MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Strength of the stallion... MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Welcome to MRS Oil Nigeria PLC Sustainability Report 2019 About this report A1 fuel) and Dual Purpose Kerosene (DPK) at either the Company Owned Retailer Operated Staons (CORO) or its Retailer Owned This is MRS Oil Nigeria Plc.'s (MRS) Sustainability Report for 2019. Retailer Operated Staons (RORO). It is an annual report of the Company and it presents the economic, social and environmental performance of the MRS Oil Nigeria Plc. (formerly known as Texaco Nigeria Limited) Company for the year. This is the first report of the Company, was incorporated as a privately and wholly-owned subsidiary of which has been prepared in line with Global Reporng Iniave Texaco Africa Limited, on the 12th of August 1969, thereby (GRI) Standards on Sustainable Development. inhering the business formerly carried out in Nigeria by Texaco Africa Limited. MRS was converted to a Public Limited Liability The report describes how the effects of the Company's Company, quoted on the Nigerian Stock Exchange in 1978, as a operaons are managed internally and externally and how these result of the 1977 Nigerian Enterprises Promoons Decree. acvies contributed to the growth of the Company during the year. The Company ensures regular engagement with Currently, MRS has a lube blending plant at No. 5 Alapata Road, Stakeholders through the Company's quarterly Customers' Apapa, Lagos-Nigeria that is ISO 9001:2008 cerfied with a 23.9 forum, dialogues at departmental meengs and/or meengs million litres annual capacity. A 1.3 million kilograms annual with regulatory agencies. capacity grease plant, 7.3 million litres annual capacity tank farm Contact Us storage and Finished-Goods warehouses located in various parts The Company Secretary's This report does not cover any data or impact of the operaons of of Nigeria. MRS has a modern Jet A-1 facilies at Lagos, Kano and Department of MRS Oil Nigeria MRS affiliate Companies. Disclosures for this purpose shall be Abuja Internaonal airports with over 5 million litres cumulave Plc., prepared this report in line made on a yearly basis and the reporng period of the storage capacity/tank share. The Aviaon depots which serve the with the 2016 GRI Standards. Sustainability Report, shall be within ninety (90) calendar days of domesc airports in Lagos, Abuja and Kano are 100% operated by Please feel free to share your the end of the Company's fiscal year. MRS. Being one of the largest downstream operators, MRS has a 2 thoughts, provide feedbacks or million litres/day fuel terminal in Apapa and over 357 retail quesons on any secon of this Who We Are staons all over Nigeria. report, by sending an email to MRS is a fully integrated and efficient downstream Company and [email protected] or by a major player in the Oil and Gas Industry in Nigeria. The head 60% of the Company shares is owned by MRS Africa Holding post to the Company’s Head office of the Company, is located at No. 2 Tin Can Island Port Road, Limited, while 40% is owned by other Nigerian Shareholders. Office, addressed to: Apapa, Lagos State, Nigeria and the main business of the Company is the markeng of petroleum products and the Further informaon on the Company's ownership structure can The Company Secretary producon of quality lubricant oil and greases. be found in the Company's Audited Report and Accounts. For MRS Oil Nigeria Plc more informaon about the Company, please visit our website on No. 2 Tin Can Island Port Road The Company markets Premium Motor Spirit (PMS), Automated www.mrsoilnigplc.net. Apapa – Lagos State, Nigeria. Gasoline Oil (AGO), Aviaon Turbine Kerosene (also known as Jet-

2 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019

1.2 Chairman’s Keynote Address and pracce sound safety culture in their daily Welcome to the first edion of MRS Oil Nigeria Plc.'s acvies while on the Company's premises. Sustainability Report. The Company has been in operaon for over 50 years and understands the Furthermore, we priorize the health of employees importance of carrying out its business acvies in a and other Stakeholders. We understand that health sustainable manner. We are commied to operang in challenges may be encountered by anyone at different a responsible manner and will connue to consider stages of life, hence the periodic health seminars the interests of the Stakeholders through our several organized for employees and the annual contribuons Stakeholders Engagement fora. to different health center iniaves.

In spite of the financial loss recorded in the reporng We also believe, that water is essenal to biodiversity; year, the Company has taken a forward looking- MRS is commied to project borehole drilling, for strategic approach to manage the negave impact of selected communies within Nigeria. We strategically the loss. The aggressive markeng of lubricant oil and reviewed remote communies with no access to clean greases, the rebranding of the lubricant kegs and retail water, amongst other community programs and we staons of the Company and the introducon of other have implemented a phased program for the borehole incidental business opportunies at the retail outlets, drilling projects at the communies. The Company did are some of the strategies put in place. not carry out any borehole drilling project in 2019; however, the Company intends to provide clean water The Company has also restructured its operaons for to the selected communies in the coming year(s). this purpose and is commied to complying with regulatory guidelines and safe operaons, while As we look forward to the connuous development ensuring that the interest of the Stakeholders are and the operaons of the Company in a sustainable considered and integrated. manner, we will assess the operaons, conduct a gap analysis on the areas assessed and make We confirm that there were no records of fines improvements on transparency and inclusiveness. imposed on the Company by any regulatory authority and there were no reports of accidents at any of the In conclusion, we assure you that we will connue to Company's terminals and retail outlets in the year engage the Stakeholders of the Company and ensure under review. As a good corporate cizen, we observe business growth and sustainability. an all-inclusive safety approach through the monthly safety training sessions of the Company's employees, Thank you. the quarterly training of MRS retail customers and regular safety outreaches, organized by the Company. Mr. Patrice Alber All Stakeholders are sensized on the need to imbibe Chairman.

3 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019

CONTENTS

1 — Overview - Pg 1 2 Welcome to MON Plc Sustainability Report 2019 3 Chairman’s Keynote Address 4 Content Page

2 — Sustainability Focus - Pg 5 6 Board of Directors and Leadership Team 7 Business Ethics and Integrity 8 An-Corrupon Policy 8 Quality Policy 8 Our Commitment

3 — Economic Performance & Development - Pg 9 10 2019, Summary of Financial Performance: Where we stand. 10 Market Analysis 13 Procurement and Recycling Policy

4 — Social Performance - Pg 14 15 Social Performance 15 Labour and Employment Pracces 15 Donaons and Sponsorships

5 — Stakeholders Engagement - Pg 17 18 Engagement with Employees 18 Shareholders' Relaons 19 Engagement with Regulators 19 Engagement with Customers 19 Other Stakeholder Engagement

6 — Environmental Pracces - Pg 20 21 MRS's Approach 21 Safety, Health and the Workplace 22 Waste Management 22 Occupaonal Health and Safety Management System 23 Hazard Idenficaon, Risk Assessment and Incident Invesgaon 23 Incident Reporng and Invesgaon 23 Occupaon Health Services

4 2 SUSTAINABILITY FOCUS

Ÿ Board of Directors and Leadership Team Ÿ An-Corrupon Policy Ÿ Quality Policy Ÿ Our Commitment MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Governance MRS Oil Nigeria Plc., is governed by the Board of Directors, which is the highest The day to day acvies of the Company is run by the Managing Director, who decision making authority of the Company. The Board is responsible for manages the Leadership Team. The Leadership Team heads the various overseeing and implemenng the Company's strategy and goals through its departments of the Company and ensures that the departmental goals are Leadership team. The Chairman of the Board is Mr. Patrice Alber, who is a Non- aligned with the vision and mission of the Company. Execuve Director. The Leadership Team of MRS Oil Nigeria Plc, as at December 2019: The Board of Directors of MRS Oil Nigeria Plc, as at December, 2019: Priscilla Thorpe Monclus¹ Sam Itodo⁵ Mr. Patrice Alber Chairman Managing Director Treasury Manager

Oluwakemi M. Jafojo Olanrewaju Johnson⁶ Mrs. Priscilla Thorpe-Monclus* Managing Director (Ag.) Company Secretary Logiscs Manager

Mr. Andrew Gbodume** Non-Execuve Director Charles O. Agutu² Nnenna Enumah⁷ Kamil Bello** Sales Administrave Manager Chief Finance Officer Dr. Paul Bissohong*** Non-Execuve Director Moruf Sobowale³ Stanley Duru⁸ Ms. Amina Maina Independent Director Sales & Markeng Manager Supply Manager Daniel Chukwuazawom Mr. Franklin Ugwueke⁹ Mr. Mahew Akinlade Non-Execuve Director Chief Internal Auditor Engineering Manager

Sir. Sunday Nnamdi Nwosu Non-Execuve Director Mr. Oluwole Ojetunde4 Alex Tiamiyu Mr. Kunle Okunowo*** LPG Manager Account Manager Dr. Amobi Daniel Nwokafor Non-Execuve Director Col. Adebisi Adesanya Olatunji Sanusi¹⁰ Chief Security Officer Oluwole Oderinde***** Mrs. Priscilla Ogwemoh**** Non-Execuve Director Informaon Technology Manager

. Christopher O. Okorie***** Non-Execuve Director Micheal Ayewah**** Gbenga Dairo¹¹ HSE Manager Consumer and Industrial Manager

Board Appointment and Resignaon *Appointed January 10, 2019 **Resigned December 31, 2019 ***Resigned April 30, 2019 ****Appointed February 28, 2019 *****Appointed March 28, 2019 6 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 As a corporate and responsible cizen, the Company Company's Code of Business Conduct prescribes the complies with its Memorandum and Arcles of All strategic issues are discussed at Board meengs, standards of behavior expected of all stakeholders of Associaon, the Nigerian Code of Corporate in alignment with the Company's vision/mission and the Company. The corporate structure of the Governance, the Rules of the Nigerian Stock as the business environment evolves. Currently, the Company is hinged on the core values of the Exchange and the Securies and Exchange Board Nominaon and Corporate Governance Company and this guides the daily acvies of the Commission, the Financial Reporng Council (FRC) Commiee has the oversight funcon on economic, business operaons: Act, as well as, other regulaons and internaonal environmental and social issues, including the best pracces applicable to the Company and as materiality of these issues to the Company's a. Performing our job with the highest integrity and amended from me to me. operaons. The Board reviews and approves issues ethics; referred by the Board and Management proposals. b. Respecng the laws of the countries we operate The Board is governed by a Charter, which provides However, their impacts are assessed and reviewed in in; the procedures and processes for the administraon line with the Company's risk management processes c. Training our people to become the best of its affairs. This includes but is not limited to the and procedures under the Audit Commiee's professionals; funcons of board members, the composion, size, purview. d. Being fair and honest towards the stakeholders we tenure of office, meengs of the Board and deal with; Commiees, amongst others. The selecon of Board Annually, the Board undertakes a review of its e. Applying our standards and procedures members is based on the Board Nominaon and performance to strengthen its efficacy, the consistently across the Corporaon; Corporate Governance Commiee Guidelines. The contribuon of each Director to the overall growth f. Creang an aracve and compeve total Commiee reviews the nominaon of candidates, of the Company. There is a follow up process for all Shareholders Return for our stakeholders. selects and makes recommendaons to the Board. maers of concern on economic, environmental and The appointment of a Nominee as Director, is subject social issues and sustainable business development The Company aligns its operaons with Corporate to the Board's approval and the Shareholders training programs are organized annually for Governance requirements and best pracce and has raficaon during the Company's Annual General Directors. developed and implemented a number of Policies. Meeng (AGM). These Policies include the Securies Trading Policy, All issues relang to economic, environmental and the Conflict of Interest Policy, the An-Corrupon The Board is currently comprised of an Execuve social topics which are material to the Company's Policy, the Complaints Management Policy, the Director, Non-Execuve Directors and an operaons are addressed to the Managing Director, Whistle Blower Policy, the Communicaon Policy, Independent Director. To improve the Board's who assigns tasks to respecve Managers and the Data Protecon Policy, the Health and Safety management and efficacy, the Board has four (4) reports to the Commiee. Thereaer, the subject Policy, amongst others. Commiees namely: the Audit Commiee, the maer is reviewed and recommendaon made to Board Nominaon and Corporate Governance the Board for approval. All Commiees meet at the The Policies are approved by the Board of Directors Commiee, the Human Resources Commiee and minimum, three (3) mes a year. and are accessible to the public through the the Risk, Strategic and Finance Planning Commiee. Company's website. Currently the Policies are in Each Board Commiee has its own Terms of Business Ethics and Integrity English, but efforts will be made to provide the Reference, which clearly sets out its funcons and The business operates with the highest integrity and policies in other translaons. processes. ethics is of priority to MRS Oil Nigeria Plc. The

7 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019

The Company's inducon programs contain topics (Prohibion) Act, 2011 etc. of MRS's Management System (MMS) for Quality, centered on some of the Policies and the Company's Health, Safety & Environment (QHSE), in alignment business operaon. This provides an understanding The violaon of these laws are tantamount to non- with the overall mission and vision of the Company. to the inductees on the structures of the Company compliance with Corporate Governance principles and the business environment. Stakeholders are and there are criminal undertones, which negavely Our Commitment encouraged to read the Policies, available on the impact the Company's reputaon and ulmately This Policy is read, understood and implemented at Company's website. The Company also encourages lead to corporate failure. These conducts include all levels of the Company for a sustainable business stakeholders with concerns, reports, comments acts of bribery and corrupon or such acts that may connuity iniave. and/or suggesons, to submit their complaints be interpreted to lead to bribery and corrupon. through the Company's Compliant Management These acons breach public trust and threaten Safety and compliance with regulatory requirements Lodgment Form and comments or suggesons economic and social development, hence the are the core of the Company's business values. The should be addressed to the Company Secretary's Company's zero tolerance for it. Company ensures that its business operaons are office or the designated email address(es), provided safe and meets all regulatory requirements, which for this purpose. The Company's An-Corrupon Policy is elaborave enhances the customer's experience and brand and it provides penales or consequences of loyalty. MRS operates fully in line with ISO Standards The Company encourages anonymous reporng and possible violaon. They are applicable to all across all business units and locaons and it is ensures that all concerns and reports of violaon by employees, customers, and other stakeholders of verified by independent third party cerficaon its employees, are thoroughly invesgated. To the Company. For implementaon, all stakeholders body. repose confidence in the Policies, the Company including employees are required to read, ensures that the invesgaon process is confidenal understand and abide by it. The Company organizes Highlights of the Quality Policy Statement: and handled in a professional manner. Appropriate mandatory training courses on the Company's Code 1. Encourage a quality mind-set, with the aim of disciplinary measures are taken at the conclusion of of Business Ethics, includes secons on conflict of providing products and services that are trusted and the invesgaon(s). interest, an-corrupon and bribery, etc. for preferred by MRS customers. employees and it ensures that vendors or 2. Comply with relevant laws and regulaons as well 2.3 An-Corrupon Policy contractors of the Company, comply with the Code. as internal requirements. To uphold the Company's success and its business 3. Consistently improve the effecveness of the integrity and ethics, there is a Code of Business 2.4 Quality Policy Quality Management System (QMS), through Conducts, which contains the Company's posion on MRS is commied to meeng its customers' established and reviewed quality objecves, aimed bribery and corrupon. Nigeria became a signatory expectaon by providing its services in a at guaranteeing product safety and the prevenon to the United Naons (UN) Convenon against professional and efficient manner in line with all of quality incidents; Corrupon on December 9, 2003 and rafied it on applicable regulatory and statutory standards, and 4. Encourage teamwork and promoon of quality October 24, 2004. Nigeria has moved ahead to at a price that represents value to our stakeholders. responsibilies amongst all employees and third domescate and codify the principles of this Treaty The Company ensures an effecve Quality pares, through parcipaon, standards, educaon, into law, in the Corrupt Pracces and Other Related Management System (QMS), through constant training, supervision and effecve communicaon. Offences (ICPC) Act, 2000, Money Laundering reviews of its quality objecves and the applicaon

8 3 ECONOMIC PERFORMANCE AND DEVELOPMENT Ÿ 2019, Summary of Financial Performance Ÿ Market Analysis Ÿ Procurement and Recycling Policy MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Economic Performance And Development 3.1 2019, Summary of Financial Performance: retail business, the Company concentrated on revamping Where we stand. its retail networks and took strategic steps to grow the The Company's year on year performance comparison earnings by volume on the white products and lubricants. shows a 28% decline in Revenue for twelve months from The Company launched the fighng grade of lubricants, NGN89.55 billion in 2018 to NGN64.91 billion in 2019. rebranded some exisng staons, and reacvated dormant 019 Mark warehouses and retail staons, amongst others. Y 2 e F Cap t Generally, the Nigerian downstream sector broadly categorized into the refining and markeng segments of 3.2 Market Analysis petroleum products witnessed a challenging year. The MRS operates in five (5) areas of the downstream sector: downstream sector has been unable to refine adequate Retail, Commercial and Industrial, Aviaon, Lubricants and petroleum products domescally to meet local demands. Liquefied Petroleum Gas (LPG). The white products sold by There are also issues emanang from foreign exchange the Company are Premium Motor Spirit (PMS) for petrol constraints, which has connued to render the sector engines, the Automove Gas Oil (AGO) for diesel engines, vulnerable to foreign exchange volality. the Dual Purpose Kerosene (DPK) or Kerosene and LPG. The prices for these products are determined by the Nigerian The total comprehensive loss increased by 35% from N1.26 Naonal Petroleum Corporaon (NNPC). Billion in 2018 to N1.70 Billion in 2019. The total Assets value declined by 19% from N54.28 Billion in 2018, as The Company currently has 357 Retail Staons naonwide against N44.21 Billion in 2019, while the total Equity also and over 250 industrial customers across major sectors. The recorded an 8% decrease from N20.7 Billion in 2018 to Service Staons are grouped into four categories; North N19.1 Billion in 2019. East, North West, South East and South West. The number of Service Staons for these regions are provided below: However, the general market and economic condions gave rise to the decrease in revenue and profit during the year. In Per Region 2018, there was glut in the industry, which resulted in the 1. 75nos Staons in the North East decline of sales. It was also a challenge in accessing refined 2. 102nos Staons in the North West petroleum products locally. The refineries were not 3. 75nos Staons in the South East funconal and it increased the dearth in local supplies and 4. 105nos Staons in the South West foreign exchange volality, parcularly for petroleum independent marketers. Of these Service Staons, there are 137 Company Owned Staons and 220 Service Staons on Lease land. In view of these challenges, the Company took a strategic decision to return the business to profitability. To grow its

10 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Company Owned Staons 1. 17nos Staons in the North East 2. 20nos Staons in the North West 3. 48nos Staons in the South East 4. 52nos Staons in the South West

Company Leased Staons 1. 58nos Staons in the North East 2. 82nos Staons in the North West 3. 27nos Staons in the South East These pictures display the MRS Service Staon on Funsho Williams Avenue, at Alaka, Surulere, 4. 53nos Staons in the South West Lagos and it shows the old and the new outlook aer the rebranding exercise. 3.2.1 Service Staons Rebranding At the end of 2018, the Board of Directors took a strategic decision to rebrand the Service Staons of the Company in batches, to improve business patronage. In 2019, the Company began the rebranding exercise and commenced with three (3) strategic Service Staons in the Western Region, Lagos State, Nigeria. The Service Staons rebranded are Victoria Island Service Staon, Funsho Williams Avenue Alaka, Surulere Service These pictures display the MRS Service Staon on Ahmadu Bello Way, Victoria Island, Lagos, and Staon and the Ojota Service Staon. it shows the old and the new outlook aer the rebranding exercise.

Since the commencement of operaons at these Service Staons aer the rebranding exercise, the Company has recorded an increase in sales of about 60% at these Service Staons.

These pictures display the MRS Service Staon on Ikorodu Road, Ojota, Lagos, and it shows the old and the new outlook aer the rebranding exercise.

11 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 3.2.2 MRS Lubricant Grades categories as provided below. Premier and Stallion are MRS's major lubricant brands. The Premier series are formulated and 3.2.2.1 The Automove Grades blended for gasoline powered engines and are The Automove grades are engines oils used for available in mul and mono grades. heavy duty and passenger vehicle cars. There are nine (9) types of this lubricant grade. The Stallion Series are formulated and blended for diesel powered engines. They reflect the Company's 3.2.2.2 The Industrial Lubricants strength and passion and they are specifically The Industrial Lubricants are used for heavy blended for use on heavy duty truck diesel engines. machines and equipment and there are eight (8) The Managing Director, Mrs. Priscilla Thorpe- grades. The secon of the website on lubricants Monclus in discussions with the Sales and MRS Lubricants are blends of quality oils, using provides detailed informaon on each Industrial Markeng Manager, Mr. Moruf Sobowale at the advanced technology in the producon cycle. The Lubricant. Campaign session. Company adheres to all regulaons and Internaonal best pracces and standards at the 3.2.2.3 Lubricant Oils and the Way Forward blending facilies. The Procurement of kegs for the During the review of the Company's performance in lubricant oils has been restricted to vendors who 2018, Management through the direcve of the operate in a sustainable manner. Board of Directors, reviewed and re-strategized the business to consider aggressive markeng of the The Company blends other grades of lubricant Company's lubricant oil. To drive this secon of the brands, under the Automove and the Industrial business, Management took a proacve approach to rebrand some of the lubricant oils, carry out campaigns in remote areas where there is high patronage, such as the mechanic workshops or villages as they are popularly known in Nigeria. Since the implementaon of this strategy, the Company has recorded a 10% increase in monthly sales.

The Company is commied to an increased market The Premier Xtra Formula Series presence of its lubricant oils to gain a significant market share through customer sasfacon and the provision of real me services, aer sales services and sales promoons. With the connuous imp lementa o n o f it s st rategy a n d t h e A cross secon of the aendees of the MRS commencement of social media markeng of the Lubricant Oil Campaign at Alausa, Ikeja, Lagos Company's lubricant oil, the Company hopes to State and Mechanics at the Alausa Mechanic The Stallion Xtra Premium Series Village, parcipang in the Campaign Program.

12 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019

further increase sales of its lubricant oils by 50% in vendors and disengaged the services of some 2020. The Company operates at different locaons: vendors. Currently, about 60% of these vendors 1. The Head Office at No. 2 Tin Can Island, Port Road, were engaged in 2019. 3.2.2.4 MRS CARD – A Fleet Management Tool Apapa, Lagos State; The MRS Card is a fleet Management tool designed 2. One (1) Company operated Terminal at No. No. 3 to effecvely and efficiently control fuel costs, Alapata, Apapa, Lagos State; consumpon rates and reporng of a Company's 3. Twenty-One (21) PPMC depots, for loading and fleet acvies. It is a portable and rechargeable dispatch of products across the Country; smartcard used in payment for products offered at 4. Other third party facilies (Depot and Petroleum MRS Service Staons. It is durable and it guarantee's Products Marketers Associaon of Nigeria-DAPMA). Customer Sasfacon. 3.3 Procurement and Recycling Policy 3.2.2.5 Strategy for Selecon of Retail Staons Our Procurement cycle starts from idenfying the The Company undertakes property evaluaon and procurement needs for each department per me. the focus is on brand presence, legal standards, In the resoluon of the Company's procurement regulatory controls, physical risks, economic costs needs, consideraon is given to the economic, and benefits, reputaonal risks and potenal environment and social impacts of the purchases to impacts on the Company and its key stakeholders be made. The 2019 procurement strategy was alike. centered on sourcing in line with internaonal best The Company currently does not have a recycling pracces and internal procurement policy. policy but, it has developed policy for incenves to O u r s u s t a i n a b i l i t y s t r a t e g y a d d r e s s e s the retail staon with the highest number of environmental, social and governance issues in All vendors are required to register with the lubricants kegs for recycling. The Company currently order to: procurement unit of the Company and provide observes the Health, Safety and Environment (HSE) 1. Enhance value by complying with the regulatory requisite informaon on their Companies. A list of pracces in its sourcing strategy of its lubricants, requirements of DPR, building control and other registered vendors is maintained according to the addives and other harmful liquids or solvents. Only regulatory bodies, who must cite and approve the services offered. All procurement needs are vendors who have the Department of Petroleum Service Staons, taking into consideraon space, evaluated by the Tender Board on the basis of quality Resources (DPR) license and the Lagos State environment, Commercial and residenal acvies of goods, compeve pricing and delivery melines, Environmental Protecon Agency (LASEPA) permit etc. while ensuring transparency in the process. A total of are engaged for those services. In addion, the 2. Deliver exceponal retail patronage to MRS 842 vendors are fully registered by the Company and Company's 2019 procurement or sourcing strategy customers naonwide, in line with global best the vendors are engaged, based on the services they sensized employees, Retail Managers, and pracce. offer, ranging from supplies for construcon c u sto m e rs ' a l i ke , o n t h e e co n o m i c a n d 3. Operate Service Staons in a sustainable manner equipment, addives, general supplies, shipping and environmental impacts of recycling and obtained the and organize training sessions to enhance Retailers' clearing agents and haulers. The Company carries buy-in of all Stakeholders to the program. knowledge on sustainability. out an annual review on the performance of the

13 4 SOCIAL PERFORMANCE

Ÿ Social Performance Ÿ Labour and Employment Pracces Ÿ Donaons and Sponsorships MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Social Performance Social Performance is a driving force in the Company's business applicable terms and condions of engagement. All employees The Company delegated some of strategy. It starts with the Company's workforce and extends to are entled to cash and non-cash benefits. Cash benefits its employees to visit selected the Communies in which the Company operates. MRS prides include leave allowance, 13th month and long service awards, orphanages, motherless babies itself in its workforce and celebrates diversity in employment. while non-cash benefits include pension, health insurance, home in line with its commitment Its strategy is to aract and retain the best hands and to build annual comprehensive health check, group life insurance, to contribute to their welfare and skills and capacies in the Communies through educaon personal accident insurance, Naonal Social Insurance Trust operaons. and training programs. Fund (NSITF), burial assistance. The Company contributes 10% of all employees' monthly pension liability and parcipates in The Company consistently promotes the growth of the rerement plans in line with the Pension Reform Act, 2014. environment it operates, as part of its Corporate Social Responsibility. It understands the role that local communies To create an effecve work-life balance, the Company provides play in the growth of the Company and engages local parental leave for all employees and in 2019, seven (7) female Stakeholders to determine their respecve needs. To address employees and one (1) male employee took their parental these needs, the Company engages some members of the leave. Communies, to determine these needs and streamlined its focus to educaon, infrastructure, health and the mental To provide adequate opportunies for the improvement of Visit by the Company's wellbeing of members of the Community. employees on the job, the Company provides a training plan representave to Zamarr for each department. Each departmental Head is required to Instute (School for Ausm), 4.1.MR S Labour and Employment Pracces assess the skills of their subordinates to determine the skills FCT, Abuja MRS has a transparent Labour and Employment policy, which gap and recommend requisite training to the Company. is compliant with applicable Nigeria laws and regulaons. In Trainings are held either in-house or externally and in 2019, line with the Company's Policy, the Human Resource 74.3% of male employees and 25.7% of female employees department administers recruitment, compensaon and received an all-expense paid training from the Company. To benefits, learning and development and end to end human exit from the Company, all employees are required to give a resource processes, with parcular emphasis on diversity in month's prior noce to the Company. In 2019, the total rate of employment. new hires in the Company was 6%, while that of employee turnover rate was 17%. As an indigenous Company, MRS employs Nigerian cizens and offers equal employment opportunies to qualified 4.2 Donaons and Sponsorships candidates, who apply for adversed roles. In addion to In the year under review, the Company's donaons spanned Visit by the Company's ensuring fair labour pracces in the engagement of human across health centres, motherless homes, orphanages and representave to Green capital, the Company provides a posive work environment for scholarships. These donaons were in cash, totaling the sum of Pastures and Green Pasture its employees. At employment, the Company provides each N1,710,000.00 (One Million, Seven Hundred and Ten and Iniave, Sabon Gari, Kano employee with a Contract of Employment, which spulates the Thousand Naira) only. State.

15 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019

MRS Oil Nigeria Plc.'s 2019 Donaons S/N NAME OF ORGANIZATION PURPOSE AMOUNT (N) 1. Society for Orphan Welfare, Ikoyi, Lagos Donation 100,000.00 2. Pacelli School for The Blind & Partially Sighted Children Donation 100,000.00 Visit by the Company's representave at the Motherless Homes, Total Garden, Ibadan, Oyo Surulere, Lagos. State. 3. The Zamarr Institute (School for Austim), Abuja Donation 100,000.00 4. Hope Orphanage, Ilorin, Kwara State Donation 100,000.00 5. Infant Jesus Orphanage Home, Calabar, Cross River State Donation 100,000.00 6. Motherless Babies Home, Total Garden, Ibadan, Oyo State Donation 100,000.00 7. Green Pasture and Initiative, Sabon Gari, Kano State Donation 100,000.00 8. The Cerebral Palsy Centre, Surulere, Lagos State Donation 100,000.00 9. HFSN St. Joseph Orphanage, Owerri, Imo State Donation 100,000.00 10. Edo Orphanage Home, Benin City, Edo State Donation 100,000.00 11. Easterbrook Foundation, Kaduna, Kaduna State Donation 100,000.00 12. Port Harcourt Children’s Home, Rivers State Donation 100,000.00 13. Youth Empowerment Foundation (Scholarships for three Donation 510,000.00 (3) Indigent children). TOTAL 1,710,000.00

Visit by the Company's representave to HFSN St. Joseph Orphange, Owerri, Imo State. 16 5 STAKEHOLDER ENGAGEMENT

Ÿ Engagement with Employees Ÿ Shareholders' Relaons Ÿ Engagement with Regulators Ÿ Engagement with Customers Ÿ Other Stakeholder Engagement MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Stakeholder Engagement At MRS Oil Nigeria Plc., we consider Stakeholder engagement at different levels fundamental to the business operaons. We engage with MRS Shareholders, Employees, Customers, Vendors, Regulatory Authories and the Communies we operate in, through various forms. We meet our Shareholders at the Annual General Meengs; we hold periodic meengs with employees, conduct quarterly Customers' Forum and carry out periodic meengs with MRS vendors as well as our the communies and other stakeholders' we constantly engage with. There are also engagement meengs with the Regulators (i.e. A cross secon of the Directors at the Company's 50th Annual General Meeng. The Shareholders Representaves at the Audit Commiee and the Company's From L – R: Sir Sunday Nwosu (Non-Execuve Director), Mrs. Priscilla Ogwemoh External Auditors, KPMG Nigeria at the Company's 50th Annual General Meeng. Nigerian Stock Exchange (NSE), the Financial Reporng Council (FRC) (Non-Execuve Director), Mrs. Oluwakemi Jafojo (Company Secretary), Mr. Patrice and the Securies and Exchange Commission (SEC)), on issues Alber (Chairman), Mrs. Priscilla Thorpe-Monclus (Managing Director), Ms. Amina Maina (Non-Execuve Director), Dr. Amobi Daniel Nwokafor (Non-Execuve pertaining to the business operaons. Director), Mr. Mahew Akinlade (Independent Director), Mr. Christopher Okorie (Non-Execuve Director) These fora help us to understand the needs of the various Stakeholder groups, the best approach to address their needs and boost the working and business relaonships, as we work towards business operaon in a sustainable manner.

5.1 Engagement with Employees The Company receives feedback on the business operaons from employees during periodic departmental meengs and strategic

meengs with Managers. Feedback helps with the assessments and The Regulators: L – R, the Company's Registrars, First Registrars & Investor Services The Shareholders at the Company's 50th Annual General Meeng. Limited; the Nigerian Stock Exchange (NSE); the Corporate Affairs Commission (CAC); review of Company policies, with the ulmate goal of building a strong and the Securies and Exchange Commission (SEC). work culture. We take pride in the MRS workforce and understand their role in the growth and development of the Company; hence the drive to aract and retain loyal talents.

5.2 Shareholders' Relaons The end of the financial year for the Company is, the 31st of December of each year. The Company holds its Annual General Meeng (AGM) between July and August of the following year to review the Audited Financial Statement for the year. Other issues are also discussed and Shareholders examine the business operaons and ask quesons on Shareholders registering at the Company's 50th AGM. Gi Packs being shared to the Shareholders at the Company's 50th Annual General Meeng.

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any agenda item in the Annual Report and Accounts of the Company and the business performance. Customer forum are scheduled for two to three days at the Company's pre-selected locaon. Customers Last year's AGM was remarkable, as the Company are provided with informaon on the locaon of the hosted its 50th AGM on August 7, 2019 at the Federal forum in advance and at the events, a variety of issues Palace Hotel with over 900 Stakeholders in are raised by the Customers. These issues range from aendance. non-funconal fuel pumps, insufficient profit margin (high pump price of PMS), short delivery of products 5.3 Engagement with Regulators by haulers, lubricant prices, sales, durability of The Nigerian Stock Exchange periodically holds containers and labels, amongst others. stakeholder engagements in view of the promulgaon of new Rules or the amendment of extant Regulaons. In 2019, the Company held this forum in three (3) The aim of the engagement is to provide stakeholders zones; the South-West, South-East and North and the with the opportunity to review new laws or customers were informed about the Company's regulaons and propose amendments, before strategy for the year for the different categories of publicaon and implementaon and sensize them business (retailers and distributors). At the end of the L–R: The Managing Director, Mrs. Priscilla Thorpe-Monclus and some Managers at the Customers' Engagement in the South-East in January, 2019. on the compliance obligaon(s) upon implementaon forum, all Customers were commended for partnering of the Regulaons. with the Company and the contribuon to the growth of the Company. Compliance is at the core of the Company's operaons and respect for the laws of the Countries we operate 5.5 Other Stakeholder Engagement in, is one of our core values. We believe that with zero The Company also engages with several agencies default fees/fines, investors would be interested in the within its Industry, such as the Petroleum Products business and in invesng into the Company. With good Markeng Company (PPMC), Nigerian Naonal compliance record, the Company maintains its Petroleum Company (NNPC), Department of integrity with stakeholders and keep the total Petroleum Resources (DPR), Petroleum Equalizaon shareholder return compeve. Fund (PEF), NAFDAC, Standards Organizaon of The Non-Execuve Director, Mr. Christopher Okorie addressing the Customers during Nigeria (SON), and Manufacturers' Associaon of the Customers Forum in South-East 5.4 Engagement with Customers Nigeria (MAN). Engaging with these agencies, helps to The Sales and Markeng Unit of the Company holds a shape the strategy and product offerings of the quarterly Fora with Customers from the various Company. regions in the Country. The essence of this forum is to update Customers on the Company's strategy, goals, business operaon changes, new products and services and obtain feedback from the Customers, to improve the business.

19 6 ENVIRONMENTAL PRACTICES Ÿ MRS's Approach Ÿ Safety, Health and the Workplace Ÿ Waste Management Ÿ Occupaonal Health and Safety Ÿ Management System Ÿ Hazard Idenficaon, Risk Assessment and Incident Invesgaon Ÿ Incident Reporng and Invesgaon Ÿ Occupaon Health Services MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 Environmental Pracces 6.1 MRS's Approach HSE excellence; The safety and well being of employees and third Seek ways to recognize and reward employees and 1. The general safety of all stakeholders at the Retail pares who have business with the Company is top contractors for superior safe work performance; Staons operated by the Company, the Lubricant priority. We ensure that fatalies are eliminated, Establish policies, procedures, standards, rules and Plant and offices; serious injuries and illnesses are prevented, and we regulaons to guide and direct all employees to work 2. The environment and safety awareness at the operate are in line with internaonal best pracces safely and prevent injury to themselves and others. Company's Retail Staons across the territories it and standards on Health, Safety and Environment. operates; Provide resources and training for employees 3. The Company's Products & Quality Assurances; MRS is driven by the vision “to be the leading appropriate to the nature of their job and in line with integrated African energy company recognized for the health and safety requirement; its people, excellence and value.” We understand Operate in compliance with applicable laws and that in order to take the lead in the downstream regulaons; energy industry, we must pay aenon to the Learn from incidents to prevent recurrence and to business environment and the impact of our improve on risk management measures; business on the health of the stakeholders and the Integrate HSE consideraons into business planning, environment. decision making and daily acvies; Connually improve HSE performance by monitoring We are therefore commied to the conduct of MRS's crical metrics; business in a sustainable manner and pay close Yearn for every employee to contribute to posive aenon to the health and safety of our HSE performance through responsible behavior, A Cross Secon of an interacve session of the Aendees with the Non-Execuve Director, stakeholders and the protecon of the environment. working safely and commied to the promoon of a Mr. Chris Okorie at the basic Health, Safety, Environment and Quality (HSEQ) Retail Training held in Lagos in August, 2019, for the Retail and Staon Managers, Western Region. The Company's Health, Safety and Environment safe and healthy workplace.” (HSE) Policy provides that the Company shall: As part of MRS commitment to sustainability, one of Make all its workplaces safe and healthy in order to its cardinal goals is to reduce the impacts of its prevent work-related injury and ill-health; operaons on the environment and the health of the Reduce the impacts of its operaons on the stakeholders. One of the ways in which the Company environment and the health of the people; reduces the impacts of its operaons on the Strive to eliminate hazards and manage the risk of its environment is in its waste management system. products and services throughout their life cycles. 6.2 Safety, Health and the Workplace Have its employees parcipate in HSE acvies and In 2019, the Company developed a strategy to The Managing Director, Mrs. Priscilla Thorpe-Monclus briefing the Staon Managers during programs that foster a shared culture and promotes redefine its safety key areas as follows: the training session.

21 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 4. Assault Prevenon & Control Management; further filtraon, treatment and monitoring before and do not contain properes as menoned above. 5. The safe discharge of white products at Staons discharge from the site. In addion, an independent and safe handling of lubricants products. contractor carries out an analysis of the effluent in Disposal of Non-Hazardous Wastes line with regulatory requirements to assure the The various non-hazardous wastes are collected and The Company held several training and awareness Company of the acceptability of the waste to be disposed properly through established environment programs for its Retailers and the Pump Aendants discharged into the surrounding water body. management companies contracted by the and informaon on the importance of observing Company. The non-hazardous wastes generated safety principles for life and public preservaon were The waste oil collected into the slop tank is treated include solid wastes like paper, cardboards, plasc discussed. Below are pictures of some of the safety and recycled for other uses in the facility. The packaging materials, office products, glasses, training and awareness program held in Lagos State accumulated sludge is periodically evacuated from metallic cans, food and organic maers etc. These for the Western Region Retail and Staon Mangers in the site by a contracted waste management wastes are collected in segregated bins and then 2019. company for safe disposal. disposed of properly. The materials made of plasc, Non-hazardous wastes: These are wastes that do not metal and glasses are collected by waste 6.3 Waste Management threaten public safety, health, or the environment management companies for recycling and re-used Wastes generated from the Company operaons can accordingly, while other waste are taken to landfills be broadly categorized as hazardous and non- for safe disposal. hazardous wastes. Significant Spills Hazardous wastes: Wastes potenally threaten the In the year under review, there was no significant oil health and safety of stakeholders and the spill recorded for the lube plant and fuel oil terminal. environment, because of the chemical properes they possess. Some of the waste are inflammable, 6.3 Occupaonal Health and Safety Management reacve, explosive, corrosive and toxic in nature and System some hazardous wastes generated from our MRS is currently subscribed to ISO 9001: 2008 operaons include waste oil and oil emulsions. Quality Management System (QMS). It is on the verge of a re-cerficaon audit and transion of the Disposal of Hazardous Wastes: The hazardous present QMS management system to the ISO 9001: wastes are generated mainly from the operaons at 2015 Quality Management System. the MRS lube plant and the fuel terminal. The waste oils are channeled through the Oil-Water Separaon The Company intends to use the forthcoming QMS (OWS) system at both facilies, which provides a re-cerficaon and transion exercise as a means of recovery by removing oil from waste water. springboard to aain the ISO 45001: 2018 It does so by separang oil and suspended solids Occupaonal Health and Safety Management from water so that it can be skimmed away. The System (OHSMS) and the ISO 14001: 2015 heavier solids (sludge) seles to the boom, while Environment Management System (EMS). This will oil rises to the top. The oil skimmed off is channeled enhance the Company's quest to achieve the to a slop tank while the waste water moves along for Oil water separator system Integrated Management System (IMS). 22 MRS OIL NIGERIA PLC SUSTAINABILITY REPORT 2019 6.4 Hazard Idenficaon, Risk Assessment and Company seeks ways to learn from such an event in all employees. Upon employment, employees are Incident Invesgaon order to prevent recurrence and to improve on its given access to Company registered HMOs who will risk management measures. provide medical services including occupaonal In line with its HSE Policy, MRS strives to eliminate health services. In addion, there are onsite clinics hazards and manage the risk of its operaons by It is worthy of note that all stakeholders (employees, with health care providers to aend to employees' conducng hazard idenficaon and risk and contractors within all facilies of MRS) are health needs during working hours. assessment and management. We conduct periodic encouraged to report any unsafe situaon, including physical inspecons, site walk-through of our near misses and incidents. Employees are expected Work-related Injuries / Illness facilies to ascertain that operaonal acvies at to report any unsafe situaon by either reporng The Company did not record any work-related any facility does not pose harm or lead to a loss to the directly to their supervisors or any member of the injuries involving employees which resulted in days company. Similarly, we conduct risk assessments HSE team. Employees can also report via a reporng away from work or lead to fatality during the year and management, before non-roune work is system using the MRS Incident Reporng Form. The under review. permied on the facilies. reports are submied to the HSE team who review and act upon the report unl closeout. The reports These inspecons and risk assessments are carried received are handled with utmost confidenality to out by qualified and trained HSE personnel in the protect the reporter and insll confidence in the Company. In addion, the HSE personnel provide reporng system. training and involve other employees in HSE acvies and programs, aimed at improving the In the event of an accident, an incident invesgaon knowledge of hazards and fostering a shared HSE is conducted and the invesgaon report provided culture in the Company. This way, everyone is with recommendaons for correcve acons. These involved in hazard idenficaon and unsafe working acons have me limits and acon points delegated and operaonal condions. to the responsible employee(s) to address them. The correcve acons are tracked by the HSE team unl Once hazards have been idenfied, the risk compleon and an incident feedback bullen is assessed, and compared to established tolerable risk developed for the incident. The feedback bullen level, measures are put to control or limit the risk. provides informaon about the incident, causes, These measures are adopted based on the hierarchy prevenve acons and learning points. This way, of controls. informaon from incidents is shared and lessons learnt help to prevent recurrence, improve the 6.5 Incident Reporng and Invesgaon system and foster a healthy HSE culture. At MRS, we believe that accidents are preventable. As part of the HSE Policy, the Company seeks ways to 6.6 Occupaon Health Services connually improve on workplace safety and health, There are occupaonal health providers who assess in order to prevent work related injury and ill-health. the health of employees. The Company ensures that However, when accidents or incidents occur, the pre-employment medical checks are conducted for

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