MRS annual report 2011

Brief on MRS
MRS Oil Nigeria Plc is a subsidiary of MRS Holdings Limited, a Pan-African conglomerate
of companies, diversified in activities, but focused on capturing the entire value chain in oil
trading, shipping, storage, distribution and retailing. We have shown a capacity to generate
strong results under adverse financial market conditions.
MRS is one of the largest and most efficient downstream players with solid roots in Nigeria
with leading positions in local gasoline markets in Nigeria, Cameroon, and Benin as well as
an active presence in all the spectrum of petroleum products in the international market.
MRS is fast growing into prominence in sub-Saharan Africa.
As a growing company, MRS has great passion and commitment to Africa and its people.
We are a Pan-African company with an eye to put MRS on the global listing of world class
companies. Our trade mark is ‘excellence through partnership.

ContentsNotice of Annual General Meeting 6
Results at a Glance 8
Board of Directors and Corporate Information 9
Chairman’s Statement 12
Directors’ Report 15
Board of Directors 24
Statement of Directors’ Responsibilities 28
Report of the Audit Committee 29
Financial Statements:
Independent Auditor’s Report 32
Statement of Accounting Policies 34
Profit and Loss Account 39
Balance Sheet 40
Statement of Cash Flows 42
Notes to the Financial Statements 43
Value Added Statement 62
Five Year Financial Summary 63
Shareholder Information 64
Share Price Movement 65
List of Distributions - Lubricants 66
Corporate Directory 67
E-Dividend Form 69
Proxy Card 71
Certification Pursuant to Section 60 (2) of ISA 73

6
AnnualReport&Accounts
Notice of Annual General Meeting
Notice is hereby given that the Forty-Third Annual General
Meeting of MRS Oil Nigeria Plc will be held at the Federal
Palace Hotel, 6-8 Ahmadu Bello Way, Victoria Island, Lagos,
NIGERIA, on Tuesday, July 10, 2012 at 11:00 a.m. to transact
the following businesses:-
Ordinary Business:
i. To lay the Audited Financial Statements for the
year ended 31 December 2011and the Report of
the Directors and Auditors thereon.
ii. To receive the Report of the Audit Committee.
iii. To declare a Dividend.
iv To elect/re-elect Directors under Articles 90/91
and 95 of the Company’s Articles of Association.
v. To re-appoint the Auditors
vi To authorize the Directors to fix the remuneration
of the Auditors.
vii. To elect the members of the Audit Committee.
2. SPECIAL BUSINESS:
viii. To consider and if thought fit, pass the following
resolution as an ordinary resolution:
That the fees payable to the Non Executive •
Directors of the Company be retained
at N750,000.00 per annum.
NOTES: -
1. Proxy:
A member of the Company entitled to attend and
vote at the Annual General Meeting is entitled to
appoint a proxy in his/her stead. A proxy needs not
be a member of the Company. All instruments of
proxy should be duly stamped by the Commissioner
of Stamp Duties and deposited at the Registrar’s
Office, City Securities (Registrars) Limited, Primrose
Towers, 17A Tinubu Street, Lagos, not later than 48
hours before the time for holding the meeting. A
corporate body being a member of the Company is
required to execute a proxy under seal.
2. Dividend Payment:
If the dividend recommended is approved and
declared by the members at the Annual General
Meeting, the dividend warrants will be posted or
shareholders accounts credited directly on July 11,
2012 to those shareholders, whose names appear in
the Company’s Register of Members at the close of
business on June 15, 2012.
3. Closure of Register of Members and Transfer
Books:
The Register of Members and Transfer Books of the
Company will be closed from June 18 2012 through
June 20, 2012 (both dates inclusive) to enable the
presentation of an up to date Register.

7
4. Nomination for the Audit Committee:
In accordance with section 359(5) of the Companies
and Allied Matters Act, any member may nominate a
Shareholder as a member of the Audit Committee, by
notice in writing of such nomination to the Company
Secretary at least 21 days before the Annual General
Meeting.
5. Unclaimed Dividend Warrants and Share
Certificates
Several dividend warrants and share certificates
remain unclaimed or are yet to be presented for
payment or returned to the Company for revalidation
despite our publication to shareholders to update
their contact details. A list of members with such
cases will be circulated with the statements for
the year ended 31 December, 2011. We employ
shareholders who are yet to update their contact
details to kindly contact the Company’s Registrar or
the Company Secretary.
Closure of Dividends 23
In accordance with Section 385 of the Companies
and Allied Matters Act of 2004, the Board at its
meeting of May 3, 2012 approved the recall of
dividend 23 into the Company’s account effective
July 10 2012, in respect of dividends that remain
unclaimed for twelve years. No further dividend will
be paid to shareholders from these dividends.
By the Order of the Board
O.M. Jafojo (Mrs.)
Company Secretary
Registered Office
8, Macarthy Street,
Onikan Lagos, Nigeria

8
Results at a Glance
Year Ended 31 December 2011 2010
N’000 N’000
Turnover 70,952,936 74,781,925
Profit Before Tax 2,028,109 2,887,683
Tax Expense (991,935) (1,040,356)
Profit for the Year 1,036,174 1,847,327
Proposed Dividend for the Year (Kobo) 70 125
Earnings Per 50k share (Naira) 4.08 7.27
Declared Dividend per 50k share (Kobo) 125 125

9
Board of Directors and
Other Corporate Information
BOARD OF DIRECTORS
Alhaji Sayyu I. Dantata
Chairman
Mr. Shardhashis B. Prasad
Managing Director
Mr. Patrice Alberti
Representative of Pact Advisory, Management &
Service SAS
Non Executive Director
Mr. Andrew O. Gbodume
Executive Director (Finance &
Administration)
Chief Sylvanus C. Ezendu
Dr. Samaila M. Kewa
Alhaji Dahiru M. Barau
COMPANY SECRETARY
Mrs. O.M. Jafojo
REGISTERED OFFICE
8, Macarthy Street
Onikan
Lagos
Nigeria
Website: www.mrsholdings.com
REGISTRAR
City Securities
(Registrars) Limited
Primrose Tower
17A, Tinubu Street,
Lagos.
Tel: 01 – 2666944 – 53;
01 – 2714729
Website:
https://csrl.firstcitygroup.com
INDEPENDENT AUDITOR
KPMG Professional Services
KPMG Tower
Bishop Aboyade Cole Street
Victoria Island
Lagos.
PRINCIPAL BANKERS
First Bank of Nigeria Plc
Zenith Bank Plc
Citibank Nigeria Ltd
First City Monument Bank Plc
Access Bank Plc
Union Bank of Nigeria Plc

10
Leadership Team
Shardhashis B. Prasad
Managing Director
Andrew O. Gbodume
Executive Director (Finance & Admin.)
Oluwakemi M. Jafojo
Company Secretary
Martin Orogun***
Finance Manager
Ogungbangbe Thomas O.
Aviation Manager
Alfred Otobo
Sales & Marketing Manager
Kola Akinyemi
EHS Manager
Kwabena Nana**
Human Resources Manager
Teshoma A. Onwuka*
Human Resources Advisor
Emmanuel Oyibo*
Chief Accountant
Andrew Onum
Chief Legal Counsel
Fred Achoru*
Operations Manager
Solomon Ani
Lubes Sales and C & I Manager
Oladipo Omoloja
Marketing Support Manager
Okechukwu Anazodo*
Procurement Manager
John Udhe
Design Manager
Oghenekaro Ologe
Information Technology Manager
Situ Iyiola
Planning & Price Manager
*** Resumed 2011
** Resigned 2011
* Retired 2011.

Introduction
Distinguished shareholders, members of the Board of Directors
of MRS Oil Nigeria Plc, invited guests, ladies and gentlemen; I
have the pleasure to welcome you all to the 43rd Annual General
meeting of our great company. I have the privilege, to also
present to you the Annual report and the financial statements of
MRS Oil Nigeria Plc for the year ended December 31, 2011.
Operating Environment
Some local and global challenges that emanated from
the widespread financial crises of mid-2008 are still critical
determinants of operations within the industry. A cheering
aspect of this economic scenario is that developing and
emerging markets has shown faster and stronger recovery and
growth rates than those of most developed economies.
This fact is buttressed by an International Monetary Fund
(IMF) report which states that the real world Gross Domestic
Product (GDP) forecast was about 4.5% in early January 2011
and reached a zenith of about 8.2% by May of the same year.
Interestingly, the Emerging Market (EM) economies remained
the actual drivers and stimulators of global economic growth.
Conversely, the growth in the Developed Economies (DE) has
tended to slow down the overall global economic growth rate
because most of the large names are still battling to resolve
their financial crises which arose from the global economic
meltdown of 2008.
Significantly, these economic challenges coupled with social
and political issues have invariably affected and dictated the
pace of global business environment.
There is no gainsaying the fact that the Arab Spring which
started as a populist revolt in Tunisia, spread with devastating
consequences to Egypt, Libya, Yemen, Syria and Bahrain. The
backlash from these social revolts in these countries had a
telling effect on global business and by extension our business
operations within the period under review.
Withallpleasure,Imakeboldtosaythatourcompanyperformed
creditably well in spite of the unfavourable economic impacts
emanating from local and global challenges. This impressive
Performance Index is a direct testimonial of the purposeful
management and committed workforce that our company-
MRS Oil Nigeria Plc- has in place.
During the year under review, the operating environment was
influenced, largely, by some variables which impacted on the
general operations of our company.
I will briefly review some of the major aspects of the socio-
political and economic developments that shaped our overall
performance and financial results despite the daunting
challenges that confronted the industry locally and globally.
Economic Environment
Globally, the outlook has remained positive and relatively fragile
with oil production output averaging 2.17 million barrels per
day with a high of 2.30million barrels per day as a result of the
relative stability and peace in the Niger Delta region.
As a consequence of some of the factors that I have mentioned
in the earlier part of this presentation, oil pricing per barrel rose
from US$81 per barrel as at the end of 2010 to US$101.78
per barrel at the close of 2011 showing a volatile rate of price
fluctuation.
In the first quarter of the year under review, the exchange rate of
the Naira remained stable inline with the Central Bank of Nigeria
(CBN) renewed stance on fiscal stabilization and other policies
designed to re-position the Nigerian economy.
Mid-way into the year (2011), the concerted efforts of the CBN
to stabilize the Naira collapsed as the exchange rate attained a
high of N151 to US$1 as a result of the huge demand for forex
and the attendant increase in the interest rate environment.
This scenario contributed substantially to the unfavourable
business environment of this period under review that was further
compounded by external pressure.
The Nigeria Stock Exchange (NSE) reported a performance
rating of 24,621.21 points in the first quarter of 2011 as against
24,770.52 points at the close of 2010, this indicated a decline
in general performance of quoted companies and virile
transactions on the equity market. But with Asset Management
Corporation of Nigeria (AMCON) which was established by the
federal government in 2010 to revive the financial system by
efficiently resolving the non-performing loan assets of the banks
in the Nigerian economy, there is hope for future improvement.
It is important to note that the difference between 2010 and 2011
rating was partly due to the external pressure from European
banks whose lending capacity have been largely affected by the
sovereign debt crises.
In spite of the pre-emptive contractionary policy by the CBN, the
rate of inflation still hovered in double digits in 2011 (10.85%).
Some of the factors that have impacted on this scenario include
the increasing energy and food prices; and the anticipated
implementation of the Federal Government’s deregulation policy
in the oil industry.
Nigeria’s economic structure is undiversified and highly
dependent on its capital intensive oil sector. The country’s GDP
for the year in review was a high of 7.69% which still ranked it as
one of the 10 fastest growing economies in the Sub-Saharan
region of Africa.
It is note-worthy to say that the Federal Government of Nigeria
has taken steps aimed at re-directing, re-positioning and
restructuring the economy to create an enabling environment for
investment and trade in the country.
Outstanding among these proactive and decisive measures and
policies are: -
a. Ensuring zero tolerance for corrupt and corruptive
activities in private and public business undertakings and
transactions.
b. Reform and sanitization of the capital market and its
regulatory bodies to boost shareholders’ and investors’
confidence.
c. Relentless and sustainable banking reforms to remove
insider abuse and conversion of depositors fund to
selfish purposes.
d. The ongoing unbundling and privatization of the Power
Holding Company of Nigeria (PHCN) etc.

Chairman’s
Statement
Significantly, the Asset Management Corporation of Nigeria
(AMCON) became operational and effected impressive
interventions in the economy. With these key indications, the
Federal Government’s readiness to create the desired enabling
environment for the country’s economic growth and development
is very glaring and in line with its transformation policy.
Political Environment
Though, some level of sanity and safety has been restored in
the Niger Delta region due to the diligent implementation and
prosecution of the Federal Government’s amnesty programme
for repentant militants who virtually shut down the upstream
sector of the oil industry. It is pertinent to note that prevalent
spate of kidnappings, especially in some states of the southern
part of the country; ethno-sectarian violence and confrontations
and the fatal bomb blasts in the upper segment of the country
contributed in no small measure to trigger capital flight and
divestment in some areas.
Due to the ripple effects of the violence and political changes that
followed some areas of the Arab Spring, the global economy,
especially oil price regime, fluctuated and created its own
peculiar problems.
Overall, the security breaches and challenges raised the political
temperature of the country and scared away potential local and
foreign investors and entrepreneurs.
The Industry
The continued relative peace and stability in the once-volatile
Niger Delta region has contributed greatly to the increase in
Nigeria’s oil production capacity from 2.2mb/day to an average
of 2.30mb/day at the close of 2011. Despite the fact that the
unstable movements in the prices of crude oil in the global
market persisted during the year in review, there was no upward
review of prices of petroleum products.
The downstream sector of the Nigeria oil industry is faced with
serious operating challenges due to the peculiarities of both the
country’s oil sector and the uncertainties and the volatile nature
of the international oil market.
Some of the other contentious issues that has slowed down the
growth and development of the downstream sector are: -
a. Lack of diligent implementation of the policy of
full deregulation that will engender positive com-
petitiveness.
b. Lack of private sector investment initiatives to participate
in its opportunities.
c. Lack of diligence, transparency, accountability, efficiency
and effectiveness in the oil industry.
It is gratifying to note that the Federal Government of Nigeria has
put in place some measures designed to alleviate, ameliorate
and outrightly eliminate those factors that have tended to stunt
the growth and development of the country’s oil sector.
My fellow shareholders, the decision of the federal Government
of Nigeria to particularly remove fuel subsidies with a full
deregulation regime in sight, calls for our commendation. It is
envisaged that the full deregulation of the downstream sector will
attract further investments and bring into play, competition and
fair pricing of all petroleum products.
With all pleasure, I make bold to say that
our company performed creditably well in
spite of the unfavourable economic impacts
emanating from local and global challenges.
This impressive Performance Index is a direct
testimonial of the purposeful management
and committed workforce that our company-
MRS Oil Nigeria Plc- has in place.
“
“

Our Company
In consonance with our avowed vision “To be the leading
integrated African energy company recognized for its People,
Excellence and Values” your company – MRS Oil Nigeria Plc
– is deeply committed to achieving quality results and strides
without compromising safety, operational excellence and strict
compliance with the highest ethical and corporate standards.
The major steps taken by your company, in spite of the
challenges encountered in 2011, to consolidate our position as
the leading player in the downstream sector included: -
• The secondment of new streams of staff from our
sister organization, MRS Oil and Gas to enhance
performance and transfer relevant technology.
• The maintenance of a zero-level labour con-frontation
between management and staff.
• The training of staff members on the ongoing SAP i
mplementation was vigorously pursued.
• The engagement of PricewaterhouseCoopers firm
of consultants for the implementation of the IFRS
compliance requirement which is very crucial to
the realization of the company’s goal of transparent
reporting and meeting globally-certified reporting
requirements. The training is vital for both Non-Executive
Directors and staff members concerned.
• Expansion and updating of the company’s existing
service station’s facilities and lube production lines
to enhance its participation in and share of the market.
Dividend Declaration
The board is pleased to recommend for your approval a total
dividendpaymentofN177,792,070.40whichrepresentsN0.70k
per share subject to the deduction of appropriate withholding
taxes. The payment is in consonance with our commitment
to deliver reasonable and due returns to shareholder’s
investment.
2012 Outlook
It is envisaged that the year 2012 will, much like 2011, bring
forth new challenges that will enhance and expand the scope
of our business activities, albeit positively.
We hope to continue to operate and prosper in a socio-political
and technologically demanding environment.
We will meet these challenges head – on and build on our
unique and entrenched Pan African roots while leveraging on
our present position and strength within the MRS Group.
Furthermore we will, together, put MRS Oil Nigeria Plc on the
global listing of world-class companies by pursuing “excellence
through partnership”.
The probable economic indices expected in the year 2012
include: -
• An inflation rate of between 12.5% - 13.5% which will be
fallout of a high consumer price index growth triggered
off by an eventual full deregulation.
• An exchange rate of N162 to US$1
• Gross Domestic Product (GDP) growth to be sustained
at 6.5% - 7.5% as global GDP growth rate.
• The stabilization of the domestic debt profile at about
N5.62 trillion.
• An external reserve of about US$32.64bn
My dear fellow shareholders, it is my fervent belief that the
expected growth in 2012 will be largely defined by the Federal
Government’s holistic approach to finding a lasting solution to
the spate of bombings, kidnappings, armed robberies and other
security breaches and challenges hindering business activities
in most states of the country.
In addition, the sustenance of a favourable exchange rate
regime and the provision of basic rural and urban infrastructure
will greatly reinforce the government’s professed willingness to
provide the enabling environment to do business in Nigeria.
On our part, we have resolved to continue to create beneficial
shareholders value through the delivery of profitable business
results.
Board Changes
On August 15, 2011, Mallam Musa Yahaya resigned from the
Board of Directors to take up an assignment as the Deputy
Chief Operating Officer of Corlay Global S.A, a member of MRS
Group.
Mr. Shardhashis B. Prasad was appointed the Managing Director
of MRS Oil Nigeria Plc on August 15, 2011.
Mr. O.T Adelekan and Mr M.O Cardoso resigned from the Board
on June 21 and July 26, 2011 respectively.
Mr. Andrew Gbodume was appointed Executive Director of your
company on May 12, 2011, to fill the vacancy on the Board.
On June 1, 2011, Mrs. Dorothy U. Ufot resigned as a Director on
the Board of MRS Oil Nigeria Plc.
Conclusion
On behalf of my colleagues on the Board of our great company,
I would like to express my profound appreciation and gratitude
to our esteemed shareholders, numerous customers, suppliers
and transporters nation-wide for their patronage, support and
unwavering confidence in our company.
We place on record the continued commitment, dedication and
overall professionalism of the management and staff of MRS Oil
Nigeria Plc which resulted in the impressive and outstanding
results posted by your company in the year under review.
Finally, my sincere gratitude and profound thanks to my
distinguished colleagues on the Board of Directors for their
commitment and wise counsel that, invariably, translated into the
outstanding success and strides recorded.
Thank you very much for your attention. May God guide and
guard you as you return to your respective destinations.
Alhaji Sayyu I. Dantata
Chairman
Chairman’s Statement

15
The Directors present their Annual Report on the state of
affairs of the Company, together with the Audited Financial
Statements for the year ended December 31, 2011.
Incorporation and Legal Status of the Company
The Company was incorporated as a privately owned
Company in 1969, and was converted to a Public Limited
Liability Company quoted on the Nigerian Stock Exchange
in 1978, as a result of the 1977 Nigerian Enterprises
Promotions Decree. The Company is domiciled in Nigeria
and its shares are listed on the Nigerian Stock Exchange
(NSE).
The marketing of products in Nigeria commenced in
1913 under the Texaco brand, when they were distributed
exclusively by CFAO a French multinational retail company.
In 1964, Texaco Africa Limited started direct marketing of
Texaco products selling through service stations and kiosks
acquired from the said multinational retail company, on
lease terms. It also entered into the aviation business.
On August 12 1969 Texaco Nigeria Limited was incorporated
as a wholly-owned subsidiary of Texaco Africa Limited, thus
inheriting the business formerly carried out in Nigeria by
Texaco Africa Limited. With the promulgation of the Nigeria
Indigenization decree in 1978, 40% of Texaco Nigeria
Limited was sold to Nigerian individuals and organizations
by Texas Petroleum Company.
In 1990, the Companies and Allied Matters Decree came
into force and this necessitated the removal of ‘Limited’ from
the Company’s corporate name to the prescribed ‘Public
Limited Liability Company’(PLC) with its shares quoted on
the Nigerian Stock Exchange.
Following the creation of ChevronTexaco in 2001 from the
merger between Chevron Corporation and former Texaco
Inc., Texaco Nigeria Plc became an integral part of the new
corporation. As ChevronTexaco considered the acquisition
of former UNOCAL, the board of ChevronTexaco decided to
eliminate ‘Texaco’ from the corporate name and retain only
Chevron as the new name of the enlarged corporation.
Effective September 1 2006, the Company’s name changed
from Texaco Nigeria Plc to Chevron Oil Nigeria Plc following
a directive from Chevron Corporation’s headquarters to all
affiliate companies.This was designed to present a clear,
strong and unified presence of Chevron Corporation
throughout the world.
On 20 March, 2009 there was an acquisition of Chevron
Africa Holdings Limited, (a Bermudian Company) by Corlay
Global SA of Moffson Building, East 54th Street, Panama,
Republic of Panama. By virtue of this foreign transaction,
M.R.S. Africa Holdings Limited gained control of all assets
of Chevron Nigeria Holdings Limited, Bermuda and hence
its 60% shareholding in Chevron Oil Nigeria Plc.
The new management of the Company announced
a change of name of the Company from Chevron Oil
Nigeria Plc to MRS Oil Nigeria Plc (“MRS”) effective 2nd
of December, 2009 following the ratification of the name
change of the Company at the 40th
Annual General Meeting
of the Company on September 29, 2009.
Currently about 253,988,672 shares are held by about
23,702 Nigerian shareholders and 1 foreign shareholder
(MRS Africa Holdings Limited, Bermuda) in MRS Oil Nigeria
Plc, a company with the main business of marketing and/
or manufacture of petroleum related products in Nigeria.
With about 138 active Company owned and more than 255
third party owned operating outlets, MRS Oil Nigeria Plc is
a major player in Nigeria’s petroleum products marketing
industry. MRS is also a leading producer of quality
lubricating oils and greases.
Principal Activities:
The Company remains principally engaged in the business
of marketing and distribution of refined petroleum products,
blending of lubricants and manufacturing of greases.
Directors’ Report

16
YEAR ENDED 31 DECEMBER 2011 2010
N’000 N’000
Turnover 70,952,936 74,781,925
Profit Before Tax 2,028,109 2,887,683
Tax Expense (991,935) (1,040,356)
Profit for the Year 1,036,174 1,847,327
Proposed Dividend for the Year (Kobo) 70 125
Earnings Per 50k share (Naira) 4.08 7.27
Declared Dividend per 50k share (Kobo) 125 125
Dividend:
The Board proposes to pay 70 kobo per share, as final
dividend (2010: 125 kobo per share). The proposed
dividend which amounts to approximately N177.79 million
(2010: N317.49 million) will, if approved at the Annual
General Meeting of the Company, be paid on July 11, 2012
to shareholders on the register of the Company at the close
of business on June 15, 2012 and is subject to appropriate
withholding tax.
The Directors:
The Directors in office during the year are listed below and
except where stated, served on the board in
2011:
NAME NATIONALITY DESIGNATION Appointment/Resignations (A/R)
Mr. S. I. Dantata Chairman March 20, 2009 (A)
Mr. Musa Yahaya* Managing Director August 15, 2011 (R)
Mr. S.B Prasad* Indian Managing Director August 15, 2011 (A)
Mr. P. Alberti French Director March 20, 2009 (A)
Mr. A.O. Gbodume* Executive Director (F & A) May 12, 2011 (A)
Mr. O. T. Adelekan* Non-Executive Director June 21, 2011 (R)
Chief S. C. Ezendu Non-Executive Director June 8, 1999 (A)
Mr. M. O. Cardoso* Non-Executive Director July 26, 2011 (R)
Dr. S. Kewa Non-Executive Director March 7, 2007 (A)
Mrs. D.U. Ufot (SAN) * Non-Executive Director June 1, 2011 (R)
Alhaji D.M. Barau Non-Executive Director March 20, 2009 (A)
*See Board changes on next page
Directors’ Report Cont.’d

17
Board Changes:
Mallam Musa Yahaya resigned from the board on August 15,
2011 to take up another assignment within the MRS Group,
as the Deputy Chief Operating Officer of Corlay Global S.A.
Following his resignation, Mr. S.B. Prasad was appointed
Managing Director of the Company on August 15, 2011.
Mr. O.T. Adelekan and Mr. O.M. Cardoso resigned from the
Board on June 21 and July 26, 2011 respectively.
Election/ Re-election of Directors:
In accordance with Articles 90/91 and 95 of the Company’s
Article of Association, Dr. S.M. Kewa and Alhaji D.M. Barau
retire by rotation and being eligible, offer themselves for re-
election.
In accordance with Articles 95 of the Company’s Articles
of Association, Mr. S.B. Prasad, being the only director
appointed since the last Annual General Meeting retires and
being eligible offers himself for reelection.
Pursuant to Section 252 of the Companies and Allied
Matters Act, Notice is hereby given that Chief S.C Ezendu
,is over the age of 70 (seventy years).
Directors’ Interest in the Issued Share Capital of
the Company:
The direct and indirect interests of Directors in the issued
share capital of the Company as recorded in the register of
directors’ shareholdings and/ or as notified by the Directors
for the purposes of Sections 275 of the Companies and
Allied Matters Act, 2004 and the listing requirements of the
Nigerian Stock Exchange are as follows:
Directors Total No. of Shares as at Total No. of Shares as at
31/03/2012 31/12/2011
S. Dantata (Indirect holdings) 152,393,190 152,393,190
S.B. Prasad - -
P. Alberti - -
Representative of Pact Advisory, Management & Service SAS
A.O Gbodume - N/A
D.M. Barau - -
S. C. Ezendu (Indirect holdings) 47,368 47,368
S. M. Kewa 1,989 1,989
Directors’ Interest in Contract:
In In accordance with Section 277 of the Companies and
Allied Matters Act 2004, none of the Directors have notified
the Company of any direct or indirect interest in any contract
or proposed contract with the Company.
Major Shareholders:
According to the Register of Members as at December
31, 2011, the following shareholders of the Company hold
more than 5% of the issued ordinary share capital of the
Company.
NameName Units Percentage %
M.R.S. Africa Holdings Limited 152,393,190 60%

18
Number of holding
Local shareholders: Number of Number of Percentage of
shareholders shares held shareholding
1 - 500 8,649 1,998,134 0.78%
501 - 1,000 3,751 2,812,801 1.1%
1,001 - 5,000 8,810 20,406,790 8.03%
5,001 - 50,000 2,331 27,084,900 10.6%
50,001 - 100,000 93 6,785,605 2.7%
100,001 - 500,000 59 10,779,726 4.2%
500,001 - 1,000,000 4 2,601,787 1.02%
1,000,001 - 10,000,000 4 9,448,317 3.7%
10,000,001 - 50,000,000 1 19,677,422 7.7%
Total 23,702 101,595,482 40%
Foreign shareholders
50,000,001 - 253,988,672 1 152,393,190 60%
TOTAL 23,703 253,988,672 100%
Acquisition of Its Own Shares:
The Company did not acquire its shares during the year
(2010: Nil).
Corporate Governance:
The Board considers the maintenance of high standards of
corporate governance, central to achieving the Company’s
objective of maximizing shareholder value. The Board has a
schedule of matters reserved specifically for its decision. The
Directors have access to learning appropriate professional
skills and knowledge development.
The Company’s Board currently comprises of a Non
Executive Chairman, Executive Directors of the Company/
Group and Non Executive Directors. The Executive Directors
have extensive knowledge of the oil and gas industry, while
the Non Executive Directors bring in their broad knowledge
of business, financial, commercial and technical experience
to the board.
Annually, the Board routinely reviews the board structure
to ensure that there is a satisfactory balance of Executive
and Non Executive Directors in the Company. However, this
balance may be reviewed on an ongoing basis, bearing in
mind the size of the Company and its ownership structure.
In the year under review, there were 11 Directors, but 7 at
the end of the year, on the Board of the Company; each
Director bringing their wealth of experience to bear on
deliberations at Board Meetings.
The Board meets at least four times a year for regular
scheduled meetings to review the Company’s operations
and trading performance, to set and monitor strategy as well
as consider new business options. The Board also meets
for unscheduled meetings, if there are specific matters that
require its attention.
The attendance of Directors at board meetings in the year
under review is noted below:
Analysis of Shareholding:
According to the Register of Members at December 31, 2011, the spread of shareholding in the Companyis presented
below:

19
MRS Oil Nigeria Plc - 2011 Board Meetings
DIRECTORS Mar 16, ‘11 May 12, ‘11 July 26, ‘11 Oct 27, ‘11
Alhaji Sayyu I. Dantata Chairman X X X X
Mallam Musa Yahaya Managing Director X X X
(Resigned from the board on August 15, 2011)
Mr. S.B Prasad Managing Director X
(Appointed to the board on August 15, 2011)
Mr. Patrice Alberti Director X X X
Mr. Andrew O. Gbodume Executive Director X X
(Appointed to the board on May 12, 2011)
Mr. Olujinmi T. Adelekan Director X X
(Resigned from the board on June 21, 2011)
Chief Sylvanus C. Ezendu Director X X X X
Mr. Olayemi M. Cardoso Director X
(Resigned from the board on July 26, 2011)
Dr. Samaila M. Kewa Director X X X X
Alhaji Dahiru M. Barau Director
Mrs. Dorothy U. Ufot (SAN) Director
Board Performance Appraisal:
The Board did not undertake any formal evaluation of its
performance, individual or collective in the year under
review.
A process exists for the follow up on all matters of
concern or potential improvement which may arise when
an evaluation process is carried out. During the latest
evaluation completed in February 2012 for the year ended
2011, no material concerns arose from the review, although
a few initiatives for improvement were recorded.
Sub Committees of the Board:
The Board has established Committees, each with written
terms of reference approved by the Board.
Currently, there are four sub-committees of the Board and
the Chairman is not on any of the Committees.
The sub-committees are established to assist the Board to
effectively and efficiently perform guidance and oversight
functions, amongst others.
The terms of reference for all the committees are available
for inspection at the registered office of Company.
The current composition of the Board Sub-committees
and attendance at meetings in the year under review are
as follows:-

20
Audit Committee Members Designation Feb 22, ‘11 May 11, ‘11 July 19, ‘11 Oct 21, ‘11
Engr. Tunji Ijaiya Chairman X X X
Mr. Isiaka Saliu Member X X X X
Chief Vincent Barrah Member X X X X
Mr. Olujinmi T. Adelekan
(Resigned from the board on June 21, 2011) Member X X
Mr. Olayemi M. Cardoso
(Resigned from the board on July 26, 2011) Member X X
Chief Sylvanus C. Ezendu Member X X X X
Mr. Andrew Gbodume
(Appointed to the board on May 12, 2011) Member X X
Dr. Samaila M. Kewa Member X
(Appointed to the board on March 7, 2007)
The Audit Committee is chaired by a shareholder
representative. On the invitation of the Chairman of the
Audit Committee, representatives of Management and the
External Auditors are invited to attend meetings. The Audit
Committee is responsible for the review of the quarterly and
annual financial reports of the Company before submission
totheBoard.TheAuditCommitteemakesrecommendations
on the appointment of the External Auditors and agrees with
the External Auditors on the nature and scope of their work
as well as recommendations on particular review areas of
the external audit.
In the year under review, the Audit Committee met four
times.
Board Nomination and
Corporate Governance Members Position Jan 28, ‘11
Mr. Olayemi M. Cardoso Chairman X
Chief Sylvanus C. Ezendu Member X
Mallam Musa Yahaya (In attendance) Member X
Mrs. D.U. Ufot (In attendance) Member x
The Board Nominations and Corporate Governance
Committee is responsible for proposing candidates for
appointment to the board, bearing in mind the balance and
structure of the Board. The board also considers corporate
governance issues, ensures strict compliance and makes
recommendation to the Board (on issues regarding but
not limited to) the membership of the Audit, Strategic &
Finance Planning and the Human Resources Committee in
consultation with the Chairman of each Committee.
In the year under review, the Board Nominations and
Corporate Governance Committee met once.

21
Strategic Planning and Finance
Committee members: Position Mar 10, ’11 Oct 26, ‘11
Chief Sylvanus C. Ezendu Chairman X X
Mr. Olayemi M. Cardoso
(Resigned from the board on July 26, 2011) Member
Mallam Musa Yahaya
(Resigned from the board on August 15, 2011) Member X
Mr. Olujinmi T. Adelekan
(Resigned from the board on June 21, 2011) Member X
Mr. Andrew O. Gbodume
(Appointed to the board on May 12, 2011) Member X
Mr. S.B. Prasad
(Appointed to the board on August 15, 2011) Member X
In the year under review, the Strategic Planning and Finance Committee Members met twice.
Human Resources Committee Members Designation Dec 8, ‘11
Dr. Samaila M. Kewa Chairman X
Chief Sylvanus C. Ezendu Member X
Mr. Olayemi M. Cardoso Member X
(Resigned from the board on July 26, 2011)
Mrs. D. U. Ufot (SAN) Member X
Mr. Olujinmi T. Adelekan Member
Mallam Musa Yahaya Member X
(Resigned from the board on August 15, 2011)
Mr. S.B. Prasad Member X
(Appointed to the board on August 15, 2011)
Mr. Andrew O. Gbodume Member X
(Appointed to the board on May 12, 2011)
The Human Resources Committee is responsible for
reviewing the contract terms, remuneration and other
benefits of the Executive Directors and Senior Management
of the Company. The Committee also reviews the reports of
external consultants for services rendered, which assist the
Committee in their duties.
In the year under review, the Human Resources Committee
met once.
The Chairman and other Directors may be invited to attend
meetings of the Committee, but do not take part in any
decision making directly affecting their own remuneration.
The Committee undertakes an external and independent
review of remuneration levels on a periodic basis, to ensure
that employment policies are strictly adhered to.

22
Meetings:
The register of attendance at meetings is available for
inspection during normal business hours at the registered
office of the Company and at each Annual General Meeting
of the Company.
Employment Policy:
The Company from time to time recruits and hires highly
skilled and competent personnel, to drive the Company’s
operations to sustainable and profitable growth. The
Company skills requirements for hiring are specific and well
established and applicants who meet the job requirements
are objectively considered.
Theobjectiveofthepolicyistoprovidealevelofremuneration
that is sufficient to attract, retain and motivate high quality
employees to run the Company successfully and to ensure
that there is an alignment between the Company’s business
plan and shareholder objectives. A significant proportion of
the employee remuneration is linked to the achievement of
short and long-term performance objectives.
The Company maintains a fair policy in considering job
applications of disabled persons having regard to their
abilities and aptitude. The policy prohibits any form of
discrimination on the basis of disability, race, religion, colour,
national or ethnic origin, age, sex, political preference,
membership or non membership of any lawful organization
or any other basis in the recruitment, training and career
development of employees. The Company did not employ
any person with disability during the year (2010: Nil).
TheCompanyprovidesaworkingenvironmentthatpromotes
diversity within its workforce and enables employees to
participate and contribute to the growth of the Company.
Employees Safety, Health and Environment:
The Company is committed to achieving and maintaining
the highest standards of safety for its employees, suppliers,
customers and the public. In the year under review,
consistent Health Safety and Environment (HSE) standards
guided the Company’s operations and activities.
Employees and their families enjoyed the best of medical
care obtainable in-house and through selected private
hospitals across the country. It is worth of note that the
statutory periodic Industrial Health (IH) screening and
monitoring tests (Audiometric and Vision) were conducted
on all Aviation operatives by qualified medical practitioners
and the records properly maintained.
Essential safety trainings conducted for the workforce in the
year under review are, Road transportation safety planning,
Incident/Accident investigation and reporting training, Fire
and Emergency response planning, First Aid Response
Training, Marine pollution and prevention and contingency
planning workshops.
On regulatory compliance, statutory inspections visits
were conducted and emergency preparedness drills were
carried out at our operational facilities by the Department
of Petroleum Resources (DPR), NOSDRA (Federal agency),
LASEPA(Stateagency)andtheNigerianPortsAuthority(NPA)
and FAAN, Airlines Operators. The Company was issued
a report of satisfactory compliance, thereby endorsing
the Company’s initiatives and objectives to achieve best
practice in SHE in the industry (Downstream subsector).
Employees Involvement, Training and
Development:
The Company recognizes that success and reputation are
dependent on the integrity of its people. Employees are
given equal opportunity to acquire knowledge, develop
skills and broaden their horizon with on the job training.
In 2011, 22 employees took part in various training and
development programmes; BPCS Training (2 Modules-
Invoice processing and closing) Training Governance,
MRS Action Tracking Tool, Industrial Training Fund Grand
Reimbursement Seminar, Induction Programmes for new
employees, 7 Habits of Highly Effective People, Retirement
Workshop, Human Resources Management, The Effective
Secretary/PA Training Workshop, Strategic Vendor
Management, ICAN Professional Training and PTDF Local
Content Act Training.
Contributions and Charitable Donations:
During the year, the Company made the following donations
in fulfillment of its corporate social responsibility:

23
1. The Zamarr Institute(School for Autism) 200,000.00
2. Old People’s Home,Yaba 200,000.00
3. Ereko Methodist Primary School,Berkley,Lagos 200,000.00
4. SOS Children’s Villages Nigeria, Isolo 200,000.00
5. Boys Junior Academy,Sura,Lagos 200,000.00
6. Pacelli School for The Blind,Surulere,Lagos 200,000.00
TOTAL 1,200,000.00
Information Technology Upgrades:
The Company is committed to the provision of regular
upgrade of its information technology infrastructure for
its head office and field locations to assist with online
monitoring of its field transactions. IT achievements in the
year under review include:
WANUpgrade(InternetLinkwaschangedfromDOPC
to a more robust and cost effective communication
(Gateway Communication);
BPOS Migration;
Ongoing SAP implementation;
Biometric attendance completed in the head office,
Ikeja and Apapa;
Migrated some key users to Glo to enjoy the CUG
plan for effective cost reduction;
Migration of email facility to the cloud;
Centralization of all information into the SharePoint
folder and easy;
Communication using the communicator.
Appointments and Promotions:
The Company is committed to attracting, recruiting
and retaining skilled and experience personnel into
the organization for future growth and continuity of the
Company’s operations. The Company will continue to
identify and reward positive contributions by our employees
who excel in their various functional areas.
In 2011, the Company employed 21 new employees to
strengthen its operations.
Staff Strength:
As at December 31, 2011, the Company’s staff strength
was 203. This number includes expatriates and employees
on secondment to MRS Holdings. Six (6) employees were
promoted in the year under review.
Property, Plant and Equipment
Information relating to changes in the Company’s property,
plant and equipment is given in Note 10 to the financial
statements. In the Directors opinion, the market value of the
Company’s properties is not less than the value shown in
the financial statements during the year.
Post Balance Sheet Event
There were no post balance sheet events which could have a
material effect on the state of affiars of the company as at 31st
Dec. 2011 and the result for the year ended.
Auditors:
In accordance with Section 357(2) of the Companies and
Allied Matters Act of Nigeria, the auditors, KPMG Professional
Services have indicated their willingness to continue in office
as auditors.
By the Order of the Board
O.M. JAFOJO (MRS.)
Company Secretary

24
Board of Directors
ALHAJI SAYYU IDRIS DANTATA
Chairman
Alhaji Sayyu Idris Dantata is a Mechanical Engineer. He started his
career as the Transport Director with the Dangote Group, one of
Nigeria’sleadingconglomeratesandrosethroughtheorganization.
Thereafter, he started his own business and currently sits as
the Chief Executive Officer of MRS Group. The MRS group of
companies has interests in Oil & Gas, Shipping, Construction
and Property Development amongst other Investments.
With an exceptional vision and world class business skill, Alhaji
Dantata has led the Group to remarkable and unprecedented
success in the history of Nigeria’s independent petroleum
marketing. This has made MRS the leading supplier of petroleum
products in Nigeria and the West African Sub-Region.

25
GBODUME ANDREW OGHENOVO
Executive Director
Mr. Gbodume, holds a master degree from
Ahmadu Ballo University, Zaria. He is a fellow of
the Institute of Chartered Accountants of Nigeria
and an Associate member, Nigerian Institute
of Management as well as Nigeria Institute of
Taxation.
He is a financial and economic consultant with
many years of experience. Prior to joining MRS Oil
Nigeria PLC, his experience cut across finance,
audit, insurance and banking. He had a stint with
African International Bank (AIB) where he rose to
the position of an Assistant General Manager,
Financial Control and Management, a position he
held for over 5 years. He joined MRS Oil and Gas
Co. Ltd as Assistant General Manager, Finance
and Corporate Planning in 2007. A year after, the
position was re-designated as Deputy General
Manager. Also in 2008, he was elevated to the
position of Director, Special Duties. As a result
of his excellent performance, he was appointed
Ag. Managing Director MRS Investment Co. Ltd
in July 2010, before his secondment to MRS Oil
Nig Plc. he was appointed Executive Director
Finance & Admin on May 12, 2011.
MR. PATRICE ALBERTI
Director
Mr. Alberti holds a Bachelors Degree in
Economics from the Paris Academy and has
been with the MRS Group since 2004. He is
currently the Group Managing Director of
MRS Group of Companies, Director of Ovlas
Management SAM in Monaco and a Director
on the Board of Corlay Global S.A.
Prior to joining MRS Group, he held a number
of positions over a period of 20 years in various
banks in Europe namely: BNP Paribas, Paribas,
Banque Arabe Internationale D’Investitssment,
Banco Central SA, to mention a few.

Board of Directors
MR. SHARDHASHIS B. PRASAD
Managing Director
Mr. S.B. Prasad holds a B.Sc (Ag) from the College
of Agriculture, Pune, India. He also holds a Post
graduate diploma in Business management
from the Shivaji University, Kolhapur, India and
has worked in various organizations in which he
has held positions of increasing responsibility in
various departments prior to his appointment as
the Managing Director of MRS Oil Nigeria Plc.
Amongst the companies he has worked for include
Bharat Petroleum Corporation Limited (BPCL),
India, Caltex India, Limited as a business manager;
Reliance Industries Limited, Mumbai, India as Vice
President – Retail; Essar Oil Limited, Mumbai,
India as Chief Operating Officer; ConoilPlc, Lagos
, Nigeria – Head, Retail Business.
He was until his appointment as the Managing
Director of MRS Oil Nigeria Plc, the Managing
Director and Group Head – Business development,
MRS Oil & Gas Limited.
Mr. Prasad has attended various management
development programs and conferences. He was
appointed Managing Director of MRS Oil Nigeria
Plc on August 15, 2011.

26
Board of Directors
DR. SAMAILA MUSA KEWA
Director
He holds A Doctorate Degree In Economics
From Binghamton University and has
worked in various organizations prior to his
appointment on the Board of the Company. He
was a member of the Plateau State Executive
Council and Commissioner for Finance and
Commissioner for Education from 1986 – 1988.
He was seconded from Nigerian National
Petroleum Corporation in 2003 to Nigerian LNG
Limited as the Deputy Managing Director/ CEO
and to National Oil and Chemicals Marketing
Plc in 1990 as the Executive Director, Chemical
Marketing.
He was appointed on the board of Chevron Oil
Nigeria Plc, now MRS Oil Nigeria Plc on March
7, 2007.
CHIEF SYLVANUS CHUKWUEMEKA
EZENDU
Director
Chief Ezendu is an Accountant by profession.
He is a graduate of the Birmingham Institute
of Business Studies and a member of
the Chartered Institute of Secretaries &
Administrators. Chief Ezendu has worked in
many organizations with increasing responsibility.
He was an Accounts Supervisor at Bentworth
Finance Nigeria Ltd between (1962 – 1964),
Accountant at Gulf Oil Company Nigeria Ltd
between (1971 – 1975) and a Treasurer at
Chevron Nigeria Ltd between (1980 – 1995).
He attended many courses and seminars in the
course of his career and he is on the board of
many Companies in Nigeria which includes City
– Links Investments Ltd, Resort Savings & Loans
Plc and Deap Capital Management & Trust Plc.
Chief Ezendu engages in Consultancy Services
in Capital Market Operations.
ALHAJI DAHIRU MANGAL BARAU
Director
Alhaji Barau, is the Chairman and Chief
Executive Officer of Afdin Group of
Companies Nigeria Limited, Max Air Limited
and Kastina Dyeing and Printing Textiles
Limited. He is an Executive Director on board
ofMassanawaTravel&ToursandMassanawa
Enterprises Limted amongst others.
He was appointed to the Board on March
20, 2009.

28
Statement of Directors’ Responsibilities in
Relation to The Financial Statements
For the year ended 31 December 2011
The directors accept responsibility for the preparation of the annual financial statements set out on pages 34 to 63 that give
a true and fair view in accordance with the Statements of Accounting Standards applicable in Nigeria and in the manner
required by the Companies and Allied Matters Act of Nigeria.
The directors further accept responsibility for maintaining adequate accounting records as required by the Companies and
Allied Matters Act of Nigeria and for such internal control as the directors determine as necessary to enable the preparation
of financial statements that are free from material misstatements whether due to fraud or error.
The directors have made an assessment of the Company’s ability to continue as a going concern and have no reason to
believe the Company will not remain as a going concern in the year ahead.

SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

Signature: Signature:

Alhaji S. I. Dantata Mr. Shardhashis B. Prasad
Name: Name:

Date: 12th April, 2012 Date: 12th April, 2012

29
Report of The Audit Committee
TO THE MEMBERS OF MRS OIL NIGERIA PLC
In accordance with Section 359(6) of the Companies and Allied Matters Act 2004, we the Members of the Audit Committee
of MRS Oil Nigeria Plc, have reviewed the audited financial statements of the Company for the year ended 31 December
2011 and based on the documents and information available to us, report as follows:
(a) We have ascertained that the accounting and reporting policies of the Company are in accordance with legal
requirements and agreed ethical practices;
(b) We have reviewed the scope and planning of the audit requirements;
(c) We have reviewed the findings on management matters in conjunction with the external auditor and departmental
responses thereon;
(d) We have kept under review the effectiveness of the Company’s system of accounting and internal control.
TUNJI IJAIYA
Chairman, Audit Committee
22nd March, 2012
Members of the Audit Committee
1. Engr. T. Ijaiya - Chairman
2. Mr. I.Saliu - Member
3. Chief V. Barrah - Member
4. Chief S. C. Ezendu - Director
5. Mr. A.O. Gbodume - Executive Director (F & A)
6. Dr. S.M. Kewa - Director

32
KPMG Professional Services, a Partnership established under
Nigeria law, is a member of KPMG International Cooperative
(”KPMG International”), a swiss entity, All rights reserved.
Registered in Nigeria No BN 986925
Abayomi D. Sanni
Adetola P. Adeyemi
Ayodele H. Othihiwa
Goodluck C. Obi
Oladapo R. Okubadejo
Oluseyi T. Bickersteth
Victor U. Onyenkpa
Adebisi O. Lamikanra
Adewale K. Ajayi
Ayo L. Salami
Joseph O. Tegbe
Oladimeji I. Salaudeen
Oluwatoyin A. Gbagi
Adekunle A. Elebute
Ajibola O. Olomola
Chibuzor N. Anyanechi
Kabir O. Okunlola
Olumide O. Olayinka
Tayo I. Ogungbenro
KPMGKPMG KPMG Professional Services
KPMG Tower
Victoria Island
PMB 40014, Falomo
Lagos
Telephone
Fax
Internet
234 (1) 271 8955
234 (1) 271 8599
234 (1) 462 0704
www.ng.kpmg.com
Report on the Financial Statements
We have audited the accompanying financial statements of MRS Oil Nigeria Plc (“the Company”) which comprise the
balance sheet, as at 31 December 2011, profit and loss account, statement of cash flows and value added statement
for the year then ended, the statement of accounting policies, notes to the financial statements and five year financial
summary, as set out on pages 34 to 63.
Directors’ Responsibility for the Financial Statements
The directors are responsible for the preparation and fair presentation of these financial statements in accordance with
Statements of Accounting Standards applicable in Nigeria, and in the manner required by the Companies and Allied
Matters Act of Nigeria and for such internal control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatements, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material
misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal controls relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on
the effectiveness of the entity’s internal controls.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independent Auditor’s Report
To the Members of MRS Oil Nigeria Plc

33
KPMG Professional Services, a Partnership established under
Nigeria law, is a member of KPMG International Cooperative
(”KPMG International”), a swiss entity, All rights reserved.
Registered in Nigeria No BN 986925
Abayomi D. Sanni
Adetola P. Adeyemi
Ayodele H. Othihiwa
Goodluck C. Obi
Oladapo R. Okubadejo
Oluseyi T. Bickersteth
Victor U. Onyenkpa
Adebisi O. Lamikanra
Adewale K. Ajayi
Ayo L. Salami
Joseph O. Tegbe
Oladimeji I. Salaudeen
Oluwatoyin A. Gbagi
Adekunle A. Elebute
Ajibola O. Olomola
Chibuzor N. Anyanechi
Kabir O. Okunlola
Olumide O. Olayinka
Tayo I. Ogungbenro
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of MRS Oil Nigeria Plc (“the
Company”) as at 31 December 2011, and of the Company’s financial performance and cash flows for the year then
ended in accordance with Statements of Accounting Standards applicable in Nigeria and In the manner required by the
Companies and Allied Matters Act of Nigeria.
Report on Other Legal and Regulatory Requirements
Compliance with the Requirements of Schedule 6 of the Companies and Allied Matters Act of Nigeria
In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of those
books and the Company’s balance sheet and profit and loss account are in agreement with the books of account.
KPMGKPMG KPMG Professional Services
KPMG Tower
Victoria Island
PMB 40014, Falomo
Lagos
Telephone
Fax
Internet
234 (1) 271 8955
234 (1) 271 8599
234 (1) 462 0704
www.ng.kpmg.com

34
Statement of Accounting Policies
A summary of the principal accounting policies, all of which
have been applied consistently throughout the current and
preceding years, except as shown in note (f) is set out
below.
(a) Basis of accounting
The financial statements are prepared under the
historical cost convention, modified to include the
revaluation of certain fixed assets and the use of
actuarial methods for estimating certain employee
benefits.
(b) Receivables
Debtors are stated net of allowances for debts
considered doubtful of recovery. These allowances
are recorded in the profit and loss account. Debts
deemed bad are written off to the profit and loss
account.
(c) Turnover
Turnover represents net value of goods and services
provided by the Company to third parties in the
normal course of business net of returns, trade
discounts, rebates and value added tax. Turnover for
regulated products equates amounts that accrue to
the Company directly net of amounts the Company
collects from the regulators on behalf of third parties
i.e. as dealer commissions and transport costs.
Turnover from goods sold is recognised when
persuasive evidence exists that the significant risks
and rewards of ownership have been transferred
to the buyer, recovery of consideration is probable,
the associated costs and possible return of goods
can be estimated reliably, there is no continuing
management involvement with the goods and the
amount of turnover can be measured reliably.
(d) Property, plant and equipment
Property, plant and equipment are stated at cost or
valuation less accumulated depreciation.
Costs includes expenditure that are directly
attributable to the acquisition of the property, plant
and equipment. Costs relating to property, plant and
equipment under construction or in the process of
installation are disclosed as Capital Work in Progress.
The cost attributable to each asset is transferred
to the relevant category immediately the asset is
available for use.
Gains and losses on disposal of property, plant
and equipment are included in the profit and loss
account.
(e) Depreciation
Depreciation is provided at rates calculated to
write off the cost/valuation, less estimated residual
value, of each asset on a straight-line basis over its
estimated useful life. During the year, the Company
revised the depreciation rate as follows:

35
The impact of the change in depreciation rates was a
decrease of N1.67 billion in depreciation charge for the
year.
Depreciation is not calculated on property, plant and
equipment until they are available for use and is included in
the profit and loss account.
(f) Intangible assets
An intangible asset is recognised if, and only if, it is
probable that the expected future economic benefits
that are attributable to the asset will flow to the entity
and the cost of the asset can be measured reliably.
The cost of an intangible asset with a finite useful
life is amortised to the profit and loss account on
a straight line basis over its estimated useful life.
Amortisation begins when the asset is available for
use. Amortization ceases at the earlier of the date
that the asset is classified as held for sale and the
date that the asset is derecognized.
After initial recognition, intangible assets with finite
useful lives are carried at cost less any accumulated
amortization and impairment losses. The estimated
Asset category Depreciation rate (%) Revised depreciation rate (%)
Leasehold land and Building
Leasehold Land Over the unexpired period of the lease Not Revised
Buildings Over the earlier of the unexpired period Over the earlier of the unexpired
of the lease of the Land or 10% period of the lease of the Land or 4 %
Partitioning 20 10
Plant and Machinery
Machinery 10 5 - 10
Service station equipment 25 5 - 10
Storage and retail outfit tanks 10 5 - 10
Computer equipment 33.33 Not Revised
Furniture and fittings 20 Not Revised
Automotive equipment 25 Not Revised
useful lives for intangible assets which consist mainly
of computer software is the earlier of 5 years or the
license period of the related software.
Subsequent expenditure on intangible assets with
finite useful life is capitalised only when it increases
the future economic benefits embodied in the
specific asset to which it relates. All other expenditure
is expensed as incurred.
This new policy is in line with the Statement of
Accounting Standard (SAS) 31 issued by the Financial
Reporting Council (formerly known as the Nigerian
Accounting Standards Board), which is effective
for annual periods beginning on or after 1 January
2011. The policy has been applied prospectively. No
reclassifications were made to the balance sheet on
implementation of the new accounting policy as the
Company as at that date had fully depreciated all
qualifying software. There was no effect on either the
profit and loss account or retained earnings.
(g) Revaluation reserve
Property, plant and equipment are revalued every
three (3) years. Surpluses/ (deficits) arising on the

36
revaluationofindividualProperty,plantandequipment
are (credited)/debited to a non-distributable reserve
known as the Property, plant and equipment.
Revaluation deficits in excess of the amount of prior
revaluation surpluses on the same asset are charged
to the profit and loss account.
On disposal of previously revalued Property, plant
and equipment, an amount equal to the revaluation
surplus attributable to that asset is transferred from
the revaluation reserve to the retained earnings.
(h) Stocks
Stocks are valued at the lower of cost and net
realizable value. Cost incurred in bringing each
product to its present location and condition is based
on:
White petroleum products -: Weighted average
cost, to the extent that the weighted average cost
reflects historical cost, including transportation
and clearing costs (for deregulated products). For
regulated products, the cost is reduced by the
subsidies due. See Note (p).
Product and packaging materials, Work-in-
progress, lubricants and greases- A first-in, first-out
basis, including transportation and clearing costs.
Stock-in-transit-: Purchase cost incurred to date.
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).
Net realisable value is based on estimated normal
selling price less further costs expected to be incurred
to completion and disposal. Allowance is made for
defective and slow moving items as appropriate.
(i) Taxation
Tax expenses/credits are recognised in the profit and
loss account.
Income tax is the expected amount of income tax
payable on taxable profit determined in accordance
with Companies Income Tax Act (CITA) using
statutory tax rates at the balance sheet date and
any adjustment to tax payable in respect of previous
years.
Education tax is assessed at 2% of the assessable
profits while capital gains tax is assessed at 10% of
the capital gains.
(j) Deferred taxation
Deferred taxation, which arises from differences in
the timing of the recognition of items in the financial
statements and by the tax authorities, is calculated
using the liability method. Deferred tax is provided
on all timing differences at the rates of tax likely to be
in force at the time of reversal. A deferred tax asset
is recognized to the extent that it is probable that
future taxable profits will be available against which
the assets will be utilised. Deferred tax assets are
reduced to the extent that it is no longer probable
that the related tax benefit will be realised.
Deferred tax is charged to the profit and loss account
except to the extent that it relates to a transaction that
is recognised directly in equity.
(k) Cash and cash equivalents
For the purpose of reporting cash flows, cash
and cash equivalents include cash on hand, cash
balances with banks and short term deposits with
banks with original maturity of three months or less.
(l) Foreign currency transactions
Transactions denominated in foreign currencies are
recorded in Naira at exchange rates ruling at the dates
of the transactions. Monetary assets and liabilities
denominated in foreign currencies at the balance
sheet date are reported at the rates of exchange
prevailing at that date or where appropriate at the
contracted rate of exchange if the balance is to be
settled at a contracted rate. Any gain or loss arising
from a change in exchange rates, subsequent to the
dates of transactions, is included as an exchange
gain or loss in the profit and loss account.

37
(m) Employee benefits
i. Gratuity Scheme:
The Company operates an unfunded defined
benefit gratuity scheme for its permanent staff. The
benefits under the scheme are related to employees’
length of service and remuneration. Lump-sum
benefits payable upon retirement or resignation
of employment are fully accrued over the service
lives of employees of the Company. The liability
recognised in the balance sheet in respect of the
unfunded gratuity scheme is the present value of the
defined benefit obligation at the balance sheet date.
The defined benefit obligation is calculated annually
by an independent actuary using the projected
unit credit method. Actuarial gains or losses arising
during the year are charged in full to the profit and
loss account.
ii. Other long term employee benefits:
Other long term employee benefits are accrued over
the service life of the employees. The charge to profit
and loss account is based on independent actuarial
valuation performed using the projected unit credit
method. Actuarial gains or losses are recognised in
full in the profit and loss account.
iii. Pension Fund Scheme:
The Company, in line with the provisions of the
Pension Reform Act 2004, operates a defined
contribution pension scheme under which the
Company and its employees each contribute 12%
and 3% respectively of the employees’ monthly basic
salary, housing and transport allowances to the fund.
The staff contributions to the scheme are funded
through payroll deductions while the Company’s
contributions are accrued and charged fully to the
profit and loss account.
(n) Provisions
A provision is recognized only if, as a result of a
past event, the Company has a present legal or
constructive obligation that can be estimated reliably,
and it is probable that an outflow of economic
benefits will be required to settle the obligation.
(o) Impairment
The carrying value of the assets are reviewed at each
balance sheet date to determine whether there is any
indication of impairment. If any such indication exists,
the asset’s recoverable amount is estimated. An
impairment loss is recognised whenever the carrying
value of an asset exceeds its recoverable amount.
Impairment losses are recognized in the profit and
loss account except where they relate to previously
revalued assets, in which case, they are recognised
directly against any revaluation surplus to the extent
that an amount is included in the revaluation reserve
account for the related assets, with any remaining
loss recognised in the profit and loss account.
(p) Government grants
Petroleum Products Pricing Regulatory Agency
(PPPRA) subsidies which compensate the Company
for losses made on importation of certain refined
petroleum products are recognised when there is
reasonable assurance that they will be recovered
and the Company has complied with the conditions
attached to receiving the subsidy. The subsidies are
recognised as a reduction to the landing cost of the
subsidised petroleum product.
(q) Dividends
Dividends on ordinary shares are recognized as
a liability in the period in which they are declared.
Unclaimed dividends which remain unclaimed for a
period exceeding twelve (12) years from the date of
declaration and which are no longer actionable by
shareholders in accordance with section 385 of the
Companies and Allied Matters Acts of Nigeria are
written back to retained earnings.
(r) Leases
(i) Where the Company is the lessee
Leases in terms of which the Company assumes
substantially all the risks and rewards of ownership
are classified as finance leases. At the beginning of
the lease term, the leased asset is measured at an

38
amount equal to the fair value of the leased asset
less the present value of unguaranteed or partially
guaranteed residual value which would accrue to the
lessor at the end of the term of the lease. Subsequent
to initial recognition, the asset is accounted for in
accordance with the accounting policy applicable to
that asset.
Minimum lease payments made under finance
leases are apportioned between the finance expense
and the reduction of the outstanding liability. The
finance expense is allocated to each period during
the lease term so as to produce a constant periodic
rate of interest on the remaining balance of the
liability. Contingent lease payments are accounted
for by revising the minimum lease payments over
the remaining term of the lease when the lease
adjustment is confirmed.
Other leases are classified as operating leases and
are not recognised on the Company’s balance
sheet. Payments made under operating leases are
recognised in profit or loss on a straight-line basis
over the term of the lease. Lease incentives received
are recognised as an integral part of the total lease
expense, over the term of the lease.
(ii) Where the Company is the lessor
When assets are held subject to a finance lease,
the transactions are recognized in the books of the
Company at the net investments in the lease. Net
investment in the lease is the gross investment in
the lease discounted at the interest rate implicit in
the lease. The gross investment is the sum of the
minimum lease payments plus any residual value
payableonthelease.Thediscountonleaseisdefined
as the difference between the gross investment and
the present value of the asset under the lease. The
discount is recognized as unearned in the books
of the Company and amortized to income as they
are earned over the life of the lease at a basis that
reflects a constant rate of return on the Company’s
net investment in the lease.
When assets are held subject to an operating lease,
the assets are recognized as property, plant and
equipment based on the nature of the asset and the
Company’s normal depreciation policy for that class
of asset applies. Lease income is recognized on a
straight line basis over the lease term.
All indirect costs associated with the operating
lease are charged as incurred to the profit and loss
account.
(s) Segment reporting
A segment is a distinguishable component of the
Company that is engaged either in providing related
products or services (business segment), or in
providing products or services within a particular
economic environment (geographical segment),
which is subject to risks and returns that are different
from those of other segments.
The Company’s primary format for segment reporting
is based on business segments. The business
segments are determined by management based on
the Company’s internal reporting structure. Segment
results, assets and liabilities include items directly
attributable to a segment as well as those that can
be allocated on a reasonable basis.
(t) Jointly controlled assets
Jointly controlled assets refers to the Company’s
interests in joint aviation facilities held jointly with
other parties. These financial statements include the
Company’s share of these jointly controlled assets
and a proportionate share of the relevant revenue
and related operating costs.

39

Notes 2011 2010
N’000 N’000

TURNOVER 2 (a) 70,952,936 74,781,925
Cost of sales 2 (b) (63,914,979) (67,390,247)

GROSS PROFIT 7,037,957 7,391,678

Selling and distribution expenses (375,610) (263,460)
General and administrative expenses (4,651,560) (4,221,958)
Other income 3 147,411 194,731
Exceptional item 4 - (244,828)

OPERATING PROFIT 2,158,198 2,856,163
Interest income 5 139,639 122,339
Interest expense and similar charges 6 (269,728) (90,819)

PROFIT BEFORE TAXATION 7 2,028,109 2,887,683
Taxation 8 (a) (991,935) (1,040,356)

PROFIT AFTER TAXATION 1,036,174 1,847,327

APPROPRIATION
Transferred to retained earnings 26 (b) 1,036,174 1,847,327
Earnings per share (Naira) 9 (a) 4.08 7.27
Declared Dividend per share (kobo) 9 (b) 125 125

The board of directors have proposed a dividend of 70 kobo per share (2010: 125 kobo per share) on the issued share
capital of 253,988,672 ordinary shares of 50 kobo each (2010: 253,988,672 ordinary shares of 50 kobo each).
The accounting policies on pages 34 to 38 and accompanying notes on pages 43 to 61 form an integral part of these
financial statements.
Profit and Loss Account

40
Balance Sheet
As at 31 December 2011
Notes 2011 2010
N’000 N’000
NON-CURRENT ASSETS:
Property, plant and equipment 10 17,676,983 18,209,184
Intangible assets 11 162,641 -
Long term prepayments 12 243,612 370,108
TOTAL NON - CURRENT ASSETS 18,083,236 18,579,292

CURRENT ASSETS:
Stocks 13 8,366,153 8,637,715
Debtors and prepayments 14 13,564,382 10,719,360
Due from related parties 15 19,049,777 244,342
Cash and cash equivalents 16 8,421,512 2,899,395
TOTAL CURRENT ASSETS 49,401,824 22,500,812
CURRENT LIABILITIES:
Bank overdraft and short term borrowings 17 (21,003,958) (517,347)
Creditors and accruals 18 (9,513,541) (15,199,804)
Due to related parties 19 (13,542,005) (2,047,873)
Tax payable 8(b) (1,157,171) (1,347,115)
Dividend payable 20 (533,081) (528,543)
NET CURRENT ASSETS 3,652,068 2,860,130
TOTAL ASSETS LESS CURRENT LIABILITIES 21,735,304 21,439,422

NON - CURRENT LIABILITIES:
Security deposits 21 (822,920) (630,699)
Deferred tax liability 22 (2,386,991) (1,699,058)
Provision for long term employee benefits 23 (551,480) (580,919)
TOTAL NON-CURRENT LIABILITIES (3,761,391) (2,910,676)
NET ASSETS 17,973,913 18,528,746

41
EQUITY
Called-up share capital 24 126,994 126,994
Revaluation reserve 25 13,045,781 14,008,720
Retained earnings 26 4,801,138 4,393,032
TOTAL EQUITY 17,973,913 18,528,746
SIGNED ON BEHALF OF THE BOARD OF DIRECTORS BY:

………………………….. )

) Directors

………………………….. )

Approved by the Board of Directors on 12 /04/2012


2011 2010
Notes N’000 N’000
Balance Sheet (contd..)
As at 31 December 2011

42
2011 2010
Notes N’000 N’000

Cash flows from operating activities
Operating profit before working capital changes 27 3,212,578 3,851,674
Working capital changes 28 1,738,306 (1,336,868)
Exceptional item - (244,828)
Decrease / (increase) in long term prepayments 126,496 (104,976)
Increase/(decrease) in security deposits 192,221 (1,359)
Gratuity paid 23 (a) (120,882) (29,119)
Long service award paid 23 (b) (4,215) (2,226)
Value added tax paid (151,033) (129,997)
Withholding tax credit notes utilised .8 (b) (9,900) (97,174)
Tax paid .8 (b) (1,295,850) (210,683)

Net cash provided by operating activities 3,687,721 1,694,444

Cash flows from investing activities
Proceeds from sale of property, plant and equipment 8,298 30,854
Purchase of property, plant and equipment 10 . (397,652) (361,369)
Purchase of intangible assets 11 . (171,089) -
Interest received 137,894 122,339
Net cash used in investing activities (422,549) (208,176)

Cash flows from financing activities
Net increase/(net repayment) of bank overdraft
and short term borrowings 2,874,453 (416,698)
Dividends paid 20 . (302,369) (287,603)
Interest paid (315,139) (90,819)
Net cash provided by/(used in) financing activities 2,256,945 (795,120)
Net increase in cash and cash equivalents 5,522,117 691,148
CASH AND CASH EQUIVALENTS, beginning of year 2,899,395 2,208,247
CASH AND CASH EQUIVALENTS, end of year 8,421,512 2,899,395


Statement of Cash Flows

43
1 Reporting entity
MRS Oil Nigeria Plc (‘’the Company’’) was incorporated as Texaco Nigeria Limited as a privately and wholly-owned
subsidiary of Texaco Africa Limited (later changed to Chevron Africa Holdings Limited) on 12 August 1969. It was
converted to a Public Limited Liability Company in 1978.

Subsequent to the acquisition of Chevron Africa Holdings on 20 March 2009 by Corlay Global SA of Panama and
ratification by the shareholders at the Annual General Meeting of 29 September 2009, the Company’s name was
changed to MRS Oil Nigeria Plc from Chevron Oil Nigeria Plc, effectively on 2 December 2009. The Company is
domiciled in Nigeria.

The Company is primarily engaged in manufacturing and/or marketing of refined petroleum products, lubricants
and greases.
2 Turnover
(a) Turnover for the year, all of which was earned in Nigeria, comprises:

2011 2010
N’000 N’000

Premium Motor Spirit (PMS) 49,150,651 55,766,260
Aviation Turbine Kerosene (ATK) 9,690,006 8,232,685
Automotive Gas Oil (AGO) 7,033,178 6,048,915
Lubricants and greases 2,544,037 2,695,584
Dual Purpose Kerosene (DPK) 2,535,064 1,338,373
Low Pour Fuel Oil (LPFO) - 700,108
70,952,936 74,781,925

(b) Analysis of turnover and cost of sales:

Retail/C&I* Aviation Lubes Total
N’000. % of Total N’000. % of Total N’000. % of Total N’000. %

Turnover 58,718,893 83 9,690,006 14 2,544,037 3 70,952,936 100
Cost of sales (53,001,799) 83 (8,956,075) 14 (1,957,105) 3 (63,914,979) 100
Gross profit 5,717,094 81 733,931 11 586,932 8 7,037,957 100

Notes to the Financial Statements

44

Retail/C&I * Aviation Lubes Total
N’000. % of Total N’000. % of Total N’000. % of Total N’000. %
Turnover 63,853,656 85 8,232,685 11 2,695,584 4 74,781,925 100
Cost of sales (58,148,930) 86 (7,591,287) 11 (1,650,030) 3 (67,390,247) 100
Gross profit 5,704,726 77 641,398 9 1,045,554 14 7,391,678 100
* C&I represents Consumer and Industry markets.

3 Other income
Other income comprises:
2011 2010
N’000 N’000

Rental and lease income (Note 10 (c)) 67,967 114,684
(Loss) / gain on disposal of property, plant and equipment (9,731) 23,388
Sundry income 89,175 56,659
147,411 194,731

4 Exceptional item
Exceptional item relates to the cost of repainting of all service stations in Nigeria to reflect the Company’s brand
(‘MRS’).

5 Interest income
Interest income comprises:
2011 2010
N’000 N’000

Interest on fixed deposits 135,211 113,554
Interest on dealers’ loans and receivables 4,428 8,785
139,639 122,339

6 Interest expense and similar charges
Interest expense and similar charges relate to interest on bank overdrafts and short term borrowings. See Note 17.

45
7 Profit before tax
(a) Profit before taxation is stated after charging/(crediting): 2011 2010
N’000 N’000

Depreciation 911,824 539,234
Amortisation of intangible assets (Note 11) 3,189 -
Impairment of intangible assets (Note 11) 5,259 -
Management fee (Note 29 (a)) 704,150 577,194
Directors’ remuneration (Note 7 (b) (iv)) 16,076 24,506
Employee costs (Note 7 (b)(i)) 1,601,921 1,305,994
Auditors’ remuneration 17,114 12,500
Bad debt provision 28,719 6,301
Loss / (gain) on disposal of property, plant and equipment 9,731 (23,388)
Foreign currency exchange loss 178,959 93,376
Exceptional item - 244,828

(b) Employee costs and directors’ remuneration
i) Employee costs during the year comprise:

2011 2011 2010
N’000 N’000
Salaries and wages 1,225,372 905,799
Other employee benefits 77,558 82,834
Termination benefits 86,309 -
Employer’s pension contribution 117,024 88,825
Gratuity charge (Note 23 (a)) 86,720 195,014
Other long term employee benefits charge (Note 23 (b)) 8,938 33,522
1,601,921 1,305,994
ii) The average number of full-time persons employed during the year (other than executive directors) was as
follows:

2011 2010
Number Number
Administration 49 55
Technical and production 37 41
Operation and distribution 43 52
Sales and marketing 74 78
203 226

46
iii) Higher-paid employees of the Company, other than directors, whose duties were wholly or mainly discharged in
Nigeria, received remuneration in excess of N1,000,000 (excluding pension contributions) in the following ranges:

2011 2010
Number Number
N N
1,000,001 - 2,000,000 6 15
2,000,001 - 3,000,000 8 43
3,000,001 - 4,000,000 73 68
4,000,001 - 5,000,000 46 33
5,000,001 - 6,000,000 32 45
6,000,001 - 7,000,000 19 4
7,000,001 - 8,000,000 9 3
8,000,001 - 9,000,000 2 5
9,000,001 - 10,000,000 3 5
Above 10,000,000 5 5
203 226

iv) Director’s remuneration (including pension contributions) for directors of the Company charged to the profit and
loss account are as follows:

2011 2010
N’000 N’000

Fees 2,500 2,500
Other emoluments 13,576 22,006
16,076 24,506
The directors’ remuneration shown above includes:

2011 2010
N’000 N’000
Chairman - -
Highest paid director 5,880 5,096
Other directors received emoluments in the following ranges:

2011 2010
Number Number
N N
Nil 3 2
1,000,001 - 2,000,000 1 -
2,000,001 - 3,000,000 - 1
3,000,001 - 4,000,000 1 3
4,000,001 - 5,000,000 - 1
5,000,001 - 6,000,000 2 1

47
8 Taxation

(a) The tax charge for the year has been computed after adjusting for certain items of expenditure and income which
are not deductible or chargeable for tax purposes. Tax charge for the year is analysed as follows:

2011 2010
N’000 N’000
Current year provision:
Income tax 998,026 1,026,898
Education tax 76,328 86,221
Capital gains tax 733 -
Prior year under provision 191,854 -
For the year (Note 8 (b)) 1,266,941 1,113,119
Deferred tax (Note 22) (275,006) (72,763)
Charge to profit and loss 991,935 1,040,356

(b) The movement on the tax payable account during the year was as follows:

2011 2011 2010
N’000 N’000
Balance, beginning of year 1,347,115 541,853
Charge for the year (Note 8 (a)) 1,266,941 1,113,119
Tax charge on prior year adjustments (Note 26 (a)) (151,135) -
Withholding tax credit notes utilised (9,900) (97,174)
Payments during the year (1,295,850) (210,683)
Balance, end of year 1,157,171 1,347,115

9 Earnings per share and declared dividend per share

(a) Earnings per share
Earnings per share for the Company is based on profit after taxation of N1,036,174,000 (2010: N1,847,327,000)
and on 253,988,672 (2010: 253,988,672) being number of ordinary shares in issue during the year.

(b) Declared dividend per share
Declared dividend per share is based on the declared dividend and on ordinary shares in issue during the year.
During the year, a dividend of 125 kobo per share on the issued share capital of 253,988,672 ordinary shares of 50
kobo each was declared and approved by shareholders at the Annual General Meeting held on 26 July 2011 (2010:
125 kobo per share).

48
10 Property, plant and equipment
(a) The movement on these accounts during the year was as follows:

Leasehold Plant and Storage and Computer and Furniture Automotive Capital Total
land and machinery retail outfit office and fittings equipment Work in
buildings tanks equipment Progress
N’000 N’000 N’000 N’000 N’000 N’000 N’000 N’000
COST:
Beginning of year 14,192,725 5,203,579 1,787,524 587,457 178,924 1,351,924 191,651 23,493,784
Additions 177,294 32,201 7,970 73,952 1,689 - 104,546 397,652
Transfers 4,048 1,890 7,184 11,138 8,158 17,318 (49,736) -
Disposals (36) (24,971) (449) (335) - (41,208) - (66,999)

End of year 14,374,031 5,212,699 1,802,229 672,212 188,771 1,328,034 246,461 23,824,437

DEPRECIATION:
Beginning of year 633,950 1,883,228 879,234 532,328 144,392 1,211,468 - 5,284,600
Charge for the year 377,256 332,432 91,296 32,221 14,272 64,347 - 911,824
Disposals (36) (7,514) (239) (291) - (40,890) - (48,970)

End of year 1,011,170 2,208,146 970,291 564,258 158,664 1,234,925 - 6,147,454
NET BOOK VALUE:
End of year 13,362,861 3,004,553 831,938 107,954 30,107 93,109 246,461 17,676,983
Beginning of year 13,558,775 3,320,351 908,290 55,129 34,532 140,456 191,651 18,209,184
(b) Certain assets (Leasehold land and buildings, plant and machinery and Storage and retail outfit tanks) of the
Company were revalued by Idowu Adeyemi and Co. and Adefila and Partners (Estate Surveyors and Valuers) on
31 December 2010, using the depreciated replacement cost basis. The values were incorporated in the financial
statements as at that date and the surplus that arose on the revaluation was credited to the revaluation reserve. The
net book value of revalued assets included in the above was as follows:

2011 2010
N’000 N’000

Leasehold land and buildings 13,183,390 13,558,775
Plant and machinery 2,970,859 3,320,351
Storage and retail outfit tanks 817,297 908,290
16,971,546 17,787,416

49
(c) Included in property, plant and equipment are filling stations, trucks and related equipment under operating lease to
dealers. The net book value of these assets (inclusive of revaluation surplus) was N7.90 billion (2010: N8.78 billion).
Income earned under these leases amounted to N67.97 million (2010: N114.68 million). Note 3

(d) During the year, the Company revised the depreciation rates of the revalued assets. The impact of revising the
depreciation rate in current year amounted to a reduction in depreciation charge for the year by approximately N1.67
billion.

(e) Capital commitments: Capital expenditure commitments as at year end authorised by the Board of Directors
amounted to N312 million (2010: Nil).

11 Intangible assets
Intangible assets represent the cost of acquired software during the year.

2011
N’000
At cost:
Balance, beginning of year -
Additions, during the year 171,089
Balance, end of year 171,089

2011
N’000
Amortisation:
Charge for the year (Note 7) (3,189)
Impairment charge (Note 7) (5,259)
Balance, end of year (8,448)

2011
N’000
Net carrying amount:
Balance, end of year 162,641

50
12 Long term prepayments
Long term prepayments represents prepaid rent and employee receivables relating to periods more than one year
after the balance sheet date. These comprise:

2011 2010
N’000 N’000

Prepaid rent 116,085 209,143
Employee receivables 127,527 160,965
243,612 370,108
13 Stocks
Stocks comprise:
2011 2010
N’000 N’000

Premium Motor Spirit (PMS) 1,623,300 1,777,550
Lubricants and greases 2,952,721 1,008,504
Aviation Turbine Kerosene (ATK) 1,201,337 418,055
Automotive Gas Oil (AGO) 248,710 255,364
Dual Purpose Kerosene (DPK) 15,972 13,670
Packing materials and other sundry stocks 82,256 82,872
Work in progress 25,482 19,060
Stocks in transit 2,216,375 5,062,640
8,366,153 8,637,715
14 Debtors and prepayments
Debtors and prepayments comprise:

2011 2010
N’000 N’000
Trade receivables 2,930,976 2,504,294
Petroleum Equalisation Fund (PEF) 2,559,922 6,107,739
Petroleum Support Fund (PSF) 7,119,146 1,189,294
Prepayments 78,150 98,071
Employee receivables 298,369 377,362
Interest receivable 1,745 -
Interest paid in advance 45,411 -
Withholding tax receivables (Note 14 (a)) 100,115 82,131
Due from joint venture partners 38,742 7,340
Directors’ debit balance 100 1,300
Receivables from registrar (Note 20 (c)) 231,206 309,778
Other debtors 160,500 42,051
13,564,382 10,719,360

51

(a) The movement in withholding tax receivables account during the year was as follows:

2011 2010
N’000 N’000

Balance, beginning of year 82,131 149,122
Additions during the year 27,884 30,183
Utilisations during the year (9,900) (97,174)
Balance, end of year 100,115 82,131
The Company has not considered it necessary to provide for the risk of non-utilisation of the withholding tax
receivables. This is based on section 23 of the Federal Inland Revenue Services Amendment Act of 2007, which
provides that the Company will be entitled to a refund of excess tax payments subject to an audit of the books of the
Company by the relevant authority. The Company is of the opinion that these amounts are realisable.

15 Amounts due from related parties
Due from related parties comprise:

2011 2010
N’000 N’000
Corlay Togo S.A 81,768 28,839
Corlay Cameroun S.A 22,986 5,128
MRS Oil and Gas Limited (Note 15(a)) 18,865,536 -
MRS Shipping Line Limited 11,128 -
MRS Holdings Company Limited 68,359 210,375
19,049,777 244,342

(a) Included in this balance is an amount of N17.61 billion, representing amounts recoverable from MRS Oil and Gas
Limited in connection with import facilities drawn by the Company on its behalf. See Note 17(a).

16 Cash and cash equivalents
Cash and cash equivalents comprise:

2011 2010
N’000 N’000
Cash at Bank and in hand 6,513,027 1,649,395
Short term deposits with banks (Note 16 (a) and 20 (c)) 1,908,485 1,250,000
8,421,512 2,899,395

52
(a) Included in cash and cash equivalents are unclaimed dividends amounting to N 240.71 million (2010: Nil) held in
separate bank accounts in accordance with guidelines issued by the Securities and Exchange Commission. This
amount is restricted from use by the Company.
17 Bank overdraft and short term borrowings
Bank overdraft and short term borrowings comprise bank overdrafts and short term facility obtained to meet working
capital requirements. These comprise:

2011 2010
N’000 N’000

Import finance facilities (Note 17 (a)) 20,001,092 -
Short term borrowings 1,002,866 517,347
21,003,958 517,347

Total lines of credit available to the Company amounted to N25.50 billion (2010: N2.50 billion). Interest rates on these
facilities ranged between 14% to 19.75% per annum (2010: 12% to 14.5% per annum). The net interest expense
incurred in the year amounted to N269.73 million (2010: N90.82 million). Note 6. These facilities are either secured
with the products financed, domiciliation of PPPRA payments or the Company’s sinking fund account with a balance
of N 1.6 billion as at year end. This sinking fund account is included in the short term deposits in Note 16.

(a) Included in import finance facilities are facilities drawn down by the Company in favour of a related party, MRS Oil and
Gas Limited amounting to N17.50 billion. This related party bears all costs associated with the facility and amount
due from the related party with respect to this facility (inclusive of all charges) amounting to N17.61 billion has been
included as part of receivables due from MRS Oil and Gas Limited. Note 15(a).

18 Creditors and accruals
Creditors and accruals comprise:

2011 2010
N’000 N’000
Trade and other creditors 5,199,261 9,732,296
Accruals 3,440,258 1,832,515
Due to joint venture partners 62,096 51,894
Advances received from Customers 472,414 1,028,399
Bridging allowance 336,214 2,551,796
Pension Payable (Note (18 (a)) 3,298 2,904
9,513,541 15,199,804

53

(a) The balance on the pension payable account represents the amount due to the Pension Fund Administrators which
is yet to be remitted at the year end. The movement on this account during the year was as follows:

2011 2010
N’000 N’000
Balance, beginning of year 2,904 11
Contributions during the year 155,080 120,912
Payments during the year (154,686) (118,019)

19 Amounts due to related parties
The amounts due to related parties include:

2011 2010
N’000 N’000
Petrowest S.A. (Formerly Ovlas Trading S.A) 11,232,801 1,926,596
Corlay Cote d’Ivoire S.A 116,188 95,349
MRS Oil and Gas Limited 2,135,790 -
Corlay Benin S.A 57,226 25,928
13,542,005 2,047,873
Amounts due to related parties do not bear interest and have no fixed repayment period.

20 Dividend payable
The movement on the dividend payable account during the year was as follows:

2011 2010
N’000 N’000
Balance, beginning of year 528,543 522,920
Dividend declared (Note 20 (a) and 26 (b)) 317,486 317,486
Unclaimed dividend written back (Note 20 (b) and 26 (b)) (10,579) (24,260)
Dividend paid (302,369) (287,603)
(a) Dividend declared represents ordinary dividend declared at the Annual General Meeting held on 26 July 2011
amounting to N317.49 million in respect of the 2010 financial year (2009 financial year: N317.49 million).

(b) This represents write back to retained earnings of unclaimed dividend exceeding a period of twelve (12) years from

54
date of declaration as they have become statute barred in accordance with section 385 of the Companies and Allied
Matters Act of Nigeria. Note 26 (b).

(c) Analysis of dividend payable is as follows:
2011 2010
N’000 N’000
Held with registrar (Note (14)) 231,206 309,778
Held in separate bank account (Note 16 (a)) 240,711 -
Held as working capital 61,164 218,765

21 Security deposits
These are collateral deposits paid by dealers who maintain credit facilities with the Company. These amounts are
refundable to the dealers upon termination of the relationship less any outstanding amounts due from the dealers.

These deposits do not bear interest.

22 Deferred tax
The movement in deferred tax account was as follows:
2011 2010
N’000 N’000
Balance, beginning of year 1,699,058 389,372
Charge/(credit):
- Recognised in the revaluation reserve (Note 25) 962,939 1,382,449
- Recognised in the profit and loss account (Note 8 (a)) (275,006) (72,763)
Balance, end of year 2,386,991 1,699,058
23 Provision for Long Term Employee Benefits
Provision for long term employee benefits comprises:
2011 2010
N’000 N’000
Provision for gratuity (Note 23 (a)) 515,461 549,623
Provision for long term employee benefits (Note 23 (b)) 36,019 31,296
551,480 580,919

(a) Gratuity provision is based upon independent actuarial valuation performed by HR Nigeria Limited using the

MRS annual report 2011

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MRS annual report 2011