From left to right, Engr Rufai Sirajo, Chief Felix Majekodunmi, Bruno Dormoy, Bunmi Popoola Mordi, Company’s Secretary, Stanislas Mittelman, Chairman of Total Nigeria Plc, Imrane Barry, Managing Director of Total Nigeria Plc and Tejiro Ibru, Alexander Adotevi and Dr. Jefferson Nnamani at the 41st Annual General Meeting of Total Nigeria Plc in Lagos.
One of Nigeria’s downstream giant, Total Nigeria Plc had its Annual General Meeting, AGM, on Thursday the 27th of July, 2019 in Lagos. Company Secretary, Bunmi Popoola Mordi, who read the details of the meeting made it known that the ordinary business of the day is to lay before members for approval, the financial statements for the year ended, 31st December, 2018 and receive reports of the Directors, Auditors and Statutory Audit Committee. At the AGM, the final dividend was declared, directors re-elected, appointments of directors were ratified, authorize directors to fix the remuneration of External Auditors and elect members of the statutory committee.
The special business that was declared at the AGM was also to fix the remuneration of directors while renewing the general mandate for related party transactions.
Reading the audit report of Total Nigeria Plc, Ayodele Soyinka of KPMG, explained the independent auditor’s report of the company. He disclosed that the audit firm has audited the financial statement of the company, which comprises statement of financial position as at 31 December, 2018. This include the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the year ended and notes, comprising significant accounting policies and other explanatory information.
According to Soyinka, the accompanying financial statements give a true and fair view of the financial position of the company, as at 31st December, 2018, and of its financial performance and its cash flows for the year ended, in accordance with International Financial Reporting Standards (IFRSs) and in the manner required by the Companies and Allied Matters Act.
He pointed out that the key audit matters that KPMG had with Total Nigeria has to do with revenue recognition, impairment on financial instrument, Petroleum Products Pricing Regulatory Agency (PPPRA), recognition of interest and foreign exchange differentials.
The KPMG helmsman asserted thus “In our opinion, proper books of account has been kept by the company, so far as it appears in our examination of those books and the company’s statement of financial provision and statement of profit or loss and other comprehensive income are in agreement with the books of accounts signed by myself.”
Report on the statutory audit committee was delivered by Chief Adeshiyan. He ascertained that the accounting and reporting policies of the company for the year ended 31st December, 2018 are in accordance with legal requirements and agreed ethical practices. He added that the scope and planning of the audit for the year ended 31st December 2018 were adequate and management’s responses to the Auditor’s findings are satisfactory adding that the scope, planning and reporting of these financial statements is compliant with the requirements of the International Financial Reporting Standards as adopted by the company.
Notwithstanding, Total Nigeria Plc result for the year ended 31st December, 2018 shows that the downstream giant has revenue worth 307,987,896, profit before taxation is 12,098,463, profit for the year is 7,960,893, shareholders’ funds 30,730,889 while dividend declared is 4,753,306.
Reacting to the financial statement, a shareholder, Sunny Nwosu, commended the management and board of Total Nigeria for its continuous understanding that shareholders need money to keep fit. He said the company has been paying dividends and advised the company not to relent in this endevour.
Nwosu bemoaned a situation in the country where regulator is into business with operators. “This is a situation where politically they have demobilized the operators from bringing products that will be profitable, it is only in Nigeria that we can see such a situation, he added.”
He wondered why government that is supposed to deregulate is regulating. He advocated for a deregulated downstream sector so that operators can make profit for the benefit of investments.
He revealed that filling stations belonging to the Nigerian National Petroleum Corporation, NNPC, sells at lower price of either N142 or N143 as against the benchmark of N145. This development does not augur well for those who have invested in the downstream sector.
Nwosu was of the opinion that Total Nigeria management team should intervene by lobbying the new NNPC management in order to nip the issue in the bud because there is a clear difference between operators and regulators.
Another shareholder, Matthew Akinlade, aligned with Nwosu on the company’s success in 2018 despite passing through a year of challenges and turbulence in businesses across Nigeria. He said the profit was reasonable owing to the economic situation even though it was slightly below the previous year with increase in cost.
Akinlade thanked Total Nigeria for being investor friendly and maintaining dividends in 2018 adding that the company should keep the good gesture going forward.
He also expressed concern on NNPC’s dual role of operatorship and regulator thereby competing with other operators and having undue advantage over others. NNPC is the only operator that has access to foreign exchange between N305 and N306. No other operator in the downstream can have access to foreign exchange in the market.
The shareholder disclosed that no operator that accesses exchange rate for N336 or N362 can afford to import Premium Motor Spirit, PMS, and compete favourably with the corporation. This is why it is only NNPC importing PMS into the country. “If not for being innovative by diversifying the business going to some other areas promoting lubricants and other areas that were not controlled probably we will not have the result that we have today, he added.”
He commended Total for its innovation and adding value to its business model to suit the circumstances in the country in terms of business environment.
Akinlade appealed to the government to assist the downstream sector by avoiding monopoly through NNPC which has created avenue for lobbying. The monopoly should be broken to allow free level playing ground for all operators. This will make the private sector to thrive by creating jobs while discouraging subsidy in the system. Subsidy has brought setback to Nigeria’s downstream.
He extolled Total Nigeria for training 55% of its workforce. He emphasized on zero fatality, the company deployed technology to enhance its operations and no Total truck has been reported to be involved in any form of accident. The company has maintained a clean slate in this order.
Some of the shareholders at the AGM spoke on Dual Purpose Kerosene, DPK, which is exorbitant and out of the reach of indigent people. They applauded government’s intervention to gasify the country but it should also consider the older generation in its planned gasification. Others remarked on the oil companies in Nigeria that gave dividends to shareholders in spite challenges and advised Total to improve in its solar lightening project.
Responding to shareholders, Chairman of Total Nigeria Plc, Stanislas Mittelman noted that it is not the prerogative of the company to decide regulatory issues, it has to do with the country. Total operate in both regulated and deregulated business environment and it succeeds hence it is not the role of the company to interfere in host countries affairs.
Mittelman said, Total has been able to maintain dividends in spite of the challenges during the year while it remains confident on its activities. According to him, on job creation, Total directly or indirectly employs about 12000 people which is significant and no entity in the country can claim it employs that number of people. The company keeps growing and developing in spite challenges. When a new station is opened, about 20 jobs are created.
The Chairman reiterated that Total Nigeria has been supporting educational activities across the country. It will develop its lubricants sales and make it a priority because it is a huge market. Lubricant production facilities have been extended in Lagos.
In terms of solar, which has a big potential in Nigeria, the company has embarked on how to extend its network while its 75 stations will be equipped and powered by solar.