Total Nigeria Annual Report 2011

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Total Nigeria Annual Report 2011

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Total Nigeria Annual Report 2011

  1. 1. Total S.A. (the parent company of Total Nigeria Plc), is a publicly-traded oil company with businesses in exploration and production, refining, marketing and trading. It is also a major player in the Chemicals sector. Total's oil and gas production of more than two million barrels of oil equivalent per day underpinned by proven reserves of more than eleven billion barrels of oil equivalent and a portfolio of geographically diversified assets that is among the fastest growing in the industry. As Europe's leading refiner and marketer, the Group directly operates 13 refineries, its retail network comprises 16,700 service stations mainly in Europe andAfrica which distribute motor fuels, lubricants and LPG under the internationally recognizedTOTALbrand. Total Nigeria Plc, a subsidiary of Total S.A. France, is a major player in the Petroleum marketing and distribution business in Nigeria. With over 500 retail outlets, 5 LPG bottling plants, 3 Lubricants blending plants and operating from 4 aviation depots as well as other facilities spread across the country, the company is regarded as the pacesetter in the downstream sector of the oil industry. CORPORATE PROFILE 012011 Annual Report & Accounts
  2. 2. F. Boussagol Managing Director 02 2011 Annual Report & Accounts We are in business to ensure total customer satisfaction by the creation of quality products and services delivered with a strong commitment to safety, respect for the environment and the sustainable development of resources. This objective drives all our corporate actions and the mutual acknowledgement of them by our partners forms the basis for our business relationships. To sustain this objective, our commitment is to constantly strive to improve our productivity so as to build and sustain a work culture that is firmly rooted in professionalism, respect for employees, internal efficiency and dedicated services. Mission Statement TOTAL NIGERIA PLC RC 1396
  3. 3. CONTENTS 04 05 06 07 08-09 10-11 12-13 14-22 23 24 25-26 28 29 30 31-44 45 46 54 55-56 Page 03 Board of Directors, Professional Advisers, Bankers, etc Head Office, Sales Territories and Sales Area Offices Results at a glance Notice of Meeting Chairman’s Statement Board of Directors Brief Profile of Directors Report of the Directors Report of the Auditors Report of audit committee Significant Accounting Policies Profit and Loss Account Balance Sheet Statement of Cash Flows Notes to the Financial Statements Statement of Value Added Five year Financial Summary Share capital History Major Distributors 2011 Annual Report & Accounts
  4. 4. TOTAL NIGERIA PLC COMPANY REGISTRATION NO. 1396 BOARD OF DIRECTORS, PROFESSIONAL ADVISERS, BANKERS ETC DIRECTORS: Mr. S. Mittelman Mr. F. Boussagol Mr. F. Boni Engr. J.W. Adeyinka Engr. K. Ukonne Chief F. Majekodunmi Ms. T. Ibru Mr. M. Nguer Engr. A. R. Sirajo Mr. D. Toulouse Chairman (French) Managing Director (French) Executive Director (Ivorian) (Senegalese) (French) SECRETARY: Olubunmi Popoola-Mordi REGISTRARS: City Securities Limited PrimroseTowers 17A Tinubu Street, Lagos. Telephone No. 2665944-53 REGISTERED OFFICE: Total House 4, Afribank Street, Victoria Island, Lagos AUDITORS: Akintola Williams Deloitte (Chartered Accountants) 235 Ikorodu Road, Ilupeju Lagos SOLICITORS: Messrs. H.O Davies & Co. Messrs. Bandele A. Aiku & Co. Messrs. Eghobamien & Co. Messrs. P.O. Balonwu & Co. Messrs. Solomon Asemota & Co. Messrs. Anachebe & Anachebe BANKERS: Zenith Bank Plc Ecobank Nigeria Plc United Bank for Africa Plc GTBank Plc First Bank of Nigeria Plc Access Bank Plc Wema Bank Plc Citibank Nigeria Limited Union Bank of Nigeria Plc Stanbic IBTC Bank Nigeria Plc Diamond Bank Plc Mainstreet Bank Nigeria Limited Standard Chartered Bank Nigeria Limited 04 2011 Annual Report & Accounts
  5. 5. HEAD OFFICE, SALES TERRITORIES AND SALES AREA OFFICES HEAD-OFFICE TOTAL HOUSE 4, Afribank Street, Victoria Island, Lagos. PMB: 2143, Lagos Tel: 2621780-9, 2600280-9 4617041 – 3, Fax: 2621810, 2621811 TOTAL CARD: 01 – 4617044 AIR TOTAL IKEJA Tel: 01 – 7746082 JUHI: 01 – 7744537 Total/Mobil – Ikeja Tel: 01 – 7746082 Ijora Causeway, Ijora- Lagos. Tel: 01 – 7749259 TERRITORIAL OFFICES WESTERN Total Nigeria Plc 6, Bonny Road, Apapa- Lagos. Tel: 01 – 7747021, 7743951, 7738728 EASTERN Total Nigeria Plc Plot 124, Trans-Amadi Industrial Layout, Port-Harcourt. Tel: 084- 236752, 232597, 232161, 231757, 461046 – 8 Fax: 239663 NORTHERN Total Nigeria Plc Total House, Plot 247, Herbert Macaulay St, Central Business Area, Wuse, Abuja. Tel: 09- 4610350, 4610351, 4610352, 4610353 Switch Board: 09-4610354 ABUJA Total Nigeria Plc Total House, Plot 247, Herbert Macaulay St., Central Business Area, Wuse, Abuja. Tel: 09- 4610350, 4610351, 4610352 Switch Board: 09-4610354 AREA SALES OFFICES KANO Total Nigeria Plc. 181, Airport Road, P.O.Box 21,Kano. Tel: 064-959359, 959285, 959395, 959360 BENIN Total Nigeria Plc 8/10 Akpakpava Street P.O.Box 20, Benin City. Tel: 052- 257861, 257856, 253502, 257866, 256390, 256098, Fax: 252893 LAGOS SOUTH Total Nigeria Plc 6, Bonny Rd Apapa, Lagos. Tel: 01 5871255/5877211, 7747021, 7743951, 7738728 Fax: 01 5873369 IBADAN Total Nigeria Plc Mokola Roundabout, P.O.Box 868, Ibadan. Tel: 02- 2414185, 2411595, 2414459, 2414367, 2411732, 2415009 Fax:02- 2413032 LAGOS NORTH Total Nigeria Plc 3, Steve Ajose Street, Former SCOA Yard, Behind Elida Hotel, Kirikiri. Tel: 01- 7944400, 7747675 KADUNA Total Nigeria Plc 2, Kachia Road, P.O.Box 1433, Kaduna. Tel:062- 885559, 885558 Switch Board: 062-23641-2 PORT HARCOURT Total Nigeria Plc Plot 124, Trans-Amadi Industrial Layout, Port Harcourt. Tel: 084- 236752, 232597, 232161, 231757, 461046- 8; Fax: 239663 052011 Annual Report & Accounts
  6. 6. Turnover 173,948,954 160,604,104 8 Profit before taxation and extraordinary item 5,858,613 5,783,464 1 Extraordinary item - 1,464,721 100 Profit after taxation and extraordinary item 3,813,202 5,436,638 (30) Share capital 169,761 169,761 - Shareholders' funds 10,026,215 8,929,188 12 Total dividend Interim dividend -paid 3,055,697 2,716,175 13 679,044 679,044 Final dividend -proposed 2,376,653 2,037,131 PER SHARE DATA: Based on 339,521,837 ordinary shares of 50 kobo each: Earnings per 50k share (Naira) - basic 11.23 16.01 Dividend per 50k share (Naira) 9.00 8.00 Dividend cover (times) 1.25 2.00 Stock Exchange quotation (Naira) 188.10 234.00 Number of staff 472 469 2011 N'000 2010 N'000 Change % Interim dividend of N2.00 per share was paid during the year. A final dividend of N7.00 is proposed for the year ended 31 December, 2011 as contained in Notes 7 and 20 of these financial statements. RESULTS AT A GLANCE 06 2011 Annual Report & Accounts For the year ended 31st December, 2011
  7. 7. NOTICE OF MEETING 072011 Annual Report & Accounts NOTICE IS HEREBY GIVEN that the next Annual General Meeting of the members of TOTAL NIGERIA PLC will be held at the Shell Hall, Muson Centre, Onikan Lagos on Wednesday 13th June, 2012 at 11.00 o' clock in the morning to transact the following business: 1. 2. 3. 4. 5. 6. 7. To receive the report of the Directors and the Financial Statements as at 31st December, 2011 and the report of the Auditors thereon. To declare a dividend To re-elect Directors To appoint Directors To fix the remuneration of the Directors To authorize the Directors to fix the remuneration of the Auditors To elect members of the Audit Committee. PROXY: A member of the Company entitled to attend and vote, is entitled to appoint a proxy to attend instead of him. Aproxy need not be a member of the Company. AProxy Form is enclosed, and if it is to be valid for the purpose of the meeting, it must be completed and duly stamped by the Commissioner of Stamp Duties and deposited at the office of the Registrars, City Securities (Registrars) Limited, Primrose Towers, 17A, Tinubu Street, Lagos not less than 48 hours before the time of the meeting. OLUBUNMI POPOOLA-MORDI Company Secretary th 28 March, 2012 BY ORDER OF THE BOARD TOTAL HOUSE Registered Office: 4, Afribank Street Victoria Island, Lagos, Nigeria. Note : DIVIDEND WARRANTS: If the payment of a dividend is approved, the warrants will be posted on Thursday 14th June, 2012 to all shareholders, whose names are registered in the Company's Register of Members as at 20th April, 2012. NOMINATIONS FOR THEAUDIT COMMITTEE: In accordance with Section 359 (5) of the Companies and Allied Matters Act, Laws of the Federation 2004 any member may nominate a shareholder as a member of the Audit Committee by giving in writing, notice of such nomination to the Company Secretary at least 21 days before theAnnual General Meeting.
  8. 8. 08 CHAIRMAN’S STATEMENT INTRODUCTION Distinguished Ladies and Gentlemen, on behalf of the Board of Directors and with great pleasure, I welcome you to the 34th Annual General Meeting of your company. During the course of this meeting, I shall present to you the Directors' Report and Financial Statements for the year ended 31st December, 2011. MATTERS RELATING TO THE BOARD Since our last Annual General Meeting, five members have left the Board of Directors of Total Nigeria Plc while four new members have been appointed. Mr. Osifo O.Akpata who served as the Executive Director, Human Resources and Corporate Services as well as the Company Secretary, resigned and Mrs. Olubunmi Popoola-Mordi was appointed Legal Affairs Manager and Company Secretary. Dr. Ibrahim Addullahi Gobir who was a Non–Executive Director resigned from the Board to pursue his personal interests. We thank him for his services to the company. Ms. Janet Ibru also a Non-Executive Director resigned and was replaced by Ms. Tejiro Ibru. We thank her for her past services. Mr. Olivier Hahn who has taken a new assignment in the Group resigned and Mr. Denis Toulouse, Head of Corporate and Project Finance Department for Supply & Marketing has been appointed in his place. Please join me to thank him for his contribution to the Board. Following a long successful and meritorious career within the Group, Mr. Alain Champeaux, the former Vice President Africa/Midle East of Total Supply and Marketing, retired from his position and Mr Momar Nguer has been appointed in his stead. We wish Mr. Champeaux success in all his future endeavours. To ensure that the Board continues to be effective in protecting the interests of the company's stakeholders, also appointed to the Board is Engr. Ahmed Rufa'i Sirajo, who brings with him a great wealth of experience in engineering practice. At this meeting, we shall be asking you to ratify these appointments. Please join me in wishing the new members a very successful tenure on the Board. BUSINESSAND ECONOMIC ENVIRONMENT The period under review was largely dominated by the 2011 general elections. Though the macro-economic performance was stable, the year 2011 presented great challenges for the downstream petroleum sector, following the same pattern as the previous year. Marketers’ PMS unit margin is still a major concern as it has remained static since 2007 despite the double digit inflation rate over the period, the devaluation of the Naira and high cost of investment in the petroleum downstream subsector. However, we are pleased to say that your company emerged from the challenges of 2011 with its management and staff poised to sustain the success story of previous years in the NewYear. th AT THE 34 ANNUAL GENERAL MEETING OF TOTAL NIGERIA PLC 2011 Annual Report & Accounts The Company's turnover increased from ? 160.6 Billion in 2010 to ? 173.95 Billion at the end of 2011 and the market share stood at 10.3%. “ “ Mr. Stanislas MITTELMAN Chairman
  9. 9. CHAIRMAN’S STATEMENT (Cont’d) COMPANYPERFORMANCE The Company's turnover increased from ?160.6 Billion in 2010 to N173.95 Billion at the end of 2011 and the market share stood at 10.3%. However, profit after tax but before extraordinary item dropped marginally from N3.97 Billion to N3.81 Billion. Considering the challenges stated above, we believe that this performance is and reflects the high level of commitment and dedication to duty of the Company's management and staff in the face of a very volatile and challenging business environment. DIVIDENDS The Company had earlier distributed the sum of N679.04 Million as interim dividends, representing 200 Kobo per share for the year ended 31st December, 2011. The Board recommends for your consideration and approval the sum of N2.377 Billion representing N7.00 per share to be distributed as final dividend for the year 2011 subject to the deduction of appropriate withholding taxes at the time of payment. In line with our corporate reputation for early disbursement of shareholders' dividends, we are delighted to confirm to you that if approved, your dividends will be paid on June 14, 2012. THE FUTURE With a stable and conducive business environment and our belief that security issues will be resolved soonest, your company is poised to face the challenges of the business environment as she has the human capital and experience to do so. In a market characterized by stiff challenges and uncertainties, we shall continue to provide high quality products and services. The Board and Management will continue to improve on internal efficiencies and productivity within the framework of a strong commitment to safety, environment and sustainable development. In 2011, we opened a Tanker Drivers' Training School & Truck Inspection Centre in Ibadan. We expect to train about 2,000 drivers every year. You will recall that last year we announced the kick-off of the migration to the International Financial Reporting Standard (IFRS). We are happy to inform you of the completion of the conversion process from the Nigerian GAAP under the Nigerian Accounting Standards Board to the IFRS.The Financial statements for the first quarter of 2012 was published under the IFRS. Concomitantly, this process will be supported by the implementation of a new Information Technology System SAP Harmonie. Also, in the course of the year, the Non-Executive Directors and Members of the Board Audit Committee received training on the IFRS which will assist them in their duties. In respect of corporate governance and ethics, we will continue to devote priority to the “Business Integrity Policy” to sustain and strengthen the prevention of fraud and corruption to increase the protection of your Company's assets and its employees. MANAGEMENTAND STAFF In line with the company's policy to have very highly qualitative staff strength at all times in the different facets of the company, various employees were trained and retrained to prepare them for the challenges ahead. To empower Nigerian women working for Total Nigeria Plc, the feminization programme has continued with female employees representing 28% of the workforce and 29% of management. Your company has continued to encourage proper work-life balance. APPRECIATION Please permit me to use this opportunity, on behalf of the Board of Directors, to express our appreciation to our shareholders, numerous customers, transporters, suppliers nationwide as well as the Management and Staff of Total Nigeria Plc for their immense contributions in achieving the result for the year. Finally, I thank you, for your esteemed presence and participation at this meeting. We wish you all safe journey to your various destinations and take with you the best wishes of the Company's Board of Directors to your families. Thank you. S. MITTELMAN Chairman Also, in the course of the year, the Non-Executive Directors and Members of the Board Audit Committee received training on the IFRS which will assist them in their duties. “ “ 09 2011 Annual Report & Accounts
  10. 10. Mr Stanislas Mittelman (French) Chairman BOARD OF DIRECTORS Engr. Kanu Ukonne Mr. Francois Boussagol (French) Managing Director Mr. Felix Boni (Ivorian) Engr. Wole Adeyinka 10 2011 Annual Report & Accounts
  11. 11. Engr Rufa’i SirajoMr. Denis Toulouse (French) Chief Felix Majekodunmi Ms. Tejiro Ibru Mr. Momar Nguer (Senegalese) 112011 Annual Report & Accounts BOARD OF DIRECTORS (Cont’d)
  12. 12. THE DIRECTORS’ PROFILE Mr. Mittelman, a dynamic and visionary manager, graduated with a Masters degree from EDHEC Lille Business School in France. He previously worked as a Salesman in Network stations in Paris and was transferred to Nigeria to head the project team that upgraded over 400 network stations in Nigeria. He served in Vietnam as TOTAL's representative in an LPG joint venture and was posted to work as General Manager TOTAL Zimbabwe and then as General Manager (Specialties), in the UK, a position he held before his appointment as Executive Vice President for West Africa and Chairman of all subsidiaries in WestAfrica. A graduate of the Bordeaux Management School, France. He joined the Total Group in 1987 as a Sales Representative in Limoges. He thereafter worked as Area Sales Manager for Air Total in Bordeaux and subsequently Paris till 1994. He became the Aviation Manager, Total Outré-Mer – Africa & Middle East the same year and worked in that capacity till 1998 when he was made Managing Director of Total Caribbean in the West Indies. He subsequently became the Managing Director of Total Cameroun and thereafter, Total DMS in Lille, North of France until his appointment in 2010 as the Managing Director ofTotal Nigeria Plc. Mr. Francois Boussagol Graduated with a degree in Finance from Abidjan Business School. He started his career in 1985 as an Auditor with Coopers & Lybrand in Paris and then in Abidjan covering various countries including Togo, Benin, Mali, Niger, Cameroun and Burkina Faso. From 1991 to 1993, he was the Accounting and Reporting Manager Cosmivoire Ivory Coast, before joining TOTAL in Abidjan in 1994 as Head of Accounting & Taxation. Between 1997 and 2001 he was appointed Country Manager in Benin Republic to kick-off Total Benin operations, moving to TOTAL Senegal as Finance Manager and then Paris in 2005, as the Coordinator, 'Flamingo Project Implementation' in the Strategy Department of Total OutréMer, for the acquisition of ExxonMobil subsidiaries in West Africa. In 2006 he was appointed Financial Controller in Refining & Marketing in Paris overseeing the Finance Division of TOTAL in Latin America, the Caribbean, Italy, Spain and Portugal. In 2008 he became TOTAL Nigeria Plc's Executive Director, Finance & Development. Mr. Felix Boni Mr. Stanislas Mittelman Holds a degree in Mechanical Engineering from the University of Lagos and joined TOTAL as Lube Engineer and worked in Koko as Plant Manager. He held the position of Supply and Distribution Manager and rose to become AGM Operations. Widely commended for his knowledge of industry matters, he headed the Major Oil Marketers Fuel Importation Committee and retired from TOTAL as Executive Director (Special Duties). He currently runs his own private business. Engr. Wole Adeyinka Engr. Ukonne holds a first degree in Chemical Engineering and an M.Sc. in Petrochemical Engineering from the University of Petroleum & Gas, Baku and the University of Petroleum and Petrochemical, L'Vov all in the former USSR. He started his working career with the Nigerian Petroleum Refining Company Port Harcourt as a Process Engineer and rose to the position of Senior Process Engineer. In 1981, he joined Total Nigeria Plc as a Lubricants Engineer and was later promoted to the position of Branch Manager both in the East and Lagos. Engr. Ukonne was again promoted to the position of Assistant General Manager Marketing and later as Head of Division Operations. A well-known industry expert, he was active in the sector as Chairman, Major Oil Marketers Imports Committee for several years. He is a Chartered Engineer (COREN), a member of the Nigerian Society of Engineers and currently runs his own private business. Engr. Kanu Ukonne: 12 2011 Annual Report & Accounts
  13. 13. He is a graduate of Ecole Superieure des Sciences Economiques et Commerciales (ESSEC) Business School, Paris. He began his career in 1982 with Hewlett Packard's Finance Department. He joined Total Africa in 1984 and became the General Manager, Sales and Marketing at Total Senegal from 1985 to 1991 and was thereafter, appointed Vice President, Retail Network and Consumers, Total Africa with his office based in Paris. Mr. Nguer was subsequently appointed Chief Executive Officer, Total Cameroun, then Chief Executive Officer Total Kenya and Executive Vice President, Total East Africa and Indian Ocean in 2000. Mr. Nguer became the Vice President, Aviation Fuel of Total in February 2007 till his appointment in December, 2011 as Senior Vice President, Africa/Middle East. Mr. Momar Nguer: Mr. Denis Toulouse is a graduate of Ecole des Hautes Etudes Commerciales (HEC) Business School, Paris. He joined Total in 1991, where he held different positions in the Finance Division and LPG business. He was appointed Chief Financial Officer (CFO) of Total Deutschland from 2000 to 2005 and CFO of Total Belgium from 2006 to 2008. He was in charge of the Merger and Acquisition Department for Refining and Marketing in 2009, a position he held before his appointment as Head of Corporate and Project Finance Department for Supply and Mr. Denis Toulouse: Ms. Tejiro Ibru: Ms. Tejiro Ibru obtained a first degree and a Masters in Engineering from Imperial College, London. She started her career with Deloitte &Touche Petroleum Services Group, London. In 2005, she joined Oceanic Bank International as Head of International Banking Group and later on as Head of Project Management Office. She is presently the Head of Corporate Services at Destiny Dredgers International Limited, Nigeria. She is a member of several bodies including the Institute of Petroleum and Society of Petroleum Engineers. She is also an Associate of the Royal School of Mines, Imperial College. Engr. Ahmed Rufa'i Sirajo obtained National Diploma in Electrical/Electronic Engineering from the Federal Polytechnic Mubi, a Higher N a t i o n a l D i p l o m a i n E l e c t r o n i c s /Telecommunications Engineering from Kaduna Polytechnic, Post Graduate Diploma in Electrical Engineering from Bayero University, Kano and an MBAdegree from the University of Calabar. He commenced his working career in 1986 as Engineering Superintendent (Electrical) at Geotechnical Services Limited, moved on to NOCACO as Quality Control Supervisor. He is currently the Managing Director/Chief Executive Officer of Nalado Nigeria Limited. He is registered with the Council for the Regulation of Engineering in Nigeria (COREN), Member of the Society of Engineers (MNSE), and also a Member of the Solar EnergyAssociation of Nigeria. Engr Ahmed R. Sirajo: THE DIRECTORS’ PROFILE (Cont’d) 132011 Annual Report & Accounts Chief Felix Majekodunmi obtained a first degree in Mechanical Engineering from the Thames Polytechnic (Greenwich University) London in 1974, and a Certified Diploma in accounts & finance London Cdip. AF in 1986. Chief Majekodunmi began his career in 1974 as Operations Engineer with the British Petroleum (BP) Nigeria Ltd. Thereafter, he held various managerial positions in BP. He joined Total Nigeria Plc in 1985 as the Supply and Distribution Manager and rose to the position of Chief Operations Officer. In 1998, he was appointed the MD and CEO Total Tanzania Ltd, position he held until 2001 when he was appointed the MD and CEO Total Ghana Ltd. He subsequently became the Managing Director and Chief Executive Officer for Mobil Ghana Ltd, Total Petroleum Ghana Ltd and Total Kenya Ltd respectively. He is a member of several professional bodies including the Institute of Mechanical Engineers of UK and the Nigerian Institute of Engineers. He currently runs his private business. Chief Felix Majekodunmi:
  14. 14. REPORT OF THE DIRECTORS The Directors submit their report together with the audited financial statements of the company for the year ended 31st December, 2011. 1. FINANCIAL STATEMENTS 160,604,104 5,783,464 1,464,721 5,436,638 2,716,175 RESULT2. 2011 N'000 2010 N'000 Turnover Profit before tax and extraordinary item Extraordinary item Profit after taxation and extraordinary item Dividend 173,948,954 5,858,613 - 3,813,202 3,055,697 The company was incorporated as a private limited liability company in 1956 and was converted to a public limited liability company in 1978. Its shares are currently quoted on the Nigerian Stock Exchange. Under a scheme of arrangement concluded and sanctioned by the Federal High Court on 11 September, 2001, the company merged with Elf Oil Nigeria Limited and changed its name to TotalFinaElf Nigeria Plc. To mark the completion of its corporate mergers,TotalFinaElf Group worldwide reverted to its former name TOTAL in 2003. Accordingly, the company changed its name from TotalFinaElf Nigeria Plc to Total Nigeria Plc in the same year. 3. PRINCIPAL ACTIVITIES The Company is engaged in the blending of lubricants and sales of petroleum products. 4. LEGAL FORM The names of the current directors are listed on page 4. Their thumbnail pictures and brief profiles are also indicated on pages, 10 to 13. In accordance with Articles 90 and 91 of the Company's Articles of Association, Mr. S. Mittelman, Engr. J. W. Adeyinka and Chief Felix Majekodunmi retire by rotation and being eligible, offer themselves for re-election. Since the last Annual General Meeting, Dr. I. Gobir, Mr. O.O. Akpata, Ms. J. Ibru, Mr. A. Champeaux, and Mr. O.Hahn resigned from the Board. Ms. T. Ibru, Mr. M. Nguer, Engr. A. R. Sirajo and Mr. D.Toulouse were appointed to the Board. In accordance with Article 94 of the company's Article of Association, Ms. T. Ibru, Mr. M. Nguer, Engr. A. R. Sirajo and Mr. D. Toulouse being Directors appointed since the last Annual General Meeting retire and being eligible, offer themselves for re-election. 5. DIRECTORS AND DIRECTORS' INTERESTS. .1 .2 .3 .4 14 2011 Annual Report & Accounts For the year ended 31st December, 2011
  15. 15. REPORT OF THE DIRECTORS (Cont’d) 46,974 17,873 43,581 .5 The interests of each Director in the ordinary shares of the company are as follows: 2011 Number 2010 Number 46,974 17,873 6. DIRECTORS' INTEREST IN CONTRACTS None of the Directors has notified the company for the purpose of Section 277 of the Companies and Allied Matters Act, CAP C20 of the Laws of the Federation 2004 of any declarable interest in any contracts involving the company. DIRECTORS' AND THEIR RESPONSIBILITIES The company's Directors are responsible for the preparation of financial statements which give a true and fair view of the state of affairs, and of the profit for that period, and which comply with the Companies andAllied MattersAct CAP C20 of the Laws of the Federation 2004. They are obliged to ensure that: 7. Proper accounting records are maintained; Internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets, prevent and detect fraud and other irregularities; Applicable accounting standards are followed; Suitable accounting policies are adopted and consistently applied; Judgments and estimates made are reasonable and prudent, and The going concern basis is used, unless it is inappropriate to presume that the company will continue in business. DIVIDEND8. During the year ended 31st December, 2011, the directors authorized the payment of N2.00 (2010 – N2.00) as interim dividend and hereby recommend to members the payment of a final dividend of N7.00 (2010– N6.00) per ordinary share of 50 kobo each. The dividend is subject to deduction of withholding tax at the rate applicable at the time of payment. FIXED ASSETS9. Movements in fixed assets during the year are shown in Note 8 on page 35. 152011 Annual Report & Accounts - For the year ended 31st December, 2011 Engr. J.W. Adeyinka Engr. K. Ukonne Chief F. Majekodunmi
  16. 16. 10. POST BALANCE SHEET EVENTS As at 28th March, 2012, the Directors were not aware of any post balance sheet events which have not been adequately provided for and which could have a material effect on the state of affairs of the company as at 31st December, 2011 as well as the profit for the year to that date. 11. COMPANY'S DISTRIBUTORS The names of the Company's significant distributors are shown on page 55 and 56 of these financial statements. 12. DONATIONS As the company did in the previous year, donations made to charitable organizations during the year 2011 amounted to N4,000,000.The beneficiaries are as follows: BENEFICIARIES 4,000,000 Amount (N) Little Saints Orphanage Home. Ilupeju The Heritage Home Orphanage, Anthony Village, Lagos. Bishop Court Orphanage, Ijebu Ode Daniel Akintonde School of Handicap, Abeokuta The Care People Foundation, Ibadan Motherless Babies Home, Ibadan Pro Labor Dei Motherless Babies Home, Asaba St. Ann Orphanage Home, Airport Junction. Warri, Delta State. Compassion Center Nkpogu Motherless Babies Home Uzuakoli Birniwa Rehabilitation Centre, Hadeja Motherless Babies Home, Maiduguri Adonai Orphanage Home, Kaduna Zawan Orphanage Home, Jos. Abuja Children’s Home, Karu. Holy Family Sisters of the Needy, Abuja Koko Health Centre, Koko Friends of Beth Torrey Home, Festac Town Lagos Missionaries of Charity, Alapere Lagos Orphanage of the Holy Spirit, Ekpoma 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 200,000 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 No contribution was made to any political party during the year under review. REPORT OF THE DIRECTORS (Cont’d) 16 2011 Annual Report & Accounts For the year ended 31st December, 2011
  17. 17. The company is not associated with the local suppliers. However, the company is an affiliate of Total Outre-Mer, Paris, France. 13. SUPPLIERS The Company's significant overseas and local suppliers are: Total Outre-Mer Nigerian National Petroleum Corporation Van Leer Containers Nigeria Plc Lanre Badmus Industries Limited Lotus Plastics Limited The company is a party to a subsisting agreement in respect of License, Marketing know-how andTraining.This agreement is between the company andTotal Outre-Mer. The terms of the agreement include: 14. INTER-COMPANY TRANSFERS AND TECHNICAL MANAGEMENT AGREEMENTS Provision of assistance and advice on the general organization and management of the company. Provision of suitable expatriate personnel for employment as required and at the request of the company. Provision of overseas training and retraining for Nigerian employees to enable them assume positions of higher responsibility within the company. Product research development assistance. Constructions, engineering and design assistance, provision of accounting and operations computer software, sample analysis and control. Technical assistance for inventory control, product storage and handling procedures; Aviation services assistance, provision of operational manual to ensure compliance with international standards. Payments of technical assistance and management fees. .1 .2 .3 .4 .5 .6 .7 The directors affirm that the company has not purchased its own shares during the year. The employees of the company are participants in the Total Group Employees' shareholding plan through share loans granted byTotal Nigeria Plc. 15. ACQUISITION OF OWN SHARES REPORT OF THE DIRECTORS (Cont’d) It is the policy of the company that there is no unfair discrimination in considering applications for employment including those from disabled persons or persons living with HIV/AIDS. All employees are given equal opportunities to develop their experience and knowledge and to qualify for promotion in furtherance of their careers. This commitment has engendered an active feminization policy aimed at developing and empowering a greater number of female managers. The Diversity and Staff Development Committee of the Board is charged with the responsibility of ensuring diversity in the employee population. The Company had two physically challenged persons in its employment as at the end of the year under review. 16. EMPLOYMENT AND EMPLOYEES .1 Equal opportunities policy 172011 Annual Report & Accounts For the year ended 31st December, 2011
  18. 18. The company has, in accordance with Group policy, implemented the Group's Health, Safety and Environmental Charter which places these issues above economic considerations. Emergency procedures are tested, drilled and updated systematically to ensure optimum performance. Compliance with these principles remains a crucial element in the performance evaluation of the company and its employees. Industrial and personal safety, continue to be at the core of the company's operations in Nigeria. In this context, our facilities at Apapa, Ibafon, JUHI, Abuja, Port Harcourt and Koko have been awarded significantly high recognition levels by local and international, independent safety rating system experts in various audits. .2 Health, Safety and Environment Policy. The Company provides free health care for its employees through the instrumentality of HMOs with national coverage. It is mandatory for every employee to undergo a yearly medical examination, which forms the basis for the analysis of trends and the provision of timely medical solutions. Subsidies are also in place towards transportation, housing etc. for the benefit of employees. The development of managerial, professional and technical expertise continues to attract the company's highest priority and investments in developing such skills are significantly increased on a year to year basis. .3 Welfare of Employees, Staff Development and Training. 17. CORPORATE GOVERNANCE: The Company is committed to the highest standards of corporate governance and ethical business practices. It has always adopted a responsible attitude towards Corporate Governance and issues of corporate social responsibility in Nigeria. It conducts its business with integrity and pays due regard to the laws of Nigeria and the legitimate interest of its stakeholders. These principles are stipulated in its “Business Integrity Guide” and “Code of Conduct”. Compliance: As a good corporate citizen, the Company complied with all regulations guiding its operations and activities throughout the year. There exists adequate guidance for all aspects of internal controls relating to operational and compliance controls as well as risk management. The Board and Management will continue to review the effectiveness and the adequacy of the company's internal control systems and update such as may be necessary. .1(a) Whistle Blowing Policy: In line with the Code of Corporate Governance and global best practices, the company has put in place a Whistle Blowing Policy which is a process whereby the misdemeanors or inappropriate actions of employees that are injurious to the interest of the company can be reported to the Board and Management. .1(b) The Board: As currently constituted, comprises the Chairman, the Managing Director, the Executive Director (Finance and Development) as well as seven other Non-Executive Directors. They regularly attend relevant seminars designed to expose them to new trends in Corporate Governance and organizational development. REPORT OF THE DIRECTORS (Cont’d) 18 2011 Annual Report & Accounts For the year ended 31st December, 2011
  19. 19. Attendance at Board Meetings during the year ended 31st December, 2011 is as shown below: 6th April 27th Octotber Mr. S. Mittelman Mr. F. Boussagol Mr. F. Boni Engr. K. Ukonne Engr. J.W. Adeyinka Chief F. Majekodunmi Mr. A. Champeaux Ms. J. Ibru/T. Ibru Mr. O. Hahn Mr. M. Nguer Barr. O.O. Akpata Alhaji I. Gobir * * * * * * Absent * Absent N/A * Absent * * * * * * Absent * * N/A * Resigned * * * * * Absent Absent * * N/A Resigned Resigned * * * * * * * * Absent * Resigned Resigned Directors 30th June 1st December .2 Board Committees: In line with its Articles and in conformity with the code of best practices in corporate governance, the Board has continued to establish committees comprising of Directors and General Managers. Apart from the Executive Committee, all others Committees are chaired by non-executive directors. In the opinion of the Board, the committees performed diligently during the period under review. Executive Committee: This Committee is responsible for establishing priorities, allocating resources, proposing overall corporate targets, establishing and monitoring divisional strategies and plans and has responsibility for supervising the affairs of the business on a day to day basis. It is chaired by the Managing Director/Chief Executive Officer of the company. As an internal working committee, it meets all year round and reports to the Board as may be necessary. Diversity and Staff Development Committee: This committee is charged with studying diversity patterns in the work-force and developing ideas and solutions towards ensuring balanced and productive human resource base for the company as well as recommending methods for building and developing employee potentials in line with company policy. The members are: Attendance at meetings during the year ended 31st December, 2011 Engr. J.W. Adeyinka Engr. K. Ukonne Chief F. Majekodunmi Mr. J.O. Ogbimi (General Manager Human Resource) in attendance Director Engr. J. W. Adeyinka Engr. K. Ukonne Chief F. Majekodunmi Barr. O. O. Akpata Mr. J.O. Ogbimi 25th March * * N/A * N/A 19th March * * * * N/A 13th December * * * Resigned *In attendance 192011 Annual Report & Accounts REPORT OF THE DIRECTORS (Cont’d) For the year ended 31st December, 2011
  20. 20. This committee's brief is essentially geared towards the application of the Nigerian Corporate Code of Best Practices to the structure and operations of the company with a view to ensuring compliance with internationally accepted guidelines, practices and norms of corporate conduct. In this respect, it also examines matters that bear potential risks for the company. Corporate Governance Committee: Engr. K. Ukonne Mr. F. Boni Engr. J.W. Adeyinka Ms. T. Ibru Chief F. Majekodunmi The members are: Attendance at meetings during the year ended 31st December, 2011 25th March * * * * N/A * * Absent * * * * * * * Director Engr. K. Ukonne Mr. F. Boni Ms. T. Ibru Engr. J.W. Adeyinka Chief F. Majekodunmi 19th July 13th December In accordance with the provisions of Section 359(3) of the Companies and Allied Matters Act, CAP. C20, of the Laws of the Federation, 2004, the Audit Committee comprises three Directors (two of whom are Non-Executive Directors) and three shareholders. It is chaired by a member representing the shareholders and conducts meetings during the year. The committee in the conduct of its affairs reviews the overall risk management and control systems, financial reporting arrangements and standards of business conduct. It provides independent monitoring of internal control and the internal audit department of the company. In the performance of their duties, members have direct access to the Internal Audit Department and the External Auditors. The members are: Audit Committee: Chief T.A. Adesiyan Alhaji K. Bello Mr. Chinwendu Achara Mr. F. Boni Engr. J.W. Adeyinka Engr. K. Ukonne Attendance at meetings during the year ended 31st December 2011 Members 19th April Chief Alhaji K. Bello Mr. C. Achara Engr. K. Ukonne Engr. J. W. Adeyinka Mr. F. Boni T.A. Adesiyan * * * * * * 14th July 17th November 13th December * * * * * * * * * * * * * * * * * * 20 2011 Annual Report & Accounts REPORT OF THE DIRECTORS (Cont’d) For the year ended 31st December, 2011
  21. 21. Respect For Law: Total Nigeria ensures that its existence and operations remain within the law.The company complies with the laws and regulations of Nigeria. .3 .4 Role In Society: Total Nigeria Plc, one of the major players in the downstream sector of the oil and gas industry and an integral part of the Nigerian society is an employer, a supplier, a customer, a partner and a taxpayer. The company maintains constant consultation with its stakeholders and has a policy which, not only drives but equally regulates its relationships with its operating environment. The company has a strong belief that sustenance of its business is linked to the wellbeing of its immediate environment hence its decision to invest in health, education and economic empowerment of its host communities, stakeholders and the Nigerian public. The company has successfully run and managed skill acquisition schemes for young people in Koko, Delta State as well as in Kaduna raising and empowering this vital section of the local communities around its facilities. The company pioneered, in partnership with the Nigerian Business Coalition Against AIDS (NIBUCAA), a free HIV/AIDS voluntary consultation and testing scheme for the ordinary members of the public using its network of stations throughout the country. In the campaign against HIV/AIDS in 2011, Total Nigeria Plc partnered with Total Exploration & Production with the aim of expanding the scope of the project to have a wider coverage and impact on the environment. Two sets of high-tech screening machine were donated to two hospitals in Kaduna and Akwa Ibom States. The company sponsors two (2) houses in the SOS villages in Nigeria and also initiated the whereby employees act as mentors through the monitoring of the moral, mental and general developmental stages in the lives of their chosen child while the child still lives in the village. To contribute to Road Safety and Zero Accident tolerance in Nigeria, the company built a truck driving school in Ibadan where truck drivers are trained. This is to improve the power transmission techniques and habits of the Nigerian truck drivers on our roads. In collaboration with the Federal Road Safety Corps, Total Nigeria Plc equally pioneered Road Safety campaigns amongst truck drivers in all NNPC depots nation wide. Mentor-a-Child-Programme .5 Relationships with Shareholders: The Board places a high priority on effective communication with shareholders. This is achieved through the medium of Annual Reports and as well as meetings with institutional and other shareholders. The Board also welcomes the participation of all shareholders at the Annual General Meeting during which shareholders are able to put questions to the Directors, Senior Managers and theAudit Committee. .6 Internal Financial Controls: Effective financial controls are an essential management tool.Accordingly, reasonable care has been taken to establish and maintain a framework of financial controls to ensure that the company's assets are safeguarded and that proper accounting records are maintained with a view to providing reliable financial information. In accordance with Section 359(6) of the Companies and Allied Matters Act, CAP C20 LFN 2004, the following Shareholders and Directors sat on theAudit Committee for the purpose of the Company's year 2011 audit. 18. AUDIT COMMITTEE 1. 2. 3. 4. 5. 6. Chief T. A. Adesiyan- Chairman Mr. C. Achara Alhaji K. O. Bello Engr. J. W. Adeyinka Engr. K. Ukonne Mr. F. Boni 212011 Annual Report & Accounts REPORT OF THE DIRECTORS (Cont’d) For the year ended 31st December, 2011
  22. 22. The issued and fully paid shares of 50 kobo each of the Company at 31 December, 2011, were beneficially held as follows: 19. MAJOR SHAREHOLDINGS. .1 % 2011 Number of shares Holding ‘000 2010 Number of shares Holding ‘000 45.24 16.48 8.12 30.16 153,600 55,960 27,562 102,400 45.24 16.48 4.96 33.32 153,600 55,960 16,839 113,123 Total Societe Anonyme Elf Aquitaine S.A. Enifor Limited Nigerian Citizens & Associations % 339,522 100.00 339,522 100.00 No shareholder, except as disclosed above, held more than 10% of the issued capital as at 31st December, 2011 and as at 28th March, 2012. MessrsAkintola Williams Deloitte have indicated their willingness to continue in office. Aresolution will be proposed authorizing the Directors to determine their remuneration. .2 .3 Range analysis of ordinary shareholdings Range % 1 501 1,001 5,001 10,001 20,001 50,001 100,001 500,001 5,000,001 50,000,001 500 1,000 5,000 10,000 20,000 50,000 100,000 500,000 5,000,000 50,000,000 339,521,837 47.06 13.94 30.17 4.61 2.24 1.01 0.41 0.45 0.09 0.01 0.01 0.68 0.79 4.89 2.42 2.37 2.37 2.18 7.43 8.46 6.69 61.72 26,096 100.00 339,521,837 100.00 No. of holders 12,281 3,638 7,873 1,204 584 264 108 117 23 2 2 Units 2,299,745 2,698,096 16,613,560 8,206,480 8,061,142 8,032,544 7,393,718 25,224,429 28,726,209 22,706,284 209,559,630 % GRAND TOTAL 20. AUDITORS BY ORDER OF THE BOARD Olubunmi Popoola-Mordi Company Secretary LAGOS, NIGERIA 28th March, 2012 22 2011 Annual Report & Accounts REPORT OF THE DIRECTORS (Cont’d) For the year ended 31st December, 2011
  23. 23. REPORT OF AUDIT COMMITTEE TO THE MEMBERS OF TOTAL NIGERIA PLC In compliance with section 359 (6) of the Companies and allied Matters act CAP C20 LFN 2004 we confirm that we have - (a) Reviewed the scope and planning of the audit requirements, (b) Reviewed the External Auditors’ Management Report for the year ended 31st December, 2011 as well as the management response thereon and ( c) Ascertained that the accounting and reporting policies of the Company for the year ended 31st December, 2011 are in accordance with legal requirements and agreed ethical practices. In our opinion, the scope and planning of the audit for the year ended 31st December, 2011 were adequate and Management’s responses to theAuditors’finding were satisfactory dated this 29th day of March, 2012. Chief T. Adesiyan Chairman Members of the Committee Mr. C. Achara Alhaji K. O. Bello Engr. J. W. Adeyinka Engr. K.Ukonne Mr. F. Boni * Mrs. Bunmi Popoola-Mordi served as the Secretary to the Committee 24 2011 Annual Report & Accounts
  24. 24. 1. Basis of accounting The financial statements are prepared under the historical cost convention. 2. Turnover Turnover comprises the net value of sales invoiced to third parties. 3. Fixed assets Fixed assets are stated at cost less accumulated depreciation. 4. Depreciation Fixed assets are depreciated at the following rates which are expected to write off their cost on a straight line basis over the anticipated useful lives: The following is a summary of the significant accounting policies adopted by the Company in the preparation of these financial statements. Annual rate/basis Freehold land Not depreciated Buildings and leasehold property: Industrial buildings 5% Non – Industrial buildings 4% Leasehold improvements Duration of the lease Plant, equipment and vehicles: Plant and machinery 20% Generators 33.3% Tanks 10% Motor cars and vans 25% Lorries and forklift trucks 25% Furniture and fittings 25% House and office equipment 25% Computer equipment 25% Capital work-in-progress Not depreciated 5. Stocks Stocks are valued at the lower of cost and net realisable value. Cost comprises suppliers' invoice prices and, where applicable, freight, labour, and other overheads incurred to bring the stock to their location and condition. Cost is determined by the use of the weighted average method. 6. Investments Investments are stated at cost less any diminution in value. 7. Debtors Debtors are stated after deduction of specific provision for debts considered to be doubtful of collection. 8. Foreign currencies Transactions in foreign currencies are recorded in Naira at the rate of exchange ruling on the dates of the transactions. Assets and liabilities denominated in foreign currencies are converted to Naira at the rates of exchange ruling at the balance sheet date. All differences arising on the conversion of balances in foreign currencies to Naira are taken to the profit and loss account. 9. Repairs and renewals Repairs and renewals are charged against revenue during the year in which they are incurred. SIGNIFICANT ACCOUNTING POLICIES 252011 Annual Report & Accounts For the year ended 31st December, 2011
  25. 25. 10. Deferred taxation Deferred tax is provided using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Currently enacted tax rates are used to determine deferred income tax. The principal temporary differences arise from rates used for depreciation of fixed assets and the rates of capital allowances granted for tax purposes. 11. Taxation Income tax and education tax are provided for by applying the current statutory rate on the taxable profit and adjusted profit respectively. 12. Retirement benefits The Company operates a Pension Scheme in accordance with the provisions of the Pension Reform Act 2004. The scheme applies to all confirmed staff of the company and is funded through monthly contribution of 11.5% and 7.5% of the consolidated basic salary (which comprises of basic salary, transport and housing allowance) by both the Company and the employee respectively. In addition, the Company currently operates a gratuity scheme for members of staff employed not later than 31st December, 2000. Effective February 2010, the company changed from Defined Benefits Scheme which entitled a retiree to a benefit equal to one month of the total annual emolument for each completed year of service, to Defined Contribution Scheme. Under the Defined Contribution Scheme, the gratuity is computed based on 9.5% of Total Annual Emolument and paid monthly to the Fund Managers as chosen by employees. 13. Bridging claims Bridging claims are costs of transporting white products (PMS, AGO, DPK) except ATK from specific depots to approved zones which are claimable from the Federal Government. On the other hand, Bridging Contributions are mandatory contributions per litre of all white products (except ATK) lifted to assist the Federal Government defray the Bridging Claims. Bridging Claims and Bridging Contributions are handled by the Petroleum Equalization Fund Board. Bridging Claims and Bridging Contributions are reconciled with the Board in determining what is due to or from the Fund. 14. Provisions Provisions are recognized when the Company has a present obligation whether legal or constructive, as a result of a past event for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligations and a reliable estimate can be made of the amount of the obligation. 15. Segment reporting The Company's business segments have been presented by products that are subject to similar risks and returns. 16. Finance lease Assets under finance leases are capitalised and depreciated over the estimated useful life in line with the Company's policy for assets of the same class. Finance charges are allocated over lease term. 17. Long term Prepayments Long term Prepayments are recognised when prepaid charges on leases and rents are due after more than one year of balance sheet date. 26 2011 Annual Report & Accounts SIGNIFICANT ACCOUNTING POLICIES (Cont’d) For the year ended 31st December, 2011
  26. 26. FINANCIALS 272011 Annual Report & Accounts
  27. 27. 2011 2010 Note N'000 N'000 Turnover 2 173,948,954 160,604,104 Cost of sales (151,529,623) (139,576,922) Gross profit 22,419,331 21,027,182 Selling and distribution expenses (4,211,902) (4,520,745) Administrative expenses (12,160,432) (11,015,640) Other operating income 3 623,881 643,403 Interest receivable and similar income 4 62,733 113,632 Interest payable and similar charges (874,998) (464,368) Profit before taxation 5 5,858,613 5,783,464 Taxation 6 (2,045,411) (1,811,547) Profit after taxation and before extraordinary item 3,813,202 3,971,917 Extraordinary Item - 1,464,721 Profit after taxation and extraordinary item 20 3,813,202 5,436,638 Per share data: Earnings per 50k share (Naira) - basic 24 11.23 16.01 The accounting policies on financial statements. pages 25 to 26 and the notes on pages 31 to 44 form part of these PROFIT AND LOSS ACCOUNT 28 2011 Annual Report & Accounts For the year ended 31st December, 2011
  28. 28. Note N'000 N'000 FIXED ASSETS 8 16,352,992 14,737,730 FINANCE LEASED ASSETS 9 260,903 255,640 INVESTMENTS 10 - 31 LONG TERM PREPAYMENTS 11 1,677,884 1,791,345 18,291,779 16,784,746 CURRENT ASSETS Inventory 12 13,713,658 12,756,762 Trade debtors 13 7,343,361 7,099,756 Prepayments and other debtors 14 6,961,301 11,669,485 Due from related companies 27 2,759,412 566,871 Foreign currencies purchased for imports 22 2,853,501 3,596,577 Bank balances, deposits and cash 22 6,796,799 2,127,163 40,428,032 37,816,614 CREDITORS: Amounts falling due within one year Trade creditors 15 21,610,282 22,561,876 Bank overdrafts 22 3,185,335 5,129,687 Lease and short term loans 16 99,882 102,977 Due to related companies 27 8,965,350 5,849,834 Other creditors and accruals 17 9,897,830 7,785,177 Taxation 6.1 2,296,968 1,874,785 46,055,647 43,304,336 NET CURRENT LIABILITIES (5,627,615) (5,487,722) TOTAL ASSETS LESS CURRENT LIABILITIES 12,664,164 11,297,024 Deferred taxation 6.2 2,449,222 2,204,842 LONG TERM LIABILITIES Provision for retirement benefits 17.3 - - Lease 28 188,727 162,994 10,026,215 8,929,188 CAPITAL AND RESERVES Share capital 18 169,761 169,761 Capital reserve 19 263,436 263,436 General reserve 20 9,593,018 8,495,991 10,026,215 8,929,188 ) F. Boni - ED (Finance and Development) ) )Directors ) The financial statements on pages 25 to 46 were approved by the Board of Directors of the company on 28 March, 2012 and signed on its behalf by: BALANCE SHEET 2011 2010 F. Boussagol - Managing Director ) The financial statements. accounting policies on pages 25 to 26 and the notes on pages 31 to 44 form part of these 292011 Annual Report & Accounts As at 31st December, 2011
  29. 29. 2011 2010 Note N'000 N'000 Cash flows from operating activities Cash receipts from customers 174,329,229 161,028,981 Cash paid to suppliers and employees (159,583,675) (152,489,833) Cash generated from operations 14,745,554 8,539,148 Net value added taxes paid (599,766) (546,531) Income taxes paid 6 (1,378,847) (1,879,998) Net cash provided by operating activities 21 12,766,941 6,112,619 Cash flows from investing activities Purchase of fixed assets 8 (3,461,996) (3,873,580) Finance leased assets 9 (136,602) (87,893) Interest received and similar income 4 62,733 113,632 Long term prepayments 113,461 108,152 Proceeds from sale of fixed assets 94,910 1,844,148 Net cash provided by investing activities (3,327,494) (1,895,541) Cash flows from financing activities Interest payable and similar charges (874,998) (464,368) Additional finance lease and short term advances 28 202,512 100,578 Repayment of short term loans and advances 28 (179,874) (116,199) Dividends paid 7 (2,716,175) (3,490,285) Net cash provided by financing activities (3,568,535) (3,970,274) Net (decrease)/increase in cash and cash equivalents 5,870,912 246,804 Cash and cash equivalents at 1 January 594,053 347,249 Cash and cash equivalents at 31 December 22 6,464,965 594,053 STATEMENT OF CASH FLOWS 30 2011 Annual Report & Accounts For the year ended 31st December, 2011
  30. 30. 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 N148,541,000 made up of 297,082,000 ordinary shares of 50k each. With the capitalisation of the bonus issue of 42,440,228 ordinary shares of 50k each in March 2004, the authorised share capital became N169,760,918 made up of 339,521,837 ordinary shares of 50k each. 61.72% of the company's ordinary shares are held by Total Societe Anonyme (worldwide) with head office in Paris while the remaining 38.28% are held by the Nigerian public. To mark the completion of its corporate mergers, Total Group worldwide reverted to its former name Total in 2003 and adopted a new logo with a unifying design to express its corporate ambition. Accordingly, the company changed its name from TotalFinaElf Nigeria Plc toTotal Nigeria Plc in the same year. 1. 1.1 No shareholder, except as disclosed above, held more than 10% of the issued capital as at 31st December, 2011 and as at 28th March, 2012. 2010 Number of Holdings shares Holdings % '000 % Total Societe Anonyme 45.24 153,600 45.24 Elf Aquitaine S. A. 16.48 55,960 16.48 Enifor Limited 4.96 27,562 8.12 Nigerian Citizens & Associations 33.32 102,400 30.16 100.00 339,522 100.00 1.2 Principal Activities: The Company is engaged in the blending of lubricants and sales of petroleum products. 2. TURNOVER Turnover comprises the net value of sales invoiced to third parties. 2.1 PRODUCTS Petroleum products Lubricants and others Gross Turnover Less: Commissions and discounts Net Turnover 2010 N'000 143,298,653 20,801,126 164,099,779 3,495,675 160,604,104 THE COMPANY Legal form: 2011 Number of shares '000 153,600 55,960 16,839 113,123 339,522 2011 N'000 153,927,671 23,873,715 177,801,386 3,852,432 173,948,954 NOTES TO THE FINANCIAL STATEMENTS 312011 Annual Report & Accounts
  31. 31. 2.2 SEGMENT REPORTING The Company has three main business lines: White Products (Retail and General Trade), Lubricants, Special Products and Aviation fuels. White Products) (Retail & GT) N'000 Lubricants & Aviation Special Products Fuels Total N'000 N'000 N'000 Turnover 73.9% 128,584,275 13.2% 22,944,897 12.9% 22,419,783 100.0% 173,948,954 Cost of Sales 74.8% (113,371,744) 11.1% (16,819,575) 14.1% (21,338,304) 100.0% (151,529,623) Gross Profit 67.9% 15,212,531 27.3% 6,125,322 4.8% 1,081,479 100.0% 22,419,331 Turnover Cost of Sales Gross Profit 78.7% 80.5% 66.1% 12.1% 9.7% 27.8% 9.3% 9.7% 6.1% 100.0% 100.0% 100.0% 2011 White Products) (Retail & GT) N'000 126,329,235 (112,427,063) 13,902,172 Lubricants & Special Products N'000 19,393,130 (13,546,510) 5,846,620 2010 Aviation Fuels N'000 14,881,739 (13,603,349) 1,278,390 Total N'000 160,604,104 (139,576,922) 21,027,182 2010 N’0003. OTHER OPERATING INCOME Network income 205,025 178,796 Other income ( Note 3.1 ) 264,036 344,730 Gain on sale of fixed assets - 40,000 Exchange gain 154,820 79,877 623,881 643,403 There is no disclosure of assets per business segment because the assets of the company are not directly related to a particular business segment. 2.3 There is also no distinguishable component of the entity that is engaged in providing products or services within a particular environment and that is subject to risk and returns that are different from those of components operating in other economic environments. 2.4 2011 N’000 This amount represents income from Bonjour shop, rent, vendor management fees and other miscellaneous income. 3.1 NOTES TO THE FINANCIAL STATEMENTS (Cont’d) 32 2011 Annual Report & Accounts
  32. 32. 4. INTEREST RECEIVABLE AND SIMILAR INCOME Interest on domiciliary account Interest on call and other deposits Interest on staff loan Sundry interest income 5. PROFIT BEFORE TAXATION Profit before taxation is stated after charging/(crediting) the following: Depreciation Directors' emoluments: Fees Others Auditors' remuneration Interest payable and similar charges Technical assistance and management fees Loss/(profit)on sale of fixed assets Exchange gain 6. TAXATION .1 Income tax based on the profit for the year Education tax Capital gains tax Deferred taxation (Note 6.2) Per profit and loss account Balance brought forward Payments during the year Deferred taxation Per balance sheet 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 Education Tax charge is based on the EducationTaxAct CAPE4 LFN 2004. 2010 N’000 2011 N’000 859 420 46,378 70,078 15,496 20,869 - 22,265 62,733 113,632 1,877,527 1,558,720 800 600 103,963 118,912 22,990 22,990 874,998 464,368 786,446 831,686 5,636 (40,000) (154,820) (79,877) 1,636,641 1,468,293 162,657 130,710 1,733 2,905 1,801,031 1,601,908 244,380 209,639 2,045,411 1,811,547 1,874,785 2,152,875 (1,378,847) (1,879,998) (244,380) (209,639) 2,296,968 1,874,785 332011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
  33. 33. 2011 2010 N’000 N’000 2,204,842 1,995,203 244,380 209,639 2,449,222 2,204,842 2011 2010 N’000 N’000 7. DIVIDEND PAYABLE .1 Summary At 1 January 699,512 495,203 Final dividend 2,037,131 2,811,241 Interim dividend 679,044 679,044 3,415,687 3,985,488 Payments - Unclaimed dividend paid (352,119) (146,662) City Securities Limited (2,716,175) (3,490,285) Unclaimed dividend for the year 520,802 350,971 At 31 December (Note 17) 868,195 699,512 Deferred tax as of depreciation adopted for accounting purposes and the rates of capital allowances granted for tax purposes. at 31st December 2011 was as a result of differences between the rates .2 Deferred taxation At 1 January Charge to profit and loss account (Note 6.1) At 31 December In accordance with SAS 23, proposed dividends no longer qualify to be recognized as provisions in the financial statements as they do not constitute present obligations of the Company since they are usually proposed and declared after the balance sheet date. Therefore, the proposed dividend for 2011 is shown in Note 20 to the financial statements. Unclaimed dividends are the amounts payable to Nigerian shareholders in respect of dividends previously declared by the company which have been outstanding for more than 15 months after the initial payment. .2 By the provisions of the Company's Articles of Association, dividends which remain unclaimed for 12 years stand forfeited. The dividends below accordingly revert to the company:- .3 No. of Shareholders 2,767 3,115 10,381,702- 9,129,495 Dividend No.26 Dividend No.27 2011 N 10,381,7029,129,495 2010 N 34 2011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
  34. 34. Plant, Capital Land and equipment Computer work-in- Total 8. FIXED ASSETS buildings vehicles equipment progress N'000 N'000 N'000 N'000 N'000 .1 Cost At 1 January 2011 8,742,154 10,083,275 1,807,910 2,367,925 23,001,264 Transfers 764,576 839,194 382,985 (1,986,755) - Additions 341,787 880,783 293,930 1,945,496 3,461,996 Disposals (64,517) (251,222) (35,447) (351,186) At 31 December 2011 9,784,000 11,552,030 2,449,378 2,326,666 26,112,074 Depreciation At 1 January 2011 1,559,575 5,494,631 1,209,328 - 8,263,534 Charge for the year 311,917 1,190,907 264,942 - 1,767,766 Disposals (173) (238,166) (33,879) - (272,218) At 31 December 2011 1,871,319 6,447,372 1,440,391 - 9,759,082 Net book value At 31 December 2011 7,912,681 5,104,658 1,008,987 2,326,666 16,352,992 At 31 December 2010 7,182,579 4,588,644 598,582 2,367,925 14,737,730 2011 2010 .2 Cost of land and buildings include: N'000 N'000 Freehold land 2,969,401 2,719,332 Buildings 6,814,599 6,022,822 9,784,000 8,742,154 .3 .4 .5 .6 Some of the buildings were freehold land. constructed on land held under rights of occupancy and some on The depreciation charge for the period N cost is included in administrative expenses. There is no fixed asset for which there is no record of price or production cost. There was no outstanding Capital commitment as at December 2011 (Dec 2010 - N61,636,804). Capital work in progress relates to projects under construction. As each project is completed it is transferred to appropriate class of fixed assets. 1,767,766,000 which is attributable to historical 352011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
  35. 35. 2010 N'000 9. FINANCE LEASED ASSETS Motor vehicles Cost At 1 January 393,788 Additions 87,893 Disposal (32,930) At 31 December 448,751 Depreciation At 1 January 111,273 Charge for the year 99,490 Disposal (17,652) At 31 December 193,111 Net book value 255,640 2011 2010 10. INVESTMENTS N'000 N'000 10.1 At cost: Shares in Bank of Industry Limited - 10 Oando Plc - 20 African Petroleum Plc - 1 - 31 10.2 At 1 January 31 31 Investment written off during the year (31) - At 31 December - 31 11. LONG TERM PREPAYMENTS Long term prepaid network 1,543,128 1,633,108 Prepaid depot expenses 82,000 147,600 Prepaid rent- residences and offices 52,756 10,637 1,677,884 1,791,345 During the period, the Company acquired motor vehicles amounting to N136,601,500 under finance lease contracts. These had been capitalised and depreciated in accordance with the requirements of the Statement of Accounting Standards No.11. Depreciation charges for the year are included in administrative expenses. 36 2011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d) 2011 N'000 448,751 136,602 (66,037) 519,316 193,111 109,761 (44,459) 258,413 260,903
  36. 36. 2011 2010 N'000 N'000 12. INVENTORY Raw materials 1,079,567 990,618 Finished goods 10,721,634 10,853,107 Goods in transit 1,122,003 189,859 Consumable equipment and spares 1,255,767 903,640 14,178,971 12,937,224 Provision for obsolete spares and slow moving stock (465,313) (180,462) 13,713,658 12,756,762 13. TRADE DEBTORS Customers’ accounts 8,003,516 7,641,369 Provision for doubtful debts (660,155) (541,613) 7,343,361 7,099,756 14. PREPAYMENTS AND OTHER DEBTORS Prepaid rent- Depot, Network and Employees 1,665,731 1,567,214 Other receivables 2,150,034 2,072,773 Bridging Claims less provision (Note 14.1) 2,277,341 5,012,043 Receivable from Petroleum Support Fund - 2,317,943 City Securities Limited (Unclaimed dividends) 868,195 699,512 6,961,301 11,669,485 14.1 Bridging Claims 2,658,675 5,225,601 Provision (381,334) (213,558) 2,277,341 5,012,043 15. TRADE CREDITORS Trade creditors 10,487,728 9,840,210 Bridging contribution 4,740,559 5,811,799 Other suppliers 4,033,958 3,416,285 Provisions 2,348,037 3,493,582 21,610,282 22,561,876 The Directors consider the book values. that the replacement cost of stocks is not materially different from 372011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
  37. 37. 2011 2010 N'000 N'000 16. LEASE AND SHORT TERM LOANS Advance on finance lease - (Note 28) 99,882 102,977 17. OTHER CREDITORS AND ACCRUALS Sundry creditors 4,409,079 2,648,189 Security deposits 3,422,792 3,406,156 Accrued liabilities 1,140,894 963,214 Staff pension - Note 17.1 13,049 5,276 Staff gratuity - Note 17.2 7,122 38,647 Suppliers' retention 36,699 24,183 Dividend payable - (Note 7) 868,195 699,512 9,897,830 7,785,177 17.1 Staff Pension At 1 January 5,276 6,350 Provision for the year 329,302 181,515 Remittance during the year (321,529) (182,589) At 31 December 13,049 5,276 17.2 Staff gratuity contribution At 1 January 38,647 - Contribution during the year 125,705 106,728 Outstanding balance from defined benefit scheme (17.3) - 38,647 Remittance during the year (157,230) (106,728) At 31 December 7,122 38,647 17.3 18. SHARE CAPITAL Authorised, issued and fully paid 339,521,837 Ordinary shares of 50k each History of share capital 224,000,000 ordinary shares of 50k each (1997) 73,081,608 ordinary shares of 50k each issued in exchange of Elf Oil Nigeria Limited (2001) 42,440,000 ordinary shares of 50k each issued as bonus shares transferred from Bonus issue reserve (2004). The company changed its staff gratuity plan from defined benefit to defined contribution during the year ended 31 December 2010 and made full payment to the fund managers of individual employees. The company continues to make full payments to the fund managers. 2011 2010 169,761 169,761 112,000 112,000 36,541 36,541 21,220 21,220 169,761 169,761 38 2011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d) N'000 N'000
  38. 38. 19. CAPITAL RESERVE 2011 2010 N'000 N'000 20. GENERAL RESERVE At 1 January 8,495,991 6,549,638 Final dividend-prior year (2,037,131) (2,811,241) Interim dividend - Current year (Note 7) (679,044) (679,044) Profit for the year 3,813,202 5,436,638 At 31 December 9,593,018 8,495,991 On 30 June 2011, a final dividend of 600 kobo per share was approved at the Annual General Meeting and was paid to shareholders (total value of N2.037 billion) for the year ended 31 December 2010. In respect of the current year, the Directors paid an interim dividend of 200 kobo per share (total value of N679.04 million) and proposed that a final dividend of 700 kobo per ordinary share should be paid to shareholders. The dividend is subject to approval by shareholders at the Annual General Meeting and deduction of witholding tax at the appropriate rate. Consequently, it has not been included as a liability in these financial statements. The proposed dividend is payable to all shareholders on the Register of Members on 20 April 2012 and will be paid on 14 June 2012. The estimated dividend to be paid is N2.377 billion. This represents net capital reserve arising on exchange of shares in respect of merger with Elf Oil Nigeria Limited. 21. RECONCILIATION OF NET INCOME TO CASH PROVIDED BY OPERATING ACTIVITIES 2011 2010 N'000 N'000 Profit after tax 3,813,202 5,436,638 Adjustment to reconcile net profit to net cash provided: Depreciation of fixed assets 1,877,527 1,558,720 (Profit)/loss on asset disposal 5,636 (40,000) Investment written off 31 Extraordinary item - Profit on sale of Abuja Office - (1,464,721) Interest payable and similar charges 874,998 464,368 Interest receivable and similar income (62,733) (113,632) Changes in assets and liabilities: Increase in stock (956,896) (1,466,797) Increase in trade debtors (243,605) (178,526) Decrease in prepayment and other debtors 4,708,184 289,815 Increase in due from related companies (2,192,541) (159,216) (Decrease)/increase in creditors (951,595) 1,538,684 Increase in due to related companies 3,115,516 867,699 2,112,653 826,829 Increase/(decrease) in tax payable 422,184 (278,090) Increase in deferred tax provision 244,380 209,639 Decrease in provision for retirement benefits - (1,378,791) 8,953,738 675,981 Net cash provided by operating activities 12,766,941 6,112,619 Increase in other creditors and accruals 392011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d) -
  39. 39. 2011 2010 N'000 N'000 22. CASH AND CASH EQUIVALENTS Bank and cash balances 6,796,799 2,127,163 Foreign currencies purchased for imports 2,853,501 3,596,577 Bank overdrafts (3,185,335) (5,129,687) 6,464,965 594,053 23. INFORMATION REGARDING DIRECTORS AND EMPLOYEES .1 Emoluments of the Directors of the Company were: As fees 800 600 Other emoluments 103,963 118,912 104,763 119,512 .2 Emoluments of the highest paid Director were N45,531,151 (2010 - N61,148,914) .3 N N Number Number Less than - 1,000,000 4 3 1,000,000 - 2,000,000 - - 2,000,001 - 3,000,000 - - 3,000,001 - 4,000,000 - - 4,000,001 - above 2 3 6 6 .4 Number of Directors who had no emoluments 4 5 The table below shows the number of Directors whose emoluments during the year excluding pension contributions were within the ranges stated: 40 2011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d) 2011 2010 N'000 N'000 2011 2010
  40. 40. .5 2011 2010 N N Number Number 1,500,001 - 2,000,000 - 1 2,000,001 - 2,500,000 3 17 2,500,001 - 3,000,000 23 17 3,000,001 - 3,500,000 8 13 3,500,001 - 4,000,000 10 91 4,000,001 - 4,500,000 14 62 4,500,001 - 5,000,000 106 116 5,000,001 - 5,500,000 97 38 5,500,001 - 6,000,000 70 20 6,000,001 - 6,500,000 28 19 6,500,001 and above 113 75 472 469 .6 2011 2010 Number Number Managerial staff 98 90 Senior staff 334 335 Junior staff 40 44 472 469 The related salaries and wages amounted to N4,717,975,727 (2010 - N3,929,869,528). .7 Staff costs relating to the above were: Salaries and wages Pension and social benefits Staff medical expenses 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: 2011 2010 N'000 N'000 4,187,432 3,419,024 335,479 345,221 195,065 165,624 4,717,976 3,929,869 2011 Annual Report & Accounts 41 NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
  41. 41. 2011 2010 N'000 N'000 Earnings for the purpose of basic earnings per share being net profit attributable to equity holders of the company 3,813,202 5,436,638 2011 2010 Number Number '000 '000 Number of Shares Number of ordinary shares for the purpose of basic earnings per share 339,522 339,522 Earnings per 50k share (Naira) - Basic 11.23 16.01 25. GUARANTEES AND OTHER FINANCIAL COMMITMENTS The Company did not charge any of its assets to secure liabilities of third parties. 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. .2 Contingent liabilities There are contingent liabilities in respect of legal actions against the company amounting to N2,837,556,902 (Dec 2010 - N3,008,607,695). Management has not made provision for these contingent liabilities as consultation with the Company's external solicitors has indicated that the likely outcome of the legal action will favour the Company. 26. TECHNICAL SERVICE AGREEMENT The Company has a technical service agreement with Total Outre-Mer which is renewable every 3 years subject to the approval of The National Office for Technology Acquisition and Promotion (NOTAP). The amount charged in the profit and loss account was N786,446,276 (2010: N831,686,514). EARNINGS PER SHARE24. From continuing operations The calculation of the basic earnings per share is based on the following data: Earnings Financial commitments.1 42 2011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
  42. 42. 27. RELATED PARTY TRANSACTIONS During the year, the company traded with related parties on terms similar to such transactions entered into with third parties as follows: Amount Amount owed owed Sales of Purchase by related to related 2011 Goods of Goods Others Companies Companies N'000 N'000 N'000 N'000 N'000 Total Outre - Mer - 50,015,359 - - 6,267,977 Total International - 9,168,460 - - 2,241,217 Elf Petroleum (Total E & P ) 13,278,388 - 2,706,983 - Elf Aquitaine - - 103,525 - 103,525 Total S. A. - - 300,642 - 300,642 Total France - - 6,441 - 6,441 Air Total International 212,933 - - - 11,725 Total Gestion - - 26,487 - 26,487 Total Guinea Conakry - - 1,310 1,310 - Total Gaz - - 285 285 - Total Gambia ` - 4,427 4,427 - Total Ghana - - 483 483 Total RM 6,853 6,853 Total Lubrifiants 323,219 - - 46,407 - 13,814,540 59,183,819 450,453 2,759,412 8,965,350 Amount Amount 2010 Sales of Purchase Others owed owed Goods of Goods by related to related Companies Companies N'000 N'000 N'000 N'000 N'000 Total Outre - Mer - 29,434,998 - - 5,075,718 Total International - 4,459,531 - - 370,946 Elf Petroleum (Total E & P ) 7,400,004 - - 530,899 - Air Total International 1,308,696 - 3,641 - 3,641 Elf Aquitaine - - 103,525 - 103,525 Total S. A. - - 284,160 - 284,160 Total France 11,508 - 11,844 Total Gestion - - 1,106 1,106 - Total Guinea Conakry - - 295 295 - Total AXA - - 335 335 - Total Lubrifiants 254,622 - - 34,236 - 8,963,322 33,894,529 404,570 566,871 5,849,834 432011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
  43. 43. LEASE OBLIGATION .1 Minimum Future Finance Present Value Lease payment Charges of obiligation Period not later than one year 127,667 27,785 99,882 Period later than one year and not later than five years 215,490 26,763 188,727 Period later than five years - - - 343,157 54,548 288,609 Lease obligation due within 12 months 99,882 Lease obligation due after one year 188,727 Present value of lease obligation 31 December 2011. 288,609 .2 2011 2010 N'000 N'000 Balance at 1 January 265,971 281,592 202,512 100,578 Payments (179,874) (116,199) Balance at 31 December 288,609 265,971 Additions Lease and Short term Loan 29. POST BALANCE SHEET EVENTS There was no post balance sheet event that could have material effect on the state of affairs of the company at 31 December 2011 and on the profit for the year ended on that date that has not been taken into account in these financial statements. 30. RECLASSIFICATION OF BALANCES Certain comparative balances have been reclassified to ensure proper disclosure and uniformity with current year's presentation. 44 2011 Annual Report & Accounts NOTES TO THE FINANCIAL STATEMENTS (Cont’d) 28. Reconciliation of minimum lease payment to present value.
  44. 44. 452011 Annual Report & Accounts STATEMENT OF VALUE ADDED 2011 2010 N'000 % N'000 % External sales 173,948,954 160,604,104 Other operating income 623,881 643,403 Interest receivable and similar charges 62,733 113,632 Extraordinary item 1,464,721 Less: Bought in materials and services - Imported (51,927,702) (37,507,763) - Local (109,378,751) (112,116,955) Value added 13,329,114 100 13,201,142 100 Applied as follows: To pay employees: Salaries, wages, pensions and social benefits 4,717,976 35 3,929,869 30 Organisational restructuring benefits - - - - To pay providers of capital: Interest payable and similar charges 874,998 7 464,368 3 To pay government: Income tax, education tax and capital gains tax 1,801,031 14 1,601,908 12 Deferred tax 244,380 2 209,639 2 Depreciation 1,877,527 14 1,558,720 12 Profit for the year 3,813,202 28 5,436,638 41 13,329,114 100 13,201,142 100 To provide for replacement of assets, payment of dividend to shareholders and future development: Value added represents the additional wealth which the Company has been able to create by its own and its employees' efforts. This statement shows the allocation of that wealth among employees, providers of capital, government and that retained for the future creation of more wealth. For the year ended 31st December, 2011
  45. 45. FIVE-YEAR FINANCIAL SUMMARY 2011 2010 2009 2008 2007 N'000 N'000 N'000 N'000 N'000 CAPITAL AND RESERVES Share capital 169,761 169,761 169,761 169,761 169,761 Capital reserve 263,436 263,436 263,436 263,436 263,436 General reserve 9,593,018 8,495,991 6,549,638 6,835,787 5,905,747 10,026,215 8,929,188 6,982,835 7,268,984 6,338,944 ASSETS EMPLOYED Fixed assets 16,352,992 14,737,730 12,647,529 11,236,909 9,943,600 Leased assets 260,903 255,640 282,515 218,243 107,359 Investments - 31 31 31 31 Long term prepayments 1,677,884 1,791,345 1,899,497 1,529,485 1,437,348 Net current liabilities (5,627,615) (5,487,722) (4,472,743) (2,849,115) (2,303,385) Long term liabilities (2,637,949) (2,367,836) (3,373,994) (2,866,569) (2,846,009) 10,026,215 8,929,188 6,982,835 7,268,984 6,338,944 TURNOVER AND PROFITS Turnover 173,948,954 160,604,104 178,570,273 177,411,946 137,339,503 Profit before taxation 5,858,613 5,783,464 6,163,359 6,508,186 4,828,795 Profit after taxation 3,813,202 5,436,638 3,968,059 4,393,162 3,255,410 Dividends (interim & proposed) 3,055,697 2,716,175 3,965,614 4,390,017 3,255,458 Earnings: Per 50k share (basic) (Naira) 11.23 16.01 11.69 12.94 9.59 Dividend: Per 50k share (actual) (Naira) 9.00 8.00 11.68 12.93 9.50 Net assets: Per 50k share (actual) (Naira) 29.53 26.30 20.57 21.41 18.67 Earnings per share is based on profit after tax and the number of ordinary shares of 50k in issue at the end of each financial year. Dividend per share is based on the interim dividend declared and paid within the year and the final dividend proposed for that year which is subject to approval at the Annual General Meeting divided by the number of ordinary shares in issue at the end of the year. Net assets per share are based on the net assets of the Company and number of ordinary shares of 50k in issue at the end of each financial year. Interim dividend of N2.00 (2010 - N2.00) was paid during the year. A final dividend of 7.00 (2010- N6.00) was proposed for the year ended 31 December 2011 as contained in Notes 7 and 20 of these financial statements. NOTE: 46 2011 Annual Report & Accounts
  46. 46. “ COLLABORATION: A PATH FOR TOMORROW”.
  47. 47. TRAINING SCHOOL THE TRUCK DRIVER'S he petroleum marketing industry with a stock in trade of high – risk products is constantly faced with the daunting challenges of industrial and personal safety. Ensuring Truck and product safety is even made more complex by difficulties inherent in our national road transportation network. This is why Total Nigeria Plc makes safety its foremost slogan, a daily focus and an ultimate battle we must win hence the company's establishment of The Truck Driver Training School (TDTS). This trail blazing school was opened on the 28th of March, 2011 in Ibadan. The school provides an ideal environment for the training of truck drivers about defensive driving techniques, the dangers of hydrocarbon products and safe handling of same, loading and offloading procedures and Heavy Duty Vehicles (HDV) power transmission. The drivers are also trained on the behavior of a vehicle in relation to the relevant braking techniques. It naturally came out that practical demonstrations of all techniques described in the classrooms would magnify the effect of this positive training, making it a real sustainable contribution to the future of road safety. In 2011, over 1400 TNPLC truck drivers were trained in the Ibadan Training School, with capacity for more external drivers. The School premises houses an ultra-modern and automated Vehicle Inspection centre to ensure that not only the drivers' behaviors are being modified, but also ensuring that material trucks are of quality and safety conditions. Total Nigeria Plc bears in mind that road transport lays at the heart of its activities therefore road safety is an everyday priority. Consequently the company came up with strategies to achieve this hence the creation of the Track Centre (the second phase of the Truck Driver Training School). This centre will offer a unique opportunity for Drivers to spend more time behind the wheel, learning by practice in safe conditions, how to manage dangerous situations. In addition, it is intended to open the Centre to external professional drivers. The Track Centre will require at least 17 hectares of land, 2.7 kms of tracks coated with specific professional paint, full irrigation and 5 trucks. Bearing in mind that road safety is a global/national issue and actions to prevent accidents have to be done together if they are to be effective. Hence Total Nigeria Plc is developing strategic partnerships with its sister company, Total Exploration and Production Nigeria Limited (TEPNL) and the Oyo State government for the donation of land. T The company has equally set in motion the process of renewing its entire transport fleet by the year 2015. It intends to achieve this by partnering with Messrs Lanre Shittu Motors Nigeria Limited, the country's representative of MACK tractors to supply our transporters with 50 trucks. With these strategic partnerships, TNPLC intends to build a path for tomorrow to bring sustainable results in years to come. 50 2011 Annual Report & Accounts “ COLLABORATION: A PATH FOR TOMORROW”.
  48. 48. Total Nigeria Plc through the years remain a reference point in lubricants technology as attested to in Nigeria by numerous customer surveys of the product quality in the market. To showcase the efficacy of its Quartz 4X4 lubricant, the company partnered with Hemenga Grand Prix in 2011 to sponsor the Lagos Rally. History has it that the Grand Prix started in France as just a motor racing competition from town to town and has since evolved from a simple race to an endurance test for the car and the driver. At Total, continuous creativity is the hallmark of all our marketing efforts with the sole aim of presenting quality products to the end user hence the production of the Quartz 4x4 lubricant and the strategic partnership with Hemenga Grand Prix to promote the advantages of this lubricant at the Lagos rallies. The Company has through the years created awareness of this innovative product through these rallies and is proud to announce that it is the only company presently in Nigeria producing this particular type of lubricant for this specific brand of vehicles. The rallies are equally intended to compensate TNPlc's customers who have remained loyal to this brand of the Total lubricant over the years and to also create an atmosphere of relaxation for spectators who would learn that the power behind the wheel is the Quartz 4x4 lubricant. (an engine oil that improves the endurance of 4-wheel drives) LAGOS 4X4 RALLY POWERED BY TOTAL QUARTZ T The Quartz 4x4 is an advanced technology product specifically formulated to meet the demanding requirements of 4-wheel drive cars which are designed to operate in the toughest conditions. The endurance test of a vehicle cannot be complete without the type of engine oil the vehicle is subject to. The 4- wheel drive car has a drain –train which allows all four wheels to receive torque for the engine at the same time. These vehicles are built for tough and difficult terrains, and besides the big ones popular on Nigerian roads, smaller cars such as those used for rallies and safaris may also be 4-wheel drives. Research has indicated that the Quartz 4x4 is by far the best lubricant for these heavy engines as it assists them in coping with the roughness of road surfaces in all driving conditions particularly during the rainy season. It is a top quality new generation synthetic based multi – grade oil which meets the latest API SL/CF and ACEA-A3/B3 international specifications and is suitable for both diesel and petrol engines. This unique oil offers high protection to engines in most extreme circumstances (dusty environments, desert conditions, grid-lock urban traffic etc), besides extending the engine's life span, it offers extended drain intervals (above 7,500km depending on the environment and usage), reduces carbon emission and is also great on fuel economy. 2011 Annual Report & Accounts 51 “ COLLABORATION: A PATH FOR TOMORROW”.
  49. 49. THE STAIRWELL I N I T I A T I V E Total Nigeria Plc recognizes the fact that employee's health, welfare, satisfaction and motivation are indispensable tools in the sustainability of its business, therefore as part of the year's Healthy Living Campaign, the company collaborated with its medical professional partners (Medexia) in introducing a new challenge tagged “Take The Stairs”. This stairwell initiative was geared towards motivating employees to carry out physical activities especially while at work and to check mate various health challenges associated with long term diseases emanating from lack of exercise. Studies have shown that 60% of working adults do not get the recommended amount of physical activity, while 25% are not active at all making them highly prone to ill health. Considering all our modern conveniences including cars, elevators, computers, etc. an individual could go a whole day without getting the necessary physical activity. Employees of TOTALNIGERIAPLC having a great understanding of the benefits of good health bought into the laudable idea of the stairwell initiative hence combining work with physical activities as a daily routine without negative effect on productivity. It has been proven that choosing the stairs instead of the elevator can boost the amount of exercise accumulated throughout the day, burn unwanted calories, fight weight gain and provide significant health benefits. As often as an individual goes up and down the stairs, the stronger the person becomes and the easier the activity becomes. Participating in this initiative permits employees to monitor and measure their achievement per day using a pedometer distributed by the company. It is expected with the introduction of this initiative that employees will end up having; Reduced blood cholesterol Lower blood pressure Increased cardiovascular endurance Boosted bone strength Burnt calories keeping their weight down Promoted psychological well-being Lowered risk of premature death Since the launch of the programme, employees have been actively participating in the “Take the Stairs” initiative and are able to monitor and measure their achievement per day using a pedometer distributed by the company. Ultimately, Total Nigeria Plc will have healthier employees with boosted morale. 52 2011 Annual Report & Accounts “ COLLABORATION: A PATH FOR TOMORROW”.
  50. 50. n 2006, the Total Nigeria Plc pilot HIV/AIDS awareness campaign initiative was launched in Lagos using 20 service stations. Till date, the Company has not relented in its effort at combating the disease and reducing its effects on the society. To have an increased and more sustainable impact of the program in its communities, the Company went into collaboration with Total Upstream Company in Nigeria in 2011. This collaboration has in no small measure expanded the impact of the campaign through the provision of advanced hi-tech HIV/AIDS screening machines to identified medical facilities in beneficiary communities. They are able to access highly subsidized screening at close proximity; beneficiary states now get to access free HIV counselling and testing for longer periods as the collaboration ensures longer testing periods and establishment of support groups to cater for identified positive livers. In addition, more peer educators are trained, this means more people are reached by these peer educators in the course of their work. The primary target of the campaign is to extend this program to all states of the federation. It has so far been launched in 14 States in Nigeria. They include, Lagos State, FCT (Abuja),Kano, Calabar (CrossRiver State),Benin(Edo State), Port- Harcourt(Rivers State), Makurdi (Benue State), Katsina State, Owerri (Imo State), Ibadan (Oyo State), Ilorin (Kwara State), Akure(Ondo State), Uyo (Akwa-Ibom State) and Kaduna State. With further collaboration planned on this project, the objective reaching a much more wider population of the country with far reaching and measurable impact will be achieved in no time. I 532011 Annual Report & Accounts “ COLLABORATION: A PATH FOR TOMORROW”.
  51. 51. 1. The authorized share capital has been increased as follows: th On the 10 ofApril, 1958 to N1,500,000 th On the 18 ofAugust, 1959 to N2,000,000 th On the 25 of May, 1960 to N3,000,000 th On the 30 of November, 1976 to N5,000,000 st On the 21 of June, 1978 to N10,000,000 st 2. On the 21 June, 1978 each share of =N=20 each was sub-divided into 40 shares of 50 kobo each. th 3. As at 10 October, 1978 the authorized capital of the company was N10,000,000 divided into 20,000,000 shares of 50 kobo each. th 4. By a special resolution of theAnnual General Meeting of the 8 ofAugust, 1980 the authorized share capital of the company was increased to =N= 15,000,000 divided into 30,000,000 ordinary shares of 50 kobo each. th 5. By a special resolution of the Extra-ordinary General Meeting of the 18 of October, 1982 the authorized share capital of the company was increased to =N= 22,500,000 divided into 45,000,000 ordinary shares of 50 kobo each. th 6. By a special resolution of the Annual General Meeting of the 27 of June, 1984 the authorized share capital of the company was increased to =N= 33,750,000 divided into 67,500,000 ordinary shares of 50 kobo each. rd 7. By a special resolution of the Annual General Meeting of the 23 of June, 1988 the authorized share capital of the company was increased to =N= 40,500,000 divided into 81,000,000 ordinary shares of 50 kobo each. th 8. By a special resolution of the Annual General Meeting of the 11 of July, 1991 the authorized share capital of the company was increased to =N= 54,000,000 divided into 108,000,000 ordinary shares of 50 kobo each. th 9. By a special resolution of the Annual General Meeting of the 8 of June, 1994 the authorized share capital of the company was increased to =N= 72,000,000 divided into 144,000,000 ordinary shares of 50 kobo each. th 10. By a special resolution of the Annual General Meeting of the 7 of June, 1995 the authorized share capital of the company was increased to =N= 96,000,000 divided into 192,000,000 ordinary shares of 50 kobo each. th 11. By a special resolution of the Annual General Meeting of the 11 of June, 1997 the authorized share capital of the company was increased to =N= 112,000,000 divided into 224,000,000 ordinary shares of 50 kobo each th 12. By a special resolution of the Annual General Meeting of the 28 of August, 2001 the authorized share capital of the company was increased to =N= 148,540,804 divided into 297,081,608 ordinary shares of 50 kobo each. th 13. By a special resolution of the Annual General Meeting of the 17 of June, 2004 the authorized and issued share capital of the company was increased to =N= 169,760,918.00 divided into 339,521,836 ordinary shares of 50 kobo each SHARE CAPITAL HISTORY 54 2011 Annual Report & Accounts
  52. 52. LIST OF MAJOR DISTRIBUTORS No. STATE NAME OF DEALER STATION 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20 21 22 23 Adamawa Bauchi Benue Borno F.C.T. F.C.T. Gombe Jigawa Jigawa Kaduna Kano Kano Katsina Kogi Kogi Nasarawa Niger Plateau Plateau Sokoto Taraba Yobe Zamfara M Samuel Ibrahim Saidu Dickson Bala M. Kachalla F. Sule A. A. Minijibir M.B. Abubakar H. Abdul Ibrahim Husseini A. Hassan Jamilu Nashe Tijani Hashim S. Abdulsalam E. O. Ilonoh Tunde Oyediran Ibrahim Shehu Haruna Baba Abdul Danladi Janet Eru I. Gobir S. Nabasu M Adamu Abdul Ododo Airport Road - Service Station Yandoka Bauchi - Service Station Makurdi Centre Service Station Race Course Service Station, M'Guri Total House Filling Station Asokoro Service Station Bauchi Road, Gombe - Service Station Mallam Madori Motor Park - Filling Station Hadejia Town Walf Road, Kaduna - Service Station Kano Co-operative Service Station, Kano Zoo Road, Kano IBB Way Katsina - Service Station Ankpa Filling Station Post Office Road, Lokoja Lafia - Service Station Bosso Station Road - Filling Station Minna Dogon Dutse - Jos Filling Station Yakubu Gowon Way Ahmadu Bello Way - Service Station Jalingo - Service Station Damaturu Filling Station Railway Station Gusau - Filling Station 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Abia Akwa Ibom Akwa Ibom Cross River Delta Edo Ekiti Ekiti Enugu Imo Kogi Ondo Onitsha Onitsha Osun Rivers Rivers P. C. Ogbu C. ETIM UDUAK UMOH Francis Udoka Onuoha Okoh Andrew Ekeananye Abraham Olabanji Kayode Olawunmi M Madu S. EDUEME Sunday Obinyan Bolanle Folorunsho B. Okereke J. Azubuike D. A. Adeyanju J Erekosima CHIGOZIE NWOKO Aba GRA – Filling Station Ikot Ekpene – Aba Road – Filling Station Uyo Town Calabar Road Service Station, Clalabar Asaba Bridge Head – Filling Station Ugbowo Filling Station, Benin Iworoko Road, Ado-Ekiti – Filling Station Ado Owo, Akure Ekiti Agbani Road, Enugu – Service Station Douglas Road, Owerri – Service Station Okene Filling Station Ore Express Service Station, Ore Nkpor Junction, Onitsha – Filling Station Awka Road, Onitsha. Ibadan Road Ile Ife – Service Station Mile 2 Diobu, Port-Harcourt – filling station Runmubiakani NORTHERN TERRITORY EASTERN TERRITORY 552011 Annual Report & Accounts
  53. 53. No. STATE NAME OF DEALER STATION 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 Kwara Kwara Kwara Kwara Kwara Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Lagos Ogun Ogun Ogun Ogun Ogun Ogun Ogun Osun Osun Osun Oyo Oyo Oyo Oyo Oyo Samuel Abiola Yaya Akande Tunde Hassan Musibau Olanipekun Femi Akinpelu S. C. Mozia Muda Kareem S.O.MORIN Ayo Ajayi B O Fakorede O.ONI K.Nwidobie T Okorie JIDE ALESHE DELE RABIU C.OLAJIDE G.EFEVWIARE S.A.OLOFIN Fathia Babatunde Kassim Makunjola M Akanji Sanni Kusimo Bimbo Titus Omotshein Sadiku Muibi Solomom Aderohumu Oseni Sanni Olurin Olatunji Mudashiru Bolaji Segun Ojumola Gbenga Adeyanju Alh. Olatunde Mr. Taju Olalere Mr. Ogunmojede Oluwaseun Joseph Elder Degun Gbenga Idowu Mr. Wole Oladipo Ogbomosho Road Service Station, Ogbomosho Road, Ilorin Jebba Rd, Old Jebba Rd, Agric, Ilorin Station Road Service Station, Ilorin Omu Aran filling station, Omu Aran Town Offa Town Service Station, Offa Kwara State Awolowo Road, Ikoyi, Lagos. Ojota 2 Service Station, Ojota Bus stop, Lagos Festac Service Station, 3rd Gate Festac, Lagos Alausa Service Station, Secretariat Road, Alausa, Ikeja, Lagos Lekki 2 Service Station, Ikate/Epe, Lagos Oshodi Service Station Anthony/Oshodi express way, Lagos Western Avenue Sura Service Station Simpson Street, Lagos Lekki 1 Service Station, Oba- Oniru Estate, Lekki, Lagos Onigbagbo Service Station, Onigbongbo, Maryland, Lagos Diya S/S Diya Street Gbagada Old Toll Gate, Old Lagos Toll Gate Lagos- Ibadan Express way Surulere Service Station, Ishaga Road, Surulere, Lagos Ikorodu Town Station, Ikorodu Round About, Ikorodu Benson Bus Stop, Ikorodu/Sagamu Road Pen Cinema Agege Sagamu Center Service Station Ode Remo SS, Lagos/Ibadan Expressway Abeokuta Road ,Ijebu, Ogun State Ibadan Road , Ijebu ode Ejirin Road, Ijebu Ode Obantoko Service Station, Abeokuta Oketokun Station, Abeokuta Ibadan Road Service Station, Ibadan Road, Ife Oshogbo Road Service Station, Ilesha. Ife Centre , Iremo Road, Ile-Ife. Mokola Service Station, Mokola Roundabout, Ibadan New Reservation F/S, Iyaganku, Ibadan Eleyele 1 Service Station, Magazine Rd, Jericho, Ibadan New Ife Road, Ife Road, Ibadan Sango Service Station, Oyo Road, Sango Bus stop, Ibadan. WESTERN TERRITORY 56 2011 Annual Report & Accounts LIST OF MAJOR DISTRIBUTORS (Cont’d)
  54. 54. TOTAL NIGERIA PLC MANDATE FOR DIVIDEND PAYMENT TO BANKS TO: The Registrar City Securities (Registrars) Ltd 17A Tinubu Street P. O.Box 9117 Lagos. I Hereby request that from now on, all my dividend warrants due to me from my holdings in Total Nigeria Plc be paid directly to my bank account named stated below: SHAREHOLDER’S FULL NAME ADDRESS SIGNATURE GSM NUMBER NAME OF BANK BANK BRANCH BRANCH ADDRESS ACCOUNT NUMBER BANK SORT CODE For Bank’s Use Only Official stamp and Authorised Signatories Page No and Name We agree to the Customer’s request as stated above
  55. 55. PROXY FORM TOTAL NIGERIA PLC. RC:1396 Annual General Meeting to be held Shell Hall, Muson Centre, 8/9 Marina, Onikan, Lagos at 11.00am on Wednesday 13th June, 2012 RESOLUTIONS For Against To adopt the Report and Financial Statements To declare a dividend To re-elect Mr. S. Mittelman as Director To re-elect Engr. J. W. Adeyinka as Director To Chief F. Majekodunmi as Director re-elect To appoint Ms. T. Ibru as Director To appoint Mr. M. Nguer as Director To appoint Engr. A. Rufai Sirajo as Director To appoint Mr. D. Toulouse as Director To fix the remuneration of the Directors To authorise the Directors to fix the remuneration of the Auditors To elect members of the Audit Committee I/We being a member/members of TOTAL NIGERIA PLC hereby Appoint or failing him the Chairman of the meeting as my/our proxy to vote for me/us on my/our behalf at the Annual General Meeting of the Company to be held on 13th day of June, 2012 and any adjournment thereof. Dated the day of 2012 Shareholder’s Signature NOTES A member (Shareholder) who is unable to attend an Annual General Meeting is allowed by law to vote by proxy. The above proxy form has been prepared to enable you exercise your vote cannot personally attend. (1) Provision has been made on this form for the Chairman of the meeting to act as your proxy, but if you wish, you may insert in the blank space on the form (marked*) the name of any person, whether a member and vote on your behalf instead of the Chairman of the meeting. (2) Please sign the above form and post it so as to reach the address shown overleaf not later than 11.00am. on 11th June, 2012. if executed by a corporation, the proxy form should be sealed with it’s common seal. (3) The proxy must produce the Admission Card sent with the Annual Report and Accounts to obtain admission to the meeting. (4) TOTAL NIGERIA PLC. RC 1396 Annual General Meeting Admission Card Please admit: to the Annual General Meeting of TOTAL NIGERIA PLC which will be held at Shell Hall, Muson Centre, 8/9 Marina, Onikan, Lagos on Wednesday, 13th June 2012 NUMBER OF SHARES HELD This admission card must be produced by shareholder or his proxy in order to obtain admission to theAnnual General Meeting. OLUBUNMI POPOOLA -MORDI Company Secretary Please indicate with an “X” in the appropriate space how you wish your vote to be cast on resolutions set out above. Unless other wise instructed, the proxy will vote or abstain from voting at his discretion.

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