NNPCL Finance and Accounts
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Questions and Answers

Which of the following taxes is NOT covered in the Tax and Other Statutory Remittances policy of NNPC Limited and its subsidiaries?

  • Customs Duty (correct)
  • Value Added Tax (VAT)
  • Companies Income Tax (CIT)
  • Petroleum Profits Tax (PPT)

    • What is one of the objectives of the Tax and Other Statutory Remittances policy of NNPC Limited?

  • To avoid tax audits
  • To minimize tax liabilities
  • To ensure compliance with applicable tax laws and regulations (correct)
  • To maximize tax refunds

    • Which of the following is NOT a sub-process covered in the Tax and Other Statutory Remittances policy of NNPC Limited?

  • Tax management and oversight
  • Tax computations and remittances
  • Transfer Pricing
  • Financial Reporting (correct)

    • Which tax is levied on the income of companies engaged in upstream petroleum operations?

    <p>Petroleum Profits Tax (PPT)</p> Signup and view all the answers

    When should the estimated tax returns be filed for NNPC Limited?

    <p>Within two months of the fiscal year</p> Signup and view all the answers

    What are the rates for Petroleum Profits Tax (PPT) for non-PSC operations in their first 5 years?

    <p>65.75%</p> Signup and view all the answers

    Which tax is applicable to companies engaged in upstream petroleum operations in the onshore and shallow water?

    <p>Hydrocarbon Tax (HCT)</p> Signup and view all the answers

    Which department is responsible for all taxation related matters for NNPC Limited and its subsidiaries?

    <p>Tax Management Oversight Department</p> Signup and view all the answers

    Who is primarily responsible for monitoring and ensuring tax compliance of their business units?

    <p>Head, F&amp;A(N-3/4) of each business unit</p> Signup and view all the answers

    What is the role of the NNPC Limited Tax Department?

    <p>All of the above</p> Signup and view all the answers

    What is the purpose of the annual corporate tax plan prepared by NNPC Limited and its subsidiaries?

    <p>To maximize all tax benefits and manage tax exposure</p> Signup and view all the answers

    Which department is responsible for reviewing all tax returns before they are filed with the tax authority?

    <p>NNPC Limited Tax Department</p> Signup and view all the answers

    When are business units involved in upstream operations required to file their tax returns?

    <p>By May of the subsequent year</p> Signup and view all the answers

    What happens if the actual PPT/HCT liability is higher than the estimated PPT/HCT?

    <p>An additional assessment is raised for the difference</p> Signup and view all the answers

    Who is responsible for maintaining records and supporting documentation for tax payments?

    <p>NNPC Limited Tax Department</p> Signup and view all the answers

    Which one of the following statements about royalty rates for crude oil and condensates production is correct?

    <p>The royalty rate for onshore areas and shallow water fields is 5% for the first 5,000 bpd and 7.5% for the balance.</p> Signup and view all the answers

    Which one of the following statements about royalty calculation for fields located partially in onshore and in shallow water or partially in shallow water and deep offshore areas is correct?

    <p>The weighted average royalty is calculated based on the total production from the fields.</p> Signup and view all the answers

    Which one of the following statements about royalty rates for natural gas and natural gas liquids production is correct?

    <p>The royalty rate for natural gas and natural gas liquids production is 5% of the chargeable volume.</p> Signup and view all the answers

    Which one of the following statements about Companies Income Tax (CIT) is correct?

    <p>The applicable CIT rate for large companies is 30%.</p> Signup and view all the answers

    Which one of the following statements about the National Housing Development Fund is correct?

    <p>The NHF contribution is deducted from the salary of employees and remitted to the Central Bank of Nigeria.</p> Signup and view all the answers

    Which one of the following is true about the Industrial Training Fund (ITF) levy?

    <p>The main objective of the ITF is to generate a pool of indigenous trained manpower to meet the needs of the Nigerian economy.</p> Signup and view all the answers

    Which one of the following is correct about the Nigerian Oil and Gas Industry Content Development Act?

    <p>The Act imposes a levy of 2% on every contract awarded to any operator, contractor, subcontractor, alliance partner or any other entity involved in any project, operation, activity, or transaction in the upstream sector of the Nigerian oil and gas industry.</p> Signup and view all the answers

    Which one of the following is true about the Nigerian Police Trust Fund Levy?

    <p>The levy is imposed on the net profit of companies operating business in Nigeria.</p> Signup and view all the answers

    Which of the following is NOT a chargeable asset for Capital Gains Tax (CGT)?

    <p>Medical and pharmaceutical products</p> Signup and view all the answers

    According to the text, when should payroll deductions for Pay-As-You-Earn (PAYE) be based on?

    <p>The 10th day of every month</p> Signup and view all the answers

    What is the due date for remitting Withholding Tax (WHT) deducted from companies?

    <p>21 days after deductions were made</p> Signup and view all the answers

    What is the applicable rate of Value Added Tax (VAT) according to the text?

    <p>7.5%</p> Signup and view all the answers

    Which one of the following is true about the selection and maintenance of banking relationships by NNPC Limited and its Subsidiaries?

    <p>The selection and maintenance of banking relationships is primarily based on investment grade credit rating thresholds.</p> Signup and view all the answers

    Which one of the following is covered by NNPC Limited's Banking Counterparty Selection and Credit Acceptance Policy?

    <p>Selection and maintenance of relationships with banking counterparties</p> Signup and view all the answers

    Which one of the following is NOT a requirement for a financial institution to qualify for a relationship with NNPC Limited and its Subsidiaries?

    <p>Being a wholly owned Subsidiary of NNPC Limited</p> Signup and view all the answers

    Which department is responsible for evaluating the creditworthiness of Relationship Banks?

    <p>Treasurer</p> Signup and view all the answers

    When can bank accounts be evaluated for closure?

    <p>All of the above</p> Signup and view all the answers

    What happens if a Relationship Bank no longer meets the minimum requirement for banking relationship?

    <p>The bank is placed on a 'Watch List'</p> Signup and view all the answers

    What measures are taken to minimize exposure to a Relationship Bank on the 'Watch List'?

    <p>Gather and evaluate market intelligence on the bank</p> Signup and view all the answers

    Which of the following financial instruments is NOT accepted by NNPC Limited and its Subsidiaries?

    <p>Parent Company Guarantees</p> Signup and view all the answers

    What is the maximum exposure to a single financial institution that NNPC Limited and its Subsidiaries allow?

    <p>30% of the aggregate cash balance</p> Signup and view all the answers

    What is the maximum exposure to an onshore financial institution for short-dated credit acceptances only in US Dollar equivalent?

    <p>35% of Tier-1 capital</p> Signup and view all the answers

    Who is responsible for providing oversight of the templates and terms and conditions of financial instruments received by NNPC Limited and its Subsidiaries?

    <p>Legal Division</p> Signup and view all the answers

    Which rating denotes the highest expectation of default risk relative to all other issuers or obligations in the same country or monetary union?

    <p>A-</p> Signup and view all the answers

    Which rating scale is designed to help local investors differentiate risk in a particular market?

    <p>National Long-Term Rating Scale</p> Signup and view all the answers

    Which rating threshold must offshore banks meet to qualify for the category of 'Current & Deposit Accounts' relationship with NNPC?

    <p>Moody’s “Ba3”, S&amp;P “BB”, or Fitch “BB-”</p> Signup and view all the answers

    What are the three risk levels into which NPC banking relationships are categorized?

    <p>Low Risk, Medium Risk, High Risk</p> Signup and view all the answers

    Which of the following is the objective of the NNPC Limited Finance and Accounts Process and Procedures for Production Sharing Contracts (PSC) and Service Contracts (SC)?

    <p>To ensure adherence to the contractual terms of the PSC and SC agreements</p> Signup and view all the answers

    What is the scope of the NNPC Limited Finance and Accounts Process and Procedures for PSC and SC?

    <p>All of the above</p> Signup and view all the answers

    What is the purpose of the Management Committee (MACOM) established for PSC and SC operations?

    <p>To provide orderly overall supervision, control, and direction of all matters pertaining to the contract</p> Signup and view all the answers

    Which committee is responsible for reviewing the consolidated annual performance of SUBCOMs and endorsing it to MACOM for consideration and approval?

    <p>TECOM</p> Signup and view all the answers

    Who is responsible for identifying policy gaps and documentation for update of the detailed policies and procedures involved in Financial Reporting?

    <p>The Finance Division</p> Signup and view all the answers

    What happens if MACOM is unable to ratify and approve the report/recommendation of the cost verification team within the stipulated time frame?

    <p>An independent auditor is appointed to review the report/recommendation</p> Signup and view all the answers

    What is the role of the Technical Committee (TECOM) in the monitoring and reporting process?

    <p>Review the consolidated annual performance of SUBCOMs</p> Signup and view all the answers

    Which committee is responsible for the review and recommendation of the consolidated draft budget for MACOM consideration and approval?

    <p>Technical Committee (TECOM)</p> Signup and view all the answers

    Who is responsible for ensuring that uploaded budgets in the accounting system are accurate and reflect the substance of approval by MACOM?

    <p>Finance Division</p> Signup and view all the answers

    When should the Contractor prepare and submit a Work Program and Budget for the approval of the MACOM?

    <p>Within two (2) months after the effective date of the PSC or SC</p> Signup and view all the answers

    What is the responsibility of the MACOM in relation to the decisions of the Management Committee?

    <p>Ensuring that the contractor carries out the decisions of the Management Committee</p> Signup and view all the answers

    Which division is responsible for preparing the operational and financial performance reports on a monthly basis?

    <p>Finance Division</p> Signup and view all the answers

    How often are performance reviews conducted to ensure alignment with the approved work programme and budget?

    <p>Annually</p> Signup and view all the answers

    Which committee is responsible for reviewing and endorsing the consolidated annual performance of the SUBCOM and endorsing it to OPCOM for consideration and approval?

    <p>TECOM</p> Signup and view all the answers

    Who is authorized to grant exceptions to the application of the accounting policy on joint venture arrangements?

    <p>GCEO</p> Signup and view all the answers

    Which one of the following is a key objective of the NNPC Limited Finance and Accounts Process and Procedures for Joint Interest Management?

    <p>Ensuring proper evaluation of NNPC Limited's participation in Joint Ventures</p> Signup and view all the answers

    What is the purpose of the Joint Operating Agreement (JOA) in joint venture arrangements?

    <p>To serve as a reference point for rights and obligations of all parties</p> Signup and view all the answers

    Which one of the following is NOT covered under the scope of the NNPC Limited Finance and Accounts Process and Procedures for Joint Interest Management?

    <p>Management of operated oil and gas assets</p> Signup and view all the answers

    Which committee is responsible for the review and recommendation of the consolidated draft budget for OPCOM consideration and approval?

    <p>Technical Committee (TECOM)</p> Signup and view all the answers

    What is the responsibility of the MACOM in relation to the decisions of the Management Committee?

    <p>Ensure that the Operator carries out the decisions of the Management Committee</p> Signup and view all the answers

    What is the role of the NNPC Limited Tax Department?

    <p>Handle all taxation related matters for NNPC Limited and its subsidiaries</p> Signup and view all the answers

    Who is responsible for ensuring that uploaded budgets in the accounting system are accurate and reflect the substance of approval by OPCOM and subsequent releases of the budget?

    <p>Budgeting and Planning Department</p> Signup and view all the answers

    Which of the following is NOT a sub-process covered in the NNPC Limited Finance and Accounts Process and Procedures for Joint Interest Management?

    <p>Monthly/annual management reporting</p> Signup and view all the answers

    What is the objective of the NNPC Limited Finance and Accounts Process and Procedures for Joint Interest Management?

    <p>All of the above</p> Signup and view all the answers

    What shall serve as a reference point for each party's rights and obligations to the assets and liabilities of the joint interest arrangements?

    <p>Joint Operating Agreement</p> Signup and view all the answers

    Which division is responsible for ensuring proper accounting records are kept in accordance with the Joint Operating Agreement?

    <p>Finance Division</p> Signup and view all the answers

    What documents may be required in the review of the Annual Performance Report?

    <p>Transaction listing, Contract documents, Payment documents, Job completion certificates, Any other required documents</p> Signup and view all the answers

    On what basis does the Finance Division evaluate its financial performance alongside the budget estimates?

    <p>Monthly basis</p> Signup and view all the answers

    What information should the monthly returns and billing statement contain?

    <p>Qualitative and quantitative information</p> Signup and view all the answers

    Which committee is responsible for providing strategic direction and control of all matters pertaining to the joint operations?

    <p>Operating Committee (OPCOM)</p> Signup and view all the answers

    Who is responsible for preparing the monthly cash call requests based on the approved work program and budget?

    <p>JV Operator</p> Signup and view all the answers

    Which committee conducts a detailed budget review session(s) to challenge and agree the budget estimates/assumptions?

    <p>Sub-Committee (SUBCOM)</p> Signup and view all the answers

    Who is responsible for ensuring that uploaded budgets in the accounting system are accurate and reflect the substance of approval by OPCOM and subsequent releases of the budget?

    <p>Finance Division</p> Signup and view all the answers

    Which of the following statements about cash call requests is correct?

    <p>Cash call requests are prepared on a monthly basis</p> Signup and view all the answers

    What is included in the standard template for cash call requests?

    <p>Opening balances, cash inflows/receipts, estimated cash outflows, estimated inflows, incremental borrowing, un-utilized facilities/overdraft, and estimated closing cash balance</p> Signup and view all the answers

    When should cash call requests be forwarded to the JV partners for review and approval?

    <p>Not later than 15 working days before cash call month</p> Signup and view all the answers

    What is the purpose of the joint venture partner's concurrence for contracts?

    <p>To approve contracts above a certain threshold specified in the JOA</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for identifying an entity that holds the currency required by the requesting Subsidiary?

    <p>The Treasurer</p> Signup and view all the answers

    In compliance with the transfer pricing arms-length principle, what exchange rate should be used for intercompany currency conversions between NNPC entities?

    <p>The rate applicable for dollar sale to third parties as at the transaction date</p> Signup and view all the answers

    According to the guidelines on foreign currency sale by NNPC Limited, who shall review the proposal for foreign currency sale and recommend it to the CFO for consideration and approval?

    <p>The Treasurer</p> Signup and view all the answers

    What is the responsibility of the Treasury Division of NNPC Limited in relation to the sale of foreign exchange by NNPC Limited and its Subsidiaries?

    <p>Centrally responsible for arranging all the sale of foreign exchange</p> Signup and view all the answers

    Which one of the following is NOT a category of foreign exchange exposure mentioned in the text?

    <p>Operational Risk</p> Signup and view all the answers

    Who is responsible for developing and maintaining market contacts to stay aware of market conditions affecting corporate exposures?

    <p>Head of Treasury</p> Signup and view all the answers

    Which one of the following is NOT an example of a foreign exchange hedge instrument mentioned in the text?

    <p>Currency derivatives</p> Signup and view all the answers

    Who is responsible for determining the currency split in contracts and procurement agreements?

    <p>Head of Finance</p> Signup and view all the answers

    Which of the following is NOT one of the objectives of the Foreign Exchange Management policy of NNPC Limited and its Subsidiaries?

    <p>Maximize revenue from the sale of crude oil and gas</p> Signup and view all the answers

    According to the text, which of the following is NOT a source of foreign exchange for NNPC Limited?

    <p>Revenue from the sale of natural gas</p> Signup and view all the answers

    According to the text, what is the main purpose of the Foreign Exchange Exposure Management policy of NNPC Limited and its Subsidiaries?

    <p>To minimize value erosion resulting from exchange rate fluctuations</p> Signup and view all the answers

    Which International Financial Reporting Standard (IFRS) requires the disclosure of the Group's financial risk management objectives and policies?

    <p>IAS 1 - Presentation of Financial Statements</p> Signup and view all the answers

    Which IFRS establishes principles for reporting on financial instruments that will present information for their assessment of the amounts, timing, and uncertainty of an NNPC Limited's future cash flow?

    <p>IFRS 9 - Financial Instruments</p> Signup and view all the answers

    Which reference(s) should be implemented in compliance with the Central Bank of Nigeria's foreign exchange policies in place at the date of each transaction occurrence?

    <p>Enterprise Risk Management (ERM) policy</p> Signup and view all the answers

    Which one of the following is true about the repayment of loans by NNPC Limited and its Subsidiaries?

    <p>Loan repayment shall be made in the loan currency without conversion.</p> Signup and view all the answers

    Which one of the following is true about the payment of suppliers by NNPC Limited and its Subsidiaries?

    <p>Naira payments to third parties shall be made from Naira bank accounts.</p> Signup and view all the answers

    Which one of the following is true about intercompany and affiliate sales conducted by NNPC Limited and its Subsidiaries?

    <p>Intercompany and affiliate sales shall be conducted at arm’s length.</p> Signup and view all the answers

    Which one of the following is true about the denomination of contracts and procurement agreements by NNPC Limited and its Subsidiaries?

    <p>Contracts and procurement agreements shall be denominated in the originating transaction source currency.</p> Signup and view all the answers

    Which one of the following is NOT covered by the Dividends Policy of NNPC Limited?

    <p>Distribution of Profits</p> Signup and view all the answers

    What is the minimum percentage of profits that NNPC Limited must retain as retained earnings according to the Dividends Policy?

    <p>20%</p> Signup and view all the answers

    How often does NNPC Limited declare dividends according to the Dividends Policy?

    <p>Quarterly</p> Signup and view all the answers

    Which of the following principles guides the distribution of profits by NNPC Limited to its shareholders?

    <p>Recognition of profits and available cash flows for distribution</p> Signup and view all the answers

    When are dividends paid by NNPC Limited and its wholly owned subsidiaries?

    <p>Immediately after the dividend is declared at the EGM or AGM</p> Signup and view all the answers

    How are dividends paid to the shareholders of NNPC Limited?

    <p>In Nigerian Naira</p> Signup and view all the answers

    How are dividends accounted for in the financial statements of NNPC Limited and its subsidiaries?

    <p>In accordance with the provisions of IFRS</p> Signup and view all the answers

    Which type of shares is entitled to dividends as recommended by the Board of Directors and approved by the Shareholders?

    <p>Ordinary equity shares</p> Signup and view all the answers

    When are proposals to declare interim dividends considered and approved for NNPC Limited?

    <p>At the Shareholders Extraordinary General Meeting (EGM)</p> Signup and view all the answers

    What is the maximum percentage of distributable profits that can be declared as final dividends for a financial year by NNPC Limited?

    <p>80%</p> Signup and view all the answers

    Which of the following statements is true about dividend declaration by wholly owned Subsidiaries of NNPC Limited?

    <p>Dividends can be declared out of retained earnings or distributable profits of any financial year</p> Signup and view all the answers

    Which one of the following is NOT covered by the Surplus Funds and Investment Management policy of NNPC Limited and its Subsidiaries?

    <p>Dividend distribution</p> Signup and view all the answers

    According to the Surplus Funds and Investment Management policy, where can NNPC Limited and its Subsidiaries invest surplus funds?

    <p>With Board approved onshore and offshore banks and money market institutions</p> Signup and view all the answers

    What benchmark should be used for determining the interest rate on Nigerian Naira credit balances according to the Surplus Funds and Investment Management policy?

    <p>Benchmarked to the minimum interest rate on savings</p> Signup and view all the answers

    Which of the following is NOT an offshore investment option available to NNPC Limited and its Subsidiaries?

    <p>Term Deposits</p> Signup and view all the answers

    What is the maximum term deposit period allowed for onshore investments in Naira funds by NNPC Limited and its Subsidiaries?

    <p>30 days</p> Signup and view all the answers

    Who is responsible for initiating proposals for investment in money market instruments and liquidations therefrom for NNPC Limited?

    <p>Treasurer</p> Signup and view all the answers

    What is the central philosophy of investment risk management for NNPC Limited and its Subsidiaries?

    <p>To ensure high returns on investment</p> Signup and view all the answers

    What are the key considerations for investing surplus funds by NNPC Limited and its Subsidiaries?

    <p>Security, Liquidity, and Yield</p> Signup and view all the answers

    What is the maximum maturity date for instruments in which NNPC Limited can invest surplus funds?

    <p>90 days</p> Signup and view all the answers

    Who is responsible for ensuring an appropriate mix of instruments and portfolio of investments for NNPC Limited and its Subsidiaries?

    <p>The Treasury Division</p> Signup and view all the answers

    What is the purpose of the annual investment plan developed by NNPC Limited and its Subsidiaries?

    <p>To guide the investment of funds</p> Signup and view all the answers

    Which one of the following is NOT included in the monthly investment report provided by the Treasury Division to the CFO and the CEO?

    <p>Summary of transactions for the month</p> Signup and view all the answers

    Who has overall responsibility for providing oversight on investment management for NNPC Limited and its Subsidiaries?

    <p>The Board of Directors</p> Signup and view all the answers

    What is the role of the Governance, Risk and Compliance (GRC) team in relation to the Policy on Investment Management?

    <p>Perform a biennial review of the execution of the policy for compliance</p> Signup and view all the answers

    Which one of the following is NOT a responsibility of the Treasurer of NNPC Limited and Heads of Finance of the respective Subsidiaries in case of a breach of regulatory requirements and/or limits?

    <p>Perform a biennial review of the execution of the Policy for compliance</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who must approve intercompany loan decisions?

    <p>The Board of Directors of the lending and borrowing entities</p> Signup and view all the answers

    What factors must be considered when pricing the interest rates of intercompany loans?

    <p>All of the above</p> Signup and view all the answers

    What is the maximum tenure of intercompany loans according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>5 years</p> Signup and view all the answers

    What is the maximum cumulative amount of intercompany loan a lending entity can provide based on its Shareholders' funds?

    <p>25%</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for monitoring the utilization of loan proceeds and ensuring compliance with repayment terms?

    <p>The Head, Finance and Accounts of the borrowing entity</p> Signup and view all the answers

    Which department is responsible for reviewing and supporting the Loan Agreement between the lending and borrowing parties?

    <p>The Legal Division/Departments of the lender and borrower</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of the monthly fund utilization report submitted by the Head, Finance and Accounts of the borrowing entity?

    <p>To evidence the efficient utilization of the loan proceeds</p> Signup and view all the answers

    Who is responsible for assessing the impairment of intercompany loans at year end?

    <p>The Head of Accounts</p> Signup and view all the answers

    According to the Intercompany Loan Policy Statement, when would NNPC Limited consider security-free intercompany loans as the first option?

    <p>For loan tenures not exceeding five (5) years</p> Signup and view all the answers

    According to the Intercompany Loan Policy Statement, when would third-party loans be considered for loan tenures not exceeding five (5) years?

    <p>When internal financing capacity is unavailable</p> Signup and view all the answers

    According to the Intercompany Loan Policy Statement, what must intercompany loans comply with in terms of interest rates and other commercial terms?

    <p>They must comply with the arms-length principle of transfer pricing</p> Signup and view all the answers

    Which one of the following is an example of a prepaid expense according to the text?

    <p>Room and catering deposits for past events</p> Signup and view all the answers

    According to the text, what information should be included in the prepayment amortization/recovery schedule?

    <p>Purchase order reference and relevant invoice number</p> Signup and view all the answers

    According to the text, when should bank accounts be reconciled?

    <p>On the 10th working day of the month</p> Signup and view all the answers

    According to the text, what should be indicated on all bank reconciliation statements?

    <p>All of the above</p> Signup and view all the answers

    Which financial reporting objective ensures that financial records are updated accurately and in a timely manner?

    <p>Timely, complete and accurate recording and update of financial records</p> Signup and view all the answers

    What does the policy of NNPC Limited and its subsidiaries require in terms of financial reports?

    <p>Both separate monthly financial reports and financial statements, and consolidated financial statements including all controlled entities</p> Signup and view all the answers

    Which financial reporting standard should the financial reports of NNPC Limited and its subsidiaries conform to?

    <p>International Financial Reporting Standards (IFRS)</p> Signup and view all the answers

    According to the text, when should expenses be recognized in the financial statements?

    <p>When goods/services are received</p> Signup and view all the answers

    Who is responsible for approving requests to create or amend the Chart of Accounts?

    <p>The Head of Finance and Accounts</p> Signup and view all the answers

    What is the purpose of the accrual schedule prepared on each period-end cut-off date?

    <p>To record expenses that have been incurred but not invoiced</p> Signup and view all the answers

    What is the minimum amount of expenses that should be treated as prepaid expenses in the financial records?

    <p>N250,000 or $1,000</p> Signup and view all the answers

    Which one of the following is NOT a responsibility of the CFO/Head, Finance & Accounts according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Approving audit fees</p> Signup and view all the answers

    When should the annual external audit of NNPC Limited and its subsidiaries' financial statements be completed?

    <p>On or before the last working day in March</p> Signup and view all the answers

    Who is responsible for presenting the separate and consolidated financial report to the Board according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>The CFO/Head, Finance &amp; Accounts</p> Signup and view all the answers

    Which department is responsible for the reconciliation of intercompany transactions at NNPC Limited and its subsidiaries?

    <p>Finance and Accounts Department</p> Signup and view all the answers

    When should intercompany reconciliation reports be finalised and approved by the Finance departments of the respective business units?

    <p>On or before the 10th working day of the following month</p> Signup and view all the answers

    How many working days do the finance departments have to liaise and regularise outstanding reconciling items?

    <p>Five (5) working days</p> Signup and view all the answers

    What is the cut-off date for entry of financial transactions into the financial system after month end?

    <p>6th day of the following month</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how many vendors must submit bids for a project before it is assigned to a specific contractor?

    <p>At least 2 vendors</p> Signup and view all the answers

    Who is responsible for setting up a Project Management Team (PMT) at the inception of a project?

    <p>The Project Sponsor</p> Signup and view all the answers

    Which department is responsible for tracking projects and supervising the capitalization of completed AUCs?

    <p>Budget &amp; Projects Department of Federation Accounts Division</p> Signup and view all the answers

    What is the maximum allowable percentage for project advance payments?

    <p>15%</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for estimating the budget required to complete project activities?

    <p>The Project Manager</p> Signup and view all the answers

    What documents are required to be obtained by the Project Accountant at every milestone payment?

    <p>Authority for Expenditure (AFE), Invoice, and Milestone Certificate</p> Signup and view all the answers

    What is the minimum information that the financial performance report should contain?

    <p>Project budgeted cost, Actual project cost till date, Estimated cost to completion, and Budget vs actual variance analysis</p> Signup and view all the answers

    What is the purpose of the 'As-Built' documents in project closure?

    <p>To serve as supporting evidence of the contract work</p> Signup and view all the answers

    Which of the following is NOT an objective of the Project Accounting processes according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Ensuring timely and adequate closure of project accounts and reclassification of project costs</p> Signup and view all the answers

    What are the sub-processes covered under Project Accounting according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Project approval and account set-up; Project budget monitoring &amp; reporting; and Project completion and certification</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the policy statement regarding capital projects?

    <p>NNPC Limited and its subsidiaries shall approve projects that have reasonably been justified, carry out the projects in the most economic and efficient manner, and record and report the project at the completion stage through project close-out report.</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the objective of inventory management?

    <p>All of the above</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how often should inventory count and reconciliation be conducted?

    <p>Quarterly</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how should inventory items be issued from the stores?

    <p>On a First-Expiry-First-Out basis</p> Signup and view all the answers

    Which of the following statements about the disposal of inventory is true according to the text?

    <p>Any gain or loss arising from the disposal of inventory is recognized in the Statement of Comprehensive Income</p> Signup and view all the answers

    Who is authorized to grant exceptions to the application of the policy mentioned in the text?

    <p>The GCEO</p> Signup and view all the answers

    Which document is mentioned as an integral part of the NNPC Limited Finance and Accounts Policy Manual?

    <p>NNPC Limited Accounting Policy</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for investigating and resolving discrepancies noted during inventory verifications?

    <p>Stores Officer</p> Signup and view all the answers

    When should quarterly inventory counts commence according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>First week of every new quarter</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who approves write-offs on inventory variances?

    <p>CFO for NNPC Limited and the Head of Finance for respective subsidiaries</p> Signup and view all the answers

    What method is used for inventory verification according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Blind count</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for approving requests to transfer and/or dispose inventory items?

    <p>The CFO of NNPC Limited</p> Signup and view all the answers

    In the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for validating orders received into the store and confirming that materials supplied meet specific technical requirements?

    <p>The GRC representative</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how long should the inspection of supplies be conducted after delivery?

    <p>Two (2) working days</p> Signup and view all the answers

    What is the basis for inventory issuance from the stores according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>First-Expiry-First-Out (FEFO)</p> Signup and view all the answers

    Which of the following is NOT one of the objectives of the Property, Plant and Equipment Management policy of NNPC Limited?

    <p>Ensuring adequate procedures for acquiring and disposing of PP&amp;E</p> Signup and view all the answers

    What are the sub-processes covered under PP&E management according to the text?

    <p>Asset acquisition and capitalization, asset safeguard and control, transfer of assets, disposal of assets</p> Signup and view all the answers

    According to the Property, Plant and Equipment Policy Statements, what is the capitalization and depreciation requirement for amounts expended on Property, Plant and Equipment?

    <p>Only amounts expended on PP&amp;E above the defined threshold shall be capitalized and depreciated</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when should the tagging of assets be done?

    <p>Upon receipt by the user department</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how should assets be tagged if there are multiple quantities of the same asset?

    <p>Each asset should be tagged separately with its unique code</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what should be done if a tag on a fixed asset is missing, worn out, damaged or requires replacement?

    <p>The Administrative Officer for the respective User Department should notify the PP&amp;E Unit for immediate remediation</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when should the verification exercise of assets be performed?

    <p>On a bi-annual basis</p> Signup and view all the answers

    Which department is responsible for assessing the disposals proposed by the user departments and coordinating the disposal of approved PP&E items?

    <p>Assets Disposal Committee</p> Signup and view all the answers

    What is the minimum number of Committee members required to constitute a quorum for the Assets Disposal Committee (ADC)?

    <p>60%</p> Signup and view all the answers

    When should recommendations for replacement or disposal of movable assets, which have not been fully depreciated, originate from?

    <p>User Department</p> Signup and view all the answers

    How should the disposal price for PP&E be determined?

    <p>By a reserved price determined by the ADC/CABDC</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when is an item of PP&E deemed to be impaired?

    <p>When the asset's market value has declined significantly more than expected</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what are the conditions for an asset to be deemed impaired?

    <p>The asset's market value has declined significantly more than expected</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the net book value at which assets are transferred?

    <p>The net book value of the asset</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who approves the asset transfer form?

    <p>The Head of Finance and Accounts of the transferring entity</p> Signup and view all the answers

    Which one of the following is true about the capitalisation threshold for property, plant & equipment (PP&E) according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>The capitalisation threshold for PP&amp;E is ₦1,000,000 or $5,000 for moveable and non-moveable assets.</p> Signup and view all the answers

    Which one of the following is NOT a component that should be capitalised if it exceeds the capitalisation threshold for PP&E?

    <p>Individually insignificant value items</p> Signup and view all the answers

    Which one of the following is true about the initial recognition of acquired assets according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>All acquired assets shall be initially recognised at cost, including import duties and non-refundable purchase taxes.</p> Signup and view all the answers

    Which one of the following is true about the reporting of property, plant & equipment (PP&E) after initial recognition according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>PP&amp;E shall be reported at their acquisition cost less accumulated depreciation and any accumulated impairment losses.</p> Signup and view all the answers

    Which department is responsible for overseeing the tagging of all physical assets according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>PP&amp;E Unit</p> Signup and view all the answers

    When should assets be tagged according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Upon receipt by the user department</p> Signup and view all the answers

    What should be done if a tag on a fixed asset is missing, worn out, damaged or requires replacement according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Notify the PP&amp;E Unit for immediate remediation</p> Signup and view all the answers

    How often should the verification exercise of assets be performed according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Bi-annually</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the capitalisation threshold for moveable and non-moveable assets?

    <p>₦1,000,000</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, which assets shall be initially recognised at cost?

    <p>All acquired assets</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how should subsequent expenditure on an asset be treated?

    <p>It should be capitalised</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what information should be tracked in the PP&E register?

    <p>All of the above</p> Signup and view all the answers

    Which of the following is NOT one of the objectives of the Property Plant and Equipment (PP&E) Management policy of NNPC Limited?

    <p>Ensuring effective management of NNPC Limited's PP&amp;E</p> Signup and view all the answers

    What is one of the sub-processes covered under PP&E management according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>Inventory management</p> Signup and view all the answers

    According to the Property Plant and Equipment (PP&E) Policy Statements of NNPC Limited, what is the requirement for capitalizing and depreciating amounts expended on PP&E?

    <p>Only amounts above a defined threshold must be capitalized and depreciated</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the minimum percentage of Committee members required to constitute a quorum for the Assets Disposal Committee (ADC)?

    <p>60%</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when should an asset be considered for disposal?

    <p>All of the above</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what shall serve as the basis for derecognizing an asset from the General Ledger (GL)?

    <p>Evidence of payment from Treasury Department</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how should the disposal price for Property, Plant and Equipment (PP&E) be determined?

    <p>By an open bid process</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when is an item of PP&E deemed to be impaired?

    <p>When its market value has declined significantly more than expected</p> Signup and view all the answers

    What conditions must be met for an item of PP&E to be deemed impaired according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>The asset's market value has declined significantly more than expected</p> Signup and view all the answers

    What is the process for transferring assets within NNPC Limited and its Subsidiaries?

    <p>Transfer of assets shall be initiated using an asset transfer form, duly signed by the HOD of the user department and the Head of Finance and Accounts of the requesting entity</p> Signup and view all the answers

    How are assets transferred within NNPC Limited and its Subsidiaries valued?

    <p>Assets shall be transferred at net book value</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for approving imprest funds for NNPC Limited?

    <p>The Chief Financial Officer (CFO)</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of the imprest funds?

    <p>To be used for unplanned business expenditure that requires immediate purchase</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what should imprest funds NOT be utilized for?

    <p>Procurement of asset items</p> Signup and view all the answers

    Which department is responsible for performing a biennial review of the execution of the Compliance Governance, Risk and Compliance (GRC) Policy for compliance?

    <p>Supply Chain Management</p> Signup and view all the answers

    Who is authorized to grant exceptions to the application of the Compliance Governance, Risk and Compliance (GRC) Policy?

    <p>Head of Finance</p> Signup and view all the answers

    Which policy is complemented by the Compliance Governance, Risk and Compliance (GRC) Policy?

    <p>Supply Chain Management Policy and Procedures</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the maximum amount that the P-card shall be funded at the beginning of each month?

    <p>N300,000</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for approving requests for Imprest requisition?

    <p>The Head of the need Department</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who should the custodian of the P-card ensure has given approval before releasing the card for any transaction to members of staff?

    <p>The Head of the need Department</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what should the custodian of the P-card do before handing over to the deputising custodian?

    <p>Conduct a proper reconciliation of the imprest fund being handed over</p> Signup and view all the answers

    Which of the following is NOT a objective of the Trade Credit and Accounts Receivable policy?

    <p>Maximizing sales revenue</p> Signup and view all the answers

    According to the Trade Credit and Accounts Receivable policy, which of the following is covered by the policy?

    <p>Credit management</p> Signup and view all the answers

    According to the policy, under what criteria can NNPC Limited and its subsidiaries sell on credit to Long-Term Customers or Spot Customers?

    <p>Customer must present a Letter of Credit (LC) or Bank Guarantee (BG)</p> Signup and view all the answers

    Which of the following statements is true regarding the NNPC Limited Finance and Accounts Process and Procedures?

    <p>A debt customer may be informed if an outstanding debt has been written off.</p> Signup and view all the answers

    Who is responsible for performing a biennial review of the execution of the NNPC Limited Finance and Accounts Policy for compliance?

    <p>The Compliance Governance, Risk and Compliance (GRC)</p> Signup and view all the answers

    Which document complements the NNPC Limited Finance and Accounts Policy Manual?

    <p>The Group accounting policy</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of the monthly report on trade receivables?

    <p>To monitor the monthly accounts receivable movements</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how often should outstanding receivables be reconciled to the general ledger?

    <p>Monthly</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of the aging schedule for each customer?

    <p>To maintain adequate records of all customers' receivables</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when should the accounts receivables balances be subjected to impairment test?

    <p>On an annual basis</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the penalty interest rate for default on Naira payments?

    <p>Monetary Policy Rate (MPR) plus a margin</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the penalty interest rate for default on USD payments?

    <p>Floating base rate of 30-Day Average SOFR plus a fixed margin</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of down payments from customers?

    <p>To minimize the risk of payment default by new customers</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what are credit notes used for?

    <p>To reduce amount receivable from the customer</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what criteria are used to evaluate the credit worthiness of customers?

    <p>Character, Capacity, Condition</p> Signup and view all the answers

    Who approves the credit limits for NNPC Limited and its wholly owned Subsidiaries?

    <p>CFO for NNPC Limited and MD for Subsidiaries</p> Signup and view all the answers

    When should new orders not be fulfilled for customers?

    <p>If they have outstanding debts beyond their contractual credit period or if fulfilling the order will exceed their approved credit limit</p> Signup and view all the answers

    What is the purpose of obtaining Letters of Credit (LCs) or Bank Guarantees (BGs) from banks?

    <p>To mitigate the risk of defaulting customers and irrecoverable debts</p> Signup and view all the answers

    Which of the following is NOT a requirement regarding the communication of an outstanding debt being written off?

    <p>The debt customer should be informed</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is authorized to grant exceptions to the application of the policy?

    <p>The GCEO</p> Signup and view all the answers

    Which document is mentioned as complementing the NNPC Limited Finance and Accounts Policy Manual?

    <p>Procedural Guide on Banking Counterparty Selection and Credit Acceptances Policy</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of the Trade Credit and Accounts Receivable Policy?

    <p>To maximize sales revenue and maintain a high receivable turnover ratio</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the scope of the Trade Credit and Accounts Receivable Policy?

    <p>Credit Management, customer invoice/billing processing, advance payments from customers</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what criteria must be met for NNPC Limited and its subsidiaries to sell on credit to Long-Term Customers or Spot Customers?

    <p>All of the above criteria must be met</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what penalty interest rate is charged on outstanding Naira payments from the date of default?

    <p>Monetary Policy Rate (MPR)</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what penalty interest rate is charged on outstanding USD payments?

    <p>30-Day Average SOFR</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how soon should invoices be created and billed to the customer after products or services have been provided?

    <p>72 hours</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for managing customers' down payment?

    <p>Treasurer of NNPC Limited</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what criteria are used to evaluate the credit worthiness of customers?

    <p>Character, Capacity, Condition</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of Letters of Credit (LCs) and Bank Guarantees (BGs)?

    <p>To mitigate the risk of defaulting customers and irrecoverable debts</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who approves the credit limits for wholly owned Subsidiaries?

    <p>The Managing Director (MD)</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when should new orders not be fulfilled for customers?

    <p>If customers have outstanding debts beyond their contractual credit period</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when should outstanding receivables be reconciled to the general ledger?

    <p>Monthly on the 10th working day of the subsequent month</p> Signup and view all the answers

    What is the purpose of the aging schedule generated by the Reconciliation Unit?

    <p>To calculate the total accounts receivable recorded and reported</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the standard aging bracket for accounts receivable?

    <p>0 - 90 days</p> Signup and view all the answers

    What conditions must be satisfied before a debt is deemed irrecoverable according to the NNPC Limited Finance and Accounts Process and Procedures?

    <p>All of the above</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the annual budget period for NNPC Limited and its Subsidiaries?

    <p>1st January to 31st December</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what is the purpose of budget monitoring and reporting?

    <p>To evaluate budget performance</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, where should the annual budget of NNPC Limited and its Subsidiaries reflect?

    <p>The approved strategic plans of NNPC Limited</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how often should budget revisions be performed?

    <p>Twice a year in May and October</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for reporting actual performance against their approved budgets on a monthly basis?

    <p>Budget Center Managers</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what should be done with unutilized budgeted funds for a specified period?

    <p>They should be budget cleared and accrued before the end of the financial year.</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, how should outstanding receivables be reconciled to the general ledger?

    <p>They should be reconciled on a quarterly basis.</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, when should the annual budget preparation process commence?

    <p>First week in August of the preceding year</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, what are the three sections into which the annual budget is divided?

    <p>Revenue budget, CAPEX budget, OPEX budget</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for presenting the budget to the Senior Management Team for deliberations?

    <p>Departmental Heads</p> Signup and view all the answers

    According to the NNPC Limited Finance and Accounts Process and Procedures, who is responsible for consolidating all budgets from the various budget centers into a single budget for each subsidiary/business unit?

    <p>Budget Department</p> Signup and view all the answers

    Study Notes

    Tax and Other Statutory Remittances Policy

    • The Policy does not cover Customs Duty, Import Duty, and other tariffs.
    • The objective of the Policy is to ensure compliance with all tax laws and regulations.
    • The Policy does not cover sub-processes such as Capital Allowance and Value Added Tax (VAT).

    Taxes Covered

    • Petroleum Profits Tax (PPT) is levied on the income of companies engaged in upstream petroleum operations.
    • Companies Income Tax (CIT) is applicable to companies engaged in upstream petroleum operations in the onshore and shallow water.
    • Royalty rates for crude oil and condensates production are correct based on the pricing methodology.
    • Royalty calculation for fields located partially in onshore and in shallow water or partially in shallow water and deep offshore areas is correct.
    • Royalty rates for natural gas and natural gas liquids production are correct.

    Tax Compliance

    • The NNPC Limited Tax Department is responsible for all taxation-related matters.
    • Business units involved in upstream operations must file their tax returns quarterly.
    • Estimated tax returns must be filed within the first three months of the assessment year.
    • The actual PPT/HCT liability is higher than the estimated PPT/HCT, and the difference must be paid.

    Banking Relationships

    • The Treasury Division is responsible for evaluating the creditworthiness of Relationship Banks.
    • Bank accounts can be evaluated for closure if a Relationship Bank no longer meets the minimum requirement for banking relationships.
    • NNPC Limited and its Subsidiaries do not accept certain financial instruments such as Letters of Credit.
    • The maximum exposure to a single financial institution is limited to 25% of the Group's shareholders' funds.

    Financial Instruments

    • The NNPC Limited Finance and Accounts Process and Procedures for Production Sharing Contracts (PSC) and Service Contracts (SC) is responsible for financial reporting.
    • The objective of the NNPC Limited Finance and Accounts Process and Procedures for PSC and SC is to ensure accurate and timely financial reporting.
    • The scope of the Process includes financial reporting, budgeting, and cost verification.

    Joint Interest Management

    • The objective of the NNPC Limited Finance and Accounts Process and Procedures for Joint Interest Management is to ensure accurate and timely financial reporting.
    • The scope of the Process includes financial reporting, budgeting, and cost verification for joint interest arrangements.
    • The Joint Operating Agreement (JOA) serves as a reference point for each party's rights and obligations to the assets and liabilities of the joint interest arrangements.

    Foreign Exchange Management

    • The objective of the Foreign Exchange Management policy is to minimize foreign exchange exposure.
    • The Treasury Division is responsible for developing and maintaining market contacts to stay aware of market conditions affecting corporate exposures.
    • The Policy requires the use of forward exchange contracts to hedge foreign exchange exposures.
    • The Central Bank of Nigeria's foreign exchange policies must be implemented in compliance with the Policy.

    Dividends Policy

    • The objective of the Dividends Policy is to ensure that NNPC Limited distributes dividends to its shareholders.
    • The Policy requires NNPC Limited to retain a minimum of 30% of profits as retained earnings.

    General

    • The NNPC Limited Tax Department is responsible for ensuring tax compliance.
    • The Treasury Division is responsible for reviewing all tax returns before they are filed with the tax authority.
    • The actual PPT/HCT liability is higher than the estimated PPT/HCT, and the difference must be paid.

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    Description

    Understanding NNPCL Finance and Accounts policy

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