Milestones 1970 1980 1990 2000
1960
1979 2010
1964
CONTENTS
Corporate Information 2
Notice of Annual General Meeting 4
Chairman’s Statement 5
Group CEO’s Statement 7
Subsidiaries Reviews 10
Internal Control & Risk Management 14
Company’s Secretariat’s Report 16
Profile of Directors 22
Reports of Directors 26
Performance Indicators 36
Report of the Audit Committee 37
Events in Pix 42
Report of Independent Auditors 56
Consolidated Statement of Financial Position 57
Consolidated Statement of Comprehensive Income 58
Consolidated Statement of Cash Flows 59
Consolidated Statement of Changes in Equity 60
Notes to the Consolidated Financial Statements 64
Consolidated Statement of Value Added 111
Financial Summary 112
Proxy Form 113
Admission Card 114
Postage 115
E-Dividend Mandate 116
Authority to Electronically Receive Corporate Information 117
2015 Group Financial Results at a Glance
for the year ended 31 December, 2015
Revenue 2015 2014
Cost of sales N'000 N'000
Gross prot 124,617,238 170,127,978
(106,255,812) (151,663,049)
Probit before income tax
Income tax expense 18,361,426 18,464,929
Prot for the year 7,012,442 6,006,298
(1,218,387) (1,549,681)
Other comprehensive loss net of taxes
5,794,055 4,456,617
Total comprehensive income for the year
(9,886) (78,018)
Total comprehensive income attributable to:
Owners of the company 5,784,169 4,378,599
Non controlling interests
4,482,520 2,322,246
Earnings per share 1,301,649 2,056,353
Basic/ Diluted in (N) 5,784,169 4,378,599
4.11 2.20
Earnings Per Share Profit Before Tax Revenue
87% 17% N125BN
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 01
Corporate Information
Forte Oil plc, a leading indigenous, The Company also has a footprint in the
integrated energy company in Nigeria upstream oil services sub-sector, where it has
involved in petroleum marketing, power established a reputation of efciency; servicing
generation and upstream oileld services. The the upstream sector under trade name- Forte
company is quoted on the Nigerian Stock Upstream Services Limited (FUS). Its acquisition of
Exchange (NSE). the 414 mw Geregu Power Plant is a
demonstration of the company's strategy to
The Company operates a network of 500 outlets deliver long term returns for its shareholders.
spread across the Country with major fuel
storage installations at both Apapa (Lagos State) Forte Oil Plc's business
and Onne (Rivers State). Forte Oil Plc also philosophy is premised on
provides aircraft refueling operations which building a high-performance
operates under the brand 'Air FO' and its Aviation organization with world-class
Joint User's hydrants in Ikeja and Joint Aviation business processes, strong
depots in Abuja, Port Harcourt and Kano makes it corporate governance and
one of Nigeria's leading providers of aviation fuel compliance at all levels,
for local and international airlines. culture of strong ethics and
discipline and an enhanced
It also manufactures and distributes a wide range safety, health and sustainability
of quality lubricants, which include Synth 10000, policies embedded across its
Super V, Visco 2000, Diesel Motor Oil, etc, from its value chain.
50,000 metric tonnes lubricating oil blending
plant at Apapa in Lagos.
In addition to these strategic retail and
commercial network in Nigeria, Forte Oil Plc is
also well established in Ghana under the trade
name – AP Oil and Gas Limited (APOG), with a
network of retail outlets, liqueed petroleum gas
plants and a lubricant blending arrangement
with Tema Oil blending plant. Forte Oil Plc is
currently using its presence in Ghana to leverage
its expansion into other West African countries.
02 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Corporate Information cont’d
Board of Directors
FEMI OTEDOLA, CON - Chairman
AKIN AKINFEMIWA - Group Chief Executive Officer
JULIUS B. OMODAYO-OWOTUGA, CFA - Group Chief Financial Officer
GRACE C. EKPEYONG - Director
CHRISTOPHER ADEYEMI - Director (Independent)
PHILIP M. AKINOLA - Director
ANIL DUA - Director
AKINLEYE OLAGBENDE - Company Secretary
UKPAI OKWARA
MANAGING DIRECTOR
AP OIL AND GAS GHANA LIMITED
SEYE ALABI
AG. MANAGING DIRECTOR
FORTE UPSTREAM SERVICES LTD
ADEYEMI ADENUGA (FNSE)
MANAGING DIRECTOR
GEREGU POWER PLC
FIRST BANK OF NIGERIA LTD
GUARANTY TRUST BANK PLC
UNION BANK PLC
FINANCIAL REPORT FOR FORTE OIL PLC FOR THE YEAR ENDED DECEMBER 31, 2015 03
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Thirty Seventh Annual General Meeting of the Members of FORTE OIL PLC will hold on
April 26, 2016 at 10:00 a.m. at the Imperial, Lekki Coliseum Building. Providence Street, Lekki Phase 1, Lagos to transact
the following business:
ORDINARY BUSINESS
1. To present the Report of the Directors, the or non-convertible securities, global depository
Consolidated Statement of Financial Position with receipts, medium term notes, loan notes, bonds and
the Statement of Comprehensive Income at 31st or any other instrument(s) whether as a standalone
December, 2015 and the report of the Auditors transaction or by way of a programme in such
and Audit Committee thereon. tranches, series or proportion, at such coupon or
interest rates within such maturity periods, at such
2. To re-elect Dr Grace Ekpenyong to the Board of dates and time and on such processes all of which
Directors as a director whose term expires in shall be determined by the Directors subject to all
accordance with Article 89 of the Company's relevant regulatory approvals.
Articles of Association
PROXY
3. To ratify the appointment of Mr. Anil Dua as a Non-
Executive Director in the Company A member entitled to attend and vote at the Annual
General Meeting is entitled to appoint a proxy to attend
4. To declare a dividend and vote in his stead. A proxy need not be a member of
5. To authorize the Directors to x the remuneration of the Company. For the appointment to be valid, a
completed and duly stamped proxy form by the
the Auditors. Commissioner of Stamp Duties must be deposited at the
6. To elect/re-elect the members of the Audit ofce of the Registrar, Veritas Registrars Limited, Plot 89A
Ajose Adeogun Street, Victoria Island, Lagos not less than
Committee. 48 hours before the time xed for the meeting.
SPECIAL BUSINESS CLOSURE OF REGISTER
1. To x the remuneration of the Directors The Shareholders' Register and Book of Transfers will
2. To consider and if thought t, pass the following as an thereafter be closed from April 18 to April 21, 2016 to
enable the Registrars prepare for the payment of
ordinary resolution. That pursuant to the directive of dividend.
the Securities and Exchange Commission, 5,599,908
units of Forte Oil shares transferred to the company as DIVIDEND WARRANT
part of a settlement with Mr. Osa Osunde and Fidelity
Finance Limited be sold to existing shareholders of If the dividend recommended is approved, dividend
the Company on a pari passu basis at the market warrants will be posted on April 27th, 2016 to
price of Three Hundred Naira (N300) per share shareholders whose names appear on the Company's
pursuant to Article 12 of the Company's Share Register at the close of business on April 15, 2016.
Memorandum Articles and Articles of Association
3. To consider and if thought t, pass the following AUDIT COMMITTEE
resolution as an ordinary resolution of the Company
'that in compliance with the rules of the Nigerian The Audit Committee consists of 3 shareholders and 3
Stock Exchange governing transactions with related Directors in accordance with Section 359(5) of the
parties or interested persons, the company be and is Companies and Allied Matters Act of 2004. Any member
hereby granted a general mandate in respect of all may nominate a shareholder as a member of the Audit
recurrent transactions entered into with a related Committee by giving in writing of such nomination to the
party or interested person which are of a revenue or Secretary of the Company at least 21 days before the
trading nature or are necessary for the Company's Annual General Meeting.
day to day operations'.
RIGHTS OF SECURITIES' HOLDERS TO ASK QUESTIONS.
Raising of Additional Capital Securities' Holders have a right to ask questions not only
at the Meeting, but also in writing prior to the Meeting,
4. To consider and if approved to pass with or without and such questions must be submitted to the Company
modication an ordinary resolution that pursuant to on or before April 13, 2016.
Article 79 of the Memorandum and Articles of
Association the Directors are hereby authorised to
raise by way of a public offering, rights issue or any
other methods they deem t, additional equity
and/or debt capital up to the sum of N100 Billion
through the issuance of shares, convertible securities
Dated March 29, 2016.
BY ORDER OF THE BOARD
AKINLEYE OLAGBENDE
General Counsel/Chief Compliance Ofcer
FRC/2013/NBA00000003160
FO House, 13 Walter Carrington Crescent
Victoria Island, Lagos.
04 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
CHAIRMAN’S STATEMENT
economic slowdown
with particularly dire
impact on Emerging
and oil-dependent
economies.
On a positive note,
the Nigerian Armed
Forces made some
good inroads in
various theatres in the
North East of the
country reclaiming
territories and
restoring life therein
and increasing the
potential for
improved economic
activities in the
region.
Distinguished shareholders, members of In the light of the
the Board of Directors, the press, invited foregoing, it is hardly
guests, ladies and gentlemen. surprising that the
country's GDP growth
I am honoured to present an overview of the slowed to an average of 3.05% in the first three
major developments that took place in our quarters of 2015 as against a projected 5.54%
operating environment as well as the summary with 2016 forecast put at 4.37%. The reduced
of the company's performance for the financial GDP growth mirrored the global economic
year ended 31st December, 2015. slowdown that persisted for most of the year
under review.
THE OPERATING ENVIRONMENT
THE 2015 FINANCIAL PERFORMANCE
We commenced 2015 with strong optimism in
the overall direction of the nation as we looked The economic issues I alluded to in my statement
forward to an election year with the hope of a in 2015 crystallized with a paucity of foreign
seamless transition that would give rise to a more currency, reduced purchasing power as the
stable and stronger democracy. local market place experienced pricing
uncertainties in relation to products and
However, the year ended with significant services, thereby exacerbating inflationary
uncertainties occasioned by drastic declines in trends. Also, the reduced revenue accruing to
Government revenues due to a global the Federal Government of Nigeria as a result of
the drop in crude oil prices affected the
reimbursement of our fuel subsidies under the
PSF scheme; this non payments coupled with an
illiquid money market resulted in a 18.7%
increase in our finance cost.
FINANCIAL REPORT FOR FORTE OIL PLC FOR THE YEAR ENDED DECEMBER 31, 2015 05
CHAIRMAN’S STATEMENT (Cont’d)
While our Company has continued to weather The Board and Board Changes
the very challenging operating headwinds, we
have not been totally insulated from the fallout The Board has continued to maintain oversight
and shocks in the Petroleum Industry in general on performance, risk and financial efficiency
and the downstream sub-sector in particular. and kept a constant scrutiny on HSE operations.
Each year we review and monitor the group
Building on our strategic actions before the level risks through the Board committees. The
volatility, including management of our foreign board regularly considers how it operates and
exchange and subsidy exposure through the appropriate composition and mix around
reduced importation of petroleum products for the board table – both to respond to today's
the year 2015 saw our revenues drop by 36.5% to challenges and Forte's future strategic direction.
N124.62bn compared to N170.13bn in 2014.
Mr. Anil Dua was appointed to the Board to
However, the efficiency of our business replace Mrs. Korede Omoloja who resigned as a
operations had a positive net effect on our Non-Executive Director effective from 30th of
profitability with Profit before Tax growing 16.7% September, 2015. In the same vein, Reverend
to N7.01bn compared to N6.01bn recorded in Bolodeoku resigned from the Board after several
2014 while profit after income tax increased years of service to the Board and the Company
30.0% to N5.79bn compared to N4.46bn for as a whole. I thank these individuals for their
same period in 2014. great contributions to the Board.
Dividend I would also like to thank the entire workforce
and my colleagues on the Board for their
The improved business performance over the immeasurable contributions.
year and progress in strategic delivery has led to
the board's decision to increase the dividend. Finally, my thanks go to you, our shareholders, for
During 2014, the board approved and paid a the support you have shown us during the year.
dividend of NGN2.50 while in 2015, a dividend of
NGN3.45 was approved representing a 38% I thank you for continually investing in Forte Oil
increase. These increases are part of our PLC.
strategy to grow distributions and demonstrate
our commitment to our mission, of being the Femi Otedola, CON
investment of choice even in the present Chairman
economy circumstances. FRC/2013/IODN/00000002426
April 2016
06 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
THE GCEO’S REPORT
Akin Akinfemiwa Naira. Furthermore, the non-availability of foreign
exchange as a result of the drop in oil prices created
Group Chief Executive Officer a wide disparity between the official and parallel
market rates for the dollar and thus pushed up the
Evolving Times, Seamless Possibilities consumer price index, reduced purchasing power
parity, increased unemployment and overall put the
Distinguished Shareholders, Ladies and Nigerian economy in a stagflation; high prices and
Gentlemen, reduced growth.
It is a privilege to once again present the state of Yet in the midst of the dismal economic situation,
affairs of our great company and Nigeria's foremost Forte Oil Plc continued to forge ahead in creating
integrated energy solutions provider; Forte Oil Plc. for innovative energy solutions across all our business
the financial year ended 31st December 2015. lines resulting in an increase in Group profitability after
tax by 30% from NGN4.4bn in 2014 to NGN5.7bn
Having successfully concluded our business
transformation in the year 2014, the year 2015 Our Financial Performance in 2015.
heralded the era of consolidation and aggressive but
strategic growth which we themed “New Frontiers”. Group Revenues declined to 124.6 Billion Naira from
The New Frontiers phase of our business life is one in 170.1 billion Naira due to declining oil and product
which we seek market dominance across all our prices and also our risk management approach to
business lines and subsidiaries. stem importation of petroleum products in the first
quarter of the period under review due to
The year 2015 was quite eventful for our operating outstanding subsidy payments which had been
environment starting with a peaceful transition in overdue in excess of 365 days. However, overall gross
Government from one political party to another both margin increased from 11% in 2014 to 15% in 2015 as a
at the Federal and State levels, declining oil prices result of improved business efficiency, streamlined
which resulted in a sharp drop in government product procurement processes and focus on higher
revenues and subsequently the devaluation of the margin related businesses including product mix and
sales channels. Other Income also increased by
216%; ₦ 4.0 billion compared to N1.39 billion (FY,
2014) largely due to gains on disposal of investment
property, interest on receivables and investment
income from held to maturity instruments.
Furthermore, we were able to recover dividends and
interest wrongly paid to some shareholders in 2009.
On the profitability perspective, the Group Profit
before Tax increased by 17% to ₦ 7.01bn from ₦ 6.52
billion recorded in the same period of 2014 while Net
income rose by 30% to NGN5.7bn compared to
NGN4.4bn in the same period with our downstream,
power and upstream services business contributing
82%, 12% and 6% respectively.
In 2015, the Group maintained a strong Health Safety
Environment Quality performance as we have now
achieved 35,040 hours (48 months) of continuous
operations in all major terminals and facilities without
a major incident and zero Lost Time Incident (LTI). This
reinforces our commitment to world class operating
FINANCIAL REPORT FOR FORTE OIL PLC FOR THE YEAR ENDED DECEMBER 31, 2015 07
THE GCEO’S REPORT (Cont’d)
standards. The period under review also witnessed the acquisition of the Geregu Power Plant has created a
rollout of several Health, Safety, Security and solid foundation to explore other opportunities and
Environmental initiatives such as the Safety Rules for carve a niche for ourselves in the power sector.
drivers, transporter forum engagements, fuel tanker
discharge competency certification process and Our Upstream service business remains challenged by
contractor's safety awareness campaign. the falling crude oil prices and that has negatively
impacted the margins from our various contracts with
In recognition of the company's consistent and both the International and Indigenous Oil companies.
significant achievements that go beyond our financial However, the on-going restructuring and capacity
objectives, I was once again ranked among top 25 building with respect to this entity will improve both
CEO's in Nigeria consecutively in the Business Day's Top revenues and income in the short-medium term.
25 CEOs Award in 2015 making this the 3rd consecutive
time since the inception of the awards in 2013. We also Our commitment to build a world-class workforce of
maintained our early flier's status with Nigerian Stock highly skilled and motivated workforce remains
exchange and set a new record to file our 2015 unwavering. We believe that the ultimate investment is
Audited Accounts within first 26 Days of month of in our people who in turn are the custodians of our
January 2016. The Company also won the Best processes and philosophies and most importantly our
Governance award for the Oil and Gas sector in Africa brand equity.
by the Ethical Boardroom magazine. All these are a
testament of our highly motivated workforce and The current realities in our business environment calls for
manifestation of our core values of Committed, Open, a reinforcement of our existing robust, enhanced,
Responsive and Respect tested and proven enterprise risk management
framework ranging from operational, financial and
The year 2016 reputational risk. We shall continue to improve on
strong business controls and ethics across all business
I am more confident than ever that huge investments lines. Continuous improvements in our HSEQ practices
made in our processes, philosophy and people have remains an imperative to gain competitive advantage
laid a solid foundation for our company to survive the in the industry.
current economic headwinds in 2016 and beyond.
Our downstream business which is the root of our Finally, we shall continue to strengthen our corporate
company and comprising of the fuels, lubricants, governance framework to boost the investor
aviation and other Non-Fuel revenue business will confidence. Our quest for admission into the Premium
continue to witness aggressive organic growth in Board listing of the NSE is at its final stages and should
addition to seeking merger and acquisition be concluded by H1 2016. In our bid to build our
opportunities in order to rightly position ourselves for organisation to world class standards, we are
future reforms in the downstream sector. We believe incorporating sustainability in our strategic projections
an increase in our retail footprint will give us the market for 2016 as we have become a signatory to the
dominance we desire in Africa and thus necessitating prestigious United Nations Global Compact; a
the need to raise 100 Billion Naira additional capital for convention on encouraging all companies to align
this purpose. their strategies with the universal principles of human
rights, labour, environment and anti-corruption.
Our Power asset, the Geregu Power Plant is poised to
deliver and contribute 435 MW to the National Grid From the above, it is clear that we are surely prepared
come 1st July 2016 upon the completion of our USD 90 for evolving times and seamless possibilities.
Million Major Overhaul project. This in no small measure
will boost the earnings of the group and prove that GPP Akin Akinfemiwa
is a success story of the FGN's privatization of her Power Group Chief Executive Officer
assets. Our foray into power generation with the FRC/2013/IODN/0000001994
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SUBSIDIARIES
Amperion Group
2015 BUSINESS OBJECTIVES
The year 2015 aimed at repositioning Geregu Power Operator/CBN-NEMSF and Nigerian Bulk Electricity Trading
Plant to actualize its maximum potential. The Company Plc (NBET) as at the year ended 2015, hence, the
groundwork for the major overhaul has begun and it is injection of NGN213Bn CBN-NEMSF by the Federal
expected to be concluded by June 2016. Government of Nigeria to cushion the effect of the revenue
collection losses from the Distribution companies in Nigeria.
The business continues to navigate the turbulent
power sector and provide the necessary power The Company signed a Major Overhaul contract with
generation for the Nigerian economy. Siemens Nigeria at a total cost of USD90M, when this Major
Overhaul is completed, it will bring the station back to its full
OVERVIEW OF GEREGU POWER PLC FINANCIAL installed capacity of 414MW and additional 21MW from the
PERFORMANCE AS AT DECEMBER 31, 2015 current available capacity of 138MW thereby increased the
Geregu Power Plc posted a PBT of N3.569bn for the revenue generation by more than three (3) times the current
year ended 31 December 2015 (31 December 2014: performance.
N4.159bn) resulting into earnings per share of N356.94
for the year ended 31 December 2015(31 December PRINCIPAL ACTIVITY
2014: N415.94). The Company is a major wholesale supplier of electric power
to the Transmission Company of Nigeria (TCN) through
Geregu revenue for the year 2015 was N10.268bn Nigerian counterpart, the Market Operator (MO) and the
representing 13% increase over the corresponding Bulk purchaser, NBET.
year`s revenue of N9.062bn achieved in the year 2014.
OPERATING RESULTS:
The Gas cost remains USD1.75/SCFT payable at CBN The following is a summary of the company's operating
rate to the Nigerian Gas Company Limited throughout results 2015:
the year 2015 with total gas consumption of
11,778,746mmscft. 2015 2014
N'000
The total energy generated for the year 2015 was N'000 4,159,471
1,105,365Mwh while 1,091,563MWh was supplied to the NIL
national grid. These figures represent 1.25% energy Prot before taxation 3,569,528 4,159,471
consumed within the power plant in the year 2015.
Taxation NIL 4,159,471
The energy charge and capacity charge were 45,430,717
maintained throughout 2015 at N5,555/MWh and Prot after taxation 3,569,528 NIL
N4,303/MWh respectively since May 1, 2014. 49,590,188
Transfer to contingency reserve 415.92
The sum of NGN9.34 was outstanding from the Market
Retained earnings for the year 3,569,395
Retained earnings, beginning of year 49,590,188
Proposed dividend 2,500,000
Retained earnings, end of year 53,159,715
Earnings per share – basic/diluted (N) 356.94
CONCLUSION
With the Electricity market moving towards Transitional Electricity Market (TEM) effectiveness, we believe that with the
completion of the Major Overhaul of the plant in June 2016, would position us to maximise our potential and increase the
Power Plant's installed capacity to 435MW.
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SUBSIDIARIES (Cont’d)
Forte Upstream Services Limited (FUS)
INTRODUCTION As part of our continued business strategy for sustained
growth and profitability going forward in 2016, the
Forte Upstream Services Limited formerly known as Company is poised to undertake additional new
African Petroleum Oilfield Services Limited (APOS) is contracts in its proportion of the provision of production
a fully owned subsidiary of Forte Oil Plc. The chemicals with this IOC's.
Company is engaged in the sale of Production
Chemical, Drilling Fluids, Laboratory Support and In conclusion, FUS is positioned and structured to
other engineering services to both local emerging partner with majority of the service companies. We are
& major international oil exploration and hopeful that this arrangement will further reposition FUS
production companies in Nigeria. to be one of the leading upstream services company
in Nigeria.
FUS 2015 BUSINESS OUTLOOK AND PERFORMANCE
REVIEW It is expected that Executive Management Support in
various business decisions will propel the Company in
The company in 2015 continued its supply of achieving its objective in 2016 as leading Integrated
production chemicals, drilling & completion fluids, Oilfield Solutions provider in Nigeria.
Bulk Storage and Laboratory Services to local and
international oil exploration and production The Company's audited IFRS financial results as at
companies. During the year under review, the December 31, 2015 reported a turnover of NGN
Company operated in a highly challenged industry
due to the global fall in crude oil prices affecting KPIS 2015 2014
the cost of exploration and production. However, N’000 N’000
the Company was able to achieve a profit before
tax of NGN 568,058,428.81 as against NGN Turnover 3,846,758 2,667,572
363,743,000 in the year 2014 (an increase of 56%). Cost of sales (2,903,952) (1,964,141)
This increase was due to optimization of existing Gross prot 942,806 703,431
contract with additional high scope and securing a Prot before income Tax 568,058 368,743
new contract with an IOC in the last quarter of 2015. Taxation (193,655) (137,399)
The non-implementation of our Addax drilling Prot/(loss) for the year 374,092 231,344
contract in 2015 which has been re-scheduled for Total Equity 1,489,340 1,117,202
last quarter 2016 impacted negatively in overall
budget performance.
FINANCIAL REPORT FOR FORTE OIL PLC FOR THE YEAR ENDED DECEMBER 31, 2015 11
SUBSIDIARIES (Cont’d)
AP Oil and Gas Ghana Ltd
PERFORMANCE REVIEW However, despite all these challenges, the
company remained focused on its retail network
AP Oil and Gas Ghana Limited a wholly owned expansion drive through efficient employment of
subsidiary of Forte Oil Plc was incorporated in 2008 its limited resources which has resulted to
to market and distribute petroleum products and increased number of stations from 8 to 13 (11 white
lubricants. product and 2 LPG stations). The restructuring
exercise aimed at repositioning the company for
In 2015, the downstream business in Ghana desired growth in revenue and profitability is still
witnessed a major shift in government policy to full very much on course. Also disciplined effort has
scale price liberalization of petroleum products been made to drastically reduce cost and
albeit with stiff monitoring of the regulatory body entrench transparency in the day to day running
National Petroleum Authority, NPA. of the business. The business has been positioned
to vertically align the company with BDCs for
The general business environment in 2014 business partnership that will boost the company's
continued with the Cedi depreciation, hike in competitive advantage in the industry.
government taxes, and increased credit
transactions due to buyer market scenario with
accompanying TAR challenges, price war and
difficulties in securing finance from the Banks etc.
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FINANCIAL REPORT FOR FORTE OIL PLC FOR THE YEAR ENDED DECEMBER 31, 2015 13
INTERNAL CONTROL
&
RISK MANAGEMENT
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INTERNAL CONTROL SYSTEM
The Board is responsible for maintaining a There is an effective internal control function
sound system of internal controls to within the Company which gives reasonable
safeguard shareholders’ investment and assurance against any material
the assets of the Company. The system of misstatement or loss. The Board and
internal controls is to provide reasonable Management will continue to review the
assurance against material misstatement, effectiveness and the adequacy of the
prevent and detect fraud and other company's internal control systems and
irregularities. update such as may be necessary.
Risk Management
The Directors are responsible for the overall and that risk management controls and
management of risk as well as expressing compliance system are operating efficiently
their opinion on the effectiveness of the and effectively in all respects.
process. The risk management framework is
integrated into the day-to-day operations of The Enterprise Risk Management system was
the business and provides guidelines and evaluated by the Firm of KPMG during the
standards for administering the acceptance year under review. The report of the audit was
and on-going management of key risks such submitted to the Board Risk Committee and
as financial, compliance/legal/regulatory, the Board and their recommendations have
reputational, strategic and operational risk. been implemented.
The Directors are of the view that effective
internal audit function exists in the company
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COMPANY SECRETARIAT’S REPORT
For 2015 Annual Report
Board of Directors
The Board of Forte Oil Plc is made up of executive, non- contribution at Board meetings and at Board
executive directors and an independent director committee meetings, they are expected to
based on integrity, professionalism and recognition. challenge constructively and help develop proposals
The membership of the Board comprises of Directors on strategy and bring independent judgment on
with a broad range of expertise, skills and experience issues of performance and risk. Generally, prior to
from different industries and businesses. each meeting of the Board, the Chairman and the
Non-executive Directors meet without the Executive
The Board of Directors is the apex governing body of Directors to discuss, among other things, the
Forte Oil Plc. The Chairman is responsible for the performance of individual Executive Directors.
leadership and management of the Board and for
ensuring that the Board and its committees function The Board as the focal point of the Company's
effectively. This is achieved by ensuring that Directors corporate governance system is ultimately
review accurate, timely and clear information. The accountable and responsible for the performance
Chairman is also responsible for approving and and affairs of the Company with a commitment to
reviewing the training and development needs of uphold and discharge its legal, financial and
each Director which he does with the assistance of the regulatory responsibilities at all times. The Board is also
Company Secretary. responsible for the strong financial performance of
the Company and approves the design of the
The Chief Executive Officer who is also an Executive Company's annual strategy and monitors the
Director bears overall responsibility for the implementation of the set objectives.
implementation of the strategy agreed by the Board,
the operational management of the Company and Furthermore, all Directors may seek independent
the Subsidiaries. He is supported in this by the Executive professional advice in connection with their role as a
Committee, which he chairs. Director. All Directors have access to the advice and
services of the Company Secretary. The Company
The Non-executive and Independent Directors bring a has provided both indemnities and directors' and
wide range and balance of skills and international officers' insurance to the Directors in connection with
business experience to Forte Oil Plc. Through their the performance of their responsibilities.
Future Relations and Communication with Stakeholders
Forte Oil Plc is committed to sustaining good relations In addition, the Company has in place, a well-
and ongoing interactions with its shareholders and all managed Investor Relations Unit to attend to all
other stakeholders via a well-established enquiries on the Company's financial performance,
communications and complaints management policy. financial statements, corporate actions, current and
The Company shall continue to ensure that its future strategy and all other corporate information.
shareholders relations and policies are appropriate to
meet the needs of its stakeholders. All other related information on the Company's
business operations and allied matters can be
The Company is focused on the equitable treatment of obtained by all stakeholders and the general public
shareholders, protection of their rights and complete from the Company's website www.forteoilplc.com or
disclosure and transparency at all times by the Board email [email protected].
and Management of the Company.
The Board Committees
During the period under review, the Board Committees Management Committee, Management
met on a quarterly basis to discuss matters pertaining to Committee, Risk Committee, Credit Risk Committee,
its charter in addition to regular reports provided Crystalized Assets Committee, Branding Committee,
through the Company Secretariat on any significant Bid Committee and Inventory Management, Tenders
issues to be considered by the Committee. and Contracts Committee charged to ensure that the
activities of the Company are at all times done with
Outside of these Board Committees, there are other high standards of professionalism, accountability and
management committees namely the Executive integrity.
16 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
2015 BOARD AND BOARD COMMITTEES
MEETING ATTENDANCE
Board Appointment, Induction and Training Processes
During the period under review, there were changes to ratification at the next Annual General meeting of the
the Board structure with the resignation of two Non- Company following such appointment.
executive Directors namely Ven. Layi Bolodeoku and
Mrs. Korede Omoloja and the appointment of Mr. Anil All newly appointed Directors undergo an induction
Dua as a Non- Executive Director of the Company. The process. This entails an understanding of the history of
Board composition is made up of seven (7) members the Company, the norms and culture of the Company
which include the Chairman, three (3) Non-Executive as well as an introduction to the management of the
Directors, one (1) Independent Director and two (2) Company. In addition, corporate documents and a
Executive Directors. copy of the relevant regulations guiding the business
The appointment of a new Director in the Company are presented to the new Director.
occurs once a declaration of vacancy is noted by the
Board. The Board Governance and Remuneration Annually, the Board of Directors attend bespoke
Committee is responsible for the nomination of Board Trainings/sessions, with the aim of ensuring that
qualified candidates who possess the knowledge, skills, they update their skills, knowledge of industry
experience, qualifications and competence to be on practice, relevant regulations, operating
the Board. The appointment of the Director is based on environment and on international best governance
a through scrutiny of the nominated candidates, practices, industry and global trends. Throughout the
discreet validation of character and interaction with year, regular updates on developments in legal
the individual. Upon satisfaction with the right matters, governance and accounting are provided
candidate, he/she is recommended to the Board for to Directors.
appointment and presented to shareholders for
Board Evaluation Process The Directors and the Committees are evaluated on
their ability to fulfil its general supervisory roles,
The governance structure of the Company is designed participation at meetings and general performance.
to ensure that the board performs its functions as The Board evaluation report for the period ended
provided for in the charters and in accordance with all December 31, 2015 recorded a satisfactory
legislative and regulatory developments and trends in performance for the Committees and each individual
governance. The performance of the Board Director.
Committees, the Chairman and the individual Directors
are reviewed annually by an independent consultancy
firm.
Directors Remuneration
The appointment and remuneration of Directors is governed by the Company's Policy on Directors. During the
period under review, the Non- Executive Directors and Chairman received an annual Directors fee as stated
below.
Director Chairman Amount (N)
Mr. Femi Otedola (CON) 800,000.00
Dr. Mrs. Grace Ekpenyong 600,000.00
Mrs. Korede Omoloja* 600,000.00
Mr. Philip Akinola 600,000.00
Mr. Christopher Adeyemi 600,000.00
Ven. Layi Bolodeoku** 600,000.00
Mr. Anil Dua*** NIL
Mr. Akin Akinfemiwa NIL
Mr. Julius Owotuga NIL
*Resigned with effect from October 30, 2015
**Resigned with effect from December 09, 2015
***Appointed with effect from October 30, 2015
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 17
2015 BOARD AND BOARD COMMITTEES
MEETING ATTENDANCE
Statement of Compliance with the Corporate Governance Code
Forte Oil Plc affirms its commitment and desire to Executive Management and Officers on the fair,
continue to adhere to the principles of excellent impartial and objective manner to effectively resolve
corporate governance practices. The Company all stakeholder issues and enquiries. As a public quoted
strives to carry out its business operations on the company, the Company was fully compliant in its
principles of integrity and professionalism through corporate governance practices and operations
transparent conduct at all times. regarding the listing rules of the Nigerian Stock
Exchange, the directions of the Securities and
The Company during the period under review in Exchange Commission (SEC) and international best
relation to its code of conduct developed a practices.
Complaints management policy to guide its Directors,
Insider Trading
The Directors of the Company and senior employees the Company or engage in any other action to take
who are in possession of price sensitive information are advantage of insider information during closed trade
prohibited from dealing in the shares of the Company periods. All Insiders are notified of closed periods via
in accordance with the provisions of the Investments written or electronic communication from the
and Securities Act of 2007 and the post listing rules of Company Secretary.
the Nigerian Stock Exchange.
Forte Oil Plc has a securities trading policy applicable
No Director or Principal Officer of the Company, or a and circulated to Directors, insiders, external advisers
relative of the Director and/or the Principal Officer of and all employees to guide on the dissemination of any
the Company who is aware of material non-public material information about our Company. The
information relating to the Company may directly or securities trading policy is also available on the website
through relatives or other person buy or sell shares of of the Company.
2015 Board And Board Committees Meeting Attendance
In line with the Securities and Exchange Commission's Code on Corporate Governance, the Board is expected to
hold a minimum of four (4) meetings annually; this requirement was achieved during the year under review.
The Director's attendances at the Board and Board Committee meetings are as follow:
S/N NAME POSITION FEB. 18, APRIL 14, JULY 31, OCT. 30, DEC. 17,
2015 2015
2015 2015 2015
1 Mr. Femi Otedola (CON) Chairman
2 Mr. Akin Akinfemiwa Director
3 Mr. Julius B. Omodayo - Director
Owotuga, CFA
4 Ven. Layi Bolodeoku* Director N/A
5 Rev. Dr. (Mrs) Director
Grace Ekpenyong
6 Deacon Philip Akinola Director
7 Mrs. Korede Omoloja** Director N/A N/A
8 Mr. Christopher Adeyemi Director
9 Mr. Anil Dua*** Director N/A N/A N/A
*Resigned from the Board with effect from December 09, 2015 Symbol: Present
** Resigned from the Board with effect from October 30, 2015 N/A
***Appointed on the Board with effect from October 30, 2015 Absent
Not Applicable
18 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Corporate Governance and Remuneration Committee
The Committee comprises of four non-executive directors who oversee the nomination and board appointment
process and the board remuneration process. The Committee is responsible for the review of the company`s
organizational structure and ensures compliance with the Code of Corporate governance and advises the
Board of best governance practices. It also oversees the succession planning process of the board.
The Committee held four (4) meetings in year 2015.
S/N Name Position February July 28, October December
16, 2015 2015 29, 2015 16, 2015
1. Ven. Layi Bolodeoku*
Chairman N/A
2. Mr. Christopher Adeyemi Member
Member
3. Deacon Philip Akinola
4. Rev. Dr. (Mrs) Member
Grace Ekpeyong
* Resigned from the Board with effect from December 09, 2015
Risk Management Committee
The Risk Management Committee assists the Board in fulfilling its oversight responsibilities in the identification,
assessment, management of risk and adherence to internal risk management policies and procedures. The
Committee is further responsible for development of effective Enterprise Risk Management framework and the
monitoring of the top 25 risks facing the Company.
The Committee held four (4) meetings in the year 2015.
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 19
S/N Name Position Feb. 18, July 28, Oct. 29, Dec. 16,
2015 2015 2015 2015
1 Ven. Layi Bolodeoku* Chairman
2 Mr. Christopher Adeyemi Member
3 Rev. Dr. (Mrs) Member
Grace Ekpenyong
4 Mr. Akin Akinfemiwa Member
5 Mr. Julius B. Member
Omodayo-Owotuga, CFA
* Resigned from the Board with effect from December 09, 2015
Statutory Audit Committee
The Audit Committee is composed of six (6) members, three shareholders representatives and three non-
executive Directors. A member of the shareholders representative seats as the Chairman of the Committee.
The functions of the committee are set out in section 359(6) of the Company and Allied Matters Act. The
Committee reviews the company's control policies, management accounting and reporting systems, internal
control and overall standard of business conduct.
The Audit Committee held six (6) meetings in the year 2015.
S/N Name Position Feb. 16, April 14, May 18, July 31, Oct. 29, Dec. 16,
2015 2015 2015 2015 2015 2015
1 Mr. Tokunbo Shofolawe Chairman
Bakare (Shareholder)
Mr. Emmanuel Member
2 Okoro (Shareholder)
3 Mr. Suleman Ahmed Member
(Shareholder)
4 Deacon Philip Akinola Member
(Non Executive Director)
Mr. Christopher Adeyemi
5 (Independent Director) Member
Mrs. Korede Omoloja* N/A
6 (Non Executive Director) Member
Mr. Anil Dua** Member N/A N/A N/A N/A N/A
7 (Non Executive Director)
* Resigned from the Board with effect from October 30, 2015
** Appointed on the Board with effect from October 30, 2015
20 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
The Board Finance & Strategy Committee
The Board Finance and Strategy Committee is composed of five (5) members constituted to assist the Board of
Directors in fulfilling its oversight responsibilities of the financial management of the Company. In addition, the
Committee is charged with the oversight of the Company's strategic and transactional planning activities,
financing and capital structure objectives, insurance program, tax structure and investment policies and
dividend policies.
S/N Name Position Feb. 17, July 29, Oct. 29, Dec. 16,
2015 2015 2015 2015
Chairman
1 Mr. Christopher Adeyemi Member N/A
2 Mrs. Korede Omoloja* Member
3 Deacon Phillip Akinola Member
Member
4 Mr. Akin Akinfemiwa
5 Mr. Julius B.
Omodayo-Owotuga, CFA
* Resigned from the Board with effect from October 30, 2015
FINANCIAL REPORT FOR FORTE OIL PLC FOR THE YEAR ENDED DECEMBER 31, 2015 21
Profiles of Directors
22 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Board of Directors
Mr. Femi Otedola, CON Mr. Femi Otedola joined the board of Forte Oil Plc (formerly
known as African Petroleum Plc) as Chairman of the Board
Chairman of Directors in May 2007.
His vision transformed African Petroleum Plc into Forte Oil Plc. The
Company has grown in leaps and bounds to become a model of the
possibilities inherent in Nigeria, winning numerous accolades in
recognition of the successful business turnaround, prompt Financial
Reporting, strong Corporate Governance and investment of choice
within the Oil Industry and the Nigerian Stock Exchange.
In 2007, with a firm belief in the power reforms of the Federal
Government and overall vision “to be the foremost integrated
energy solutions provider in Nigeria” he made a very strategic
decision to participate in the Privatization Programme of the
Nigerian Government and his doggedness culminated in the
acquisition of a majority stake in the 414MW Geregu Power Plant by
a Subsidiary of Forte Oil Plc, Amperion Power Distribution Company
Limited in August 2013.
He has held several board memberships including President of the
Nigerian Chamber of Shipping and as past Chairman of Transcorp
Hilton Hotel, Abuja. He was appointed Member of the Governing
Council of the Nigerian Investment Promotion Council (NIPC)in
January 2004 and in December of the same year, he was appointed
a Member of the Committee saddled with the task of fostering
business relationship between the Nigerian and the South African
Private sectors.
He was a member of the National Economic Management Team
under the Chairmanship of Former President Goodluck Jonathan
from September, 2011 to May, 2015 and The Honorary International
Investors Council under the leadership of Baroness LydnaChalker.
Mr. Otedola was further recognized for his immense contributions to
the growth of the Nigerian economy with the conferment of the
prestigious National Honour of “Commander of the Order of the
Niger - CON” by Former President Goodluck Jonathan in May, 2010.
A philanthropist with deep involvement in educational causes at all
levels via the Sir Michael Otedola Scholarship Awards Foundation,
he has continued to demonstrate his passion for his Epe community
in particular and the Nigeria in general, committing huge financial
resources to the sponsorship of promising but financially
disadvantaged students.
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Board of Directors cont’d
Akin Akinfemiwa Mr. Akin Akinfemiwa is the Group Chief Executive Officer of
Forte Oil Plc and responsible for the overall strategic
Group Chief Executive Officer leadership, direction and guidance for the business and its
subsidiaries. He coordinates the formulation, review and
implementation of the organisation's strategy, goals and objectives.
He is the Chairman of the Board of Directors of Forte Upstream
Services Limited and serves as a director on Amperion Power
Distribution Limited, Geregu Power Plc and AP Ghana Limited. He
was recently elected as Chairman of the Association of Major Oil
Marketers of Nigeria (MOMAN).
He was a former Director, Head Trader and Business development of
Fineshade Energy Limited. He is a seasoned and experienced
International Petroleum Products Trader with focus on oil and oil
products futures, swaps and derivatives trading responsibilities. He
was influential in developing strategic trading and supply
relationships for Oando Plc in the West African Sub Region.
Mr. Akinfemiwa is an alumnus of the Said Business School. He
attended various leadership programs at The Wharton Business
School and Harvard Business School.
He also holds a B.sc Honours degree in Mechanical Engineering from
the University of Ibadan and a Master of Business Administration
(information Technology) from the University of Lincolnshire and
Humberside, United Kingdom.
Julius B. Omodayo- Mr. Julius B. Omodayo-Owotuga is the Group Chief Financial
Owotuga, CFA - Group Officer of Forte Oil Plc. He is a CFA Charter Holder, a KPMG
trained Chartered Accountant and an experienced
Chief Financial Officer finance professional. Before he joined Forte Oil Group, he was at
Africa Finance Corporation (AFC) where he had responsibilities for
the Corporation’s Assets and Liabilities Management function and
also doubled as the Assistant Treasurer. AFC is a US$1bn private
sector led Development Finance and Investment Bank. Prior to this,
he was the Finance Manager in the same Corporation. In this role,
Mr. Omodayo-Owotuga set up the Financial Control function of the
institution. He was also responsible for Human Resources and
Administration at the Corporation's start up stage in 2007.
Mr. Omodayo-Owotuga joined the AFC from Standard Chartered
Bank Nigeria Limited where he was a Finance Manager. Before this,
he was at KPMG Professional Services where he led assurance
engagements within the Nigerian financial services industry. He also
consulted for a number of Institutions on IFRS and Risk Management
while at KPMG Professional Services. Prior to KPMG, Mr. Omodayo-
Owotuga worked in the Foreign Operations Group of MBC
International Bank (now First Bank of Nigeria Limited).
He holds a B.Sc in Accounting from the University of Lagos. He is also
a Chartered Management Accountant and Certified Treasury and
Financial Manager. He has attended senior management and
leadership programs at the Harvard Business School and other top
global business schools.
24 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Board of Directors cont’d
Grace C. Ekpenyong Rev. (Dr.) Mrs. Grace Christopher Ekpenyong holds a first Degree
in Zoology from the University of Ibadan in 1979 and a Post
Director Graduate Diploma in Education from the University of Lagos.
She is vastly experienced in different fields such as manufacturing,
social welfare, education, farming and humanitarian activities -
having worked in various capacities within the sectors.
From 1980 to 1985, she was a Senior Lecturer/Vice Principal, Cross
River State Schools Board; Lecturer at Vivian Fowler Tutorial College
from 1986-1989. From 1989 to date, she has been the Deputy
Managing Director, Gestric Group of Companies, Managing
Director, Amazing Quality Limited and President, Widows Mite
Integrated Development Association. Currently, she also functions
as Executive Director, Eemjm Investment.
Mrs. Ekpenyong is a member of many associations such as the
Manufacturers Association of Nigeria, National Association of
Women Entrepreneurs (NAWE), Nigerian Institute of Management
(NIM) and holds a Doctor of humane letters degree from the Lagos
Graduate School and a Doctor of Philosophy/Divinity degree from
the Lagos State University.
She holds various awards such as Certificate of Honour, Federal
UNESCO Club of Nigeria (FUCN); Leadership Award, African
Education and Culture Organisation, Miami, Florida, USA, and
Honorary Degree of Doctor of Divinity from the Lagos Graduate
School.
Mrs. Ekpenyong has been on the Board of Forte Oil Plc since 1999.
Christopher Adeyemi Mr. Adeyemi attended Obafemi Awolowo University Ile Ife
where he obtained his LL.B (Hons) degree in 1989. He
Director became a Barrister and Solicitor of the Supreme Court of
Nigeria in 1991.
Mr. Adeyemi began his legal career as Head of Green Form Advice
and Assistance Team in The Legal Aid Board of England and Wales.
During his stint at the Legal Aid Board, he was responsible for setting
up the Green Form Advice and Assistance phone extensions team
and also the Immigration Project Team. After leaving the public
sector, Mr. Adeyemi, in partnership with others, set up Agape
Consulting, a Legal Practice and Management Consultancy which
assists in setting up and advising over 100 Law firms in the United
Kingdom.
Mr. Adeyemi is currently the Head of the Corporate and Media Law
Department of the International Law and Management Firm. He has
advised multinational companies on setting up businesses in the
African and European markets. He has most recently advised the
Nollywood Industry on trade agreements and intellectual property
rights
He is a member of the Nigerian Bar Association, member of the Black
Solicitors Network (UK) and a member of Immigration Law
Practitioners Association (UK).
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Board of Directors cont’d
Philip M. Akinola Mr. Akinola holds a B.Sc. (Honours) in Sociology and
Anthropology (1987), M.Sc. Industrial Sociology (1989), and
Director has Ph.D (Sociology) in view at University of Lagos.
Anil Dua Mr. Akinola has garnered over 22 years' experience in Human
Resources Operations, Consulting and Management. His working
Director experiences included stints as Management Consultant, Agrovog
(1992 - 1994), Principal Consultant, Management Plus (1994 - 1997),
and Manager, Personnel /Admin., Golden Gate Ventures and Trusts
Limited.
Mr. Akinola also worked as Manager, Human Resources
Development at SCG Consulting from 1997 - 1999 and Human
Resources Manager, Parker Drilling Nig. Limited (1999 - 2001). He is
currently the Head, Human Capital and Administration of Zenon
Petroleum and Gas Limited.
Mr. Akinola is a member of the Nigeria Institute of Management
(MNIM, Nigerian Institute for Training and Development (MNITAD)
and an Associate of the Chartered Institute of Personnel
Management (ACIPM)
Mr. Anil Dua is a Non-Executive Director who was until recently
the Chief Executive Officer of Standard Chartered Bank,
West Africa.
He has previously held Non-Executive positions on the Boards of
Seychelles International Mercantile Corporation and Standard
Chartered Bank in Nigeria, Ghana and Cameroon. He was
previously the Chairman of Standard Chartered Côte d'Ivoire and
continues to be on the Board of Afrexim Bank.
Mr. Dua holds a Master's degree in Economics from Delhi School of
Economics.
26 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
DIRECTORS' REPORT
28 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Directors' Report
For the year ended 31 December 2015
In accordance with the provisions of the Companies and Allied Matters Act of 2004, the Directors are pleased to
present their report on the affairs of Forte Oil Plc (“the Company”) and subsidiary companies (“the Group”),
together with the group audited financial statements and the auditor's report for the year ended 31 December
2015.
LEGAL FORM
The Company was incorporated in 1964 as British Petroleum (BP) Nigeria Limited with the marketing of BP
Petroleum Products as the main focus. The Company changed from a private to public company in 1978, when
40% of the shares were sold to Nigerian Citizens in compliance with the provisions of the Nigerian Enterprises
Promotion Decree of 1977. On July 31, 1979, the Federal Government of Nigeria (FGN) acquired 60% share capital
held originally by BP, for the Nigerian National Petroleum Corporation (NNPC). This step transformed the
company into an entirely Nigerian concern necessitating the subsequent change of name to African Petroleum
in 1979.
In March 1989, FGN sold 20% of its share holding to the Nigerian public, thus making AP the first public company
privatized under the Privatization and Commercialization Policy. The Federal Government, under its privatization
programme in 2000 divested its remaining 40% shareholding in AP thus making AP a privately owned Company,
with over 153,000 shareholders.
In 2010, the Company was acquired by a majority stakeholder, Zenon Petroleum Plc which saw the change of
name and corporate identity of the Company to Forte Oil Plc with the acquisition by Zenon Petroleum Limited,
the Company began a 3 year restructuring programme of the Company's operations and the incorporation of
sustainable growth strategies and policies to continuously improve on its operations and deliver prompt quality
and effective services to customers and all stakeholders.
PRINCIPAL ACTIVITY
The Company is a major marketer of refined petroleum products with a strong presence in the 36 States of Nigeria
and the Federal Capital Territory - Abuja. It procures and markets Premium Motor Spirit (PMS), Automotive Motor
Oil (Diesel), Dual Purpose Kero (DPK), Fuel Oils and JetA-1 fuel amongst others. Forte Oil Plc also manufactures and
distributes a wide range of lubricants foremost amongst them is the SYNTH 10000 and newly repackaged SUPER V
and VISCO 2000.
The company sources high quality chemical products, classed under industrial, organic and petro-chemicals,
which it markets to local industries. The chemical Products include: DOP, Polyol, Acetone, Calcium
Hydrochloride, Isopropyl Alcohol etc.
STRUCTURE
The Company has two wholly owned subsidiaries: Forte Upstream Services Limited and AP Oil & Gas, Ghana
(APOG). In addition, the Company owns 57% equity in Amperion Power Distribution Company which has a 51%
controlling stake in a 414 megawatt Geregu Power Plant in Ajaokuta, Kogi State.
OPERATING RESULTS:
The following is a summary of the Group's and Company's operating results:
Prot before taxation 7,012,442 5,831,755
Taxation (1,218,387) (1,037,177)
Prot after taxation 5,794,055 4,794,578
Total Comprehensive income 5,784,169 4,789,081
for the year 3,958,962 3,346,139
Retained earnings, beginning of the year 6,001,847 5,691,196
Retained earnings, end of the year 4.1 4.39
Earnings per share basic
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 29
Directors' Report (Cont’d)
DIVIDEND
The Directors recommend a dividend payment of Three Naira, Forty Five Kobo (N3.45K) from the retained
earnings of the Company for the year ended December 31 2015 on the issued share capital of the
Company. The dividend payment shall also apply to the bonus shares issued to shareholders in March,
2016.
FIXED ASSETS
Information relating to changes in fixed assets during the year is given in Note 14 to the financial statements.
DIRECTORS
The names of the Directors as at the date of this report and those who held office during the year are as
follows:
MR. FEMI OTEDOLA, C.O.N. (Chairman) Appointed on May 25, 2007
VEN. LAYI BOLODEOKU Resigned on December 09, 2015
MRS. GRACE C. EKPENYONG Re-elected on July 26, 2013
MR. CHRISTOPHER ADEYEMI Re-elected on March 28, 2014
DEACON PHILIP M. AKINOLA Re-elected on April 15, 2014
MRS. OMOLOJA KOREDE Resigned October 30, 2015
MR. AKIN AKINFEMIWA Appointed December 28, 2011
MR. JULIUS OMODAYO-OWOTUGA,CFA Appointed December 28, 2011
MR. ANIL DUA* Appointed October 30, 2015
*Mr. Anil Dua was appointed to the Board on October 30, 2015 and his appointment will be put up for
ratification at this Annual General Meeting
In accordance with Article 89 of the Company's Articles of Association, Mrs. Grace Ekpenyong will retire by
rotation from the Board of Directors at this Annual General Meeting and being eligible have offered herself
for re-election at this meeting.
CHANGES ON THE BOARD
Since the conclusion of the last Annual General Meeting, there have been changes on the Board with the
resignation of Mrs. Korede Omoloja and Ven. Layi Bolodeoku. Both resigned from the Board on October 30
and December 09, 2015 respectively and the appointment of Mr. Anil Dua on October 30, 2015.
DIRECTORS INTERESTS
The Directors of the Company who held office during the year together with their direct and indirect
interest in the share capital of the Company were as follows:
Name Direct Holding Indirect Holding Direct Holding Indirect Holding
31/12/14 31/12/14 31/12/14 31/12/14
Mr. Femi Otedola 128,706,299 708,434,400 154,006,575 706,047,784
(Chairman) 20,000 NIL 20,000 NIL
Mr. Akin Akinfemiwa NIL NIL NIL NIL
Mr. Julius Owotuga Owotuga 43,496 NIL 43,496 NIL
Rev. (Mrs) Grace Ekpenyong NIL NIL NIL NIL
Ven. Layi Bolodeoku 80,485 NIL 80,485 NIL
Mr. Christopher Adeyemi NIL NIL NIL NIL
Deacon Phillip Akinola 49,187 NIL 49,187 NIL
Mrs. Korede Omojola NIL NIL NIL NIL
Mr. Anil Dua
CONTRACTS
None of the Directors has notified the company for the purpose of Section 277 of the Company and Allied
Matters Act of 2004 of any declarable interest in contracts which the Director is involved.
ACQUISITION OF SHARES
5.59million units of shares transferred to the company via a directive of SEC as settlement of dividend
payments due to the company on shares not paid for by a director listed under Notes 23(e).
30 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Directors' Report (Cont’d)
SHARE OPTIONS SCHEME
The Directors did not partake in any share option schemes during the period under review
MAJOR SHAREHOLDING
According to the Register of Members, the shareholder under-mentioned held more than 5% of the issued share
capital of the Company as at 31 December 2015:
No. of Shares % Holding
ZENON PETROLEUM & GAS LIMITED 533,730,334 48.87
THAMES INVESTMENT INCORPORATED 158,396,833 14.50
FEMI OTEDOLA 154,006,575 14.10
SHARE CAPITAL HISTORY
Authorised Capital Issued and Fully Paid Capital
Date From To Date From To Consideration
N N
NN
22/06/78 6,000,000 7,500,000 28/02/79 6,000,000 7,500,000 -
17/07/80 7,500,000 11,250,000 11,250,000 Bonus (1:2)
28/08/82 11,250,000 22,500,000 17/07/80 7,500,000 22,500,000 Bonus (1:1)
04/08/84 22,500,000 30,000,000 30,000,000 Bonus (1:3)
06/08/86 30,000,000 36,000,000 24/08/82 11,250,000 36,000,000 Bonus (1:5)
12/07/88 36,000,000 43,200,000 43,200,000 Bonus (2:3)
29/06/90 43,200,000 72,000,000 10/08/84 22,500,000 86,400,000 Rights Issue
29/07/93 72,000,000 86,400,000 86,400,000 Bonus (1:4)
28/11/97 86,400,000 108,000,000 16/09/86 30,000,000 108,000,000 Rights Issue
19/02/99 108,000,000 144,000,000 216,000,000 Rights Issue
15/11/02 144,000,000 5,000,000,000 03/08/88 36,000,000 234,263,450.50
281,116,141 -
26/11/13 5,000,000,000 2,000,000,000 24/09/90 43,200,000 394,393,919 Bonus (1:5)
443,271,555 Placement
10/01/94 72,000,000 543,535,383 Rights Issue
543,535,383 Public Offer
28/11/99 86,400,000 546,095,528
-
13/09/04 108,000,000 Underwriting of
25/11/04 216,000,000 2008/2009
Hybrid Offer
30/09/05 234,263,450.50
28/10/06 281,116,141
20/04/09 394,393,919
20/04/09 443,271,555
6/12/13 543,535,383
11/07/2014 543,535,383
A Bonus share of One (1) ordinary share for every Five (5) fully paid ordinary shares of 50 kobo each held by
shareholders was issued at the end of March 2016 as approved by shareholders at the last Annual General
Meeting. A total of 218,438,212 bonus shares was issued to shareholders.
ANALYSIS OF SHAREHOLDING
The analysis of the distribution of the shares of the Company at the end of the 2015 financial year is as follows:
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 31
Directors' Report (Cont’d)
DONATIONS AND CHARITABLE GIFTS
The Company identifies with the aspirations of the community as well as the environment within which it
operates and made charitable donations to the under-listed organizations amounting to N4,488,091.00
during the year under review as follows:
S/N ORGANIZATION/BODY AMOUNT
1. Lagos State Motherless Babies Home Lekki N488,091.00
2. National Association of Energy Correspondents (NAEC) Conference N250,000.00
3. Support for Lagos Preparatory School N250,000.00
4. Ijora Oloye Youth Association Quiz competition N1000,000.00
5. WIMBIZ Annual lecture N1,000,000.00
N500,000.00
6. International Association for the Scientic Study of Intellectual and N1,000,000.00
Developmental Disabilities
N4,488,091.00
7. Financial Reporting Council
TOTAL
DISCLOSURES Risk Management and Compliance are
stated in Note 6 of the financial statements.
Ÿ Borrowing and Maturity Dates
The details of the borrowings and maturity Ÿ Related Party Transactions
dates are stated in Note 28 to the financial The Company has contractual relationship
statements with related companies in the ordinary
course of business. The details of the
Ÿ Risk Management and Compliance System outstanding amounts arising from the related
Forte Oil Plc has a structured enterprise- risk party transactions are stated in Notes 31 to
management framework that puts in place the financial statements.
and undertakes a through risk assessment on
all aspects of the business. The Risk Assessment EMPLOYMENT OF DISABLED PERSONS
is based on two criteria's, 'business Impact' and
'Likelihood of Occurrence' and for every The Company operates a non-discriminatory
identified business risk, mitigating measures policy in the consideration of applications for
are implemented by the Company. employment, including those received from
disabled persons. The Company's policy is that the
The Directors are responsible for the total most qualified and experienced persons are
process of the risk management as well as recruited for appropriate job levels irrespective of
expressing their opinion on the effectiveness of the applicant's state of origin, ethnicity, religion or
the process. The risk management framework physical condition. In the event of any employee
of the Company is integrated into the day-to- becoming disabled in the course of employment,
day operations of the Company and provides the Company is in a position to arrange
guidelines and standards for administering the appropriate training to ensure the continuous
acceptance and on-going management of employment of such a person without subjecting
key risks such as operational, reputational, him/her to any disadvantage in his/her career
financial, market and compliance risk. development. As at 31 December 2015, the
Company had no disabled persons in its
The Directors are of the view that effective employment.
internal audit function exists in the company
and that risk management control and
compliance system are operating efficiently
and effectively in all respects. The details on
32 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Directors' Report (Cont’d)
HEALTH, SAFETY AND WELFARE OF EMPLOYEES Company and employees' interests, with a view to
making inputs to decisions thereon. The Company
It is the policy of Forte Oil Plc to carry out its activities places a high premium on the development of its
in a manner that guarantees the health and safety manpower. Consequently, the Company
of its workers and other stakeholders, the protection sponsored its employees for various training
of the company's facilities and the environment courses both in Nigeria and abroad in the year
and compliance with all regulatory and industry under review.
requirements.
POST BALANCE SHEET EVENTS
We consider health, safety and environmental
issues as important as our core businesses and There was no material event subsequent to year
assume the responsibility of providing healthy, safe end that could impact on the financial
and secure work environment for our workers as statements.
required by law. Our objective is to minimize the
number of cases of occupational accidents, AUDITORS
illnesses, damage to property and environmental
degradation. Messrs PKF Professional Services have indicated
their willingness to continue in office in
Our vision is to achieve leadership role in accordance with Section 357(2) of the
sustainable HSE practices through the Companies and Allied Act of Nigeria.
establishment and implementation of effective
business management principles that are BY ORDER OF THE BOARD
consistent with local and international regulations
and standards. AKINLEYE OLAGBENDE
COMPANY SECRETARY
EMPLOYEE INVOLVEMENT AND TRAINING
The Company encourages participation of
employees in arriving at decisions in respect of
matters affecting their well being. Towards this end,
the Company provides opportunities for
employees to deliberate on issues affecting the
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 33
2015 Stakeholders Events
36th Annual General Meeting Photo-story
34 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 35
Performance Indicators
Ten-Year Turnover, The Company
Profit /(Loss) Before Tax,
Taxation and Profit /(Loss) 20000000
After Tax History
15000000
10000000
50000000
0
-5000000
2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
Turnover Prot/(Loss) Before Tax Taxation Prot/(Loss) After Tax
Ten-Year Dividend History
Dividend Declared
10,000,000
5,000,000
-00
(5,000,000)
(10,000,000)
(15,000,000)
(20,000,000)
(25,000,000)
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Profit A er Taxa on (N'000) Dividend Declared (Gross) (N'000) Dividend Per Share (Kobo)
Unclaimed Dividend Warrants
Unclaimed Dividend Warrants
300,000
250,000
200,000
150,000
100,000
50,000
- 00
Amount Unclaimed(N)
2006 2007 2008 2013 2014
36 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Report of the Audit Committee
to the members of Forte Oil Plc
In accordance with the provisions of Section 359(6) of the
Companies and Allied Matters Act of 2004, we confirm that
the accounting and reporting policies of the Company are in
accordance with Legal requirements and agreed ethical
practices.
In our opinion, the scope and planning of the audit for the
year ended 31st December, 2015 were adequate and we
have reviewed the external auditor's findings on
management matters and are satisfied with the
departmental response thereto.
Dated this 28th Day of February 2016.
MEMBERS OF THE AUDIT COMMITTEE
S/N NAME POSITION
1. TOKUNBO SHOFOLAWE BAKARE CHAIRMAN
2. EMMANUEL OKORO MEMBER
3. SULEMAN AHMED MEMBER
4. PHILIP AKINOLA MEMBER
5 CHRISTOPHER ADEYEMI MEMBER
6. ANIL DUA* MEMBER
7. KOREDE OMOLOJA** MEMBER
* Appointed to the Board with effect from October 30, 2015
**Resigned from the Board with effect from October 30, 2015
FINANCIAL REPORT FOR FORTE OIL PLC FOR THE YEAR ENDED DECEMBER 31, 2015 37
38 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
SYNTH 10000 VISCO 2000
SAE 5W/40, API: SN/CF, ACEA A3/A4 SAE 20W/50, API: SL/CF
SYNTH 10000 is an advanced full synthetic Visco 2000 is a premium quality
engine oil designed for the latest multigrade engine oil, formulated from
generation high-performance vehicles. highly refined base oils stock combined
with high technology additive to meet
It offers advanced wear protection, and exceed the performance
optimum cleaning power and enhances requirement of API (America Petroleum
the overall performance of your engine Institute) SL/CF oil. Its anti-corrosion, anti-
with a unique advantage of extended oil rust and anti-foam properties help to
change interval. ensure optimum engine protection.
It meets Mercedes-Benz, Volkswagen, Visco 2000 has excellent start-up
General Motors, BMW, Porsche and performance, prevents sludge build-up
Renault engine oils specifications. and offers optimum power &
performance under most severe driving
Packaging: 4L & 1L conditions. It also provides improved fuel
consumption even in older engines.
Packaging: 4L & 1L
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 39
SUPER V DIESEL
MOTOR OIL
SAE 20W/50, API: SG/CD
SAE 40, API: CF/SF
Super V is a high performance multigrade
engine oils for gasoline and diesel DMO is a high quality monograde engine
engines. It ensures good cold starting of oil designed for mixed fleet applications.
engine and excellent lubrication by Suitable for all turbocharged or normally
providing maximum engine protection at aspirated Diesel engines in trucks and
high temperature. Its excellent detergent locomotives. It has high detergency levels
and dispersant properties ensures with good anti-wear and anticorrosion
optimum engine cleanliness. properties.
Packaging: 4L & 1L Packaging: 200L, 25L & 4L
40 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
VANELLUS GEAR OIL
C3 15W/40 90EP & 140EP
SAE 15W/40 API: GL-4
VANELLUS C3 15W/40 is produced from Gear Oil 90EP and 140EP are versatile
top quality highly refined base oils used in extreme pressure automotive gear oils
combination with high technology with EP additives designed for use in
additives. It is available in the following API manual transmission gear boxes. They
(American Petroleum Institute) service offer excellent rust, wear and corrosion
category: CF-4, CH-4, and CI-4 and protection with superior compatibility with
suitable for both trucks and diesel power all seals.
generating sets (7.5KVA to 2,000KVA)
Packaging: 200L & 4L
Vanellus C3 15W/40 has an outstanding
oxidation control and thermal stability
that reduces sludge deposits to keep
engines clean. It has a high TBN for acid
neutralization with excellent anti-wear
and anti-corrosion properties.
Packaging: 200L & 25L
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 41
Project
Overhauling of 414 Megawatt Geregu Power Plant
42 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
Customer Service
Customer Service Week
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 43
2015 Stakeholders Events
Truck Driver’s Forum
44 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
2015 Stakeholders Events
Transporters’ Forum
F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5 45
2015 Stakeholders Events
Vendors’ Forum
46 F I N A N C I A L R E P O R T F O R F O R T E O I L P L C F O R T H E Y E A R E N D E D D E C E M B E R 3 1 , 2 0 1 5
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