carrying amountLoans and Other financial Totalreceivables liabilities

30 September 2017 ₦’000 ₦’000 ₦’000

Financial assets not measured atTrade and other receivables 32228840 0 32228840Loans and receivables 294825 0 294825Cash and cash equivalents 808886 0 808886

33332551 0 33332551

Financial liabilities not measuredShort term borrowings 0 9488890 9488890Trade and other payables 0 19472305.98 19472305.98Security deposits 0 1876550 1876550Dividend payable 0 408668 408668

0 31246413.98 31246413.98

Carrying amountLoans and Other financial Totalreceivables liabilities

31 December 2016 ₦’000 ₦’000 ₦’000

Financial assets not measured atTrade and other receivables 40879708 0 40879708Loans and receivables 445193 0 445193Cash and cash equivalents 10910784 0 10910784

52235685 0 52235685

Financial liabilities not measuredShort term borrowings 0 18526556 18526556Trade and other payables 0 31103245 31103245Security deposits 0 1766967 1766967Dividend payable 0 422746.08474 422746.08474

0 51819514.08474 51819514.08474

Trade and other receivables, security deposits, bank overdrafts and other short term borrowings are the Company’s short term f



39

26 Related party transactions

(i) Parent and ultimate controlling entity

As at the period ended 30 September 2017, MRS Africa Holdings Limited (incorporated in Bermuda) owned 60% of the issued shar

The Company entered into the following transactions with the under-listed related parties during the period:

(a) MRS Oil and Gas Limited (MOG)

MOG is a wholly owned company of MRS Holdings Limited which is a shareholder in Corlay Global SA. Corlay Global SA is th

Nature of transactions September 2017 December 2016₦’000 ₦’000

Sales of goods 435 18464237.72282Staff Secondment -178417 -219723Other services 0 0Reimbursements for expenses 0 0Purchase of goods -1074764 0

The value of products stored by MRS Oil and Gas Limited for the Company amounting to ₦340.78 million (Dec 2016: ₦315.99

Net balance due from MRS Oil and Gas Limited was ₦3.82 billion (Dec. 2016: ₦6.23 billion).

(b) Petrowest SA (Petrowest)

Patrice Albert is the Chairman of the Board of MRS Oil Nigeria Plc. He is also a director in Petrowest SA. The following traSeptember 2017 December 2016

Nature of transactions ₦’000 ₦’000

Purchase of goods 0 -17140228.33133Goods in transit 0 0

Net balance due to Petrowest was ₦4.36 billion (Dec. 2016: ₦4.15 billion)

(c) MRS Holdings Limited

MRS Holdings Limited owns 50% of the shares in Corlay Global SA, the parent company of MRS Africa Holdings Limited. MRS

September 2017 December 2016Nature of transactions ₦’000 ₦’000

Management fees -249321 -275500Sale of goods 124505 111607Shared services 0 32567

Net balance due to MRS Holdings Limited was ₦172.62 million (Dec. 2016: ₦27.52 million)



40

(d) Net balances due (to)/from other related entities were as follows:September 2017 December 2016₦’000 ₦’000

MRS Benin 27546 41940.60925Corlay Togo 2238 -3921.07999500002Corlay Benin 27718 344.099319999967Corlay Cote D'Ivoire -86128 -86164.1342725Corlay Cameroun 29795 3770.17500749987Others 0 0Total 1169 -44030.3306900002

The Corlay entities are subsidiaries of Corlay Global SA incorporated in Panama, the parent company of MRS Africa Holdings Limi

All outstanding balances do not bear interest and exclude value of products stored by MRS Oil and Gas Limited for the Compan

(e) Summary of intercompany receivables and payables:September 2017 December 2016Receivables Payables Receivables Payables₦’000 ₦’000 ₦’000 ₦’000

MRS Oil and Gas Limited (MOG) 4112018 -294478 17566745.930805 -11338952.55801MRS Holdings Limited 2712044 -2884664 2423029.641155 -2450550.675708Petrowest 0 -4357204 0 -4150300.018645MRS Benin 27546 0 41940.60925 0Corlay Togo 2238 0 0 -3921.07999500002Corlay Benin 27718 344.099319999967 0Corlay Cote D'Ivoire 0 -86128 0 -86164.1342725Corlay Cameroun 29795 0 3770.17500749987 0Other 0 0 0 0

6911359 -7622474 20035830.4555375 0 -18029888.4666305

(ii) Key management personnel compensationThe Company pays short term benefits to its directors as follows:


Short term employee benefits 1250 1928

The managing director is seconded from a related party (MRS Oil and Gas Limited) as part of the management fees agreemen

(iii) Related Party Transactions above 5% of total tangible assets

In line with Nigerian Stock Exchange - Rules Governing Transactions with Related Parties or Interested Persons, the Company has



41


MRS Oil and Gas Limited ( See Note 26(a) above) -1252746 18244514.72282Petrowest SA ( See Note 26(b) above) 0 -17140228.33133

MRS Holdings Limited (See note 26 ( c ) above -124816 -131326

27 Segment reporting

In accordance with the provisions of IFRS 8 – Operating Segments, the operating segments used to present segment information

Segment information is provided on the basis of product segments as the Company manages its business through three product

The Company has identified three operating segments:

(i)

(ii)

(iii)

Segment assets and liabilities are not disclosed as these are not regularly reported to the Chief Operating decision maker.

Segment revenue and cost of sales

Sept. 2017Revenue Cost of sales Gross profit

% of Total % of Total % of TotalRetail/C&I 71397601 87.12528812 67186081 88.5699722502 4211520 69.1354376737509Aviation 7455000 9.097210744 6923866 9.12758432039 531134 8.71898543837142Lubes 3095594 3.77750114 1746553 2.30244342937 1349041 22.1455768878777Total 81948195 100 75856500 100 6091695 100

Sept. 2016Revenue Cost of sales Gross profit₦’000 % of Total ₦’000 % of Total ₦’000 % of Total

Retail/C&I 74234823 90.16157269 68293453 91.0645680481 5941370 80.9364393590059Aviation 5748641 6.981986249 5018538 6.69187125745 730103 9.94584366658334Lubes 2351860 2.856441058 1682548 2.24356069447 669312 9.11771697441078Total 82335324 100 74994539 100 7340785 100

28 Subsequent events

There are no significant subsequent events that could have had a material effect on the financial position of the Company as at

Retail/ Commercial & Industrial - this segment is responsible for the sale and distribution of petroleum products (refined products) to retail customers and industrial customers.

Aviation - this segment involves the sale of Aviation Turbine Kerosene (ATK).

Lubricants - this segment manufactures and sells lubricants and greases.

₦’000 ₦’000 ₦’000



42

29 Contingencies

(a) Pending litigations and claims

There are certain lawsuits and claims pending against the Company in various courts of law which are being handled by external l

(b) Financial commitments

The Directors are of the opinion that all known liabilities and commitments, which are relevant in assessing the state of affair

30 PrepaymentsSeptember 2017 December 2016₦’000 ₦’000

Operating leases 777759 698114Other prepayments 284294 213089

1062053 911203

The Company leases a number of offices, buses, warehouses and service stations under both cancellable and non-cancellable lease


Non-current portion 648345 578073Current portion 413708 333130

1062053 911203


Opening balance 911203 643494Addition 565173 706747Release to P&L -414323 -439038Closing balance 1062053 911203



43

Intangible assets relate to the Company's accounting, software application package and license. The movement on these accoun

-180755-61580



44

The movement in the allowance for impairment in respect of loans and receivables during the period was as follows:

-347922

The Company, entered into an arrangement with some of its transporters to provide tankers to them. The transporters are to repay the Company the cost of the tankers plus an interest of 17% per annum. The transporters were expected to repay their obligations to the Company from freight costs charged to the Company for services rendered. The repayment periods range from 12 to 24 months. The transporters made a 20% contribution at the commencement of the arrangement. The outstanding balance on the receivable from the transporters are secured by the Company's retention of title to the tankers. Legal title will only be passed to the transporters once they have settled the outstanding balance.In addition, in 2015, the arrangement was revised and the interest on outstanding payments was increased to 20% per annum and the tenor was extended for another 12 months and the insurance payments on the trucks for the current period was included as part of the new principal amount. The Company did not record any impairment during the period. (Dec. 2016: N61.58 million) in respect of certain transporters whose recoverables are doubtful of recovery. On the basis of retention of title as well as historical payment behaviours of the respective transporters (including continuing business as of date, repayments during the year and adequate insurance cover on the tankers), the Company believes that the outstanding balances are recoverable.



45

Included in the Petroleum Support Fund is an amount of ₦15.03 billion (Dec. 2016: ₦10.98 billion) receivable from Petroleum

The Company's exposure to credit risk and impairment losses related to trade and other receivables are disclosed in Note 25 (a

###

#########



46



47



48

This represents statutory deductions which are mandated by law or statute. They include Value Added Tax (VAT) and Withholding T



49



50



51



52

0.343612461495398



53



54

The value of products stored by MRS Oil and Gas Limited for the Company amounting to ₦340.78 million (Dec 2016: ₦315.99



55

-44030.3306900002

######



56



57

3rd … · XLS file · Web view · 2017-11-08Obagi_Flow_Station_Installations_communes_OML_58 ......

Documents

Transcript of 3rd … · XLS file · Web view · 2017-11-08Obagi_Flow_Station_Installations_communes_OML_58 ......