MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Contents Page
Corporate information 2
Statement of directors’ responsibilities 3
Statement of financial position 4
Statement of profit or loss and other comprehensive income 5
Statement of changes in equity 6
Statement of cash flows 7
Index to notes to the financial statements 8
Notes to the financial statements 9
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Corporate information
RC 6442
Board of directors Alhaji Sayyu I. Dantata ChairmanMr. Andrew O. Gbodume Managing Director (Ag.)
Non Executive DirectorMr. Paul Bissohong Non Executive DirectorDr. Samaila M. Kewa Non Executive DirectorAlhaji Dahiru Lawal Mangal Non Executive Director Mr. Lawal Mangal Alternate DirectorMs Amina Maina Non Executive Director
Registered office 8, Macarthy StreetOnikanLagos
Company secretary Mrs. O.M. Jafojo8, Macarthy StreetOnikanLagos
Registrar Cardinal Stone Securities (Registrars) Limited -(formerly City Securities)358, Albert Macaulay StreetYabaLagos
Auditor KPMG Professional ServicesKPMG TowerBishop Aboyade Cole StreetVictoria IslandLagos
Principal bankers Access Bank PlcCitibank Nigeria LimitedFirst City Monument Bank PlcFirst Bank of Nigeria LimitedStandard Chartered Bank Nigeria LimitedZenith Bank PlcSkye Bank PlcSterling Bank Plc
Leadership team Andrew O. Gbodume Oghenekaro OlogeManaging Director Information Technology Manager
Oluwakemi M. Jafojo Timipiri OduCompany Secretary Human Resources Manager
Martin Orogun Andrew Onum Chief Financial Officer Chief Legal Counsel
Peter Z. Dia Abdullahi MasanawaAviation Manager Operations Manager
Tara Ajibulu Moruf SobowaleSales & Marketing Manager Consumer & Industrial Manager
Michael Ayewa Kola Akinyemi Health, Safety and Enviroment Manager Engineering/Marketing Support Manager
Jubril Hassan Gloria AtongTreasury Manager Procurement Manager
Daniel Chukwuazawom Charles OnumChief Internal Auditor Lubes Operation Manager
Mr. Patrice Alberti
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Statement of directors’ responsibilities in relation to the financial statements for the period ended 30 September 2
The directors accept responsibility for the preparation of the half year financial statements set out on pages 4 to 3
The directors further accept responsibility for maintaining adequate accounting records as required by the Companie
The directors have made an assessment of the Company's ability to continue as a going concern and have no reason
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
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Statement of financial position as at 30 ###
September 2016 December 2015Notes
AssetsProperty, plant and equipment 12 18138145.3059829 19053705###Intangible assets 13 6067 1144###Prepayments 30 341355 354303###Trade and other receivables 15 0 1211###Total non-current assets 18485567.3059829 19410363
Inventories 17 5993962 6260483###Loans and receivables 14 519168 606985###Trade and other receivables 15 39071147 20519974###Witholding tax receivables 16 61982 32348Prepayments 30 307730 289191###Cash and cash equivalents 18 20637151 19774397###Total current assets 66591140### 47483378
Total assets 85076707.3059829 66893741###
Equity ###Share capital 19 126994 126994Retained earnings 21741029.88904 20850330###
Total equity 21868023.88904### 20977324###
Liabilities ###Employee benefit obligations 20 16774 12618###Deferred tax liabilities 5312099 5312099###Total non-current liabilities 5328873 5324717
Security deposits 21 1706545 1573485###Dividend payable 22(a) 395220.4 399889###Trade and other payables 23 31522439 21226030###Bank overdraft and short term borrowings 24 23144905 16400466###Tax payable 11(c) 1110701 991830###Total current liabilities 57879810.4 40591700
Total liabilities 63208683.4### 45916417
Total equity and liabilities 85076707.28904### 66893741
Approved by the Board of Directors on ____________2016 and signed on its behalf by: ###
The notes on pages 9 to 38 are an integral part of these financial statements.
N’000 N’000
)Mr. Andrew Gbodume (Managing Director)FRC/2012/ICAN/00000000534
) Mr. Paul Bissohong (Director) FRC/2013/IOD/00000003841
) Mr. Martin Orogun (Chief Financial Officer) FRC/2013/ICAN/00000004639
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Statement of profit or loss and other comprehensive income for the period ended 30
Notes September 2016 September 2015
Revenue 5 82335324 64590068Cost of sales 7 -74994539 -59722783
Gross profit 7340785 4867285######
Other income 6 1095225 1039623Selling and distribution expenses 7 -1212180 -448063Administrative expenses 7 -4048444 -3781970
Operating profit 3175386 1676875###
Finance income 8 421891 1651107Finance costs 8 -1636646 -2068351
Net finance costs 8 -1214755 -417244
Profit before income tax 9 1960631 1259631
Income tax expense 11(a) -790332 -529045###
Profit for the period 1170299 730586###
Total comprehensive income for the period 1170299 730586###
Earnings per share (EPS) Basic and diluted earnings per share (Naira) 10(a) 4.60768187330811 2.87645111983577
###The notes on pages 9 to 38 are an integral part of these financial statements.
N’000 N’000
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Statement of changes in equityfor the Period ended 30 September
*
Share capital Retained earnings Total equityNotes
Balance as at 1 January 2015 126994 20091127 20218121Total comprehensive income: Profit for the year 0 730586 730586Other comprehensive income 0 0 0###Total comprehensive income for the period 0 730586 730586
Transactions with owners of the CompanyContributions and DistributionsDividends declared 22 (b) -223745 -223745Unclaimed dividend written back 22 (b) 0 32565 32565
Total transactions with owners of the Company 0 -191180 -191180
Balance as at 30 September 2015 126994 20630533 20757527
Share capital Retained earnings Total equityNotes
Balance as at 1 January 2016 126994 20850330 20977324Total comprehensive income: Profit for the period 0 1170299 1170299Other comprehensive income 0 0 0
Total comprehensive income 0 1170299 1170299
Transactions with owners of the CompanyContributions and DistributionsDividends declared 23 (b) 0 -279387.539 -279387.539Unclaimed dividend written back 23 (b) -211.57196 -211.57196Total transactions with owners of the Company 0 -279599.11096 -279599.11096
Balance as at 30 September 2016 126994 21741029.88904 21868023.88904
*
###
The notes on pages 9 to 38 are an integral part of these financial statements.
N’000 N’000 N’000
N’000 N’000 N’000
Included in retained earnings is N14.40 billion (2014: N14.40 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 PlcFinancial Statements-- 30 September 2016
Statement of cash flows for the period ended 30
Notes September 2016 September 2015
Cash flows from operating activities:Profit after tax 1170299 730586
Adjustments for:Depreciation 12(a) 1176122.97096 1142923Amortisation of intangible assets 13 4099 56020 Loss on DisposalFinance income 8 -421891 -1651107 NBVFinance costs 127289 355585 ProceedsGain on sale of property, plant and equipment 9(a) -70000 -2000 Loss(Write-back)/Provision for long-term service award 20 4500 3675Impairment loss on trade receivables - net 7 0 0Impairment loss on non-current assets 7 0 0Impairment loss on employee and other receivables 7 -500 0Net increase in impairment loss on inventory 17 0 0Tax expense 11(a) 790332 529045
2780250.97096 1164727Changes in: - Inventories 266521 -457970###- Trade, other receivables and prepayments -18584687 -11703829###- Security deposits 133060 70525###- Trade and other payables 10296409 10587739###Cash generated from operating activities -5108446.02904 -338808
Income taxes paid 11(c) -671460.91059 -939112###Withholding tax credit notes utilised 11(c) 0 -18662###Long-term service award paid 20 -344 0###
Net cash generated from operating activities -5780250.93963 -1296582
Cash flows from investing activities:Proceeds from sale of property, plant and equipment 70000 2000Purchase of property, plant and equipment 12(a) -260563.33527 -319582Purchase of intangible assets 13 -9022 0Amounts paid on behalf of transporters 14 -54448.179 0Principal repayment received on amounts advanced to transporte 14 166766.458 252657Interest received 8 397390 1651107
Net cash generated from investing activities 310122.94373 1586182
Cash flows from financing activities:Net repayment on short term borrowings 6744439 4103809Dividends paid 22(b) -284268.6 -230785Interest paid -127289 -355585
Net cash used in financing activities 6332881.4 3517439
Net change in cash and cash equivalents 862753.404100001 3807039Cash and cash equivalents at 1 January 19774397.1394918 9683802Effect of movements in exchange rates on cash held 0
Cash and cash equivalents at 30 18 20637150.5435918 13490841
The notes on pages 9 to 38 are an integral part of these financial statements.
N’000 N’000
CASH FLOW WORKSHEET
Finance Cost:Interest expense a 77663Bank Charges b 49626Interest Paid c=a+b 127289Effect of movements in exchange rates on cash held d 0Finance cost e=c+d 127289
Property, plant and equipmentCost on disposal f 0Accum. Dep on disposal g 0NBV h=f+g 0Proceeds on sale of PPE i 70000Gain on disposal j=h+i 70000
Trade and other receivables2013
Prepayments - non current 354303Trade and other receivables - non current 1211Trade and other receivables - current 20519974Prepayments - current 289191
l 21164679
2014Prepayments - non current 341355Trade and other receivables - non current 0Trade and other receivables - current 39071147Prepayments - current 307730
l 39720232
m=k-l -18555553Impairment loss on trade receivables - net less: 0Impairment loss on employee and other receivable less: 500
Net changes Trade, other receivables and prepayments -18555053
Trade and other payables2013
Trade and other payables n 212260302014Trade and other payables o 31522439Net changes in Trade payables z=n-o -10296409
2013Inventories n2 6260483
2014Inventories 5993962Reversal of impairment loss 0
n2 5993962
Changes in Inventories z=n2-n -266521
2014short term borrowings p 23144905
Net Repayment on Short-Term Borrowings q=n:p -6744439
2013short term borrowings p 16400466
Effects of exchange rate on cash and cash equivalent
USDOpening balance of cash and cash equiv (USD) 789 167.5 year-end rate x 132157.5
2014 transactions 2062.4174 193 Average rate y 397304.0879
Closing balance (calculated) z=x+y 529461.5879
closing balance of cash equiv @ year end spot rate 2851.4174 196.5 year-end rate 560303.5191
Effect of movements in exchange rates on cash held 30841.93116
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Index to Notes to the financial statements for the period ended 30 September 2016
Page
1 Reporting entity 92 Basis of preparation 93 Significant accounting policies 104 Standards and Interpretations not yet effective 175 Revenue 206 Other income 207 Expenses by nature 208 Finance income and costs 219 Profit before income tax 21
10 Earnings per share (EPS) and dividend declared per share. 2211 Income Taxes 2312 Property, plant and equipment 2413 Intangible assets 2514 Loans and receivables 2615 Trade and other receivables 2616 Witholding tax receivables 2617 Inventories 2718 Cash and cash equivalents 2719 Share capital 2720 Employee benefit obligations 2721 Security deposits 2922 Dividends 2923 Trade and other payables 3024 Bank overdraft and other short term borrowings 3025 Financial risk management & financial instruments 3026 Related party transactions 3527 Segment reporting 3728 Subsequent events 3829 Contingencies 3830 Operating leases 38
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Notes to the financial statements
1. Reporting entity
The Company was incorporated as Texaco Nigeria Limited (a privately owned Company) on 12 August 196
On 20 March, 2009 there was an acquisition of Chevron Africa Holdings Limited, (a Bermudian Company)
The new management of the Company announced a change of name of the Company from Chevron Oil Nige
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
2 Basis of preparation
(a) Statement of compliance
(b) Basis of measurementThe financial statements have been prepared on the historical cost basis.
(c) Functional and presentation currency
These financial statements are presented in Nigerian Naira, which is the Company’s functional currency.
(d) Use of judgements and estimates
The preparation of annual financial statements in conformity with IFRS requires management to make jud
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are rec
i Judgements, assumptions and estimation uncertainties
Information about judgements, assumptions and estimation uncertainties that have a significant risk ofNote 12 - Impairment test- recoverable amounts are higher than carrying amounts.Note 20 - Measurement of employee benefits obligations; key actuarial assumptions.
Note 29 - Recognition of contingencies: key assumptions about the likelihood and magnitude of an o
ii Measurement of fair values
3 Significant accounting policiesThe accounting policies set out below have been applied consistently to all periods presented in these f
(a) Foreign currency transactions
Transactions denominated in foreign currencies are translated and recorded in Nigerian Naira at the actual
Foreign currency differences arising on translation are recognized in profit or loss. Non-monetary items t
(b) Financial instrumentsThe 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 liab
The Company derecognises a financial asset when the contractual rights to the cash flows from the asset exp
Financial assets and financial liabilities are offset and the net amount presented in the statement of fin
ii Non-derivative financial assets - measurement
The Company has only loans and receivables, trade and other receivables, cash and cash equivalents as nLoans and receivables
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand, cash balances with banks and call deposits with ori
iii Non-derivative financial liabilities - measurement
(c) Property, plant and equipment
i Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulat
Cost includes expenditure that is directly attributable to the acquisition of the asset. Property, plant
Purchased software that is integral to the functionality of the related equipment is capitalized as part o
If significant parts of an item of property, plant and equipment have different useful lives, they are a
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing
ii Subsequent expenditure
The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying a
iii Depreciation
Depreciation is calculated to write off the depreciable amount, which is the cost of an asset, or other amo
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of
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 i
Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred to the relev
(d) Intangible assets
Intangible assets that are acquired by the Company and have finite useful lives are measured at cost lThe 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
Amortisation of intangible assets
Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its resi
Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted i
(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 lea
ii Leased assets
Assets held by the Company under leases that transfer to the Company substantially all of the risks and
Assets held under other leases are classified as operating leases and are not recognised in the Company'
iii Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the ter
Minimum lease payments made under finance leases are apportioned between the finance expense and the re
(f) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of inventories include
The basis of costing inventories are as follows:
Product Type Cost Basis
Weighted average costs incurred (for regulated products reduced by the valu
First in First Out (FIFO)
Packaging materials , lubric 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 estimate
(g) Impairmenti Non-derivative financial assets
Financial assets not classified at fair value through profit or loss are assessed at each reporting date to
Objective 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
. indications that a debtor or issuer will enter bankruptcy;
. adverse changes in the payment status of borrowers or issuers;
. 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 financial assets
The Company considers evidence of impairment for these assets at both an individual asset and collective
In assessing collective impairment, the Company uses historical information on timing of recoveries and
An impairment loss is calculated as the difference between an asset's carrying amount and the present val
ii Non-financial assets
At each reporting date, the Company reviews the carrying amounts of its non-financial assets (other than
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recov
Impairment losses are recognised in profit or loss. An impairment loss is reversed only to the extent
(h) Employee benefitsi Defined contribution plan
A defined contribution plan is a post-employment benefit plan (pension fund) under which the Company pa
ii Other long-term employee benefits
The Company’s other long-term employee benefits represents a Long Service Award scheme instituted for
iii Termination benefits
Termination benefits are expensed at the earlier of when the Company can no longer withdraw the offer o
iv Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the
A liability is recognized for the amount expected to be paid under short-term cash bonuses if the Compan
(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
A provision for restructuring is recognised when the Company has approved a detailed and formal restr
A provision for onerous contracts is recognized when the expected benefits to be derived by the Company
Contingent liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will be
Contingent liabilities are only disclosed and not recognised as liabilities in the statement of financial p
(j) Revenue
Revenue from the sale of non-regulated products in the course of ordinary activities is measured at the
Revenue for regulated products is measured at the regulated price of the products. The timing of the tr
(k) Finance income and finance costs
Finance income comprising of interest income on funds invested, foreign currency gain on financial asset
Finance costs comprises interest expense on borrowings, bank charges, foreign currency loss on financial aForeign 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 prof
i Current tax
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax
The Company offsets the tax assets arising from WHT credits and current tax liabilities if, and only if, th
ii Deferred tax
Deferred tax is recognised in profit or loss except to the extent that it relates to a transaction that is re
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
(m) Earnings per share (EPS)
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS
(n) Segment reporting
(o) Statement of cash flows
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).The financial statements were authorised for issue by the Company's Board of Directors on 30 March 2016 Details of the Company's significant accounting policies are included in Note 3.
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 Executive director (Finance & Administration) has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the Board of Directors.
The Executive director (Finance & Administration) regularly reviews significant unobservable inputs and valuation adjustments. If third party inf ormation, such as broker quotes or pricing services, is used to measure fair values, then the Executive director (Finance & Administration) 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 direct ly (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.
The Company initially recognizes loans and receivables at fair value plus any direct ly 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.
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.
Refined petroleum products (i) ( AGO, ATK, PMS , DPK)
Refined petroleum product (ii)( LPG)
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.
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.
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Notes to the financial statements
The statement of cash flows is prepared using the indirect method. Changes in statement of financial pos
(p) Government grants
Petroleum Products Pricing Regulatory Agency (PPPRA) subsidies which compensate the Company for loss
(q) Joint arrangement
The Company’s joint arrangement is in respect of its interests in joint aviation facilities held with othe(r) Share capital
4 Standards and Interpretations not yet effective (but available for early adoption)
A number of standards, amendments to standards and interpretations are effective for annual periods b
Effective for the financial year commencing 1 January 2016• Disclosure Initiative (Amendments to IAS 1)
Effective for the financial year commencing 1 January 2018
Effective for the financial year commencing 1 January 2018
Ammendments to IAS 1
IFRS 15 Revenue from contracts with customers
IFRS 9 Financial Instruments
The amendments apply retrospectively. The Company will adopt the amendments for the year ending
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 direct ly attributable to the issue of ordinary shares, net of any tax effects are recognised as a deduction from equity.
• IFRS 1 5 Revenue from Co ntracts with Cu stomers
• IFRS 9 Finan cial Instruments
All Standards and Interpretations will be adopted at their effective date (except f or those Standards and Interpretations that are not applicable to the entity).
IFRS 14 Regulatory Deferra l Acco unts, Clarifica tion of a cceptable methods of depreciation an d amortisation (Amendments to IAS 16 and IAS 38), Accou nting for acquis itions of in terests in joint o perations (Amendments to I FRS 11 ), Agriculture: Bea rer plants (Amendments to IAS 6 and I AS 41 ), Equity Method in Seperate Fin ancial Statements (Amendments to I AS 12 7), Sale o r Contribution of Assets betw een an Investor an d its Associa te or Joint Venture (Associates and Joint Ven tues : Asset Tr an saction s - Amendments to IFRS 10 and IAS 28 ), Investment Entities: Applying the C onso lidation Exception (Amendments to IFRS 1 0, IFRS 12 and I AS 28) are not ap plicable to th e bus iness of the entity and will therefore have no impact on future fin an cial s tatements . The d irectors are o f the opinion that th e impact of the application of the remaining Standards and Interpretation s will be as fo llows:
The amendments provide additional guidance on the application of materiality and aggregation when preparing financial statements.
The ammendments is effective for annual rep ortin g period s begin ning o n o r after 1 Jan uary 2 016, with early adop tion permitted.
This standard replaces IAS 11 Constructio n Co ntracts , IAS 18 Revenu e, IFRIC 13 Customer Loyalty Progra mmes, IFRIC 15 Agreements for the C onstruction of Real Es tate , IFRIC 18 Tra nsfer of Assets from Cu stomers and SIC-31 Revenu e – Ba rter of Transactio ns Involvin g Advertising Services.
The s tand ard contains a s in gle model that app lies to con tracts with cu stomers and two ap proaches to recognis in g revenu e: at a po int in time or over time. The mo del featur es a contract-b ased five-s tep analysis of transaction s to determin e whether, how much an d when revenue is recognised . This new standard will mos t lik ely have a significant impact on th e Compan y, wh ich will include a possible change in the timing of when revenue is recognised and the amount of rev en ue recogn ised.
IFR S 15 is effectiv e for annual repo rting periods b eg inn in g on or after 1 Janu ary 20 18, with ear ly adoption permitted. The Company will adop t the amendments for th e year end in g 31 December 2018.
On 24 July 2014, the IASB issued the final IFRS 9 F inancial Instruments Standard, which replaces earlier versions of IFRS 9 and completes the IASB’s project to replace IAS 39 Finan cial Instruments : Recognitio n a nd M easurement .
This s tandard will have a significant impact on the Comp an y, wh ich will include chang es in the measur ement bases of th e Comp an y’s financial assets to amortised cost, fair v alue through other co mprehensive in co me or fair value throu gh profit or loss . Even th ough these measu rement categories are s imilar to IAS 39, the criteria for class ification into these categories are s ign if icantly different. In additio n, the IFRS 9 imp airment mo del has been chang ed fro m an “incurr ed loss” mod el from IAS 39 to an “expected credit loss” mod el, which is expected to in cr ease the allowance for bad debts recogn ised in th e Comp an y.
14
MRS Oil Nigeria PlcNotes to the financial statements for the year ended 31st December, 2013
1. Reporting entity
The Company was incorporated as Texaco Nigeria Limited (a privately owned Company) on 12 August 1969 and was converted to a Public Li
On the 20 March, 2009 there was an acquisition of Chevron Africa Holdings Limited, (a Bermudian Company) by Corlay Global SA of Moffson B
The new management of the Company announced a change of name of the Company from Chevron Oil Nigeria Plc to MRS Oil Nigeria Plc (“
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 products, blending of lubricants an
2 Basis of preparation
(a) Statement of compliance
(b) Basis of measurementThe financial statements have been prepared on the historical cost basis except for defined benefit obligations (Note 20).
(c) Functional and presentation currency
These financial statements are presented in Nigerian naira, which is the Company’s functional currency. All financial information present
(d) Use of estimates and judgements
The preparation of annual financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in
(i) Judgements:
information about judgements made in applying accounting policies that have the most significant effects on the amounts recognized in t
(ii) Assumptions and estimation uncertainties
Information about assupmtions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year eNote 25 - Impairment test, key assumptions underlying recoverable amounts.Note 29 - Measurement of deferred benefits obligations; key actuarial assumptions.
3 Significant accounting policiesThe accounting policies set out below have been applied consistently to all periods presented in these financial statements. The compan
(a) Foreign currency transactions
Transactions denominated in foreign currencies are translated and recorded in Nigerian Naira at the actual exchange rates as of the date of
Foreign currency differences arising on retranslation are recognized in profit or loss, except for qualifying cash flow hedges, which are r
(b) Financial instruments
i. Non-derivative financial assets
The Company initially recognizes loans and receivables on the date that they are originated. All other financial assets (including assets de
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Comp
The Company has the following non-derivative financial assets: financial assets at fair value through profit or loss, loans and receivables.
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand; cash balances with banks and call deposits with original maturities of three months or
Financial assets at fair value through profit or loss
A financial asset is classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon ini
Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are rec
8, Macarthy StreetOnikanLagos Nigeria
These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs).
The financial statements were authorised for issue by the Board of Directors on __________ . Details of the company's accounting policies are included in Note 3.
15
MRS Oil Nigeria PlcNotes to the financial statements for the year ended 31st December, 2013
ii Non-derivative financial liabilities
All financial liabilities (including liabilities designated at fair value through profit or loss) are recognized initially on the trade date at The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the CompThe Company has the following non-derivative financial liabilities: loans and borrowings, trade and other payables.
Such financial liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial recogni
iii Share capitalThe Company has only one class of shares, ordinary shares. Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity, net of any tax effects.
(c) Property, plant and equipment
i Recognition and measurement
Items of property, plant and equipment are measured at cost or deemed cost less accumulated depreciation and accumulated impairment los
Cost includes expenditure that is directly attributable to the acquisition of the asset. Property, plant and equipment under construction are
Purchased software that is integral to the functionality of the related equipment is capitalized as part of the equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major com
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the
ii Subsequent costs
The cost of replacing a part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable
iii Depreciation
Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for cost, less its residual
Depreciation is recognized in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, p
The estimated useful lives for the current and comparative periods are as follows:
- Land and Buildings- Leasehold Land Lease period- Buildings 10 to 25 years
- Plant and Machinery 10 to 20 years
- Furniture and Fittings 5 years
- Automotive equipment 4 years
- Computer and office equi 3 years
Depreciation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.
Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred to the relevant asset category immediately th
(d) Intangible assets
Intangible assets that are acquired by the Company and have finite useful lives are measured at cost less accumulated amortisation and
The 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 specific intangible asset to which
Amortisation of intangible assets
Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value. Amortisation is recogniz
(e) Leases
Leased assets
Leases in terms of which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. Upon in
Other leases are operating leases and the leased assets are not recognized in the Company’s statement of financial position.
Lease payments
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives
Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liabili
16
MRS Oil Nigeria PlcNotes to the financial statements for the year ended 31st December, 2013
Determining whether an arrangement contains a lease
At inception of an arrangement, the Company determines whether such an arrangement is or contains a lease. This will be the case if the fthe fulfilment of the arrangement is dependent on the use of a specific asset or assets; and the arrangement contains a right to use the asset(s).
At inception or on reassessment of the arrangement, the Company separates payments and other consideration required by such an arrangement
(f) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories includes expenditure incurred in acquiring
The basis of costing inventories are as follows:
Product Type Cost Basis
White Petroleum Products ( AGO, ATK, PMS , DPK) Weighted Average Cost of costs incurred (for deregulated products) and reduced value of subsidies due for deregulated products.
Packaging Materials , Lubricants and Greases First in , First Out
Inventory-in-transit Purchase cost incurred to date
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling e
(g) Impairmenti Non-derivative financial assets (including receivables)
A financial asset not carried at fair value through profit or loss, including an equity accounted investee, is assessed at each reporting date
Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restruct
The Company considers evidence of impairment for receivables at both a specific asset and collective level. All individually significant recei
In assessing collective impairment the Company uses historical trends of the probability of default, timing of recoveries and the amount of
An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount
ii Non-financial assets
The carrying amounts of the Company’s non-financial assets, other than inventories are reviewed at each reporting date to determine whethe
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs to sell. In asses
The Company’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate asset may be impaired,
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable amount. Impairment losses
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no l
(h) Employee benefits
i Defined contribution plan
A defined contribution plan is a post-employment benefit plan (pension fund) under which the Company pays fixed contributions into a separ
In line with the provisions of the Pension Reform Act 2004, the Company has instituted a defined contribution pension scheme for its per
ii Defined benefit plan
The Company currently operates one gratuity scheme which is a defined benefit scheme for certain employees.
The Company’s net obligation in respect of defined benefit scheme is calculated by estimating the amount of future benefit that employees h
The recognised liability is determined by an independent actuarial valuation every year using the projected unit credit method. HR Nigeri
· ·
17
MRS Oil Nigeria PlcNotes to the financial statements for the year ended 31st December, 2013
iii Other long-term employee benefits
The Company’s other long-term employee benefits represents Long Service Awards scheme instituted for all permanent employees. The Company
iv Termination benefits
Termination benefits are recognized as an expense when the Company is committed demonstrably, without realistic possibility of withdrawa
v Short-term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognized for the amount expected to be paid under short-term cash bonuses if the Company has a present legal or constructi
(i) Provisions and contingent liabilities
Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated r
A provision for restructuring is recognised when the Company has approved a detailed and formal restructuring plan, and the restructuri
A provision for onerous contracts is recognized when the expected benefits to be derived by the Company from a contract are lower than the
Contingent liabilities
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence o
Contingent liabilities are only disclosed and not recognised as liabilities in the statement of financial position.
If the likelihood of an outflow of resources is remote, the possible obligation is neither a provision nor a contingent liability and no disclos
(j) Revenue
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receiv
If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of
(k) Rental income
Rental income is recognized in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognized as
(l) Finance income and finance costs
Finance income comprises interest income on funds invested and changes in the fair value of financial assets at fair value through profit or l
Finance costs comprise interest expense on borrowings, bank charges, unwinding of the discount on provisions and impairment losses recognize
Foreign currency gains and losses are reported on a net basis.
(m) Income and deferred tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates statutorily enacted at the
Deferred tax is recognised in profit or loss account except to the extent that it relates to a transaction that is recognised directly in equity.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that ha
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting
(n) Earnings per share (EPS)
The Company presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profi
18
MRS Oil Nigeria PlcNotes to the financial statements for the year ended 31st December, 2013
(o) Segment reporting
(p) Loans and borrowings
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred. Loans and borrowings are subsequently state
Loans and borrowings, for which the Company has an unconditional right to defer settlement of the liability for at least 12 months after the s
(q) Statement of cash flows
The statement of cash flows is prepared using the indirect method. Changes in statement of financial position items that have not resulted i
(r) Government Grants
Petroleum Products Pricing Regulatory Agency (PPPRA) subsidies which compensate the Company for losses made on importation of certain
(s) Jointly Controlled Assets
Jointly controlled assets refers to the Company’s interests in joint aviation facilities held with other parties. These financial Statements
4 New standards and interpretations not yet adopted
5 Determination of fair values
A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and non-financia
(i) Trade and other receivables
The fair value of trade and other receivables is estimated as the present value of future cash flows, discounted at the market rate of intere
(ii) Non-derivative financial instruments
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows
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 Board of Directors 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 Board of Directors include items directly attributable to a segment as well as those that can be allocated on a reasonable basis.
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 January 2013, and have not been applied in preparing these financial statements. Those which may be relevant to the Company are IFRS 11 Joint Arrangement, IFRS 13 Fair Value Measurement and IFRS 9 Financial Instruments, which is expected to impact the classification and measurement of financial assets. These standards will become mandatory for the Company’s 2013 financial statements except for IFRS 9 which is mandatory for the 2015 financial statements. The extent of the impact has not been determined and the Company does not plan to adopt these standards early.
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Notes to the financial statements
5 Revenue September 2016 September 2015
Premium Motor Spirit (PMS) 62852550 50671391Aviation Turbine Kerosene (ATK) 5748641 7763919Automotive Gas Oil (AGO) 7632048 2794171Lubricants and greases 2351860 1801050Dual Purpose Kerosene (DPK) 3750225 1540440
0 1909782335324 64590068
6 Other income September 2016 September 2015
Rental and lease income (Note 6(a)) 24158 28746Gains on disposal/Sale of property, plant & equipment 70000 2000Sundry income (Note 6(b)) 503547 633680Income on storage services 497520 375197
Total 1095225 1039623
(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 incl
(b) Sundry income represents service fees for handling and other fees earned in the delivery of products.
7 Expenses by nature September 2016 September 2015
Depreciation 1176123 1142923Amortization of intangible assets 4099 56020Changes in inventories of lubes, greases and refined products 75007094 58739330.611Rental of service stations, buildings and equipment 174675 129705Advertising expense 213769 38380Consultancy expense 246995 242576Maintenance expense 245808 161429Throughput expense 37940 1037796.389Freight expense 809241 262320Management fees (Note 26 (c)) 670205 525210Director's remuneration 1350 2500Employee benefit expense (Note 9 (b)) 464978 345232Auditor's remuneration 22500 18342Impairment loss on employee and other receivables -500 0Impairment loss on trade receivables 0 0Impairment loss on non-current assets 0 0Local and international travel 103583 61291Office expenses and supplies 137322 123424Communication and postage 121100 101703Fines and penalties 3099 0Insurance premium 100341 92536Contract labour 408769 370867Sponsorships and donations 7814 18883.85739Licenses and Levies 50864 38704.24962Utilities 27922 24772.11962Subcriptions 2899 2037.371Board meetings and AGM expenses 51526 44129.50129Security 31889 26098.04226Other expenses 133758 346605.78309Total cost of sales, selling and distribution and administrative expenses 80255163 63952815.92427
8 Finance income and finance costs September 2016 September 2015
Finance incomeInterest income on short-term bank deposits 397390 248344PPPRA reimbursement on interest and foreign exchange differential (a) 0 1354914Interest income on loans to transporters (Note 14) 24501 47849Total finance income 421891 1651107
Finance costInterest expense 77663 300910Bank charges 49626 54675Net foreign exchange loss 1509357 1712766Total finance costs 1636646 2068351
Net finance costs/ (income) 1214755 417244
(a)
9 Profit before income tax September 2016 September 2015 (a) Profit before income tax is stated after charging/(crediting):
Depreciation (Note 12) 1176123 1142923Amortisation of intangible assets (Note 13) 4099 56020Management fees (Note 26(c)) 670205 525210Service fee (Note 26(b)) 0 0Director's remuneration (Note 9(b)(iv)) 1350 2500Employee benefit expense (Note 9(b)(i)) 464978 345232Auditor's remuneration 22500 18342Gain on disposal of property, plant and equipment -70000 -2000PPPRA reimbursement on interest and foreign exchange differential 0 -1354914Net foreign exchange loss (Note 8) 1509357 1712766
(b) Directors and employees
i Employee costs during the period comprise:September 2016 September 2015
Salaries and wages 310347 277085Other employee benefits 115917 32422Employer's pension contribution 34214 32050Other long term employee benefit charge 4500 3675
464978 345232
ii The average number of full-time persons employed during the period (other than executive directors) was as followsNumberSeptember 2016 September 2015
Administration 39 20Technical and production 11 2Operations and distribution 40 26Sales and marketing 44 34
134 82
iii Higher-paid employees of the Company and other than directors, whose duties were wholly or mainly discharged in Ni NumberSeptember 2016 September 2015
1000001 2000000 0 02000001 3000000 7 193000001 4000000 39 304000001 5000000 59 105000001 6000000 11 106000001 7000000 9 107000001 8000000 5 08000001 9000000 - 19000001 10000000 - 1
Above 10000000 4 1
134 82
iv Directors' remuneration for directors of the Company charged to profit or loss account are as follows:September 2016 September 2015
Fees 1100 2000Other emoluments 250 500 1350 2500
The directors' remuneration shown above includes:
Chairman 0 0
Highest paid director 1350 6040
Other directors received emoluments in the following ranges: Number
September 2016 September 2015
Nil 2 21000001 2000000 1 12000001 3000000 1 1
10 Earnings per share (EPS) and Dividend declared per share
(a) Basic EPS
Basic earnings per share of N4.61 (Sept. 2015: N2.88 is based on profit attributable to ordinary shareholders of N1
September 2016 September 2015
Profit for the year attributable to shareholders (expressed in Naira) 1170299000 730586000
Weighted average number of ordinary shares in issue 253988672 253988672Basic earnings per share (expressed in Naira per share) 4.60768187331 2.8764511198358
4.6076818733111 Income taxes
Income tax expense
The tax charge for the period has been computed after adjusting for certain items of expenditure and income, which
(a) Amounts recognized in profit or lossSeptember 2016 September 2015
Current tax expense:Income tax 751119 570632Tertiary education tax 39213 25193Prior year over-provision 0 0
790332 595825Deferred tax expense:Origination and reversal of temporary differences 0 -66780Tax expense on operations 790332 529045
(b) Reconciliation of effective tax ratesThe tax on the Company's profit before tax differs from the theoretical amount as follows:
% September 2016 % September 2015
Profit before income tax 1960631 1259631
Income tax using the statutory tax rate 38.31006446 751119 39.66 503852
Effect of:Impact of tertiary education tax 2.000019382### 39213 2 25193Effect of tax incentives 0 0 0 0Non deductible expenses 0### 0 0 0Prior year over-provision 0 0 0 0Other differences 0 0 0 0
Total income tax expense in income stateme 40.31008385 790332 41.66 529045
(c) Movement in current tax liability
September 2016 December 2015
Balance at beginning of the year 991829.91059 1217783Payments during the year -671460.91059 -939113.16661Net provision for the year 790332 735029Withholding tax credit notes utilized 0 -21868.9228
1110701 991829.91059
The Company believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment
N’000 N’000
Liquidified Petroleum Gas (LPG)
N’000 N’000
N’000 N’000
N’000 N’000
This amount represents net interest / foreign exchange differential cost claims received from PPPRA arising from delayed subsidy payments relating to products imported.
N’000 N’000
N’000 N’000
N N
N’000 N’000
N’000 N’000
N’000 N’000
MRS Oil Nigeria Plc.Annual Report -- 31 December 2015
40
Notes to the financial statements
(d) Recognised deferred tax assets and liabilitiesDeferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net2015 2014 2015 2014 2015 2014
Property, plant and equipment 0 0 -5494533 -5783712 -5494533 -5783712Employee benefits 3785 4892 0 0 3785 4892Impairment loss 137106 106164 0 0 137106 106164Inventories 8800 17628 0 0 8800 17628Net unrealised exchange difference 32743 133118 0 0 32743 133118
182434 261802 -5494533 -5783712 -5312099 -5521910
The Company does not have any unrecognized deferred tax assets or liabilities
(e) Movement in temporary differences during the year
Balance Recognized in Balance Recognized in Balance41640 profit or loss 42004 profit or loss 42369
Property, plant and equipment -6068376 284664 -5783712 289179 -5494533Employee benefits 4662### 230 4892 -1107 3785Impairment loss 71348### 34816 106164 30942 137106Inventories 24163### -6535 17628 -8828 8800Net unrealised exchange difference -13416### 146534 133118 -100375 32743
N’000 N’000 N’000 N’000 N’000 N’000
N’000 N’000 N’000 N’000 N’000
MRS Oil Nigeria PlcAnnual Report -- 31 December 2015
41
Notes to the financial statements
12 Property, Plant and Equipment(a) The movement on these accounts was as follows:
Leasehold Land & BPlant & MachinAutomotive Equ Computer & Offic Furniture & Fitti Capital Work in Pr Total
CostBalance at 1 January 2014 14438612 10149259 1646343### 775767### 191302 373103 27574386Additions 19773### 233974 111434 42628 12882 117175 537866Transfers 34981 254311 75311 25362 0 -389965 0Write-off -85500 -85500Disposals 0 0 -18022 0 0 0 -18022
Balance as at 31 December 201 14493366### 10552044 1815066### 843757### 204184 100313 28008730 Depreciation and impairment losses
Balance as at 1 January 2014 1502999 2796338 1100939 655686 167155 0 6223117Charge for the year 293544 999625 227372 63274 6096 0 1589911Disposal 0 0 -16682 0 0 0 -16682
Balance as at 31 December 201 1796543 3795963 1311629 718960 173251 0 7796346
N’000 N’000 N’000 N’000 N’000 N’000 N’000
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Notes to the financial statements
Property, Plant and Equipment(a) The movement on these accounts was as follows:
Leasehold Land & Plant & Machin Automotive EqComputer & OffFurniture & Fittin Capital Work in PrTotal
CostBalance at 1 January 2016 14568251### 10770226 1913021### 864556### 210101 79828 28405983Additions 11419.1438 118785.02664 68195.75 12215.73786 5547.63947 44400.0375 260563.33527Transfers 0 0 0 0 0
Balance as at 30 September 2016 14579670.1438### 10889011.027 1981216.75### 876771.73786### 215648.63947 124228.0375 28666546.33527 Depreciation and impairment losses
Balance as at 1 January 2016 2090311.00638 4831360 1506203.763 743354.21885 181049.069935 0 9352278.058327Charge for the Period 247573.33076 813480.94478 78607.69542 25352 11109 0 1176122.97096Impairment loss
Balance as at 30 September 2016 2337884.33714 5644840.9448 1584811.459 768706.21885 192158.069935 0 10528401.02929
Carrying amountsBalance as at 30 September 2016 12241785.8067 5244170.0819 396405.2914 108065.51901 23490.5695346 124228.0375### 18138145.30598Balance as at 31 December 2015 12477940 5938866 406817 121202 29052 79828 19053705
N’000 N’000 N’000 N’000 N’000 N’000 N’000
MRS Oil Nigeria Plc.Annual Report -- 31 December 2015
61
Other National Disclosures
Value added statementFor the year ended 31
December 2015 December 2014
Revenue 82335324 92325405###Bought in materials and services
- Imported -36036491 -19934429- Local -42573472 -68756604
3725361 3634372Other income 1095225 1255531
Finance income 421891 277712
Value added by operating activities 5242477 5167615
Distribution of Value Added % %
To Government as:Taxes and duties 790332 15 535649 10
To Employees:Salaries, wages, fringe and end of service benefits 464978 9 785082 15
To Providers of Finance:- Finance cost 1636646 31 1427577 28
Retained in the BusinessTo maintain and replace: - Property, plant and equipment 1176123 22 1589911 31 - Intangible assets 4099 0 82992 2Proposed dividend 0 0 223921 4To augment retained earnings 1170299 22 522483 10
Value added 5242477 99 5167615 100
N’000 N’000
MRS Oil Nigeria Plc.Annual Report -- 31 December 2015
62
Other National DisclosuresFinancial summary
Statement of comprehensive income 2015 2014 2013 2012
Revenue 82335324 92325405 87786323 79727349Results from operating activities 3175386 2431918 -1092618 1587900Profit before taxation 1960631 1282053 1407143 378755Profit for the year 1170299 746404 634418 205121Comprehensive income for the ye 1170299 746404 634418 208846
RatiosEarnings per share (Kobo) 460.7681873308 293.87255507206 249.78200602584 80.759900977Declared dividend per share (Kobo 88 74.93 23.34 69.9999722822Net assets per share (kobo) 8609.842209435 7960.2451718792 7728.3553023971 7501.91331368
Statement of financial position31 Dec 2015 31 Dec 2014 31 Dec 2013 31 Dec 2012
Employment of FundsProperty, plant and equipment 18138145.30598### 20212384 21351269 22013568Intangible assets 6067### 57366 81320 140560Loans and receivables 0 0 655229 0Trade and other receivables 0### 2044 5361 7507Prepayment 341355### 297014 303594 236673Net current assets 8711329.6### 5187530 3229534 3112717Employee benefit obligation -16774 -16307 -15541 -218415Deferred tax liability -5312099 -5521910 -5981619 -6238600
Net assets 21868023.90598 20218121 19629147 19054010
Funds EmployedShare capital 126994 126994 126994 126994Retained earnings 21741029.88904 20091127 19502153 18927016.04
21868023.88904 20218121 19629147 19054010.04
The financial information presented above reflects historical summaries based on International Financial Report
N’000 N’000 N’000 N’000
N’000 N’000 N’000 N’000
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Notes to the financial statements
(b) Impairment assessment
The carrying amount of the Company's net assets exceeded its market capitalization as at the year end. As a re
( c ) The Company holds various parcels of land under lease arrangements. The maximum tenor of the lease is 99 year
( d )Capital commitmentsCapital expenditure commitments at the period end authorised by the Board of Directors comprise:
September 2016 December 2015
Capital commitments 393422.822 541804.5
13 Intangible assets September 2016 December 2015
CostBalance as at 1 January 234088 234088Additions 9022 0Balance as at 30 243110 234088
Accumulated amortisationBalance as at 1 January 232944 176722Charge for the Period 4099 56222Balance as at 30 237043 232944
Carrying amount 6067 1144
Amortisation of N4.1 million is included in 'administrative expenses' in the statement of profit or loss and
14 Loans and receivables
The analysis of the loans was as follows:September 2016 December 2015
Balance as at 1 January 606985 909115Insurance 54448.179 72585Interest accrued 24501.279 55116Principal and interests repayments received during the period -166766.458 -429831Balance as at 30 519168 606985Less non current portion 0 0Current portion 519168 606985
Interest income earned with respect to these loans was N24.50 million (Dec. 2015: N55.12 million) and has been
15 Trade and other receivables September 2016 December 2015
Trade receivables 5911965 3697155Petroleum Equalisation Fund (PEF) 2225238 1366129Petroleum Support Fund (PSF) 11203655 375628Loans to employees 43344 27470Due from joint operation partners 37999 38077Receivables from registrar 54244 54244Receivables from related parties 19184542 14835297Advances paid to suppliers 348300 0Other debtors 61860 127185
39071147 20521185Less: non-current portion 0 -1211Current portion 39071147 20519974
For receivables that are classified as 'current', due to their short-term maturities, the fair value approximates thei
The Company's exposure to credit risk, market risk and impairment losses related to trade and other receivables
16 Witholding tax receivablesThe movement on the witholding tax receivable account was as follows:
September 2016 December 2015
Balance at 1 January 32348 36147Additions 29634 18069.9228Withholding tax credit note utilised 0 -21868.9228Balance at 30 61982 32348
17 InventoriesSeptember 2016 December 2015
Premium Motor Spirit (PMS) 1943723 721485Lubricants and greases 1953772 1869542Aviation Turbine Kerosene (ATK) 1746588 315900Automotive Gas Oil (AGO) 65795 67089Dual Purpose Kerosene (DPK) 211498 341759Packaging materials and other sundry items 72586 28167Goods in Transit 0 2916541
5993962### 6260483
Inventory amounting to N347.53 million (Dec. 2015 : N377.93 million) was held in a facility owned by MRS Oi
The value of changes in products, packaging materials and work-in-progress included in cost of sales amounte
18 Cash and cash equivalentsSeptember 2016 December 2015
Cash at bank and on hand 7373853 1301602Short term deposits with ban(Note 18 (a)) 13263298 18472795Cash and cash equivalents in the statement of financial position 20637151 19774397Bank overdrafts used for cash management purposes (Note 0 0
Cash and cash equivalents in the statement of cash flows 20637151 19774397
(a) Short term deposits with banks represent placements with commercial banks for periods between 0 - 90 days.
19 Share capital
September 2016 December 2015Authorised:271,657,230 Ordinary shares of 50k each 135828.615 135828.615
Issued and fully paid:253,988,672 Ordinary shares of 50k each 126994.3362 126994.3362
Issued and fully allotted:253,988,672 Ordinary shares of 50k each 126994.3362 126994.3362
All ordinary shares rank equally with regard to the Company's residual assets. Holders of these shares are entit
20 Employee benefit obligations(a) The amounts outstanding at the end of the year with respect to employee benefit obligations is shown below:
September 2016 December 2015
Year end obligations for:Other long term employee benefits 16774 12618Total employee benefit liabilities 16774 12618
The movement on the provision for other long term employee benefits is as follows:
September 2016 December 2015
Balance as at 1 January 12618 16307Provision for the Period : 4500 0Current service cost 0 4694Interest cost 0 2188Discontinued benefits due to contract change 0 -6297Remeasurement gains (net) 0 -834Benefits paid by the employer -344 -3440Balance as at 30 16774 12618
(c) Actuarial AssumptionsPrincipal actuarial assumptions at the reporting date (expressed as weighted averages):
September 2016 December 2015
Long-term average discount rate (p.a.) 0.12 0.12Future average pay increase (p.a.) 0.11 0.11Average rate of inflation (p.a.) 0.09 0.09Average Duration in years (Long Service Awards) 7.29 7.29These assumptions depict management’s estimate of the likely future experience of the Company.
Due to unavailability of published reliable demographic data in Nigeria, the demographic assumptions regarding f
Mortality in Service
Sample ag
September 2016 December 2015
Number of deaths in year out of Number of deaths in year out of25 7 730 7 735 9 940 14 1445 26 26
Assumptions regarding future mortality rates are based on published statistics and mortality tables by institute
Withdrawal from Service
Age Band
September 2016 December 2015
Rates≤ 30 0.005 0.00531 - 39 0.005 0.00540 - 44 0.005 0.00545 - 60 0 0
It is assumed that all the employees covered by the long service award scheme would retire at age 60 (2014: ag
Sensitivity Analysis
Below is the sensitivity analysis of the principal actuarial assumptions adopted in determining the employee bene
Long Service Award
Discount rate -0.01 13600+1% 11760
Salary increase rate -0.01 12029+1% 13272
Inflation rate -0.01 12275+1% 13015
Mortality rateAge rated up by 1 year 12653Age rated down by 1 year 12579
21 Security deposits
These are collateral deposits paid by dealers who maintain credit facilities with the Company. These amounts arThe Company's exposure to liquidity risks related to security deposits is disclosed in Note 25 (b).
22 Dividends(a) Declared dividends
The following dividends were declared and paid by the Company during the period.September 2016 December 2015
xx kobo per qualifying ordinary share (Dec. 2015: 88 kobo) 279387.539 223510
After the respective dates, the following dividends were proposed by the Directors. The dividends have not beSeptember 2016 December 2015
xx per qualifying ordinary share (Dec. 2015: N1.10 kobo) 0 279387.5392
Dividend payableSeptember 2016 December 2015
Balance as at 1 January 399889 427995Declared dividend 279388 223510Payments -284268.6 -204528Unclaimed dividend written back to retained earnings 212 -47088Balance as at 30 395220.4 399889
395454 400123.8245
(i) Unclaimed dividends transferred to retained earnings represents dividends which have remained unclaimed for o
(ii) As at 30 September 2016, dividend payable held by the Company was N361.58 million (Dec 2015: N345 million
23 Trade and other payablesSeptember 2016 December 2015
Trade payables 11332239 5446521Accrued expenses 686347 534827Amounts due to joint arrangement partners 154538 110527Advances received from customers 1020477 993441Bridging allowance 2145020 1333897Amounts due to related parties 15813444 12437570Pension payable (Note 23(a)) 829 752Other tax liabilites 369545 368495
31522439 21226030
(a) The balance on the pension payable account represents the amount due to Pension Fund Administrators which a
September 2016 December 2015
Balance as at 1 January 752 784Contributions during the period 34290.50571 33598Payments during the period -34213.50571 -33630Balance as at 30 829 752
24 Bank overdraft and other short term borrowingsSeptember 2016 December 2015
Bank overdraft (Note 18 and Note 24(a)) 0 0Bank borrowings (Import Finance Facilities) (Note 24(b)) 23144905 16400466Total Borrowings 23144905 16400466
(a) Interest rates on these facilities ranged between 18% to 20% per annum (2015: 18% - 22%). Where the fixed depo
(b) Import Finance Facilities represents short term borrowings obtained to fund letters of credits for product imThe fair value of current borrowings equals their carrying amount, as the impact of discounting is not significan
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 object
Risk management framework
The Board of Directors has overall responsibility for the establishment and oversight of the Company’s risk m
The Company’s risk management policies are established to identify and analyze the risks faced by the Company
The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk managem
(a) Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument
Trade and other receivables
Management has credit policies in place and the exposure to credit risk is monitored on an ongoing basis by a
The Credit Committee reviews each customer’s credit limit in line with the customers’ performance, feedback fr
In monitoring customer credit risk, customers are grouped according to their credit characteristics, including w
The Company establishes an allowance for impairment that represents its estimate of incurred losses in respect
The maximum exposure to credit risk for trade and other receivables at the reporting date by type of counterpar
September 2016 December 2015
Trade receivables5704031.48157 3154947
626269.07384 965362-418335.52374 -423154
5911965.03167 369715519184542 1483529713428893 1741757
197447 24697638722847.0317 20521185
* 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:
September 2016 December 2015
Neither past due nor impaired 4229702.3513 2121928Past due 0-30 days 95759.56497 843393.04Past due 31-90 days 446176.52683 427543.41Past due 91 days and above 1140326.589 304291
5911965.0321 3697155.45
The movement in the allowance for impairment in respect of trade receivables during the period was as follows
September 2016 December 2015
Balance as at 1 January 423154 337485Impairment loss recognised 0 108975Bad debt written-off 0 -3147Reversal of impairment losses -4818 -20159Balance as at 30 September 418336 423154
Due from Government entities
This comprises amount due from PPPRA with respect to subsidies/PSF receivable on imported products as well
Determination of amounts due are based on existing regulations/ guidelines and impairment is only recognized w
Due from related parties
The Company has transactions with its parent and other related parties who are related to the Company by vir
Other receivables
Other receivables includes staff debtors and other sundry receivables. The Company reviews the balances due f
Loans and receivables
Loans receivable comprise amounts loaned to some of the Company's transporters. See Note 14. All the transpor
Cash and cash equivalents
The Company held cash and cash equivalents of N20.64 billion as at 30 september 2016 (Dec 2015: N19.77 bill
(b) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with
The Company has a clear focus on ensuring sufficient access to capital to finance growth and to refinance mat
Typically the credit terms with customers are more favourable compared to payment terms to its vendors in orde
The following are the contractual maturities of financial liabilities, including estimated interest payments and
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
· Credit risk· Liquidity risk· Market risk
N’000 N’000
- Major customers- Others- Impairment
- Due from related parties- Due from regulators (Government entities)- Others*
N’000 N’000
N’000 N’000
MRS Oil Nigeria PlcFinancial Statements-- 30 September 2016
Notes to the financial statements
Notes Carrying amoun Contractual cash f 6 months or less
Non-derivative financial liabilities31 December 2015Overdraft and other short-term borrowings 24 16400466 11614366 11614366Dividend payable 22 399889 427995 427995Trade and other payables* 23 19864094 19864094 19864094Security deposits 21 1573485 1573485 1573485
38237934 33479940 3347994030 September 2016Overdraft and other short-term borrowings 24 23144905 23144905 23144905Dividend payable 22 395220.4 395220.4 395220.4Trade and other payables* 23 30132417 30132417 30132417Security deposits 21 1706545 1706545 1706545
55379087.4 55379087.4 55379087.4
* 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
The Company manages market risks by keeping costs low through various cost optimization programs. Moreover,
Currency risk
The Company is exposed to currency risk on sales and purchases and borrowings that are denominated in a currenc
In managing currency risk, the Company aims to reduce the impact of short-term fluctuations on earnings. The
The following significant exchange rates were applied during the year
Average rate Reporting date spot rateSeptember 2016 December 2015September 2016 December 2015N N N N
US Dollar 237.66 192.64 304.75 196.5
Interest rate risk profile
In managing interest rate risk, the Company aims to reduce the impact of short-term fluctuations in earnings.
At the reporting date the interest rate profile of the Company’s interest-bearing financial instruments was:Carrying amountSeptember 2016 December 2015
Fixed rate instrumentsBank overdraft and borrowings 23144905 16400466
The Company does not account for any fixed rate financial assets and liabilities at fair value through profit or lo
(c) Capital risk management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confid
The Company’s adjusted net debt to equity ratio at the end of the reporting period was as follows:
September 2016 December 2015
Total borrowings (Note 24) 23144905 16400466Less: Cash and cash equivalents (Note 18) -20637151 -19774397Adjusted net debt 2507754 -3373931Total equity 21868023.889 20977324Total capital employed 24375777.889 17603393
Adjusted net debt to equity ratio 0.11467675418 -0.160837054
There were no changes in the Company's approach to capital management during the period.
The Company is not subject to externally imposed capital requirements.
(d) Fair valuesFair values versus carrying amounts
The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It dCarrying amountLoans and Other financial Totalreceivables liabilities
31 December 2015Financial assets not measured at fair valueTrade and other receivables 20521185 0 20521185Loans and receivables 606985 0 606985Cash and cash equivalents 19774397 0 13114626
40902567 0 34242796
Financial liabilities not measured at fair valueShort term borrowings 0 16400466 16400466Trade and other payables 0 0 0Security deposits 0 1573485 1573485Dividend payable 0 399889 399889
0 18373840### 18373840
The Company's financial instruments are categorised as follows:
Carrying amountLoans and Other financial Totalreceivables liabilities
30 September 2016Financial assets not measured at fair valueTrade and other receivables 38722847 0 38722847.03Loans and receivables 519168 0 519168Cash and cash equivalents 20637151 0 20637151
59879166 0 59879166.03
Financial liabilities not measured at fair valueShort term borrowings 0 23144905 23144905Trade and other payables 0 30132417 30132417Security deposits 0 1706545 1706545Dividend payable 0 395220.4 395220.4
0 55379087.4 55379087.4
Trade and other receivables, security deposits, bank overdrafts and other short term borrowings are the Company’
26 Related party transactions
(i) Parent and ultimate controlling entity
As at the year ended 30 September 2016, MRS Africa Holdings Limited (incorporated in Bermuda) owned 60% of t
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. Corla
Nature of transactions September 2016 December 2015
Sales of goods 20045773.3208 26900941Staff Secondment 139788 -192660Other services 0 164756Reimbursements for expenses 0 724225Purchase of goods 0 0
Net balance due from MRS Oil and Gas Limited was N3.97 billion (Dec. 2015: N8.91 billion).
(b) Petrowest SA (Petrowest)
Patrice Albert is Non-executive director on the Board of MRS Oil Nigeria Plc. He is also a director in Petrow
September 2016 December 2015Nature of transactions
Purchase of goods -17140228.331 -25197535Goods in transit 0 -2916541Service fee 0 0
Net balance due to Petrowest was N1.81 billion (Dec. 2015: N6.53 billion)
(c) MRS Holdings Limited
MRS Holdings Limited owns 50% of the shares in Corlay Global SA, the parent company of MRS Africa Holdi
September 2016 December 2015Nature of transactions
Management fees -670205 -708936Sale of goods 84138.2502 76154Storage fees 0 0Shared services 48269
Net balance due from MRS Holdings Limited was N64.15 million (Dec. 2015: N285.71 million)
(d) Net balances due (to)/from other related entities were as follows:September 2016 December 2015
MRS Benin 24055 24312Corlay Togo -86164 -6014.62Corlay Benin 19374 -44736.01Corlay Cote D'Ivoire 3169 -55215.82Corlay Cameroun 7246 -35462.51Others 0 -140000Total -32320 -257116.96
The Corlay entities are subsidiaries of Corlay Global SA incorporated in Panama, the parent company of MRS Afri
All outstanding balances do not bear interest and exclude value of products stored by MRS Oil and Gas Lim
(ii) Key management personnel compensationThe Company pays short term benefits to its directors as follows:
September 2016 December 2015
Short term employee benefits 1350 6677.5
The managing director is seconded from a related party (MRS Oil and Gas Limited) as part of the management
(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,September 2016 December 2015
MRS Oil and Gas Limited ( See Note 25(a) above) 20185561.3208 27597262Petrowest SA ( See Note 25(b) above) -17140228.331 -28114076
27 Segment reporting
In accordance with the provisions of IFRS 8 – Operating Segments, the operating segments used to present segm
Segment information is provided on the basis of product segments as the Company manages its business throu
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 decisSegment revenue and cost of sales
Sept. 201Revenue Cost of sales Gross profit
% of Total % of Total % of TotalRetail/C&I 74234823 90.1615727 68293453 91.06350921 5941370 80.94605481Aviation 5748641 6.98198625 5018538 6.691793449 730103 9.947025258Lubes 2351860 2.85644106 1683420 2.244697346 668440 9.106919932Total 82335324 100 74995411 100 7339913 100
Sept. 201Revenue Cost of sales Gross profit
% of Total % of Total % of TotalRetail/C&I 55025099 85.1912697 51199611 85.72877624 3825488 78.59593182Aviation 7763919 12.0202985 7330425 12.27408475 433494 8.906279373Lubes 1801050 2.78843181 1192747 1.997139015 608303 12.49778881Total 64590068 100 59722783 100 4867285 100
28 Subsequent events
There are no significant subsequent events that could have had a material effect on the financial position of
29 Contingencies(a) Pending litigations and claims
(b) Financial commitments
The Directors are of the opinion that all known liabilities and commitments, which are relevant in assessing the
30 Operating leasesLeases as lessee
The Company leases a number of offices, buses, warehouses and service stations under both cancellable and non-September 2016 December 2015
Current portion 341355 354303Non-current portion 307730 289191
N’000 N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000 N’000
N’000 N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
N’000 N’000
Retail/ Commercial & Industria l - this segment is respons ible for the sale and distribution of petroleum products (refined p roducts ) to retail cus tomers and industrial cu stomers .
Aviation - th is segment involves the sale of Av iation Turbine Kerosene (ATK).
Lubricants - this segment manufactures and sells lubricants and greases .
N’000 N’000 N’000
N’000 N’000 N’000
There are certain lawsuits and claims pending against the Company in various courts of law which are being handled by external legal counsels. The total claims in respect of pending litigations amounted to N101.96 billion as at 30 September 2016 (Dec. 2015: N17 billion). In the opinion of the Directors and based on independent legal advice, the Company’s liabilities are not likely to be material, thus no provision has been made in these financial statements.
The
N’000 N’000