MOBIL OIL NIGERIA plc
Unaudited Financial Statements for the
period ended 30 June, 2014
Mobil Oil Nigeria plc
Statement of Significant Accounting Policies
30 June, 2014
The Company
Mobil Oil Nigeria plc. was incorporated as a Private Limited Liability Company in 1951. It became a public limited
liability company in 1978 and its share capital is listed on the Nigerian Stock Exchange.
The issued share capital is held 60% by ExxonMobil Oil Corporation, Fairfax, U.S.A., and 40% by other investors.
The Company was formed principally for the marketing of petroleum products. Petroleum products the company
sells include; Premium Motor Spirit (PMS), Diesel, Aviation fuel, kerosene and lubricants. Petrol, Diesel, Kerosene and
lubricants are mainly sold through the company’s service stations while Aviation fuel through the aviation domestic
and international terminal at Murtala Mohammed Airport.
All the fuels which the Company sells are purchased from the Nigerian National Petroleum Corporation and from
other third party suppliers. Lubricants are blended locally or purchased from associated companies.
The company also has some investment properties which are leased out to a related party at market rate in an arm’s
length transaction.
Statement of Compliance
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS)
issued by the International Accounting Standards Board (IASB).
Significant accounting policies
1
Basis of measurement
The financial statements have been prepared under the historical cost convention.
2
Presentation of financial statements
The preparation of the financial statements in conformity with IFRS requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosures at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Although these estimates are based on the
directors' best knowledge of current events and actions, actual results may differ from those estimates.
3
Jointly controlled assets
The Company has jointly controlled assets with Total Nigeria for storage and handling of jet fuel to aircrafts in its
Aviation Domestic Terminal of Murtala Mohammed airport. In addition, the Company has a twenty percent (20%)
interest in the Joint Users Hydrant Installation used to refuel aircraft at Murtala Mohammed Airport international
terminal. The Company combines its share of the joint assets income and expenditure, assets and liabilities and cash
flow on a line-by-line basis with similar items in the Company’s financial statements. The Company classifies its share
of the jointly controlled assets, according to the nature of the assets; while operating costs of the joint facility are
shared based on throughputt.
Mobil Oil Nigeria plc. has no obligation to decommission these assets and has not recognized any decommissioning
costs.
4
Investment Property
Investment property is recognised as an asset when it is probable that the future economic benefits associated with the
property will flow to the Company and its costs can be measured reliably.
Investment property is initially recognised at cost. Transaction costs are included in the initial measurement.
Costs include costs incurred initially and costs incurred subsequently to add to, or to replace a part of, or service a
property. Where a replacement part is recognised in the carrying amount of the investment property, the carrying
amount of the replaced part is derecognised.
Subsequent costs are included in the carrying amount of the investment property or recognized as a separate asset as
appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably.
Cost model
Investment property is carried at cost, less depreciation and any accumulated impairment losses.
Depreciation is provided to write down the cost, less estimated residual value over the useful life of the property,
which is as follows:
Page 1
Mobil Oil Nigeria plc
Statement of Significant Accounting Policies (Contd.)
30 June, 2014
5
Property plant and equipment
All categories of property, plant and equipment are initially recorded at cost. Cost includes expenditures that are
directly attributable to the acquisition of the asset. Subsequent costs are included in the asset's carrying amount or
recognized as a separate asset as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the Company and the cost of the item can be measured reliably. Interest is capitalized as an
increase in property, plant and equipment on major capital projects during construction. All property, plant and
equipment are stated at historical cost less depreciation. Repairs and maintenance costs are charged to the statement of
income during the period in which they are incurred.
Residual values, method of amortization and useful lives of the assets are reviewed consistently and adjusted when
appropriate.
Impairment losses and gains and losses on disposals of property, plant and equipment and are included in Statement
of Comprehensive Income.
Incomplete construction relates to uncompleted project which are not depreciated. Upon completion, balances are
reclassified to the relevant asset category for depreciation.
The useful lives of items of property, plant and equipment have been assessed as follows:
6
Intangible assets
The Company’s intangible assets are classified into two groups:
a) Software costs:
These are acquired computer software licenses and are capitalised on the basis of costs incurred to acquire and bring to
use the specific software. The costs are amortised on a straight line basis over 15 years which is the estimated useful
life of the software. Costs associated with maintaining computer software programs are recognized in expense as
incurred.
b) Franchise costs:
These are capitalised amounts paid to UAC for giving the Company the right to use the "Mr. Biggs" Brand in Mobil
retail outlets. Amortisation is calculated using the straight line method to allocate the franchise costs over the period of
the agreement between Mobil and UAC, which has a contractual life of 10years.
7
Financial Instruments
a) Initial recognition and measurement
Financial instruments are recognised initially when the Company becomes a party to the contractual provisions of the
instruments. The Company classifies its financial instruments on initial recognition as a financial asset or a financial
liability.
Page 2
Mobil Oil Nigeria plc
Statement of Significant Accounting Policies
30 June, 2014
b)
c)
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have
been transferred and the Company has transferred substantially all risks and rewards of ownership.
The Company’s financial instruments are classified as:
i. Loans and receivables
Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for maturities greater than 12 months after the end of the reporting
period.
Trade and other receivables
Trade receivables are measured on initial recognition at fair value, and are subsequently measured at amortised cost
using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised
in the statement of comprehensive income when there is objective evidence that the asset may be impaired. Significant
financial difficulties of the debtor, probability that the debtor will file for bankruptcy or conduct financial
reorganization, and default or delinquency in payments (more than 180 days overdue) are considered indicators that
the trade receivable is impaired. The allowance recognised is measured as the difference between the asset’s carrying
amount and the present value of estimated future cash flows discounted at the effective interest rate computed at
initial recognition.
The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is
recognised in profit and loss within operating expenses. When a trade receivable is uncollectable, it is written off
against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are
credited against operating expenses in profit and loss.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks and other short-term highly liquid
investments. Bank overdrafts are recognized under current liabilities.
ii. Financial liabilities at amortized cost
Trade and other payables
Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the
effective interest rate method
Borrowings
Borrowings are initially measured at fair value and are subsequently measured at amortised cost using the effective
interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption
of borrowings is recognised over the term of the borrowings in accordance with the Company’s accounting policy for
borrowing costs.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee
is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
8
Current and deferred income tax
Income tax expense is the aggregate of the charge to the profit and loss account in respect of current income tax,
education tax and deferred tax.
Current income tax liabilities are recognised in line with the provisions of the Companies Income Tax Act. Education
tax is determined at 2% of assessable profits. Capital gains tax liability is charged on applicable capital asset disposals
where the proceeds are not to be reinvested in a similar asset.
Deferred tax is provided using the liability method on all temporary differences arising between the tax basis of assets
and liabilities and their carrying values for financial reporting purposes in accordance with the provisions of IAS 12.
Current tax rates are used to determine deferred taxes.
Income taxes are recognised in income except when they relate to items recognized in other comprehensive income, in
which case the tax is also recognised in other comprehensive income.
Deferred tax assets are recognised only to the extent that it is probable that future taxable profits will be available
against which the temporary differences can be utilized.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current assets
against current liabilities and when deferred income taxes assets and liabilities relate to income levied by the same
taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the
balances on a net basis.
Page 3
Mobil Oil Nigeria plc
Statement of Significant Accounting Policies
30 June, 2014
9
Leases
a) Finance lease
These are leases that transfer substantially all the risks and rewards of ownership to the Company. They are recognised
at the commencement of the lease term as finance leases and are capitalized at the fair value of the leased asset or, if
lower, at the present value of the minimum lease payments. Finance lease payments are apportioned between interest
expense and repayments of debt.
The Company’s finance leases relate to motor vehicles where it bears substantially all risks and rewards.Loans and
receivables
Assets acquired under lease are depreciated using the useful life of the assets. However, if there is no reasonable
certainty that the Company will obtain ownership by the end of the lease term, they are depreciated over the shorter of
the useful life and the lease term.
b) Operating lease
Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor, are classified as
operating leases.
The Company owns investment properties which are leased out under operating lease agreements to related parties.
The investment properties are presented in the balance sheet in line with the accounting policy disclosed in note 4.
The lease income from the operating leases are recognized in income on a straight-line basis over the lease term. They
are also received from the lessee on the same basis. Costs, including depreciation, incurred in earning the lease income
are recognized as an expense.
10
Inventories
Inventories are stated at the lower of cost and net realizable value. Cost includes expenditure incurred in acquiring
and transporting the stock to its present location. Cost is determined using the first-in, first-out (FIFO) method for
lubricant products and weighted average method for fuels products. Net realisable value is the estimated selling price
in the ordinary course of business, less applicable variable selling expenses. If the carrying value exceeds the net
realisable value, an inventory write down is recognised.
11
Employee Benefits
a) Short term benefits
The cost of short-term employee benefits, (those payable within 12 months after the service is rendered, such as paid
vacation and sick leave, and non-monetary benefits such as medical care), are recognised in the period in which the
service is rendered and are not discounted.
The expected cost of compensated absences is recognised as an expense as the employees render services that increase
their entitlement or, in the case of non-accumulating absences, when the absence occurs.
b) Post-employment benefits
The Company operates a defined benefit pension plan approved by the National Pension Commission. These are
retirement plans that define the amount of pension benefit to be provided and are generally funded by payments to
independent pension fund administrators.
The defined benefits plans define an amount of pension benefit that an employee will receive on retirement usually
dependent on one or more factors as determined by the actuary. The defined benefit obligation is calculated by the
actuary using the projected unit credit method.
Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in
the statement of other comprehensive income in the periods in which they arise.
Pension cost represents the increase in the actuarial present value of the obligation for pension benefits based on
employee service during the year and the interest on this obligation in respect of employee service in previous years,
net of the expected return on plan assets.
Pension costs are recognized as expenses in the statement of comprehensive income.
12
Provisions and contingencies
Provisions are recognized as best estimates on balance sheet dates. They are recognised when the company has a legal
or constructive obligation as a result of past events and where it is more likely than not that an outflow of resources
will be required to settle the obligation. A reliable estimate of the amount to settle the obligation must also be possible
before a provision is made. The measurement of provisions takes into consideration the time value of money and risk
specific to the obligation. The increase in provision due to the passage of time is recognised as an interest expense.
The carrying amount of provisions are regularly reviewed and adjusted for new facts or changes in law, regulation.
Where the above conditions are not met, a contingent asset/liability is disclosed.
Page 4
Mobil Oil Nigeria plc
Statement of Significant Accounting Policies (Contd.)
30 June, 2014
13 Revenue Recognition
Revenue from the sale of all petroleum products (PMS, Aviation fuel, Diesel, Kerosene and lubricants) is recognised at
fair value of consideration received or receivable net of taxes and discounts on sales when the significant risk and
rewards of ownership have been transferred and title passed to the customer.
Revenue is recognized when the following conditions have been met
• The company has transferred to the buyer the significant risks and rewards of ownership of the goods.
• The company does not retain managerial involvement usually associated with ownership nor effective control over
the goods sold
• The amount of revenue can be measured reliably
• It is probable that the economic benefits associated with the transaction will flow to Mobil oil Nigeria plc.
• The costs incurred in respect of the transaction can be measured reliably.
14 Interest Income
Interest income is recognised in the Company’s financial statements using the effective interest rate method.
15 Other Income
Other income refers to all other sources of income apart from the sale of petroleum products which the Company
receives. It includes amongst others; rental income and back court income.
Rental income refers to rent the Company gets from its investment property and service stations. This income is
recognised when due for payment according to the contract terms in place.
Backcourt income refers to income recognised from the use of the food court on some of the Company’s service
stations by UAC. It is charged at a percentage of total revenue recognised by the UAC at the food courts.
16 Borrowing Costs
Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are
capitalised as part of the cost of that asset until such time as the asset is ready for its intended use. The amount of
borrowing
costs eligible
is determined
as follows:
Actual
borrowing
costsfor
oncapitalisation
funds specifically
borrowed
for the purpose of obtaining a qualifying asset less any
temporary investment of those borrowings.
Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of
obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred. The
capitalisation of borrowing costs commences when:
•
•
•
expenditures for the asset have occurred;
borrowing costs have been incurred, and
activities that are necessary to prepare the asset for its intended use or sale are in progress
Capitalisation is suspended during extended periods in which active development is interrupted and ceases when
substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. All
other borrowing costs are recognised in an expense in the period they are incurred.
17 Translation of foreign currencies
The Company’s presentation currency and functional currency is Nigerian Naira. Transactions in foreign currencies
are recorded at the official rates of exchange on the transaction date. Assets and liabilities denominated in foreign
currency are translated at the applicable official rates of exchange on the balance sheet date. Exchange gains and losses
are included in the profit and loss account of the period in which they arise.
18 Segment Reporting
The Company has two business segments - Petroleum Products Marketing & Property Business. These business
segments have been grouped in a manner consistent with internal reporting and as provided to the chief operating
decision maker (Executive Directors). The Company's activities that are significantly integrated or interdependent are
not considered as separate business segments.
19 Dividend payable
Proposed dividends for the year are recognised as a liability after the balance sheet date when declared and approved
by shareholders at the Annual General Meeting.
Page 5
Mobil Oil Nigeria plc
Statement of Significant Accounting Policies (Contd.)
30 June, 2014
20
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized
as a deduction from equity.
Deferred income
This relates to advance rent received from investment property. The current portion is amortized to income within one
year on a straight line basis while the non-current portion is initially carried at initial cost and subsequently at face
value.
Impairment
22
a) Financial assets
At each reporting date the company assesses all financial assets, other than those at fair value through profit or loss, to
determine whether there is objective evidence that a financial asset or group of financial assets has been impaired.
The Company adopts the following criteria when considering the financial assets not at fair value, in the books:
• Indication of any material decline in market value.
• Significant changes with long term adverse impacts that have taken place during the period or will take place in
the near future.
• Material changes in interest rates.
• Evidence of adverse economic performance
21
Impairment losses are reversed when an increase in the financial asset's recoverable amount can be related objectively
to an event occurring after the impairment was recognised, subject to the restriction that the carrying amount of the
financial asset at the date that the impairment is reversed shall not exceed what the carrying amount would have been
had the impairment not been recognized.
b) Tangible and intangible assets
Impairment test is carried out on group of fixed assets only when events or changes in circumstances indicate that the
carrying amount of the assets may not be recoverable.
The Company assesses at each end of the reporting period whether there is any indication that an asset may be
impaired. If any such indication exists, the Company estimates the recoverable amount of the asset.
If there is any indication that an asset may be impaired, the recoverable amount is estimated for the individual asset. If
it is not possible to estimate the recoverable amount of the individual asset, the recoverable amount of the cashgenerating unit to which the asset belongs is determined.
The recoverable amount of an asset or a cash-generating unit is the higher of its fair value less costs to sell and its
value in use. If the recoverable amount of an asset is less than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. That reduction is recognised as an impairment loss.
An impairment loss of assets carried at cost less any accumulated depreciation or amortisation is recognised
immediately in profit or loss. Any impairment loss of a revalued asset is treated as a revaluation decrease.
23
Key Accounting Estimates and Jungements
In preparing the financial statements, management is required to make estimates and assumptions that affect the
amounts represented in the financial statements and related disclosures. Use of available information and the
application of judgment is inherent in the formation of estimates. Actual results in the future could differ from these
estimates which may be material to the financial statements. Significant judgments include:
a) Provisions
Provisions made in the financial statements are determined by management using estimates based on the information
available. Additional disclosures of provisions are included in the provisions note (Note 20). The provision made by
management during the year is 100% of the litigation claim filed against the company.
Provisions for litigation claims are classified as non-current liabilities based on the time frame for legal cases to be
settled.
b) Defined benefit pension plans
Defined benefit plan assets and obligations are subject to significant volatility as market values and actuarial
assumptions change. The assumptions used in determining the net cost/income for pensions include the discount
rate, mortality rates, and expected increase in salaries. Any change in these assumptions will impact the carrying
amount of the pension obligation.
The Actuary determines the appropriate discount rate to use at the end of the year based on the interest rates of
government bonds with extrapolated maturities corresponding to the expected duration of the defined benefit
obligation. The interest rate is used to determine the present value of estimated future cash outflows to be required to
settle the pension obligations.
Due to the complexity of valuation, the underlying assumption and its long term nature, a defined benefit obligation is
highly sensitive to changes in these assumptions. All the assumptions are reviewed at each reporting date.
Under the accounting policy applied, experienced gains or losses are recognised immediately in the statement of other
comprehensive income.
Pension Fund Administrators manage the pension funds in accordance with National Pension Commission
(PENCOM) regulations.
Page 6
Mobil Oil Nigeria plc
Unaudited Statement of Financial Position
As at 30 June, 2014
=N='000
Note
Assets
Non-current assets
Property plant and equipment
Lease assets
Intangible assets
Investment property
Deferred tax
Prepayments
Total non-current assets
June 2014
December 2013
2a
2b
3
4
11
5
7,020,673
32,747
137,257
23,577,862
1,048,356
1,689,182
33,506,077
7,111,042
605
134,706
20,695,199
350,964
1,525,090
29,817,606
6
4
7
16
4,211,060
6,048,663
60,659
10,320,382
4,509,924
128,075
5,311,211
961,706
10,910,916
Total assets
43,826,459
40,728,522
Equity and Liabilities
Equity
Share capital
Share premium
Reserves
Total capital and reserves
180,298
14,380
11,995,463
12,190,141
180,298
14,380
9,342,953
9,537,631
2,992,002
990,864
20,048
8,096,661
1,280,665
13,380,240
1,940,830
7,913,886
4,526,160
14,380,876
1,420,712
167,760
16,667,606
18,256,078
1,253,087
1,086,259
14,470,669
16,810,015
Total liabilities
31,636,318
31,190,891
Total Equity and Liabilities
43,826,459
0
40,728,522
0
Current assets
Inventories
Assets held for sale
Trade and other receivables
Cash and cash equivalents
Total current asset
Current liabilities
Current tax payable
Current portion of long-term borrowings
Bank overdraft
Payables and other liabilities
Current portion of deferred income
Total current liabilities
Non current liabilities
Pension plan asset /(reserve)
Long-term borrowings
Deferred income
Total non-current liabilities
18
13
10
8
9b
12
10
9a
The financial statements, accounting policies and the notes were approved by the Board of Directors on July 23, 2014 and
Page 7
Mobil Oil Nigeria plc
Unaudited Statement of Total Comprehensive Income
For the Period Ended 30 June 2014
=N='000
Statement of Income
Note
Jan - June 2014
Jan - June 2013
Turnover
Cost of sales
42,167,608
(36,559,747)
38,741,038
(33,960,354)
Gross profit
5,607,861
4,780,684
1,242,590
(2,553,415)
(1,069,051)
1,044,805
(2,361,024)
(987,252)
Other income
Selling and distribution expenses
Administrative expenses
Other non-operating income /(expense)
14
15
2,793,875 *
(55)
Operating profit
Finance income
Finance costs
6,021,860
146,518
(15,018)
2,477,158
13,517
(39,876)
Profit before taxation
6,153,360
2,450,799
Taxation
Profit for the period
Basic earnings per share (kobo)
Statement of Other Income
13
(1,337,278)
(792,631)
4,816,082
1,658,168
1,336
460
Jan - June 2014
Jan - June 2013
Items that will not be reclassified to profit or loss
Actuarial gains /(losses)
-
-
Other comprehensive income net of tax
-
-
Total comprehensive income for the period
4,816,082
1,658,168
Note:
* Included in other non-operating income is the sum of N2,851,584,800 which relates to profit on sale of a surplus property
Page 8
Mobil Oil Nigeria plc
Unaudited Changes in Equity
For the Period Ended 30 June 2014
=N='000
2014 June
At the beginning of the year
Comprehensive Income for the period
Dividend payment
At the end of the period
Share
capital
180,298
180,298
Share capital
2013 December
At the beginning of the year
Comprehensive Income for the period
Dividend payment
Other Comprehensive Income/(loss) for the period
At the end of the period
180,298
180,298
Share
premium
14,380
14,380
Share
premium
14,380
14,380
Total share
capital
Reserves
194,678
194,678
10,249,955
4,816,082
(2,163,572)
12,902,465
Total share
capital
Reserves
194,678
194,678
8,572,146
3,480,785
(1,802,976)
10,249,955
Accumulated other
reserves
Total equity
(907,002)
(907,002)
9,537,631
4,816,082
(2,163,572)
12,190,141
Accumulated other
reserves
Total equity
(2,176,856)
1,269,854
(907,002)
6,589,968
3,480,785
(1,802,976)
1,269,854
9,537,631
Page 9
Mobil Oil Nigeria plc
Unaudited Statement of Cash Flows
For the Period Ended 30 June 2014
=N='000
Note
OPERATING ACTIVITIES
Operating Profit
Adjustment for non cash items
Depreciation of fixed assets
Provision for pension plan
Amortization of intangible assets
(Gain) / Loss on disposal of fixed assets
Changes in current assets and liabilities
Decrease/(Increase) in inventories
Decrease/(Increase) in due from associated companies
Decrease/(Increase) in foreign currency deposit for imports
Decrease/(Increase) in trade debtors and bridging claims
Decrease/(Increase) in other debtors and prepayments
Increase/(Decrease) in due to associated companies
Increase/(Decrease) in trade creditors
Increase/(Decrease) in other creditors and accruals
Increase/(Decrease) in unamortised rental income
Net changes in current assets and liabilities
Income taxes paid
Witholding tax credit utilised
Retirement benefits paid
Net cash generated from operating activities
Jan - June 2014
6,021,860
513,602
215,013
12,494
(2,793,875)
(2,052,766)
Jan - June 2013
2,477,158
305,456
302,099
15,214
55.27
622,824
298,864
(103,134)
(49,488)
(487,188)
(261,734)
44,536
(138,130)
244,227
(1,048,558)
(1,500,605)
(1,092,216)
(382,932)
56,293
(154,512)
(169,012)
373,240
1,786,699
(307,606)
2,048,050
2,158,004
(725,229)
(258,269)
(47,388)
(712,144)
-
1,437,603
4,545,842
INVESTING ACTIVITIES
Purchase of fixed assets
Proceeds from disposal of assets
Payment for franchise/permit
Interest received
Net cash used in investing activities
(3,411,165)
2,995,077
(15,045)
146,518
(284,615)
(3,371,942)
1,211
13,517
(3,357,214)
FINANCING ACTIVITIES
Increase/(Decrease) in overdraft
Dividend paid
Long-term borrowings
Increase/(Decrease) in lease obligations
Interest charges
Net cash used in financing activities
20,048
(2,163,572)
72,365
32,142
(15,018)
(2,054,035)
(429,378)
(1,802,976)
1,630,289
(8,283)
(39,876)
(650,225)
Net Increase/(Decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
(901,047)
961,706
60,659
(0)
538,403
243,697
782,100
20,640
Page 10
Mobil Oil Nigeria plc
Notes to the Unaudited Interim Financial Statement
For the Period Ended 30 June 2014
1 The Company
The Company was incorporated as a private limited liability company in 1951. It became a public limited liability company in 1978 and its
share capital is listed on the Nigerian Stock Exchange.
The issued share capital is held 60% by ExxonMobil Oil Corporation, Fairfax, U.S.A., and 40% by other investors.
The Company was formed principally for the marketing of petroleum products. All the fuels which the Company sells are purchased from the Nigerian
National Petroleum Corporation and other third party suppliers. Lubricants are blended locally or purchased from associated companies.
2a Property plant and equipment movement analysis
Buildings
Plant
and
Equipment
Fixtures
and
Fittings
Motor
Vehicles
Incomplete
Construction
Total
N'000
N'000
N'000
N'000
N'000
N'000
3,892,688
66,916
54,437
(12,365)
4,001,676
5,707,713
16,913
98,830
(127,470)
5,695,986
300,379
1,620
4,720
(11,690)
295,029
284,954
(12,029)
272,925
677,157
118,057
(157,987)
637,227
11,581,159
203,506
(163,554)
11,621,111
(1,353,192)
(101,192)
10,232
(1,444,152)
(2,762,479)
(148,815)
118,478
(2,792,816)
(165,848)
(15,614)
8,946
(172,516)
(188,598)
(12,246)
9,890
(190,954)
2,557,524
2,903,170
122,513
81,971
Buildings
Plant
and
Equipment
Fixtures
and
Fittings
Motor
Vehicles
Incomplete
Construction
Total
N'000
N'000
N'000
N'000
N'000
N'000
3,787,818
74,253
106,495
(75,878)
3,892,688
5,684,694
123,318
264,249
(364,548)
5,707,713
336,610
6,841
1,320
(44,392)
300,379
338,623
29,754
(83,423)
284,954
453,823
626,812
(403,478)
677,157
11,288,422
831,224
29,754
(568,241)
11,581,159
(1,255,110)
(150,815)
52,733
(1,353,192)
(2,715,468)
(329,762)
282,751
(2,762,479)
(185,877)
(24,026)
44,055
(165,848)
(236,731)
(27,296)
(7,438)
82,867
(188,598)
2,539,496
2,945,234
134,531
96,356
June 2014
Land
Cost
At beginning of the period
Additions
Transfers from Incomplete Construction
Disposals
At end of the period
Depreciation
At beginning of the period
Charge for period
Disposals
At end of the period
Net book value
30 June 2014
718,268
718,268
-
718,268
December 2013
Land
Cost
At beginning of the period
Additions
Transfers from Lease
Transfers
Disposals
At end of the period
Depreciation
At beginning of the period
Charge for period
Transfers from Lease
Disposals
At end of the period
Net book value
31 December 2013
686,854
31,414
718,268
-
718,268
-
(4,470,117)
(277,867)
147,546
(4,600,438)
637,227
-
677,157
7,020,673
0
(4,393,186)
(531,899)
(7,438)
462,406
(4,470,117)
7,111,042
Page 11
Mobil Oil Nigeria plc
Notes to the Unaudited Interim Financial Statement
For the Period Ended 30 June 2014
N'000
2b Leasehold asset movement analysis
June 2014
Leasehold Land
50 years below
N'000
Motor Vehicles
Total
N'000
N'000
Cost
At beginning of the period
Additions
At end of the period
2,275
2,275
35,116
35,116
2,275
35,116
37,391
Depreciation
At beginning of the period
Charge for period
At end of the period
(1,670)
(1,670)
(2,974)
(2,974)
(1,670)
(2,974)
(4,644)
32,142
Motor Vehicles
32,747
0
Total
N'000
N'000
Net book value
30 June 2014
December 2013
605
Leasehold Land
50 years below
N'000
Cost
At beginning of the period
Transfers
At end of the period
2,275
2,275
29,754
(29,754)
-
32,029
(29,754)
2,275
Depreciation
At beginning of the period
Charge for period
Transfers
At end of the period
(1,670)
(1,670)
(1,101)
(6,337)
7,438
-
(2,771)
(6,337)
7,438
(1,670)
Net book value
31 December 2013
605
-
605
3 Intangible assets movement analysis
June 2014
Cost
At beginning of the period
Additions
At end of the period
Amortization
At beginning of the period
Amortization for the period charged to expense
At end of the period
Net Book Value
30 June 2014
December 2013
Software Costs
Franchise Costs
N'000
N'000
201,551
201,551
133,278
133,278
(96,298)
(6,718)
(103,016)
(103,825)
(5,588)
(109,413)
98,535
23,865
Software Costs
Franchise Costs
N'000
N'000
Permit
Total
N'000
15,045
15,045
(188)
(188)
14,857
Permit
334,829
15,045
349,874
(200,123)
(12,494)
(212,617)
137,257
137,257
Total
N'000
Cost
At beginning of the period
At end of the period
201,551
201,551
133,278
133,278
-
334,829
334,829
Amortization
At beginning of the period
Amortization for the period charged to expense
At end of the period
(82,861)
(13,437)
(96,298)
(87,805)
(16,020)
(103,825)
-
(170,666)
(29,457)
(200,123)
Net Book Value
31 December 2013
105,253
29,453
-
134,706
Intangible assets are made up of the cost of upgrading the Company's computer systems, permits and the
franchise cost paid, which gives the Company the right to use named brands in Mobil service stations. The
assets are amortised using straight line method with a useful life of fifteen and ten years for the software and
franchise cost respectively.
Page 12
Mobil Oil Nigeria plc
Notes to the Unaudited Interim Financial Statement
For the Period Ended 30 June 2014
=N='000
June 2014
4 Investment Property
Opening balance
Additions
Asset held for sale
Disposals
Depreciation
Closing balance
December 2013
20,695,199
3,172,543
(57,119)
(232,761)
23,577,862
13,164,228
8,155,120
(128,075)
(32,057)
(464,017)
20,695,199
The investment property previously disclosed as asset held for sale was disposed during the period. The gain on disposal has been
reported as part of other non-operating income in the Statement of Comprehensive Income.
1
Amounts recognized in statement of comprehensive income for the period
Rental income from investment property
914,938
1,930,945
Direct operating expenses from rental generating investment property
(230,590)
(476,080)
5 Prepayments (Non-Current)
Rent
Employee benefits
Loan
Prepayment and deferred charges
1,524,558
46,915
117,709
1,689,182
1,338,703
54,180
132,207
1,525,090
This represents prepaid rent for company owned service stations, prepaid employee benefits and prepaid loan.
6 Inventories
Raw materials
Finished products
Total
2,655,185
1,555,875
4,211,060
3,559,978
949,946
4,509,924
7 Trade debtors and other receivables
Trade debtors
Bridging claims
Other debtors
Current portion of prepayments
Foreign currency deposit for imports
Advances and employee receivables
Due from associated companies
Value Added Tax net receivable
2,400,859
506,927
630,794
45,973
87,548
327,215
1,861,988
187,359
2,044,650
375,948
465,355
159,372
38,060
359,256
1,758,854
109,716
6,048,663
5,311,211
Total
Aging analysis of trade debtor
Current
2,129,698
2,015,676
Overdue 1 - 30 Days
210,259
26,402
Overdue 31 - 60 days
60,902
Overdue 61 - 90 days
-
Overdue 91 - 180 days
-
297
Overdue 181 days
-
2,133
Total
8 Payables and other liabilities
Trade creditors
Other creditors
Accruals
Lease obligation
Due to associated companies
Total
The fair value of financial liabilities included above aproximates the carrying amount.
142
2,400,859
2,044,650
4,047,204
2,705,269
123,303
32,142
1,188,743
8,096,661
4,185,334
2,431,326
153,019
1,144,207
7,913,886
Page 13
Mobil Oil Nigeria plc
Notes to the Unaudited Interim Financial Statement
For the Period Ended 30 June 2014
=N='000
June 2014
December 2013
9 Deferred revenue
9a (a) Portion of deferred revenue due after one year (Non-current)
9b (b) Portion of deferred revenue due within a year (Current)
16,667,606
14,470,669
1,280,665
4,526,160
This represents advance rent for the company's real estate occupied by a related party company, Mobil Producing Nigeria Unlimited.
The fair value of financial liabilities included above approximates the carrying amount.
10 Long-term Borrowings
(a) Borrowings due after one year (Non-current)
167,760
1,086,259
The lender of the term loan is Zenith Bank plc.
(b) Borrowings due within one year (Current)
990,864
-
11 Deferred income tax
(a) Deferred tax movement
At beginning of the period
Current period charge/(provision)
At the end of the period
350,964
697,392
1,048,356
283,963
67,001
350,964
(b) Deferred tax
Deferred tax asset
Retirement benefits
Advance rent
Deferred tax on remmitable service charge
Others
Total deferred tax asset
454,628
2,755,340
76,305
31,868
3,318,141
400,988
2,231,765
14,541
2,647,294
(2,195,534)
(74,251)
(2,269,785)
(2,222,079)
(74,251)
(2,296,330)
Deferred tax liability
Accelerated depreciation
Capital gains tax rollover
Total deferred tax liability
Net deferred tax asset/(liability)
1,048,356
12 Pension plan liability
Movement Analysis:
At beginning of the period
(1,253,087)
Provision for the period
(215,013)
Payments made during the period
47,388
Additional Provision
At the end of the period
(1,420,712)
Additional Provision relates to Actuarial gains & losses recognized in Other Comprehensive Income (OCI)
350,964
(2,530,145)
(604,197)
13,824
1,867,431
(1,253,087)
Reconciliation of amount recoginised in the statement of financial position
Defined Benefit Obiligation
(5,786,876)
(5,339,333)
Funded Asset
4,366,164
4,086,246
Net Liability at the end of the period
(1,420,712)
(1,253,087)
The Company operates a defined benefit pension plan. As at the end of the reporting years, the outstanding obligations as valued by
the actuary, comprised of both unfunded reserves and funded assets. The requirements of Section 39 of the Pension Reforms Act
specifies that any deficit is funded within 90 days.The pension plan liability balance at the end of the year represents the shortfall of
the cumulative funding over the benefits liability accrued in income.
Page 14
Mobil Oil Nigeria plc
Notes to the Unaudited Interim Financial Statement
For the Period Ended 30 June 2014
=N='000
June 2014
13 Current tax analysis:
Movement in current income tax balance
At beginning of the period
Payments
Provision for the period
Withholding tax credit
At the end of the period
1,940,830
(725,229)
2,034,670
(258,269)
2,992,002
June 2014
Taxation charge for the period
Based on profit for the period :
Company income tax
December 2013
1,171,254
(1,306,567)
2,306,797
(230,654)
1,940,830
June 2013
1,643,275
1,162,284
Capital gains tax
271,474
83,801
Education tax
119,921
85,648
Current taxes
2,034,670
1,331,733
Deferred tax Profit & Loss
(697,392)
(539,102)
Deferred tax Other Comprehensive income
Total Company Deferred taxes
(697,392)
(539,102)
Taxation Charge Profit & Loss
1,337,278
792,631
Taxation Charge Other Comprehensive income
Total company Taxation charge
1,337,278
792,631
The tax charge comprises of company income tax at 30% of taxable income plus education tax at 2% of taxable income before capital
allowances.
14 Other income
Rent income
Gain/(Loss) on foreign exchange transactions
Back-court income
Others
Total
Included in the Rent Income is N915M relating to rents received from a related party.
15 Other non-operating income /(expense)
Profit/(Loss) on disposal of investment property assets
`
Profit/(Loss) on disposal of fixed assets
Total
1,056,302
(880)
76,023
111,145
1,242,590
838,678
3,061
78,109
124,957
1,044,805
2,788,961
-
4,914
2,793,875
(55)
(55)
June 2014
December 2013
16 Cash and cash equivalents
Short-term bank deposits
60,659
961,706
Cash intransit
At the end of the period
60,659
961,706
Of the 61M short-term bank deposits at the end of June 2014, 61M is domiciled in dollars and subject to exchange rate fluctuations.
17 Dividends
At beginning of the period
Dividend Proposed
Dividend Paid
At the end of the period
2,163,572
(2,163,572)
-
1,802,976
(1,802,976)
-
9,342,953
4,816,082
(2,163,572)
11,995,463
6,395,290
3,480,785
1,269,854
(1,802,976)
9,342,953
18 Reserves
At the beginning of the period
Profit for the period
Other comprehensive income/(loss) for the period
Dividend paid
At the end of the period
Page 15
Mobil Oil Nigeria plc.
Notes to the Unaudited Interim Financial Statement
For the Period Ended 30 June 2014
19 Segmental Information
As at 31 March 2014, the Company had two reportable business segments:
Property Business - This is the lease out of Company buildings to associated and other third party companies.
Management has determined operating segments based on the performance reports reported to the Chief Operating Decision Maker
(CODM). The Petroleum Products Marketing segment generates revenue from the sale of white products and company lubricants
while the Property business generates income from the rent paid on MONs investment properties leased out solely (100%) to a related
party.
Petroleum
Products
Marketing
Property Business
Total
42,167,608
(36,559,747)
(3,391,876)
327,652
4,914
146,518
(15,018)
2,680,051
(864,069)
1,815,982
(230,590)
914,938
2,788,961
3,473,309
(473,209)
3,000,100
42,167,608
(36,559,747)
(3,622,466)
1,242,590
2,793,875
146,518
(15,018)
6,153,360
(1,337,278)
4,816,082
38,741,038
(33,960,354)
(3,315,281)
331,853
(55)
13,517
(39,876)
1,770,842
(574,385)
1,196,457
(32,995)
712,952
679,957
(218,246)
461,711
38,741,038
(33,960,354)
(3,348,276)
1,044,805
(55)
13,517
(39,876)
2,450,799
(792,631)
1,658,168
23,434,127
(17,140,815)
6,293,312
42,717,444
(31,636,318)
1,048,356
60,659
12,190,141
3,172,543
3,426,209
20,551,180
(14,471,114)
6,080,066
39,415,852
(31,190,891)
350,964
961,706
9,537,631
8,155,120
8,986,344
A The segment results for the period ended 30 June 2014 are as follows:
Turnover
Cost of sales
Operating expense
Other income
Other non-operating income /(expense)
Finance income
Finance costs
Profit before taxation
Taxation
Profit for the period
The segment results for the period ended 30 June 2013 are as follows:
Turnover
Cost of sales
Operating expense
Other income
Other non-operating income /(expense)
Finance income
Finance costs
Profit before taxation
Taxation
Profit for the period
B Reconciliation of segment asset and liabilities to total assets and liabilities as at 30 June 2014
Segmented total assets (excl. cash and cash equivalents & deferred tax)
Segmented total liabilities
Deferred tax
Cash and cash equivalents
Segmented net asset
Capital expenditure
19,283,317
(14,495,503)
1,048,356
60,659
5,896,829
253,666
Reconciliation of segment asset and liabilities to total assets and liabilities as at 31 December 2013:
Segmented total assets (excl. cash and cash equivalents & deferred tax)
Segmented total liabilities
Deferred tax
Cash and cash equivalents
Segmented net asset
Capital expenditure
18,864,672
(16,719,777)
350,964
961,706
3,457,565
831,224
Segment assets consist primarily of Investment property, property, plant and equipment, leasehold properties, intangible assets, long
term investments, stock, long term receivables, debtors and other receivables. Unallocated assets comprise deferred taxation and cash
and short term deposits.
Segment liabilities comprise current taxation, unamortized rental income, payables and other liabilities and provision for liabilities &
charges. Unallocated liability is deferred taxation.
Capital expenditure comprises additions to property, plant and equipmentand intangible assets.
Page 16