TOTAL NIGERIA PLC · Balance at 30 September 2015 Final dividend Interim dividend Transactions with...

TOTAL NIGERIA PLC

UNAUDITED FINANCIAL STATEMENTS -- 30 SEPTEMBER 2015

TOGETHER WITH DIRECTORS' AND AUDITOR'S REPORTS

Contents Page

Results at a glance 1

Statement of financial position 2

Statement of profit or loss and other comprehensive income 3

Statement of changes in equity 4

Statement of cash flows 5

Notes to the financial statements 6

TOTAL NIGERIA PLC

RESULTS AT A GLANCE

FOR THE PERIOD ENDED 30 SEPTEMBER

September September

2015 2014 Change

N'000 N'000 %

Revenue 159,299,273 177,807,414 (10)

Profit before taxation 4,009,604 4,204,461 (5)

Profit after taxation 2,132,919 2,648,720 (19)

Share capital 169,761 169,761 -

September December

2015 2014

Shareholders' funds 12,327,956 13,929,778 (11)

PER SHARE DATA:

Based on 339,521,837 ordinary

shares of 50 kobo each:

September September

2015 2014

Earnings per 50k share (Naira) - basic 6.28 7.80

Stock Exchange quotation (Naira) 150.00 180.00

Number of staff 479 456

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TOTAL NIGERIA PLC

STATEMENT OF FINANCIAL POSITION

AS AT 30 SEPTEMBER 2015

30 September 31 December

2015 2014

Note N'000 N'000

Non-current assets

Property, plant and equipment 16 22,134,071 21,921,619

Intangible assets 15 140,107 171,907

Prepayments 19 3,674,624 3,085,316

Total non-current assets 25,948,802 25,178,842

Current assets

Inventories 17 20,082,460 19,826,763

Trade and other receivables 18 22,133,195 35,379,702

Prepayments 19 773,300 658,676

Cash and bank balances 23 7,370,271 14,468,445

Total current assets 50,359,226 70,333,586

Total assets 76,308,028 95,512,428

Equity

22 169,761 169,761

12,158,195 13,760,017

Total Equity 12,327,956 13,929,778

Non-current liabilities

Deferred tax liabilities 11.3 3,038,613 2,767,576

Employee benefits 12 225,440 211,087

Total non-current liabilities 3,264,053 2,978,663

Current liabilities

Trade and other payables 21 44,949,851 61,773,238

Deferred income 21.2 19,436 43,676

Current tax liabilities 11.2 1,012,232 1,104,147

Borrowings 20 14,734,500 15,682,926

Total current liabilities 60,716,019 78,603,987

63,980,072 81,582,650

Total equity and liabilities 76,308,028 95,512,428

Bassey Okon- Head of Finance

Wilfried J.Y. Konde - Director

Alexis Vovk - Managing Director

Total liabilities

Share capital

Retained earnings

The notes on pages 6 to 42 form an integral part of these financial statements.

These financial statements were approved by the Board of Directors of the Company on 28 October 2015

and signed on behalf of the Board by:

FRC/2013/IODN/0000002084

FRC/2013/IODN/0000005534

FRC/2015/ICAN/00000011585

2

TOTAL NIGERIA PLC

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


30 September 30 September

2015 2014

Note N'000 N'000

5 159,299,273 177,807,414

10 (140,105,984) (157,059,963)

Gross profit 19,193,289 20,747,451

9 807,267 633,994

10 (3,511,956) (3,382,281)

10 (13,370,875) (12,161,284)

Operating profit 3,117,725 5,837,880

8 2,141,776 211,867

8 (1,249,897) (1,845,286)

Net finance costs 891,879 (1,633,419)

Profit before tax 4,009,604 4,204,461

11 (1,876,685) (1,555,741)

Profit for the year 2,132,919 2,648,720

Other comprehensive income - -

Total comprehensive income for the year 2,132,919 2,648,720

Earnings per share

Basic earnings per share 14 6.28 7.80


Income tax expense

Finance income

Finance costs

Revenue

Cost of sales

Other income/Loss

Selling & distribution costs

Administrative expenses

3

TOTAL NIGERIA PLC

STATEMENT OF CHANGES IN EQUITY


Share capital Retained

earnings

Total

equity

N'000 N'000 N'000

Notes

Balance at 1 January 2014 169,761 13,071,024 13,240,785

- 4,423,733 4,423,733

13 - (3,055,697) (3,055,697)

13 - (679,044) (679,044)

169,761 13,760,017 13,929,778

Share capital Retained

earnings

Total

equity

N'000 N'000 N'000

Notes

Balance at 1 January 2015 169,761 13,760,017 13,929,778

- 2,132,919 2,132,919

13 - (3,055,697) (3,055,697)

13 - (679,044) (679,044)

169,761 12,158,195 12,327,956

For the year ended 31 December 2014

Total comprehensive income for the year

Final dividend

Interim dividend

For the period ended 30 September 2015

Transactions with owners of the Company

Balance at 31 December 2014

Total comprehensive income for the year

Balance at 30 September 2015

Final dividend

Interim dividend

Transactions with owners of the Company


4

TOTAL NIGERIA PLC

STATEMENT OF CASH FLOWS



2015 2014

Note N'000 N'000

Profit after tax 2,132,919 4,423,733

Adjustments for:

Depreciation 16 2,240,781 2,854,661

Amortisation 15 49,256 51,412

Provision for employee benefits 14,353 211,087

Gains on sale of PPE 9 (32,112) (58,442)

Foreign exchange gain on domicillary accounts 9 10,462 (140,950)

Net finance costs 8 (891,879) 2,278,292

Tax expense 11.1.1 1,876,685 1,134,593

5,400,465 10,754,386

Changes in:

- Inventories (255,697) (5,185,870)

- Trade and other receivables 13,246,507 (4,261,119)

- Prepayments (703,932) (535,171)

- Trade and other payables (17,485,974) 18,070,725

- Deferred income (24,240) 43,676

Cash generated from operating activities 177,129 18,886,627

Taxes (1,697,562) (3,281,834)

Net cash generated from operating activities (1,520,433) 15,604,793

Cash flows from investing activities

Purchase of property, plant and equipment 16 (2,471,943) (3,965,684)

Purchase of intangible assets 15 (17,456) (56,753)

Interest received 8 2,141,776 342,919

Proceeds from disposal of property, plant and equipment 52,129 71,927

Net cash used in investing activities (295,494) (3,607,591)

Cash flow from financing activities

Interest paid on overdrafts 8 (1,249,897) (2,621,211)

Dividends paid 13.1 (3,073,462) (3,568,406)

Net cash used in financing activities (4,323,359) (6,189,617)

Net increase in cash and cash equivalents (6,139,286) 5,807,585

Cash and cash equivalents at 1 January (1,214,481) (7,163,016)

Effect of movement in exchange rates on cash (10,462) 140,950

23 (7,364,229) (1,214,481)Cash and cash equivalents as at 30 September


5

TOTAL NIGERIA PLC

NOTES TO THE FINANCIAL STATEMENTS

1 The Company

Legal form:

Number Holdings Number Holdings

'000 % '000 %

Total Raffinage Marketing 209,560 61.72 209,560 61.72

Other shareholders 129,962 38.28 129,962 38.28

339,522 100.00 339,522 100.00

Principal activities

Description of business

No. 4, Churchgate street

Victoria Island

Lagos state

No shareholder, except as disclosed above, held more than 10% of the issued share capital of the

Company as at 30 September 2015 (2014: Nil).

It has over 500 retail outlets, 5 LPG bottling plants, 3 lubricant blending plants and 4 aviation depots

as well as other facilities spread across the country.

The Company was incorporated as a private limited liability Company in 1956 and was converted to a

public Company in 1978. The merger of the Company with Elf Oil Nigeria Limited which commenced

globally in November 1999 was completed in Nigeria in 2002. With this development, the authorized,

issued and fully paid share capital was ₦148,541,000 made up of 297,082,000 ordinary shares of

50k each. In 2003, to mark the completion of its corporate mergers, Total Group worldwide reverted

to its former name Total and adopted a new logo with a unifying design to express its corporate

ambition.

Accordingly, the Company changed its name from TotalFinaElf Nigeria Plc to Total Nigeria Plc in the

same year. With the capitalisation of the bonus issue of 42,440,228 ordinary shares of 50k each in

March 2004, the authorised share capital became ₦169,760,918 made up of 339,521,837 ordinary

shares of 50k each. 61.72% of the Company's ordinary shares were held by Total Societe Anonyme

up until 2013 when a restructuring was concluded and Total Raffinage Marketing became the

shareholders of 61.72% of Total Nigeria Plc while the remaining 38.28% are held by the Nigerian

public.

30 September 2015 31 December 2014

The principal activity of the Company is the blending of lubricants as well as the sales and marketing

of refined petroleum products.

Total Nigeria Plc. ("the Company") is a subsidiary of Total Raffinage Marketing ("the Parent

Company") in France and operates in the petroleum marketing and distribution business in Nigeria.

The Company's registered office is situated at:

6

TOTAL NIGERIA PLC


2.0 Basis of preparation

2.1 Statement of compliance

2.2 Basis of measurement

2.3 Functional and presentation currency

2.4

2.5

(i) Judgement

(ii) Assumptions and estimation uncertaintiesInformation about assumptions and estimation uncertainties that have the most significant effect

on the amounts recognised in the financial statements is included in Note 12 on employee

benefits - measurment of defined benefit obligation relating to the Company's Long Service

Award (LSA) scheme.

These financial statements cover the financial period from 01 January to 30 September 2015, with

corresponding figures for the financial period from 01 January to 30 September 2014, and where

appropriate from 01 January to 31 December 2014.

Use of estimates and judgments

In preparing these financial statements, management has made judgement, estimates and

assumptions that affect the application of the Company's accounting policies and the reported

amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting

estimates are recognised in the period in which the estimates are revised and in any future periods

affected.

Information about judgements made in applying accounting policies that have the most

significant effects on amounts recognised in the financial statements is included in Note 23 with

respect to cash balances held with Total Treasury.

The financial statements have been prepared on the historical cost basis.

The financial statements of the Company have been prepared in accordance with International

Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board

(IASB). They were authorised for issue by the Board of Directors on 28 October 2015.

These financial statements are presented in Nigerian Naira, which is the Company's functional

currency. All financial information presented in Naira have been rounded to the nearest thousand

unless otherwise stated.

Financial period

7

TOTAL NIGERIA PLC


3

Effective for the financial year commencing 1 January 2016

New standards and interpretations not yet adopted

- IFRS 15 Revenue from Contracts with Customers



- IFRS 9 Financial Instruments

- Disclosure Initiative (Amendments to IAS 1)

IFRS 14 Regulatory Deferral Accounts, Clarification of acceptable methods of depreciation and

amortisation (Amendments to IAS 16 and IAS 38), Defined Benefit Plans: Employee Contributions

(Amendments to IAS 19), Accounting for acquisitions of interests in joint operations (Amendments to

IFRS 11), Agriculture: Bearer plants (Amendments to IAS 6 and IAS 41) are not applicable to the

business of the Company and will therefore have no impact on future financial statements.

The directors are of the opinion that the impact of the application of the remaining Standards and

Interpretations will be as follows:

All standards and interpretations will be adopted at their effective date (except for those Standards and

Interpretations that are not applicable to the Company).

A number of new standards, amendments to standards and interpretations are effective for annual

periods beginning after 1 January 2015, and have not been applied in preparing these financial

statements. Those which may be relevant to the Company are set out below. The Company does not

plan to adopt these standards early. These will be adopted in the period that they become mandatory

unless otherwise indicated.

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TOTAL NIGERIA PLC


Date issued by

IASB

Effective date

Periods beginning

on or after

Summary of the requirements

and assessment of impact

IAS 1 Disclosure

Initiative

December 2014 1 January 2016

Early adoption is

permitted

The amendments provide additional

guidance on the application of

materiality and aggregation when

preparing financial statements.

IFRS 15 Revenue from

contract with

customers

May 2014 1 January 2017

Early adoption is

permitted

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 will adopt the

amendments for the year ending 31

December 2017.

Standard/Interpretation

not yet effective as at

30 September 2015

9

TOTAL NIGERIA PLCNOTES TO THE FINANCIAL STATEMENTS

Date

issued by

IASB

Effective date

Periods

beginning on

or after

Summary of the requirements and

assessment of impact

IFRS 9 Financial

Instruments

July 2014 1 January

2018

Early adoption

is permitted

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 .

This standard will have a significant impact

on the Company, which will include changes

in the measurement bases of the Company’s

financial assets to amortised cost, fair value

through other comprehensive income or fair

value through profit or loss. Even though

these measurement categories are similar to

IAS 39, the criteria for classification into these

categories are significantly different. In

addition, the IFRS 9 impairment model has

been changed from an “incurred loss” model

from IAS 39 to an “expected credit loss”

model, which is expected to increase the

provision for bad debts recognised in the

Company.

The amendments apply retrospectively. The

Company will adopt the amendments for the

year ending 31 December 2018.

Standard/Interpretation

not yet effective as at

30 September 2015

10

TOTAL NIGERIA PLC


4 Significant accounting policies

4.1 Foreign currency transactions

4.2 Revenue

(i) Sale of goods

Revenue from the sale of goods is recognised when the following conditions are satisfied

-

-

-

-

-

(ii) Other Income

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

these financial statements.

The Company retains neither continuing managerial involvement in the goods to the degree

usually associated with ownership nor effective control over goods sold;

The amount of revenue can be measured reliably;

Transactions denominated in foreign currencies are translated at the exchange rate on the

transaction date. At each reporting date, monetary assets and liabilities are translated at the

closing rate and the resulting exchange differences are recognised in profit or loss on a net basis

as “Other income” (exchange gain) or “Other expenses” (exchange loss). Non monetary items that

are measured based on historical cost in a foreign currency are not translated.

It is probable that economic benefits associated with the transaction will flow to the Company;

The cost incurred or to be incurred in respect of the transaction can be measured reliably.

The Company recognises income from commission on sales at its bonjour shops as well as the

rental of some of its space for mast kiosks. The period of occupancy is the basis upon which rental

income is recognised. Rental income is recongnised in profit or loss on a straight line basis over

the term of the lease.

Revenue is measured at the fair value of consideration received or receivable. Revenue is

reduced for estimated customer returns, rebates and other similar allowances.

The Company has transferred to the buyer significant risks and rewards of ownership of the

goods;

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TOTAL NIGERIA PLC


4.3 Finance income and finance costs

4.4 Income taxes

The Company's finance income comprises interest income on funds invested and interest on

delayed subsidy payment by Petroleum Product Pricing and Regulatory Agency (PPPRA). Finance

income is recognised as it accrues in profit or loss, using the effective interest method, by reference

to the principal outstanding.

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

the entity has a legally enforceable right to set-off the recognised amounts, and it intends to either

settle on a net basis, or to realise the asset and settle the liability simultaneously. The tax asset is

reviewed at each reporting date and written down to the extent that it is no longer probable that

future economic benefit would not be realised.

Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the

year in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have

been enacted or substantively enacted by the end of the reporting period. The measurement of

deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in

which the Company expects, at the end of the reporting period, to recover or settle the carrying

amount of its assets and liabilities.

Current and deferred tax are recognised in the statement of profit or loss and other comprehensive

income, except when they relate to items that are recognised in other comprehensive income or

directly in equity, in which case, the current and deferred tax are also recognised in other

comprehensive income or directly in equity respectively. Where current tax or deferred tax arises

from the initial accounting for a business combination, the tax effect is included in the accounting for

the business combination.

Finance costs comprise interest expense on borrowings, unwinding of the discount on provisions and

borrowing costs that are not directly attributable to the acquisition, construction or production of a

qualifying asset are recognised in profit or loss using the effective interest method.

Income taxes disclosed in the statement of profit or loss and other comprehensive income include

the current tax expenses and the deferred tax expenses.

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 reporting date, and any adjustment to tax payable in respect

of previous years.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and

liabilities in the financial statements and the corresponding tax bases used in the computation of

taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.

Deferred tax assets are generally recognised for all deductible temporary differences to the extent

that it is probable that taxable profits will be available against which those deductible temporary

differences can be utilised. Such deferred tax assets and liabilities are not recognised if the

temporary difference arises from goodwill or from the initial recognition (other than in a business

combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor

the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the

extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of

the asset to be recovered.

Total Nigeria Plc uses the liability method whereby deferred income taxes are recorded based on

the temporary differences between the carrying amounts of assets and liabilities recorded in the

statement of financial position and their tax bases, and on carry forwards of unused tax losses and

tax credits.

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TOTAL NIGERIA PLC


4.5 Earnings per share

4.6 Property plant and equipment

i Recognition and measurement

ii Subsequent costs

iii Depreciation

Type of asset Useful lives

‧ Furniture, office equipment, machinery and tools 3 - 12 years

‧ Transportation equipment 5 - 20 years

‧ Storage tanks and related equipment 10 - 15 years

‧ Specialized complex installations and pipelines 10 - 30 years

‧ Buildings 10 - 50 years

4.7 Intangible assets

i Recognition and measurement

Property, plant and equipment are depreciated to their residual values using the straight-line method

over their useful lives for current and corresponding periods as follows:

Work in progress is not depreciated. The attributable cost of each asset is transferred to the relevant

asset category immediately the asset is available for use and depreciated accordingly.

Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders of

the Company by the weighted average number of ordinary shares outstanding during the year.

Property, plant and equipment are measured at cost, less accumulated depreciation and any

accumulated impairment losses.

Property, plant and equipment under construction are disclosed as work in progress. The cost of self-

constructed assets includes the cost of materials and direct labour, any other costs directly

attributable to bringing the asset to a working condition for their intended use including, where

applicable, the cost of dismantling and removing the items and restoring the site on which they are

located and borrowing costs on qualifying assets.

Depreciation methods, useful lives and residual values are reviewed each financial year end and

adjusted if appropriate.

Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is

reasonably certain that the Company will obtain ownership by the end of the lease term.

Intangible assets are computer software's and licenses with an estimated useful life of between 3 to 5

years. These are capitalised on the basis of acquisition costs as well as costs incurred to bring the

assets to use.

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

comparing the proceeds from disposal with the carrying amount of property, plant and equipment,

and are recognised net within other income in profit or loss.

When parts of an item of property, plant and equipment have different useful lives, they are

accounted for as separate items (major components) of property, plant and equipment.

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

amount of the item if it is probable that the future economic benefits embodied within the part will flow

to the Company and its cost can be measured reliably. The carrying amount of the replaced part is

derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised

in profit or loss as incurred.

Intangible assets that are acquired by the Company and have finite useful lives are measured at cost

less accumulated amortisation and accumulated impairment losses.

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TOTAL NIGERIA PLC


ii Subsequent expenditure

iii Amortisation of intangible assets

4.8 Technical assistance and management fees

Development expenses are capitalized when the following can be demonstrated:

• The technical feasibility of the project and availability of adequate resources for completion of the

asset.

• The ability of the asset to generate probable future economic benefits.

• The ability to measure reliably the expenditures attributable to the asset.

Subsequent to initial recognition, development expenditure is measured at cost less accumulated

amortisation and any accumulated impairment losses.

Amortisation is calculated to write off the cost of intangible assets less their estimated useful lives,

and is generally recognised in the profit or loss.

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

residual value. Amortisation is recognised in profit or loss on a straight-line basis over the estimated

useful lives of intangible assets from the date that they are available for use, since this most closely

reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

Total Raffinage Marketing charges Total Nigeria Plc for General Assistance while Total Outre Mer

charges Total Nigeria Plc for Research & Development costs. The expenses are generally charged to

profit or loss.

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

in the specific intangible asset to which it relates. All other expenditure is recognised in profit or loss

as incurred.

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TOTAL NIGERIA PLC


4.9 Impairment

Non-derivative financial assets

Objective evidence that financial assets are impaired includes;

‧ Default or delinquency by a debtor

‧

‧ Indications that a debtor or issuer will enter bankruptcy

‧ Adverse changes in the payment status of borrowers or issuers

‧

Financial assets measured at amortised cost

Non financial assets

Financial assets not classified at fair value through profit or loss are assessed at each reporting date to

determine whether there is objective evidence of impairment.

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

cash flows from continuing use that are largely independent of the cash flows of other assets or CGUs.

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

recoverable amount.

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

the asset's carrying amount does not exceed the carrying amount that would have been determined, net

of depreciation or amortisation, if no impairment loss had been recognised.

Restructuring of an amount due to the Company on terms that the Company would not consider

otherwise

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

collective level. All individually significant assets are individually assessed for impairment. Those found

not to be impaired are then collectively assessed for any impairment that has been incurred but not yet

individually identified. Assets that are not individually significant are collectively assessed for

impairment. Collective assessment is carried out by grouping together assets with similar risk

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

the amount of loss incurred, and makes adjustment if current economic and credit conditions are such

that the actual losses are likely to be greater or less than suggested by historical trends.

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

value of the estimated future cash flows discounted at the asset’s original effective interest rate. Losses

are recognised in profit or loss and reflected in an allowance account. When the Company considers

that there are no realistic prospect of recovery of the asset, the relevant amounts are written off. If the

amount of impairment loss subsequently decreases and the decrease can be related objectively to an

event occurring after the impairment was recognised, then the previously recognised impairment loss is

reversed through profit or loss.

Observable data indicating that there is a measurable decrease in the expected cash flows from a

group of financial assets

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

than inventories and deferred tax assets) to determine whether there is any indication of impairment. If

any such indication exists, then the asset’s recoverable amount is estimated.

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. Value in use is based on the estimated future cash flows, discounted to their

present value using a pre-tax discount rate that reflects current market assessments of the time value of

money and the risks specific to the asset or CGU.

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TOTAL NIGERIA PLC


4.10 Financial instruments

i Non-derivative financial assets

Loans and receivables

Cash and cash equivalents

ii Non-derivative financial liabilities

The Company derecognises a financial liability when its contractual obligations are discharged,

cancelled or expire.

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in

an active market. Such assets are recognised initially at fair value plus any directly attributable

transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised

cost using the effective interest method, less any impairment losses.

Short term receivables that do not attract interest are measured at original invoice amount where the

effect of discounting is not material.

Loans and receivables comprise trade and other receivables, employee loans, as well as cash and cash

equivalents.

The Company initially recognises loans and receivables on the date that they are originated. All other

financial assets (including assets designated at fair value through profit or loss, if any) are recognised

initially on the trade date at which the Company becomes a party to the contractual provisions of the

instrument.

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

asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a

transaction in which substantially all the risks and rewards of ownership of the financial asset are

transferred. Any interest in transferred financial assets that is created or retained by the Company is

recognised as a separate asset or liability.

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

original maturities of three months or less. Bank overdrafts that are repayable on demand and form an

integral part of the Company’s cash management are included as a component of cash and cash

equivalents for the purpose of statement of cash flows.

The Company has only loans and receivables as well as cash and cash equivalents as non-derivative

financial assets.

All financial liabilities (including liabilities designated at fair value through profit or loss, if any) are

recognised initially on the trade date at which the Company becomes a party to the contractual

provisions of the instrument.

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TOTAL NIGERIA PLC


iii Share capital

4.11 Inventories

The basis of costing inventories are as follows:

Weighted Average Cost of costs incurred (for

deregulated products reduced by the value of

subsidies due)

Weighted Average Cost

Purchase cost incurred to date

Cost BasisProduct Type

Refined Petroleum Products

(AGO, ATK, PMS, DPK)

Packaging Materials, Lubricants

and Greases

Inventories-in-transit

Inventories are measured at the lower of cost and net realizable value. Net realizable value represents

the estimated selling price for inventories less estimated cost to make the sale. The cost of blended

products/lubricants includes an appropriate share of production overheads based on normal operating

capacity.

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

costs of completion and selling expenses. Inventory values are adjusted for obsolete, slow-moving or

defective items.

The Company has only one class of shares namely 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 over the par value is recorded in the share premium reserve.

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

position when, and only when, the Company has a legal right to offset the amounts and intends either to

settle on a net basis or to realise the asset and settle the liability simultaneously.

Such financial liabilities are recognised initially at fair value plus any directly attributable transaction

costs. Subsequent to initial recognition these financial liabilities are measured at amortised cost using

the effective interest method.

The Company classifies non-financial liabilities into the other financial liabilities category.

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.

Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction

from equity, net of any tax effects.

When shares recognised as equity are repurchased, the amount of the consideration paid, which

includes directly attributable costs, net of any tax effects, is recognised as a deduction from equity

17

TOTAL NIGERIA PLC


4.12 Provisions

4.13 Employee benefits

i Defined contribution plan

ii Gratuity scheme

iii Other long-term employee benefits

iv Termination benefits

v Short-term employee benefits

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

those benefits and when the Company recognises costs for a restructuring. If benefits are not expected to be

settled wholly within 12 months of the end of the reporting period, then they are discounted.

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

related service is provided.

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

a present legal or constructive obligation to pay this amount as a result of past service provided by the

employee, and the obligation can be estimated reliably.

Provisions comprise liabilities for which the amount and the timing are uncertain. They arise from environmental

risks, legal and tax risks, litigation and other risks. A provision is recognised when the Company has a present

obligation (legal or constructive) as a result of a past event for which it is probable that an outflow of resources

will be required and when a reliable estimate can be made regarding the amount of the obligation. Provisions

are determined by determining the expected future cash flow at a pre-tax rate that reflects current market

assessment of the value and the risk specific to the liability. The unwinding of the discount is recognised in

profit or loss.

A defined contribution plan is a post-employment benefit plan under which the Company pays fixed

contributions into a separate entity. The Company has no legal or constructive obligations to pay further

contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee

service in the current and prior periods.

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

permanent employees. The Company’s obligations in respect of this scheme is the amount of future benefits

that employees have earned in return for their service in the current and prior periods. The benefit is discounted

to determine its present value. The discount rate is the yield at the reporting date on Federal Government of

Nigeria issued bonds that have maturity dates approximating the term of the Company’s obligation. The

calculation is performed using the Projected Unit Credit method. Remeasurements are recognised in profit or

loss in the period in which they arise. This Scheme is not funded. The obligations are paid out of the

Company’s Cash flows as and when due.

The Company operates a gratuity scheme for its employees in service before January 2001. This is funded by

the Company monthly, at a rate of contribution of 9.5% of total annual emolument and paid to Fund Managers

chosen by each employee.

The Company's obligation are extinguished once the amounts have been transferred to the Fund Managers.

In line with the provisions of the Amended Pension Act 2014, the Company has instituted a defined contribution

pension scheme for its permanent staff. Employees contribute 8% each of their Basic salary, Transport and

Housing Allowances to the Fund on a monthly basis. The Company’s contribution is 10% 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

18

TOTAL NIGERIA PLC


4.14 Government grant

4.15 Leases

Determining whether an arrangement contains a lease

Leased assets

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

lease. Lease incentives received are recognised as an integral part of the total lease expense, over the term of

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

and the reduction of the outstanding liability. The finance expense is allocated to each period during the lease

term so as to produce a constant periodic rate of interest on the remaining balance of the liability.

Petroleum Products Pricing Regulatory Agenciy (PPPRA) subsidises the cost of importation of certain refined

petroleum products whose prices are regulated in the Nigerian market. The subsidies are recognised when

there is reasonable assurance that they will be recovered and the Company has complied with the conditions

attached to receiving the subsidy. The subsidies are recognised as reduction to landing cost of the subsidised

petroleum product.

Assets held by the Company under leases that transfer to the Company substantially all of the risk and reward

of ownership are classified as finance lease. The leased assets are measured initially at an amount equal to the

lower of the fair value and the present value of the minimum lease payments. Subsequent to initial recognition,

the assets are accounted for in accordance with the accounting policy applicable to that asset.

Any other type of lease is an operating lease.

Lease payments

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

inception or on reassessment of an arrangement that contains a lease, the Company seperates payment and

other consideration required by the arrangement into those for the lease and those for other elements on the

basis of their relative fair values. If the Company concludes for a finance lease that is impracticable to

sepearate the payment reliably, then an asset and a liability are recognised at an amount equal to the fair value

of the underlying asset. Subsequently, the liability is reduced as payments are made and an inputed finance

cost on the liability is recognised using the Company's incremental borrowing rate.

19

TOTAL NIGERIA PLC


4.16 Measurement of fair values

- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities

-

-

The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period

during which the change has occurred.

Some of the Company’s accounting policies and disclosures require the determination of fair value, 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 & Development (EDFD) has overall responsibility for overseeing all significant fair

value measurements, including Level 3 fair values, and reports directly to the Board of Directors.

The EDFD 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 EDFD 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 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.

20

TOTAL NIGERIA PLC


5 Revenue

2015 2014

N'000 N'000

140,098,365 157,128,082

19,200,907 20,679,332

159,299,273 177,807,414

-0.01-

6 Segment reporting

Quantity

(Ltrs) Revenue

’000 N’000

JET A1 fuel (ATK) 31,658 4,653,894

6.1 Segment profit or loss (key items)

NETWORK

GENERAL

TRADE AVIATION Total

N'000 N'000 N'000 N'000

Revenue 71% 113,213,904 18% 28,711,813 11% 17,373,556 100% 159,299,273

Gross profit 79% 15,109,273 19% 3,724,618 2% 359,398 100% 19,193,289

Finance income 89% 1,900,087 11% 227,297 1% 14,391 100% 2,141,776

Finance cost 76% (947,143) 22% (279,613) 2% (23,142) 100% (1,249,897)

Depreciation and amortisation 84% (2,143,088) 13% (419,254) 4% (130,984) 100% (2,693,326)

NETWORK

GENERAL

TRADE AVIATION Total

N'000 N'000 N'000 N'000

Revenue 67% 118,721,772 23% 40,894,200 10% 18,191,443 100% 177,807,414

Gross Profit 77% 15,902,563 20% 4,088,064 4% 756,824 100% 20,747,451

Finance Income 72% 152,199 22% 45,686 7% 13,982 100% 211,867

Finance Cost 72% (1,325,600) 19% (348,734) 9% (170,952) 100% (1,845,286)

Depreciation and amortisation 80% (1,901,345) 16% (371,962) 5% (116,208) 100% (2,389,516)

An analysis of the entity’s revenue is as follows:

Petroleum products

Lubricants and others

Segment revenue reported below represents revenue generated from external customers. There were no inter-segment sales in the current

period (2014: Nil).

Products and services from which reportable segments derive their revenues

30 September 2015

30 September-2014

Information reported to the Company's Chief Executive for the purposes of resource allocation and assessment of segment performance is

focused on the category of products for each type of activity (petroleum products, lubricants and others). The principal sales channels are

Network, General Trade and Aviation. The Company's reportable segments under IFRS 8 are therefore as follows: Network, General

Trade and Aviation.

The Company made the following sales to the industry partners during the year which have been included in the aviation segment as

shown below:

21

TOTAL NIGERIA PLC


7 Auditors’ remuneration

The analysis of auditors' remuneration is as follows:


2015 2014

N'000 N'000

16,085 16,950

Total audit fees 16,085 16,950

7.1

- Tax services 100,131 70,850

- Information technology services 159,183 161,583

- Litigation services 10,768 39,083

- Recruitment and remuneration services 2,715 13,879

- Other services 1 54,199 94,191

326,996 379,587

8 Finance income and finance cost


2015 2014

Finance income: N'000 N'000

Interest on deposits 2,031,233 79,555

Interest on other loans and receivables2 110,543 132,312

Total finance income 2,141,776 211,867

Finance Costs

Interest on bank overdrafts and loans (1,249,897) (1,845,286)

Total finance costs (1,249,897) (1,845,286)

Net finance costs 891,879 (1,633,419)

Fees payable to the Company’s auditors for the audit of the

Company’s annual accounts

Fees paid to other professional consultants

1Other Services include Subscription to professional bodies (N13M) Secretarial Fees (N10M) Attendance

Fees (N10M)

2Interest on other loans and receivables include interest on bank current accounts ( September 2015:N110M).

22

TOTAL NIGERIA PLC



2015 2014

N'000 N'000

9 Other income

Network income 1

45,526 49,421

Other sundry income 2

719,167 665,419

Gain on sales of property, plant and equipment 32,112 31,672

Net foreign exchange gain/(loss) 10,462 (112,518)

807,267 633,994


2015 2014

N'000 N'00010 Expenses by nature

Changes in inventory of lubes, greases and refined products 137,739,159 154,186,353

Custom duties 958,480 1,241,243

Transport on supplies 1,408,345 1,632,367

Staff cost (Note 31(iii)) 5,744,799 5,070,696

Selling and other distribution Costs 3,511,956 3,688,841

Depreciation and amortisation 2,693,326 2,389,516

Technical assistance and management fees 937,145 697,292

Maintenance expenses 774,369 779,583

Motor fuels and travelling expenses 486,820 574,322

Communication, computer and stationery expenses 432,615 438,076

Bank charges 155,774 376,521

Business promotion and publicity 342,051 391,741

Other expenses1

270,099 98,416

Sub-contracted service security & guarding 227,005 230,944

Bad and doubtful debts impairment 353,763 262,202

Professional and legal fees 370,780 295,754

Rental services 98,056 151,543 Purchase of consumables 74,442 44,382

Insurance 86,438 88,680

Sub-contracted services others 96,100 41,727

Licences and similar charges 74,172 69,729

Entertainment expenses 76,719 60,703

Sub-contracted service engineering studies 42,197 28,832

Sub-contranted serivces de-pollution and environment 18,120 53,679

Auditor's remuneration 16,085 16,950

Total cost of sales, selling & distribution and administrative expenses 156,988,815 172,910,090

1 Other expenses include other station consumables of N150M and AGM expenses of N11M.

1 Network income represents royalty received.

2 Other sundry income relates to income from Bonjour shop, rent, vendor management fees and other

miscellaneous income.

23

TOTAL NIGERIA PLC



11 Income tax

Income tax expense

11.1.1 Amounts recognised in profit or loss 30 September 30 September

2015 2014

N'000 N'000

TaxCorporation tax expenses:

Income tax 1,462,877 1,354,149

Education tax 142,770 27,636

Capital gains tax - -

Current year tax expense 1,605,647 1,381,785

Origination and reversal of temporary differences (Note 11.3) 271,037 173,956

Tax expense 1,876,685 1,555,741

11.1.2 Reconciliation of effective tax rate 30 September 30 September

2015 2014

N'000 N'000

Profit before tax 4,009,604 4,204,461

Income tax using the statutory tax rate (30%) 30% 1,202,881 1,261,338

Effect of:

Education tax 142,770 27,636

Non-deductible expenses 1,326,270 1,033,672

Tax incentives (1,079,927) (962,890)

Recognition of previously unrecognised temporary differences 271,037 173,956

Others 13,654 22,029

1,876,685 1,555,741

11.2 Movement in current tax liability 30 September 31 December

2015 2014

N'000 N'000

Balance as at 1 January 1,104,147 3,015,922

Net provision for the year (Note 11.1.1) 1,605,647 1,370,059

Payments during the year (1,327,628) (2,234,491)

Withholding tax credit notes (369,934) (1,047,343)

Balance as at 30 September 1,012,232 1,104,147

The tax charge for the year has been computed after adjusting for certain items of expenditure and income, which are

not deductible or chargeable for tax purposes and comprises:

24

TOTAL NIGERIA PLC


11.3 Deferred taxation

Deferred tax assets and liabilities are attributable to the following;

2015 2014 2015 2014 2015 2014

N'000 N'000 N'000 N'000 N'000 N'000

Property, plant and equipment - - (3,171,635) (3,244,840) (3,171,635) (3,244,840)

Provision for doubtful debts 111,061 418,307 - - 111,061 418,307

Provision for employee benefits - 63,326 - - - 63,326

Provision for stock - 9,561 - - - 9,561

Unrealised exchange differences 21,961 - (13,931) 21,961 (13,931)

Other difference - - - -

133,021 491,194 (3,171,635) (3,258,771) (3,038,613) (2,767,577)

Movement in deferred tax balances during the year;

Balance

1 January

2014

Recognised in

profit or loss

Balance

31 December

2014

Recognised in

profit or loss

Balance

30 September

2015

N'000 N'000 N'000 N'000 N'000

Property, plant and equipment (3,003,042) (241,797) (3,244,839) 73,204 (3,171,635)

Provision for doubtful debts - 418,307 418,307 (307,246) 111,061

Provision for employee benefits - 63,326 63,326 (63,326) -

Provision for stock - 9,561 9,561 (9,561) -

Unrealised exchange differences - (13,931) (13,931) 35,892 21,961

Other difference - - - -

(3,003,042) 235,466 (2,767,576) (271,037) (3,038,613)

11.4 The charge for income tax in these financial statements is based on the provisions of the Companies Income Tax Act CAP C21 LFN 2004 (as

amended) and the tertiary education tax charge is based on the Tertiary Education Trust Fund Act, 2011. There are no unrecognised deferred tax

assets or liabilities.

Assets Liabilities Net

25

TOTAL NIGERIA PLC


12.0

13 Dividends

Declared dividends

The following dividends were declared by the Company during the year.


2015 2014

N'000 N'000

Prior year final dividend:

N9.00 per qualifying ordinary share (2014: N9.00) 3,055,697 3,055,697

Current year interim dividend:

N2.00 per qualifying ordinary share (2013: N2.00) 679,044 679,044

3,734,741 3,734,741

Employee benefits

Employee benefits represent the Company's liability for long service awards. Staff who have attained the

milestones for the specified number of years of service in the Company (i.e. 10 years, 15 years and 20 years)

are rewarded with cash and gift items as long service awards.

A provision of N14M was made in the period ended 30 September 2015.

26

TOTAL NIGERIA PLC


13.1 Dividend payable 30 September 31 December

2015 2014

N'000 N'000

Balance as at 1 January 1,252,748 1,086,413

Final dividend 3,055,697 3,055,697

Interim dividend 679,044 679,044

4,987,489 4,821,154

Dividend paid (3,073,462) (3,568,406)

Balance as at 30 September 1,914,027 1,252,748

14 Earnings per share (EPS) and dividend declared per share

Basic earnings per share


2015 2014

Earnings

Profit for the year attributable to shareholders (expressed in Naira) 2,132,919,278 4,423,733,000

Number of shares

339,521,837 339,521,837

6.28 13.03

Weighted average ordinary shares of 50 kobo each

Basic earnings per 50 kobo share (expressed in Naira)

By the provision of the Company's Articles of Association , dividend which remain unclaimed for 12 years stand

The denominators for the purposes of calculating basic earnings per share are based on issued and paid

ordinary shares of 50 kobo each.

Basic earnings per share of N6.80 (Dec 2014: N13.03) is based on profit attributable to ordinary shareholders of

N2.13 billion (Dec 2014: N4.4 billion), and on the 339,521,837 ordinary shares of 50 kobo each, being the

weighted average number of ordinary shares in issue during the year (2014: 339,521,837 ordinary shares).

27

TOTAL NIGERIA PLC


15 Intangible assets

Computer

software

Cost N'000

Balance as 1 January 2015 348,505

Additions 17,456

Balance as at 30 September 2015 365,962

Amortisation

Balance as 1 January 2015 (176,598)

Charge for the year (49,256)

Balance as at 30 September 2015 (225,855)

Carrying amount

At 30 September 2015 140,107

At 31 December 2014 171,907

28

TOTAL NIGERIA PLC


16 Property, plant and equipment

The movement on these accounts were as follows:

Total

N'000 N'000 N'000 N'000 N'000 N'000 N'000

Cost or valuation

Balance as at 1 January 2015 14,273,050 10,869,768 579,284 6,835,263 1,239,418 4,122,195 37,918,978

Additions 538,785 281,794 263 248,301 41,808 1,360,992 2,471,943

Transfers ( Note 16.1) 308,191 609,390 6,220 570,695 44,113 (1,538,609) -

Disposals (3,474) (40,429) (3) (26,509) (82,596) - (153,011)

Balance as at 30 September 2015 15,116,552 11,720,523 585,764 7,629,365 1,242,743 3,944,578 40,239,525

Accumulated depreciation and impairment

Balance as at 1 January 2015 (3,468,540) (5,656,718) (462,854) (5,600,873) (808,374) - (15,997,359)

Charge for the year (443,434) (757,844) (41,623) (839,768) (158,112) - (2,240,781)

Eliminated on disposals 1,860 22,292 3 42,485 66,287 - 132,927

Reclassification (Note 16.2) - - - (241) - - (241)

At 30 September 2015 (3,910,114) (6,392,270) (504,474) (6,398,397) (900,199) - (18,105,454)

Carrying amount

At 30 September 2015 11,206,438 5,328,253 81,290 1,230,968 342,544 3,944,578 22,134,071

At 31 December 2014 10,804,510 5,213,050 116,430 1,234,390 431,044 4,122,195 21,921,619

16.1

Office

equipment

and furniture

Computer

equipment

and other

tangible assets

Motor

vehicles

Capital

work in

progress

Plant,

machinery

and fittings

Leasehold

land and

buildings

Capital work in progress relates to projects under construction and technical installations. As each project is completed, it is transfered to the appropriate

class of property, plant and equipment.

29

TOTAL NIGERIA PLC


17 Inventories

Inventories comprise: 30 September 31 December

2015 2014

N'000 N'000

Raw materials 1,775,046 1,740,789

Goods in transit 2,951,345 3,524,121

Finished goods 14,987,218 14,168,671

Consumable equipment and spares 368,851 393,182

20,082,460 19,826,763

18 Trade and other receivables 30 September 31 December

2015 2014

N'000 N'000

9,976,362 14,843,694

395,149 2,523,394

10,371,511 17,367,088

Other receivables 1,165,385 1,821,094

Bridging claims 4,108,502 9,049,629

Receivable from Petroleum Support Funds 5,252,814 5,889,143

Cardinal Stone Registrars (Unclaimed dividends) 1,234,983 1,252,748

11,761,684 18,012,614

22,133,195 35,379,702

18.1


2015 2014

N'000 N'000

5,281,352 12,049,867

3,385,180 3,739,264

1,151,597 416,423

553,382 1,161,534

10,371,511 17,367,088

18.2 Ageing of impaired trade receivables

Above 180 days past due

Customers account

Due from related parties (Note 30.2)

0 - 90 days past due

91 - 180 days past due

The Company considers its receivables to be impaired when normal collection methods fail and the

receivables are referred to the legal team/collection agents.

Neither past due nor impaired

As at 30 September 2015, the ageing of trade receivables that were not impaired was as follows:

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TOTAL NIGERIA PLC


18.3 Movement in the allowance for doubtful debts 30 September 31 December

2015 2014

N'000 N'000

1,394,356 1,080,379

1,328,299 728,285

(2,995) (25,471)

(951,541) (388,837)

1,768,118 1,394,356

(373,762)

19 Prepayments

Non-current and current prepayments mainly represent advance payment for rent, insurance expenses,

and long term prepaid network assets prepaid by the Company as at year end.

Impairment losses recognised

Amounts written off during the year as uncollectible

Balance as at 1 January

Balance as at 30 September 2015

In determining the recoverability of a trade receivable the Company considers changes in the credit

quality of the trade receivable from the date credit was initially granted up to the reporting date. The

concentration of credit risk is limited due to the Company's diverse customer base.

Amounts recovered during the year

The long term prepaid network assets relate to amounts paid in advance for leased stations, as well as

leased lands on which stations and other Company installations are built.

31

TOTAL NIGERIA PLC




2015 2014

20 Borrowings N'000 N'000

14,734,500 15,682,926

14,734,500 15,682,926

-

-

-


21 Trade and other payables 2015 2014

N'000 N'000Trade payables :

Amount due to related companies (Note 30.2) 8,340,788 12,019,175

2,235,539 14,796,488 Bridging contribution 9,647,675 9,228,732

Other suppliers 2,245,279 804,256

Suppliers retention 88,975 75,081

22,558,256 36,923,732

Other payables:

Sundry creditors 1,406,303 3,183,644

Security deposit 5,005,727 4,685,320

Accrued liabilities 14,008,800 15,667,637

Unclaimed dividend (Note 13.1) 1,914,027 1,252,748

Pay As You Earn (PAYE) 37,051 34,161

Staff pension 19,471 25,653

Staff gratuity 216 343

22,391,595 24,849,506

Total trade and other payables 44,949,851 61,773,238

21.1


21.2 Deferred income 2015 2014N'000 N'000

Rental services 19,436 43,676

- 19,436 43,676

The fair value of current borrowings equals their carrying amount as at 30 September 2015, as the impact of discounting

is not significant.

The Directors consider that the carrying amount of trade payables as at 30 September 2015 approximates their fair value.

Trade and other payables principally comprise amounts outstanding for trade purchases and ongoing costs. The average

credit period taken for trade purchases is thirty days.

Other suppliers represents accruals made for transport payments.

Trade creditors

Accrued liabilities principally comprise provision for product bills and other charges not yet received.

The other principal features of the Company’s borrowings are as follows:

Bank overdrafts are repayable on demand. The average interest rate on bank overdrafts for the period was approximatey

15.2% per annum (2014: 13.9% per annum). This was determined based on banks' cost of funding plus lenders' mark-up.

These overdrafts are neither guaranteed nor is any collateral given on the balances.

The deferred income represents amounts billed or collected in accordance with contractual terms in advance of when the

work is performed. These advance payments primarily relate to the rental income and prepaid revenue for goods and

services yet to be rendered. The Company estimates this will be earned as revenue during the next financial year.

Trade finance loan represents short term borrowings obtained to fund letters of credits for product importation. These

facilities are either secured with products financed or domiciliation of Petroleum Products Pricing Regulatory Agency

(PPPRA) payments.

Unsecured borrowing at amortised cost

Total borrowings

Bank overdrafts & trade finance loan

32

TOTAL NIGERIA PLC



2015 2014

N'000 N'000

22 Share capital

Authorised, Issued and fully paid:

339,521,837 ordinary shares of 50k each 169,761 169,761


2015 2014

N'000 N'000

23 Cash and cash equivalents

Bank and cash balances 5,256,238 13,848,156

Cash balances with Total Treasury (Note 30.2) 2,114,033 620,289

Cash & cash equivalents in statement of financial position 7,370,271 14,468,445

Bank overdrafts & trade finance loan (Note 20) (14,734,500) (15,682,926)

Cash & cash equivalents in statement of cash flows (7,364,229) (1,214,481)

The directors believe that the amounts held with Total Treasury qualify as cash and cash equivalents because

they can be withdrawn at any time without penalty.

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

entitled to dividends as declared from time to time and are entitled to one vote per share at general meetings

of the Company.

33

TOTAL NIGERIA PLC


(264,779)

24 Commitments and contigent liabilities

Financial commitments

The Company did not charge any of its assets to secure liabilities of third parties.


2015 2014

Bonds N'000 N'000

Total commitments given 687,691 1,415,020

Total commitments received 117,160 100,000

There are contingent liabilities in respect of legal actions against the Company amounting to

approximately N18 billion. The Directors have not made provision for these contingent liabilities as

consultation with the Company's external solicitors has indicated that the likely outcome of the legal

actions will favour the Company and as such no material losses will crystalise against the Company.

The Directors are of the opinion that all known liabilities and commitments have been taken into

account in the preparation of these financial statements. These liabilities are relevant in assessing the

Company's state of affairs.

At 30 September 2015, the Company had contractual commitments for the acquisition of property,

plant and equipment amounting to N 1,031,071,808 (December 2014: N345,408,112).

Commitments received include customers' guarantees.

Commitments received and given are held with local banks.

Contingent liabilities

Commitments given primarily include Bonds to Major Oil Marketers Association of Nigeria (MOMAN)

for joint petroleum product importation in the ordinary course of business. No losses are anticipated in

respect of this.

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TOTAL NIGERIA PLC


25 Capital risk management

The Company is not subject to any externally imposed capital requirements.

Gearing ratio

The gearing ratio is as follows: 30 September 31 December

2015 2014

N'000 N'000

Debt 14,734,500 15,682,926

Cash and cash equivalents (7,370,271) (14,468,445)

Net Debt 7,364,229 1,214,481

Equity 12,327,956 13,929,778

Net debt to equity ratio 60% 9%

Equity includes all capital and reserves of the Company that are managed as capital.

The Company manages its capital to ensure that the Company will be able to continue as a going concern

while maximising the return to stakeholders through the optimisation of the debt and equity balance. The

Company’s overall strategy remains unchanged from prior year.

The capital structure of the Company consists of debt, which includes the borrowings disclosed in Note 23,

cash and cash equivalents and equity attributable to equity holders, comprising issued capital, reserves

and retained earnings and the Statement of Changes in Equity.

Debt is defined as long and short-term borrowings (excluding derivatives and financial guarantee

contracts) and obligations under finance lease.

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TOTAL NIGERIA PLC


26 Financial Risk Management

(i) Financial risk management objectives

(ii) Market risk

(iii) Interest rate risk management

Interest rate risk

Sensitivity analysis

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


2015 2014

N'000 N'000

Variable rate instruments Average rate

Bank overdrafts and trade finance loans 15.6% 14,734,500 15,682,926

14,734,500 15,682,926

Sensitivity analysis for variable rate instruments

Change of 200 basis points or 2%

N'000 N'000

30 September 1,249,897 '+/-2 % 213,014

31 December 2014 2,621,211 '+/-2 % 377,153

(iv) Foreign exchange risk management

Effect of increase/decrease in

Interest rate

The Company uses the spot deals to hedge its foreign exchange exposure. The Company also has

access to purchase foreign exchange at the Central Bank of Nigeria (CBN) rates.

A change of 200 basis points in interest rates at the reporting date would have increased (decreased)

equity and profit or loss by the amounts shown below:

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

equity prices will affect the Company’s income or the value of its holdings of financial instruments. The

objective of market risk management is to manage and control market risk exposures within acceptable

parameters, while optimizing the return.

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

Moreover, market developments are monitored and discussed regularly, and mitigating actions are

taken where necessary.

Interest

charged

The Company is exposed to interest rate risk as it borrows funds at multiple interest rates. The risk is

managed by the Company by constantly negotiating with the banks to ensure that interest rates are

consistent with the monetary policy rates as defined by the Central Bank of Nigeria.

The Company’s Treasury function provides services to the business, co-ordinates access to domestic

and international financial markets, monitors and manages the financial risks relating to the operations

of the Company through internal risk reports which analyses exposures by degree and magnitude of

risks. These risks include market risk (including currency risk, interest rate risk), credit risk and liquidity

risk.

The Corporate Treasury function reports monthly to the Group's Treasury, a section of the Group that

monitor's risk and policies implemented to mitigate risk exposures.

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TOTAL NIGERIA PLC


26 Financial Risk Management (cont'd)

Foreign exchange risk management

Effect in thousands of Naira

As at 30 September 2015

Foreign

currency Naira balance Exchange rate

'000 '000 N '000

Trade receivables

USD 5,809 1,154,481 198.76 '15% 173,172

Euro - - - '15% -

Cash Deposits

USD 10,291 2,045,322 198.76 '15% 306,798

EURO 18 3,957 224.87 '15% 594

Trade Payables

USD (5,453) (1,083,831) 198.76 '15% (162,575)

EURO (608) (136,611) 224.87 '15% (20,492)

Net impact on Profit and Loss

USD 10,646 2,115,972 198.76 '15% 317,396

EURO (590) (132,654) 224.87 '15% (19,899)

As at 31 December 2014

Foreign

currency Naira balance Exchange rate

'000 '000 N '000

Trade Receivables

USD 17,923 3,298,516 184.04 '15% 494,777

Euro - - - - -

Cash Deposits

USD 2,122 390,555 184.04 '15% 58,583

EURO 71 15,909 223.79 '15% 2,386

Trade Payables

USD (56,551) (10,407,628) 184.04 '15% (1,561,144)

EURO (3,123) (698,931) 223.79 '15% (104,840)

Net impact on Profit and Loss

USD (36,506) (6,718,557) 184.04 '15% (1,007,784)

EURO (3,052) (683,022) 223.79 '15% (102,454)

A decrease in exchange rate by 1500 basis points against the above currencies at the reporting period would have had the equal but opposite

effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.


exchange rate


exchange rate

A movement in the exchange rate either positively or negatively by 1500 basis points is illustrated below. Such movements would have increased

(decreased) the Statement of Financial Position by the amounts shown below. This analysis is based on foreign currency exchange rate

variances that the Company considered to be reasonably possible at the end of the reporting period. The analysis assumes that all other

variables, in particular interest rates, remain constant.

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TOTAL NIGERIA PLC


(v) Liquidity risk management

Liquidity and interest risk tables

30 September 2015 N '000 N '000 N '000 N '000

Borrowings 15.6% - - 14,734,500 -

Trade payables 5,330,818 9,609,341 7,618,097 -

Other Payables 8,005,932 7,522,039 6,863,624 -

13,336,749 17,131,381 29,216,221 -

31 December 2014

Borrowings 13.9% - - 15,682,926 -

Trade payables 8,441,624 15,216,886 12,063,648 -

Other Payables 9,922,459 9,322,729 8,506,696 -

18,364,083 24,539,615 36,253,270 -

The Company manages liquidity risk by maintaining reserves, banking facilities by monitoring forecasts and actual cash flows and matching the

maturity profiles of financial assets and liabilities. Below is a listing of financing facilities that the Company has at its disposal to further reduce

liquidity risk.

The following tables detail the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods.

The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Company can

be required to pay. The tables include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted

amount is derived from interest rate curves at the end of the reporting period. The contractual maturity is based on the earliest date on which the

Company may be required to pay.

Less than

1 month 1 to 3 months 3 months to 1 year 1 to 5 Years

Weighted

average

effective

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TOTAL NIGERIA PLC


Financial Risk Management (cont'd)

Financing facilities

30 September 30 September2015 2014

N'000 N'000

Amount used 14,734,500 15,682,926

Amount unused 37,465,500 36,517,074

Total Facilities 52,200,000 52,200,000

(vi) Credit risk management

At 30 September 2015

Fully Performing Past Due Total

N'000 N'000 N'000

Network 3,922,661 - 3,922,661

General Trade 2,772,747 5,116,116 7,888,863

Gross receivables 6,695,408 5,116,116 11,811,524


Fully Performing Past Due Total

N'000 N'000 N'000

Network 2,932,840 - 2,932,840

General Trade 4,356,428 8,948,782 13,305,210

Gross receivables 7,289,268 8,948,782 16,238,050

Unsecured bank loans and overdrafts payable at call and reviewed annually.

The credit risk on liquid funds is limited because most of the counterparties are banks with high credit-ratings assigned

by international credit-rating agencies or Total Treasury, a related entity within the Group.

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the

Company. The Company has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient

collateral where appropriate e.g. security deposits, as a means of mitigating the risk of financial loss from defaults. The

Company uses other publicly available financial information and its own trading records to rate its major customers.

Credit exposure is controlled by setting credit limits that are reviewed and approved by the management.

The Company does not have any significant credit risk exposure to any single counterparty or any group of

counterparties having similar characteristics. The Company defines counterparties as having similar characteristics if

they are related entities.

The credit policy of Total Nigeria Plc is set in accordance with the Sales Channel the Customer belongs:

Network Channel: Credit is extended to dealers who operate the Company Owned, Dealer Operated Service Station

(CODO) and some of the Dealer Owned, Dealer Operated service stations (DODO) who specifically apply to operate

under the DODO credit scheme. Under both CODO and DODO credit schemes, credit is extended to each dealer to

cover the working capital needs of the station. Each day's sales proceeds are lodged into the Company's bank account at

least twice daily. The Company's financial risk exposure is covered by retentions from dealers income to increase the

security deposit, as well as, physical stock in the station.

General Trade (GT) Channel: Credit for the GT customers is set at the monthly average sales to the customer for a

period of one year or six months after proper financial and qualitative analysis. The approved credit limit is extended for

30 days or 45 days in rare occassions for blue chip companies.

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TOTAL NIGERIA PLC


Financial Risk Management (cont'd)

27 Fair value

At 30 September 2015

Loans and

receivables

Other financial

liabilities Total

N'000 N'000 N'000

Financial assets not measured

at fair value

Trade and other receivables1

21,677,511 - 21,677,511

Cash and cash equivalents 7,370,271 - 7,370,271

29,047,782 - 29,047,782

Financial liabilities not

measured at fair value

Bank overdrafts & trade advance loan - 14,734,500 14,734,500

Trade and other payables - 44,949,851 44,949,851

- 59,684,351 59,684,351


Loans and

receivables

Other financial

liabilities Total

N'000 N'000 N'000

Financial assets not measured

at fair value

Trade and other receivables 34,922,036 - 34,922,036

Cash and cash equivalents 14,468,445 - 14,468,445

49,390,481 - 49,390,481

Financial liabilities not

measured at fair value

Bank overdrafts & Trade Advance Loan - 15,682,926 15,682,926

Trade and other payables - 61,773,238 61,773,238

- 77,456,164 77,456,164

28 Assets pledged as security

As at the period ended 30 September 2015 there were no assets pledged as security (2014: Nil).

Carrying amount

The classification of financial assets and liabilities, together with the carrying amounts shown in the

statement of financial position, are shown in the table below. It does not include fair value information

for financial assets and financial liabilities not measured at fair value if the carrying amount is a

reasonable approximation of fair value.

Carrying amount

The Directors consider that the fair value of financial assets and liabilities are not significantly

different from their carrying values.

1Amount excludes receivables for inventory owed by Major Oil Marketers Association of Nigeria

(MOMAN) members of N506M which are not considered to be financial assets.

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TOTAL NIGERIA PLC


29 Events after the reporting date

30 Related party transactions

30.1 Trading transactions

30 September 31 December 30 September 31 December 30 September 31 December

2015 2014 2015 2014 2015 2014

N'000 N'000 N'000 N'000 N'000 N'000

Total Outré Mer - - 31,504,298 53,302,790 906,967 -

Total Oil Trading - - 1,204,527 5,430,488 - -

Total E&P Nigeria 2,075,480 10,283,818 - - - -

Total Lubricants 368,998 360,193 - - - -

Total Access to Solar 125,009 - 327,821

Air Total international - - 70,371

Total SA - - - - 101,593 384,754

Total Gestion international - - - - 73,932 121,674

Total RM - - - - 300,759 2,224,563

2,444,478 10,644,011 32,833,835 58,733,277 1,383,251 3,129,183

31.2

30.2 Outstanding balance

The following amounts were outstanding at the reporting date:

30 September 31 December 30 September 31 December

2015 2014 2015 2014

Total Outre Mer - - 7,663,551 8,816,945

Total E&P Nigeria 338,869 2,503,286 -

Air Total international - - 6,840

Elf Aquintaine - - -

Total SA - - 24,870 -

Total Gestion international - - 4,208

Total Access to Solar - - 35,533 1,236

Total Ghana - 176 -

Total Oil Trading - - 19,883 2,751,823

Total RM - - 596,951 438,123

Total Lubrifiants 56,280 19,931 - -

395,149 2,523,393 8,340,788 12,019,175

Total Treasury 1 2,019,597 620,289 - -

2,414,746 3,143,682 8,340,788 12,019,175

30.3 Technical service agreement

During the year, the Company entered into the following transactions with related parties, who are members of the Total Group, as

shown below:

Sale of goods

There were no post balance sheet events that could have material effect on the financial position of the Company at 30 September

2015 and on the profit for the year ended on that date that have not been taken into account in these financial statements.

Others

As at the period ended 30 September 2015, Total Marketing and Services (incorporated in France) owned 61.72 % of the issued

shares of Total Nigeria PLC. The Ultimate parent Company and ultimate controlling party is Total S.A (incorporated in France).

The Company has a general assistance and cost sharing agreement with Total Outre Mer as well as Total Raffinage Marketing which

is still subject to the approval of the National Office for Technology Acquisition and Promotion (NOTAP). The amount provided for in

profit or loss for the period ended September 2015 is N 919Million ( September 2014: N697 million)

Purchase of goods

Amounts owed to

related parties

Amounts owed by

related parties

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TOTAL NIGERIA PLC


31 Information regarding employees

(i)


2015 2014

Number Number

1,500,001 - 2,000,000 0 5

2,000,001 - 2,500,000 2 -

2,500,001 - 3,000,000 1 16

3,000,001 - 3,500,000 2 12

3,500,001 - 4,000,000 14 11

4,000,001 - 4,500,000 2 73

4,500,001 - 5,000,000 3 36

5,000,001 - 5,500,000 13 80

5,500,001 - 6,000,000 7 51

6,000,001 - 6,500,000 16 88

6,500,001 and above 419 111

479 483

(ii)


2015 2014

Number Number

Managerial staff 111 113

Senior staff 346 342

Junior staff 22 28

479 483

(iii) The related salaries and wages amounted to N5.7 billion (2014: N5 billion).

Staff costs relating to the above were: 30 September 30 September

2015 2014

N'000 N'000

Salaries and wages 5,008,460 4,368,852

Termination benefits 186 51,516

Pension and social benefit 348,669 327,142

Medical expenses 125,261 162,871

Training expenses 118,971 115,775

Provision for long service award. 14,353 -

Staff welfare expenses 128,899 44,540

5,744,799 5,070,696

The table below shows the number of staff of the Company whose emoluments during the year excluding

pension contributions were within the ranges stated:

The average number of persons employed in the financial year and the staff costs were as follows:

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