· 2017-03-31 · rak unity petroleum company plc annual report and financial statements for the 9...

RAK UNITY PETROLEUM COMPANY PLC Annual report and financial statements

For the 9 months period ended 31 December 2016

50

Notes to the financial statements

24.7 Credit risk

The Company trades only with recognised, creditworthy third parties. It is the Company’s

policy that all customers who wish to trade on credit terms are subject to credit verification

procedures, which include an assessment of credit rating, short-term liquidity and financial

position. The Company obtains sufficient collateral (where appropriate) from customers as a

means of mitigating the risk of financial loss from defaults. In addition, receivable balances are

monitored on an ongoing basis, with the result that the Company’s exposure to bad debts is

not significant.

Refer to Note 15b for analysis of trade receivables ageing.

25 Dividend

The directors proposed that a dividend of 10k per ordinary share be paid to shareholders. The

dividend is subject to approval by the shareholders at the Annual General Meeting and

deduction of withholding tax at the appropriate rate. Consequently, it has not been included as

a liability in these financial statements.

26 Events after the reporting period

There are no significant or material events that occurred after the end of the reporting period

and before the financial statements are authorised for issue by the management of the entity.

27 Commitments

There were no capital commitments as at 31 December 2016.

28 Contingent liabilities

There is a legal suit outstanding against the Company estimated at N42.5 million (31 March

2016: Nil). On the advice of the Solicitor, the Board of Directors are of the opinion that no

material losses are expected to arise therefrom, hence no provision has been made in these

financial statements.

29 Waiver for chairman of audit committee

Based on FRC RULE 2, audit committee chairman is required to be a duly registered

professional with any accounting body established by the Act of National Assembly, but the

Company has since obtained waiver from the Financial Reporting Council (FRC) for its current

chairman who is not a professional member of an accounting body in Nigeria.