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

Ann

ual

Rep

ort &

Acc

ount

s

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 Auditorsvi 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

Ann

ual

Rep

ort &

Acc

ount

s

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 Office8, Macarthy Street, Onikan Lagos, Nigeria

8

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

Board of directors andOther Corporate information

BOArd Of direCTOrS

Alhaji Sayyu i. dantata Chairman

Mr. Shardhashis B. Prasad Managing Director

Mr. Patrice AlbertiRepresentative of Pact Advisory, Management &Service SASNon Executive Director

Mr. Andrew O. Gbodume Executive Director (Finance &Administration)

Chief Sylvanus C. ezendu Non Executive Director

dr. Samaila M. Kewa Non Executive Director

Alhaji dahiru M. Barau Non Executive Director

COMPAny SeCreTAryMrs. O.M. Jafojo

reGiSTered OffiCe8, Macarthy StreetOnikanLagosNigeriaWebsite: www.mrsholdings.com

reGiSTrArCity Securities(Registrars) LimitedPrimrose Tower17A, Tinubu Street,Lagos.Tel: 01 – 2666944 – 53;01 – 2714729Website:https://csrl.firstcitygroup.com

indePendenT AudiTOrKPMG Professional ServicesKPMG TowerBishop Aboyade Cole StreetVictoria IslandLagos.

PrinCiPAL BAnKerSFirst Bank of Nigeria Plc Zenith Bank PlcCitibank Nigeria Ltd First City Monument Bank Plc Access Bank PlcUnion Bank of Nigeria Plc

10

Ann

ual

Rep

ort &

Acc

ount

s

Leadership Team

Shardhashis B. PrasadManaging Director

Andrew O. GbodumeExecutive Director (Finance & Admin.)

Oluwakemi M. JafojoCompany Secretary

Martin Orogun***Finance Manager

Ogungbangbe Thomas O.Aviation Manager

Alfred OtoboSales & Marketing Manager

Kola Akinyemi EHS Manager

Kwabena nana**Human Resources Manager

Teshoma A. Onwuka*Human Resources Advisor

emmanuel Oyibo*Chief Accountant

Andrew OnumChief Legal Counsel

fred Achoru*Operations Manager

Solomon AniLubes Sales and C & I Manager

Oladipo OmolojaMarketing Support Manager

Okechukwu Anazodo*Procurement Manager

John udheDesign Manager

Oghenekaro OlogeInformation Technology Manager

Situ iyiolaPlanning & Price Manager

*** Resumed 2011** Resigned 2011* Retired 2011.

IntroductionDistinguished 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 EnvironmentSome 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.

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.

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 EnvironmentGlobally, 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 EnvironmentThough, 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 IndustryThe 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 CompanyIn 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.

• Themaintenanceofazero-levellabourcon-frontationbetween management and staff.

• ThetrainingofstaffmembersontheongoingSAPimplementation was vigorously pursued.

• The engagement of PricewaterhouseCoopers firmof 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.

• Expansionandupdatingofthecompany’sexistingservice station’s facilities and lube production lines to enhance its participation in and share of the market.

Dividend DeclarationThe board is pleased to recommend for your approval a total dividend payment of N177,792,070.40 which represents N0.70k 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 OutlookIt 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: -• Aninflationrate of between 12.5% - 13.5% which will be

fallout of a high consumer price index growth triggered off by an eventual full deregulation.

• AnexchangerateofN162toUS$1• GrossDomesticProduct(GDP)growthtobesustained

at 6.5% - 7.5% as global GDP growth rate.

• The stabilization of the domestic debt profile at aboutN5.62 trillion.

• Anexternalreserve 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 ChangesOn 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.

ConclusionOn 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. dantataChairman

Chairman’s Statement

15

Ann

ual

Rep

ort &

Acc

ount

s

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 CompanyThe 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 qualitylubricating 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

Ann

ual

Rep

ort &

Acc

ount

s

yeAr ended 31 deCeMBer 2011 2010 n’000 n’000

Turnover 70,952,936 74,781,925Profit Before Tax 2,028,109 2,887,683Tax Expense (991,935) (1,040,356)Profit for the Year 1,036,174 1,847,327Proposed Dividend for the Year (Kobo) 70 125Earnings Per 50k share (Naira) 4.08 7.27Declared 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 in2011:

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

Ann

ual

Rep

ort &

Acc

ount

s

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) 152,393,190 152,393,190S.B. Prasad - -P. Alberti - -Representative of Pact Advisory, Management & Service SAS

A.O Gbodume - N/Ad.M. Barau - -S. C. ezendu (indirect holdings) 47,368 47,368S. 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%

Directors’ Report Cont.’d

18

Ann

ual

Rep

ort &

Acc

ount

s

number of holdingLocal 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:

Directors’ Report Cont.’d

Analysis of Shareholding:According to the Register of Members at December 31, 2011, the spread of shareholding in the Companyis presented below:

19

Ann

ual

Rep

ort &

Acc

ount

s

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(Resigned from the board on June 1, 2011)

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:-

Directors’ Report Cont.’d

20

Ann

ual

Rep

ort &

Acc

ount

s

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 to the Board. The Audit Committee makes recommendations

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

dr. Samaila M. Kewa 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.

Directors’ Report Cont.’d

21

Ann

ual

Rep

ort &

Acc

ount

s

Strategic Planning and finance Committee members: Position Mar 10, ’11 Oct 26, ‘11

Chief Sylvanus C. ezendu Chairman X XMr. Olayemi M. Cardoso (Resigned from the board on July 26, 2011) MemberMallam Musa yahaya (Resigned from the board on August 15, 2011) Member Xdr. Samaila M. Kewa Member XMr. Olujinmi T. Adelekan (Resigned from the board on June 21, 2011) Member XMr. 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 XChief Sylvanus C. ezendu Member XMr. Olayemi M. Cardoso Member X(Resigned from the board on July 26, 2011)

Mrs. d. u. ufot (SAn) Member X(Resigned from the board on June 1, 2011)

Mr. Olujinmi T. Adelekan Member(Resigned from the board on June 21, 2011) 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.

Directors’ Report Cont.’d

22

Ann

ual

Rep

ort &

Acc

ount

s

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.

The objective of the policy is to provide a level of remuneration 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).

The Company provides a working environment that promotes 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(State agency) and the Nigerian Ports Authority (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 EffectiveSecretary/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:

Directors’ Report Cont.’d

23

Ann

ual

Rep

ort &

Acc

ount

s

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:

WAN Upgrade (Internet Link was changed from DOPC 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 equipmentInformation 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 eventThere 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

Directors’ Report Cont.’d

24

Ann

ual

Rep

ort &

Acc

ount

s

Board of directors

ALHAJi SAyyu idriS dAnTATAChairman

Alhaji Sayyu Idris Dantata is a Mechanical Engineer. He started his career as the Transport Director with the Dangote Group, one of Nigeria’s leading conglomerates and rose through the organization.

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

Ann

ual

Rep

ort &

Acc

ount

s

GBOduMe AndreW OGHenOVOExecutive 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 ALBerTiDirector

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. PrASAdManaging 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

Ann

ual

Rep

ort &

Acc

ount

s

BOard Of direCtOrs

dr. SAMAiLA MuSA KeWADirector

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 eZenduDirector

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 BArAuDirector

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 of Massanawa Travel & Tours and Massanawa Enterprises Limted amongst others.

He was appointed to the Board on March 20, 2009.

28

Ann

ual

Rep

ort &

Acc

ount

s

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. PrasadName: Name: Date: 12th April, 2012 Date: 12th April, 2012

29

Ann

ual

Rep

ort &

Acc

ount

s

report of The Audit Committeefor the year ended 31 december 2011

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 Committee22nd March, 2012

Members of the Audit Committee

1. Engr. T. Ijaiya - Chairman2. Mr. I.Saliu - Member3. Chief V. Barrah - Member4. Chief S. C. Ezendu - Director5. Mr. A.O. Gbodume - Executive Director (F & A)6. Dr. S.M. Kewa - Director

The financial Statements

32

Ann

ual

Rep

ort &

Acc

ount

s

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 ServicesKPMG TowerBishop Aboyade Cole StreetVictoria IslandPMB 40014, FalomoLagos

Telephone

FaxInternet

234 (1) 271 8955234 (1) 271 8599234 (1) 462 0704www.ng.kpmg.com

report on the financial statementsWe 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 statementsThe 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 reportTo the Members of MrS Oil nigeria Plc

33

Ann

ual

Rep

ort &

Acc

ount

s

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

OpinionIn 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 requirementsCompliance 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 ServicesKPMG TowerBishop Aboyade Cole StreetVictoria IslandPMB 40014, FalomoLagos

Telephone

FaxInternet

234 (1) 271 8955234 (1) 271 8599234 (1) 462 0704www.ng.kpmg.com

34

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

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 10Plant and Machinery Machinery 10 5 - 10Service station equipment 25 5 - 10Storage and retail outfit tanks 10 5 - 10Computer equipment 33.33 Not Revisedfurniture and fittings 20 Not RevisedAutomotive 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

Ann

ual

Rep

ort &

Acc

ount

s

revaluation of individual Property, plant and equipment 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

Ann

ual

Rep

ort &

Acc

ount

s

(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

Ann

ual

Rep

ort &

Acc

ount

s

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 payable on the lease. The discount on lease is defined 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

Ann

ual

Rep

ort &

Acc

ount

s

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 thesefinancial statements.

Profit and Loss Account for the year ended 31 december 2011

40

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

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 4,393,032TOTAL 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 The accounting policies on pages 34 to 38 and accompanying notes on pages 43 to 61 form an integral part of thesefinancial statements.

2011 2010 notes n’000 n’000

Balance Sheet (contd..) As at 31 december 2011

42

Ann

ual

Rep

ort &

Acc

ount

s

2011 2010 notes n’000 n’000 Cash flows from operating activities Operating profit before working capital changes 27 3,212,578 3,851,674Working 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

The accounting policies on pages 34 to 38 and accompanying notes on pages 43 to 61 form an integral part of thesefinancial statements.

Statement of Cash flows for the year ended 31 december 2011

43

Ann

ual

Rep

ort &

Acc

ount

s

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: For the year ended 31 December 2011

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 for the year ended 31 december 2011

44

Ann

ual

Rep

ort &

Acc

ount

s

For the year ended 31 December 2010 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

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

(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: Balance, beginning of year - 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, beginning of year - Balance, end of year 162,641

50

Ann

ual

Rep

ort &

Acc

ount

s

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

Ann

ual

Rep

ort &

Acc

ount

s

(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

Ann

ual

Rep

ort &

Acc

ount

s

(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

Ann

ual

Rep

ort &

Acc

ount

s

(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) Balance, end of year 3,298 2,904

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) Balance, end of year 533,081 528,543

(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

Ann

ual

Rep

ort &

Acc

ount

s

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 Balance, end of year 533,081 528,543

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

55

Ann

ual

Rep

ort &

Acc

ount

s

projected unit credit basis. This valuation was carried out as at 31 December 2011. The principal assumptions, i.e., discount rates, average rate of inflation, used for the purpose of arriving at the actuarial valuation ranged between 10% and 14% per annum (2010: 10% and 12% per annum). Actuarial gain for the year amounting to N57.29 million (2010: N 67.44 million, actuarial loss) has been recognised in full in the profit and loss account.

The movement on the gratuity provision account was as follows: 2011 2010 n’000 n’000

Balance, beginning of year 549,623 383,728 Provision for the year (Note 7 (b)(i)) 86,720 195,014 Payments during the year (120,882) (29,119) Balance, end of year 515,461 549,623

The gratuity charge for the year includes interest charges of N55.13 million (2010: N37.74 million).

(b) The movement on the provisions for other long term employee benefits was as follows: 2011 2010 n’000 n’000

Balance, beginning of year 31,296 - Provision for the year (Note 7 (b)(i)) 8,938 33,522 Payments during the year (4,215) (2,226) Balance, end of year 36,019 31,296

The provision was based on independent actuarial valuation performed by HR Nigeria Limited using the projected unit credit basis as at 31 December 2011. Included in other long term employee benefits are interest charges and actuarial losses of N4.69 million and Nil respectively (2010: Nil and Nil).

24 Share capital 2011 2010 n’000 n’000

Authorized share capital: 271,657,230 ordinary shares of 50 kobo each (2010: 271,657,230) ordinary shares of 50 kobo each 135,829 135,829

issued and fully paid 253,988,672 ordinary shares of 50 kobo each 126,994 126,994

56

Ann

ual

Rep

ort &

Acc

ount

s

25 revaluation reserve The movement in the revaluation reserve account was as follows:

2011 2010 n’000 n’000

Balance, beginning of year 14,008,720 - Revaluation surplus recognised in the year (Note 10(a)) - 15,391,169 Deferred tax on revaluation surplus (Note 22) (962,939) (1,382,449) Balance, end of year 13,045,781 14,008,720

26 retained earnings (a) Up to the year ended 31 December, 2010, the Company omitted costs incurred on behalf of a related party; MRS

Oil and Gas Limited, with respect to the purchase of products amounting to N472.30 million. The impact of this omission is a reduction of N472.30 million in the general reserve. The net impact of this on the opening general reserve is as follows: 2011 n’000

Net impact of prior year adjustments - before tax 472,296 Tax impact of prior year adjustments at 32% (Note 8 (b)) (151,135) Net impact of prior year adjustments - after tax (Note 26 (b)) 321,161

To adjust for the above, the general reserve for the 2010 financial year has been restated as follows:

2011 n’000

Balance, beginning of the year as previously reported 4,393,032 Prior year adjustment (321,161) Balance, end of year restated 4,071,871

57

Ann

ual

Rep

ort &

Acc

ount

s

(b) The movement on the retained earnings account during the year was as follows:

2011 2010 n’000 n’000

Balance, beginning of year 4,393,032 2,838,931 Net impact of prior year adjustments (Note 26 (a)) (321,161) - Transfer from profit and loss account 1,036,174 1,847,327 Dividend declared (Note 20) (317,486) (317,486) Unclaimed dividend written back (Note 20) 10,579 24,260 Balance, end of year 4,801,138 4,393,032

27 Operating Profit before Working Capital Changes

Operating profit before working capital changes comprise 2011 2010 n’000 n’000

Profit after tax 1,036,174 1,847,327 Adjustments:

- Taxation 991,935 1,040,356 - Interest income (139,639) (122,339) - Exceptional item - 244,828 - Interest expense and similar charges 269,728 90,819

Operating profit less exceptional item 2,158,198 3,100,991

Adjustments for items not involving movement of cash: - Depreciation 911,824 539,234 - Amortisation of intangible assets 3,189 - - Impairment of intangible assets 5,259 - - Loss / (gain) on disposal of property, plant and equipment 9,731 (23,388) - Bad debt provision 28,719 6,301 - Other long term employee benefit charge 8,938 33,522 - Gratuity charge 86,720 195,014 3,212,578 3,851,674

58

Ann

ual

Rep

ort &

Acc

ount

s

28 Working capital changes

Working capital changes comprise: 2011 2010 n’000 n’000

Decrease / (increase) in stocks 271,562 (3,793,004) Increase in amounts due from related parties (1,665,573) (229,701) Increase in debtors and prepayments (2,826,585) (2,637,857) (Decrease) / increase in creditors and accruals (5,535,230) 7,336,043 Increase / (decrease) in amounts due to related parties 11,494,132 (2,012,349)

1,738,306 (1,336,868)

29 related party transactions The Company transacts business with various members in the MRS Group. Amounts due from and/or due to these members are disclosed in Notes 15 and 19 respectively. Significant transactions with related parties are as follows:

(a) MrS Holdings Company Limited (MrSH) Management fees are charged to the Company by MRS Holdings Company Limited. The fees are fixed at $1,099,952.18 per quarter (2010: $895,000 per quarter). A total amount of N 704.15 million or $4.40 million has been charged to the profit and loss account for the year with respect to these fees (2010: N 577.19 million or $ 3.58 million). Note 7.

During the year, MRS Holdings Company Limited seconded employees to the Company and charged the costs

back to the Company. Amount charged was N11.44 million (2010: N49 million). In addition, the Company seconded employees to MRS Holdings Company Limited during the year and charged the costs to MRSH.

(b) MrS Oil and Gas Limited (MOG) The Company stores its products with MRS Oil and Gas Limited for which it pays throughput charges. At the end of year, an amount of N961.78 million (2010: N966.41 million) worth of stocks was held on behalf of the Company by this related party. N741.69 million was paid as throughput charges to MRS Oil and Gas Limited in the year (2010: N317.30 million). The Company also sold products amounting to N2.44 billion to MOG during the year.

During the year, the Company drew down some of its import finance facilities on behalf of MOG. MOG pays all costs related to these facilities and as at the year end, an amount of N17.61 billion was due from MOG in respect of these facilities, Note 17 (a).

(c) Petrowest S.A. ( formerly Ovlas Trading S.A)

The Company sources a significant proportion of its products from a related party, Petrowest S.A. During the year N28.93 billion worth of products were purchased from this related party (2010: N 4.06 billion).

(d) Corlay entities MRS Oil Nigeria Plc renders administrative services to various Corlay entities. Such services rendered include

receipts and remittances of payments of outstanding debts from aviation customers.

59

Ann

ual

Rep

ort &

Acc

ount

s

Outstanding amounts receivable from and/or payable to these entities are as disclosed in Notes 15 and 19

respectively. 30 ultimate Holding Company

The ultimate parent of the Company is MRS Holdings Limited.

31 Segment reporting Business Segments

The Company has three reportable business segments as described below:

Segment description Retail/ C&I This segment is responsible for the sale and distribution of petroleum

products (white products) in retail outlets and to industrial customers.

Aviation This involves the sale of Aviation Turbine Kerosene (ATK).

Lubes This segment manufactures and sells lubricants and greases.

Information regarding each reportable business segment is as shown below:

Turnover

2011 2010 n’000 n’000 Retail/ C&I 58,718,893 63,853,656 Aviation 9,690,006 8,232,685 Lubes 2,544,037 2,695,584 70,952,936 74,781,925

Cost of sales 2011 2010 n’000 n’000 Retail/ C&I 53,001,799 58,148,930 Aviation 8,956,075 7,591,287 Lubes 1,957,105 1,650,030 63,914,979 67,390,247

depreciation 2011 2010 n’000 n’000 Retail/ C&I 705,023 460,894 Aviation 65,421 58,635 Lubes 141,380 19,705 911,824 539,234

60

Ann

ual

Rep

ort &

Acc

ount

s

Property, plant and equipment (nBV)

2011 2010 n’000 n’000 Retail/ C&I 13,964,817 14,079,358 Aviation 1,060,619 1,306,465 Lubes 2,651,547 2,823,361 17,676,983 18,209,184

interest expense 2011 2010 n’000 n’000 Retail/ C&I 269,728 90,819 269,728 90,819

exceptional item 2011 2010 n’000 n’000 Retail/ C&I - 244,828 - 244,828

net assets 2011 2010 n’000 n’000 Retail/ C&I 11,832,274 14,177,406 Aviation 3,030,887 3,248,619 Lubes 5,799,617 2,276,830 Unallocated (2,688,865) (1,174,109) 17,973,913 18,528,746

Profit before tax 2011 2010 n’000 n’000 Retail/ C&I 1,539,060 1,829,341 Aviation 332,299 341,607 Lubes 156,750 716,735 2,028,109 2,887,683

32 Prior year Corresponding figures

Certain prior year corresponding figures have been reclassified to conform with current year presentation format.

61

Ann

ual

Rep

ort &

Acc

ount

s

33 Guarantees and other financial commitments

(a) Litigations and claims

The Company is subject to various claims and other liabilities arising in the normal course of business. The contingent liabilities in respect of pending litigations and other liabilities amounted to N8.37 billion as at 31 December 2011 (2010: N2.26 billion). In the opinion of the Directors, based on legal advise, no material loss is expected to arise from these claims.

(b) Capital Gains Tax on revaluation surplus

No provision has been made in the financial statements for contingent capital gains tax of N1.70 billion (2010: N1.78

billion) which might arise on disposal of revalued leasehold land and buildings at their present net book values. However, it is not the Directors’ present intention to sell these assets.

(c) Guarantees (i) The Company has an agreement with a commercial bank to guarantee car and housing loans to employees to a

limit of N45 million (2010: N45 million). There was no guaranteed amount as at year end (2010: N2.33 million)

(ii) The Company has bank guarantees it obtained in the normal course of its business in favour of major oil marketers amounting to N409.35 million as at year end to facilitate import of products on its behalf.

34 Post balance sheet events

There are no significant post balance sheet events which could have a material effect on the state of affairs of the Company as at 31 December 2011. However, subsequent to the year end, as part of its transformation exercise, and continued alignment into the MRS Group strategy, the Company reduced its staff size by 125. Where necessary, plans are ongoing to retain existing staff and hire new staff.

62

Ann

ual

Rep

ort &

Acc

ount

s

2011 2010

n’000 % n’000 %

Turnover 70,952,936 74,781,925

Bought in materials and services

- Local (19,431,374) (45,026,160)

- Imported (46,993,841) (25,249,105)

Value added by operating activities 4,527,721 4,506,660

Other income 147,411 194,731

Interest income 139,639 122,339

Value added 4,814,771 100 4,823,730 100

Applied as follows:

Employees as salaries,

wages and other benefits 1,601,921 33 1,305,994 27

Providers of capital as:

- Interest on borrowings 269,728 5 90,819 2

Government as taxes 991,935 21 1,040,356 22

retained in the business:

- For replacement of fixed assets (depreciation) 911,824 19 539,234 11

- For replacement of intangibles (amortisation) 3,189 - - -

- Proposed dividend 177,792 4 317,486 7

- To augment retained earnings 858,382 18 1,529,841 31

4,814,771 100 4,823,730 100

Valued Added Statement for the year ended 31 december 2011

63

Ann

ual

Rep

ort &

Acc

ount

s

2011 2010 2009 2008 2007 n’000 n’000 n’000 n’000 n’000 Revenue 70,952,936 74,781,925 74,603,050 48,687,821 72,628,103 Profit/(loss) before taxation 2,028,109 2,887,683 1,721,283 (305,726) 2,994,919 Taxation (991,935) (1,040,356) (670,373) 80,300 (1,035,602)Profit/(loss) after taxation 1,036,174 1,847,327 1,050,910 (225,426) 1,959,317 Dividend declared 317,486 317,486 - 1,904,915 1,300,422 Assets employed Property, plant and equipment 17,676,983 18,209,184 3,036,012 3,421,515 3,838,056 Intangible assets 162,641 - - - - Long term prepayments 243,612 370,108 265,132 139,733 149,288 Net current assets/ (liabilities) 3,652,068 2,860,130 1,069,939 (370,739) 1,425,431 Non-current liabilities (3,761,391) (2,910,676) (1,405,158) (1,275,494) (1,367,420) net assets 17,973,913 18,528,746 2,965,925 1,915,015 4,045,355 funds employed Share capital 126,994 126,994 126,994 126,994 126,994 Revaluation reserve 13,045,781 14,008,720 - - - Retained earnings 4,801,138 4,393,032 2,838,931 1,788,021 3,918,361 equity 17,973,913 18,528,746 2,965,925 1,915,015 4,045,355 Basic earnings per share (N) 4.08 7.27 4.14 (0.89) 7.71 Declared dividend per share (kobo) 125 125 - 750 512

five-year financial Summary

64

Ann

ual

Rep

ort &

Acc

ount

s

Shareholder information

SHAre CAPiTAL HiSTOry

year Share Capital Mode of Acquisition

1978 - 1979 13,606,536 Initial Share Capital

1980-1982 27,213,072 Bonus 1980 (1:1) 13,606,536 shares

1983-1985 45,355,120 Bonus 1983 (2:3) 18,141,048 shares

1986-1988 68,032,680 Bonus 1986 (1:2) 22,677,560 shares

1989 90,710,240 Bonus 1989 (1:3) 22,677,560 shares

1990-1996 113,387,800 Bonus 1990 (1:4) 22,667,560 shares

1997-2001 151,183,734 Bonus 1997 (1:3) 37,795,934 shares

2002-2003 181,420,480 Bonus 2002 (1:5) 30,236,746 shares

2004-till date 253,988,672 Bonus 2004 (2:5) 72,568,192 shares

The following dividends were declared by the Company between 2000 and 2011. Our records show that several dividends and share certificates remain unclaimed despite publications in the Newspaper to our shareholders and the circulation of the e-dividends forms. Affected shareholders are urged to kindly update their records to enable the Registrars complete the e-dividend process. We attach herewith the e-dividend form for your necessary and urgent attention.

diVidend dATe deCLAred AMOunT

Dividend 24 (Interim) March 20, 2000 9,016,421.87

Dividend 25 (Final) June 9, 2000 10,158,694.20

Dividend 26 (Interim) October 11, 2000 15,796,664.30

Dividend 27 (Final) May 14, 2001 19,485,125.10

Dividend 28 (Interim) November 30, 2001 14,578,502.40

Dividend 29 (Final) May 29, 2002 18,174,287.25

Dividend 30 (Interim) December 16, 2002 17,730,956.78

Dividend 31 (Final) June 14, 2003 15,016,091.18

Dividend 32 (Final) September 13, 2005 52,505,086.77

Dividend 33 (Final) July 25, 2006 29,175,995.10

Dividend 34 (Final) June 27, 2007 100,482,533.16

Dividend 35 (Final) July 1, 2008 134,541,708.75

Dividend 36 (Final) July 28, 2010 32,732,136.87

Dividend 37 (Final) July 27, 2011 63,932,546.72

For further information on the unclaimed dividend/certificates, please contact the Company’s Registrar at City Securities Registrars Limited, Primrose Towers, 17A Tinubu Street, Lagos.

65

Ann

ual

Rep

ort &

Acc

ount

s

Share Price Movement

Shareholders can receive information or contact the Company about any questions (regarding the financial results and up-to-date share price information), through the Company’s website (www.mrsholdings.com).

66

Ann

ual

Rep

ort &

Acc

ount

s

List Of distributors - LubricantsnAMe deSiGnATiOn AddreSSADOLF HYMAN NIG LTD Distributor 5 Red Cross Road, Ogbete, EnuguANGELA ADELOLA LTD Distributor Km 3 Ondo Road AkureANGUS NNOLIM C Distributor Angus West Africa Angus Filling Station 1 Airport Road MaiduguriARONU MOTORS CO.(NIG) LTD Distributor 71, Jubilee Road, AbaCEERO ALLIANCE LTD Distributor Airforce-Airport Road, By Airforce Fly Over Port HarcourtCY GENERAL ENTERPRISES Distributor 126 Industrial Rd OlodiApapa By Trinity B/S, Lagos DANBERTON INT NIG Distributor Zone D Block5 Shop 55 Tradefair LagosEZEANOCHIE FELIX, CHIEF Distributor 19 Beach Road Opp Union Bank JosHAMISU DAN TINKI MOTORS Distributor Naibawa Motor Park Km 7, Zaria Road, KanoJEZCO OIL NIGERIA LTD Distributor 13 Numan Road JimetaYolaJOHN AND ROSE VENTURES LTD Distributor Beside Uncle T Bakery, Ibafo, Ogun StateMATRIX PETRO - CHEM LTD Distributor 3 Wilmer Street Off Town Planning Way, Ilupeju, Lagos.NECIT NIGERIA LTD Distributor Hajiya Halima Estate Opp.KofarKalambaina Sokoto Central MarketONUORAH JOSEPHINE MRS Distributor B 6/4 New Spare Parts Onitsha R. N. IWOBI Distributor MRS Warehouse 127 Club Road, KanoSIMITAL NIG LTD Distributor I4 Ogooluwa Shopping Complex Challenge, IbadanT.O EWEH & SONS LTD Distributor A17/4 Etomekpe, Duke Town Drive State Housing, Calabar.UNLIMITED OIL SERVICES LTD Distributor 37 AmedOhibudo Street Victoria Island, LagosWOOPET OGBUS VENTURES LIMITED Distributor Ajase-Ipo Road Offa-Garrage, Ilorin

67

Ann

ual

Rep

ort &

Acc

ount

s

Corporate directory

LAGOS HeAdQuArTerS8, Macarthy Street, OnikanP. O. Box 166, LAGOSTel: 4614500Fax: 01-4614602

POrT HArCOurT4, Reclamation RoadPORT HARCOURT PMB 5369, email: Inquiries@mrsoilnigeriaplc.com

WArri 305, Warri /Sapele RoadP. O. Box 165, WARRITel: 053-254505, Fax: 053-254505

enuGu Km 8, Abakaliki ExpresswayEmene, EnuguP. O. Box 650, ENUGUTel: 08035250912

KAdunA2, Akilu RoadP. O. Box 71, KADUNAemail: Inquiries@mrsoilnigeriaplc.com

KAnO 19b Club RoadKANOemail: Inquiries@mrsoilnigeriaplc.com

APAPA Fuels Terminal / Manufacturing Apapa Complex5, Alapata Street Apapa, LagosP.M.B. 1083, Lagos.email: Inquiries@mrsoilnigeriaplc.com

JOS19, Beach Road,P.O. Box 457Jos Plateau Stateemail: Inquiries@mrsoilnigeriaplc.com

E-DIVIDEND FORM

Dear Sir,

I/We hereby request that all dividend(s) due to me/us from my/our holding in MRS Oil Nigeria Plc be paid directly to my/our Bank named below:

NAME OF BANK BRANCH

BANK ADDRESS

BANK ACCOUNT NO

SHAREHOLDERS FULL NAMESURNAME

TITLE

OTHER NAMES

FULL ADDRESS

MOBILE (GSM) NO LAND LINE

EMAIL FAX

The Registrar,City Securities (Registrars) Limited,Primrose Towers17A Tinubu StreetLagos

P.O. Box 9117, LagosTel: 01–2665944-53, 01-2641298, 01–7924462

Fax: 01-2714729

SHAREHOLDER’S SIGNATURE(S) BANK’S AUTHORISED SIGNATURES/STAMP

1. 3.

2. 4.

Company Seal-------------------------------------------------------------------------------------------------------------

Please fill out and send this form to the Registrar’s address above

PROXY CARD

NUMBER OF SHARES

ADMISSION CARDMRS OIL NIGERIA PLC

NAME OF SHAREHOLDER:__________________________________________

SIGNATURE OF PERSON ATTENDING: ________________________

NOTE: The shareholder or his/her proxy must produce this admission card in order to be admitted at the meeting. Shareholders or their proxies are requested to sign the admission

NOTICE IS HEREBY GIVEN THAT THE FORTY-THIRDANNUAL GENERAL MEETING OF MRS OIL NIGERIA PLC WILL BEHELD AT THE FEDERAL PALACE HOTEL, 6-8 AHMADU BELLOW WAY, VICTORIA ISLAND, LAGOS, NIGERIA, ON TUESDAY,JULY 10, 2012AT 11:00 A.M. TO TRANSACT THE FOLLOWING BUSINESSES:-

I/We*__________________________________________________________________

of___________________________________________being a member/members of MRS OIL NIGERIA PLC hereby appoint**_______________________________________________________________________

or failing him/her, the Chairman of the meeting as my/our proxy to act and vote for me/us on my/our behalf at the AnnualGeneral Meeting of the Company to be held on July 10, 2012 and adjournment thereof.

Dated this ________________________________ day of _________________ 2012

Signature ____________________________________________

1. To receive the report of the Audit Committee

2. To declare a dividend

To re-elect Directors under Articles 90/91 and 95of the Company’s Articles of Association.

I. Dr. Samaila M. KewaII. AlhajiDahiru M. BarauIII. Mr. Shardhashis B. Prasad

4. To re-appoint the Auditors

5. To authorized the Directors to fix the remuneration of Auditors.

6. To elect members of the Audit Committee.

7.

3.

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 retainedat 750,000.00 per annum.N

ANNUAL GENERAL MEETING OF MRS OIL NIGERIA PLC WILL BE HELD AT THE FEDERAL PALACE HOTEL, 6-8 AHMADUBELLOW WAY, VICTORIA ISLAND, LAGOS, NIGERIA, ON TUESDAY, JULY 10, 2012 AT 11:00 A.M.

The RegistrarsCity Securities (Registrars) LimitedPrimrose Towers, 17A Tinubu Street,Lagos

NOTE:A member who is unable to attend an Annual General Meeting isentitled by law to vote by proxy. A proxy form has been prepared toenable you exercise your right in case you cannot personally attendthe meeting. The proxy form should not be completed if you will beattending the meeting.

If you are unable to attend the meeting, read the followinginstructions carefully:

(a) Write your name in BLOCK CAPITALS on the p r o x y f o r mwhere marked *

(b) Write the name of your proxy**, and ensure the proxy form isdated and signed by you. The common seal should beaffixed on the proxy form if executed by a corporation.

The proxy form must be posted as to reach the address below notlater than 48 hours before the time for holding the meeting.

PROPOSED RESOLUTIONS FOR AGAINST

We the undersigned hereby certify the following with regards to our 2011, financial report for the year ended December 31, 2011 that:

(a) We have reviewed the report;(b) To the best of our knowledge, the report does not contain:

(i) Any untrue statement of a material fact, or(ii) Omit to state a material fact, which would make the statements, misleading in the light of the circumstances

under which such statements were made;

(c) To the best of our knowledge, the financial statement and other financial information included in the report fairly present in all material respects the financial condition and results of operation of the Company as of and for the periods presented in the report.

(d) We:(i) Are responsible for establishing and maintaining internal controls.(ii) Have designed such internal controls to ensure that material information relating to the Company, particularly

during the period in which the periodic reports are being prepared;

(e) We have disclosed to the auditors of the company and the audit committee:(i) Any fraud, whether or not material, that involves management or other employees who have significant roles in

the Company’s internal controls;

Certification Pursuant to Section 60(2) Of Investment and Securities Act No. 29 of 2007

Executive Director Finance & Admin

Managing Director

April 12, 2012