forte oil annual report 2015

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Milestones

Corporate Information

Notice of Annual General Meeting

Chairman’s Statement

Group CEO’s Statement

Subsidiaries Reviews

Internal Control & Risk Management

Company’s Secretariat’s Report

Profile of Directors

Reports of Directors

Performance Indicators

Report of the Audit Committee

Events in Pix

Report of Independent Auditors

Consolidated Statement of Financial Position

Consolidated Statement of Comprehensive Income

Consolidated Statement of Cash Flows

Consolidated Statement of Changes in Equity

Notes to the Consolidated Financial Statements

Consolidated Statement of Value Added

Financial Summary

Proxy Form

Admission Card

Postage

E-Dividend Mandate

Authority to Electronically Receive Corporate Information

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CONTENTS

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

2015 Group Financial Results at a Glance

for the year ended 31 December, 2015

Revenue 124,617,238

170,127,978

Cost of sales (106,255,812)

(151,663,049)

Gross prot 18,361,426

18,464,929

Probit before income tax 7,012,442

6,006,298

Income tax expense (1,218,387)

(1,549,681)

Prot for the year 5,794,055

4,456,617

Other comprehensive loss net of taxes (9,886)

(78,018)

Total comprehensive income for the year 5,784,169

4,378,599

Total comprehensive income attributable to:

Owners of the company 4,482,520

2,322,246

Non controlling interests 1,301,649

2,056,353

5,784,169

4,378,599

Earnings per share

Basic/ Diluted in (N) 4.11

2.20

2015 2014

N'000 N'000

Earnings Per Share

87%Profit Before Tax

17%Revenue

N125BN

Corporate Information

orte Oi l plc, a leading indigenous,

Fintegrated energy company in Nigeria involved in petroleum marketing, power

generation and upstream oileld services. The company is quoted on the Nigerian Stock Exchange (NSE).

The Company operates a network of 500 outlets spread across the Country with major fuel storage installations at both Apapa (Lagos State) and Onne (Rivers State). Forte Oil Plc also provides aircraft refueling operations which operates under the brand 'Air FO' and its Aviation Joint User's hydrants in Ikeja and Joint Aviation depots in Abuja, Port Harcourt and Kano makes it one of Nigeria's leading providers of aviation fuel for local and international airlines.

It also manufactures and distributes a wide range of quality lubricants, which include Synth 10000, Super V, Visco 2000, Diesel Motor Oil, etc, from its 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.

The Company also has a footprint in the upstream oil services sub-sector, where it has established a reputation of efciency; servicing the upstream sector under trade name- Forte Upstream Services Limited (FUS). Its acquisition of the 414 mw Geregu Power P lan t i s a demonstration of the company's strategy to deliver long term returns for its shareholders.

F o r t e O i l P l c ' s b u s i n e s s philosophy is premised on building a high-performance organization with world-class business processes, strong corporate governance and compl iance at al l levels , culture of strong ethics and discipline and an enhanced safety, health and sustainability policies embedded across its value chain.

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 1 502


FIRST BANK OF NIGERIA LTDGUARANTY TRUST BANK PLCUNION BANK PLC

Corporate Information cont’d

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 OKWARAMANAGING DIRECTORAP OIL AND GAS GHANA LIMITED

SEYE ALABI AG. MANAGING DIRECTOR FORTE UPSTREAM SERVICES LTD

ADEYEMI ADENUGA (FNSE)MANAGING DIRECTORGEREGU POWER PLC

Board of Directors

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:

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 5F 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 04

NOTICE OF ANNUAL GENERAL MEETING

ORDINARY BUSINESS

1. To present the Report of the Directors, the Consolidated Statement of Financial Position with the Statement of Comprehensive Income at 31st December, 2015 and the report of the Auditors and Audit Committee thereon.

2. To re-elect Dr Grace Ekpenyong to the Board of Directors as a director whose term expires in accordance with Article 89 of the Company's Articles of Association

3. To ratify the appointment of Mr. Anil Dua as a Non-Executive Director in the Company

4. To declare a dividend5. To authorize the Directors to x the remuneration of

the Auditors.6. To elect/re-elect the members of the Audit

Committee.

SPECIAL BUSINESS

1. To x the remuneration of the Directors2. To consider and if thought t, pass the following as an

ordinary resolution. That pursuant to the directive of the Securities and Exchange Commission, 5,599,908 units of Forte Oil shares transferred to the company as part of a settlement with Mr. Osa Osunde and Fidelity Finance Limited be sold to existing shareholders of the Company on a pari passu basis at the market price of Three Hundred Naira (N300) per share pur suant to Ar t ic le 12 o f the Company ' s Memorandum Articles and Articles of Association

3. To consider and if thought t, pass the following resolution as an ordinary resolution of the Company 'that in compliance with the rules of the Nigerian Stock Exchange governing transactions with related parties or interested persons, the company be and is hereby granted a general mandate in respect of all recurrent transactions entered into with a related party or interested person which are of a revenue or trading nature or are necessary for the Company's day to day operations'.

Raising of Additional Capital

4. To consider and if approved to pass with or without modication an ordinary resolution that pursuant to 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

or non-convertible securities, global depository receipts, medium term notes, loan notes, bonds and or any other instrument(s) whether as a standalone transaction or by way of a programme in such tranches, series or proportion, at such coupon or interest rates within such maturity periods, at such dates and time and on such processes all of which shall be determined by the Directors subject to all relevant regulatory approvals.

PROXY

A member entitled to attend and vote at the Annual General Meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy need not be a member of the Company. For the appointment to be valid, a completed and duly stamped proxy form by the Commissioner of Stamp Duties must be deposited at the ofce of the Registrar, Veritas Registrars Limited, Plot 89A Ajose Adeogun Street, Victoria Island, Lagos not less than 48 hours before the time xed for the meeting. CLOSURE OF REGISTER

The Shareholders' Register and Book of Transfers will thereafter be closed from April 18 to April 21, 2016 to enable the Registrars prepare for the payment of dividend.

DIVIDEND WARRANT

If the dividend recommended is approved, dividend warrants wil l be posted on April 27th, 2016 to shareholders whose names appear on the Company's Share Register at the close of business on April 15, 2016.

AUDIT COMMITTEE

The Audit Committee consists of 3 shareholders and 3 Directors in accordance with Section 359(5) of the Companies and Allied Matters Act of 2004. Any member may nominate a shareholder as a member of the Audit Committee by giving in writing of such nomination to the Secretary of the Company at least 21 days before the Annual General Meeting.

RIGHTS OF SECURITIES' HOLDERS TO ASK QUESTIONS.Securities' Holders have a right to ask questions not only at the Meeting, but also in writing prior to the Meeting, and such questions must be submitted to the Company on or before April 13, 2016.

Dated March 29, 2016. BY ORDER OF THE BOARD

AKINLEYE OLAGBENDEGeneral Counsel/Chief Compliance OfcerFRC/2013/NBA00000003160FO House, 13 Walter Carrington CrescentVictoria Island, Lagos.


istinguished shareholders, members of

Dthe Board of Directors, the press, invited

guests, ladies and gentlemen.

I am honoured to present an overview of the

major developments that took place in our

operating environment as well as the summary

of the company's performance for the financial

year ended 31st December, 2015.

THE OPERATING ENVIRONMENT

We commenced 2015 with strong optimism in

the overall direction of the nation as we looked

forward to an election year with the hope of a

seamless transition that would give rise to a more

stable and stronger democracy.

However, the year ended with significant

uncertainties occasioned by drastic declines in

Government revenues due to a global

economic slowdown

with particularly dire

impact on Emerging

and oil-dependent

economies.

On a positive note,

the Nigerian Armed

Forces made some

g o o d i n r o a d s i n

various theatres in the

North East of the

country reclaiming

t e r r i t o r i e s a n d

restoring life therein

and increasing the

p o t e n t i a l f o r

improved economic

a c t i v i t i e s i n t h e

region.

In the light of the

foregoing, it is hardly

surprising that the

country's GDP growth

slowed to an average of 3.05% in the first three

quarters of 2015 as against a projected 5.54%

with 2016 forecast put at 4.37%. The reduced

GDP growth mirrored the global economic

slowdown that persisted for most of the year

under review.

THE 2015 FINANCIAL PERFORMANCE

The economic issues I alluded to in my statement

in 2015 crystallized with a paucity of foreign

currency, reduced purchasing power as the

local market place experienced pricing

uncertainties in relation to products and

services, thereby exacerbating inflationary

trends. Also, the reduced revenue accruing to

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.

CHAIRMAN’S STATEMENT


While our Company has continued to weather

the very challenging operating headwinds, we

have not been totally insulated from the fallout

and shocks in the Petroleum Industry in general

and the downstream sub-sector in particular.

Building on our strategic actions before the

volatility, including management of our foreign

exchange and subsidy exposure through

reduced importation of petroleum products for

the year 2015 saw our revenues drop by 36.5% to

N124.62bn compared to N170.13bn in 2014.

However, the efficiency of our business

operations had a positive net effect on our

profitability with Profit before Tax growing 16.7%

to N7.01bn compared to N6.01bn recorded in

2014 while profit after income tax increased

30.0% to N5.79bn compared to N4.46bn for

same period in 2014.

Dividend

The improved business performance over the

year and progress in strategic delivery has led to

the board's decision to increase the dividend.

During 2014, the board approved and paid a

dividend of NGN2.50 while in 2015, a dividend of

NGN3.45 was approved representing a 38%

increase. These increases are part of our

strategy to grow distributions and demonstrate

our commitment to our mission, of being the

investment of choice even in the present

economy circumstances.

The Board and Board Changes

The Board has continued to maintain oversight

on performance, risk and financial efficiency

and kept a constant scrutiny on HSE operations.

Each year we review and monitor the group

level risks through the Board committees. The

board regularly considers how it operates and

the appropriate composition and mix around

the board table – both to respond to today's

challenges and Forte's future strategic direction.

Mr. Anil Dua was appointed to the Board to

replace Mrs. Korede Omoloja who resigned as a

Non-Executive Director effective from 30th of

September, 2015. In the same vein, Reverend

Bolodeoku resigned from the Board after several

years of service to the Board and the Company

as a whole. I thank these individuals for their

great contributions to the Board.

I would also like to thank the entire workforce

and my colleagues on the Board for their

immeasurable contributions.

Finally, my thanks go to you, our shareholders, for

the support you have shown us during the year.

I thank you for continually investing in Forte Oil

PLC.

Femi Otedola, CON

Chairman

FRC/2013/IODN/00000002426

April 2016

CHAIRMAN’S STATEMENT (Cont’d)


Evolving Times, Seamless Possibilities

istinguished Shareholders, Ladies and

DGentlemen,

It is a privilege to once again present the state of

affairs of our great company and Nigeria's foremost

integrated energy solutions provider; Forte Oil Plc. for

the financial year ended 31st December 2015.

Having successfully concluded our business

transformation in the year 2014, the year 2015

heralded the era of consolidation and aggressive but

strategic growth which we themed “New Frontiers”.

The New Frontiers phase of our business life is one in

which we seek market dominance across all our

business lines and subsidiaries.

The year 2015 was quite eventful for our operating

environment starting with a peaceful transition in

Government from one political party to another both

at the Federal and State levels, declining oil prices

which resulted in a sharp drop in government

revenues and subsequently the devaluation of the

Naira. Furthermore, the non-availability of foreign

exchange as a result of the drop in oil prices created

a wide disparity between the official and parallel

market rates for the dollar and thus pushed up the

consumer price index, reduced purchasing power

parity, increased unemployment and overall put the

Nigerian economy in a stagflation; high prices and

reduced growth.

Yet in the midst of the dismal economic situation,

Forte Oil Plc continued to forge ahead in creating

innovative energy solutions across all our business

lines resulting in an increase in Group profitability after

tax by 30% from NGN4.4bn in 2014 to NGN5.7bn

Our Financial Performance in 2015.

Group Revenues declined to 124.6 Billion Naira from

170.1 billion Naira due to declining oil and product

prices and also our risk management approach to

stem importation of petroleum products in the first

quarter of the period under review due to

outstanding subsidy payments which had been

overdue in excess of 365 days. However, overall gross

margin increased from 11% in 2014 to 15% in 2015 as a

result of improved business efficiency, streamlined

product procurement processes and focus on higher

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

Akin Akinfemiwa Group Chief Executive Officer

THE GCEO’S REPORT


standards. The period under review also witnessed the

rollout of several Health, Safety, Security and

Environmental initiatives such as the Safety Rules for

drivers, transporter forum engagements, fuel tanker

discharge competency certification process and

contractor's safety awareness campaign.

In recognition of the company's consistent and

significant achievements that go beyond our financial

objectives, I was once again ranked among top 25

CEO's in Nigeria consecutively in the Business Day's Top

25 CEOs Award in 2015 making this the 3rd consecutive

time since the inception of the awards in 2013. We also

maintained our early flier's status with Nigerian Stock

exchange and set a new record to file our 2015

Audited Accounts within first 26 Days of month of

January 2016. The Company also won the Best

Governance award for the Oil and Gas sector in Africa

by the Ethical Boardroom magazine. All these are a

testament of our highly motivated workforce and

manifestation of our core values of Committed, Open,

Responsive and Respect

The year 2016

I am more confident than ever that huge investments

made in our processes, philosophy and people have

laid a solid foundation for our company to survive the

current economic headwinds in 2016 and beyond.

Our downstream business which is the root of our

company and comprising of the fuels, lubricants,

aviation and other Non-Fuel revenue business will

continue to witness aggressive organic growth in

addition to seeking merger and acquisition

opportunities in order to rightly position ourselves for

future reforms in the downstream sector. We believe

an increase in our retail footprint will give us the market

dominance we desire in Africa and thus necessitating

the need to raise 100 Billion Naira additional capital for

this purpose.

Our Power asset, the Geregu Power Plant is poised to

deliver and contribute 435 MW to the National Grid

come 1st July 2016 upon the completion of our USD 90

Million Major Overhaul project. This in no small measure

will boost the earnings of the group and prove that GPP

is a success story of the FGN's privatization of her Power

assets. Our foray into power generation with the

acquisition of the Geregu Power Plant has created a

solid foundation to explore other opportunities and

carve a niche for ourselves in the power sector.

Our Upstream service business remains challenged by

the falling crude oil prices and that has negatively

impacted the margins from our various contracts with

both the International and Indigenous Oil companies.

However, the on-going restructuring and capacity

building with respect to this entity will improve both

revenues and income in the short-medium term.

Our commitment to build a world-class workforce of

highly skilled and motivated workforce remains

unwavering. We believe that the ultimate investment is

in our people who in turn are the custodians of our

processes and philosophies and most importantly our

brand equity.

The current realities in our business environment calls for

a reinforcement of our existing robust, enhanced,

tested and proven enterprise risk management

framework ranging from operational, financial and

reputational risk. We shall continue to improve on

strong business controls and ethics across all business

lines. Continuous improvements in our HSEQ practices

remains an imperative to gain competitive advantage

in the industry.

Finally, we shall continue to strengthen our corporate

governance framework to boost the investor

confidence. Our quest for admission into the Premium

Board listing of the NSE is at its final stages and should

be concluded by H1 2016. In our bid to build our

organisation to world class standards, we are

incorporating sustainability in our strategic projections

for 2016 as we have become a signatory to the

prestigious United Nations Global Compact; a

convention on encouraging all companies to align

their strategies with the universal principles of human

rights, labour, environment and anti-corruption.

From the above, it is clear that we are surely prepared

for evolving times and seamless possibilities.

Akin Akinfemiwa

Group Chief Executive Officer

FRC/2013/IODN/0000001994

THE GCEO’S REPORT (Cont’d)

SUBSIDIARIES

Amperion Group

Operator/CBN-NEMSF and Nigerian Bulk Electricity Trading Company Plc (NBET) as at the year ended 2015, hence, the injection of NGN213Bn CBN-NEMSF by the Federal Government of Nigeria to cushion the effect of the revenue collection losses from the Distribution companies in Nigeria.

The Company signed a Major Overhaul contract with Siemens Nigeria at a total cost of USD90M, when this Major Overhaul is completed, it will bring the station back to its full installed capacity of 414MW and additional 21MW from the current available capacity of 138MW thereby increased the revenue generation by more than three (3) times the current performance.

PRINCIPAL ACTIVITY The Company is a major wholesale supplier of electric power to the Transmission Company of Nigeria (TCN) through Nigerian counterpart, the Market Operator (MO) and the Bulk purchaser, NBET.

OPERATING RESULTS:The following is a summary of the company's operating results 2015:

2015 BUSINESS OBJECTIVES

The year 2015 aimed at repositioning Geregu Power Plant to actualize its maximum potential. The groundwork for the major overhaul has begun and it is expected to be concluded by June 2016.

The business continues to navigate the turbulent power sector and provide the necessary power generation for the Nigerian economy.

OVERVIEW OF GEREGU POWER PLC FINANCIAL PERFORMANCE AS AT DECEMBER 31, 2015Geregu Power Plc posted a PBT of N3.569bn for the year ended 31 December 2015 (31 December 2014: N4.159bn) resulting into earnings per share of N356.94 for the year ended 31 December 2015(31 December 2014: N415.94).

Geregu revenue for the year 2015 was N10.268bn representing 13% increase over the corresponding year`s revenue of N9.062bn achieved in the year 2014.

The Gas cost remains USD1.75/SCFT payable at CBN rate to the Nigerian Gas Company Limited throughout the year 2015 with total gas consumption of 11,778,746mmscft.

The total energy generated for the year 2015 was 1,105,365Mwh while 1,091,563MWh was supplied to the national grid. These figures represent 1.25% energy consumed within the power plant in the year 2015.

The energy charge and capacity charge were maintained throughout 2015 at N5,555/MWh and N4,303/MWh respectively since May 1, 2014.

The sum of NGN9.34 was outstanding from the Market

2015 2014 N'000 N'000Prot before taxation 3,569,528 4,159,471 Taxation NIL NILProt after taxation 3,569,528 4,159,471 Transfer to contingency reserve Retained earnings for the year 3,569,395 4,159,471Retained earnings, beginning of year 49,590,188 45,430,717Proposed dividend 2,500,000 NIL Retained earnings, end of year 53,159,715 49,590,188Earnings per share – basic/diluted (N) 356.94 415.92

CONCLUSIONWith 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.


SUBSIDIARIES (Cont’d)

Forte Upstream Services Limited (FUS)

As part of our continued business strategy for sustained growth and profitability going forward in 2016, the Company is poised to undertake additional new contracts in its proportion of the provision of production chemicals with this IOC's.

In conclusion, FUS is positioned and structured to partner with majority of the service companies. We are hopeful that this arrangement will further reposition FUS to be one of the leading upstream services company in Nigeria.

It is expected that Executive Management Support in various business decisions will propel the Company in achieving its objective in 2016 as leading Integrated Oilfield Solutions provider in Nigeria.

The Company's audited IFRS financial results as at December 31, 2015 reported a turnover of NGN

INTRODUCTION

Forte Upstream Services Limited formerly known as African Petroleum Oilfield Services Limited (APOS) is a fully owned subsidiary of Forte Oil Plc. The Company is engaged in the sale of Production Chemical, Drilling Fluids, Laboratory Support and other engineering services to both local emerging & major international oil exploration and production companies in Nigeria.

FUS 2015 BUSINESS OUTLOOK AND PERFORMANCE REVIEW

The company in 2015 continued its supply of production chemicals, drilling & completion fluids, Bulk Storage and Laboratory Services to local and international oil exploration and production companies. During the year under review, the Company operated in a highly challenged industry due to the global fall in crude oil prices affecting the cost of exploration and production. However, the Company was able to achieve a profit before tax of NGN 568,058,428.81 as against NGN 363,743,000 in the year 2014 (an increase of 56%). This increase was due to optimization of existing contract with additional high scope and securing a new contract with an IOC in the last quarter of 2015. The non-implementation of our Addax drilling contract in 2015 which has been re-scheduled for last quarter 2016 impacted negatively in overall budget performance.

KPIS 2015 2014 N’000 N’000

Turnover 3,846,758 2,667,572 Cost of sales (2,903,952) (1,964,141)Gross prot 942,806 703,431Prot before income Tax 568,058 368,743Taxation (193,655) (137,399)Prot/(loss) for the year 374,092 231,344 Total Equity 1,489,340 1,117,202


SUBSIDIARIES (Cont’d)

AP Oil and Gas Ghana Ltd

AP Oil and Gas Ghana Limited a wholly owned subsidiary of Forte Oil Plc was incorporated in 2008 to market and distribute petroleum products and lubricants.

In 2015, the downstream business in Ghana witnessed a major shift in government policy to full scale price liberalization of petroleum products albeit with stiff monitoring of the regulatory body National Petroleum Authority, NPA.

The general business environment in 2014 continued with the Cedi depreciation, hike in 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.

However, despite all these challenges, the company remained focused on its retail network expansion drive through efficient employment of its limited resources which has resulted to increased number of stations from 8 to 13 (11 white product and 2 LPG stations). The restructuring exercise aimed at repositioning the company for desired growth in revenue and profitability is still very much on course. Also disciplined effort has been made to drastically reduce cost and entrench transparency in the day to day running of the business. The business has been positioned to vertically align the company with BDCs for business partnership that will boost the company's competitive advantage in the industry.

PERFORMANCE REVIEW


INTERNAL CONTROL &

RISK MANAGEMENT


INTERNAL CONTROL SYSTEM

he Board is responsible for maintaining a

Tsound system of internal controls to safeguard shareholders’ investment and

the assets of the Company. The system of internal controls is to provide reasonable assurance against material misstatement, prevent and detect fraud and other irregularities.

There is an effective internal control function within the Company which gives reasonable a s s u r a n c e a g a i n s t a n y m a t e r i a l misstatement or loss. The Board and Management will continue to review the effectiveness and the adequacy of the company's internal control systems and update such as may be necessary.

The Directors are responsible for the overall management of risk as well as expressing their opinion on the effectiveness of the process. The risk management framework is integrated into the day-to-day operations of the business and provides guidelines and standards for administering the acceptance and on-going management of key risks such as financial, compliance/legal/regulatory, reputational, strategic and operational risk. The Directors are of the view that effective internal audit function exists in the company

and that risk management controls and compliance system are operating efficiently and effectively in all respects.

The Enterprise Risk Management system was evaluated by the Firm of KPMG during the year under review. The report of the audit was submitted to the Board Risk Committee and the Board and their recommendations have been implemented.

Risk Management



The Board of Forte Oil Plc is made up of executive, non-executive directors and an independent director based on integrity, professionalism and recognition. The membership of the Board comprises of Directors with a broad range of expertise, skills and experience from different industries and businesses.

The Board of Directors is the apex governing body of Forte Oil Plc. The Chairman is responsible for the leadership and management of the Board and for ensuring that the Board and its committees function effectively. This is achieved by ensuring that Directors review accurate, timely and clear information. The Chairman is also responsible for approving and reviewing the training and development needs of each Director which he does with the assistance of the Company Secretary.

The Chief Executive Officer who is also an Executive Director bears overall responsibil ity for the implementation of the strategy agreed by the Board, the operational management of the Company and the Subsidiaries. He is supported in this by the Executive Committee, which he chairs.

The Non-executive and Independent Directors bring a wide range and balance of skills and international business experience to Forte Oil Plc. Through their

Board of Directors

contribution at Board meetings and at Board committee meetings, they are expected to challenge constructively and help develop proposals on strategy and bring independent judgment on issues of performance and risk. Generally, prior to each meeting of the Board, the Chairman and the Non-executive Directors meet without the Executive Directors to discuss, among other things, the performance of individual Executive Directors.

The Board as the focal point of the Company's corporate governance system is ultimately accountable and responsible for the performance and affairs of the Company with a commitment to uphold and discharge its legal, financial and regulatory responsibilities at all times. The Board is also responsible for the strong financial performance of the Company and approves the design of the Company's annual strategy and monitors the implementation of the set objectives.

Furthermore, all Directors may seek independent professional advice in connection with their role as a Director. All Directors have access to the advice and services of the Company Secretary. The Company has provided both indemnities and directors' and officers' insurance to the Directors in connection with the performance of their responsibilities.

The Board CommitteesDuring the period under review, the Board Committees met on a quarterly basis to discuss matters pertaining to its charter in addition to regular reports provided through the Company Secretariat on any significant issues to be considered by the Committee.

Outside of these Board Committees, there are other management committees namely the Executive

M a n a g e m e n t C o m m i t t e e , M a n a g e m e n t Committee, Risk Committee, Credit Risk Committee, Crystalized Assets Committee, Branding Committee, Bid Committee and Inventory Management, Tenders and Contracts Committee charged to ensure that the activities of the Company are at all times done with high standards of professionalism, accountability and integrity.

COMPANY SECRETARIAT’S REPORT For 2015 Annual Report

Forte Oil Plc is committed to sustaining good relations and ongoing interactions with its shareholders and all o t h e r s t a k e h o l d e r s v i a a w e l l - e s t a b l i s h e d communications and complaints management policy. The Company shall continue to ensure that its shareholders relations and policies are appropriate to meet the needs of its stakeholders.

The Company is focused on the equitable treatment of shareholders, protection of their rights and complete disclosure and transparency at all times by the Board and Management of the Company.

In addition, the Company has in place, a well-managed Investor Relations Unit to attend to all enquiries on the Company's financial performance, financial statements, corporate actions, current and future strategy and all other corporate information.

All other related information on the Company's business operations and allied matters can be obtained by all stakeholders and the general public from the Company's website www.forteoilplc.com or email [email protected].

Future Relations and Communication with Stakeholders

During the period under review, there were changes to the Board structure with the resignation of two Non- executive Directors namely Ven. Layi Bolodeoku and Mrs. Korede Omoloja and the appointment of Mr. Anil Dua as a Non- Executive Director of the Company. The Board composition is made up of seven (7) members which include the Chairman, three (3) Non-Executive Directors, one (1) Independent Director and two (2) Executive Directors.The appointment of a new Director in the Company occurs once a declaration of vacancy is noted by the Board. The Board Governance and Remuneration Committee is responsible for the nomination of qualified candidates who possess the knowledge, skills, experience, qualifications and competence to be on the Board. The appointment of the Director is based on a through scrutiny of the nominated candidates, discreet validation of character and interaction with the individual. Upon satisfaction with the right candidate, he/she is recommended to the Board for appointment and presented to shareholders for

ratification at the next Annual General meeting of the Company following such appointment.

All newly appointed Directors undergo an induction process. This entails an understanding of the history of the Company, the norms and culture of the Company as well as an introduction to the management of the Company. In addition, corporate documents and a copy of the relevant regulations guiding the business are presented to the new Director.

Annually, the Board of Directors attend bespoke Board Trainings/sessions, with the aim of ensuring that they update their skills, knowledge of industry p ract ice , re levant regu la t ions , operat ing environment and on international best governance practices, industry and global trends. Throughout the year, regular updates on developments in legal matters, governance and accounting are provided to Directors.

Board Appointment, Induction and Training Processes

The governance structure of the Company is designed to ensure that the board performs its functions as provided for in the charters and in accordance with all legislative and regulatory developments and trends in governance. The performance of the Board Committees, the Chairman and the individual Directors are reviewed annually by an independent consultancy firm.

The Directors and the Committees are evaluated on their ability to fulfil its general supervisory roles, participation at meetings and general performance. The Board evaluation report for the period ended December 31, 2015 recorded a satisfactory performance for the Committees and each individual Director.

Board Evaluation Process

Director Amount (N)

Mr. Femi Otedola (CON) Chairman 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

Directors RemunerationThe 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.

2015 BOARD AND BOARD COMMITTEES MEETING ATTENDANCE


Statement of Compliance with the Corporate Governance CodeForte Oil Plc affirms its commitment and desire to continue to adhere to the principles of excellent corporate governance practices. The Company strives to carry out its business operations on the principles of integrity and professionalism through transparent conduct at all times.

The Company during the period under review in relation to its code of conduct developed a Complaints management policy to guide its Directors,

Executive Management and Officers on the fair, impartial and objective manner to effectively resolve all stakeholder issues and enquiries. As a public quoted company, the Company was fully compliant in its corporate governance practices and operations regarding the listing rules of the Nigerian Stock Exchange, the directions of the Securities and Exchange Commission (SEC) and international best practices.

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:

1

2

3

4

5

6

7

S/N NAME

Mr. Femi Otedola (CON)

Mr. Akin Akinfemiwa

Mr. Julius B. Omodayo -Owotuga, CFA

Ven. Layi Bolodeoku*

Rev. Dr. (Mrs)Grace Ekpenyong

Deacon Philip Akinola

Mrs. Korede Omoloja**

POSITION

Chairman

Director

Director

Director

Director

Director

Director

8 Mr. Christopher Adeyemi Director

Symbol:Present

Absent

The Directors of the Company and senior employees who are in possession of price sensitive information are prohibited from dealing in the shares of the Company in accordance with the provisions of the Investments and Securities Act of 2007 and the post listing rules of the Nigerian Stock Exchange.

No Director or Principal Officer of the Company, or a relative of the Director and/or the Principal Officer of the Company who is aware of material non-public information relating to the Company may directly or through relatives or other person buy or sell shares of

the Company or engage in any other action to take advantage of insider information during closed trade periods. All Insiders are notified of closed periods via written or electronic communication from the Company Secretary.

Forte Oil Plc has a securities trading policy applicable and circulated to Directors, insiders, external advisers and all employees to guide on the dissemination of any material information about our Company. The securities trading policy is also available on the website of the Company.

Insider Trading

2015 Board And Board Committees Meeting Attendance

*Resigned from the Board with effect from December 09, 2015** Resigned from the Board with effect from October 30, 2015***Appointed on the Board with effect from October 30, 2015

FEB. 18, 2015

APRIL 14, 2015

JULY 31, 2015

OCT. 30, 2015

DEC. 17,2015

9 Mr. Anil Dua*** Director

N/A

N/A N/A

N/AN/AN/A

N/A Not Applicable


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.

Risk Management CommitteeThe 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.

S/N Name

Position

February 16, 2015

July 28, 2015

October 29, 2015

December 16, 2015

1. Ven. Layi Bolodeoku*

Chairman

2. Mr. Christopher Adeyemi

Member

3. Deacon Philip Akinola Member

4. Rev. Dr. (Mrs) Grace Ekpeyong

Member

* Resigned from the Board with effect from December 09, 2015

N/A


S/N Name Position

1

2

3

4

5

Ven. Layi Bolodeoku*

Mr. Christopher Adeyemi

Mr. Julius B. Omodayo-Owotuga, CFA

Mr. Akin Akinfemiwa

Chairman

Member

Member

Member

Member

Rev. Dr. (Mrs) Grace Ekpenyong

Statutory Audit CommitteeThe 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.

1

2

3

4

5

S/N Name

Mr. Tokunbo Shofolawe Bakare (Shareholder)

Mr. Emmanuel Okoro (Shareholder)

Mr. Suleman Ahmed (Shareholder)

Deacon Philip Akinola(Non Executive Director)

Mrs. Korede Omoloja*(Non Executive Director)

Position

Chairman

Member

Member

Member

Member

6

Mr. Christopher Adeyemi(Independent Director)

Member

Feb. 18,

2015

July 28,

2015

Oct. 29,

2015

Dec. 16,

2015

* Resigned from the Board with effect from December 09, 2015

** Appointed on the Board with effect from October 30, 2015

Feb. 16, 2015

April 14,

2015

May 18,

2015

July 31, 2015

Oct. 29, 2015

Dec. 16, 2015

Mr. Anil Dua**(Non Executive Director)7 Member

* Resigned from the Board with effect from October 30, 2015

N/A

N/A N/A N/A N/A N/A


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.

1

2

3

4

S/N Name

Mr. Christopher Adeyemi

Mrs. Korede Omoloja*

Deacon Phillip Akinola

Position

Chairman

Member

Member

Member

5 MemberMr. Julius B. Omodayo-Owotuga, CFA

Mr. Akin Akinfemiwa

Feb. 17,2015

July 29, 2015

Oct. 29, 2015

Dec. 16, 2015

* Resigned from the Board with effect from October 30, 2015

N/A


Profiles of Directors


Board of Directors

Mr. Femi Otedola, CON Chairman

r. Femi Otedola joined the board of Forte Oil Plc (formerly

Mknown as African Petroleum Plc) as Chairman of the Board 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.


Julius B. Omodayo- Owotuga, CFA - Group Chief Financial Officer

r. Julius B. Omodayo-Owotuga is the Group Chief Financial

MOfficer of Forte Oil Plc. He is a CFA Charter Holder, a KPMG trained Chartered Accountant and an experienced

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.

Board of Directors cont’d

Akin Akinfemiwa Group Chief Executive Officer

r. Akin Akinfemiwa is the Group Chief Executive Officer of

MForte Oil Plc and responsible for the overall strategic 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.



Grace C. Ekpenyong Director

ev. (Dr.) Mrs. Grace Christopher Ekpenyong holds a first Degree

Rin Zoology from the University of Ibadan in 1979 and a Post 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.

r. Adeyemi attended Obafemi Awolowo University Ile Ife

Mwhere he obtained his LL.B (Hons) degree in 1989. He 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).

Christopher AdeyemiDirector


Philip M. Akinola Director

r. Akinola holds a B.Sc. (Honours) in Sociology and

MAnthropology (1987), M.Sc. Industrial Sociology (1989), and has Ph.D (Sociology) in view at University of Lagos.

Mr. Akinola has garnered over 22 years' experience in Human Resources Operations, Consulting and Management. His working 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)


Anil Dua Director

r. Anil Dua is a Non-Executive Director who was until recently

Mthe 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.


DIRECTORS' REPORT


Directors' ReportFor 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

Taxation

Prot after taxation

Total Comprehensive incomefor the year

Retained earnings, beginning of the year

Retained earnings, end of the year

Earnings per share basic

7,012,442 5,831,755

(1,218,387) (1,037,177)

5,794,055 4,794,578

5,784,169 4,789,081

3,958,962 3,346,139

6,001,847 5,691,196

4.1 4.39


DIVIDENDThe 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. DIRECTORSThe 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, 2007VEN. LAYI BOLODEOKU Resigned on December 09, 2015MRS. GRACE C. EKPENYONG Re-elected on July 26, 2013MR. CHRISTOPHER ADEYEMI Re-elected on March 28, 2014DEACON PHILIP M. AKINOLA Re-elected on April 15, 2014MRS. OMOLOJA KOREDE Resigned October 30, 2015MR. AKIN AKINFEMIWA Appointed December 28, 2011MR. JULIUS OMODAYO-OWOTUGA,CFA Appointed December 28, 2011MR. 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 BOARDSince 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 (Chairman) 128,706,299 708,434,400 154,006,575 706,047,784Mr. Akin Akinfemiwa 20,000 NIL 20,000 NILMr. Julius Owotuga Owotuga NIL NIL NIL NILRev. (Mrs) Grace Ekpenyong 43,496 NIL 43,496 NILVen. Layi Bolodeoku NIL NIL NIL NILMr. Christopher Adeyemi 80,485 NIL 80,485 NILDeacon Phillip Akinola NIL NIL NIL NIL Mrs. Korede Omojola 49,187 NIL 49,187 NILMr. Anil Dua NIL NIL NIL NIL

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 SHARES5.59million 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).

Directors' Report (Cont’d)


SHARE OPTIONS SCHEMEThe 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 14.50FEMI OTEDOLA 154,006,575 14.10

SHARE CAPITAL HISTORY

Date From To

22/06/7817/07/8028/08/8204/08/8406/08/8612/07/8829/06/9029/07/9328/11/9719/02/9915/11/02

26/11/13

N N

Date From To

N N

Consideration

ANALYSIS OF SHAREHOLDINGThe analysis of the distribution of the shares of the Company at the end of the 2015 financial year is as follows:

-Bonus (1:2)Bonus (1:1)Bonus (1:3)Bonus (1:5)Bonus (2:3)Rights IssueBonus (1:4)Rights IssueRights Issue

-Bonus (1:5)PlacementRights Issue

Public Offer-

Underwriting of 2008/2009

Hybrid Offer

7,500,000 11,250,000 22,500,000 30,000,000 36,000,000 43,200,000 86,400,000 86,400,000 108,000,000 216,000,000

234,263,450.50 281,116,141 394,393,919 443,271,555543,535,383543,535,383546,095,528

6,000,000 7,500,000 11,250,000 22,500,000 30,000,000 36,000,000 43,200,000 72,000,000 86,400,000 108,000,000 216,000,000

234,263,450.50 281,116,141 394,393,919 443,271,555543,535,383543,535,383

28/02/7917/07/8024/08/8210/08/8416/09/8603/08/8824/09/9010/01/9428/11/9913/09/0425/11/0430/09/0528/10/0620/04/0920/04/09

6/12/1311/07/2014

7,500,000 11,250,000 22,500,000 30,000,000 36,000,000 43,200,000 72,000,000 86,400,000 108,000,000 144,000,000

5,000,000,000

2,000,000,000

6,000,000 7,500,00011,250,00022,500,00030,000,00036,000,000 43,200,000 72,000,000 86,400,000

108,000,000144,000,000

5,000,000,000

Authorised Capital Issued and Fully Paid Capital


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.


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:

DISCLOSURES

Ÿ Borrowing and Maturity Dates The details of the borrowings and maturity

dates are stated in Note 28 to the financial statements

Ÿ Risk Management and Compliance System Forte Oil Plc has a structured enterprise- risk

management framework that puts in place and undertakes a through risk assessment on all aspects of the business. The Risk Assessment is based on two criteria's, 'business Impact' and 'Likelihood of Occurrence' and for every identified business risk, mitigating measures are implemented by the Company.

The Directors are responsible for the total process of the risk management as well as expressing their opinion on the effectiveness of the process. The risk management framework of the Company is integrated into the day-to-day operations of the Company and provides guidelines and standards for administering the acceptance and on-going management of key risks such as operational, reputational, financial, market and compliance risk.

The Directors are of the view that effective 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

Risk Management and Compliance are stated in Note 6 of the financial statements.

Ÿ Related Party Transactions The Company has contractual relationship

with related companies in the ordinary course of business. The details of the outstanding amounts arising from the related party transactions are stated in Notes 31 to the financial statements.

EMPLOYMENT OF DISABLED PERSONS The Company operates a non-discriminatory policy in the consideration of applications for employment, including those received from disabled persons. The Company's policy is that the most qualified and experienced persons are recruited for appropriate job levels irrespective of the applicant's state of origin, ethnicity, religion or physical condition. In the event of any employee becoming disabled in the course of employment, the Company is in a position to arrange appropriate training to ensure the continuous employment of such a person without subjecting him/her to any disadvantage in his/her career development. As at 31 December 2015, the Company had no disabled persons in its employment.

S/N ORGANIZATION/BODY AMOUNT

1.

2.

3.

4.

5.

TOTAL N4,488,091.00


Lagos State Motherless Babies Home Lekki N488,091.00

National Association of Energy Correspondents (NAEC) Conference N250,000.00

Support for Lagos Preparatory School N250,000.00

Ijora Oloye Youth Association Quiz competition N1000,000.00

WIMBIZ Annual lecture N1,000,000.00

International Association for the Scientic Study of Intellectual and Developmental Disabilities

N500,000.00

Financial Reporting Council N1,000,000.00

6.

7.



HEALTH, SAFETY AND WELFARE OF EMPLOYEES It is the policy of Forte Oil Plc to carry out its activities in a manner that guarantees the health and safety of its workers and other stakeholders, the protection of the company's facilities and the environment and compliance with all regulatory and industry requirements.

We consider health, safety and environmental issues as important as our core businesses and assume the responsibility of providing healthy, safe and secure work environment for our workers as required by law. Our objective is to minimize the number of cases of occupational accidents, illnesses, damage to property and environmental degradation.

Our vision is to achieve leadership role in sus ta inable HSE pract ices th rough the establishment and implementation of effective business management principles that are consistent with local and international regulations and standards.

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

Company and employees' interests, with a view to making inputs to decisions thereon. The Company places a high premium on the development of its manpower. Consequently, the Company sponsored its employees for various training courses both in Nigeria and abroad in the year under review. POST BALANCE SHEET EVENTS There was no material event subsequent to year end that could impact on the financial statements. AUDITORS Messrs PKF Professional Services have indicated their willingness to continue in office in accordance with Section 357(2) of the Companies and Allied Act of Nigeria. BY ORDER OF THE BOARD

AKINLEYE OLAGBENDECOMPANY SECRETARY



2015 Stakeholders Events

36th Annual General Meeting Photo-story

Unclaimed Dividend Warrants

- 00

50,000

100,000

150,000

200,000

250,000

300,000

Amount Unclaimed(N)

Unclaimed Dividend Warrants

2006 2007 2008 2013 2014


Performance Indicators

Ten-Year Turnover, Profit /(Loss) Before Tax, Taxation and Profit /(Loss) After Tax History

20000000

15000000

10000000

50000000

0

-5000000

2015 2014 2013 2012 2011 2010 2009

The Company

2008 2007 2006

Turnover Prot/(Loss) Before Tax Taxation Prot/(Loss) After Tax

Ten-Year Dividend History

(25,000,000)

(20,000,000)

(15,000,000)

(10,000,000)

(5,000,000)

-00

5,000,000

10,000,000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Dividend Declared

Profit A�er Taxa�on (N'000) Dividend Declared (Gross) (N'000) Dividend Per Share (Kobo)

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.

Report of the Audit Committeeto the members of Forte Oil Plc

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

MEMBERS OF THE AUDIT COMMITTEE

7. MEMBER

* Appointed to the Board with effect from October 30, 2015**Resigned from the Board with effect from October 30, 2015

KOREDE OMOLOJA**


SYNTH 10000 is an advanced full synthetic engine oi l designed for the latest generation high-performance vehicles.

It offers advanced wear protection, optimum cleaning power and enhances the overall performance of your engine with a unique advantage of extended oil change interval.

It meets Mercedes-Benz, Volkswagen, General Motors, BMW, Porsche and Renault engine oils specifications.

Packaging: 4L & 1L

SYNTH 10000SAE 5W/40, API: SN/CF, ACEA A3/A4

Vi sco 2000 i s a p remium qua l i t y multigrade engine oil, formulated from highly refined base oils stock combined with high technology additive to meet a n d e x c e e d t h e p e r f o r m a n c e requirement of API (America Petroleum Institute) SL/CF oil. Its anti-corrosion, anti-rust and anti-foam properties help to ensure optimum engine protection.

Visco 2000 has excel lent start-up performance, prevents sludge build-up a n d o f f e r s o p t i m u m p o w e r & performance under most severe driving conditions. It also provides improved fuel consumption even in older engines.

Packaging: 4L & 1L

VISCO 2000SAE 20W/50, API: SL/CF


Super V is a high performance multigrade engine oils for gasoline and diesel engines. It ensures good cold starting of engine and excellent lubrication by providing maximum engine protection at high temperature. Its excellent detergent and dispersant propert ies ensures optimum engine cleanliness.

Packaging: 4L & 1L

DMO is a high quality monograde engine oil designed for mixed fleet applications. Suitable for all turbocharged or normally aspirated Diesel engines in trucks and locomotives. It has high detergency levels with good anti-wear and anticorrosion properties.

Packaging: 200L, 25L & 4L

SUPER VSAE 20W/50, API: SG/CD

DIESEL MOTOR OILSAE 40, API: CF/SF


VANELLUS C3 15W/40 is produced from top quality highly refined base oils used in combination with high technology additives. It is available in the following API (American Petroleum Institute) service category: CF-4, CH-4, and CI-4 and suitable for both trucks and diesel power generating sets (7.5KVA to 2,000KVA)

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

Gear Oil 90EP and 140EP are versatile extreme pressure automotive gear oils with EP additives designed for use in manual transmission gear boxes. They offer excellent rust, wear and corrosion protection with superior compatibility with all seals.

Packaging: 200L & 4L

VANELLUS C3 15W/40SAE 15W/40

GEAR OIL 90EP & 140EPAPI: GL-4


Project

Overhauling of 414 Megawatt Geregu Power Plant


Customer Service

Customer Service Week



Truck Driver’s Forum



Transporters’ Forum



Vendors’ Forum


Stakeholders Events

Drivers’ Safety Awareness Campaign



Facts behind the figures



FO Advantage card launch



Mechanic Village Storm



Employee Events

Staff Retreats

Sports Day

Employee Events


Staff Retreats

Employee Events

Old School Party


CONSOLIDATEDFINANCIAL STATEMENTS3 1 D E C E M B E R 2 0 1 5


Contents Page

Report of the independent auditors 56

Consolidated statement of nancial position 57

Consolidated statement of comprehensive income 58

Consolidated statement of cash ows 59

Consolidated statement of changes in equity 60

Notes to the consolidated nancial statement 64

Other National Disclosures

Consolidated statement of value added 111

Financial summary 112


Report of the Independent Auditorsto the members of Forte Oil Plc

We have audited the accompanying consolidated financial statements of Forte Oil Plc (“the Company”) and its subsidiaries (together, “the Group”), which comprise the consolidated financial position at 31 December 2015 and the consolidated statement of comprehensive income, consolidated statement of cash flows and statement of changes in equity for the year then ended and a summary of significant account ing pol ic ies and other explanatory information.

Directors' Responsibility for the Consolidated Financial Statements

The Directors are responsible for the preparation and fair presentation of these consolidated financial statements in accordance with the Companies and Allied Matters Act, Cap C20, LFN 2004 and with the requirements of the International Financial Reporting Standards in compliance with the Financial Reporting Council of Nigeria Act, No 6, 2011, and for such internal controls as the Directors determine are necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consol idated f inancial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor consider internal

control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by Directors, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Forte Oil Plc and its subsidiaries at 31 December 2015, and of their financial performance and cash flows for the year then ended; in accordance with the Companies and Allied Matters Act, CAP C20, LFN 2004 and in the manner required by the International Financial Reporting Standards in compliance with the Financial Reporting Council of Nigeria Act, No 6, 2011.

The company and its subsidiaries have kept proper books of account, which are in agreement with the consolidated financial position and statement of comprehensive income as it appears from our examination of their records.

Tajudeen A. Akande, FCA, FRC/2013/ICAN/01780 For: PKF Professional Services Chartered Accountants Lagos, Nigeria Dated: 28 January 2016

Accountants &business advisers

Tel: +234(01) 8042074 | 7734940 | 7748366Web: www.pkf-ng.comEmail: [email protected] | [email protected] House | 205A Ikorodu Road, Obanikoro | Lagos | G.P.O. Box 2047 | Marina | Lagos, Nigeria

Partners: Isa Yusufu, Geoffrey C. Orah, Omede P.S. Adaji, Tajudeen A. Akande, Samuel I. Ochimena, Najeeb A. Abdus-salaam, Olatunji O. Ogundeyin, Benson O. AdejayanOfces in: Abuja, Bauchi, Jos, Kaduna, KanoPKF Professional Services is a member of PKF International Limited, a network of legally Independent Firms. PKF International does not accept any responsibility or liability for the actions or inactions on the part of any other individual member Firm or Firms

The accompanying notes and signicant accounting policies form an integral part of these consolidated nancial statements.

The consolidated nancial statements were approved by the Board of Directors on 28 January 2016 and signed on its behalf by:

Chairman FRC/2013/IODN/00000001994

FRC/2013/IODN/00000002426 Directors

FRC/2013/ICAN/00000001995

Consolidated Statement Of Financial Position At 31 December 2015



Consolidated Statement of Profit or Loss And Other Comprehensive Income For The Year Ended 31 December 2015

Consolidated Statement Of Cash Flows For The Year Ended 31 December 2015

(16,601,830)

13,856,914

12,739,846


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Notes to the Consolidated Financial Statements for the year ended 31 December 2015



1. The Group

1.1 Reporting Entity Forte Oil Plc (the Company) was incorporated on 11 December 1964 as British Petroleum. It became African Petroleum

through the indigenalisation policy of the Federal Government of Nigeria in 1979. The Company changed its name to Forte Oil Plc in December 2010 upon restructuring and rebranding. The major shareholders are Zenon Petroleum and Gas Company Limited and Thames Investment Incorporated. The Company and its subsidiaries, Forte Upstream Services Limited, AP Oil and Gas Ghana Limited and Amperion Power Distribution Limited and its subsidiary, Geregu Power Plc are collectively the Group.

1.2 Principal activities The Company and its subsidiaries are primarily engaged in the marketing of petroleum products which is divided into

fuels, production chemicals, lubricants, greases and power generation.

2. Basis of preparation

2.1 Statement of compliance These consolidated financial statements have been prepared in accordance with International Financial Reporting

Standard (IFRSs) as issued by the International Accounting Standard Board (IASB) and in compliance with the Financial Reporting Council of Nigeria Act, No 6, 2011. These are the Group's financial statement for the year ended 31 December 2015, prepared in accordance with IFRS 3- Business Combination has been applied.

2.2 Functional/presentation currency These consolidated financial statements are presented in Naira, which is the Group's functional currency (except for AP

Oil Ghana Ltd which operates in the Ghanian Cedis). Except as indicated in these consolidated financial statements, financial information presented in Naira has been rounded to the nearest thousand.

2.3 New standards and interpretations not yet adopted Standards and interpretations issued but not yet effective. At the date authorisation of these consolidated financial statements, the following IFRSs and amendments to IFRS that

are relevant to the group and the company were issued but not effective.

2.3.1 IFRS 9 , 'Financial instruments' A finalized version of IFRS 9 has been issued which replaces IAS 39 Financial Instruments: Recognition and

Measurement. The completed standard comprises guidance on Classification and Measurement, Impairment, Hedge Accounting and Derecognition:

A) IFRS 9 introduces a new approach to the classification of financial assets, which is driven by the business model in which the asset is held and their cash flow characteristics. A new business model was introduced which does allow certain financial assets to be categorised as "fair value through other comprehensive income" in certain circumstances. The requirements for financial liabilities are mostly carried forward unchanged from IAS 39.

B) The new model introduces a single impairment model being applied to all financial instruments, as well as an "expected credit loss" model for the measurement of financial assets.

c). IFRS 9 contains a new model for hedge accounting that aligns the accounting treatment with the risk management activities of an entity, in addition enhanced disclosures will provide better information about risk management and the effect of hedge accounting on the financial statements.

IFRS 9 carries forward the derecognition requirements of financial assets and liabilities from IAS 39.

The group is yet to assess IFRS 9's full impact and intends to adopt IFRS 9 not later than the accounting period beginning on or after I January 2018.

2.3.2 IFRS 15, 'Revenue from Contracts with Customers' IFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue

arising from contracts with customers. IFRS 15 supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related Interpretations when it become effective.

The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standards introduces a 5-step approach to revenue recognition:



Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation.

Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when “control” of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios. Furthermore, the new standard will also result in enhanced disclosures about revenue, provide guidance for transactions that were not previously addressed comprehensively and improve guidance for multiple-element arrangements. IFRS 15 is effective for annual reporting periods beginning on or after 1 January 2017. The group is yet to assess IFRS 15's full impact and intends to adopt IFRS 15 not later than the accounting period beginning on or after 1 January 2017.

2.3.3 1FRS 16, 'Leases' IFRS 16 was issued which introduces a number of significant changes to the lease accounting model under IFRSs,

including a requirement for lessees to recognize nearly all leases on their balance sheets. IFRS 16 will supersede the current leases guidance including IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a lease, SIC 15- Operating leases incentives, SIC 27-Evaluating the substance of Transactions involving the legal form of lease.

IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019. However, an entity cannot adopt this standard earlier than it adopts IFRS 15, Revenue from Contracts with Customers. This standard was issued on 13 January, 2016. The group is yet to assess IFRS 16's full impact and intends to adopt IFRS 16 not later than the accounting period beginning on or after 1 January 2019.

2.3.4 IAS 1, 'Presentation of Financial Statements' Effective date Annual periods beginning on or after 1 January 2016.

Disclosure Initiative the amendments have been made to the following: * Materiality and aggregation - An entity shall not obscure useful information by aggregating or desegregating

information and materiality considerations apply to the primary statements, notes and any specific disclosure requirements in IFRSs.

* Statement of financial position and statement of profit or loss and other comprehensive income - The list of line items to be presented in these statements can be aggregated or disaggregated as relevant. Guidance on subtotals in these statements has also been included.

* Presentation of items of other comprehensive income (“OCI”) arising from equity-accounted investments - An entity's share of OCI of equity-accounted associates and joint ventures should be presented in aggregate as single items based on whether or not it will subsequently be reclassified to profit or loss.

* Notes - Entities have flexibility when designing the structure of the notes and guidance is introduced on how to determine a systematic order of the notes. In addition, unhelpful guidance and examples with regard to the identification of significant accounting policies are removed.

2.3.5 IAS 16, 'Property, Plant and Equipment' and IAS 38, 'Intangible Assets' Effective date Annual periods beginning on or after 1 January 2016

A) Amendment to both IAS 16 and IAS 38 establishing the principle for the basis of depreciation and amortisation as being the expected pattern of consumption of the future economic benefits of an asset. Clarifying that revenue is generally presumed to be an inappropriate basis for measuring the consumption of economic benefits in such assets.

B) Amendment to IAS 16 and IAS 41 which defines bearer plants and includes bearer plants in the scope of IAS 16 Property, plant and Equipment, rather than IAS 41 allowing such assets to be accounted for after initial recognition i n accordance with IAS 16.

2.3.6 IFRS 10, 'Consolidated Financial Statements' Effective date Annual periods beginning on or after 1 January 2016 Narrow-scope amendments to IFRS 10, IFRS 12 andIAS 28 introduce clarifications to the requirements when

accounting for investment entities. The amendments also provide relief in particular circumstances, which will reduce the costs of applying the Standards.

2.3.7 IFRS 5, 'Non-current assets Held for Sale and Discontinued Operations' Effective date Annual periods beginning on or after 1 January 2016 Amendments clarifying that a change in the manner of disposal of a non-current asset or disposal group held for sale is

considered to bea continuation of the original plan of disposal, and accordingly, the date of classification as held for sale does not change.




2.3.8 IFRS 7, 'Financial Instruments Disclosures' Effective date Annual periods beginning on or after 1 January 2016 Amendment clarifying under what circumstances an entity will have continuing involvement in a transferred financial

asset as a result of servicing contracts.

2.3.9 IAS 19, 'Employees Benefit' Effective date Annual periods beginning on or after 1 January 2016 Clarification given that when looking at a deep market in terms of the standard the deep market requirement applies to

the currency as a whole and not to a specific country.

2.3.10 IAS 27, 'Consolidated and Separate Financial Statements' Effective date Annual periods beginning on or after 1 January 2016 The amendments include the introduction of an option for an entity to account for its investments in subsidiaries,

joint ventures, and associates using the equity method in its separate financial statements. The accounting approach that is selected is required to be applied for each category of investment. Before the amendments, entities have either accounted for their investments in subsidiaries, joint ventures or associates at cost or in accordance with IFRS 9 Financial Instruments (or IAS 39 Financial Instruments: Recognition and Measurement for those entities that have yet to adopted IFRS 9). The option to present investments using the equity method result in the presentation of a share of profit or loss, and other comprehensive income, of subsidiaries, joint ventures and associates with a corresponding adjustment to the carrying amount of the equity accounted investment in the statement of financial position. Any dividends received are deducted from the carrying amount of the equity accounted investment, and are not recorded as income in profit or loss.

2.4 Basis of measurement These consolidated financial statements are prepared on the historical cost basis except as modified by actuarial

valuation of staff gratuity and fair valuation of financial assets and liabilities where applicable. There are other asset and liabilities measured at amortised cost.

2.5 Use of estimates and judgements The preparation of the consolidated financial statements in conformity with IFRSs requires management to make

judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods.

In particular, the Group has identified the following areas where significant judgements, estimates and assumptions are required. Changes in these assumptions may materially affect the financial position or financial results reported in future periods. Further information on each of these areas and how they impact the various accounting policies are described below and also in the relevant notes to the consolidated financial statements.

a) Recovery of deferred tax assets Judgement is required to determine which types of arrangements are considered to be tax on income in contrast to an

operating cost. Judgement is also required in determining whether deferred tax assets are recognised in the consolidated statement of financial position. Deferred tax assets, including those arising from un-utilised tax losses require management assessment of the likelihood that the Group will generate sufficient taxable earnings in future periods in order to utilise recognised deferred tax assets. Assumptions about the generation of future taxable profits depend on management's estimates of future cash flows. These estimates of future taxable income are based on forecast cash flows from operations (which are impacted by sales volume and production, global oil prices, operating costs and capital expenditure) and judgement about the application of existing tax laws. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Group to realise the net deferred tax assets recorded at the reporting date could be impacted.

Future changes in tax laws could also limit the ability of the Group to obtain tax deductions in future periods.

b) Decommissioning costs The Group may incur decommissioning cost at the end of the operating life of some of the Group's facilities and

properties. The Group assesses its decommissioning provision at each reporting date. The ultimate decommissioning costs are uncertain and cost estimates can vary for various factors including changes to relevant legal requirements, emergence of new restoration techniques or experience on similar decommissioning exercise. The expected timing, extent and amount of expenditure can also change, for example in response to changes in laws and regulations or their interpretations. Therefore, significant estimates and assumptions are made in determining the provision for decommissioning. As a result, there could be significant adjustments to the provisions established which could affect future financial results.


C) Contingencies By their nature, contingencies will only be resolved when one or more uncertain future events occur or fail to occur. The

assessment of the existence, and potential quantum, of contingencies inherently involves the exercise of significant judgement and the use of estimates regarding the outcome of future events.

d) Estimated Useful Lives And Residual Values Of Property, Plant And Equipment The Group's management determines the estimated useful lives and related depreciation charge for its items of

property, plant and equipment on an annual basis. The Group has carried out a review of the residual values and useful lives of property, plant and equipment as at 31st December 2015 and that has not highlighted any requirement for an adjustment to the residual lives and remaining useful lives of the assets for the current or future periods.

e) Provisions Employee Benefits The actuarial techniques used to assess the value of the defined benefit plans involve financial assumptions (discount

rate, rate of return on assets, medical costs trend rate) and demographic assumptions (salary increase rate, employee turnover rate, etc.). The Group uses the assistance of an external independent actuary in the assessment of these assumptions. For more details refer to note 24.

f) Control Over Subsidiaries The management of Group have asessed whether or not the Group has control over the subsidiaries based on whether

the Group has the practical ability to direct the relevant activities of each subsidiary laterally. In making their judgement, the directors considered the Group's absolute size of holding in the subsidiaries and the relative size of and dispersion of the shareholdings owned by the other shareholders. After assessment, the Directors concluded that the Group has a sufficiently dominant voting interest to direct the relevant activities of the subsidiaries and therefore the Group has control over them.

3. Basis of consolidation

3.1 The Group financial statements incorporate the financial statements of the parent and entities controlled by the parent and its subsidiaries made up to 31st December 2015. Control is achieved where the investor;

(I) has power over the investee entity,(ii) is exposed, or has rights, to variable returns from the investee entity as a result of its involvement,(iii) can exercise some power over the investee to affect its returns.

The financial statements of subsidiaries are included in the consolidated financial statements from the date that control

commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

Profit or loss and each component of other comprehensive income of subsidiaries are attributed to the owners' of the Company and to the non-controlling interests even if this results in the non-controlling interest having a deficit balance.

In the Company's separate financial statements, investments in subsidiaries are carried at cost less any impairment that has been recognised in profit or loss.

3.2 Group Structure Forte Upsteam Services (FUS) Limited and AP Oil and Ghana Limited (APOG) are wholly owned by Forte Oil Plc while

Forte Oil Plc owns 57% in Amperion Power Distribution Limited. Amperion Power Distribution Limited owns 51% of Geregu Power Plc.

3.3 Transactions Eliminated on Consolidation All intra-group balances and any gain and losses arising from intra-group transactions are eliminated in preparing the

consolidated financial statements. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

3.4 Non-controlling Interest Non-controlling interest is the equity in a subsidiary or entity controlled by the Company, not attributable, directly or

indirectly, to the parent company and is presented separately in the consolidated statement of profit or loss and other comprehensive income and within equity in the consolidated statement of financial position. Total comprehensive income attributable to non- controlling interests is presented on the line “Non- controlling interests” in the statement offinancial position, even if it can create negative non- controlling interests.

4. Significant accounting policies

The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements, unless otherwise indicated.




4.1.1 Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of the entities within the group. Monetary items denominated in foreign currencies are re-translated at the exchange rates applying at the reporting

date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not re-translated.

Exchange differences are recognised in profit or loss in the period in which they arise except for: -exchange differences on foreign currency borrowings which are regarded as adjustments to interest costs, where

those interest costs qualify for capitalisation to assets under construction; - exchange differences on transactions entered into to hedge foreign currency risks; and - exchange differences on loans to or from a foreign operation for which settlement is neither planned nor likely to occur

and therefore forms part of the net investment in the foreign operation, which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.

4.1.2 Foreign operations The functional currency of the parent company and the presentation currency of the consolidated financial statements

is Naira. The assets and liabilities of the Group's foreign operations are translated to Naira using exchange rates at period end. Income and expense items are translated at the average exchange rates for the year, unless exchange rates fluctuated significantly during that year, in which case the exchange rate on transaction date is used. Goodwill acquired in business combinations of a foreign operation are treated as assets and liabilities of that operation and translated at the closing rate.

Exchange differences are recognised in other comprehensive income and accumulated in a separate category of equity.

On the disposal of a foreign operation, the accumulated exchange differences of that operation, which is attributable to the Group are recognised in profit or loss.

4.2 Financial instruments The Group classifies financial instruments, or their component parts, on initial recognition as a financial asset, a

financial liability or an equity instrument in accordance with the substance of the contractual arrangement. Financial instruments are recognised when the Group becomes a party to the contractual provisions of the instrument.

Financial instruments are recognised initially at fair value plus transactions costs that are directly attributable to the acquisition or issue of the financial instrument, except for financial assets at fair value through profit or loss, which are initially measured at fair value, excluding transaction costs.

Financial instruments are derecognised on trade date when the Group is no longer a party to the contractual provisions of the instrument.

4.2.1 Available-for-sale financial assets Available-for-sale financial assets comprise equity investments. Subsequent to initial recognition, available-for-

sale financial assets are stated at fair value. Movements in fair values are taken directly to equity, with the exception of impairment losses which are recognised in profit or loss. Fair values are based on prices quoted in an active market if such a market is available. If an active market is not available, the Group establishes the fair value of financial instruments by using a valuation technique, usually discounted cash flow analysis.

When an investment is disposed, any cumulative gains and losses previously recognised in equity are recognised in profit or loss. Dividends are recognised in profit or loss when the right to receive payments is established.

4.2.2 Trade and other receivables Trade receivables are stated at their original invoiced value, as the interest that would be recognised from discounting

future cash receipts over the short credit period is not considered to be material. Trade receivables are reduced by appropriate allowances for estimated irrecoverable amounts. Interest on overdue trade receivables is recognised as it accrues.

4.2.3 Cash and cash equivalents Cash equivalents comprise short-term, highly liquid investments that are readily convertible into known amounts of

cash and which are subject to an insignificant risk of changes in value. An investment with a maturity of three months or less is normally classified as being short-term.

4.2.4 Non-derivative financial liabilities Bank overdrafts that are repayable on demand and form an integral part of the Group's cash management are included

as a component of cash and cash equivalents for the purpose of the statement of cash flows.


4.2.5 Trade and other payables Trade payables are stated at their original invoiced value, as the interest that would be recognised from discounting

future cash payments over the short payment period is not considered to be material.

4.2.6 Interest-bearing borrowings Interest-bearing borrowings are stated at amortised cost using the effective interest method. The effective interest

method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability.

4.2.7 Compound instruments At the issue date, the fair value of the liability component of a compound instrument is estimated using the market

interest rate for a similar non-convertible instrument. This amount is recorded as a liability at amortised cost using the effective interest method until extinguished upon conversion or at the instrument's redemption

The equity component is determined as the difference of the amount of the liability component from the fair value of the instrument. This is recognised in equity, net of income tax effects, and is not subsequently remeasured.

4.2.8 Impairment of financial assets A financial asset not carried at fair value through profit or loss is assessed at reporting date to determine whether there is

objective evidence that is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occured after initial recognition of the asset, and that the loss event had a negative effect on the future cash flows of that asset that can be estimated reliably. See note 4.11 (Impairment) and note 6 (Financial risk management).

4.3 Share capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary sharesand share

options are recognised as a deduction from equity, net of any tax effects and costs directly attributable to the issue of the instrument.

4.4 Property, Plant and Equipment

4.4.1 Recognition and measurement Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated

impairment losses, if any.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Items of property, plant and equipment under construction are disclosed as capital work-in-progress. The cost of construction recognised includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for the intended use, the costs of dismantling and removing the items and restoring the site on which they are located, and borrowing costs on qualifying asset

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognised net within other income in profit or loss.

4.4.2 Reclassification of investment property When the use of a property changes from owner-occupied to investment property, the property is transferred to

investment properties at its carrying amount.

4.4.3 Subsequent costs The cost of replacing part of an item of property or equipment is recognised in the carrying amount of the item if it is

probable that future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The costs of the day-to-day servicing of property and equipment are recognised in profit or loss as incurred.

4.4.4 Depreciation Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substituted for

cost, less its residual value.

Depreciation is recognized in profit or loss on a straight-line basis(Except for Gas Turbines; which Unit of Production Method i.e Equivalent Operating Hours (EOH) are used) over the estimated useful lives of each part of an item of property, plant and equipment which reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term in which case the assets are depreciated over the useful life.




The estimated useful lives for the current and comparative period are as follows: Land Over lease period Buildings 25 years Plants, equipment and tanks 5-20 years Furniture and fitttings 5 years Computer equipment 4 years Motor vehicles 4-8years Gas turbines 160,000 Equivalent Operating Hours (EOH) per plant

Depreciation methods, useful lives and residual values are reviewed at each financial period end and adjusted, if appropriate. Capital work-in-progress is not depreciated. The attributable cost of each asset is transferred to the relevant asset category immediately the asset is available for use and depreciated accordingly.

4.4.5 De-recognition of tangible assets An item of property and equipment is derecognised on disposal or when no future economic benefits are expected from

its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period the asset is derecognised.

Non-current asset held for sale Non-current assets or a disposal group comprising assets and liabilities, that are expected to be recovered primarily

through sale rather than through continuing use, are classified as held for sale. Immediately before classification as held for sale, the assets, or components of a disposal group are remeasured in accordance with the Group's accounting policies. Thereafter generally the assets, or disposal group are measured at the lower of their carrying amount and fair value less cost to sell. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit and loss. Gains are not recognised in excess of any cumulative impairment loss.

4.5 Investment property Investment properties are measured at cost less accumulated depreciation and accumulated impairment losses,

if any. Cost includes expenditure that is directly attributable to the acquisition of the property. Investment properties under construction are disclosed as capital work-in-progress. The cost of construction recognised includes the cost of materials and direct labour, any other costs directly attributable to bringing the property to a condition of commercial lease to third parties. Land held for an undefined future use is recognised as investment property.

Property that is being constructed or developed for future use as investment property is recognised as investment property.

Depreciation is calculated over the depreciable amount, which is the cost of a property, or other amount substituted for cost, less its residual value. Depreciation is recognised on a straight - line basis over the useful life of the investment property.

The estimated useful lives for the current and comparative period are as follows: Land Over lease period Buildings 25 years

The criteria used by the Group to distinguish investment property from owner occupied property are as follows: - The property must not be actively used for the running of the core business activity of the group that is, production and

marketing of petroleum products. - The property generates cash flows which have no direct connection with core business activity of the group. - The property is held primarily for rental income generation and/or value appreciation.

4.6 Intangible assets

4.6.1 Intangible assets acquired separately Intangible assets acquired separately are shown at historical cost less accumulated amortisation and impairment

losses.

Amortisation is charged to profit or loss on a straight-line basis over the estimated useful lives of the intangible assets unless such lives are indefinite. These charges are included in other expenses in profit or loss.

Intangible assets with an indefinite useful life are tested for impairment annually. Other intangible assets are amortised from the date they are available for use. The estimated useful live for the current and comparative period is:

Software costs - 3 to 5 years

Amortisation periods and methods are reviewed annually and adjusted if appropriate.


4.6.2 Intangible assets generated internally Expenditures on research or on the research phase of an internal project are recognised as an expense when incurred.

The intangible assets arising from the development phase of an internal project are recognised if, and only if, the following conditions apply:

- it is technically feasible to complete the asset for use by the Group - the Group has the intention of completing the asset for either use or resale - the Group has the ability to either use or sell the asset - it is possible to estimate how the asset will generate income - the Group has adequate financial, technical and other resources to develop and use the asset; and - the expenditure incurred to develop the asset is measurable.

If no intangible asset can be recognised based on the above, then development costs are recognised in profit and loss in the period in which they are incurred.

4.6.3 Intangible assets recognised in a business combination Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised

at their fair value at the acquisition date.

4.6.4 Subsequent expenditure Subsequent expenditure on software assets is capitalised only when it increases the future economic benefits

embodied in the specific asset to which it relates. All other expenditure is expensed as incurred.

4.6.5 Amortisation Amortisation is calculated over the cost of the asset, or other amount substituted for cost, less its residual value.

Amortisation is recognised in profit or loss on a straight - line basis over the estimated useful lives of intangible assets from the date that they are available for use, since this must closely reflect the expected pattern of consumption of the future economic benefits embodied in the asset. The estimated useful life for the current and comparative period is:

Computer software: 3 to 5 years

Amortisation methods, useful lives and residual values are reviewed at each financial period end and adjusted if appropriate.

4.7 Leases Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards

of ownership to the Group. All other leases are classified as operating leases. 4.7.1 Finance leases Assets held under finance leases are recognised as assets of the Group at the fair value at the inception of the lease or if

lower, at the present value of the minimum lease payments. The related liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between interest expenses and capital redemption of the liability. Interest is recognised immediately in profit or loss, unless attributable to qualifying assets, in which case they are capitalised to the cost of those assets.

Contingent rentals are recognised as expense in the period in which they are incurred.

4.7.2 Operating leases Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except if another

systematic basis is more representative of the time pattern in which economic benefits will flow to the Group.

Contingent rentals arising under operating leases are recognised in the period in which they are incurred. Lease incentives and similar arrangements of incentives are taken into account when calculating the straight-lined expense.

4.8 Borrowing costs Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are

capitalised as part of the cost of that asset. Other borrowing costs are expensed in the period in which they are incurred.

4.9 Taxation Income tax for the period is based on the taxable income for the period. Taxable income differs from profit as reported in

the statement of comprehensive income for the period as there are some items which may never be taxable ordeductible for tax and other items which may be deductible or taxable in other periods.




Deferred tax is the future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities shown on the statement of financial position. Deferred tax assets and liabilities are not recognised if they arise in the following situations: the initial recognition of goodwill; or the initial recognition of assets and liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of recovery or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the statement of financial position date.

. The Group does not recognise deferred tax liabilities, or deferred tax assets, on temporary differences associated with investments in subsidiaries, joint ventures and associates where the parent company is able to control the timing of the reversal of the temporary differences and it is not considered probable that the temporary differences will reverse in the foreseeable future. It is the Group's policy to reinvest undistributed profits arising in group companies.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.

The carrying amount of deferred tax assets are reviewed at each statement of financial position date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.

4.10 Inventories Inventories are measured at the lower of cost and net realisable value. The cost of deregulated inventories -

AGO, ATK, LPFO, is based on the weighted average cost principle, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. The cost of regulated inventories - PMS and DPK is based on the standard cost principle. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

Perpetual inventory system where cost of sales and ending inventory is updated continuously is in use. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of

completion and selling expenses.

The production costs comprise direct materials, direct labour and an appropriate proportion of manufacturing fixed and variable overheads.

Allowance is made for obsolete, slow moving or defective items where appropriate.

4.11 Impairment

4.11.1 Financial assets (including loans and receivables) A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether

there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be reliably estimated.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management's judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset where applicable continues to be recognized through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss

4.11.2 Non-financial assets The carrying amounts of the Group's non-financial assets, other than inventories and deferred tax assets are reviewed

at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each period at the same time. .


The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset exceeds its recoverable amount. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses recognized in

prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognised.

4.12 Employee benefits The Group operates both defined contribution plans and defined benefit plans.

4.12.1 Defined benefit plan A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Group's net

obligation in respect of defined benefit post-retirement plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior years; that benefit is discounted to determine its present value and any unrecognised past service costs and the fair value of any plan assets are deducted. The discount rate is the yield at the reporting date on government bonds that have maturity dates approximating the terms of the Group's obligations and that are denominated in the same currency in which the benefits are expected to be paid. The calculation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a benefit to the Group, the recognised asset is limited to the total of any unrecognised past service costs and the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan. In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements that apply to any plan in the Group. An economic benefit is available to the Group if it is realisable during the life of the plan, or on settlement of the plan liabilities. When the benefits of a plan are improved, the portion of the increased benefit related to past service by employees is recognised in profit or loss on a straight-line basis over the average period until the benefits become vested. To the extent that the benefits vest immediately, the expense is recognised immediately in profit or loss.

4.12.2 Defined contribution plan A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a

separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the period during which services are rendered by employees. In relation to the defined contribution plan, the Group has in place the Pension fund scheme.

4.12.3 Pension fund scheme In accordance with the provisions of the Pension Reform Act, 2014, the Group has instituted a Contributory Pension

Scheme for its employees, where both the employees and the Group contribute 8% and 10% respectively of the employee's emoluments (basic salary, housing and transport allowances). The Group's contribution under the scheme is charged to the profit and loss account while employee contributions are funded through payroll deductions.

4.12.4 Terminal benefit Termination benefits are recognised as an expense when the Group is committed demonstrably, without realistic

possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value.

4.13 Provision, contingencies and decommissioning

4.13.1 Provisions A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can

be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

4.13.2 Contingent liabilities Contingent liabilities are possible obligations whose existence will only be confirmed by future events not wholly within

the control of the Group. Contingent liabilities are not recognised in the financial statements but are disclosed. However if the possibility of an outflow of economic resources is considered remote, such contigent liabilities are recognised in the financial statements.




4.13.3 Contingent assets Contingent assets are possible assets that arise from past events whose existence will be confirmed only by the

occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. Contigent assets are only disclosed when an inflow of economic benefit is probable. Asset is recognised when the realisation of income is virtually certain, in which case the related asset is no more contingent.

4.13.4 Decommissioning Liabilities for decommissioning costs are recognised when the Group has an obligation to dismantle and remove a

facility or an item of property, plant or equipment and to restore the site on which it is located, and when a reliable estimate of the liability can be made. Where an obligation exists for a new facility such as a retail outlet, this will be on construction. An obligation for decommissioning may also crystalize during the period of operation of a facility through a change in legislation or through a decision to terminate operations. The amount recognised is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. A corresponding item of property, plant and equipment of an amount equivalent to the provision is also recognised. This is subsequently depreciated as part of the asset.

Other than the unwinding discount on the provision, any change in the present value of the estimated expenditure is reflected as an adjustment to the provision and the corresponding item of property, plant and equipment.

4.14 Models used for impairment test, valuations, actuarial results A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether

there is objective evidence that it is impaired. A financial asset is impaired if objective evidence indicates that a loss event has occurred after the initial recognition of the asset, and that the loss event had a negative effect on the estimated future cash flows of that asset that can be reliably estimated.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not consider otherwise, indications that a debtor or issuer will enter bankruptcy, or the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The Group considers evidence of impairment for receivables at both specific asset and collective level. All individually significant receivables are assessed for specific impairment. All individually significant receivables found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables that are not individually significant are collectively assessed for impairment by grouping together receivables with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries and the amount of loss incurred, adjusted for management's judgment as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the asset's original effective interest rate. Losses are recognized in profit or loss and reflected in an allowance account against receivables. Interest on the impaired asset continues to be recognized through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

Non-financial assets The carrying amounts of the Group's non-financial assets, other than inventories and deferred tax assets are

reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For intangible assets that have indefinite useful lives or that are not yet available for use, the recoverable amount is estimated each financial period at the same time.

The recoverable amount of an asset is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

4.15 Income Recognition

4.15.1 Sale of goods and services Revenue from sale of goods in the course of ordinary activities is measured at fair value of the consideration received or

receivable, net of returns, trade discounts and volume rebates.

Revenue from energy sold and capacity charge are measured on monthly basis using the regulated rates in the Mulit Year Tariff Order 11, 2012 - 2017 (MYTO II) of the Nigerian Electricity Regulatory Commission (NERC), net of energy and capacity import and grid transmission losses of 8.05% of energy sent out.


Revenue is recognised when significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is possible, the associated costs and possible return of goods can be estimated reliably , there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.

The timing of the transfer of risks and rewards varies depending on the individual terms of the sales agreement.

4.15.2 Rental income Rental income from investment property is recognised as revenue on a straight-line basis over the term of the lease.

Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Rental income from other property is recognised as other income.

4.15.3 Throughput income Throughput income represents fees earned from the use of the Group's storage facilities by third parties on one hand

and the Nigerian National Petroleum Corporation product discharge into these storage facilities. These are recognised as other income.

4.16 Finance income and finance costs Finance income comprises interest income on funds invested and dividend income. Interest income is recognised

as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group's right to receive payment is established.

Finance costs comprises interest expense on borrowings and impairment losses recognised on financial assets.

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses on financial assets and financial liabilities are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

4.17 Earnings per share The Company presents basic earnings per share data for its ordinary shares.

Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Group by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

4.18 Segment reporting An operating segment is a component of the Group that engages in business activities from which it may earn

revenues and incur expenses. Segment results that are reported to the Group's CEO (the chief operating decision maker) include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly of head office expenses, and tax assets and liabilities.

4.19 Business combinations The acquisition method of accounting is used to account for the acquisition of subsidiaries by the group. The

consideration transferred is measured as the sum of the fair value of the asset given, equity instruments issued and liabilities incurred or assumed at the acquisition date. Transaction costs are recognised within profit or loss as and when they are incured. The Group measures non-controlling interest on the acquisition date as the proportion of the subsidiary's identifiable net assets.

4.20 Transactions with non controlling interests Transactions with non controlling interests that do not result in the gain or loss of control are accounted for as

transactions with equity holders of the group. For purchases of additional interest from non controlling interests, the difference between the purchase consideration and the group's proportionate share of the subsidiary's additional net asset value acquired is accounted for directly in equity.




4.21 Deferred fair value gain on loans Deferred fair value gain on loans are not recognised until there is reasonable assurance that the Company will

comply with the conditions attached to them and that the gains will be received. Deferred fair value gain on loans are recognised in profit or loss on a systematic basis over the periods in which the Company recognises as expenses the related costs for which the gains are intended to compensate. Specifically, deferred fair value gain on loans whose primary condition is that the Company should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the consolidated statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. Deferred fair value gain on loans that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related costs are recognised in profit or loss in the period in which they become receivable. The benefit of a deferred fair value gain on loans at a below-market rate of interest is treated as a deferred fair value gain on loans, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates. The amount recognised as deferred fair value gain on loan is recognised in profit or loss over the period the related expenditure is incurred.

4.22 Trade and other receivables The fair value of trade and other receivables is estimated as the present value of the future cash flows, discounted at

market rates of interest at the reporting date. For trade and other receivables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.

Fair value which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at market rates of interest at the reporting date. For trade and other creditors with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.

4.23 Effective interest method The effective interest method is a method of calculating the amortised cost of a financial instrument and of allocating

interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments (including all fees on points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial instrument, or where appropriate, a shorter period. Income and expense is recognised on an effective interest basis for debt instruments other than those financial instruments “at fair value through profit or loss”.

4.24 Offsetting Financial assets and liabilities Offsetting Financial assets and liabilities are offset and the net amount presented in the statement of financial position

when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

4.25 Repurchase and reissue of share capital (Treasury shares) When share capital recognised as equity is repurchased, the amount of the consideration paid, which includes directly

attributable costs, net of any tax effects, is recognised as deduction from equity. Repurchased shares are classified as treasury shares and are presented in the reserve for own shares. When treasury shares are sold or reissued subsequently, the amount received is recognised as an increase in equity, and the resulting surplus or deficit on the transaction is presented in share premium.

5. Determination of fair values

A number of Group's accounting policies and disclosures require the determination of fair value, both for financial and non financial assets and liabilities. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability that market participants would take into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated and separate financial statements is determined for measurement and / or disclosures purposes based on the following methods.

When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.

Trade and other receivables The fair value of trade and other receivables is estimated as the present value of the future cash flows, discounted at

market rates of interest at the reporting date. For trade and other receivables with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.

Fair value which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at market rates of interest at the reporting date. For trade and other creditors with a remaining life of less than one year, the notional amount is deemed to reflect the fair value.


6. Financial risk management

Overview Our Risk Management objective is to ensure sustainable business growth with stability by promoting a proactive

approach in identifying, evaluating, mitigating and reporting risks associated with the business. In order to achieve these objective, we have established a structured and disciplined approach to Risk Management, including the development of the Risk Matrix, in order to guide decisions of the Group on risk related issues. Forte Oil Plc Group has a risk management system embedded in our day to day business activities which guides our business operations which is being followed in a consistent and systematic manner to increase value to our shareholders. Our Enterprise Risk Management framework focuses on enterprise wide risk of Forte Oil Group with the objective to protect and enhance each entity's value and by extension the Group's value.

Forte Oil Group - Risk Management framework

The Board of Directors sets our overall risk appetite, approves the risk management strategy and is ultimately responsible for the effectiveness of the risk management process and system of internal control within FO Group.

Specific objectives of the Group's Risk Management framework are: * To ensure that all the current and future material risk exposures of FO Group are identified, assessed, quantified,

appropriately mitigated and managed. * To establish a framework for FO’s risk management process and ensure group-wide implementation. * To ensure systematic and uniform assessment of risks related with the Group's operations. * To reduce operational losses. * To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices * To assure business growth with financial stability.

The Board oversees risk management through the following Committees:

Board Risk Management Committee The Board Risk Management Committee is responsible for developing and monitoring the Group's risk management

policies which are established to identify and analyse the risks faced by the Group, set appropriate risk limit and controls, monitor risks and adherence to risk limits. The Committee ensures that risk management policies are integrated into FO's culture. The Committee also reviews quarterly risk management reports and directs appropriate actions to be taken by senior management. The committee reports quarterly to the Board of Directors on its various activities.

Statutory Audit Committee The Audit Committee oversees how management monitors compliance with the Group's risk management policies and

procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the FO Group.

Corporate Governance and Remuneration Committee The Corporate Governance and Remuneration Committee assists the Board in fulfilling its responsibilities in relation to

Corporate Governance & remuneration matters by ensuring the groups meets the legal and regulatory requirements, thus protecting the Group from incurring operational and reputational liabilities that can affect the achievement of our goals and objectives

Risk Management Committee The Risk Management Committee is a Management Committee of Forte Oil Group that evaluates the risks inherent

within the business and ensure that they are captured appropriately within the business risk profile. The committee monitors residual risk exposures and provides assurance as to adequacy of controls implemented to manage risks to the agreed level of appetite. The committee meets monthly, however risk reports are provided quarterly to the Board Risk Committee. Principal risk events are however escalated immediately.

Credit Risk Management Committee The Credit Risk Management Committee is a Sub-Committee of the Risk Management Committee that assess

the credit risk of Forte Oil Group. The Committee reviews and approves credit request in line with the Group's credit policy.

The committee also meets monthly to review payment performance of credit customers, the adequacy of Bank Guarantees, credit limits of customers and also take appropriate actions to ensure zero tolerance for bad debts.




Risk Management Structure & Governance

Risk Profile In the course of our daily operations, we are exposed to various risks. The Group has a risk management

function that manages these risks with various reporting done as required. We have categorised the risks into the following:

Operational Risk HSE Risk

Financial Risk Credit risk

Liquidity risk Market risk

Capital risk management

Reputational Risk Strategic Risk

Operational Risk Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the group's

processes and controls, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the group's operations.

FO Plc Management Committees including -Risk Management & Credit Management

Board/Board Risk Management Committee

Risk Management Governance Structure


The group's objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the group's reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity. The primary responsibility for the development and implementation of controls to address operational risk is assigned to senior management within each business unit. This responsibility is supported by the development of overall group standards for the management of operational risk in the following areas:

* Requirements for appropriate segregation of duties, including the independent authorization of transactions /processes.

* Requirements for the reconciliation and monitoring of transactions. * Compliance with regulatory and other legal requirements. * Documentation of controls and procedures. * Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to

address the risks identified. * Requirements for the reporting of operational losses and proposed remedial action. * Development of contingency plans * Training and professional development * Ethical and business standards * Risk mitigation, including insurance when this is effective.

The Operational risk of the Group is identified and monitored through a risk management review of operational processes and procedures across departments and subsidiaries with the use of Risk Management tool kit such as Risk registers, Control Self- Assessments, Top 25 Risk of the business and Key Risk Indicators Review.

Compliance with Group's operating standards is also supported by a programme of periodic reviews undertaken by Business Assurance and Compliance (BAC). The results of BAC reviews are discussed with the management of the business unit to which they relate, with summaries submitted to the Audit Committee and Executive Management of the group.

HSE Risk Forte Oil Group is committed to managing a Health, Safety & Environmental system that promotes a safe working

environment for all employees, contractors, customers and visitors to our sites. At Forte Oil Group, Health and Safety has equal importance with all other core business activities.

It is the policy of the Group to carry out its activities in a manner that guarantees health and safety of its workers and other stakeholders, the protection of the company's facilities and the environment and compliance with all regulatory and industry requirements. We consider health, safety and environmental issues as important as our core businesses and assume the responsibility of providing healthy, safe and secure work environment for our workers as required by law.

Our objective is to minimize the number of cases of occupational accidents, illnesses, damage to property and

environmental degradation. 32 incidents were reported by various staff from different departments at different locations in the year 2015

% of Total Reported

Cases

ReportedCases

S/N

Department

1 Distribution and Logistics

12

38

2 Retail Marketing

11

34

3 Terminal Operations

3

9

4 IT

2

6

5 Finance

1

3

6 Air FO

1

3

7 HSSEQ

1

3

8

Supply

1

3

Total 32 100




Financial Risk The Group has exposure to the following risks from its use of financial instruments: Credit Risk Liquidity Risk

Market Risk Foreign Exchange Risk

Currency Risk Interest Rate Risk

Other Market Risk

Credit Risk Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the

Group. The Group has a policy of only dealing with creditworthy customers as a means of mitigating the risk of financial loss from defaults and also request for a Bank Guarantee for customers that do not meet our credit criteria. The Group also uses publicly available financial information and customers credit history to rate its major customers. The Management Credit Committee also conducts rigorous review of all credit applications before its final approval. The GCEO & Board Risk Committee (where necessary) also approves credit request in line with FO's Credit Policy.

Trade and Other Receivable The Group has established a credit policy under which each new customer is analysed individually for credit worthiness.

Credit limits are established for each customers, which represents the maximum exposure to the customer. These limits are reviewed periodically by management credit committee based on customers’ performance and credit worthiness. Customers that fail to meet the Group's credit criteria may transact with the Company on a cash-and-carry basis or provide a Bank Guarantee.

Our exposure to credit risk for trade and other receivables and related impairment losses at the reporting date is as disclosed in note 28.

Allowance for impairment losses Forte Oil Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of

trade and other receivables and investments. Please refer to Note 28 for the ageing of trade and other receivables and related impairment allowances for the Group at the reporting date.

The models used for impairment is explained in note 4.14 above

Investments The Group actively monitors the credit rating of companies and only invest in liquid securities with companies with high

credit ratings. The Group does not expect any counter party to fail to meet its obligations.

Guarantees The Group's policy is to provide financial guarantees only to subsidiaries after a careful review of the underlying

transaction. Where the underlying transaction does not meet the Group's risk appetite, such transactions are exited.

There is a financial guarantee on behalf of Amperion to First Bank of Nigeria Plc.

Liquidity Risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial

liabilities that are settled by delivering cash or another financial asset. The Group's approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable and avoidable losses or risking damage to the Group's reputation.

The Group has a clear focus on ensuring sufficient access to capital to finance growth and to refinance maturing debt obligations. As part of the liquidity management process, the Company has various credit arrangements with some banks and related parties which can be utilised to meet its liquidity requirements.

The Group manages its liquidity process by: - Day to day funding, managed by monitoring future cash flows to ensure that requirements can be met. - Monitoring balance sheet liquidity ratios against internal requirements. - Managing the concentration and debt profile. - Usage of overdraft facility to meet liquidity needs

Lastly, the Group ensures that it has sufficient cash on demand to meet expected operational expenses for a period of 60 days, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted, such as natural disasters.


Market Risk Market risk can be classified as changes in market prices, such as foreign exchange rates, interest rates and equity

prices that will affect the Group's income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.

Foreign Exchange Risk The Group uses Non-Deliverable Forwards (NDFs) to manage Foreign Exchange Risk. All transactions are carried out

within the guidelines set by the Risk Management Committee. Generally, the Group seeks to apply hedge accounting in order to manage volatility in profit or loss.

Foreign exchange risks are managed by maintaining foreign denominated bank accounts and maintaining letters of

credit facility lines with the Group's bankers. Also interest rates are benchmarked to NIBOR (for local loans and LIBOR (for foreign loans).

Currency Risk The currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to the

changes in foreign exchange rates.

The Group is exposed to currency risk on sales, purchases and borrowings that are denominated in a currency other than its functional currency. The Group is exposed primarily to US Dollars (USD), Euro (E), Pound Sterling (GBP) and Cedes (GHC).

The Group monitors the movement in currency rates on an ongoing basis to mitigate the risk that the movements in the exchange rates may adversely affect the Group's income or value of their financial instruments.

The Group is allowed to hedge currency exposure within the tolerable limit by bank and must be approved by Risk Management. The Group does not hedge for speculative reasons.

Interest on borrowings is denominated in the currency of the borrowing. Generally, borrowings are denominated in currencies that match the cash flows generated by the underlying operations of the Group, primarily Naira, also GHC and USD. This provides an economic hedge without derivatives being entered into and therefore hedge accounting is not applied in these circumstances.

In respect of other monetary assets and liabilities denominated in foreign currencies, the Group ensures that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.

The investment in APOG subsidiary is hedged by a GHC-denominated secured bank loan, which mitigates the currency risk arising from the subsidiary's net assets. The investments in other subsidiaries are not hedged as those currency positions are considered to be long-term in nature.

Sensitivity Analysis A change in the exchange rate either positively or negatively by 200 basis points would have increased/ (decreased)

equity and profit or loss by the amount stated below. This analysis is based on foreign currency exchange rate variances that the Group considered to be reasonably possible at the end of the reporting period, the analysis assumes that all other variables, in particular interest rates remain.

A weakening of the Naira against the currencies at 31 December would have increased/(decreased) equity and profit or loss by the amount shown below:

Interest Rate Risk

The Group is exposed to interest rate risk because the Company borrows funds at fixed interest rates and also utilizes overdraft facilities from Banks. This risk is managed by the Company by maintaining an appropriate mix between short and long term borrowings. The risk is also managed by the Company by constantly negotiating with the banks to ensure that interest rates are consistent with the monetary policy rates as defined by the Central Bank of Nigeria.

At the reporting date, the interest rate profile of the Group's interest -bearing financial interest was: Secured bank loan 19% Overdraft 18%

Note 25 highlights the borrowings for the reporting period.




Sensitivity Analysis Assuming that all other variables remain constant, a 200 basis points increase in interest rates at the reporting period

would lead to an additional NGN139.97m charge to the income statement (2014 : NGN177.70m). A 200 basis point decrease in interest rate at the reporting date would have an equal but opposite effect.

Other market Risk Management of the Forte Oil Group monitors the mix of debt and equity securities in its investment portfolio based on

market indices. Material investments within the portfolio are managed on an individual basis and all buy and sell decisions are recommended by Risk Management Committee and approved by the Executive Committee.

Management is assisted by external advisors in this regard. In accordance with this strategy, certain investments are designated at fair value through profit or loss because their performance is actively monitored and they are managed on a fair value basis. The group does not enter into commodity contracts other than to meet the group's expected usage and sale requirements; such contracts are not settled net.

Capital Management The Board's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence at all

times and to sustain future development and growth of the business. The Board of Directors monitors capital on the basis of the gearing ratio, which the group defines as total liabilities (non-current liabilities and current liabilities) over total assets (non-current assets and current assets). Board of Directors also monitors the level of dividends to ordinary shareholders.

The Group manages its capital structure to achieve capital efficiency, maximise flexibility and give the appropriate level of access to debt markets at attractive cost levels. Also, The Board seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position. The group does not have a defined share buy-back plan.

The group's debt to capital ratio at the end of the reporting year was as follows:

There were no changes in the group's approach to capital management during the year.

Reputational Risk Reputational risk is the risk that operations and activities of Forte Oil Group, its related parties or affiliates will negatively

affect its image or public perception. The Group understands the fact that the losses stemming from reputational exposure may not be quantifiable, thus we

have implemented structures and procedures which will help protect the company's brand equity.

The Board through the Risk Management committee monitor closely, media publications about the activities of Forte Oil Group through Brand and Corporate Communications Unit (BCC) who ensures controls for mitigating this risk are active at all times.

In the course of the year, we increased FO Plc's presence in the Social Media with the appointment of a consultant that manages details and content on FO Plc in the media space.

We also engaged and received feedback from our customers, vendors, dealers, transporters and investors through interaction fora organized to determine whether the Group is meeting their expectations. We improve our performance based on the feedback obtained from our stakeholders including; customers, investors, employees, suppliers, government, regulators, special interests and consumer groups, media and the general public.

Strategic Risk Strategic risk is the risk that Forte Oil Group will make inappropriate strategic choices, or that there will be changes in the

external environment to which the Group fails to adapt its strategies.

The Group organizes a Strategy Review Session to deliberate on issues relating to changes in operating environment that may impact strategy execution and implementation. These include issues on product sourcing and logistics, PPPRA import allocation, delay in subsidy payments, exchange rate fluctuations and changes in crude prices which have implications for profitability, product availability and business growth.


Failure to manage this risk could have a wide-ranging impact. It could lower revenues, profitability and returns to shareholders, and severely impair our ability to meet other financial and non-financial objectives.

The Board has ultimate responsibility for approving strategic plans, initiatives and changes to strategic direction. In addition, Forte Oil Group employs a robust strategy development processes which consider the implications of economic, industrial, market, technological and customer developments and trends. Business Performance Review Meetings is carried out monthly for Strategic Business Units and Quarterly for all departments to review business performance against target.

7. Operating segment The Group has four reportable segments, as described below, which are the Group's strategic business units. The

strategic business units offer different products, and are managed separately. For each of the strategic business units, the Group's CEO reviews internal management reports on at least monthly basis. The following summary describes the operations in each of the Group's reportable segments.

The accounting policies of the reportable segments are the same as described in notes 2 to 5.

Information regarding the results of each reportable segment is included below:

7.1.3 The company operates Vendor Managed Inventory located at the customers premises. The risk and reward of the inventory at these locations still resides in the company until consumed or transferred to the customer's facilities. Freight cost of inventory in these locations is included as part of the value of inventory and not freight expense and subsequently recognised as cost of sales when the risk and reward of these inventory passes to the customer.

7.1.4 Included in cost of sales for the Power Generating Segment is the depreciation for the turbines used for Power generation which is recognised using Equivalent Operating Hours (EOH) of the turbines for the year.

Segment Description

Fuels This segment is responsible for the sale and distribution ofpetroleum products (white products) and Aviation Turbine Kerosene(ATK) in retail outlets and to industrial customers.

Upstream ServicesThis segment procures other services to the E&P Sub sector of the oil & gas industry.

Lubricants and Greases This segment manufactures and sells lubricants and greases.

Power Generation This segment generates power.




42,849,958

57,046,894

49,502,671

59,618,349

15,858,864


(104,774,936)

18,190,892

4,046,938

(10,796,997)

8,740,502

7,108,277

74,765,826

15,858,864

12,734,902

(53,882)




8.1 This represents throughput income earned on storage of products for the Pipeline and Petroleum Marketing Company (PPMC) in our Apapa tank farm.

8.2 This represents transactional gains of foreign exchange on sale earned from sale of dollar inflows.

8.3 This represents income from sales of scrap drums and other scrap materials.

8.4 This represents interest on dividend paid to a shareholder on shares not paid for, and accrued interest onproceed of the company's shares forcefully collected by the shareholder. The recovery was based on the ruling of the Security and Exchange Commission.

8.5 This represents income from investment in US Treasury Bills classified as HTM on recognition. The FX exposure on this investment was also covered with an NDF. The profit at the settlement date is the interest income and difference between the agreed upon exchange rate and the spot rate at the time of settlement

The company operates Vendor Managed Inventory located at the customers premises. The risk and reward of the inventory at these locations still resides in the company until consumed or transferred to the customer's facilities. Freight cost of inventory in these locations is included as part of the value of inventory and not freight expense and subsequently recognised as cost of sales when the risk and reward of these inventory passes to the customer.


Interest income represents income earned on bank deposits while interest expense represents charges paid on trade finance, loans and overdraft facilities utilised during the period.

11.1 This includes interest earned on Petroleum subsidies for 2013 and 2014 from the Petroleum Product Regulatory Agency that were not received within the stipulated 45 days of the PSF scheme.




The company income tax computation for the year ended 31 December 2015 was based on the provisions of the Company Income Tax Act Cap C21 LFN 2004. Amperion Power Distribution Company Ltd reported a taxable loss for the period ended and is exempted from minimum tax in its first four (4) years of commencement of business while Geregu Power Plc in line with the relevant tax laws and regulations will enjoy pioneer status considering its nature of operations. Hence, no tax estimate has been recognised for these entities in these financial statements. Geregu Power is not liable to income tax for the period under review because the company's Pioneer status incentive has been approved. Hence, it will enjoy tax holiday for the next three years with a two year extention option.

Education tax was computed at the rate of 2% of assesible profit in accordance with the provisions of the Act.


The group's basic earnings per share of N4.11 kobo (December 2014 : N2.20kobo) is based on the profit attributable to ordinary shareholders of N4,492,406,000 (December 2014 : N 2,400,260,000), and on the 1,092,191,056 (December 2014 :1,089,631,000) ordinary shares of 50 kobo each, being the weighted average number of ordinary shares in issue during the current and preceding period.

Bonus share of 1 for every 5 units of shares held was recommended by the Board of the directors and approved by the shareholders in 2015. This is however yet to be issued to the shareholders as at the reporting date. However, the bonus shares represent 218,438,211 shares of which the necessary documentation yet to be fully prefected as at this reporting year.

* 5,120,291 shares was issued in July 2014 thereby qualifying for only 6 months earnings. These shares have now qualified for full year earnings in the year under review.

Dilutive instruments There were no dilutive instruments in the books of the Group as at the year end 31st December, 2015. The irredeemable

convertible cummulative preference shares in the books of AP Oil and Gas Ghana Limited has been eliminated on consolidation thereby removing the dilutive instrument in the Group as at the reporting date.


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a) Investment property comprises of a number of commercial properties that are leased to third parties. The lease period ranges between 1 - 2 years. Investment properties are carried at cost/deemed cost. The carrying amount of investment property is separated between lease hold land and buildings. Lease hold land is amortised over the lease period while building is depreciated on a straight line basis over the estimated useful life at 4% per annum.

b) During the year ended 31 December 2015 the Group recognised N176,168,000 as rental income in statement of comprehensive income (December 2014 : N190,001,000) after eliminating intra-group transactions while the Company recognised N182,013,000 (December 2014 : N196,915,000).

c) Depreciation charge of N87,025,000 (2014 N86,598,000) is included in administrative expenses was N87,025,000.

d) The fair value of the investment properties as at 31 December 2015 was N7,619,827,000.The fair valuation was carried out by Jide Taiwo & Co (FRC/2012/0000000000254); Diya Fatimehin & Co (FRC/2013/NIESV/00000002773); Femi Ismail & Associates (FRC/2013/NIESV/00000005108); Bullnet & Enquiries Networking Services Limited (FRC/2013/NIESV/00000005548); Dele Olaiya & Associates (FRC/2013/NIESV/0000002559). These valuations indicate upward movement in the market values of these properties, hence no indication of impairment for all investment properties.


a) These relate to purchased softwares.

b) The amortisation charge of N201,329,000 (Company N191,490,000) on intangible asset is included in administrative expenses in the statement of comprehensive income.

c) There is an All Asset Debenture Security for the long term loan of N11.3bn secured from Zenith Bank Plc and the guarantee of a loan from First Bank of Nigeria Plc granted to Amperion Power Distribution Limited for the acquisition of Geregu Power Plc. The All Asset Debenture is however being perfected as at the reporting date.




The consolidated financial statements include the financial statements of Forte Oil Plc and its subsidiaries; Forte Upsteam Services (FUS), AP Oil and Gas Ghana Limited (APOG) and Amperion Power Distribution Company Limited and its subsidiary (Amperion Group) all made up to 31 December 2015.

17.1 The impairment allowance relates to AP Oil and Gas Ghana Limited.

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There is an All Asset Debenture Security for the long term loan of N11.3bn secured from Zenith Bank Plc and the guarantee of a loan from First Bank of Nigeria Plc granted to Amperion Power Distribution Limited for the acquisition of Geregu Power Plc.

21.1 The Group carries out review and financial assessment of customers before products are supplied on credit. Credit customers are categorised according to the determined default risk rating. High risk customers are required to provide bank guarantees for credit sales. The Credit Committee assesses the status of all credit customers periodically.See note

4.11 (Impairment) and Note 6 (Financial Risk Management)

21.2 This balance relates to outstanding subsidy claims under the PSF scheme recoverable from Petroleum Products Pricing Regulatory Agency (PPPRA) on PMS imported by Forte Oil Plc.

21.3 This balance relates to the net of bridging claims due from Petroleum Equalisation Fund(PEF). Bridging claims, usually raised against the Federal Government of Nigeria, are costs incurred in transporting white products (excluding deregulated products) from specific PPMC depots to approved areas. Bridging claims are usually set off against bridging allowances to establish the net amount due to, or from the PEF, an organ of the Federal Government responsible for managing the process.

21.4 N2.010bn of this relates to disputed balance on interest receivable from Afribank now Mainstreet Bank. This has beenFully impaired.


d) Retained earnings Retained earnings represent the carried forward recognised income net of expenses plus current year income

attributable to shareholders.

e) Treasury shares This represents 5,599,087 units (at the market value of N248 as at the date of the seizure) of the company's existing

shares seized to 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 shares are to be reissued to existing shareholders of the company in the proportion of their shareholdings.

f) Other reserves Other reserves represent the carried forward recognised other comprehensive income and expenses plus current year

other comprehensive income attributable to shareholders.

g) 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 instrument in the Group as at the reporting date.

22.1 This represents the overdrawn current account balances with four Nigerian banks. These facilities have an average interest rate of 17.5% and are secured by an 'all asset debenture' .

23. Capital and reserves

Ordinary shares




Bureau of Public Enterprises (BPE) has 49% equity stake in Geregu Power Plc; BSG Resources Limited and Shanghai Municipal Electricity Power Company own 38% and 5% respectively of Amperion Power Distribution Limited as at 31 December, 2015

j) Bonus share of 1 for every 5 units of shares held was recommended by the Board of the directors and approved by the shareholders in 2015. This is however yet to be issued to the shareholders as at the reporting date.

24. Long term employee benefits The Group operates a funded long term employees plan (gratuity) for qualifying employees of the Group. Under the

plan, the employees are entitled to a lump sum benefits on attainment of a retirement age or on disengagement after contributing a specific number of years in service. No other post-retirement benefits are provided to these employees. The most recent actuarial valuations of the present value of the defined benefit obligation were carried out at 31st December 2015 by KMC Acturial Service. The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the Projected Unit Credit Method with acturial valuation being carried out at the end of each reporting period.

a) Long term employee benefit expense is recognised in administrative expenses in the statement of comprehensive income.

b) The actuary valuation report was signed in January 2015 by Miller Kingsley (FRC/2013/NAS/00000002392) of KMC Actuarial Services a Fellow of the Society of Actuaries, USA.


c) The planned asset is held by four fund managers : Pensions Alliance Limited (PAL); FSDH Asset Management Limited, Cardinal Stone Securities Limited, and Afriinvest Securities Limited. The fair value of these assets are disaggregated as follows:

The treasury bills and bonds are Federal Government of Nigeria securities with quoted market price in the active Nigerian bond market while the fixed deposits are placements with financial institutions and do not have quoted prices. The plan typically exposes the Group to actuarial risks such as; assets volitility, interest rate risk, life expectancy, salary risk, changes in corporate yeilds and inflation risk.

Asset volatility

The present value of the defined benefit plan liability is calculated using a discount rate determined by reference to high quality corporate bond yields; if the return on plan assets is below this rate, it will create a plan deficit. Currently the plan has a relatively balanced investment in Government Securities and money market instruments. Due to the long- term nature of the plan liabilities, the board of the pension fund considers it appropriate that a reasonable portion of the plan assets should be invested in equity securities and in real estate to leverage the return generated by the fund.

Interest Rate Risk A decrease in the bond interest rate will increase the plan liability; however, this will be partially offset by an increase in

the return on the plan's debt investments.

Life Expectancy The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of

plan participants during their employment. An increase in the life expectancy of the plan participants will increase the plan's liability.

Salary Risk The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants.

As such, an increase in the salary of the plan participants will increase the plan's liability.

Changes in bond yields A decrease in corporate bonds yield will increase plans liabilities.

Inflation Risk The majority of the plan's assets are either unaffected by fixed interest bonds or loosely correlated with equities inflation,

meaning that an increase in inflation will also increase defict.

In estimating the present value of the defined benefit obligation, certain assumptions on financial environment, attrition rates of withdrawal from service and death of staff likely to be experienced were made. The significant actuarial assumptions used are summarized as follows:

a) Discount rate/average rate of return on assets 11% per annumb) Average rate of salary increase 10% per annumc) Inflation rate 9% per annumd) Mortality rate A49/52 English Life Tables

The weighted average future service of the plan is about 22 years. The average weighted duration of the closest Nigerian bond as at the valuation date, 31st December 2015 has about 18.6 years term to maturity with a gross redemption yield of about 11%.




Methodology The approach for conducting the sensitivity was a recalculation of the accrued benefit obligation on the scheme for each

revised assumption. The percentage difference between the new result and the base result provides a measure of the sensitivity to the change.

Changes in sensitivity test basis The sensitivity for investment reviewed from 100 basis points to 300 basis points to reflect the volatility within the period

and the sensitivities on salary was reviewed from 5% to 10%.


25.1 Eleven billion, two hundred million naira N11.2bn (Company N3.3bn) of this relates to long term financing for the acquisition of Geregu Power Plant by Forte Oil Plc through its subsidiary Amperion Power Distribution Company Limited.

There is an all asset debenture security as collateral to the banks for these long term borrowings.

26. Deferred fair value gain on loan

This note provides information about the contractual terms of the Group's interest-bearing loans and borrowings, which are measured at amortised cost.


FI

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NC

IA

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T

he b

ank

loans

are

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y an "A

ll A

sset D

ebentu

re" on th

e C

om

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s ass

ets

exe

cute

d in

favo

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itutio

ns.

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m lo

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red

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a

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gage p

ledge o

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ssets

*A

7 y

ear lo

an o

f $45 m

illio

n w

as

obta

ined fr

om

First

Bank

of N

igeria L

imite

d in

August

2013 fo

r th

e a

cquis

ition o

f 51%

sta

ke in

Ge

reg

u P

ow

er P

lc. T

his

loa

n w

as

con

vert

ed

to N

aira

in

August

2015


27.1 This balance relates to bridging allowance net of bridging claims due to Petroleum Equalisation Fund (PEF). Bridging claims, raised against the Federal Government of Nigeria, are costs incurred in transporting white products (excluding deregulated products) from specific PPMC depots to approved areas. Bridging allowances are compulsory contributions on each litre of white product lifted, to assist the Federal Government defray costs arising from bridging claims. Bridging claims are usually set off against bridging allowances to establish the net amount due to, or from the PEF, an organ of the Federal Government of Nigeria responsible for managing the process.

27.2 Inventory accrual accounts includes liability accrued for product and associated costs. This account holds accruals for value of goods received pending receipt of supplier's invoices.

27.3 This consists of tranporters freight account, withholding tax liabilities, VAT, rents received in advance, PAYE, NSITF, and unclaimed dividends. Unclaimed dividends of NGN83,592,000 representing dividend payable on shares not paid for previously included in non-trade payables and other creditors was transferred to retained earnings (see statement of changes in equity).




28. Financial instruments

Credit risk Exposure to credit risk The carrying amount of financial assets

represents the max imum cred i t exposure. The maximum exposure to credit risk at the reporting date was:

Trade and receivables (Note 21) Cash and cash equivalents (Note 22)


The average credit period on sales of goods is 60 days. Specific impairment is made for trade receivables that are past due and doubtful of recovery based on the probability of default. Receivables not specifically impaired are impaired collectively using the historical probability of default over the last three reporting periods. Trade receivables are considered to be past due when they exceed the credit period granted.


FI

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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 N6.8 billion as at 31 December 2015 (31 December 2014 : N46 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 financial 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 financial statements.

30. Transactions with key management personnel

Loan to directors No loan to directors was issued during the year ended 31 December 2015.

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

Key management personnel and compensation

The Group has 232 employees in 2015 and 231 in 2014. The total number of employees for the company were 182 in 2015 and 150 in 2014.

Group 2015 2014 1. Group Chief Executive Officer Akin Akinfemiwa Akin Akinfemiwa 2. Group Executive Director - Finance and Risk Management Julius Omodayo-Owotuga Julius Omodayo-Owotuga 3. Group Head Corporate Services Oludare Arinde Oludare Arinde 4. Manager Director- AP Oil and Gas Ghana Ltd Ukpai Okwara Ukpai Okwara 5. Managing Director - Forte Upstream Services Ltd Vacant Kennet Olisa 6. Chief Executive Officer - Geregu Power Plc Adeyemi Adenuga Adeyemi Adenuga

FI

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,04

1

Consolidated Statement of Value Added for the year ended 31 December 2015

Included in depreciation and amortisation for the Group is the depreciation for the turbines used for power generation which in included in cost of sales of the statement of comprehensive income for the Group in line with the provisions of IFRS.

Value added represents the additional wealth which the Group has been able to create/erode by its own and its employees'

efforts. This statement shows the allocation of that wealth among the employees, government, providers of capital and that retained for the future creation of more wealth.

(73,392,950)

(41,660,652)

16

8

25

1139

100

(62,409,672)

(41,040,450)

12,277,113

Other National Disclosures


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Proxy Form

37TH ANNUAL GENERAL MEETING to be held at the Lekki Coliseum, Providence street, Lekki Phase 1, Lekki - Lagos on April 26, 2016 at 10:00a.m

I/We……………………………………………….. being a member/members of Forte Oil Plc hereby appoint*……………………………………….....……or failing him/ her, the Chairman of the meeting, Mr. Femi Otedola, or failing him, Mr. Akin Akinfemiwa, as my/our proxy to attend and vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on April 26, 2016 and at any adjournment thereof. Signature of Shareholder……………………...............................................................…………... Name of Shareholder………........................................................................………………………

NUMBER OF SHARES HELD:

RESOLUTIONS AGAINST

Report of the Directors, the Balance Sheet together with the Profit and Loss Account s at 31st December 2015

To re-elect Dr. Mrs. Grace Ekpenyong as a Non-Executive Director

To declare a dividend

To authorize the Directors to fix the Auditors' remuneration.

To elect/re-elect members of the Audit Committee.

Please indicate with an “X” in the appropriate box how you wish your votes to be cast on the resolutions set above. Unless otherwise instructed, the proxy will vote or abstain from voting at his discretion.

To be valid, this proxy form should be duly stamped by the Commissioner of Stamp Duties and signed before posting it to reach the address overleaf not later than 48 hours before the time for holding this meeting.

Please note that no action should be taken on the proxy form if the member is attending the meeting.

To sell the 5,599,908 units of shares allotted but not paid for by Mr. Osa Osunde and Fidelity Finance Limited to existing shareholders

To authorize and grant a general mandate in respect of all recurrent transactions entered into with a related party or interested person

To ratify the appointment of Mr. Anil Dua as a Non- Executive Director

FOR


To authorize the Directors’ to raise additional equity and/or dept capital up to the sum of N100 billion by all means subject to relevant regulatory approval

To fix the remuneration of the Directors

Please admit *-------------------------------------------------------------------------* to the 37th Annual General Meeting of the members of Forte Oil Plc holding at the Lekki Coliseum, Providence street, Lekki Phase 1, Lekki - Lagos on April 26, 2016 by 10.00am.

IF YOU ARE UNABLE ATTEND THE MEETINGA 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 SecretaryFO House, 13 Walter Carrington CrescentVictoria Island, Lagos.FRC/2013/NBA00000003160

Admission Card


VERITAS REGISTRARS


Veritas Registrars

E-Dividend Mandate

I/we hereby request that all dividend(s) due to me/us from my/our holding in Forte Oil Plc be paid directlyto my/our Bank named below


Authority to Electronically Receive Corporate Information

In line with the developments in electronic communications to

circumvent the usual issue of late receipt of corporate information,

we would like to introduce to our shareholders the electronic

delivery of corporate information such as annual reports and

financial statements, proxy form etc.

With this service, as an alternative to receiving paper copies of

corporate information and materials, you can elect to receive an

electronic copy thereof via an email that will provide an electronic

link to the corporate information and/or receive a compact disk of

the corporate information by post.

If you so elect, kindly complete the authority to electronically

receive information attached below and return to The Company

Secretary at the Head office at No 13, Walter Carrington Crescent,

Victoria Island, Lagos.

Regards,

Akin Olagbende Esq.Company SecretaryFO House, 13 Walter Carrington CrescentVictoria Island, Lagos.FRC/2013/NBA00000003160

I/We……………………………………….....................................………

… being a member / members of Forte Oil Plc hereby authorise(s)

the Company and agree to receive all future corporate

information of the Company electronically.

Signature

Email(s)

CSCS Clearing House Number (CHN)

Postal Address

Telephone Number

Date

CSCS Account Number


w w w . f o r t e o i l p l c . c o m

Available at all Forte Oil retail outlets. For enquires call our Customer Care Line : 01-2776122 [email protected] :

ForteOilNg @ForteOilNg ForteOilNg


Notes