2016 Annual Report

Notes to the Consolidated Financial Statements

For the year ended 31 December 2016

21.2 This balance relates to outstanding subsidy, interest on delayed payments and foreign exchange differential
claims under the PSF scheme recoverable from Petroleum Products Pricing Regulatory Agency (PPPRA) on
PMS imported by Forte Oil Plc.

21.3 N2.010bn of this relates to disputed balance on interest receivable from Afribank now Skye Bank. This has been
fully impaired.

Group Company

Dec-16 Dec-15 Dec-16 Dec-15

N’000 N’000 N’000 N’000

21.4 Impairment allowance 6,002,101 6,030,637 5,744,074 5,767,467
At 1 January 17,602 (28,536) - (23,393)
Increase/(decrease) during the year - - -
Effect of translation difference 102,518

Balance at 31 December 6,122,221 6,002,101 5,744,074 5,744,074

22. Cash and cash equivalents 1,609,690 1,638,521 1,134,312 62,117
Bank balances 15,434,243 10,062,305 15,009,243 10,062,305
Short-term deposits (Note 22.1)

Cash and bank balances 17,043,933 11,700,826 16,143,555 10,124,422

Bank overdrafts used for cash management (1,928,321) (10,268,358) (1,812,448) (10,226,394)
purposes (Note 22.2)
Cash and cash equivalents in the 15,115,612 1,432,468 14,331,107 (101,972)

statement of cash ows

22.1 Short term deposits with banks represent placements with banks for periods between 0 - 180 days. Included in
these are unclaimed dividends amounting to N860,215,715 (Dec 2015:N799,516,310) held in a separate bank
account in accordance with the guildlines of the Security and Exchange Commission (SEC). The unclaimed
dividend deposit is restricted for use by the Company.

22.2 This represents the overdrawn current account balances with four Nigerian banks. These facilities have an
average interest rate of 19% and are secured by an 'all asset debenture'.

Group Company

Dec-16 Dec-15 Dec-16 Dec-15

N’000 N’000 N’000 N’000

23. Share capital and reserves

Ordinary shares 2,000,000 2,000,000 2,000,000 2,000,000
a) Authorised ordinary shares:

4,000,000,000 ordinary shares of 50k each

b) Issued and fully paid ordinary shares of 50k each

1,310,629,267 ordinary share of 50k each 655,314 546,095 655,314 546,095

04 FINANCIAL REPORT FOR FORTE OIL PLC
FOR THE YEAR ENDED DECEMBER 31, 2016

Notes to the Consolidated Financial Statements

For the year ended 31 December 2016

c) Treasury stocks
This represents 5,599,087 units (at the market value of N248 as at the date of the transfer) of the company's
existing shares transfered to Forte Oil Plc to enable the Company recover the dividend and interest received on
unpaid shares in 2009 by a shareholder. These shares were seized by the company on the ruling of the Security
and Exchange Commission (SEC). The shareholders at the 37th Annual General Meeting held on the 26th of
April, 2016 approved the re-issue of these shares to existing shareholders of the company on a pari passu basis
at the market price of N300 per share.

Group Dec-15 Company Dec-15
Dec-16 Units Dec-16 Units
'000 '000
Units Units
'000 '000

d) Shares Outstanding 1,092,191 1,092,191 1,092,191 1,092,191
Issued ordinary shares at 1 January (5,599) (5,599) (5,599) (5,599)
Treasury shares - -
Bonus issue 218,438 218,438
Number of ordinary shares 1,305,030 1,086,592 1,305,030 1,086,592

e) Share premium 8,071,943 8,181,162 8,071,943 8,181,162

f) Retained earnings
Retained earnings represent the carried forward recognised income net of expenses plus current year income
attributable to shareholders.

Group Company

Dec-16 Dec-15 Dec-16 Dec-15

N’000 N’000 N’000 N’000

Balance at 1 January 6,001,847 3,958,962 5,691,196 3,346,139
Prot for the year
Dividend declared 2,601,568 4,492,406 3,235,829 4,794,578
Dividend withheld
Reversal of dividends on forfeited shares (4,521,671) (2,730,478) (4,521,671) (2,730,478)
Balance at 31 December 2016
(20,000) 50,837 - 50,837

138,447 230,120 138,447 230,120

4,200,191 6,001,847 4,543,801 5,691,196

g) Other reserves
Other reserves represent the carried forward recognised other comprehensive income and expenses plus current
year other comprehensive income attributable to shareholders.

h) The irredeemable convertible cummulative preference shares in the books of AP Oil and Gas Ghana Limited has
been eliminated on consolidation thereby eliminating the dilutive instument in the Group as at the reporting date.

i) Non-controlling interest Dec-16 Dec-15
At 1 January N’000 N’000
Dividend
Share of prot for the year (see note i) 33,198,198 31,896,549
Balance (1,470,000) -

288,862 1,301,649
32,017,060 33,198,198

j) Bureau of Public Enterprises share of prot from Geregu Power Plc 1,127,849 1,749,004
BSG Resources Ltd share of prot/(loss) from Amperion Power Distribution Ltd (741,430) (395,337)
Shanghai Municipal Electricity Power Company Share of prot/(loss) from
Amperion Power Distribution Ltd (97,556) (52,018)
288,862 1,301,649
FINANCIAL REPORT FOR FORTE OIL PLC
FOR THE YEAR ENDED DECEMBER 31, 2016 04





















Notes to the Consolidated Financial Statements
For the year ended 31 December 2016

29. Contingencies

a) Guarantees
The Company guaranteed the sum of $45M loan by First Bank of Nigeria Plc to a subsidiary Amperion Power
Distribution Company Limited in respect of the acquisition of Geregu Power Plc.

b) Pending litigation and claims
The Company is engaged in lawsuits that have arisen in the normal course of business. The contingent liabilities
in respect of pending litigation and claims amounted to N388 million at 31 December 2016 (31 December 2015 :
N6.8 billion). In the opinion of the directors, and based on independent legal advice, the Company is not expected
to suffer any material loss arising from these claims. Thus, no provision has been made in these consolidated
nancial statements.

c) Financial commitments
The Directors are of the opinion that all known liabilities and commitments, which are relevant in assessing the
state of affairs of the Group, have been taken into consideration in the preparation of these consolidated nancial
statements.

30. Transactions with key management personnel
Loan to directors
No loan to directors was issued during the year ended 31 December 2016.

2016 2015

Directors Chairman Directors Chairman

N’000 N’000 N’000 N’000

Directors emoluments 600 800 600 800
Fee 5,495 6,674 5,495 6,674
Allowances
6,095 7,474 6,095 7,474

Executive Directors are not entiled to and do not get paid directors fees.

Key management personnel and compensation
The Group has 217 employees in December 2016 and 232 in December 2015. The total number of employees for
the company were 171 in December 2016 and 182 in December 2015.

Group 2016 2015
1. Group Chief Executive Ofcer Akin Akinfemiwa Akin Akinfemiwa
2. Group Executive Director - Finance and Risk
Julius Omodayo-Owotuga Julius Omodayo-Owotuga
Management Ukpai Okwara Ukpai Okwara
3. Manager Director- AP Oil and Gas Ghana Ltd Seyi Alabi Vacant
4. Managing Director - Forte Upstream Services Ltd Adeyemi Adenuga Adeyemi Adenuga
5. Chief Executive Ofcer - Geregu Power Plc

04 FINANCIAL REPORT FOR FORTE OIL PLC
FOR THE YEAR ENDED DECEMBER 31, 2016

Notes to the Consolidated Financial Statements

For the year ended 31 December 2016

Transactions with key management personnel
Key management of the Group are the executive members of Forte Oil Plc. Key management personnel
remuneration includes the following expenses:

Group Company

31-Dec-16 31-Dec-15 31-Dec-16 31-Dec-15

N’000 N’000 N’000 N’000

Key management personnel compensation comprised: 194,006 185,428 144,719 142,224
Short-term employee benets:
- Salaries including allowances

194,006 185,428 144,719 142,224

Post-employment benets: 12,524 13,128 9,560 10,906
- Dened contribution to compulsory pension fund 24,251 23,193 18,090 21,444

scheme
Dened benet gratuity scheme

230,781 221,749 172,369 174,574

The Group The Company

Range Dec-16 Dec-15 Dec-16 Dec-15
Below N1,000,000 Number Number Number Number
N1,000,001 - N2,000,000 3
N2,000,001 - N3,000,000 1 2 - -
N3,000,001 - N4,000,000 2 43 - -
N4,000,001 - N5,000,000 46 28
N5,000,001 - N6,000,000 10 47 39 37
N6,000,001 - N7,000,000 41 34 6 24
N7,000,001 - N8,000,000 34 26 43
N8,000,001 - N9,000,000 31 6 37 28
N9,000,001 - N10,000,000 11 12 30 18
N10,000,001 and above 12 - 22
2 31 11 4
Total 27 2
232 2 -
217 1 26
23
182
171

*These are annual emoluments

FINANCIAL REPORT FOR FORTE OIL PLC 04
FOR THE YEAR ENDED DECEMBER 31, 2016

31. Other related party transactions Notes to the Consolidated Financial Statements

The aggregate value of transactions and outstanding balances relating to these entities were as follows: For the year ended 31 December 2016

Dec-16 Dec-15 Dec-16 Dec-15
N’000 N’000 N’000 N’000

BSG Resources Ltd Advances Joint investor in a subsidiary 790,884 788,043 5,758,117 4,967,233
Amperion Power Company Ltd Advances Subsidiary 730,018 876,469 1,642,532 912,514
Geregu Power Plc Advances Sub subsidiary 27
Forte Upstream Services Ltd Sales & Advances Subsidiary 2,036 (33) 2,063 490,002
AP Oil and Gas Ghana Ltd Sales Subsidiary 72,174 9,562 562,176 60,878
Zenon Petroleum and Gas Limited Rent Related party to core investor 84,427
4,516 - 65,394
- 1,000,000 84,427

FINANCIAL REPORT FOR FORTE OIL PLC 1,599,628 2,674,041 8,114,709 6,515,081
FOR THE YEAR ENDED DECEMBER 31, 2016
a) BSG Resources Ltd is a co-investor in Amperion Power Distribution Company Ltd and the technical partner for the acquisition of Geregu Power Plc. The
receivables represents a loan from Forte Oil Plc to BSG in respect of its equity contribution on the acquisition of the Power Plant in 2013. Interest is charged
at prevailing market rate and recognised as nance income in the statement of prot or loss.

b) Included as collateral for the NGN3.2bn loan from Zenith Bank is a personal guarantee of the Chairman Mr. Femi Otedola.
c) All transactions with these related parties were priced at arm’s length.

32. Events after the end of reporting date
The company received N1.97billlion from Petroleum Product Pricing Regulatory Agency (PPPRA) in January 2017 been part payment of interest on overdue
subsidy.The receivable is reported in note 21.
Geregu Power Plc received N142million from the Nigerian Bulk Electricity Trading Plc(NBET) in January which is part of the reported trade receivables for the
year.

33. Prior year corresponding balances
Certain prior year balances have been reclassied to ensure proper disclosure and uniformity with current year's presentation. These reclassications have no
net effect on these nancials statements.

04

Proxy Form

38TH ANNUAL GENERAL MEETING to be held at NUMBER OF SHARES HELD: FOR AGAINST
the Shell Hall, MUSON Center 8/9 Marina
Street, Onikan, Lagos on July 05, 2017 at 10:00 RESOLUTIONS
a.m
Report of the Directors, the
I/We………………………………………………… Balance Sheet together with the
being a member/members of Forte Oil plc Profit and Loss Account s at 31st
hereby appoint*…………………………………or December 2016
failing him/ her, the Chairman of the meeting,
Mr. Femi Otedola, or failing him, Mr. Akin To re-elect a Director.
Akinfemiwa, as my/our proxy to attend and
vote for me/us and on my/our behalf at the To ratify the appointments of Mrs.
Annual General Meeting of the Company to be Salamatu Suleiman, Dr. (Mrs)
held on July 05, 2017 and at any adjournment Mairo Mandara and Mr. Nicolaas
thereof. Vervelde as a Non- Executive
Director
Dated this …….day of ……………….2017.
To authorize the Directors to fix
Signature of Shareholder……………………… the Auditors' remuneration.

Name of Shareholder………..………………… To elect/re-elect members of the
Audit Committee.
To be valid, this proxy form should be duly
stamped by the Commissioner of Stamp Duties To fix the remuneration of the
and signed before posting it to reach the Directors
address overleaf not later than 48 hours before
the time for holding this meeting. Please indicate with an “X” in the appropriate box
how you wish your votes to be cast on the resolutions
Please note that no action should be taken on set above. Unless otherwise instructed, the proxy will
the proxy form if the member is attending the vote or abstain from voting at his discretion.
meeting.

ADMISSION CARD

Please admit *-------------------------------------------------------------------------* to the 38th Annual General
Meeting of the members of Forte Oil Plc holding at the Shell Hall, MUSON Center 8/9 Marina Street,
Onikan, Lagos on July 05, 2017 by 10.00am.

IF YOU ARE UNABLE ATTEND THE MEETING
A member (Shareholder) who is unable to attend an Annual General Meeting is allowed by law to vote
by proxy and the above proxy form has been prepared to vote in case you cannot personally attend
the meeting. Following the normal practice, the names of two Directors of the Company have been
entered on the form to ensure that someone will at the meeting act as your proxy; but if you wish, you
may insert in the blank space marked (**) the name of any person, whether a member (Shareholder) of
this Company or not, who will attend the meeting and vote on your behalf instead of one of the
Directors.

NUMBER OF SHARES HELD

IMPORTANT

a)The name of the shareholder must be written in BLOCK LETTERS on the form marked (*). Please stamp
and sign the proxy form if you are not attending the meeting and post it so as to reach the address
shown overleaf not later than June 28, 2017. If executed by a corporation, the proxy form should be
sealed with a common seal.

b)The shareholder or his proxy must produce the admission card in order to gain entrance to the
Annual General Meeting

c)Shareholders or their proxies are requested to sign the admission card before attending the
meeting.

______________________________
Signature of person attending

Admission Card

Please admit *-------------------------------------------------------------------------* to the 37th
Annual General Meeting of the members of Forte Oil Plc holding at the Shell
Hall, MUSON Center 8/9 Marina Street, Onikan, Lagos on July 5th, 2016 by
10.00am.

IF YOU ARE UNABLE ATTEND THE MEETING
A member (Shareholder) who is unable to attend an Annual General Meeting
is allowed by law to vote by proxy and the above proxy form has been
prepared to vote in case you cannot personally attend the meeting.
Following the normal practice, the names of two Directors of the Company
have been entered on the form to ensure that someone will at the meeting
act as your proxy; but if you wish, you may insert in the blank space marked (**)
the name of any person, whether a member (Shareholder) of this Company or
not, who will attend the meeting and vote on your behalf instead of one of the
Directors.

NUMBER OF SHARES HELD

IMPORTANT

a) The name of the shareholder must be written in BLOCK LETTERS on the
form marked (*). Please stamp and sign the proxy form if you are not
attending the meeting and post it so as to reach the address shown
overleaf not later than April 22,2016. If executed by a corporation, the
proxy form should be sealed with a common seal.

b) The shareholder or his proxy must produce the admission card in order
to gain entrance to the Annual General Meeting

c) Shareholders or their proxies are requested to sign the admission card
before attending the meeting.

______________________________
Signature of person attending

Akinleye Olagbende Esq.
Company Secretary

FO House, 13 Walter Carrington Crescent
Victoria Island, Lagos.
FRC/2013/NBA00000003160

FINANCIAL REPORT FOR FORTE OIL PLC 04
FOR THE YEAR ENDED DECEMBER 31, 2016