ACCOUNT FOR THE YEAR ENDED 31ST DECEMBER, 2015
ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER, 2015 CONTENTS PAGE CORPORATE INFORMATION 2 AUDITORS REPORT 3-4 RESPONSIBILITY FOR ANNUAL FINANCIAL STATEMENTS 5 SIGNIFICANT ACCOUNTING POLICIES 6-15 STATEMENT OF FINANCIAL POSITION 16 STATEMENT OF COMPREHENSIVE INCOME 17 STATEMENT OF CHANGES IN EQUITY 18 CASH FLOW STATEMENT 19 NOTES ON THE ACCOUNT 20-30 FIVE YEARS FINANCIAL SUMMARY 31 1
ACCOUNTS FOR THE YEAR ENDED 31ST DECEMBER, 2015 CORPORATE INFORMATION DIRECTORS Dr. J N Taiwo Chairman Jerome Ikhine Managing Director Amos Otuata Executive Director Eromosele Omodiagbe Director Mr. Sina Alimi Director REGISTERED OFFICE 43, Adeniyi Jones Avenue, Ikeja. P. O. Box 7254, Ikeja SECRETARY Bluechip Nominees AUDITORS Egunjobi Adegbite & Co (Chartered Accountants) 9, Turton Street, Yaba. BANKERS First Bank Of Nigeria Plc Heritage Bank Ltd Zenith Bank Plc Guaranty Trust Bank Plc Sterling Bank Plc Gideon Trust Microfinance Bank Ltd Covenant Microfinance Bank Ltd First City Monument Bank Plc United Bank For Africa Plc 2
Egunjobi, Adegbite& Co. 9, TURTON STREET, YABA REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OF CAPITAL OIL PLC Report of the Financial Statements (CHARTERED ACCOUNTANTS) G.P.O. BOX 7625 LAGOS, NIGERIA TEL: 774-4149, 08029420037 Email address: egunade2004@yahoo.com OTHER OFFICES: KADUNA AND IBADAN We have audited the accompanying financial statements of Capital oil Plc, for the year ended 31 st DECEMBER 2015, set out on pages 6 to 31 which have been prepared on the basis of significant accounting policies on page 6-15 and other explanatory notes. Directors Responsibility for the Financial Statements The Directors are responsible for the preparation and fair presentation of these financial statements in accordance with Financial Reporting Council Of Nigeria Act No 6, the International Financial Reporting Standards and with the requirements of the Companies and Allied Matters Act, CAP C20 LFN, 2004. This responsibility includes: designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatements, whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. Auditor s Responsibility Our responsibility is to express an independent opinion on these 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 financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the 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 We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 3
OPINION In our opinion, the financial statements give a true and fair view of the state of affairs of the Company s financial position as at 31 st December, 2015 in accordance with International Financial Reporting Standards, Financial Reporting Council Of Nigeria Act No 6, 2011 and the Companies and Allied Maters Act, CAP C20 LFN, 2004. Report on other Legal Requirements. The Companies and Allied Matters Act, CAP C20 LFN, 2004 requires that in carrying out our audit we consider and report to you on the following matters, We confirm that: i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit. ii) iii) In our opinion, proper books of account have been kept by the Company; and The Company s balance sheet and profit and loss account are in agreement with the books of account. (CHARTERED ACCOUNTANTS) OLUSOJI ADEBANJO LAGOS, NIGERIA. Date:11 th MARCH, 2016. FRC/2015/ICAN/00000003240 4
ACCOUNTS FOR THE YEAR ENDED 31 ST DECEMBER 2015 RESPONSIBILITY FOR ANNUAL FINANCIAL STATEMENTS The Companies and Allied Matters Act and the Company and other Financial Institutions Act 1991, require the Directors to prepare financial statements for each financial period that give a true and fair view of the state of financial affairs of the Company at the end of the period and of its profit or loss. The responsibilities include ensuring that the Company: 1. Keeps proper accounting records that disclose, with reasonable accuracy, the financial position of the Company and comply with the requirements of the Companies and Allied Matter Act 2004; 11. Establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and 111. Prepares its financial statements using suitable accounting policies supported by reasonable and prudent judgements and estimates,that are consistently applied. The directors accept responsibility for annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgments and estimates, in conformity with,. International Financial Reporting Standards;. The requirements of the Companies and Allied Matters Act.. Financial Reporting Council Of Nigeria Act. The directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and of their profit for the period. The directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of financial statements, as well as adequate systems of internal financial control. Nothing has come to the attention of the directors to indicate that the Company will not remain a going concern for at least twelve months from the date of approval of the financial statements. Chairman FRC/2014/CIBN/00000010020 Managing Director/CEO FRC/2014/NIM/00000010021 5
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES 1 The following is a summary of the significant accounting policies adopted by the company in the preparation of these accounts. 2 Significant Accounting policies The following were the significant accounting policies applied in the preparation of this account. These policies have been consistently applied unless stated otherwise. 2.1 The accounts was prepared in accordance with a. International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and the interpretations issued issued by the International Financial Reporting Interpretations committee. b. Reqiurements of Companies and Allied Matters Act of Nigeria and the Financial reporting Council act of Nigeria. 2.2 Turnover Turnover comprises of sales to customers and service rendered to customers. Turnover is stated at the invoice amount and is exclusive of value added taxation. 2.3 Cost of sales When inventories are sold, the carrying amount of those inventories is recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, is recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs The related cost of providing services recognised as revenue in the current period is included in cost of sales. 2.4 Finance Income Finance Income is made up of interest income in short -term deposits with bank, dividend income, changes in the fair value of financial assets at fair value through profit or loss and foreign exchange gains. 6
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES Interest income on short-term deposit is recognised by reference to the principal outstanding at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that assets net carrying amount on initial recognition. 2.5 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 until such time as the asset is ready for its intended use. The amount of borrowing costs eligible for capitalisation is determined as follows: The Actual borrowing costs on funds specifically borrowed for the purpose of obtaining a qualifying asset less any temporary investment of those borrowings. The Weighted average of the borrowing costs applicable to the entity on funds generally borrowed for the purpose of obtaining a qualifying asset. The borrowing costs capitalised do not exceed the total borrowing costs incurred. The capitalisation of borrowing costs commences when: The expenditures for the asset have occurred; Theborrowing costs have been incurred, and The activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation is suspended during extended periods in which active development is interrupted. Capitalisation ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are complete. All other borrowing costs are recognised as an expense in the period in which they are incurred. 2.5 Foreign currency transactions A foreign currency transaction is recorded, on initial recognition in Nairas, by applying to the foreign currency amount the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. At the end of the reporting period: Foreign currency monetary items are translated using the closing rate; Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction; and Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Exchange differences arising on the settlement of monetary items or on translating monetary items at rates different from those at which they were translated on initial recognition during the period or in previous financial statements are recognised in profit or loss in the period in which they arise. 7
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES When a gain or loss on a non-monetary item is recognised to other comprehensive income and accumulated in equity, any exchange component of that gain or loss is recognised to other comprehensive income and accumulated in equity. When a gain or loss on a non-monetary item is recognised in profit or loss, any exchange component of that gain or loss is recognised in profit or loss. Cash flows arising from transactions in a foreign currency are recorded in Nairas by applying to the foreign currency amount the exchange rate between the Naira and the foreign currency at the date of the cash flow. 2.6 Property, plant and equipment The cost of an item of property, plant and equipment is recognised as an asset when: It is probable that future economic benefits associated with the item will flow to the company; and the cost of the item can be measured reliably. Property, plant and equipment is initially measured at cost. Costs include costs incurred initially to acquire or construct an item of property, plant and equipment and costs incurred subsequently to add to, replace part of, or service it. If a replacement cost is recognised in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognised. The initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located is also included in the cost of property, plant and equipment, where. the entity is obligated to incur such expenditure, and where the obligation arises as a result of acquiring the asset or using it for purposes other than the production of inventories Major spare parts and stand by equipment which are expected to be used for more than one period are included in property, plant and equipment. In addition, spare parts and stand by equipment which can only be used in connection with an item of property, plant and equipment are accounted for as property, plant and equipment. Major inspection costs which are a condition of continuing use of an item of property, plant and equipment and which meet the recognition criteria above are included as a replacement in the cost of the item of property, plant and equipment. Any remaining inspection costs from the previous inspection are derecognised. Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. 8
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses except for Revalued Assets which is carried at revalued amount being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Property, plant and equipment is carried at revalued amount, being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation is restated proportionately with the change in the gross carrying amount of the asset so that the carrying amount of the asset after revaluation equals its revalued amount. When an item of property, plant and equipment is revalued, any accumulated depreciation at the date of the revaluation is eliminated against the gross carrying amount of the asset and the net amount restated to the revalued amount of the asset. Any increase in an asset s carrying amount, as a result of a revaluation, is recognised to other comprehensive income and accumulated in the revaluation surplus in equity. The increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. Any decrease in an asset s carrying amount, as a result of a revaluation, is recognised in profit or loss in the current period. The decrease is recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in the revaluation surplus in equity. The revaluation surplus in equity related to a specific item of property, plant and equipment is transferred directly to retained earnings when the asset is derecognised. The revaluation surplus in equity related to a specific item of property, plant and equipment is transferred directly to retained earnings as the asset is used. The amount transferred is equal to the difference between depreciation based on the revalued carrying amount and depreciation based on the original cost of the asset. Property, plant and equipment are depreciated on the over their expected useful lives to their estimated residual value. 9
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses. Property, plant and equipment is carried at revalued amount, being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are made with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair value at the end of the reporting period. Any increase in an asset s carrying amount, as a result of a revaluation, is credited to other comprehensive income and accumulated in the revaluation surplus in equity. The increase is recognised in profit or loss to the extent that it reverses a revaluation decrease of the same asset previously recognised in profit or loss. Any decrease in an asset s carrying amount, as a result of a revaluation, is recognised in profit or loss in the current period. The decrease is debited in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The useful lives of items of property, plant and equipment have been assessed as follows: Item Average useful life Rate Leasehold Stations 50 2% Head office Building including Freehold Stations 50 2% Motor Vehicle 5 20% Plant & Machinery 5 20% Gas Plant 50 2% Furniture Fittings & Equipment and computer machines 5 20% The residual value, useful life and depreciation method of each asset are reviewed at the end of each reporting period. If the expectations differ from previous estimates, the change is accounted for as a change in accounting estimate. Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. The depreciation charge for each period is recognised in profit or loss unless it is included in the carrying amount of another asset. The gain or loss arising from the derecognition of an item of property, plant and equipment is included in profit or loss when the item is derecognised. The gain or loss arising from the. derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item 10
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES Assets which the company holds for rentals to others and subsequently routinely sell as part of the ordinary course of activities, are transferred to inventories when the rentals end and the assets are available-for-sale. These assets are not accounted for as non-current assets held for sale. Proceeds from sales of these assets are recognised as revenue. All cash flows on these assets are included in cash flows from operating activities in the cash flow statement. 2.7 Inventories Inventories are measured at the lower of cost and net realisable value on the first-in-first-out basis. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects is assigned using specific identification of the individual costs. The cost of inventories is assigned using the formula. The same cost formula is used for all inventories having a similar nature and use to the entity. When inventories are sold, the carrying amount of those inventories are recognised as an expense in the period in which the related revenue is recognised. The amount of any write-down of inventories to net realisable value and all losses of inventories are recognised as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realisable value, are recognised as a reduction in the amount of inventories recognised as an expense in the period in which the reversal occurs. 2.8 Trade and other receivables Trade receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in profit or loss when there is objective evidence that the asset is impaired. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The allowance recognised is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition. 11
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within operating expenses. When a trade receivable is uncollectable, it is written off against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited against operating expenses in profit or loss. 2.9 Trade and other payables Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. 2.10 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and demand deposits, and other short-term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value. These are initially and subsequently recorded at fair value. 2.11 Bank overdraft and borrowings Bank overdrafts and borrowings are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in accordance with the company s accounting policy for borrowing costs. 2.12 Tax 2.12.1 Current tax assets and liabilities Current tax for current and prior periods is, to the extent unpaid, recognised as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recognised as an asset. Current tax liabilities (assets) for the current and prior periods are measured at the amount expected to be paid to (recovered from) the tax authorities, using the tax rates (and tax laws ) that have been enacted or substantively enacted by the end of the reporting period. 2.12.2 Deferred tax assets and liabilities A deferred tax liability is recognised for all taxable temporary differences, except to the extent that the deferred tax liability arises from the initial recognition of an asset or liability in a transaction which at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). 12
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax asset is not recognised when it arises from the initial recognition of an asset or liability in a transaction at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss). A deferred tax asset is recognised for the carry forward of unused tax losses and unused WHT credits to the extent that it is probable that future taxable profit will be available against which the unused tax losses and unused WHT credits can be utilised. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. 2.12.3 Tax expenses Current and deferred taxes are recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: A transaction or event which is recognised, in the same or a different period, to other comprehensive income. Current tax and deferred taxes are charged or credited to other comprehensive income if the tax relates to items that are credited or charged, in the same or a different period, to other comprehensive income. Current tax and deferred taxes are charged or credited directly to equity if the tax relates to items that are credited or charged, in the same or a different period, directly in equity. 2.13 Leases A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership. 2.13.1 Finance leases - lessor The company recognises finance lease receivables in the statement of financial position. Finance income is recognised based on a pattern reflecting a constant periodic rate of return on the company s net investment in the finance lease. 13
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES 2-13.2 Finance leases lessee Finance leases are recognised as assets and liabilities in the statement of financial position at amounts equal to the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation. The discount rate used in calculating the present value of the minimum lease payments is the. The lease payments are apportioned between the finance charge and reduction of the outstanding liability.the finance charge is allocated to each period during the lease term so as to produce a constant periodic rate on the remaining balance of the liability. 2.13.3 Operating leases - lessor Operating lease income is recognised as an income on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging operating leases are added to the carrying amount of the leased asset and recognised as an expense over the lease term on the same basis as the lease income. Income for leases is disclosed under revenue in profit or loss. 2.13.4 Operating leases lessee Operating lease payments are recognised as an expense on a straight-line basis over the lease term. The difference between the amounts recognised as an expense and the contractual payments are recognised as an operating lease asset. This liability is not discounted. Any contingent rents are expensed in the period they are incurred. Provisions and contingencies Provisions are recognised when: Ÿthe company has a present obligation as a result of a past event; it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and A reliable estimate can be made of the obligation. The amount of a provision is the present value of the expenditure expected to be required to Where some or all of the expenditure required to settle a provision is expected to be reimbursed by another party, the reimbursement shall be recognised when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset. The amount recognised for the reimbursement shall not exceed the amount of the provision. 14
FOR THE YEAR ENDED 31ST DECEMBER, 2015 SIGNIFICANT ACCOUNTING POLICIES Provisions are not recognised for future operating losses. If an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision. A constructive obligation to restructure arises only when an entity: Has a detailed formal plan for the restructuring, identifying at least: a. the business or part of a business concerned; b. the principal locations affected; c. the location, function, and approximate number of employees who will be compensated for terminating their services: d. the expenditures that will be undertaken; and e. when the plan will be implemented; and Has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement that plan or announcing its main features to those affected by it. ` After their initial recognition contingent liabilities recognised in business combinations that are recognised separately are subsequently measured at the higher of: The amount that would be recognised as a provision; and The amount initially recognised less cumulative amortisation. Contingent assets and contingent liabilities are not recognised. Contingencies are disclosed in note. # 2.14 Retirement Benefit And Gratuity Scheme 2.14.1 The company operates contributory retirement benefits scheme for its Permanent staff based on the provisions of the New Pension Reform Act, amended 2014.The scheme is funded by contributions from Employees through payroll deductions while the company's contribution is charged to the profit and loss account. The rates applicable for each party is 8% Employees and 10% company, of the staff total emoluments. 2.14.2 The company also operates a gratuity scheme for its permanent Nigerian staff. The gratuity payable to staff upon retirement or resignation, are accrued for over the service lives of management and non-management staff of the company, and their terminal remunerations. 15
STATEMENT OF FINANCIAL POSITION AS AT 31ST DECEMBER, 2015 ASSETS NOTES 31/12/15 31/12/14 N N NON- CURRENT ASSETS Property Plant & Equipment 1 1,212,566,772 1,236,463,056 Software 1.1 810,542 0 Total Non-Current Assets 1,213,377,314 1,236,463,056 CURRENT ASSETS Inventories 2 13,102,979 7,164,789 Trade & Other receivables 3 363,178,321 407,663,982 Prepayments 4 7,786,899 15,177,398 Cash and Cash Equivalents 5 48,499,176 33,238,368 432,567,374 463,244,537 TOTAL ASSETS 1,645,944,688 1,699,707,593 EQUITY AND LIABILITIES EQUITY Issued Share Capital 6.5 1,464,394,325 1,464,394,325 Share Premium 6.6 3,036,209,766 3,036,209,766 Treasury Shares 6.4 (2,642,200,000) (2,642,200,000) Accumulated Loss 7 (1,098,044,323) (1,036,192,435) Equity attributable to Owners of the company 760,359,768 822,211,656 NON CURRENT LIABILTIES Borrowing 8 621,147,042 605,708,132 Deffered Tax Liabilties 9 110,164,600 110,164,600 Total Non Current Liabilities 731,311,642 715,872,732 CURRENT LIABILITIES Bank Overdraft 5 30,656 30,660 Trade Payables 10 26,055,918 26,055,918 Other Payables and accruals 10.1 53,766,101 64,314,524 Current Income tax payable 11 74,420,603 71,222,103 Total Current Liabilties 154,273,277 161,623,205 Total Equity And Liabilities 1,645,944,688 1,699,707,593 DEAC. JEROME IKHINE MANAGING DIRECTOR/CEO FRC/2014/NIM/00000010021 MR. AMOS OTUATA EXECUTIVE DIRECTOR FINANCE FRC/2014/ICAN/00000010022 16
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER, 2015 Notes 31/12/15 31/12/14 N N Revenue 1,132,722,975 2,106,210,044 Cost of Sales (968,707,874) (1,895,773,422) Gross Profit 164,015,101 210,436,622 Administrative Expenses 12 (154,821,145) (196,915,752) Selling & Distribution Expenses 13 (54,890,083) (50,965,460) Other Income 14 3,104,579 1,675,450 Profit From Operating Expenses (42,591,548) (35,769,140) Finance income 15 3,160,000 3,000,100 Finance cost 16 (16,721,840) (80,466,263) Profit Before Tax (56,153,388) (113,235,303) Taxation 11.1 (5,698,500) (17,926,064) Income(Net of tax) (61,851,888) (131,161,367) Profit After/ (loss) Tax (61,851,888) (131,161,367) 17
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31ST DECEMBER, 2015 Share Capital Share Premium Treasury Share Retained Earning Total Balance As At 1st January, 2015 1,464,394,325 3,036,209,766 (2,642,200,000) (1,036,192,435) 822,211,656 Changes In The Year (61,851,888) (61,851,888) Prior Year Adjustment Total Comprehensive Income For The Year 1,464,394,325 3,036,209,766 (2,642,200,000) (1,098,044,323) 760,359,768 Payment Of Dividend Balance As At 31st December, 2015 1,464,394,325 3,036,209,766 (2,642,200,000) (1,098,044,323) 760,359,768 18
CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST DECEMBER, 2015 2015 2014 CASH FLOW FROM OPERATING ACTIVITIES NOTE N N cash flow from ordinary activities Receipts from customers 1,155,493,891 2,107,917,202 Other Income 6,264,579 4,675,550 Payment to Employees/Services (1,141,863,222) (2,172,860,677) Tax Paid (2,500,000) - Net Cashflow from operating activities 22 17,395,247 (60,267,925) Cashflow on Investing Activities Adjustment to paid up capital 0 0 Purchase of fixed assets (851,500) (26,453,810) Proceeds from sale of Leasehold Land 0 50,000,000 Investments 0 Cashflow From Financing Activities Medium Term Loan Bank Interest & Similar Charges (16,721,845) (80,466,262) Net (increase)/decrease in Liquid funds (178,097) (117,187,997) Opening Cash & Bank Balances (572,500,424) (455,312,427) Closing Cash & Bank Balances (572,678,522) (572,500,424) REPRESENTED BY: Closing Cash & Bank Balances 48,499,176 33,238,368 Closing Borrowing (621,147,042) (605,708,133) closing Bank Overdraft Balances (30,656) (30,660) (572,678,522) (572,500,424) 19
FOR THE YEAR ENDED 31ST DECEMBER,2015 NOTES ON THE ACCOUNTS Note 1 1.1 The movement of these accounts during the year were as follows: Plant Machinery Equip. Freehold/ Motor Work Head Office Leasehold And Furniture & Leasehold Vehicle In Computer Gas Plant PROPERTY PLANT & EQUIPMENT Building Land Equipment Fittings Stations Progress Machines Total COST N N N N N N N N N N Balance 1st January,2015 264,300,000 80,022,270 72,929,596 10,760,447 635,275,019 8,800,000 236,768,206 4,475,596 19,023,550 1,332,354,684 Additions 0 170,000 189,000 434,500 58,000 0 851,500 Reclassification 0 (992,500) 992,500 0 Reclassification(Others) (992,500) (992,500) Disposal 0 0 0 0 0 Balance at 31st Dec,2015 264,300,000 80,192,270 73,118,596 11,194,947 635,275,019 8,800,000 235,775,706 4,533,596 19,023,550 1,332,213,684 DEPRECIATION Balance At 1st Jan,2015 0 0 34,993,612 2,832,110 53,000,652 1,320,000 0 3,092,504 652,750 95,891,628 Charge For The Year 0 0 6,787,577 2,195,374 12,194,002 1,760,000 0 619,822 380,467 23,937,242 Disposal 0 0 0 0 0 0 0 reclassification (181,958) (181,958) Balance At 31st Dec,2015 0 0 41,781,189 5,027,484 65,194,654 3,080,000 0 3,530,368 1,033,217 119,646,912 NET BOOK VALUE At31st December,2015 264,300,000 80,192,270 31,337,407 6,167,463 570,080,365 5,720,000 235,775,706 1,003,228 17,990,333 1,212,566,772 At31st December,2014 264,300,000 80,022,270 37,935,984 7,928,337 582,274,367 7,480,000 236,768,206 1,383,092 18,370,800 1,236,463,056 1.2 The company's leasehold and freehold service stations were revalued on 5th october,1992 by Mark Odu & Co on the basis of open market value. The surplus on revaluation and the accumulated depreciation amounting to N8,239,851 have been credited to retained earnings account. 1.3 The plant, machinery and equipment were revalued on 17th August,1995 by Jide Taiwo & Co on the basis of open market value.the surplus on revaluation amounting to N5,794,941 have been credited to retained earnings. 1.4 The companies leasehold and freehold stations were revalued on 1st November,1999 by Mark Odu & Co on the basis of current open market value. The surplus on revaluation amounting to N9,964,814 have been credited to retained earnings. 1.5 The leasehold and freehold stations were revalued on the 3rd September,2003 by Onakanmi & Partners on the basis of open market value.the surplus on revaluation amounting to N17,384,327 have been credited to retained earnings. 20
NOTES FOR THE YEAR ENDED 31ST DECEMBER, 2015 31/12/15 31/12/14 1.1 Software The movement is as follows Balance 1/1/15-0 Addition 992,500 0 Disposal - 0 Balance 31/12/15 992,500 - Amortization Balance 1/1/15-0 Charged in the year 181,958 0 Disposal - 0 Balance 31/12/15 181,958 - Net Book Value 31/12/15 810,542-2 Inventory 31/12/15 31/12/14 N N Finished Goods 4,885,979 4,097,421 GIT 8,217,000 3,067,368.00 13,102,979 7,164,789 3 Trade and Other receivables Trade Receivables 303,954,422 326,725,337 Sundry Debtors 77,887,421 79,886,652 381,841,843 406,611,989 Impairment Allowance (20,312,302) 0 361,529,541 406,611,989 Staff Debtors 1,648,780 1,051,993 363,178,321 407,663,982 The company's allowance for impairment on bad debt and represents its estimate of incurred losses in respect of trade debtors and other sundry debtors. The write off were specific debts which the company considered irrecoverable. The provision for impairment represents customers balances which could be recovered in the future. 4 Prepayments Insurance 7,786,899 96,065 Rent 0 5,173,000 Professional fees 0 150,000 lease Charges 0 9,758,333 0 7,786,899 15,177,398 5 Cash and Cash Equivalents Cash on Hand 10,870 108,000 Bank Balances 48,488,299 33,130,368 48,499,169 33,238,368 Bank Overdraft 30,656 30,660 48,529,825 33,269,027 21
NOTES FOR THE YEAR ENDED 31ST DECEMBER, 2015 6 Share Capital 31/12/15 31/12/14 6.1 Authorized N N 16,120,000,000 ordinary shares of 25kobo each 4,030,000,000 4,030,000,000 6.2 Called Up Share Capital 5,857,577,300 units @ 25kobo each 1,464,394,325 1,464,394,325 6.3 Issued and Fully Paid 2,473,177,300 units @25kobo each 618,294,325 618,294,325 6.4 TREASURY SHARES 3,384,400,000 units @25k per share 846,100,000 846,100,000 Total Issued Share Capital 1,464,394,325 1,464,394,325 The 3,384,400,000 units of treasury shares at 25k per share currently held in the following names: True Bond Energy Ltd 1,380,000,000 1,380,000,000 Proven Financial Services Ltd 1,258,200,000 1,258,200,000 Warehoused Shares 746,200,000 746,200,000 3,384,400,000 3,384,400,000 These treasury shares were earlier issued but payments not received and now warehoused as Treasury Shares. The company had sought the approval of the security and exchange commission via a letter dated March 6th,2015 and are already in discussion with potential investors. 6.6 Share Premiun 3,036,209,766 3,036,209,766 7 Accumulated Loss N N Balance brought Forward (1,036,192,435) (908,104,818) Profit/(Loss) in the year (61,851,888) (131,161,367) Prior Year Adjustment 0 3,073,750 Balance carried Forward (1,098,044,323) (1,036,192,435) 8 Borrowing Secured 63,855,376 48,894,965 unsecured 557,291,666 556,813,167 621,147,042 605,708,132 The secured loan was a revolving one year loan granted by PAC Asset management at the interest rate of 28% The unsecured was a soft facilty giving by Living Faith World Outreach Centre to be held as a preferred stock for one year only in favour of the church at a annual interest rate of 12.5%. 22
NOTES FOR THE YEAR ENDED 31ST DECEMBER, 2015 31/12/15 31/12/14 9 Deferred Tax Balance Brought forward 110,164,600 99,081,362 Charge in the year 0 11,083,238 Balance carried forward 110,164,600 110,164,600 10 Trade Payables 26,055,918 26,055,918 The sum of N26,055,918 was due to Index Petrolube Africa Ltd for supply of petroleum products. 10.1 Other Payables and accruals Sundry creditors 18,488,553 23,332,472 Accruals 35,277,548 40,982,052 53,766,101 64,314,524 11 Current Income Tax Payable Balance Brought Forward 71,222,103 64,379,277 Provision for the year 5,698,500 6,842,826 Payment in the year (2,500,000) - Balance Carried Forward 74,420,603 71,222,103 11.1 Taxation Comprehensive Income Current Income Tax 5,698,500 6,842,826 Deferred Tax 0 11,083,238 5,698,500 17,926,064 12 Administrative Expenses Salaries & Wages 36,258,792 49,758,922 Directors Emoluments 16,675,000 31,690,059 Transport and Travelling 4,126,733 5,459,018 Entertainment 1,049,510 1,088,050 Utilities 1,883,525 2,120,605 Printing & Stationeries 1,118,800 1,521,115 Medical Expenses 0 55,050 Donation & Gifts 0 324,000 Office Cleaning 1,157,760 1,439,210 Insurance 1,722,218 1,316,510 Security Expenses 1,048,000 1,715,399 Rent & Rates 5,295,852 7,027,630 Motor Running 430,895 248,930 Repairs & Maintenance 11,181,003 15,371,709 Licences & Registration 399,434 921,819 Fines & Penalty 150,000 979,590 Bad Debt 20,312,302 - Professional Services 9,826,940 17,069,951 Auditors Fees 700,000 700,000 Depreciation 23,755,291 23,088,185 Amortization 181,950 - Lease Charges 16,700,000 14,700,000 Disposal Account 0 20,000,000 Staff Training 847,140 320,000 154,821,145 196,915,752 13 Selling And Distribution Expenses Advertising and Haulage Expenses 54,890,083 50,965,460 23
NOTES FOR THE YEAR ENDED 31ST DECEMBER, 2015 31/12/15 31/12/14 N N 14 Other Income Recovery of Bad Debts 349,579 0 Rent 2,355,000 1,675,450 Non refundable Deposit 400,000 0 3,104,579 1,675,450 15 Finance Income Lease income 3,160,000 3,000,000 Interest Received 0 100 3,160,000 3,000,100 16 Finance Cost Interest On loan 15,438,907 77,872,006 Bank Charges 1,282,932 2,594,257 16,721,840 80,466,263 17 PROFIT BEFORE TAX Profit before tax is arrived at : After Charging: Depreciation on Fixed Asset 23,755,291 23,088,185 Auditors Remuneration 700,000 700,000 Directors Emoluments 16,675,000 31,690,059 And After Crediting Other Income 3,104,579 1,675,450 24
NOTES FOR THE YEAR ENDED 31ST DECEMBER, 2015 18 DIRECTORS/EMPLOYEES EMOLUMENTS The aggregate emoluments of the 31/12/15 31/12/14 Directors were N N Sitting Allowance 325,000 1,845,000 Other Emoluments excluding Pension Contribution 16,350,000 29,845,059 16,675,000 31,690,059 The Chairman's emoluments (excluding pension contribution) totalled 110,000 460,000 The emoluments of the highest paid Director amounted to (excluding pension Contribution) 16,785,000 15,385,717 The table below shows the number of Directors of the company (excluding the Chairman) whose remuneration (excluding pension contributions) in respect of services to the company fell within the range shown below: N N 10,000,000 to 20,000,000 1 1 30,000,000 to 40,000,000 0 0 19 EMPLOYEES The table shows the numbers of employees of the company who earned over N60,000 in the year and which fell within ranges stated below: 31/12/15 31/12/14 N N 200,001-400,000 7 3 400,001-600,000 13 3 600,001-800,000 3 15 800,001-1,000,000 3 4 1,500,000 & Above 9 12 35 37 20 STAFF COST PER PAYROLL N N Wages and Salaries 36,258,792 49,758,922 The average number of persons employed by the company during the year were: 25
NOTES FOR THE YEAR ENDED 31ST DECEMBER, 2015 21 EARNINGS PER SHARE 31/12/15 31/12/14 Earning per share calculated on basis of the company's profit after taxation based on the number of ordinary shares issued and fully paid at the end of the year (0.03) (0.05) 22 RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES 31/12/15 31/12/14 Net Income/(loss) After tax And Exraordinary N N Item (61,851,888) (131,161,367) Adjustment To Reconcile Net Income To Net Cash Provided Loss/(Profit) on Disposal 0 20,000,000 Depreciation 23,755,291 23,088,185 Amortization 181,958 Interest And Similar Charges 16,721,840 80,466,263 Prior Year Adjustment 0 3,073,750 Changes In Asset And Liabilities (Increase)/decrease in stock (5,938,190) -6846240 (Increase)/Decrease In Debtors 51,876,161 35,041,716 Increase/(Decrease) In Trade Creditors And Accruals (10,548,424) (101,856,296) Increase In Deffered Tax Provision 3,198,500 6,842,826 Increase/(decrease) In Tax Provision 0 11,083,238 Sub Total 79,247,136 70,893,442 Net Cash Provided By Operating Activities 17,395,247 (60,267,925) 23 APPROVAL OF FINANCIAL STATEMENTS The financial Statements were approved by the board of Directors of the company on the. 26
FIVE YEAR FINANCIAL SUMMARY FOR THE YEAR ENDED 31ST DECEMBER, 2015 IFRS IFRS IFRS IFRS IFRS 2015 2014 2013 2012 2011 N N N N N TURNOVER 1,132,722,975 2,106,210,044 2,967,933,461 1,901,955,774 1,296,513,497 Profit/(loss) before Taxation (56,153,388) (113,235,303) (459,321,150) 41,957,156 5,124,520 Taxation (5,698,500) (17,926,064) (16,208,957) (65,004,693) (58,656,900) Profit/(loss) After Taxation (61,851,888) (131,161,367) (475,530,107) (23,047,537) (53,532,380) Extra ordinary item 0 0 0 59,475,151 0 Profit After tax and Extra ordinary item (61,851,888) (131,161,367) (475,530,107) 36,427,614 (53,532,380) Earning/(loss) per share (kobo) (0.03) (0.05) (0.05) 0.01 (0.02) Net Asset per share (Kobo) 0.31 0.33 0.38 0.66 0.60 BALANCE SHEET AS AT 31ST DECEMBER CAPITAL EMPLOYED Share Capital 1,464,394,325 1,464,394,325 1,464,394,325 618,294,325 768,286,825 Share Premium 3,036,209,766 3,036,209,766 3,036,209,766 1,240,109,766 1,690,109,766 Treasury Shares (2,642,200,000) (2,642,200,000) (2,642,200,000) Profit & Loss Account (1,098,044,323) (1,036,192,435) (908,104,818) (432,574,711) (608,743,721) Total Capital Employed 760,359,768 822,211,656 950,299,273 1,425,829,380 1,849,652,870 ASSETS EMPLOYED Fixed Assets 1,212,566,772 1,236,463,056 1,303,097,432 1,250,574,901 2,040,783,021 Software 810,542 Current Assets 432,567,374 463,244,537 557,001,141 876,121,595 209,411,106 Current Liabilities (154,273,277) (161,623,205) (256,614,640) (607,903,325) (339,828,748) Loans (621,147,042) (605,708,132) (554,103,298) - (13,187,050) Deffered Taxation (110,164,600) (110,164,600) (99,081,362) (92,963,791) (47,525,460) Net Assets 760,359,769 822,211,656 950,299,273 1,425,829,380 1,849,652,870 27
TURNOVER 3E+09 2.5E+09 2E+09 1.5E+09 1E+09 50000000 0 2015 2014 2013 2012 2011 TURNOVER 10000000 0-1E+08-2E+08-3E+08-4E+08 PROFITABILITY TREND Profit/(loss) before Taxation Taxation Profit/(loss) After Taxation -5E+08 2015 2014 2013 2012 2011