beco petroleum products plc - africa prudential...medicine. he later attended the university of...

2014

Beco Petroleum

Products Plc

Annual Report and Accounts

Beco PetroleumProducts Plc

Table of Contents Page

Directory 2

Directors and Professional Advisors, etc 3

Financial highlights 4

Corporate Profile 5

Notice of Annual General Meeting (AGM) 10

Chairman’s Statement 11

Report of the Directors 16

Responsibility for Annual Financial Statements 21

Audit Committee Report 22

Report of Independent Auditors to the Members of BECO Petroleum Products Plc 23

Statement of Financial Position 25

Statement of Profit or Loss and Other Comprehensive Income 26

Statement of Changes in Equity 27

Statement of Cash Flows 28

Notes to the Annual financial statements 29

Statement of Value Added 49

Financial Summary 50

Proxy Form 51

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RC 80108

DIRECTORY

Corporate Head Office:

33B Bode Thomas Street Surulere,

Lagos

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DIRECTORS AND PROFESSIONAL ADVISORS, ETC.

DIRECTORS:

Dr. John Ohiomah Izebere Chairman Dr. Eugene C. Mojekwu Vice Chairman Mr. Henry C. Mojekwu Managing Director Mr. Kingsley O. Mojekwu Executive Director Sir. Obafemi Giwa-Amu Director Dr. Adeyinka Akinbami Director Bar. Eduvie Omamadaga Director Company Secretary: Unity Trustees 1 Shagamu Avenue Ilupeju, Lagos Registrars Africa Prudential Registrars Plc 220B Ikorodu Road, Lagos AUDITORS: OR&C Audit (Chartered Accountants)

Adebowale House (3rd Floor)

150Ikorodu Road,

Onupanu, Lagos

Principal Bankers: Access Bank Plc

First Bank Plc

Guaranty Trust Bank Plc

UBA Plc

Zenith Bank Plc

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CORPORATE PROFILE INTRODUCTION Beco Petroleum Products Plc is an indigenous operator in the Marine and Oil and Gas sectors of the Nigerian economy. It was founded in 1986 as a Limited Liability Company and commenced business operations in 1987. At inception, its principal activity was Service Stations operations and management. Over the years the company has witnessed major growth, engaging in the provision of diverse services in the downstream and upstream segments of the Nigerian Oil and Gas Industry. It is now a petroleum product marketer, distributor and maritime operator and transporter. The company converted to a public limited liability company in 2009. Its shares are currently quoted on the Nigerian Stock Exchange. It has an authorized share capital of 6,520,000,000 units of 50 kobo each, with 3,716,976,581 units fully paid up. Beco is in business of petroleum products marketing and related services delivered with a strong commitment to safety and respect for the environment. BECO has built a brand in the oil and gas industry and marine tanker business in Nigeria. The company’s service delivery plays a vital part in the development of the Nigerian Oil and Gas and Shipping businesses, and offers employments to a good number of Nigerians.

It is committed to excellence in satisfying customers’ needs and strives for total quality in all of its business dealings. The company is also committed to the transformation, growth and diversification of its operations. Its human resources development strategy concentrates on the growth and development of its employees, including skills development and career path planning.

Our VISION is to be a world-class integrated Marine Transportation, and Oil and Gas entity that is customer-focused and result oriented. It has the MISSION to be the leading provider of safe, reliable and efficient Oil and Gas, Marine transportation, and land Haulage services, using a combination of high flying human capital and state of the art technology to consistently exceed the expectations of customers and communities, and creating value for the shareholders. PRINCIPAL ACTIVITIES BECO dispenses refined petroleum products through a number of well managed Service Stations located across the Country. It obtains supplies of Petrol (PMS), Diesel (AGO), and kerosene (DPK), from the Pipelines and Products Marketing Company (PPMC), other oil majors and independent marketers, and from imports. All our Stations are located within growth centers or in urban areas except in circumstances where it has been shown, through appropriate studies that the need

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exists otherwise. We carry out proper environmental impact assessment and ensure conformity with all the rules and regulations governing the location of Service Stations as superintended by the Department of Petroleum Resources (DPR) in Nigeria. Beco has developed a business plan for the acquisition and expansion of marine vessels in order to reposition to play a more strategic role in both the oil and gas and shipping industries and also in view of the Cabotage Regime promoted by the Federal Government of Nigeria. We are targeting the provision of complete tanker and oil services solutions and conventional shipping operations. The marine Tanker Services will provide a wide range of shuttle solutions, and customized offloading and storage solutions for customers. It is expected to provide Lightering Services which offers ship-to-ship cargo transfer services. As proactive operators, we will ensure that high standard is applied and that our marine services set and maintain world-class standards for our ship management activities, using proven management practices, modern processes and innovative ideas.

Due to the prevailing congestion at the various ports in Nigeria for the discharge of

imported and coastal petroleum products, BECO is developing a Petroleum Products

Tank Farm at Ikot Abasi, Akwa Ibom State of Nigeria. Part of the justification for the

establishment of the facility is the need to address the congestion at the Nation’s

ports by offering storage for our trading business and to importers of petroleum

products who would otherwise incur huge demurrage costs while waiting on the

queue to discharge at the designated ports.

The Tank Farm facility will support the distribution of all refined petroleum products, particularly, PMS, AGO, DPK, and LPFO, and Lubricants. It will serve the South-South, the South-East, and the North East axes of the country and a select clientele and market segments that support BECO’s business objectives and ensure adequate returns on investments. Apart from refined petroleum products, the Tank Farm will additionally engage in products blending, lubricants business and other ancillary services directed to meeting the oil energy need of its customers. The Tank Farm will assist to hold products to satisfy the ever growing demand for tank farms in Nigeria and the ownership of such a farm, apart from being a standard condition for coastal lifting by NNPC/PPMC, is highly required to take imported products which are lightered from import vessels to eliminate demurrage payment and improve turnaround time.

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BOARD OF DIRECTORS The Board of Directors of the Company is made up of astute Nigerian investors and eminent personalities who have proven themselves in key and diverse fields of the business world and made special marks in different areas of life endeavours. They are: DR. IZEBERE OHIOMAH JOHN - Chairman Dr Izebere graduated from Ahmadu Bello University, Zaria in 1995 as Doctor of Veterinary Medicine. He later attended the University of Ibadan in 2004 to pursue a Certificate in Immunity. In 2007 he obtained M.Sc Veterinary Microbiology from the same University and PHD Degree on 16th April 2013. Dr Izebere is a Registered member of Veterinary Council of Nigeria, Registered member Veterinary Medical Association, and Member Veterinary Clinical Forum. He began his working career with Veterinary Teaching Hospital in 1994, and later joined Dutel Nigeria Limited in 1997 as a National Sales Representative. He worked with Wumago Farms Ltd between 1998 and 1999 as General Manager. He became Veterinary Clinician in 1999 in Christfield Veterinary Services. Dr Izebere was appointed the Chairman of the company in 2013. DR. EUGENE C. MOJEKWU (Ph.D) - Vice Chairman Dr. Eugene C. Mojekwu is the Vice-Chairman of Beco Petroleum Products Plc. He holds a B.Sc. and MSc in Civil Engineering from Texas Tech University and a Ph.D in Structural Engineering from the University of Texas at Arlington. He is the founding principal of Matrix Engineering Corporation, a US based structural engineering consulting practice that specializes in structural design of high rise buildings and complex structures. A published writer and award winning structural engineer, Dr. Mojekwu is credited with developing techniques that have become important tools for researchers and consultants in specialized structural engineering practice. He is a highly sought after guest speaker, has been featured in numerous national and international magazines and newspapers and is routinely invited by the U.S media to share his views on major incidents, such as the terrorist attack on the World Trade Centre in New York. In addition to his engineering practice, he has been active in structural engineering education. He served as an Adjunct Professor of structural engineering at the University of Illinois at Chicago, Illinois Institute of Technology, The University of Texas at Arlington and Texas Tech University. He is a member of The American Society of Civil Engineers, American Institute of Steel Construction, Structural Engineers Association of Illinois, and served on a code committee of the American Concrete Institute. He is a past president of

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The Organization of Nigerian Building Professionals in Chicago, and is currently a member of the Board of Trustees of The Structural Engineers Foundation of Illinois, The Continental African Chamber of Commerce and The Nigeria Higher Education Foundation. MR. HENRY C. MOJEKWU (Managing Director) Mr. Henry Mojekwu is the Managing Director of the Company. He holds a BA in Accounting from Bishop College Dallas, U.S.A, Diploma, 62J – United States Army, FT Leonard Wood Missouri U.S.A. He was a Construction Engineer in the U.S. Army for four (4) years. He was the General Manager Operations, American Airline Ft. Worth Texas (1986 – 1988). He joined BECO Petroleum Company in 1992 as Operations Manager and rose to become Executive Director Operations, until he was appointed the Managing Director of the Company. He is also a Director in Charldit Nigeria Limited and Henrich Fuels Limited. Between 2000 and 2004, he was the honorary secretary of the Independent Petroleum Marketers Association (IPMAN) during which period he contributed to the creation of NIPCO’s independent storage depot for indigenous petroleum marketers; setting up of a credit facility guideline for independent petroleum marketers and the bridging claims modifications for independent marketers. His tenure as Managing Director of the Company saw the upward movement of its turnover by over 2000% between 1992 and 2008, and in the number of filling stations from three (3) to fifteen (15) within the same period. He also expanded the transport segment of the business by increased number of heavy-duty bridgers for nationwide haulage of petroleum products. He also flagged off the marine transportation business of the Company which has recorded the outright acquisition of two (2) marine tankers vessels of 5,000 and 10,000 metric tons capacity respectively. Mr. Mojekwu has driven the aggressive growth business model of the Company that has led to strategic alliance with some North American Investors targeted at the establishment of a natural gas plant aimed at achieving reduction in gas flaring and construction of adequate storage facilities for diversified products with capacity of storing over 250 million liters of products upon completion. SIR OBAFEMI E. GIWA-AMU He holds a Masters degree in Law with bias for Marine Insurance Law, Carriage of Goods by Sea and International Protection of Human Rights. He was called to the Nigerian Bar in 1984.He is presently the Managing Director/CEO of TRAKtag Limited, Lagos Nigeria. He was the Principal Partner Obafemi Giwa-Amu & Co from 1991 – 2004. He is currently, the Chairman, Liaison Francais Nigeria Limited and Zim Estates Limited, Benin Nigeria.He is also a Knight of the Order of Saint Mulumba (KSM).

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DR. ADEYINKA AKINBAMI Dr. Adeyinka Akinbami is the Company÷s special projects consultant. He holds a Ph.D in Chemical Technology (1985) from Uninversity of Manchester Institute of Science and Technology specializing in Petrochemical and Hydrocarbon Chemistry. Dr. Akinbami has since worked with APP Chemicals (United Kingdom), Lenoil Petroleum (Nigeria) and Zenon Petroleum as Vice President. Dr. Akinbami is known in the Nigerian Oil Industry as having run successfully the first indigenous lubricant blending plant at Lenoil Petroleum (1990 – 1994). He currently serves as a Project Management and Engineering Consultant within the industry. KINGSLEY O. MOJEKWU - EXECUTIVE DIRECTOR He holds a BSc. Civil Engineering as well as a BSc. Architecture (Structures Option) from Texas Tech University, Lubbock, Texas, USA. He is the Managing Director of Beco Concrete Industries Limited, a company affiliated with Beco Petroleum Products Limited. He is on record as being the youngest chairman of the Lagos State Association of Concrete Products Manufacturers. A man of many parts, he has vast experience in sectors as diverse as Foods (Mrs. Fields Cookies); Cosmetics (K-Chic Nig. Ltd); Agriculture (fish ponds); Consumables (ethanol production); Mechanical Engineering (Generator Assembly); etc. He was the Chief Structural and Program Analyst of Matrix Engineering Incorporated in Chicago, Illinois, USA from where he was appointed Executive Director of Beco Petroleum Products Limited. He has played roles in the business development and logistics of the company, especially in its many construction projects where his engineering background has proved to be invaluable. A Rotarian of long standing, he is the president-elect of the Rotary Club of Agege for the 2009 – 2010 Rotary year. BARR. EDUVIE JOEL OMAMADAGA Barrister Eduvie graduated from the University of Benin with a Degree in law (LLB) in 1997. He attended Law School and was called to the Bar in 1999. He started his professional career with G.C Omamadaga & Co in 1999 as Senior Legal Officer. Barrister Eduvie is into Legal practice, specializing in Property Investment Advice, and International Law.

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NOTICE OF ANNUAL GENERAL MEETING (AGM) NOTICE is hereby given that the 6th Annual General Meeting of Beco Petroleum Products Plc will be held at WELCOME CENTRE HOTEL LIMITED, 70 INTERNATIONAL AIRPORT ROAD, LAGOS on Friday, 11th December, 2015 by 1 pm to transact the following business: Ordinary Business

1. To receive and consider the Financial Statements for the years ended 31st December 2012, 2013 and 2014, the Reports of the Directors, Independent Auditors, and Audit Committee thereon.

2. To re-elect the following Directors retiring by rotation in accordance with the Companies and Allied Matters Act, but are eligible and offer themselves for re-election: � Sir Obafemi Giwa-Amu

� Dr.Adeyinka Akinbami

3. To authorize the Director’s to fix the remuneration of Auditors. 4. To elect members of the Audit Committee. 5. To approve the remuneration of the Directors.

PROXY A member of the Company entitled to attend and vote at the General Meeting, is entitled to appoint a proxy to attend instead of him. A proxy need not be a member of the Company. A Proxy Form is enclosed, and if it is to be valid for the purpose of the meeting, it must be completed and duly stamped by the Commissioner of Stamp Duties and deposited at the office of the Registrars, or Company Secretary not less than 48 hours before the time for holding the meeting.

AUDIT COMMITTEE In accordance with Section 359 (5) of the Companies and Allied Matters Act, Laws of the Federation 2004 any member may nominate a shareholder as a member of the Audit Committee by giving in writing, notice of such nomination to the Company Secretary at least 21 days before the Annual General Meeting. CLOSURE OF REGISTER The register of members will be closed from 10th November 2015 – 12th November, 2015 to enable the Registrars prepare for the Annual General meeting.

CYRIL ANICHUKWUEZE FOR: UNITY TRUSTEES LIMITED

Dated this 4th day of September 2015

By Order of the Board


CHAIRMAN’S STATEMENT INTRODUCTION Our distinguished shareholders, ladies and gentlemen, I am delighted to welcome you to this Annual General Meeting of your company, Beco Petroleum Products Plc. During the course of this meeting, I shall present to you the Directors' Report and Financial Statements for the year ended 31st December, 2012, 2013 and 2014, including a brief review of the major developments that have taken place in the global and national economies, and in the oil and gas sector within the periods. ECONOMIC ENVIRONMENT The financial year 2014 remains one that witnessed many activities in monetary and fiscal policies occasioned by the monetary tightening stance of the Central Bank of Nigeria (CBN), the slide in the value of Naira, the spending activities of the political class in the run-up to the 2015 general elections and the dwindling oil prices resulting in major regulatory pronouncements.

The Nigerian economy has enjoyed sustained economic growth for a decade, with annual real GDP increasing by around 7%; it was 6.3% in 2014. The non-oil sector has been the main driver of growth, with services contributing about 57%, while manufacturing and agriculture respectively contributed about 9% and 21%. The economy is thus diversifying and is becoming more services-oriented, in particular through retail and wholesale trade, real estate, information and communication.

Nigeria’s GDP was rebased from about $270 billion to$568.51 billion in 2014. The GDP value of Nigeria represents 0.92 percent of the world economy.The increase of about 90% was attributed to new sectors of the economy such as telecommunications, entertainment, and retail services, which were previously either not captured or underreported. As a result of the rebasing, Nigeria is now the largest economy in Africa and the 26th largest in the world.

Dwindling oil prices threaten to slow down the growth of major oil producing countries in Sub-Saharan Africa including Nigeria, Angola and Ghana. In Guinea, Liberia and Sierra Leone, the Ebola outbreak took a heavy human and economic toll. In addition, the security situation continues to be difficult in some countries, including the Central African Republic, South Sudan and Nigeria. In Nigeria, the projected GDP growth rate of 6.4% has been cut down to 5.2% by the IMF largely as a result of the escalating security challenges in the

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Northern part of the country, the general election and post-election issues, and the falling oil price. All of these factors will significantly influence the monetary policies of the CBN in 2015 with an attendant impact on the macroeconomic variables. Further devaluation of the naira may be imminent in the short horizon, considering the dwindling external reserves, coupled with the drop both in volume and price of crude oil. With Nigeria’s national currency under increasing pressure in the wake of its devaluation by the Central Bank of Nigeria, CBN, the impact appears to be telling on the country’s foreign reserves, which declined to $34.53billion in December 2014. In the wake of the recent decline in the global crude oil price, which negatively impacted the national currency, the CBN intervened by devaluing the Naira from N155 to the dollar to N168, in a bid to ensure stability and attempt to find the true value and shore up the country’s foreign reserves. Domestic Lending rates have remained high and the monetary authorities have adjusted the MPR from 12% in 2012 to 13% in 2014. Prices Headline inflation at end-December 2014 was 8.0 per cent. FINANCIAL PERFORMANCE The years 2012 - 2014 presented enormous challenges to the company as it had to battle to overcome the impacts of general economic downturn, funding constraints, and loss of main income source – Marine vessel operations. Having listed on the capital Market in 2009 during the global economic meltdown, our business plan projections were drastically negatively affected. This had to be redrawn all over and involved the company in taking far reaching decisions and actions. We had to move our head office from our highbrow area in Victoria Island to a portable and more manageable accommodation in Surulere. The Company's turnover decreased from N689.18m in 2013 to N395.20m in 2014. This showed a 43% decline in revenue over the period. The decline in turnover was attributable to funding constraint, and of course, the loss of vessel income. Loss after tax increased from (N188.03m) in 2013 to (N301.96m) in 2014. Again the increase in the loss after tax is attributable to the dearth of adequate capital to operate and the loss of some of its major resources for income generation. The losses incurred led to the reduction of total assets by 14.77% from N1.76bn in 2013 to N1.50bn in 2014. 2015 BUSINESS AND OUTLOOK The future is very bright for Beco, a player in the downstream sector of the Nigerian Oil and Gas Industry. This is more so as subsidy reforms are now imminent in the near term, realizing that the 2015 budget makes zero allocation for subsidy payments. Full deregulation of the sector via total subsidy removal holds the maximum benefits to Beco. The crude oil price slump will have negligible impact on its operations as a downstream player. In a deregulated market, drop in oil price is favourable to downstream players as crude oil prices correlate positively with

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the all-in cost of refined products. Ultimately, a full deregulation of the sector will lead to market-determined petroleum prices. This will support top-line growth for Beco. Petrol Demand is expected to hit 41mn liters/day in 2015, from 39mn liters/day in 2014. Demand for petrol may grow to 51mn liters/day in 2020 and could hit 60mn liters/day by 2025. The projected increase in petrol consumption in 2015 stems from increasing industrial, transportation, technology and infrastructure needs as well as residential needs mostly for cars and generators. PMS demand from generators will remain high in the near term. Nigeria is going through a process of energy transition which will drive demand for energy going forward. The projected increase in petrol demand will support revenue growth; a drop in cost of sales (post-deregulation) while efficient local refineries will improve revenue margin of downstream players. The outlook for Beco is positive and it can look forward to an exciting and dynamic future with an ever-changing competitive landscape. Beco is therefore repositioning for growth in 2015 as talks are ongoing for new funds inflow from strategic investors to boost all aspects of operations. We will remain focused on our mission. With this new strategy in place, we are confident that we shall improve on the company’s past performances for the benefit of our stakeholders. CORPORATE GOVERNANCE: It is important to note that we have made progress towards achieving compliance with the Securities & Exchange Commission’s Code of Corporate Governance which came into effect in April 2011. Beco is committed to the highest standards of corporate governance and ethical business practices. It conducts its business with integrity and pays due regard to the laws of the land and the interests of its stakeholders. The Board and Committees The Board as currently constituted, comprises the Chairman, the Vice chairman, the Managing Director, the Executive Director (Operations) as well as six other Non-Executive Directors. They regularly attend relevant seminars designed to expose them to new trends in Corporate Governance and organizational development. Attendance at Board Meetings during the year ended 31st December, 2014 was regular. The Board established committees comprising of Directors and Management Staff. Apart from the Executive Committee, all other Committees are chaired by non-executive directors. In the opinion of the Board, the committees performed creditably well during the period under review


The Executive Committee is responsible for establishing priorities, allocating resources, proposing overall corporate targets, establishing and monitoring strategies and plans and has responsibility for supervising the affairs of the business on a day to day basis. It is chaired by the Managing Director/Chief Executive Officer of the company. As an internal working committee, it meets all year round and reports to the Board as may be necessary. Internal Controls Beco recognizes that effective internal controls are an essential management tool. Consequently, it has put in place a robust internal control policy and maintains a framework of internal controls to ensure proper safeguard of company's assets and the provision of reliable accounting records. A full-fledged Internal Audit Department was created to support the independent verification of transactions – ensuring that they conform within required best practices. Also, in accordance with Section 359(6) of the Companies and Allied Matters Act, CAP C20 LFN 2004, the Audit Committee is alive to its responsibilities in the company. The Audit Committee comprises three Directors (two of whom are Non-Executive Directors) and three shareholders. It is chaired by a member representing the shareholders and conducts meetings during the year. The committee in the conduct of its affairs reviews the overall risk management and control systems, financial reporting arrangements and standards of business conduct. It provides independent monitoring of internal control and the internal audit department of the company. In the performance of their duties, members have direct access to the Internal Audit Department and the External Auditors. Complaints Management Framework In compliance with the directives by SEC in its circular to public quoted companies in February 2015, Beco has developed a Complaints Management Framework to address complaints arising out of issues that are covered under the Investments and Securities Act, 2007 (ISA), the Rules and Regulations made pursuant to the ISA, the rules and regulations of Securities Exchanges and guidelines issued by the regulatory authorities. Beco has established a well defined Complaints Management policy to handle and resolve complaints from shareholders and other relevant parties. The framework deals with complaints against Beco by shareholders and investors. It was endorsed by the company’s senior management, who are also responsible for its implementation and for monitoring compliance. The full content of the framework has been uploaded on the website of the company. Guidelines on the Sale and Purchase of Securities

Beco has also set out guidelines and policy on the sale and purchase of its securities by any of its staff including Directors and Key Management Personnel. Key Management

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Personnel are those persons having authority and responsibility for directing and controlling the activities of the Company, including any Director (whether Executive or Non-Executive). The purpose of these guidelines is to assist all staff (but more particularly Directors and Key Management Personnel) to avoid conduct known as ‘insider trading’. This policy extends to consultants or external adviser engaged by it and who may in the course of the engagement come in contact with insider information. Insider trading is the practice of dealing in a company’s securities (i.e. shares or options) by a person with some connection with a company (for example a director, employee, contractor or consultant) who is in possession of information generally not available to the public, but which may be relevant to the value of the company’s securities. It may also include the passing on of this information to another. Legally, it is an offence which carries severe penalties, including imprisonment. The detailed guideline developed by Beco on the sale and purchase of its securities has also been uploaded on its website. RESIGNATIONS Since the last AGM, we have had some changes in the Board arising from the resignation of Dr. Ogala Osoka as Chairman. A new chairman was appointed, and he is Dr. E Izebere. Two other Directors also resigned from the board, namely Mr. Udemezue Nwuneli, and Barrister Uche V. Obi. Also there was a change of Company Secretary. Our new company Secretary is Unity Trustees Limited . CONCLUSION My I use this opportunity to thank our Shareholders, customers, employees and other Stakeholders for their continued support throughout the years despite all the challenges. With your trust and confidence in us, we are poised to work towards a better performance in the years ahead and increase returns for all Stakeholders. Thank you all for attending today’s meeting, and for your active participation. We wish you all safe journey to your various destinations. God bless you

Dr. John Ohiomah Izebere Chairman

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REPORT OF THE DIRECTORS For the year ended 31 December, 2014 The Directors submit their report with the audited financial statements of the company for the period ended 31 December, 2014 1. RESULTS N Loss before taxation (344,130,072) 2. BUSINESS To carry on trade or business of refined petroleum products, dealers on petroleum products and marketer, petroleum truck peddlers, agents and distributors of petroleum products in general and their like. 3. LEGAL FORM The company was incorporated on January 30, 1986 as a private limited liability company but commenced operations in 1987. It became a Public Liability Company (Plc) in 2009. 4. DIRECTORS i. Board of Directors The directors who served during the period are: Dr. John Ohiomah Izebere Chairman Dr. Eugene C. MojekwuVice Chairman Mr. Henry C. MojekwuManaging Director Mr. Kingsley O. MojekwuExecutive Director Sir. Obafemi Giwa-AmuDirector Dr. Adeyinka AkinbamiDirector Bar. Eduvie OmamadagaDirector ii. Directors Shareholding The direct and indirect interest of directors in the issued share capital of the company as recorded in the Register of Directors’ shareholding and or as notified by the Directors for the purpose of section 275 and 276 of the Companies and Allied Matters Act CAP C20 LFN 2004 and the listing requirements of the Nigerian Stock Exchange are noted and stated below: Directors Direct Indirect Total (July 2013) Total (Dec 2014) Dr. E. C. Mojekwu 400,500,000 578,851,153 (Matrix Engineering) 979,351,153 979,351,153 Mr. H. C. Mojekwu 80,400,000 0 80,400,000 80,400,000 Mr. K. O. Mojekwu 78,000,000 0 78,000,000 78,000,000 Dr. John Izebere 0 212,300,000 (World Mission Agency) 212,300,000 212,300,000 Barr. Eduvie Omamadaga 0 198,810,000 (Covenant University) 198,810,000 198,810,000


iii. Substantial Interest in Shares According to the register of members as at December 31, 2014, no shareholder held more than 5% of the issued share capital of the Company except as disclosed overleaf: SHARE HOLDING ORDINARY % Mojekwu Uchenna 195,000,000 5.25

Covenant University 198,810,000 5.35 Focus/AMCON/OCB/Valueline Sec Ltd 210,784,525 5.67

World Mission Agency 212,300,000 5.71 Mojekwu Eugene C 400,500,000 10.77

Matrix Engineering 578,551,153 15.57 Others 1,920,730,903 51.68 Total 3,716,976,581 100.00 iii. Shareholding Analysis The shareholding pattern of the Company as at December 31, 2014 is as stated below: Share Range No of % of No of Holdings % of Holdings

Shareholders Shareholders

1 – 1000 411 12.16 244,096 0.01

1001 – 5000 649 19.20 2,144,265 0.07

5001 – 10000 461 13.63 3,900,061 0.10

10001 – 50000 847 25.06 22,030,211 0.59

50001 – 100000 304 8.99 24,283,911 0.65

100001 – 500000 581 17.18 130,471,759 3.51

500001 – 1000000 62 1.83 45,435,636 1.22

1000001 – 5000000 25 0.76 49,129,049 1.32

5000001 – 10000000 4 0.12 30,611,812 0.82

10000001 – 50000000 17 0.51 446,742,382 12.03

50000001 – and Above 19 0.56 2,961,883,399 79.68

Total 3380 100.00 3,716,976,581 100.00

5. SHARE CAPITAL HISTORY In 2008, Beco Petroleum Products Limited raised the sum of N1,645,662,100 through Private Placement. In 2009 it listed its shares on the Nigerian Stock Exchange and became a Public Limited Company. Following the listing in 2009, the company’s Authorized Share Capital rose to 6,520,000,000 units of 50 kobo per share, and the paid-up share capital changed from N10,000,000 to N1,858,488,290. Shareholders approved the payment of N20m as Dividend in 2009. Additional dividend of N37,169,766 or 1kobo per share (paid up) was also declared in 2010. As at date, its authorized share capital stands at 6,520,000,000 units of 50 kobo each, with 3,716,976,581 units fully paid up. All the shares are held by Nigerian nationals. The Company did not purchase its own shares during the years.

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8. FIXED ASSETS Movements in Fixed Assets during the year are shown in Note 5 on page 42 9. CORPORATE GOVERNANCE The company maintains corporate policies and standards designed to encourage good governance and transparent corporate governance, avoid potential conflict of interest and promote ethical business practices. The business of the company is conducted with integrity which pays due regards to the legitimate interest of our shareholders. The Board in 2014 functioned with these committee, whose membership is as follows:

a. Finance and General Purpose Committee This Committee is made up of the following members: i. Nwuneli Mezuo Director Chairman (Resigned) ii. Valentine Obi Director Member (Resigned) iii. Henry Mojekwu Managing Director Member iv. Okey Mojekwu Executive Director Member

This Committee has the responsibility for review of the Annual Budgets and Costs Control; Supervising general assets and management; Treating External Auditor’s Report, Internal Audit reports and other Statutory reports; formulating Funding Strategies, and performs other functions as assigned by the board.

The Committee had four meetings in the year and attendance record at each meeting was 100%

b. Strategy and Business Development Committee This Committee monitors Service development, Business Growth Strategy, New Products evaluation and development, and performs other functions as assigned by the Board.

This Committee is made up of the following members:

i. Barrister Valentine Obi Director Chairman (Resigned) ii. Dr Adeyinka Akinmbami Director Member iii. Mr. Henry Mojekwu Director Member iv. Mr. Kingsley Mojekwu Executive Director Member v. Nwuneli Mezuo Director Member (resigned)

This Committee had three meetings in the year under review . It recorded 100% attendance during the first and second meetings and 80% attendance during the third meeting.

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10. RETIRING DIRECTORS In accordance with the provisions of section 259(1) and 259(3) of the Companies and Allied Matters Act 1990, Sir Obafemi Giwa-Amu and Dr. Adeyinka Akinbami are hereby retired from office and being eligible have offered themselves for re-election at this General Meeting. 11. DONATIONS There were no contributions to any political party during the year. 12. POST BALANCE SHEET EVENTS There are no significant post balance sheet events with material effect on the Financial Affairs of the company and the loss for the year ended 31 December, 2014 which have not been provided for. 13. AUDITORS The auditors Messrs OR&C Audit (Chartered Accountants) have indicated their willingness to continue in office. A resolution will be proposed to authorise the directors to fix their remuneration. BY ORDER OF THE BOARD

CYRIL ANICHUKWUEZE For: Unity Trustees Limited COMPANY SECRETARY LAGOS, NIGERIA

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RESPONSIBILITY FOR ANNUAL FINANCIAL STATEMENTS For the year ended 31 December 2014 The Companies and Allied Matters Act requires 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: i. 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 Matters Act 2004; ii. Establishes adequate internal controls to safeguard its assets and to prevent and detect fraud and other irregularities; and iii. 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 judgements 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 loss 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 the least twelve months from the date of approval of the financial statements.

Dr. John Ohiomah Izebere Chairman

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AUDIT COMMITTEE REPORT In accordance with the provision of Section 359 (6) of the Companies and Allied Matters Act of Nigeria, the members of the Audit Committee of Beco Petroleum Products Plc having carried out our statutory functions under the Act hereby report on the financial statements for the period ended 31 December 2014 as follows:

a) We are of the opinion that the accounting and reporting policies of the company are in accordance with legal requirements and agreed ethical practices.

b) The scope and planning of the external audit programmes for the year ended 31 December 2014, are satisfactory and reinforces the Company’s internal control system.

c) We have deliberated on the findings of the external auditors who have confirmed that necessary cooperation was received from management in the course of their statutory audit and we are satisfied with responses thereon.

Finally we acknowledge the cooperation of management in the conduct of these duties. Members of the Audit Committee are:

1. Dr. Adelani K. Oniwinde Shareholder Chairman 2. Mr. Chuks Osadinizu Shareholder Member 3. Alhaji Sotonwa Mufutau Owoseni Shareholder Member 4. Mr. Kingsley O. Mojekwu Director Member 5. Dr. Adeyinka Akinbanmi Director Member

In attendance: Unity Trustees Limited (Secretary)

Dr. Adelani K. oniwinde Chairman

FRC/2013/CIIN/00000002850 May 20, 2015


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24


25

STATEMENT OF FINANCIAL POSITION

As at 31 December 20142014 2013

ASSETS Notes =N= =N=

Property, plant and Equipment 5 916,853,908 1,442,195,957

Investments 6 11,823,100 15,059,500

Assets held for sale 11 260,000,000 81,457,098

Deffered Tax Assets 17 481,121,730 457,130,479

Non-current Assets 1,669,798,738 1,995,843,034

Inventories 7 13,963,036 -

T rade and other receivables 8 18,381,647 13,736,459

Cash and cash equivalents 9 15,580,777 2,073,452

Current Assets 47,925,460 15,809,912

Total Assets 1,717,724,196 2,011,652,945

Equity and Liabilities

Equity

Share Capital 12 1,858,488,290 1,858,488,290

Share Premium 12 954,912,309 954,912,309

Capital Reserve 14 44,333,400 44,333,400

Revenue Reserve 13 (2,041,209,064) (1,697,078,992)

Equity attributable to owners of the company 816,524,935 1,160,655,007

Non-Current Liabilities

Bank Loan 10 300,000,000 180,000,000

Deferred tax liabilities 17 211,949,283 205,367,902

Total Non-current Liabilities 511,949,283 385,367,902

Current Liabilities

Bank Overdraft 9 20,302,207 103,609,176

T rade Payables 16 1,250,000 2,606,172

Payables and accruals 15 150,136,626 147,740,014

Current Income Tax Payable 18 217,561,145 211,674,674

Total Current Liabilities 389,249,978 465,630,036

Total Equity and Liabilities 1,717,724,196 2,011,652,945

Dr. John O. Izebere -------------------------------------------Chairman FRC/2015/VCN/00000011915

Kingsley Mojekwu ------------------------------------------------Director FRC/2015/NIM/00000011564

The notes on page 29 to 48 form part of these financial statements


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For the year ended 31 December

2014 2013

N N

Notes

Revenue 19 395,201,655 689,180,915

Cost of sales 20 (347,995,302) (650,904,869)

Gross Profit 47,206,353 38,276,046

Other Income 21 10,203,402 15,554,765

Administative Expenses 22 (81,906,720) (107,092,534)

(Loss)/Profit on Disposal of Asset 22 (22,307,098) 3,687,945

(Dimunition)/Appreciation in Investment 6 (3,236,400) 2,828,050

Impairments - Assets Held for Sale (260,000,000) 0

Results from Operating activities (310,040,463) (46,745,728)

Finance charges 21 (45,613,010) (67,372,375)

(Loss) before taxation (355,653,473) (114,118,103)

Tax expense 18 (5,886,470) (6,823,471)

Deferred tax 17 17,409,870 (21,367,078)

(Loss)from continuing operation (344,130,072) (142,308,652)

(344,130,072) (142,308,652)

The notes on page 27 to 47 form part of these financial statements

STATEMENT OF CHANGES IN EQUITYFor the year ended 31 December 2014

Share Capital Share Premium Capital Reserves

Retained

Earnings Total Equity

=N= =N= =N= =N= =N=

Balances as at 1st January 2014 1,858,488,290 954,912,309 44,333,400 (1,697,078,992) 1,160,655,007

Changes in the year:

Loss for the year (344,130,072) (344,130,072)

Balance - December 2014 1,858,488,290 954,912,309 44,333,400 (2,041,209,064) 816,524,935


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STATEMENT OF CASH FLOWS

For the year ended 31 December 20142014 2013

=N= =N=

Cash flow from operating activities:

Net (Loss) before taxation (355,653,472) (114,118,103)

Adjustments for:

Depreciation 5,962,050 10,924,971

(Profit)/Loss on Sale of fixed assets 22,307,098 (3,687,945)

Reclassification 260,000,000 (4,950,000)

(Appreciation)/Dimunition in Investment 3,236,400 (2,828,050)

Operating (loss) before changes in operating assets (64,147,924) (114,659,127)

Increase/(decrease) in operating assets/liabilities

Inventories (13,963,036) 17,433,644

Trade receivables (4,645,188) (10,816,594)

Creditors 1,040,440 (23,571,710)

(17,567,784) (16,954,660)

Tax paid - (3,000,000)

Net cash from operating activities (81,715,708) (134,613,787)

Cash flow to investing activites:

Purchase of Fixed Assets (620,000) (300,000)

Proceed from sale of fixed assets 59,150,001 301,500,000

58,530,001 301,200,000

Cash flow to financing activites:

Bank Loan/Acceptance 120,000,000 180,000,000

120,000,000 180,000,000

Net increase in cash and cash equivalents 96,814,293 346,586,212

Bank and cash balances at 1 January (101,535,724) (448,121,937)

Bank and cash balances at 31 December (4,721,430) (101,535,724)

REPRESENTED BY:

Cash and cash equivalents 9.2 (4,721,431) (101,535,724)

(4,721,431) (101,535,724)

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NOTES TO THE ANNUAL FINANCIAL STATEMENTS At 31 December 2014 1.0 General information Beco Petroleum Products Plc is a company registered in Nigeria, it was incorporated o n January 30, 1986 as a private limited liability company but commenced operations in 1987. It beecame a Public Limited Company (PLC) in 2010. The principal activities of the company is business of refined petroleum products, dealers on petroleum products and marketer, petroleum truck peddlers, agents and distributors of petroleum products in general.

2.0 Summary of significant accounting policies The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation The financial statements have been prepared in compliance with International Financial Reporting Standards (IFRS), and interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and in line with the Companies and Allied Matter Act of Nigeria, Cap C20 LFN 2014. The financial statements have been prepared on a historical cost basis.

2.2 Going concern The financial Statements have been prepared on a going concern basis. The directors have no doubt that the company would remain in existence after 12 months

2.3 Foreign currency translation (a) Functional and presentation currency Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The financial statements are presented in (Naira), which is the Company’s presentation currency. (b) Transactions and balances Foreign currency transactions that are transactions denominated, or that require settlement, in a foreign currency are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Monetary items denominated in foreign currency are translated with the closing rate as at the reporting date. If several exchange rates are available, the forward rate is used at which the future cash flows represented by the transaction or balance could have been settled if those cash flows had occurred. Non-monetary items measured at historical cost denominated in a foreign currency are translated with the exchange rate as at the date of initial recognition; non-monetary items in a foreign currency that are

29


measured at fair value are translated using the exchange rates at the date when the fair value was determined. Foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement All foreign exchange gains and losses recognised in the income statement are present ed net in the income statement within the corresponding item. Foreign exchange gains and losses on other comprehensive income items are presented in other comprehensive income within the corresponding item. In the case of changes in the fair value of monetary assets denominated in foreign currency classified as available for sale, a distinction is made between translation differences resulting from changes in amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in the amortised cost are recognised in profit or loss, and other changes in the carrying amount, except impairment, are recognised in equity.

2.4 Property, Plant and Equipment The cost of an item of property, plant and equipment is recognized if it is probable that any future economic benefits associated with the item will flow to or from the company and the cost or value can be reliably measured. This is initially measured at cost. The cost of an item of property, plant and equipment comprises costs incurred initially to acquire or construct and costs incurred subsequently to add to, replace part of it, or service it. If a replacement cost is recognized in the carrying amount of an item of property, plant and equipment, the carrying amount of the replaced part is derecognized. 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 derecognized. Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses

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Property, plant and equipment is carried at cost less accumulated depreciation and any impairment losses except for Revalued Assets which is carried at revaluation amount being the fair value at the date of revaluation less any subsequent accumulated depreciation and subsequent impairment losses. Property, plant and Equipment is carried at revalued amount, being the fair value at the date of the 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 of the asset. Any increase in an asset's carrying amount, as a result of a revaluation, is recognized to other comprehensive income and accumulated in the revaluation surplus in equity. The increase is recognized in profit and loss to the extent that it reverses a revaluation decrease of the same asset previously recognized in profit and loss. Any decrease in asset's carrying amount, as a result of revaluation, is recognized in profit or loss in the current period. The decrease is recognized in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognized in other comprehensive income reduces the amount accumulated in the revaluation surplus in the 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 derecognized. 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.

2.4.1 Depreciation Items of property, plant and equipment are depreciated from the date they are available for use or in respect of self-constructed assets from the date the asset is completed and ready for use. Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight line basis over their estimated useful lives. Depreciation is generally recognized in profit or loss unless the amount is included in the carrying amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonable certain that the company will obtain ownership by the end of the lease term. Land is not depreciated. The estimated useful lives for the current and comparative years of significant items of property, plant and equipment are as follows:

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PPE Percentage % Buildings 2 Vessels 5 Motor Vehicles 20 Plant & Machinery 20 Furniture & Fittings 25

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized within ‘Other (losses)/gains – net’ in the income statement.

2.5 Impairment of non financial assets At each balance sheet date, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the Company estimates the recoverable amount of the cash generating unit (CGU) to which the asset belongs. Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or CGU) is estimated to be less than the carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognized as an expense immediately. 2.6 Inventories Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business, less all estimated costs of completion and costs to be incurred in marketing, selling and distribution. 2.7 Financial assets Financial assets are classified as either financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, and available for sale financial assets, as appropriate. When financial assets are recognized initially, they are measured at fair value, plus in the case of investments not at fair value through profit or loss, directly attributable costs. The Company determines the classification of its financial assets upon initial recognition and, where allowed and appropriate, reevaluates this designation at each financial year end. Recognition and measurement Regular purchases and sales of financial assets are recognized on the trade-date –the date on which the company commits to purchase or sell the asset. Investments are initially recognized at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed in the income statement. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the company has transferred substantially all risks

32


and rewards of ownership. Available-for-sale financial assets and financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are subsequently carried at amortized cost using the effective interest method. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the income statement within ‘other (losses)/gains – net’ in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognized in the income statement as part of other income when the company’s right to receive payments is established. Changes in the fair value of monetary and non-monetary securities classified as available for sale are recognized in other comprehensive income. Interest on available-for-sale securities calculated using the effective interest method is recognized in the income statement as part of finance income. Dividends on available-for-sale equity instruments are recognized in the income statement as part of other income when the company’s right to receive payments is established. a. Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried at amortized cost using the effective interest method. Gains and losses are recognized in income when the loans and receivables are derecognized or impaired, as well as through the amortization process b. Available for sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless the investment matures or management intends to dispose it within 12 months of the end of the reporting period. c. Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorized as held for trading unless the y are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current. 2.8 Trade receivables Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets. Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment. 2.9 Cash and cash equivalents In the statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the balance sheet, bank overdrafts are shown within borrowings in current liabilities.

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2.10 Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 2.11 Impairment of financial assets The Company assesses at the end of each reporting period whether there is objective evidence that a financial asset or company of financial assets measured at amortised cost is impaired. A financial asset is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset that can be reliably estimated. 2.12 Borrowings Borrowings are recognized initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates. 2.13 Borrowing costs General and specific borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred. 2.14 Income tax (a) Current income tax Income tax payable/(receivable) is calculated on the basis of the applicable tax law in the respective jurisdiction and is recognized as an expense/(income) for the period except to the extent that current tax related to items that are charged or credited in other comprehensive income or directly to equity. In these circumstances, current tax is charged or credited to other comprehensive income or to equity (for example, current tax on of available-for-sale investment). Where the Company has tax losses that can be relieved against a tax liability for a previous year, it

34


recognizes those losses as an asset, because the tax relief is recoverable by refund of tax previously paid. This asset is offset against an existing current tax balance. Where tax losses can be relieved only by carry-forward against taxable profits of future periods, a deductible temporary difference arises. Those losses carried forward are set off against deferred tax liabilities carried in the statement of financial position. The Company does not offset income tax liabilities and current income tax assets. (b) Deferred income tax Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the date of the statement of financial position and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled. The principal temporary differences arise from depreciation of property, plant and equipment, revaluation of certain financial assets and liabilities, provisions for pensions and other post-retirement benefits and carry-forwards and, in relation to acquisitions, on the difference between the fair values of the net assets acquired and their tax base. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss The tax effects of carry-forwards of unused losses, unused tax credits and other deferred tax assets are recognized when it is probable that future taxable profit will be available against which these losses and other temporary differences can be utilized. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of the asset or liability and is not discounted. Deferred tax assets are reviewed at each balance sheet date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized. Deferred income tax is provided on temporary differences arising from investments in subsidiaries and associates, except where the timing of the reversal of the temporary difference is controlled by the company and it is probable that the difference will not reverse in the foreseeable future. Deferred tax related to fair value re-measurement of equity instruments, which are recognized in other comprehensive income, is also recognized in other comprehensive income and subsequently in the income statement together with the deferred gain or loss. 2.15 Provisions, contingent liabilities and assets Provisions are liabilities that are uncertain in amount and timing. Provision are recognized when the Company has a present legal or constructive obligation as a result of past events and it is more likely than not that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. Where there is a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognized even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be

35


small. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. A contingent liability is a possible obligation that arises from past event and 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 company or the company has a present obligation as a result of a past event. It is not recognized because it is not likely that an outflow of resources will be required to settle the obligation or the amount can not be reliably estimated. Contingent liabilities normally comprise of legal claims under arbitration or court process in respect of which a liability is not likely to occur. A contingent asset is a possible asset that arises from past events and 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 company. Contingent assets are not recognized but they are disclosed in the financial statement when they arise. 2.16 Revenue Revenue represents the fair value of the consideration received or receivable for sales of goods and services, in the ordinary course of the Company’s activities and is stated net of value-added tax (VAT), rebates and discounts and after eliminating sales within the Company. The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future benefits will flow to the entity and has transferred to the buyer the significant risks and rewards of the ownership of the goods , the costs incurred or to be incurred in respect of the transaction can be measured reliably. Dividend income are recognized provided that it is probable that the economic benefits will flow to the enterprise and the amount of revenue can be measured reliably. Dividends are recognized when the shareholder's right to receive payment is established 2.17 Comparatives Except when a standard or an interpretation permits or requires otherwise, all amounts are reported or disclosed with comparative information. Where IAS 8 applies, comparative figures have been adjusted to conform with changes in presentation in the current year. 2.18 Equity and reserves Share capital represents the nominal value of shares that have been issued. Share premium includes any premium received on issue of shares capital. Any transaction cost associated with the issue of shares is deducted from share premium net of any related income tax benefits. 2.19 Event after the reporting period The company accounts for adjusting events in the financial statements and discloses the nature of each material category of non-adjusting events that occurs between the reporting period and the date the financial statements are authorized for issue, along with estimate of its financial effect. When a post reporting date event occurs, consideration is given as to whether the event is an indication of impairment of an asset. Material investments post the date of statement of financial position are disclosed by the company. Issues of share capital after the reporting period (if significant) are also disclosed by the company as a post reporting date event

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3.0 Financial risk management 3.1 Introduction and overview The Company÷s activities expose it to a variety of financial risks, including credit risk, liquidity risk and the effect of changes in the interest rates. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seek s to minimize the potential adverse effects on its financial Risk management is carried out by the management of the Company under policies approved by the executive council. Management identifies, evaluates and aims to reduce these risks to an acceptable level. 3.2 Categories of financial instruments

31 Dec 2014 31 Dec 2013

FINANCIAL ASSETS N N

Loans and Receivables

Trade and other Receivables 18,381,847 13,736,480

Cash and Cash Equivalents 15,580,777 2,073,452

Financial liabilities

Trade and other payables 151,386,626 150,346,186

Borrowings 320,302,207 283,609,176

3.3 Credit risk 3.3.1 Management of credit risk Credit risk is the risk that one party to a transaction will fail to discharge an obligation and cause the other party to incur a financial loss. The company is subject to an element of credit risk principally within Receivables and Cash and Cash equivalents. To mitigate risk, the treasury management framework is adhered to. Cash, Cash equivalents and Term deposits are diversified through placements with a number of different Nigerian financial institutions. Credit exposure is further reduced by monitoring individual weightings. Due to the large number of individual trade receivables, the concentration of credit risk with respect to Trade Receivables is greatly reduced. The company's exposure to credit risk is reflected by the carrying amount in the statement of financial position for cash and cash equivalents and receivables 3.3.2 Credit quality For the majority of customers, there is no independent rating. As such, the credit quality of the customer is being assessed, taking into account its financial position, past experience and other factors. Below is a breakdown of financial assets neither past due nor impaired, past due but not impaired and fully impaired:

37


38

31 Dec 2014 31 Dec 2013

=N= =N=Neither past due nor impaired 60,000 -

Past due but not impaired 18,321,647 13,738,480

Impaired - -

Gross 18,381,647 13,738,480

Impairments -

Net 18,381,647 13,738,480

Trade receivables

3.3.3.1 Credit quality of financial assets that are neither past due nor impaired The credit quality of financial assets that are neither past due nor impaired can be assessed by reference to external credit ratings (if available) or to historical. information about counterparty default rates as described below. Group 1: Customers with no history of default Group 2; Customers with a history of default

Trade receivables 31 Dec 2014 31 Dec 2013

N NGroup 1 18,381,647 13,738,480 Group 2 -

18,381,647 13,738,480

Cash and cash equivalents 31 Dec 2014 31 Dec 2013

Credit quality derived using external credit rating N N

A 15,580,777 2,073,452

15,580,777 2,073,452


3.3.3.2 Financial assets that are past due but nor impaired The ageing analysis of financial assets that are past due but not impaired is as follows

31 Dec 2014 31 Dec 2013

N N

1-60 days

61-120 days

Over 120 days 18,381,647 13,736,480

More than 12 months -

18,381,647 13,736,480

3.4 Liquidity risk 3.4.1 Management of liquidity risk Liquidity risk is the risk that the company will encounter difficulty raising liquid funds to meet commitments as they fall due. Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities. 3.4.2 Maturity analysis Maturity groupings based on the period remaining to the contractual maturity date as at 31 December 2012 and 31 December 2013. Future interest payments on floating rate debt are based on the floating rate applicable to the instruments at 31 December 2012 and 31 December 2013. The amounts disclosed are the contractual undiscounted cash flows.

0 - 30

days

31 - 90

days

91 - 180

days

181 - 365

days

less than 5

yrsTotal

=N= =N= =N= =N= =N= =N=


Bank borrowings and others 320,302,207 320,302,207

Trade and other payables 1,250,000 150,136,626 151,386,626

Total financial liabilities 1,250,000 - - - 470,438,833 471,688,833

0 - 30 days

31 - 90

days

91 - 180

days

181 - 365

days

Over 1 Year

less than 5 yrs Total

=N= =N= =N= =N= =N= =N=


Bank borrowings 283,609,176 283,609,176

T rade and other payables 2,606,172 147,740,014 150,346,186

Total financial

liabilities 2,606,172 - - - 431,349,190 433,955,362

39


40

3.5 Market risk The Company takes on exposure to market risks, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices such as interest rates. The Company is not exposed to any significant foreign exchange risk as most transactions are denominated in naira and the principal source of income (sales from petroleum products) is also in naira. 3.5.1 Interest rate risk The Company÷s exposure to the risk for changes in market interest rates relates primarily to the Company's Bank overdraft obligations with a floating interest rate. To manage this risk, the company’s policy is to contract for best interest rate borrowings when terms offered are attractive. The sensitivity analysis for interest rate risk shows how changes in the fair value or future cash flows of a financial instrument will fluctuate because of changes in market rates at the reporting date.

Carrying Variable Fixed Non interest-31 December 2014 (N) amount interest interest bearing

Assets

Trade and other receivables 18,381,647 18,381,647

Cash and cash equivalents 15,580,777 15,580,777 33,962,424 15,580,777 - 18,381,647

Liabilities

Bank borrowings 320,302,207 320,302,207

Trade and other payables 151,386,626 151,386,626 471,688,833 320,302,207 - 151,386,626

Carrying Variable Fixed Non interest-31 December 2013 (=N=) amount interest interest bearing

Assets

Trade and other receivables 13,736,480 13,736,480

Cash and cash equivalents 2,073,452 2,073,452 15,809,932 2,073,452 - 13,736,480

Liabilities

Bank borrowings 283,609,176 283,609,176

Trade and other payables 150,346,186 150,346,186 433,955,362 283,609,176 - 150,346,186

3.6 Financial instruments measured at fair value IFRS 7 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable input reflect market data obtained from independent sources; unobservable inputs reflect the Group's market assumptions.


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4.0 Critical accounting estimates and judgments Estimates and judgments are continually evaluated and are based on historical experience and other factors, including experience of future events that are believed to be reasonable under the circumstances.

IFRS 7 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable input reflect market data obtained from independent sources; unobservable inputs reflect the Group's market assumptions. 3.6.2 Financial instruments not measured at fair value Except as detailed below, the directors consider that the carrying amount of financial assets and financial liabilities recognized in the financial statements approximate their fair value

Carrying Fair Carrying Fair

value value value value

=N= =N= =N= =N=


Trade and other payables 151,386,626 151,386,626 150,346,186 150,346,186

Bank borrowings 320,302,207 320,302,207 283,609,176 283,609,176

At 31 December 2014 At 31 December 2013

Bank borrowings are classified under level 2 in the fair value hierarchy. The fair value has been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis with the most significant inputs being the discount rate that reflects credit risk of the counterparties. 3.7 Capital management The company manages its capital to ensure it is able to continue as a going concern while maximizing returns to stakeholders through the optimization of the debt and equity balance. The company's overall strategy remains unchanged from prior periods The capital structure of the company consists of net debt (borrowings offset by cash and cash equivalents) and equity of the company (comprising issued share capital, reserves and retained earnings). The company's gearing ratio is determined as the proportion of net debt to equity. 3.7.1 Gearing ratio The gearing ratio at the end of the reporting period is as follows:

31 Dec 2014 31 Dec 2013

N N

Debt (note i) 320,302,207 283,609,176

Cash and bank balances 15,580,777 2,073,452 Net debt (304,721,430) (281,535,724)

Equity (note ii) 816,524,935 1,160,655,007

Net debt to equity -37% -24%

Note i: Debt is defined as long and short term borrowings

Note ii: Capital includes all capital and reserves of the company


Critical accounting estimates and assumptions Fair value estimation The carrying value less impairment provision of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Company for similar financial instruments. Impairment of assets All assets are reviewed whenever events or changes in circumstances indicate that the carrying amounts for those assets may not be recoverable. If assets are determined to be impaired the carrying amounts of those assets are written down to their recoverable amount, which is the higher of fair value less costs to sell and value in use determined as the amount of estimated discounted future cash flows. For this purpose, assets are grouped into cash-generating units based on separately identifiable and largely independent cash inflows. Impairments can also occur when decisions are taken to dispose off assets. Impairments are reversed as applicable to the extent that the events or circumstances that triggered the original impairment have changed. Estimates of future cash flows are based on management estimates of market supply and demand. Asset impairments or their reversal will impact income. Useful lives and residual value of property The residual values, depreciation methods and useful lives of property, plant and equipment are reviewed for reasonableness at least on annually. The review is based on the current market situation. The review of useful lives did not significantly impact depreciation. The residual value of the various classes of assets were estimated as follows: Buildings 10% Plant & Machinery 5% Furniture & Fittings 5% Motor vehicles 5% These estimates have been consistent with the amounts realized from previous disposals for the various asset categories.

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43

Land Building Capital Work in Plant & Vehicles & Vessels

Office equip.

&

Progress Machinery Trucks Furniture Totals

=N= =N=

Cost:

At 1 January 2014 710,598,646 322,538,084 420,275,870 3,793,000 81,229,200 753,123,000 7,928,755 2,299,486,555

Additions 620,000 - 620,000

Reclassification (520,000,000) - - (520,000,000)

Disposal - - 0

At 31 December 2014 190,598,646 322,538,084 420,275,870 4,413,000 81,229,200 753,123,000 7,928,755 1,780,106,555

Depreciation

At 1 January 2014 - 26,432,628 - 3,359,913 76,842,740 743,123,000 7,532,317 857,290,598

Charge for the period - 5,829,446 132,604 0 5,962,050

Reclassification - - -

Disposal - 0 -

At 31 December 2014 - 32,262,074 - 3,492,517 76,842,740 743,123,000 7,532,317 863,252,648

At 31 December 2014 190,598,646 290,276,010 420,275,870 920,483 4,386,460 10,000,000 396,438 916,853,907

At 31 December 2013 710,598,646 296,105,456 420,275,870 433,087 4,386,460 10,000,000 396,438 1,442,195,957

5.0 PROPERTY PLANT & EQUIPMENT

6.0 INVESTMENTS

2014 2013

N N

6.1 Balance Sheet

Quoted investments 26,734,130 26,734,130

Provision for dimunition in value (Note 2) (14,911,030) (11,674,630)

11,823,100 15,059,500

6.2 Provision Account

Balance b/f 11,674,630 14,502,680

Provison/(writeback) 3,236,400 (2,828,050)

14,911,030 11,674,630


2014 2013

N N

7 INVENTORY

Stock 13,963,036 -

13,963,036 -

8 TRADE RECEIVABLES

Trade receivables

Other Receivables 16,787,522 8,954,085

Prepayments 1,594,125 4,782,375

18,381,647 13,736,460

9 CASH AND CASH EQUIVALENTS

Cash on Hand 1,217,327 620,798

Bank Balances 14,363,450 1,452,654

15,580,777 2,073,452

9.1 Borrowing Costs

Bank Overdraft 20,302,207 103,609,176

9.2 Cash and Cash Equivalents -4,721,431 -101,535,724

10 Borrowings

Bank Loan - 180,000,000

Bankers Acceptance 300,000,000

300,000,000 180,000,000

11 ASSETS HELD FOR SALE

Assets Held for Sale - Victoria Island 81,457,098

Assets Held for Sale - Alasia 520,000,000 0

Assets Held for Sale - Makurdi (260,000,000) -

260,000,000 81,457,098

The property at Makurdi was disposed in 2014. Beco Concrete was impaired during the year by litigation and partitioning and the directors have also indicated their interest to dispose of Beco Concrete and this has been reclassified as held-for-sale.

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45

12 SHARE CAPITAL 2014 2013

12.1 Authorised: N N

6,520,000,000 Ordinary shares of 50 kobo each 3,260,000,000 3,260,000,000

3,260,000,000 3,260,000,000

12.2 Called up, issued and fully paid:

Balance b/f 1,858,488,290 1,858,488,290

At 31 December 1,858,488,290 1,858,488,290

12.3 Share Premium 954,912,309 954,912,309

13 REVENUE RESERVE

At 1 January (1,697,078,992) (1,554,770,342)

Retained loss for the year (344,130,072) (142,308,650)

At 31 December (2,041,209,064) (1,697,078,992)

14 CAPITAL RESERVE

At 1 January 44,333,400 44,333,400

At 31 December 44,333,400 44,333,400

15 DIVIDEND

At 1 January 5,716,977 5,716,977

Paid during the year

5,716,977 5,716,977

16 PAYABLES AND ACCRUALS

Trade Payables 1,250,000 2,606,172

Accruals 30,490,689 23,094,077

Other Creditors 113,928,961 118,928,961

145,669,649 144,629,209


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2014 2013

17 DEFERRED TAX N N

Deferred Tax Liabilities

At start of the year 205,367,902 179,160,345

Changes during the year charged to income statement 6,581,381 26,207,557

At end of year 211,949,283 205,367,902

Deferred Tax Assets

At start of the year 457,130,479 452,290,000

Changes during the year charged to income statement 23,991,251 4,840,479

At end of year 481,121,730 457,130,479

Net chrage to profit or loss 17,409,870 21,367,078

18 CURRENT INCOME TAX PAYABLE

Balance brought forward 211,674,674 207,851,203

Provision for the year (min Tax) 5,886,470 6,823,471

Payment in the year - (3,000,000)

Balance carried forward 217,561,145 211,674,674

19 REVENUE

PMS 304,247,934 438,145,131

AGO 55,401,410 172,930,493

DPK 35,552,311 78,105,291

395,201,655 689,180,915

20 COST OF SALES

PMS 269,060,877 419,608,435

AGO 48,149,390 164,914,065

DPK 30,785,035 66,382,369

347,995,302 650,904,869

21 OTHER INCOME

Rent & other income 10,203,402 15,554,765

10,203,402 15,554,765


2014 2013

22 OPERATING EXPENSES N N

Administrative Expenses 66,442,540 83,209,000

Selling expenses 15,464,180 23,883,534

(Profit)/Loss on Disposal of Asset 22,307,098 -3,687,945

Financial charges 45,613,010 67,372,375

149,826,827 170,776,964

SUMMARY OF ADMINISTRATIVE EXPENSES

Admin expenses 7,392,250 22,415,320

Audit & Accountancy 1,500,000 1,500,000

Insurance 304,000 2,352,250

Legal fees 5,449,419 3,398,686

Medical 317,022 6,000

Salaries & wages 42,147,160 40,940,638

Stationery 82,390 77,010

Donations 100,000 0

Rent 3,188,250 1,594,125

Depreciation 5,962,050 10,924,971

66,442,540 83,209,000

SUMMARY OF SELLING EXPENSES

Telephone Expenses 198,250 577,900

Lighting and Heating 5,123,651 8,530,888

Depot loading expenses 0 1,489,731

Transportation 1,214,361 0

Product Transport 0 0

Carriage Outward 4,401,622

Carriage inwards

Depot Expenses 0 230,000

Security Expenses 642,200 3,084,150

Staff welfare 508,350 329,464

Station Overhead 6,387,808 3,848,499

Repairs Expense 1,344,560 1,391,280

PR 45,000 0

15,464,180 23,883,534

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2014 2013

SUMMARY OF OTHER EXPENSES N N

(Profit)/Loss on disposal of assets 22,307,098 (3,687,945)

22,307,098 (3,687,945)

SUMMARY OF FINANCIAL CHARGES

Interest charges 45,215,263 65,299,385

Other bank charges 397,747 2,072,990

45,613,010 67,372,375

Per IAS 23, bank charges are regarded as part of finance cost and was

classified to finance cost.

23 CHAIRMAN AND DIRECTORS' EMOLUMENTS

23.1 Emoluments:

Chairman 200,000 200,000

Other Directors 6,000,000 6,000,000

6,200,000 6,200,000

As Directors - Fees 1,200,000 1,000,000

Other Emoluments 5,000,000 5,000,000

6,200,000 6,000,000

23.2 The number of directors excluding the chairman

whose emoluments were within the following ranges were:

N

150,000 and above 2 2

2 2

24 EMPLOYMENT AND EMPLOYEES

24.1 Employees remunerated at higher rates, inclusive of

allowances and pension costs:

=N= =N=

100,000 200,000 26 38

200,001 300,000 2 3

300,001 400,000 3 1

400,001 500,000 1 6

500,001 1,000,000 6 8

1,000,001 and above 4 5

42 61

24.2 The related staff cost amounted to =N=42,147,160 (2013 N40,940,638)

POST BALANCE SHEET EVENTS

There are no other significant post balance sheet events for which provision has not been made in these accounts

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Value added is the wealth created by the efforts of the company and its employees and its allocation between employees, government, shareholders, and re-investment for the creation of future wealth.

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VALUE ADDED STATEMENTAt 31 December 2014

2014 2013

=N= % =N= %

Gross Income 395,201,655 689,180,915

Payment to third parties (640,120,785) (707,501,100)

(244,919,130) 100 (18,320,185) 100

Applied as follows:

To Pay Employees

Salaries 42,147,160 17 40,940,638 223

To Pay Government

Taxation 5,886,470 2 6,823,471 37

To Pay Providers of Funds

Interest 45,215,263 18 65,299,385 356

To Provide for Development:

Depreciation 5,962,050 2 10,924,971 60

Profit retained (344,130,072) (141) (142,308,650) (777)

(244,919,129) (100) (18,320,185) (100)


5 YEAR FINANCIAL SUMMARYFOR THE YEAR ENDED 31 DECEMBER

2014 2013 2012 2011 2010N N N N N

Property , plant and Equipment 916,853,908 1,442,195,958 1,457,908,987 2,394,922,048 2,499,676,457

Investments 11,823,100 15,059,500 12,231,450 9,736,700 10,766,040

Stock 13,963,036 0 17,433,644 254,014,654 220,882,428

Debtors and prepayments 18,381,647 13,736,460 2,919,866 852,786,975 282,751,325

Assets Held for Sale 260,000,000 81,457,098 369,231,095 82,428,293 611,118,643

Cash and Bank 15,580,777 2,073,452 4,944,137 10,656,040 27,820,028

Deferred Tax Assets 481,121,730 457,130,479 452,290,001 254,133,342 0

Total Assets 1,717,724,198 2,011,652,947 2,316,959,180 3,858,678,053 3,653,014,921

LI ABILITIES

Bank overdrafts and loans 320,302,207 283,609,176 453,066,074 419,553,793 393,632,878

Trade Creditors 145,669,649 144,629,209 168,200,920 28,754,746 -

Creditors and Accruals 5,716,977 5,716,977 5,716,977 5,716,977 85,784,520

Taxation 217,561,145 211,674,674 207,851,203 171,523,782 150,456,918

Deferred tax Liabilities 211,949,283 205,367,902 179,160,348 292,372,130 203,776,692

Total Liabilities 901,199,261 850,997,938 1,013,995,522 917,921,428 833,651,008

CAPI TAL AND RES ERVES

Paid-up Share Capital 1,858,488,290 1,858,488,290 1,858,488,290 1,858,488,290 1,858,488,290

Share premium 954,912,309 954,912,309 954,912,309 954,912,309 954,912,309

Capital Reserve 44,333,400 44,333,400 44,333,400 44,333,400 183,858,000

Profit and loss account (2,041,209,064) (1,697,078,992) (1,554,770,342) 83,022,627 (177,894,687)

Total Equity 816,524,935 1,160,655,007 1,302,963,657 2,940,756,626 2,819,363,911

1,717,724,196 2,011,652,945 2,316,959,179 3,858,678,054 3,653,014,919

PROFI T AND LOS S ACCOUNT

Gross Income 395,201,655 689,180,915 1,465,097,394 4,515,507,601 2,780,168,272

Gross Profit/(Loss) 47,206,354 38,276,046 (909,063,545) 682,941,838 248,951,196

(Loss)/Profit before taxation (355,653,472) (114,118,103) (1,912,833,988) 121,694,115 (228,519,018)

(Loss)/Profit after taxation (344,130,072) (142,308,650) (1,637,792,969) 260,917,314 (316,447,677)

Div idend - - - -

Per Share data:Earnings per share (Kobo) - adjusted (9.26) (3.83) (44.06) 7.02 (8.51)

D iv idend per share (kobo)-adjusted - - - -

Earnings and div idend per share has been adjusted to number of issued share capital at 31/12/14.

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PROXY FORM

ANNUAL GENERAL MEETING TO BE HELD AT 1 PM. ON FRIDAY 11TH DAY OF DECEMBER 2015 BY 1 PM AT WELCOME CENTRE HOTEL LIMITED, 70 INTERNATIONAL AIRPORT ROAD, LAGOS

BE IT KNOWN, that I, _________________________, the undersigned Shareholder of Beco Petroleum Products Plc, a Public Liability Company, hereby constitute and Appoint ______________________________ as my true and lawful attorney and agent for me and in my name, place and stead, to vote as my proxy at the Meeting of the Shareholders of the said company, to be held on 11th DAY OF DECEMBER, 2015 or any adjournment thereof, for the transaction of any business which may legally come before the meeting, and for me and in my name, to act as fully as I could do if personally present; and I herewith revoke any other proxy heretofore given.

Note: A member entitled to attend and vote at the General Meeting may appoint a proxy to attend and vote instead of him. A proxy need not be a member of the Company. All instruments of proxy duly stamped by the Commissioner of Stamp Duties in accordance with the Stamp Duties Act should be deposited with the Company Secretary or the Registrar not less than 48hours before the time for holding the meeting. Proposed Resolutions 1. To receive and consider the Financial Statements for the years ended 31st December 2013, the Reports of the Directors, Independent Auditors, and Audit Committee thereon 2. To authorize the Director’s to fix the remuneration of Auditors . To elect members of the Audit Committee.* 4. To approve the remuneration of the Directors. 5. To re-elect Directors retiring by rotation in accordance with the Companies and Allied Matters Act.

WITNESS my hand and seal this _________ day of __________, 2015 Signed: ____________________

ADDENDUM:

NOTICE OF ANNUAL GENERAL MEETING (AGM) NOTICE is hereby given that the 4th and 5th Annual General Meeting of Beco Petroleum Products Plc will be held at WELCOME CENTRE HOTEL LIMITED, 70 INTERNATIONAL AIRPORT ROAD, LAGOS on Friday, 11th December, 2015 by 11am and 12 Noon respectively to transact the following business: Ordinary Business

1. To receive and consider the Financial Statements for the years ended 31st December 2012 and 2013, the Reports of the Directors, Independent Auditors, and Audit Committee thereon.

2. To re-elect the following Directors retiring by rotation in accordance with the Companies and Allied Matters Act, but are eligible and offer themselves for re-election: � Sir Obafemi Giwa-Amu

� Dr.Adeyinka Akinbami

3. To authorize the Director’s to fix the remuneration of Auditors. 4. To elect members of the Audit Committee. 5. To approve the remuneration of the Directors.

PROXY A member of the Company entitled to attend and vote at the General Meeting, is entitled to appoint a proxy to attend instead of him. A proxy need not be a member of the Company. A Proxy Form is enclosed, and if it is to be valid for the purpose of the meeting, it must be completed and duly stamped by the Commissioner of Stamp Duties and deposited at the office of the Registrars, or Company Secretary not less than 48 hours before the time for holding the meeting.

AUDIT COMMITTEE In accordance with Section 359 (5) of the Companies and Allied Matters Act, Laws of the Federation 2004 any member may nominate a shareholder as a member of the Audit Committee by giving in writing, notice of such nomination to the Company Secretary at least 21 days before the Annual General Meeting.

CLOSURE OF REGISTER The register of members will be closed from 10th November 2015 – 12th November, 2015 to enable the Registrars prepare for the Annual General meeting.

CYRIL ANICHUKWUEZE FOR: UNITY TRUSTEES LIMITED

Dated this 4th day of September 2015

By Order of the Board

beco petroleum products plc - africa prudential...medicine. he later attended the university of...

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