Flour Mills Nigeria Annual Report 2014

RC 2343

2014Annual Report

& Accounts

Committed to feeding the nation since 1960

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Our Mission, Our Vision

Notice of Annual General Meeting

Board of Directors, Officers and Other Corporate Information

Financial Highlights

Company Profile

Chairman's Statement

Report of the Directors

Statement of Directors’ Responsibilities

Report of the Independent Auditors

Audit Committee Report

Consolidated and Separate Statement of Comprehensive Income

Consolidated and Separate Statements of Financial Position

Consolidated and Separate Statements of Changes In Equity

Statement of Change in Equity

Consolidated and Separate Statements of Cash Flows

Notes to the Consolidated and Separate Financial Statements

Consolidated Statement of Value Added

Non IFRS Statement Five-Year Financial Summary - Group

Non IFRS Statement Five-Year Financial Summary - Company

Performance Indicators

Share Capital History of the Company

Marketing Pages

E-Dividend Form

Proxy/Admission Form

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Contents

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NOTICE IS HEREBY GIVEN that the fifty fourth ANNUAL GENERAL MEETING of Flour Mills of

Nigeria PLC will be held at THE GRAND BALL ROOM, EKO HOTEL & SUITES, thADETOKUNBO ADEMOLA STREET, VICTORIA ISLAND, LAGOS on Wednesday 10

September, 2014 at 12 noon to transact the following business:

ORDINARY BUSINESSst1. Receive the Audited Financial Statements for the year ended 31 March, 2014 and the

Reports of the Directors, Auditors and Audit Committee thereon.

2. Declare a dividend.

3. Re-elect Directors.

4. Fix the remuneration of the Directors.

5. Authorize the Directors to fix the remuneration of the Auditors.

6. Appoint members of the Audit Committee.

SPECIAL BUSINESS

7. To consider and if thought fit, pass the following resolution, which will be proposed as

an ordinary resolution:

“That pursuant to Article 117 of the Articles of Association of the Company and the

recommendation of the Directors, the sum of N119,284,236 out of the balance on the stGeneral Reserve Account as at 31 March 2014 be capitalized and distributed amongst

thmembers at the close of business on Friday 15 August, 2014 in proportion of one new

ordinary share for every ten ordinary shares held by them on that day on

condition that the same be not paid in cash but applied in paying in full for 238,568,472

new ordinary shares of 50k each to be allotted to and credited as fully paid up amongst

such members or their respective nominees, the shares so distributed to rank parri

passu with the existing shares in all respects except that they shall not rank for the stdividend recommended by the Directors in respect of the year ended 31 March 2014

and shall be treated for all purposes as capital and not as income, and the Directors

shall give effect to this resolution on receipt of the necessary permission from the

authorities.”

PROXY

A member of the company entitled to attend and vote at the above meeting is entitled to

appoint a proxy to attend and vote instead of him. A proxy need not be a member of the

company. For the appointment to be valid, a completed proxy form must be deposited at the

office of “Flour Mills Registrars Limited, c/o BAGCO Division, 34 Eric Moore Road, Iganmu,

Lagos, P. O. Box 341, Apapa” not later than 48 hours before the time fixed for the meeting.

Notice of Annual General Meeting

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DIVIDEND

The Board recommends a dividend of N2.10 (2013 – N2.00) per ordinary share of 50kobo

each which will be subject to withholding tax at the appropriate rate.

DIVIDEND WARRANTSthIf approved, the dividend warrants will be posted on Monday 15 September, 2014 to

shareholders whose names appear in the Register of Members at the close of business on

Friday 15th August, 2014.

CLOSURE OF REGISTER AND TRANSFER BOOKS

NOTICE IS HEREBY GIVEN that the Register of Members and Transfer Books of the th ndCompany will be closed from Monday 18 August to Friday 22 August, 2014 both days

inclusive.

AUDIT COMMITTEE

In accordance with Section 359(5) of the Companies and Allied Matters Act CAP C20 LFN

2004, a nomination (in writing) by any member or shareholder for appointment to the Audit

Committee should reach the Company Secretary at least 21 days before the Annual General

Meeting.

BY ORDER OF THE BOARD

ALH. Y. OLALEKAN SALIU

Company Secretary/ Director

31st July, 2014

1, Golden Penny Place,

Wharf Road,

Apapa, Lagos.

Notice of Annual General Meeting cont’d

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Directors:

Chairman: George S. Coumantaros (U.S. Citizen)

Vice Chairmen: John G. Coumantaros (U.S. Citizen)

Dr. (Chief) Emmanuel A. Ukpabi (KJW)

Group Managing Director: Paul Miyonmide Gbededo

Alhaji Abdullahi A. Abba

Chief James O. Fagbemi

Prof. Jerry Gana, CON

Alhaji Rabiu M. Gwarzo, OON

John Katsaounis (Greek)

Thanassis Mazarakis (Greek)

Atedo N. A. Peterside, CON

Foluso O. Phillips

Alhaji Y. Olalekan A. Saliu

Folarin R. A. Williams

Company Secretary: Alhaji Y. Olalekan A. Saliu

Registrars and Transfer Office: Flour Mills Registrars Ltd.,

34, Eric Moore Road,

Iganmu,

(BAGCO Building),

P. O. Box 341,

Apapa,

Lagos State

Auditors: Akintola Williams Deloitte

(Chartered Accountants)

Akintola Williams Deloitte House235 Ikorodu Road,Ilupeju, Lagos,P.O.Box 965,

Marina, Lagos State

Registered Office: 1, Golden Penny Place,

Wharf Road

Apapa,

Lagos State

Directors, Officers and Professional Advisers

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Financial Highlights

Years 2014 2013 Increase/(Decrease)

Currency N’000 N’000 %

Turnover 332,142,685 301,941,329 10

Profit before tax 8,227,983 10,876,848 (24)

Taxation (2,860,108) (3,337,038) (14)

Profit after tax 5,367,875 7,539,810 (29)

Minority Interest (755,842) (793,897) (5)

Retained profit 4,612,033 6,745,913 (32)

Share capital 1,192,842 1,192,842 0.0

Shareholders’ fund 79,922,659 79,570,397 0.4

Market capitalisation 162,226,560 186,083,408 (13)

Proposed dividend 5,009,938 4,771,369 5

Per Share data(kobo)

Earnings (Basic) 193 283 (32)

Earnings (Diluted) 193 283 (32)

Dividend 210 200 5

Dividend cover 0.9 1.4 (34)

Net assets (kobo) 3,503 3,458 1

Stock Exchange quotation at 31st March 68 78 (13)

Number of employees(Group) 4,828 4,796 1

Number of employees(Company) 3,156 3,134 1

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l Incorporated in September 1960, Flour Mills of

Nigeria Plc (FMN) is one of Nigeria's leading food and

agro-allied companies which has grown into a

diversified group with a broad product portfolio, an

iconic brand – “Golden Penny”, and robust distribution

network.

l The Group is primarily engaged in flour milling;

production of pasta, noodles, edible oil and refined

sugar; production of livestock feeds; farming and

other agro-allied activities; distribution and sale of

fertilizer; manufacturing and marketing of laminated

woven polypropylene sacks and flexible packaging

materials; cement manufacturing; operation of

Terminals A and B at the Apapa Port; customs

clearing, forwarding agents, shipping agents and

logistics; and, management of the mills of Maiduguri

Flour Mills Limited and Port Harcourt Flour Mills

Limited.

l FMN's shares were listed on The Nigerian Stock

Exchange in 1978 and had a paid-up Share Capital of

N1.193 billion and Market Capitalisation of N155.1

billion on 31st March 2014. With the current

ownership structure of 55.73% overseas

shareholders and 44.27% Nigerian and institutional

investors, there is a broad ownership base with over

77,500 shareholders. The Group employs over 12,000

direct and indirect employees with diverse ethnic,

cultural and religious background who work

harmoniously together to deliver superior value to

customers and other stakeholders.

l Recently, the Company's flour operations witnessed

major strategic investments in milling technology and

gained accreditation to the Quality Standard ISO

9001:2008 recognizing that its flour manufacturing

facilities are world class and operating within an

internationally recognized Quality System.

l The Company which delivered N246 billion Revenue stfor the year ended 31 March, 2014 and posted an

After Tax Profit of N10.47billion is poised to continue

to deliver meaningful top and bottom line growth.

l In furtherance of its long term business model and

growth strategy, FMN recently embarked on group

restructuring, strategic business acquisitions and

investments in its core food business and backward

integration programs.

l The following significant developments/investments

are noteworthy:

Ø Merger with its subsidiary – Nigerian Bag

Manufacturing Co. Plc – the leading woven

polypropylene sack company in Nigeria, now a

Division of FMN – March 2013.

Company Profile

Ø

Division of FMN – March, 2013.

Ø Investment of over USD 65 million in “West Mills”

raising the company's wheat grinding capacity to

over 8,000 metric tonnes per day - September,

2013.

Ø Successful commissioning of a 750,000 metric tons

per annum Sugar Refinery built at a cost of USD

250 million (owned by its wholly owned subsidiary,

Golden Sugar Company Ltd) – April 2013.

Ø Acquisition of 90% equity stake in ROM Oil Mills

Ltd, a 350,000 metric tons per annum edible oil

processing company in Ibadan – 2012/2013.

Ø Acquisition of 90% equity in Thai Farm

International Ltd, Ososa, Ogun state, Nigeria's

foremost High Quality Cassava Flour processing

company - 2012/2013.

Ø Two environmentally friendly dual fuel Siemens

turbines each rated at 15 megawatts were

installed, commissioned and are operational –

2013/14.

Ø Other major Investments in Backward Integration

Programs and agro allied businesses extend to

large scale cultivation of sugar cane, cassava,

corn, rice, soybeans and oil palm in addition to

expansion of animal feeds production in different

parts of Nigeria. These backward integration

programs and initiatives which align with Federal

Government's Agriculture Transformation Agenda

would not only create group synergies and ensure

long term profitability, they would help to

strengthen and protect the supply chains of FMN's

Group's core food business and other downstream

activities.

l As FMN seeks economic opportunities in its agro allied

business and creates value for stakeholders, it

continues to give attention to education, research,

social and environmental responsibilities. And what is

more, FMN's investments and efforts continue to

create new jobs, enhance local capacity building,

increase agricultural output, minimize challenges of

sourcing some raw materials and inputs, and make

meaningful contributions to food sufficiency and

security in Nigeria.

l In the light of the moderately positive global economic

outlook and the gradual picking up of demand and

growth in emerging economies, the Board of Directors

is optimistic that Flour Mills Group has a bright, robust

and prosperous future with incredible opportunities to

grow and build long-term values for all stakeholders.

Merger with Niger Mills Co. Ltd, Calabar, now a

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Chairman’s Statement

Distinguished Shareholders, Ladies and Gentlemen;

It is with great pleasure that I welcome you to the 54th Annual General Meeting of our company, FLOUR MILLS OF NIGERIA PLC and to present to you the Annual Report and Accounts of the company for the financial year ending 31st March, 2014

BUSINESS ENVIRONMENT I like to begin my report with a brief review of the socio-economic environment within which we operated during the period under review to put the Group's performance in proper perspective.

It is encouraging that for the first time since 2008, analysts agree that the world economy showed more signs of sustainable recovery in 2013, albeit at a cautious pace which is believed to have benefitted from the gradual revival of the United States economy.

Against the background of the gradually improving world economy, the Nigerian economy continued its growth momentum as revealed by some key performance indicators.

The oil sector continued on its free fall path in terms of contribution to the Gross Domestic Product (GDP) while the non-oil sector, buoyed by the Agricultural sector, was the main driver of growth. Without doubt, the Government's efforts to diversify the economy, supported by agro-friendly policies and structural changes yielded positive results in 2013.

Nigeria's GDP which was 6.6% in March 2013 was sustained within the 7% range at the end of the first quarter of 2014 while inflation rate remained in the 'single-digit zone' closing in March 2014 at its five year low of 7.8% (March 2013 –8.6%).

Nigeria's brand of crude oil traded in the region of US$91 – 101 per barrel in the first quarter of 2014 ($116 – March 2013). The fall in price impacted Nigeria's foreign exchange reserves which contracted by 16.5%, a significant drop from US$44.17 billion in March, 2013 to US$37.82 in March, 2014. The decrease was partly driven by a reduction in portfolio and foreign direct investment

inflows.

During 2013, the 'Naira' remained stable in the region of N155.7 to 1 US$ in spite of intense pressure from the foreign exchange market, thanks to Central Bank of Nigeria's continued intervention and support.

Of some concern during the year is that borrowing cost remained relatively high although the Average Premium Lending Rate did eventually drop from 18.6% in March 2013 to 16.9% during the first quarter of 2014.

The Nigerian capital market continued its impressive growth trend with the Nigerian Stock Exchange (NSE) ending Year 2013 on a positive note. NSE's All Share Index appreciated by 47% (2012 – 35.4%) and market capitalization rose from N8.9 trillion in 2012 to N13.2 trillion in December 2013. The improved market performance was partly driven by the strong corporate earnings of blue chip companies and the continuing initiatives of NSE's Management.

The manufacturing industry continued to grapple with challenges which included poor road infrastructure, inadequate public power supply, worsening security concerns and unrest in the North East. It is remarkable to note that in November, 2013 the Federal Government commenced the privatization of electricity generation, transmission and distribution under the Independent Power Plant (IPP) Programme. The initiative was well received in the high hope that when all IPP projects come on stream, the problem of electricity which had long been the 'Achilles heel' of Nigeria's economy would finally be resolved.

RESULTS FOR THE YEARI am pleased to report that in spite of the challenging macro-economic and tough business environment, strong competition and unrest in the North East, Flour Mills of Nigeria Plc posted a Revenue of N246 billion, a growth of 9% over the N226 billion of last year. Whereas, the Company's Profit Before Tax grew by 7.1% to N12.46 billion from the N11.63 billion posted last year, Profit After Tax grew by 17.6% to N10.47 billion from N8.9 billion.

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Chairman’s Statement cont’d

The strong improvement in revenue and profitability was primarily driven by volume growth and efficiency gains, while the increase in Profit After Tax is a reflection of tax benefits arising from our investments.

We have deployed appropriate strategies to boost the volume and profitability of our bag manufacturing operations. Additionally, we intend to strengthen the growth momentum of our core food and agro allied business by leveraging on our vastly improved milling technology, enhanced capacities, group synergies, cost saving measures and continuous innovations to maximize our opportunities and ensure sustainable profit growth.

Flour Mills Group had a difficult and challenging year. Group Revenue grew by 10% to reach N332.14 billion while Group Profit Before Tax dropped by 24% from N10.87 billion to N8.23 billion. Group Profit After Tax was N5.4 billion, 28% less than N7.5 billion of 2013 financial year. The Group financial performance suffered largely due to the slower than expected contribution from the start up operations of Golden Sugar Company Ltd (Golden Sugar), FMN's wholly owned sugar production subsidiary.

The good news is that the products are widely accepted in the market where Golden Penny Food's Sugar products have rapidly established a foothold and strong reputation among industrial users, dealers, and end users, thanks to its quality, taste and flavor, availability, consistency, attractive packaging, efficient marketing and strong distribution network.

Looking ahead, we are confident that Golden Sugar will leverage on brand reputation, scale of operations and innovations to grow market share and volume, drive down costs, and ultimately improve bottom line to the delight of all stakeholders.

DIVIDEND AND CAPITALIZATIONThe Directors are pleased to propose to shareholders at the Annual General Meeting the payment of a dividend of N2.10 for every ordinary share of 50 kobo compared with N2.00 of last year, representing a 5% increase in dividend. This puts us in the category of companies having

uninterrupted record of dividend payment for over twenty years.

Additionally, the Board has decided to strengthen our capital base and improve the health of our balance sheet by ploughing back part of our earnings so that we are better fortified and leveraged to meet growing business challenges. I am therefore pleased to inform you that the Directors will propose to shareholders at the Annual General Meeting that a sum of N119,284,236 be capitalized by transfer from the General Reserve.

If the recommendation is approved, a bonus issue of one new ordinary share of 50 kobo for every ten ordinary shares of 50 kobo each will be allotted to shareholders.

The recommended dividend payment and bonus shares align with our long term model of delivering superior shareholder value.

FOOD BUSINESSI am pleased to report that 2013/14 was another excellent year for Flour Mills and its core food business.

Our flagship brand “Golden Penny” remains pre-eminent as the leading food brand in Nigeria as its success continues to be based, as always, on delivering against its core promises - best quality, consistent quality and consistent availability. To these core values we have added a 4th leg, innovation, which fuelled our growth in 2013/14 and will continue at an even faster rate in the future.

In order to meet our customers' demands, we continue to invest in processing capacity in our food and flour business and, what is more, we have started making a gradual push into the snacks sector with “Marios cheese balls”, “Noodies” and Golden bites “chin chin”.

In furtherance of our advent into edible oils and margarine markets, we are now at the final stage of completing the construction of an edible oil refinery in Ibadan.

I am happy to report that Golden Penny Flour, the preferred choice of the nation's bakers, retained its leading role in the bread flour market. The

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introduction of Confectionery Flour has enabled bakers to take advantage of specie of Golden Penny flour at a slightly reduced price while we have experienced strong growth in Pasta, Semovita, Goldenvita and Noodles in the consumer goods markets. I wish to put it on record that cassava flour is now applied in all our mills in line with Federal Government cassava flour inclusion policy.

In line with our time tested business model, there was an increased focus on customers ensuring that they are our kings and queens. We continued to invest in our growing team of Bakery Support Officers to complement our sales team. We also strengthened support to our highly esteemed dealers, big buyers and other customers by boosting our merchandising activities in major, but also neighbourhood, markets across Nigeria.

Whereas last year's performance of the Food Division was outstanding, our expectations for better performance in the current year are very high.

Quality Assurance and ResearchWe have re-engineered our Research and Development Unit to ensure the maximization of local content in our products while ensuring improved quality and we hope this would help generate wealth in the broader economy and stimulate the growth in consumption of our products.

Our staff are being trained and re-trained on-the-job, locally and overseas to upgrade their skills and broaden their exposure. Additionally, our laboratory facilities are continuously upgraded to meet both present and future needs of the business.

Our goal is nothing short of excellence!

Northern Nigeria Flour Mills Plc (NNFM) KanoThe worsening security challenges and unrest in some parts of the North continued to impact negatively on NNFM's performance and slowed the growth momentum.

Although Revenue declined marginally from N11.7 billion to N11.4 billion, the company posted an

impressive Profit After Tax of N233.5 million, a growth of 3.7% compared with N225.1 million achieved last year. The improvement was primarily driven by efficiency gains and cost reduction efforts.

We are confident that the company's business and profitability would rebound as the security concerns ease off.

Niger Mills (A Division of FMN)Niger Mills' impressive achievements of recent years were replicated during the financial year ended 31st March, 2014. In spite of production capacity constraints, Revenue was up from N17.8 million last year to N18.6 million, a growth of 4.5%. In response to growing product demand, Management's attention is now focused on maximizing plant utilization pending the completion of the on-going work to install a new mill. We have confidence that the expansion would help Niger Mills sustain its healthy contributions to the Group's overall fortunes.

Golden Pasta (GP)I am pleased to report that GP, a Division of Flour Mills of Nigeria Plc continued to deliver very impressive performance by maintaining market leadership in an increasingly competitive environment.

Also cheering is the information that our “green field” pasta factory which began full operations during the year at Agbara Industrial Estate, Igbesa, was ISO-certified by SON during the year. Our factories at Iganmu also witnessed regular visits by SON (MANCAP), NAFDAC, Ministry of Environment and Ministry of Labour & Productivity during the year and I am very happy to announce that all the visitors were impressed with the products, quality and facilities.

Golden Noodles Nigeria Limited (GNC)GNC, a wholly owned subsidiary of FMN, completed its fifth year of business with a remarkable growth in net sales in the face of major business challenges and intense competition. We are pleased to report that Golden Penny Noodles is now the number 2 brand in the market and with huge opportunities for further growth.

It gives me great joy to inform you that during the

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year our Noodles Plant obtained the NIS ISO 9001:2008 Quality Management System Certification. Similarly, the first bi-annual surveillance audit for 2014 conducted by SON went very well.

AGRO-ALLIED BUSINESSNew InvestmentsFMN continues to strategically invest in large scale commercial farming to support its food processing units with locally produced raw materials. Last year saw refocusing and significant investments in backward integrated programmes which centre on some value chains that have strategic links with our existing business:

l Agro Allied Syrups Ltd: A project to grow 5,000 hectares of cassava on land purchased at Shao, Kwara State to feed Thai Farm's Cassava Mill in Ososa.

l Kaboji Farms Ltd: Additional development of land on our Niger State grain farm to support the expansion in capacity of the Group's feed mills.

l Agri Palm Ltd: A 3,000 hectare oil palm plantation in Edo State to support the Group's vegetable oil refineries at ROM Oil Mill.

l Agro Allied Farms Sunti Ltd: A 4,500 hectare rice farm along the Niger River basin. This project will add to the rice production at Sunti Farm to complement the backward integration of our rice milling operations.

These projects add to FMN's landmark investments in Agro Allied businesses where we now grow and process maize, soy beans, sorghum, sugar cane, palm oil and rice. They also complement our leading position as supplier of Fertilizer and Agri Sacks to the Nigerian market. Indeed, FMN continues to be one of the largest promoters of Government's Agricultural Transformation Agenda with its on-going investments in agro-allied initiatives that support our concept of integrated food basket of products with home grown produce.

Golden Fertiliser DivisionWe are pleased with the performance of this Division during the year and the active contribution it made to the Federal Ministry of Agriculture and

Rural Development's Growth Enhancement

Scheme by supplying quality fertilizers to farmers nationwide. Significant improvements have been made in our distribution network and we are confident that this market will see steady growth. Kaboji Farms LtdThis FMN's wholly owned subsidiary owns 10,000 hectares of arable dry land near Kontagora in Niger State and is one of the largest commercial grain farms in the country. In the past season there were 2,500 hectares planted with Maize, 1,000 hectares of Soybean, 1,000 hectares of Cassava and 50 hectares of trial Sorghum. The maize and soybean provide consistent raw material supply to our feed milling operations and the cassava, provides critical mass for the production of High Quality Cassava Flour. It is inspiring to note that our Technical Assistance Agreement with Adecoagro, a leading South American agri-business, is expected to result in improved yields in these operations in the near to medium term and improve our profitability in this challenging and demanding sector. Premier Feed Mills Company Ltd (Premier Feeds)Premier Feeds remains the leading supplier of poultry feed in Nigeria and its new aqua feed is beginning to make a positive contribution. During the year under review the Feed Mill at Sapele was decommissioned and replaced with the new 380,000mt capacity feed mill in Calabar, Cross River State.

The Group is confident that the strategic relocation of the production facilities will not only enhance efficiency and improve geographical spread of this rapidly expanding business, it will also help in making significant contributions to profitability and enhance shareholder value.

ROM Oil Mills Ltd (Rom Oil)Our strategic investment in the palm and soybean oil extraction and refining sector has proved intuitive with good returns being made in all areas of this business with improved group synergies. Soybean grown on the Group's commercial farms is supplied to the oil extraction facilities in Ibadan where soya oil is extracted and refined for sale as cooking oil. The residual soya meal is supplied to our feed mills where it is converted into poultry feed. Our newly acquired palm plantation and mill

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in Edo State contributes Crude Palm Oil for refining and the residual De-oiled Cake is exported to Europe for animal feed.

I am happy to report that FMN's acquisition of 90% interest in the equity of ROM Oil has led to a significant increase in capacity, positioning the company for accelerated growth.

During the year, additional land was purchased in Ibadan for the installation of a state of the art US$80 million Solvent Extraction and Oil Refining facility with four times the capacity of the current business. The additional soya meal production will be utilised at our expanded feed milling facilities while the additional oil will supply our growing Noodles business and the new Margarine plant to be commissioned next year.

Thai Farm International Ltd (Thai Farm)Thai Farm grows and processes cassava into High Quality Cassava Flour (HQCF) at Ososa, near Ijebu-Ode, Ogun State. The operating strategy to date is largely based on small farmers' supplies resulting in the support and economic empowerment of over 2,500 small & medium scale entrepreneurs (SMEs) farmers from across the South West, Edo State and as far North as Niger and Kogi States in support of a robust cassava supply chain.

Worthy of note is the fact that the company has played a leading role in the emerging Agricultural Transformation Agenda of the Federal Ministry of Agriculture and Rural Development by ensuring consistent quality and availability of HQCF to the flour industry and a growing list of food processors in the bread, biscuit and snack food sectors.

The Board and Management are confident that with the ongoing financial support of FMN, its parent company, the capacity expansion and quality improvement programmes, Thai Farm is being positioned for a greater role in the evolving cassava and industrial starch sectors of the Nigerian economy.

LOGISTICS, SUPPORT AND OTHER SUBSIDIARIESBAGCO DivisionBAGCO recorded a Revenue of N20.5 billion, representing a 10.7 % decline compared to

previous year's figure of N22.96 billion. BAGCO also suffered a reduction in its Profit Before Tax which was down from N1.69 billion to N374 million.

Output was affected by reduced demand for harvest and agricultural bags due mainly to depressed harvest levels arising from extensive flooding in the previous season and security concerns in the North East. Additionally, the Division faced the challenges of overall open bag supply market which was overtraded with depressed selling prices. The situation was further exacerbated by the last harvest season being shorter than normal.

Going forward, Management has adopted a strategy to boost revenue by developing new business in the industrial sectors while at the same time focusing on internal restructuring and cost saving measures.

We are confident that the installation of additional extrusion, laminating and weaving capacity equipment coupled with our increased sales and marketing efforts will help the Division deliver improved Revenue and profitability.

Apapa Bulk Terminal Limited (ABTL)ABTL, FMN's wholly owned subsidiary, delivered better performance recording a total throughput of 2.9 million metric tons of cargo representing a 16% growth primarily due to improved marketing strategy.

As Management continues to step up investments in infrastructural development at the Port, we are confident that with improved scheduling of vessels, the earning capability of Terminal B will be maximized through third party cargo and the patronage of other port users. The emerging financial performance will undoubtedly enhance shareholder value.

Golden Transport Company Limited (GTC)GTC, a wholly owned subsidiary of FMN, continued to provide strong logistics support for FMN and its group companies hauling over 1,256,148 tons of goods with the over 380 trucks (290 in 2013) in its nationwide distribution fleet.

GTC's services have in no small way ensured the

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effective and timely delivery of products to customers in all the geo-political zones of Nigeria and plans are underway to increase the current fleet to about 500 by 2015 as this will further strengthen our commitment to customer satisfaction.

UNITED CEMENT COMPANY OF NIGERIA LTD. (UNICEM)I am pleased to report that our associated company, Unicem, where we now have 30% equity stake (up from 28.15% of last year) reported encouraging top line and bottom line growth in its financials for the year ended 31st December, 2013.

In spite of the negative impact of gas supply shortage which occurred during the last quarter of 2013, sales volume was up by 7% and consequently, Revenue grew modestly to N51 billion. This is a reflection of the gains arising from increased production capacity utilization and strong demand. And, it is remarkable to note that Unicem posted a Profit After Tax of N2.6 billion, a welcome development from the N4.9 billion loss suffered in 2012. Management is confident that the improved performance will be sustained given the rising trend of demand and the anticipated improvement in capacity utilization. Indeed, the turnaround has given credence to the growing optimism that returns from Unicem would be a significant boost to FMN group's performance in the coming years.

It is instructive to note that by the end of 2013, Unicem succeeded in raising funds to build a new 2.5 million metric tons per annum production line at Mfamosing, Cross River State to effectively double production capacity to 5 million metric tons. Construction activities have commenced in earnest and the new production facility is expected to be operational by the end of 2016. The expansion will not only help to meet anticipated growth in demand, it will strengthen Unicem's position as a major player in the industry, boost economic activities and create hundreds of jobs in Cross River State and beyond.

SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY (CSR)We continue to demonstrate our social responsibility by engaging in the sustainable development of our business activities and creating

value for stakeholders. In doing so, we remain committed to value creation and meeting the needs of the Society in ways that are economically, environmentally and socially responsible. This year, FMN received an award from the Lagos State Government's Ministry of Education's Support-Our-Schools Initiative for continuous contribution and commitment to Education. FMN made the following further contributions in line with its CSR key priority areas as follows:

(i) Education, research and skills development

a) Flour Mills Food Research Centre

In furtherance of the giant leap we took last year in setting up a Food Research Centre at the University of Ibadan (UI) namely - Flour Mills Food Research Centre, the take-off of the project received a major boost with the presentation of an additional N30 million to the University bringing FMN's contribution towards the establishment of the Centre to N60 million.

The UI-FMN partnership is part of on-going efforts at transforming the Department of Food Technology, UI into a world-class centre of excellence in food research.

b) Other projects carried out in the course of the year in the area of Education were:

l Construction of blocks of classrooms for Primary/Secondary Schools at Mokwa and Batagi in Niger State.

l Construction of a block of 4 (four) classrooms

at Government Day Secondary School, Kaboji,

Niger State.· Construction of a block of 2 (two) classrooms at Central Primary School, Kaboji, Niger State.

l Donation of a School Bus to New Era Girls' Senior Secondary School, Surulere, Lagos.

l Sponsoring of Osun State Schools Tourism quiz & debate competition for Secondary School children.

(ii) Infrastructural Development & Security

l In collaboration with Ogun State Ministry of

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Commerce & Industry, Ministry of Works and Ogun State Chambers of Commerce and other stakeholders, FMN proposed the construction of a 5.5 kilometers Opic Road at Agbara Industrial Estate. Companies under the auspices of the Chambers of Commerce in the area are expected to contribute 30% of the total project cost. Of the sum of N91,726,966 assigned to FMN as its contribution towards the project, a sum of N51,349,831 has been disbursed to date.

It is important for me to give credit to Ogun State Property Investment Corporation (OPIC) which is driving and jointly supervising the project with a counterpart contribution of 70% of the total project cost. The project which is expected to be completed in 2014 would benefit the surrounding communities of Igbesa, Igere, Ihunsa and Agbara.

l In a similar vein, FMN rehabilitated Golden Penny Road in Apapa at a cost of over N34 million bringing a great relief to motorists. The rehabilitated road runs from our new Head Office through to Apapa under bridge and is heavily used by vehicles on a daily basis.

l We constructed and handed over a Police Station at Kaboji, Niger State to the Nigeria Police, a gesture which will enhance safety of lives and properties within the Kaboji Community.

(iii) Environmental sustainability

We continually show our dedication to reducing carbon emission, preservation of the ecosystem and mitigating the impact of climate change in our operations. Two gas turbines were installed in our sugar refinery each with rated capacity of 15 megawatts which substantially increased our electricity generation capacity. The turbines use the Co-generation technology (Combined Heat and Power CHP) which helps in reducing the volume of greenhouse gasses released into the atmosphere.

We are actively involved in the beautification of Apapa environs via maintenance of designated medians and roundabouts.

(iv) Health and Welfare

l

We organized a two-day Free Eye Screening exercise in collaboration with the Department of Ophthalmology, Lagos University Teaching Hospital (LUTH) for people within Apapa community and its environs. The screening which took place at Apapa Local Government Town Hall, recorded more than one thousand (1,000) participants who were provided with recommended free eye medication and spectacles in case of need.

l Other projects executed in the area of Health and Youth Welfare included:

v Provision of Borehole water with overhead tank and 20KVA Perkin Generator at Comprehensive Primary Health Centre, Kaboji, Niger State.

v Construction of a Clinic at Sunti, Niger State.

v Sponsoring of Channels TV kids soccer competition.

HUMAN CAPITALWith a strong management team and highly professional workforce, a major transformation process that spans all facets of our organizational development and people management systems creating a sound base for sustainable future growth has commenced. Our transformation plans have not altered the unique values and strong culture on which we were founded; commitment to Performance, Integrity, Initiative, Leadership, Ownership and Teamwork [PIILOT]. These core values continue to set us apart.

Our continued success is a reflection of the talent, entrepreneurial spirit and commitment of leadership and all employees whose development and personal growth we immensely support because they are fundamental to our success. We have worked hard to put in place effective succession planning and FMN leadership development series. Periodic meetings of leaders in the business have been flagged off to further enhance team effectiveness, define and grow leadership competency. We are confident that our

actions will help us build the next generation of

Caring for the Eye Initiative

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Management that will drive our growth and competitively sustain our business.

Our regular Graduate Trainee Schemes and other Skills Development programmes continue to be sources for attracting requisite talents to renew our work force.

Let me at this point express the Board's profound appreciation to management and staff for their contributions, commitment, hard work and loyalty. I must also commend everyone for the very peaceful industrial relations that the company experienced during the year.

BOARD AND MANAGEMENT CHANGESI wish to inform you that Mr. Adebayo Alade – Loba resigned his position as a Non - Executive Director of the company on 20th October 2013. Mr. Alade - Loba who served on the Board of our Company from March 2009 to October 2013 would be missed for his ideas, extensive knowledge and experience.

On behalf of other members of the Board, I wish to express my appreciation for his contributions.

I am happy to report that the composition of the Board of Directors was strengthened with the appointment of a new Non- Executive Director with very good business and professional background, Mr. Foluso Phillips.

Foluso is a professional with high personal integrity, and brings with him, many years of managerial experience in turning around and growing companies profitability. Indeed, the Board of Flour Mills of Nigeria Plc is thrilled to have such an experienced and versatile gentleman who can add great value.

I am pleased to welcome Foluso on board on your behalf.

CONCLUSIONI would like to reassure our esteemed shareholders that our Group's prospects are promising and bright. Indeed, the 'future is golden'! We shall strive to step up investments in our core food business and, in line with our strategic business thrust, expand our production capacity and facilities, increase our productivity and efficiency to

enable us deliver top line and bottom line growth. As we strive to improve and re-engineer our existing product range, we will continue to focus on innovation and develop new products for the market making them more visible and available at points of sale while we continue to improve our sales, merchandising, redistribution personnel and activities.

Similarly, we are determined to ensure the success of our agro-allied investments and in doing so, maximize local content in our final products and derive group synergies. Indeed, we remain committed to our policy of being involved at all stages of the food value chain from “Farm to Table.” While we are mindful that our agricultural operations must be profitable, sustainable and environmentally friendly, we are also proud of the contribution these businesses make through job creation, social upliftment and economic empowerment in the rural areas. Please permit me to express my appreciation to the nation's bakers and our growing band of customers and consumers of “Golden Penny” products – Flour, Semovita, Goldenvita, Spaghetti, Macaroni, Noodles, Rice and Sugar; customers of Premier Feeds, Golden Fertilizer, BAGCO super sacks, Golden Transport Company Limited and Apapa Bulk Terminal Ltd, our Outsourced Farmers and Agro Input Suppliers, for their patronage, loyalty and support.

Finally, I want to express my thanks and appreciation to my colleagues on the Board, for their understanding and cooperation. I am proud to say that their wise counsel and efforts have indeed made it easy for the company to remain stable, progressive and focused. Similarly, I also express my thanks to members of the Audit Committee for their devotion, contribution and commitment. To our distinguished shareholders, our bankers and other professional advisers, I cannot over-emphasize my gratitude for your interest, support, trust, confidence and commitment.

Thank you all.

George S. CoumantarosChairman

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1. ACCOUNTSThe Directors are pleased to submit their report together with the audited accounts of

stthe company and the group for the year ended 31 March, 2014.

2. RESULT N’000The group profit for the year after taxation and

non-controlling interest was - 5,153,988

Proposed Dividend - 5,009,938

The proposed dividend of N2.10 (2013 – N2.00) per ordinary share of 50 kobo is subject to withholding tax at the appropriate rate.

Additionally, the Board is recommending for approval by shareholders at the next Annual General Meeting a bonus issue of 1 ordinary share for 10 ordinary shares of 50 kobo each.

3. PRINCIPAL ACTIVITIES The group is primarily engaged in flour milling; production of pasta, noodles, edible oil

and refined sugar; production of livestock feeds; farming and other agro-allied activities; distribution and sale of fertilizer; manufacturing and marketing of laminated woven polypropylene sacks and flexible packaging materials; cement manufacturing; operation of Terminals A and B at the Apapa Port; customs clearing, forwarding agents, shipping agents and logistics; and, management of the mills of Maiduguri Flour Mills Limited and Port Harcourt Flour Mills Limited.

4. LEGAL FORMthThe Company, which was incorporated on 29 September, 1960 as a private limited

liability company was converted to a public company in November, 1978. The shares are currently quoted on the Nigerian Stock Exchange.

5. DIRECTORS AND DIRECTORS’ INTERESTS

.1 The names of Directors who are currently in office are detailed on page 5.

.2 In accordance with the Company’s Articles of Association, the following Directors retire and, being eligible, offer themselves for re-election at the next Annual General Meeting:

Retiring by rotation: - Mr. John Katsaounis

- Mr. Thanassis Mazarakis

- Mr. Folarin R. A. Williams

- Alhaji Y. Olalekan A. Saliu

Report of The Directors For The Year Ended 31st March, 2014

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Mr Adebayo Alade-Loba resigned from the Board of Directors of the company with effect from 28th October 2013.

Mr. Folusho O. Phillips who was appointed to the Board as a Non–Executive Director of the company on Wednesday, 12th March, 2014 will seek confirmation of his appointment at the Annual General Meeting.

.3 No Director has a service contract not determinable within five years.

.4 The Directors’ interests in the issued share capital of the company as recorded in the Register of members and/or as notified by them for the purpose of Section 275 of the Companies and Allied Matters Act, Cap C20 LFN 2004 are as follows:

No. of 50k shares at

31st March2014 2013

Alh. Abdullahi A. Abba 11,221 11,221

Chief E. A. Ukpabi (KJW) 3,813,624 3,813,624

Chief J. O. Fagbemi 1,263,771 1,263,771

Mr. P. M. Gbededo 535,718 535,718

Professor Jerry Gana, CON 40,000 40,000

Mr. J. Katsaounis 2,192,514 2,115,421

Mr. F. R. A. Williams, Jnr. 27,348 27,348

Mr. A. N. A. Peterside, CON 1,500,000 1,500,000

Alh. R. M. Gwarzo, OON 181,566 181,566

Alh. Y. O. A. Saliu 1,462,714 1,462,714 Mr. F. O. Phillips _ _

th6. Profile of Directors seeking re-election or confirmation at the 54 Annual General Meeting:

i) Mr. John KatsaounisMr. John Katsaounis is a non-executive member of the Board of Directors of Flour Mills of Nigeria Plc, a position he has occupied since September, 1993.

Mr. Katsaounis holds a a Bachelor of Science Degree in Mechanical Engineering University of Minnesota (1969); an MBA in Economics from University of California, Berkeley (1970); a Graduate Degree in Economics, University of Geneva (1972); and a Graduate Degree in Regional Development, University of Athens (1975). He is an alumnus of Harvard Business School of Post Graduate Studies.

Report of The Directors For The Year Ended 31st March, 2014 Cont’d

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Prior to joining Flour Mills, Mr. Katsaounis was the founder and owner of Plexus Construction Company, Greece (1974-1985). He also served as Managing Director and General Manager of Alucanco S. A. Greece, an aluminum cans manufacturing company (1985-2000).

ii) Mr. Thanassis MazarakisThanassis Mazarakis is a non-executive director, who joined Flour Mills Board in July, 2006.

He holds a Bachelor of Arts Degree from Princeton University (1984) and a Masters in Business Administration from the Wharton School at the University of Pennsylvania (1985). Prior to joining Flour Mills, Mr. Mazarakis held numerous finance, marketing and general management positions. He was the Chief Financial Officer of the Prudential Insurance Company of America, one of the largest US life insurance companies, and the Chief Executive Officer of Chase Merchant Services, the largest global credit and debit card transaction processor.

iii) Mr. Folarin Rotimi Abiola WilliamsMr. F. R. A. Williams, a Chemical Engineer and legal practitioner, joined the Board

thof Flour Mills of Nigeria Plc as a non-executive member on 20 May, 2005.He was educated at Imperial College of Science and Technology, London where he graduated BSc. (Hons.) AGGI Chemical Engineering and received an award for Outstanding Work in the Humanities at the University of London in 1976.

Following a study at Selwyn College Cambridge from 1981 to 1983, Mr. Williams obtained MA Cantab Law and subsequently attended the Nigerian Law School from 1983 to 1984.

Mr. Williams is a highly experienced legal practitioner who is principally active in commercial and corporate advisory work and litigation.

He currently serves on the Board of Pharma-Deko Plc, G. Cappa Plc, Smithkline Beecham Plc and a number of other companies.

iv) Alhaji Yunus Olalekan SaliuAlhaji Saliu, a Fellow of the Institute of Chartered Accountants of Nigeria, is a Director and Company Secretary, Flour Mills of Nigeria Plc.

Alhaji Saliu was educated at the University of Ibadan where he obtained an Upper Second Class Bachelor of Science Degree (Economics) in June 1969. An alumnus of Lagos Business School Executive Programme, he also attended some Executive and Leadership Development Programs and Training in the U.K, U.S.A., Switzerland and Australia.


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Alhaji who received his accountancy training in the United Kingdom between 1971 and 1973 joined the accounting firm of KPMG Audit (formerly Peat Marwick Ani Ogunde & Co) as an Audit Senior in February 1974, worked his way up the ladder and was admitted into the Partnership of the firm in 1982. He remained a Partner of KPMG for twelve years before vacating the position to join Flour Mills of Nigeria Plc in February 1994 as Finance Director/Company Secretary.

He stepped aside from his role of Finance Director in September, 2011 and continues to serve Flour Mills as an Executive Director and Company Secretary while sitting on the Board of Golden Sugar Company Limited and some other Flour Mills’ subsidiary companies.

v) Mr. Folusho Olajide PhillipsFoluso is the Executive Chairman and Founder of Phillips Consulting Limited, a firm engaged in business and management consulting, with offices in Nigeria and South Africa. He is a qualified Industrial Economist, a Chartered Management Accountant of the United Kingdom, and a Fellow of the Institute of Chartered Accountants of Nigeria. He brings with him

Mr. Phillips who

. He is the Chairman, Nigeria Economic Summit Group; Chairman, Nigeria/South Africa Chamber of Commerce; Chairman, Interbrand Sampson West Africa; and Chairman, Web Liquid West Africa. Mr. Phillips also serves as Director, Special Olympics of Nigeria; Director, Vigeo Holdings (a Power & Energy company in Nigeria); advisory board member, Africa Leadership Academy (an African Leadership Senior School based in Johannesburg).

experience and expertise in finance, business management, enterprise development and macro-economic policy management.

is very active in the Nigerian corporate scene sits on many boards as a director, trustee or shareholder of commercial organizations, NGOs and charities

He is a prolific speaker, who has addressed many international business seminars and conferences including Wharton Business School and Harvard Business School both in the U.S.A., Business in Africa’s Leadership Summit in South Africa and several other leadership conferences, business and trade summits across Africa and Europe.

7. DIRECTORS’ RESPONSIBILITIES The Directors are responsible for the preparation of financial statements which give a

true and fair view of the state of affairs of the company at the end of each financial year and of the profit or loss for that period and comply with the Companies and Allied Matters Act C20 LFN 2004. In doing so, they ensure that:

l proper accounting records are maintained;

l applicable accounting statements are followed;


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l

l judgments and estimates made are reasonable and prudent;

l the going concern basis is used, unless it is inappropriate to presume

that the Company will continue in business and;

l Internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets, prevent and detect fraud and other irregularities.

8. CORPORATE GOVERNANCE

v The Company is committed to the best practice and procedures in corporate governance. Its business is conducted in a fair, honest and transparent manner which conforms to high ethical standards.

This enables the Board of Directors and Management to accomplish the company’s strategic goals, ensure good growth and corporate stability for the benefit of all stakeholders.

v FMN’s Code of Conduct has been launched to employees of the company in demonstration of our strong commitment to best practices in corporate governance, integrity and high ethical standards in all aspects of our business.

The roll out ceremony started with members of Management and progressed through various sensitization sessions for staff in different directorates as well as our external stakeholders, Customers and Suppliers.

v The FMN Code of Conduct complements the company’s Employee Handbook and reinforces the company’s Core Values – Performance, Integrity, Initiative, Leadership, Ownership and Teamwork (PIILOT).

v In line with the Company’s commitment to instill the best corporate governance practices, a whistle blowing procedure has been established in the company that ensures and protects anonymity. Employees and stakeholders are encouraged to report suspected wrongdoings, fraud, corruption, ask questions or share concerns anonymously.

v The Company’s Articles of Association provides that the Company’s Board of Directors shall consist of not more than fifteen directors. Presently, the Board is headed by a non-executive Chairman with two executive directors and eleven non-executive directors, one of which is an independent director.

suitable accounting policies are adopted and consistently applied;

The composition of the Board of Directors gives premium to integrity, competence, capability, knowledge, experience and diversity.


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vapprove the company’s business strategy and objectives, decide on policy matters, direct and oversee the Company’s affairs, progress, performance, operations, finances; and ensure that adequate resources are available to meet the Company’s goal and objectives. Attendance of Directors at quarterly meetings is very good.

v In line with provisions of Section 258(2) of the Companies and Allied Matters Act, Cap. C20 Laws of the Federation of Nigeria 2004, record of Directors’ attendance at Board meetings is available for inspection at the Annual General Meeting.

v The Board of Directors has two principal board committees in line with SEC’s Code of Corporate Governance. These are listed below indicating the summary of attendance at meetings held during the financial year ended 31 March 2014:

Remuneration/Governance Committee

- Mr. J.G. Coumantaros

- Chief E. A. Ukpabi

- Mr. T. Mazarakis

S/N NAME 11/12/2013 12/03/2014

1 Mr. J. G. Coumantaros

2 Chief E. A. Ukpabi

3 Mr. T. Mazarakis

Risk Management Committee

- Mr. P. M. Gbededo

- Mr. T. Mazarakis

- Alh R.M. Gwarzo, OON

- Alh. Y. O. A. Saliu

- Mr. E. J. W. Jackson - Managing Director – Food Business

- Mr. J. Vauthier - Chief Financial Officer

- Mr. W. Percival - Deigh - Group Head, Internal Audit

Members of the Board of Directors hold a minimum of four quarterly meetings to


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Record of attendance at Meetings:

S/N NAME 09/052013 2013 2013 2013 2013 2014

1 Mr. P. M. Gbededo x x x

2 Mr. T. Mazarakis x

3 Alh R.M. Gwarzo, OON x x

4 Alh. Y. O. A. Saliu x

5 Mr. E. J. W. Jackson x

6 Mr. J. Vauthier x

7 Mr. W. Percival - Deigh

v For effective management, the Company is structured along the following Divisions and Directorates :

- Finance - Fertilizer Operations

- Corporate Services/Legal - Marketing & Sales

- Human Resources - Flour Operations

- Technical - Supplies/Procurement

- Bag Manufacturing - Logistics

- Pasta Production - General Services

- Agro Allied - Internal Audit

v Frequency and Attendance of Board Meetings:The Board held five meetings during the financial year ended 31 March 2014. The notice for each meeting was in line with the Company’s Articles of Association and board papers were provided to directors in advance.

Senior Executives of the company are from time to time invited to attend board meetings and make representations of their business units.

13/06 12/09 31/10 12/12 06/02


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A summary of the record of attendance at Board meetings is presented below:

S/N NAME 03/072013 2013 2013 2013 2014

1 Mr. George S. Coumantaros x x

2 Mr. John G. Coumantaros

3 Dr. (Chief) Emmanuel Akwari Ukpabi (KJW)

4 Mr. Paul M. Gbededo

5 Alhaji Abdullahi Ardo Abba

6 Mr. Adebayo Alade-Loba (Resigned 28/10/13) x x

7 Chief James O. Fagbemi

8 Alhaji Rabiu Muhammad Gwarzo, OON

9 Mr. John Katsaounis x

10 Mr. Thanassis Mazarakis

11 Mr. Atedo N. A. Peterside, CON

12 Mr. Folarin Rotimi Abiola Williams

13 Prof. Jerry Gana, CON x

14 Alhaji Yunus Olalekan Saliu

15 Mr. Folusho Olajide Phillips [Independent ] N/A N/A N/A N/A N/A

v Statutory Audit Committee

Composition Pursuant to section 359(3) of the Companies and Allied Matters Act C20 LFN 2004, the Company’s Audit Committee comprises three Directors and three shareholders as follows:

Mr. Lazarus N. Onwuka Mrs. G. O. Igeleke Engr. O. OresegunChief E. A. Ukpabi Chief J. O. Fagbemi Alh. Y. O. A. Saliu

The functions of the Committee are laid down under section 359 (6) of the Companies and Allied Matters Act C20 LFN, 2004.

30/07 11/09 11/12 12/03


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Meetings:Members of the Statutory Audit Committee receive regular reports and updates on financial matters and internal control reviews from internal and external auditors. A summary of the record of attendance at Statutory Audit Committee meetings held

stduring the financial year ended 31 March, 2014 is shown below:

S/N NAME 10/07 19/07 17/12 21/01 18/32013 2013 2013 2014 2014

1 Mr. Lazarus N. Onwuka

2 Mrs. G. O. Igeleke

3 Engr. O. Oresegun

4 Chief J. O. Fagbemi x

5 Dr. (Chief) E. A. Ukpabi x

6 Alh. Y. O. A. Saliu

Internal Audit:The Company’s efforts to continuously ensure sound financial discipline and adherence to high ethical standards, as part of its robust corporate governance strategy, have resulted in the setting up of a strong Group Internal Audit which is risk focused.

Internal audit function is currently manned by a team of professionals charged with the responsibility of ensuring that strategic business risks facing the Group are promptly identified, effectively mitigated, recommendations proffered and continuously monitored. To ensure independence of this important function, Internal Audit reports directly to the statutory Audit Committee on a quarterly basis and is supervised by the Risk Management Committee of the Board.

9. SUBSTANTIAL INTEREST IN SHARES

stThe Registrar has advised that according to the Register of Members on 31 March, 2014, apart from Excelsior Shipping Company Limited with 1,244,275,606 (2013 – 1,244,275,606) and Stanbic Nominees Nigeria Limited with 170,801,838 (2013 – 128,602,739) ordinary shares of 50k each, representing 52.18% and 7.16% of the paid up share capital respectively, no other individual shareholder held up to 5% of the issued share capital of the Company.


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10. ANALYSIS OF SHAREHOLDING STRUCTURE as at 31st March, 2014:

HOLDINGS NO.OF PERCEN- NO. OF PERCEN- BETWEEN SHARE- TAGE SHARES TAGE

HOLDERS % HELD %

1 - 1,000 27,704 35.86 11,486,489 0.48

1,001 - 5,000 39,092 50.61 88,235,329 3.69

5,001 - 10,000 4,977 6.44 34,270,532 1.44

10,001 - 50,000 4,317 5.59 87,300,158 3.66

50,001 - 100,000 543 0.70 37,579,496 1.58

100,001 - 500,000 447 0.58 97,532,128 4.09

500,001 - 1,000,000 68 0.08 47,874,050 2.01

1,000,001 - Above 96 0.12 1,981,406,534 83.05

TOTAL 77,244 100.00 2,385,684,716 100.00

11. DONATIONS AND CHARITABLE GIFTS:

Donations and charitable gifts amounting to N41,500,000 were made during the year: (2013 - N30,200,000):

N

World Environment Day 2013 200,000

Proven Integrity- 7th Int’l Leadership Awards 200,000

Nigerian Economic Summit 5,000,000

NEPAD Business Group 750,000

Manufacturers Association of Nigeria 1,000,000

Prosthetic Limb Patient 250,000

Kidney Foundation 250,000

Institute Of Chartered Secretaries And Administrators Of Nigeria 200,000

Apapa Club 250,000

Guiness Eye Centre 1,500,000

Ogun State Ministry Of Commerce & Industry 250,000

CVL Leadership Tribute Series 500,000

New Era Girls’ Senior Secondary School - School bus 5,400,000

World Economic Forum 25,000,000

Others (Below N200,000 Each) 750,000

41,500,000


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No donation was made to any political party or organization during the year.

12. POST BALANCE SHEET EVENTSThere were no significant developments since the balance sheet date which could

sthave had a material effect on the state of affairs of the Company at 31 March, 2014 and the profit for the year ended on that date which have not been adequately provided for or recognized.

13. COMPANY’S DISTRIBUTORS The Company does not have registered distributors.

14. SUPPLIERS The Company obtains its materials at arm’s length basis from overseas and local

suppliers. Amongst its main overseas and local suppliers are Star Trading Company Limited, Southern Star Shipping Co. Inc., Cementia Trading AG., First Blend Limited, Vitachem Nigeria Limited, Montizen Limited and Wahum Packaging Limited.

15. FIXED ASSETSMovements in fixed assets during the year are shown under Note 12 to the Accounts. In the opinion of the Directors, the market value of the Company’s properties is not less than the value shown in the audited financial statements.

16. HUMAN CAPITAL

.1 Employment and Employees The Company reviews its employment policy in line with the needs of our

business. Careful recruiting is undertaken to ensure that potential high performers are attracted and retained.

.2 Employee DevelopmentsLocal and Overseas Training and Development Programmes are organized to meet the needs of the company’s modernization/automation strategy implementation.

The Company continues to place premium on its Human Capital Development arising from the fact that this would ensure improved efficiency of the business and maintain strategic advantage over competition.

.3 Health, Safety and Environment The Company appreciates the value of safe work environment to business success and therefore embarks on periodic assessment to ensure compliance and safety. Employees are continuously sensitized and pep talks on safety procedures precede the commencement of each shift in the operational areas. The Company provides Personal Protective Equipment to employees as required by the nature


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of their jobs and safety officers perform regular monitoring to ensure usage compliance.

There is a fully equipped clinic at the docksite to cater for employees located at the Port. This is in addition to the well-equipped clinics at Apapa and Iganmu. Needful employees requiring referrals on health issues are handled by the retainer hospitals.

The employee canteens at Iganmu and Apapa sites continue to provide nutritionally balanced healthy meals in very conducive environment and at subsidized rates.

.4 HIV/AIDS PolicyHIV/AIDS policy guidelines are in place and employees are encouraged to undertake voluntary counseling and testing (VCT) in order to confirm their HIV status. Continuous interactions at workshops with known HIV positive individuals are arranged from time to time to educate staff and eliminate discrimination and stigmatization. Regular educational programmes are arranged to sustain the message as part of the activities to mark World’s AIDS day annually.

.5 Performance Management/Target SettingPerformance Management/Target Setting is implemented in line with Management resolve to set strategic objectives for effective monitoring of performance of the company and its employees.

17. AUDITORS The Auditors, Messrs Akintola Williams Deloitte have indicated their willingness to

continue in office. A resolution will be proposed authorizing the Directors to determine their remuneration.

BY ORDER OF THE BOARD

ALH. Y. OLALEKAN SALIUDirector/Company Secretary 1 Golden Penny Place, Wharf Road, Apapa.Lagos, Nigeria.

30th July, 2014


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The Directors of Flour Mills of Nigeria Plc are responsible for the preparation of the consolidated

and separate financial statements that present fairly the financial position of the Company and its

subsidiaries (“the Group”) as at 31 March 2014, and the results of its operations, cash flows and

changes in equity for the year then ended, in compliance with International Financial Reporting

Standards (“IFRS”), and in the manner required by the Companies and Allied Matters Act of

Nigeria and the Federal Reporting Council of Nigeria Act, 2011.

In preparing the financial statements, the Directors are responsible for:

• Properly selecting and applying accounting policies;

• Presenting information, including accounting policies, in a manner that provides relevant,

reliable, comparable and understandable information;

• Providing additional disclosures when compliance with the specific requirements in IFRS

are insufficient, to enable users understand the impact of particular transactions, and

conditions on the Company’s consolidated and separate financial position and financial

performance; and

• Making an assessment of the Group’s ability to continue as a going concern.

The Directors are responsible for:

• Designing, implementing and maintaining an effective and sound system of internal

controls throughout the Group;

• Maintaining adequate accounting records that are sufficient to show and explain the

Group’s transactions and disclose with reasonable accuracy at any time the consolidated

financial position of the Group, and which enable them to ensure that the financial

statements of the Group comply with IFRS;

• Maintaining statutory accounting records in compliance with the legislation of Nigeria and

IFRS;

• Taking such steps as are reasonably available to them to safeguard the assets of the Group;

and

• Preventing and detecting fraud and other irregularities.

The consolidated and separate financial statements of the Group for the year ended 31 March

2014 were approved by management on 30 July 2014.

Signed on behalf of management of the Group.

Mr Paul Gbededo Alhaji Y. O. A. Saliu

Group Managing Director Director

FRC/2013/IODN/00000003828 FRC/2013/ICAN/00000003595

30 July 2014 30 July 2014

Statement of Directors’ Responsibilities For the Preparation and Approval of the Financial Statements

Report on the Financial Statements

We have audited the accompanying consolidated and separate financial statements of Flour Mills of Nigeria

Plc and its subsidiaries which comprise the consolidated and separate statements of financial position as at

31 March 2014, the consolidated income statement, statement of changes in equity, cash flow statement for

the year ended 31 March 2014, a summary of significant accounting policies and other explanatory information

set out on pages 31 to 124.

Directors’ Responsibility for the Financial Statements

The Directors are responsible for the preparation and fair presentation of these consolidated and separate

financial statements in accordance with the Companies and Allied Matters Act CAP C20 LFN 2004, the Financial

Reporting Council of Nigeria Act No 6, 2011, the International Financial Reporting Standards and for such

internal control as the Directors determine are necessary to enable the preparation of consolidated financial

statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated and separate financial statements based on

our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the

financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of

the risks of material misstatement of the financial statements, whether due to fraud or error. In making those

risk assessments, the auditors consider 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

control. An audit also includes evaluating the appropriateness of accounting policies used and the

reasonableness of accounting estimates made by Directors, as well as evaluating the overall presentation of

the financial statements.

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

audit opinion.

Opinion

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the

financial position of Flour Mills of Nigeria Plc and its subsidiaries as at 31 March 2014 and the financial

performance and cash flows for the year ended 31 March 2014 in accordance with the Companies and Allied

Matters Act CAP C20 LFN 2004, the Financial Reporting Council of Nigeria Act No 6, 2011 and the International

Financial Reporting Standards.

Ijeoma Onwu, FCA - FRC/2014/ICAN/00000001364

For: Akintola Williams Deloitte

Chartered Accountants

Lagos, Nigeria

31 July 2014

REPORT OF THE INDEPENDENT AUDITORS to the members of Flour Mills of Nigeria Plc

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

Akintola Williams Deloitte, a member firm of Deloitte Touche Tohmatsu Limited, is a professional services organization that provides audit, tax, consulting, financial advisory and enterprise risk services.

RC 2343RC 2343

030

Audit Committee Report to Members of Flour Mills of Nigeria Plc for the Financial Year

In compliance with section 359 (3) to (6) of the Companies and Allied Matters Act 1990 the Audit

Committee received the Audited Financial Statements for the year ended 31st March 2014 together

with Management Control Report from the external auditors and management response thereto at duly

convened meeting of the Committee.

We reviewed the scope and planning of the audit requirements and found them adequate.

After due consideration the Committee accepted the Report of the External Auditors that the financial

statements give a true and fair view of the state of the Company's financial affairs as at 31st March 2014

having been prepared in accordance with generally accepted accounting principles, agreed ethical

practices and statutory requirements. The Committee reviewed Management's response to the

External Auditors findings in the Management Control Report and we and the External Auditors are

satisfied with Management response.

The Committee considered and approved the provision made in the Financial Statements for the

remuneration of the External Auditors.

We confirm that the internal control system was being constantly and effectively monitored through

effective internal audit function.

The External Auditors confirmed having received full cooperation from Management in the course of

their statutory audit.

The Committee therefore recommended that the Audited Financial Statements for the year ended 31st

March 2014 and the External Auditors' Report thereon be presented for adoption at this Annual General

Meeting.

Dated 8th July, 2014

MR. LAZARUS NNADOZIE ONWUKA, A.C.I.S.CHAIRMAN, AUDIT COMMITTEEFRC/2014/ICSAN/00000006961

Other Members of the Audit Committee:

Mrs. Grace Oluyemisi Igeleke

Engr. Abiodun Olalekan Oresegun

Chief (Dr.) Emmanuel Akwari Ukpabi, (KJW)

Chief James Oladapo Fagbemi

Alhaji Yunus Olalekan Saliu

Ended 31st March 2014

RC 2343RC 2343

031

Group CompanyNotes 31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000(restated) (restated)

Continuing operationsRevenue 6 332,142,685 301,941,329 245,701,366 225,629,747Cost of sales (288,485,692) (264,042,482) (216,422,044) (202,445,764)

Gross profit 43,656,993 37,898,847 29,279,322 23,183,983Other operating income 6.1 3,873,953 5,407,308 2,747,821 3,705,300Selling and distribution expenses (12,434,164) (10,066,912) (4,834,718) (3,002,061)Administration expenses (15,721,482) (15,381,820) (9,923,693) (10,192,166)

Operating profit 19,375,300 17,857,423 17,268,732 13,695,056

Investment income 7 5,027,713 5,464,686 4,546,394 6,212,520Finance costs 8 (16,101,379) (11,407,268) (9,358,092) (8,281,195)Share of loss in associate company 9 (73,651) (1,037,993) - -

Profit before tax 10 8,227,983 10,876,848 12,457,034 11,626,381Income tax expense 11 (2,860,108) (3,337,038) (2,019,512) (2,725,392)

Profit for the year 5,367,875 7,539,810 10,437,522 8,900,989Other comprehensive income for the year, net of income tax - - - -

Items that will not be reclassified subsequently to profit or loss:

Actuarial gain/(loss) 580,672 (487,635) 566,027 (460,461)Items that may be reclassified subsequently to profit or loss:

Fair value gain on available for sale financial assets 109,820 - 109,820 -Other comprehensive income for the year, net of income tax 690,492 (487,635) 675,847 (460,461)

Total comprehensive income 6,058,367 7,052,175 11,113,369 8,440,528

Profit attributable to:Owners of the Company 4,612,033 6,745,913 10,437,522 8,900,989Non-controlling Interests 755,842 793,897 - -

5,367,875 7,539,810 10,437,522 8,900,989Total comprehensive income attributable to:

Owners of the Company 5,299,750 6,249,952 11,113,369 8,440,528Non-controlling Interests 758,617 802,223 - -

6,058,367 7,052,175 11,113,369 8,440,528Earnings per share (kobo)From continuing operationsBasic (kobo) 35 193 283 438 373

Diluted (kobo) 35 193 283 438 373

The notes on pages 36 to 121 and the additional statutory statements on pages 122 to 124 form an integral part of these financial statements.

Consolidated and Separate Statements of Comprehensive IncomeFor The Year Ended 31st March, 2014

RC 2343RC 2343

032

Group CompanyNotes 31-Mar-14 31-Mar-13 1-Apr-12 31-Mar-14 31-Mar-13 1-Apr-12

N’000 N’000 N’000 N’000 N’000 N’000Assets (restated) (restated) (restated) (restated)Non-current assetsProperty, plant and equipment 12 169,287,517 141,078,461 112,194,408 70,264,835 67,031,425 47,202,771Intangible assets 13.1 554,905 672,908 520,868 116,768 164,640 17,785Goodwill 13.4 4,148,022 4,148,022 583,728 - - -Investment in subsidiaries 14 - - - 3,814,168 3,585,132 3,020,575Investment in associates 9 7,790,094 2,058,203 1,391,674 26,586,837 20,781,295 19,076,773Other financial assets/investments 15 135,456 24,948 414,198 524,706 414,198 414,198Long-term loans receivable 16 11,457,561 19,717,445 18,578,584 11,743,706 19,966,483 18,578,584Deferred tax assets 18 688,198 434,193 - 57,907 57,907 -Biological assets 19 609,112 - - - - -Other long term assets 20 1,734,837 1,830,333 - - - -Deposit for shares 21 - - 2,194,171 - - 2,194,171Total non-current assets 196,405,702 169,964,513 135,877,631 113,108,927 112,001,080 90,504,857

Current assetsInventories 22 63,683,942 65,650,494 50,277,454 45,371,104 40,992,727 26,274,989Biological assets 19 144,885 5,435 - - - -Trade and other receivables 23 17,271,625 19,314,182 17,425,462 48,121,627 50,950,147 34,009,679Other assets 24 2,210,892 1,779,898 1,402,967 1,693,959 1,460,321 657,803Due from related companies 41 707,236 1,585,988 1,355,402 625,490 1,570,838 659,396Cash and bank balances 25 16,825,163 21,837,482 26,239,138 11,224,448 16,914,612 20,433,020

Total current assets 100,843,743 110,173,479 96,700,423 107,036,628 111,888,645 82,034,887

Total assets 297,249,445 280,137,992 232,578,054 220,145,555 223,889,725 172,539,744

Equity and LiabilitiesCapital and reservesShare capital 26 1,192,842 1,192,842 1,167,388 1,192,842 1,192,842 1,167,388Share premium 27 36,812,540 36,812,540 33,526,369 36,812,540 36,812,540 33,526,369Capital reserve 28 281,201 281,201 4,405,525 - - -Retained earnings 41,636,076 41,283,814 36,857,460 60,937,729 54,595,729 44,801,711

Attributable to equity holders of the parent 79,922,659 79,570,397 75,956,742 98,943,111 92,601,111 79,495,468Non-controlling interests 3,636,773 2,914,854 5,058,796 - - -Total equity 83,559,432 82,485,251 81,015,538 98,943,111 92,601,111 79,495,468

Non-current liabilitiesBorrowings 29 48,614,076 39,863,248 27,081,005 6,869,924 7,445,013 276,066Unsecured fixed rate bond 30 16,484,216 23,211,894 30,005,046 16,484,216 23,211,894 30,005,046Deferred revenue 17 3,136,133 3,372,148 1,401,513 1,206,669 1,374,788 -Deferred tax liabilities 18 11,806,025 10,944,797 9,433,955 10,671,238 9,908,091 7,457,983Retirement benefit obligation 31 3,673,114 4,266,712 4,123,936 2,922,289 3,462,939 2,584,246Long service award 32 1,317,571 1,483,966 1,021,250 1,154,531 1,323,376 553,656

Total non-current liabilities 85,031,135 83,142,765 73,066,705 39,308,867 46,726,101 40,876,997Current liabilitiesBorrowings 29 76,443,426 53,877,818 39,703,057 42,939,435 32,825,633 20,532,481Unsecured fixed rate bond 30 10,424,384 11,324,384 8,262,329 10,424,384 11,324,384 8,262,329Deferred revenue 17 865,738 607,220 319,184 394,896 119,858 -Trade and other payables 33 38,116,032 45,454,100 25,109,259 26,528,831 37,820,762 19,817,817Due to related companies 41 34,381 45,645 461 - 45,645 -Provisions 16,109 230,537 570,040 - 214,925 9,590Current tax liabilities 11 2,666,511 2,780,479 4,339,540 1,513,734 2,021,513 3,353,121Dividend payable 34 92,297 189,793 191,941 92,297 189,793 191,941

Total current liabilities 128,658,878 114,509,976 78,495,811 81,893,577 84,562,513 52,167,279

Total liabilities 213,690,013 197,652,741 151,562,516 121,202,444 131,288,614 93,044,276

Total equity and liabilities 297,249,445 280,137,992 232,578,054 220,145,555 223,889,725 172,539,744

The consolidated and separate statements on pages 32 to 124 were approved by the Board of Directors on 30 July 2014 and signed on its behalf by:

Mr. Paul Gbededo Alhaji Y.O.A.Saliu Mrs. Lydia ArulebaManaging Director Director Head of FinanceFRC/2013/IODN/00000003828 FRC/2013/ICAN/00000003595 FRC/2013/ICAN/00000003554

The notes on pages 36 to 121 and the additional statutory statements on pages xx to xx form an integral part of these financial statements.

Consolidated and Separate Statements of Financial PositionFor The Year Ended 31st March, 2014

RC 2343RC 2343

033

Consolidated and Separate Statements of Changes in EquityG

rou

pS

ha

re

ca

pit

al

pre

miu

mre

se

rve

ea

rnin

gs

in

tere

st

eq

uit

yN

’00

0N

’00

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’00

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’00

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’00

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’00

0(r

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)(r

esta

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)

Ba

lan

ce

at

1 A

pri

l 2

01

2 (

as p

revio

usly

re

po

rte

d)

1,1

67,

388

33,5

26,3

69

8,7

30,5

25

33,2

31,1

65

5,0

58,7

96

81,7

14,2

42

Adju

stm

ents

(se

e n

ote

a)

--

-(6

98,7

06)

-(6

98,7

06)

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ass

ific

ation

--

(4,3

25,0

00)

4,3

25,0

00

--

Bala

nce

as

at

1 A

pril 2012 r

est

ate

d1,1

67,

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33,5

26,3

69

4,4

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25

36,8

57,

460

5,0

58,7

96

81,0

15,5

38

Div

idends

--

-(3

,735,6

43)

-(3

,735,6

43)

Div

idend p

aid

to B

AG

CO

to N

on-C

ontr

olli

ng

Inte

rest

during t

he y

ear

--

-(3

20,5

87)

-(3

20,5

87)

Pro

fit

or

loss

for

the y

ear

- (r

est

ate

d)

(Note

b)

--

-6,7

45,9

13

793,8

97

7,539,8

10

Oth

er

com

pre

hensi

ve inco

me (

rest

ate

d)

(Note

b)

--

-(4

95,9

61)

8,3

26

(487,

635)

Issu

e o

f sh

are

s w

ith a

pre

miu

m in r

esp

ect

of

the m

erg

ers

25,4

54

3,2

86,1

71

--

-3,3

11,6

25

Capital re

serv

e f

rom

merg

er

of

Flo

ur

Mill

s

of

Nig

eria P

lc w

ith N

igerian B

ag M

anufa

cturing

Com

pany

Plc

.-

--

2,2

32,6

32

-2,2

32,6

32

Elim

inate

d o

f ca

pital re

serv

e o

f N

igerian B

ag

Manufa

cturing C

om

pany

Plc

merg

er

with F

lour

Mill

s of

Nig

eria P

lc.

--

(4,1

24,3

24)

--

(4,1

24,3

24)

NCI

adju

stm

ents

on m

erg

er

of

Nig

erian B

ag

Manufa

cturing C

om

pany

Plc

-

--

-(2

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55)

(2,9

65,0

55)

On a

cquis

itio

n o

f Rom

Oil

Lim

ited

--

--

18,8

90

18,8

90

Ba

lan

ce

at

31

Ma

rch

20

13

(re

sta

ted

)1,1

92,8

42

36,8

12,5

40

281,2

01

41,2

83,8

14

2,9

14,8

54

82,4

85,2

51

Div

idends

Paid

(se

e n

ote

c)

--

-(4

,771,3

69)

(4,7

71,3

69)

Pro

fit

or

loss

for

the y

ear

--

-4,6

12,0

33

755,8

42

5,3

67,

875

Oth

er

com

pre

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ve inco

me

--

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717

2,7

75

690,4

92

Changes

in inve

stm

ent

in R

OM

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Lim

ited

and T

hai Fa

rm I

nte

rnational Li

mited

--

-(1

76,1

19)

-(1

76,1

19)

NCI

adju

stm

ents

on 2

5%

of

share

s in

Thai Fa

rm

--

--

--

Inte

rnational Li

mited

--

--

(36,6

99)

(36,6

99)

Ba

lan

ce

at

31

Ma

rch

20

14

1,1

92,8

42

36,8

12,5

40

281,2

01

41,6

36,0

76

3,6

36,7

73

83,5

59,4

32

(a)T

he a

dju

stm

ent of N

698.7

mill

ion reco

gnis

ed a

s at 1 A

pril 2

012 repre

sents

net im

pact

of th

e a

ctuarial v

alu

ation o

f lo

ng s

erv

ice a

ward

paya

ble

to s

taff.

(b)A

dju

stm

ent of N

709.7

mill

ion w

as m

ade in

2013 i

n resp

ect

of

act

uarial v

alu

ation o

n lo

ng term

serv

ice a

ward

and r

evi

sed retire

ment benefits

oblig

ation v

alu

ation a

mounting to N

549 m

illi

on

;

impact

of IF

RS a

doption o

n n

ew

subsi

dia

ries

am

ounting to N

232 m

illio

n a

nd n

et ta

x im

pact

of

(N

71,8

10).

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the A

nnual G

enera

l M

eeting h

eld

on 1

1 S

epte

mber

2013 a

div

idend o

f N

2 p

er

share

was

appro

ved (

N4,

771,3

69)

in r

esp

ect

of

2013 f

inanci

al ye

ar.

Sh

are

C

ap

ita

lR

eta

ine

dN

on

co

ntr

oll

ing

To

tal

For The Year Ended 31st March, 2014

RC 2343RC 2343

034

Statements of Changes in EquityS

ha

re c

ap

ita

lR

eva

lua

tio

n r

ese

rve

Sh

are

pre

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ap

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ea

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To

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eq

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re

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17

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ivid

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35,6

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(3,7

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idend p

aid

to B

AG

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ontr

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nte

rest

during t

he y

ear

--

--

(320,5

87)

(320,5

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fit

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loss

for

the p

eriod (

rest

ate

d)

--

--

8,9

00,9

89

8,9

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er

com

pre

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ve inco

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the y

ear

--

--

(460,4

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(460,4

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option c

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dera

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esp

ect

of

FM

N/

Nig

erian B

ag m

erg

er

25,4

54

--

--

25,4

54

Share

pre

miu

m for

FM

N s

hare

s is

sued F

MN

/BAG

CO

merg

er

--

3,2

85,2

19

--

3,2

85,2

19

Share

pre

miu

m for

FM

N s

hare

s is

sued F

MN

/Nig

er

Mill

s m

erg

er

--

952

--

952

On m

erg

er

with N

igerian B

ag C

om

pany

Plc

and

Nig

er

Mill

s Com

pany

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ited

--

--

2,2

32,6

32

2,2

32,6

32

Nig

er

Mill

s Com

pany

Lim

ited r

eta

ined e

arn

ing t

ransf

err

ed

on m

erg

er

(rest

ate

d)

(Note

b)

--

--

2,3

15,6

53

2,3

15,6

53

Nig

erian B

ag M

anufa

cturing C

om

pany

Plc

reta

ined e

arn

ings

transf

err

ed o

n m

erg

er

(rest

ate

d)

(Note

c)

--

--

861,4

35

861,4

35

Ba

lan

ce

at

31

Ma

rch

20

13

(re

sta

ted

)1,1

92,8

42

-36,8

12,5

40

-54,5

95,7

29

92,6

01,1

11

Div

idends

(see n

ote

d)

(4,7

71,3

69)

(4,7

71,3

69)

Pro

fit

or

loss

for

the p

eriod

10,4

37,

522

10,4

37,

522

Oth

er

com

pre

hensi

ve inco

me for

the y

ear

675,8

47

675,8

47

Ba

lan

ce

at

31

Ma

rch

20

14

1,1

92,8

42

-36,8

12,5

40

-60,9

37,

729

98,9

43,1

11

(a)

The a

dju

stm

ent

of

N544.1

mill

ion r

eco

gnis

ed a

s at

1 A

pril 2012 r

epre

sents

net

impact

of

the a

ctuarial va

luation o

f lo

ng s

erv

ice a

ward

to s

taff.

(b)

There

was

an a

dju

stm

ent

of

(N41.3

mill

ion)

to N

iger

Mill

s Com

pany

Lim

ited r

eta

ined e

arn

ings

transf

err

ed o

n m

erg

er

in 2

013 d

ue t

o t

he n

et

impact

of

the a

ctuarial va

luation o

f lo

ng

serv

ice a

ward

to s

taff.

(c)

There

were

adju

stm

ents

of

N325.4

mill

ion a

nd N

330.7

mill

ion in r

esp

ect

of

Nig

erian B

ag M

anufa

cturing C

om

pany

Plc

rela

ting t

o r

eta

ined e

arn

ings

transf

err

ed o

n m

erg

er

in 2

013 d

ue

to t

he n

et

impact

of

the a

ctuarial va

luation o

f lo

ng s

erv

ice a

ward

to s

taff

and r

evi

sed a

ctuarial va

luation o

f re

tire

ment

benefit

oblig

ation.

(d)

Capital re

serv

es

arisi

ng f

rom

com

mon c

ontr

ol tr

ansa

ctio

ns

were

recl

ass

ifie

d t

o r

eta

ined e

arn

ings.

The b

ala

nce

s re

class

ifie

d o

n t

ransf

er

of

Gold

en P

ast

a (

2012:

N4.3

bill

ion),

Nig

er

Mill

s (2

013:

N861m

illio

n)

and N

igerian B

ag M

anufa

cturing C

om

pany

Plc

(2013:

N2.3

bill

ion).

(e)

At

the A

nnual G

enera

l M

eeting h

eld

on 1

1 S

epte

mber

2013 a

div

idend o

f N

2 p

er

share

was

appro

ved.

Co

mp

an

yFor The Year Ended 31st March, 2014

RC 2343RC 2343

035

Notes 31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13N’000 N’000 N’000 N’000

Cash flows from operating activities

Cash receipts from customers 337,995,364 306,266,060 250,769,209 224,410,883Cash payments to suppliers and employees (308,418,425) (281,961,589) (237,353,454) (221,030,867)

Cash generated from operations 29,576,939 24,304,471 13,415,755 3,380,016Value added tax (net paid) (1,643,242) (964,422) (1,478,918) (131,617)Income taxes paid 11 (2,665,060) (4,178,085) (2,002,297) (3,775,616)

Net cash generated by operating activities 25,268,637 19,161,964 9,934,540 (527,217)

Cash flows from investing activities Purchase of investments in subsidiary companies - - (229,035) (2,544,675)Purchase of investments associate company 9 (5,805,542) (1,704,522) (5,805,542) (1,704,522)Purchase of other investment (688) - (688) -Purchase of other operating lease - (1,900,000) - -Loans granted to related companies 16 (2,185,658) (3,404,792) (2,222,765) (3,653,830)Loans repaid by related companies 16 10,445,542 2,265,931 10,445,542 2,265,931Deposit for shares - 2,194,171 - 2,194,171Proceeds from disposal of property, plant and equipment 290,824 65,416 238,149 53,740Purchase of property, plant and equipment 12 (40,730,261) (37,299,096) (10,239,438) (12,300,808)Purchase of intangible assets 13 (41,399) (317,029) (41,399) (216,502)Interest received 5,027,712 5,456,436 4,510,830 5,210,270Dividend received - 8,250 35,566 1,002,250

Net cash utilised by investing activities (32,999,470) (34,635,235) (3,308,780) (9,693,975)

Cash flows from financing activities

Proceed from issue of shares - 3,311,625 - 3,311,625Proceed from term loan 29 67,444,062 42,282,537 25,509,260 35,515,890Repayment of term loan (62,828,813) (3,731,326) (37,903,906) (3,731,326)Repayment Bond 30 (7,627,678) (3,731,097) (7,627,678) (3,731,097)Interest paid 8 (16,101,379) (11,407,268) (9,358,092) (8,281,195)Dividend paid 34 (4,868,865) (4,058,648) (4,868,865) (4,058,648)

Net cash generated by financing activities (23,982,673) 22,665,823 (34,249,281) 19,025,249

Net decrease in cash and cash equivalents (31,713,506) 7,192,552 (27,623,521) 8,804,057Cash and cash equivalents at the beginningof the year (211,418) (7,403,970) 10,333,028 1,528,970

Cash and cash equivalents at the end of the year 25 (31,924,924) (211,418) (17,290,493) 10,333,027

Consolidated and Separate Statements of Cash FlowsFor The Year Ended 31st March, 2014

Notes to the Consolidated and Separate Financial StatementsFor The Year Ended 31st March, 2014

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1 General Information

1.1 Legal form

Flour Mills of Nigeria Plc (Flour Mills) was incorporated in Nigeria as a private limited

Company on 29 September, 1960 and was converted to a public liability company in

November 1978. Its registered head office is located at 1 Golden Penny Place, Apapa,

Lagos.

1.2 Principal activities

The Group is primarily engaged in flour milling, production of pasta, noodles, edible oil

and livestock feeds, farming and other agro-allied activities, distribution and sales of

fertilizer, manufacturing and marketing of laminated woven polypropylene sacks and

flexible packaging materials, cement manufacturing, operation of terminals A and B at

the Apapa Port, customs clearing, forwarding agents, shipping agents and logistics

and management of third party mills.

1.3 Going concern status

The Group has consistently been making profits. The Directors believe that there is no

intention or threat from any source to curtail significantly its line of business in the

foreseeable future. Thus, these financial statements are prepared on a going concern

basis.

1.4 Ownership structure

Name of shareholder No. of shares Percentage of

held share capital

Excelsior Shipping Company Limited 1,244,755,606 52.18

Nigerian Public and Institutions 886,511,918 37.16

Stanbic Nominees Nigeria Limited 170,801,838 7.16

West African Investments Limited 83,615,354 3.50

The ultimate holding company is Excelsior Shipping Company Limited, a company

registered in Liberia. The beneficial owner of Excelsior Shipping Company is a trust

established by the late Mr. John S. Coumantaros for his descendants. The ultimate

controlling party is therefore, the descendants of late Mr. John S. Coumantaros.

1.5 Operating environment

Emerging markets such as Nigeria are subject to different risks than more developed


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markets, including economic, political and social, and legal and legislative risks. As has

happened in the past, actual or perceived financial problems or an increase in the

perceived risks associated with investing in emerging economies could adversely affect

the investment climate in Nigeria and the country's economy in general.

The global financial system continues to exhibit signs of deep stress and many

economies around the world are experiencing lesser or no growth than in prior years.

These conditions could slow or disrupt Nigeria's economy, adversely affect the

Company's access to capital and cost of capital for the Company and, more generally,

its business, results of operations, financial condition and prospects.

Because Nigeria produces and exports large volumes of oil, Nigerian's economy is

particularly sensitive to the price of oil on the world market which has fluctuated

significantly during 2014 and 2013.

2 Financial period

These financial statements cover the financial year from 1 April 2013 to 31 March

2014, with restated comparatives for year end 31 March 2013 and 1 April 2012.

3 New and revised IFRS affecting amounts reported and/or disclosures in

these financial statements (Continued)

New and revised Standards on consolidation, joint arrangements,

associates and disclosures

In May 2011, a package of five Standards on consolidation, joint arrangements,

associates and disclosures was issued, including IFRS 10 Consolidated Financial

Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of Interest in Other

Entities, IAS 27 (as revised in 2011) Separate Financial Statements and IAS 28 (as

revised in 2011) Investments in Associates and Joint Ventures. Subsequent to the

issue of these standards, amendments to IFRS 10, IFRS 11 and IFRS 12 were issued to

clarify certain transitional guidance on the first-time application of the standards.

In the current year, the Group has considered the requirements for the first time IFRS

10, IFRS 11, IFRS 12, IAS 27 (as revised in 2011) and IAS 28 (as revised in 2011)

together with the amendments to IFRS 10, IFRS 11 and IFRS 12 regarding the

transitional guidance.

The impact of the application of these standards is explained below:


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Amendments to IAS 1 Presentation of Financial Statements

(as part of the Annual Improvements to IFRS 2009 – 2011 Cycle issued in

May 2012)

The Annual Improvements to IFRS 2009 – 2011 have made a number of amendments

to IFRS. The amendments that are relevant to the Group are the amendments to IAS 1

regarding when a statement of financial position as at the beginning of the preceding

period (third statement of financial position) and the related notes are required to be

presented. The amendments specify that a third statement of financial position is

required when (a) an entity applies an accounting policy retrospectively, or makes a

retrospective restatement or reclassification of items in its financial statements, and

(b) the retrospective application, restatement or reclassification has a material effect

on the information in the third statement of financial position. The amendments

specify that related notes are not required to accompany the third statement of

financial position.

In the current year, the Group restated some prior year figures which resulted in

material changes to the information in the consolidated statement of financial position

as at 1 April 2013. The Group has, therein, presented a third statement of financial

position as at 31 March 2012 due to restatement of retirement benefit obligation, long

service award, deferred tax and other few reclassification of some balances. See

details in the Statement of financial position and Notes 24 to 26. The Group has chosen

to present the related notes where relevant to the third statement of financial position.

IAS 19 Employee Benefits (as revised in 2011)

In the current year, the Group has applied IAS 19 Employee Benefits (as revised in

2011) and the related consequential amendments for the first time.

IAS 19 (as revised in 2011) changes the accounting for defined benefit plans and

termination benefits. The most significant change relates to the accounting for

changes in defined benefit obligations and plan assets. The amendments require the

recognition of changes in defined benefit obligations and in the fair value of plan assets

when they occur, and hence eliminate the 'corridor approach' permitted under the

previous version of IAS 19 and accelerate the recognition of past service costs. All

actuarial gains and losses are recognised immediately through other comprehensive

income in order for the net pension asset or liability recognised in the consolidated

statement of financial position to reflect the full value of the plan deficit or surplus.


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Furthermore, the interest cost and expected return on plan assets used in the previous

version of IAS 19 are replaced with a 'net interest' amount under IAS 19 (as revised in

2011), which is calculated by applying the discount rate to the net defined benefit

liability or asset. The application of this standard has had no impact on the amounts

recognised in profit or loss and other comprehensive income in prior years.

IFRS 10 Consolidated Financial Statements

IFRS 10 replaces the parts of IAS 27 Consolidated and Separate Financial Statements

that deal with consolidated financial statements and SIC-12 Consolidation – Special

Purpose Entities. IFRS 10 changes the definition of control such that an investor has

control over an investee when (a) it has power over the investee, (b) it is exposed, or

has rights, to variable returns from its involvement with the investee and (c) has the

ability to use its power to affect its returns. All three of these criteria must be met for an

investor to have control over an investee. Previously, control was defined as the power

to govern the financial and operating policies of an entity so as to obtain benefits from

its activities. Additional guidance has been included in IFRS 10 to explain when an

investor has control over an investee. Some guidance included in IFRS 10 that deals

with whether or not an investor that owns less than 50% of the voting rights in an

investee has control over the investee is relevant to the Group.

New and revised IFRS affecting amounts reported and/or disclosures in

these financial statements (Continued)

The directors of the Company made an assessment as at the date of initial application

of IFRS 10 (i.e. 1 January 2013) as to whether or not the Group has control over the

subsidiaries in accordance with the new definition of control and the related guidance

set out in IFRS 10. The directors concluded that it has had control over the subsidiaries

since acquisition on the basis that the Company has the majority shareholding in the

subsidiaries and there are no hindrances or arrangements that would give control to

the non-controlling interest holders. Therefore, in accordance with the requirements of

IFRS 10, the subsidiaries have been subsidiaries of the Company since 2011.

The directors of the Company decided that the application of this standard has had no

material impact on the disclosures or on the amounts recognised in the consolidated

financial statements since control over the subsidiaries still exist based on the

requirement of IFRS 10


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IFRS 11 Joint Arrangements;

IFRS 11 replaces IAS 31 Interests in Joint Ventures, and the guidance contained in a

related interpretation, SIC-13 Jointly Controlled Entities – Non-Monetary Contributions

by Venturers, has been incorporated in IAS 28 (as revised in 2011). IFRS 11 deals with

how a joint arrangement of which two or more parties have joint control should be

classified and accounted for. Under IFRS 11, there are only two types of joint

arrangements – joint operations and joint ventures.

The classification of joint arrangements under IFRS 11 is determined based on the

rights and obligations of parties to the joint arrangements by considering the

structure, the legal form of the arrangements, the contractual terms agreed by the

parties to the arrangement, and, when relevant, other facts and circumstances. A joint

operation is a joint arrangement whereby the parties that have joint control of the

arrangement (i.e. joint operators) have rights to the assets, and obligations for the

liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby

the parties that have joint control of the arrangement (i.e. joint venturers) have rights

to the net assets of the arrangement. Previously, IAS 31 contemplated three types of

joint arrangements – jointly controlled entities, jointly controlled operations and jointly

controlled assets. The classification of joint arrangements under IAS 31 was primarily

determined based on the legal form of the arrangement (e.g. a joint arrangement that

was established through a separate entity was accounted for as a jointly controlled

entity).

The initial and subsequent accounting of joint ventures and joint operations is

different. Investments in joint ventures are accounted for using the equity method

(proportionate consolidation is no longer allowed). Investments in joint operations are

accounted for such that each joint operator recognises its assets (including its share of

any assets jointly held), its liabilities (including its share of any liabilities incurred

jointly), its revenue (including its share of revenue from the output by the joint

operation) and its expenses (including its share of any expenses incurred jointly). Each

joint operator accounts for the assets and liabilities, as well as revenues and expenses,

relating to its interest in the joint operation in accordance with the applicable

Standards.

The application of this standard had no material impact on the disclosures or on the

amounts recognised in the consolidated financial statements as the Group does not

currently hold any Joint Arrangement contract.


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IFRS 12 Disclosure of Interest in Other Entities

IFRS 12 is a disclosure standard and is applicable to entities that have interests in

subsidiaries, joint arrangements, associates and/or unconsolidated structured

entities. In general, the application of IFRS 12 has resulted in more extensive

disclosures in the consolidated financial statements. Refer to Note 9.1.

IFRS 13 Fair Value Measurement

The Group has applied IFRS 13 for the first time in the current year. IFRS 13 establishes

a single source of guidance for fair value measurements and disclosures about fair

value measurements. The scope of IFRS 13 is broad; the fair value measurement

requirements of IFRS 13 apply to both financial instrument items and non-financial

instrument items for which other IFRS require or permit fair value measurements and

disclosures about fair value measurements, except for share-based payment

transactions that are within the scope of IFRS 2 Share-based Payment, leasing

transactions that are within the scope of IAS 17 Leases, and measurements that have

some similarities to fair value but are not fair value (e.g. net realisable value for the

purposes of measuring inventories or value in use for impairment assessment

purposes).

IFRS 13 defines fair value as the price that would be received to sell an asset or paid to

transfer a liability in an orderly transaction in the principal (or most advantageous)

market at the measurement date under current market conditions. Fair value under

IFRS 13 is an exit price regardless of whether that price is directly observable or

estimated using another valuation technique. Also, IFRS 13 includes extensive

disclosure requirements.

IFRS 13 requires prospective application from 1 January 2013. In addition, specific

transitional provisions were given to entities such that they need not apply the

disclosure requirements set out in the Standard in comparative information provided

for periods before the initial application of the Standard. In accordance with these

transitional provisions, the Group has not made any new disclosures required by IFRS

13 for the 2012 comparative period (please see notes 28.7.2 for the 2013 disclosures).

Other than the additional disclosures, the application of IFRS 13 has not had any

material impact on the amounts recognised in the consolidated financial statements

Amendments to IAS 1 Presentation of Items of Other Comprehensive

Income

The Group has applied the amendments to IAS 1 Presentation of Items of Other

Comprehensive Income for the first time in the current year. The amendments


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introduce new terminology, whose use is not mandatory, for the statement of

comprehensive income and income statement. Under the amendments to IAS 1, the

'statement of comprehensive income' is renamed as the 'statement of profit or loss and

other comprehensive income' [and the 'income statement' is renamed as the

'statement of profit or loss']. The amendments to IAS 1 retain the option to present

profit or loss and other comprehensive income in either a single statement or in two

separate but consecutive statements.

However, the amendments to IAS 1 require items of other comprehensive income to be

grouped into two categories in the other comprehensive income section: (a) items that

will not be reclassified subsequently to profit or loss and (b) items that may be

reclassified subsequently to profit or loss when specific conditions are met. Income tax

on items of other comprehensive income is required to be allocated on the same basis

– the amendments do not change the option to present items of other comprehensive

income either before tax or net of tax. The amendments have been applied

retrospectively, and hence the presentation of items of other comprehensive income

has been modified to reflect the changes.

Other than the above mentioned presentation changes, the application of the

amendments to IAS 1 does not result in any impact on profit or loss, other

comprehensive income and total comprehensive income.

l IFRS 9 Financial Instruments1;

l Amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:

Disclosures – “Mandatory Effective Date of IFRS 9 and Transition Disclosures”1;

l Amendments to IFRS 10, IFRS 12 and IAS 27: Investment entities 2;

l Amendments to IAS 32 Financial Instruments: Presentation – “Offsetting

Financial Assets and Financial Liabilities”2;

New and revised standard in issue but not yet effective

Effective for annual periods beginning on or after 1 January 2014, with

earlier application permitted.

IFRS 9 Financial Instruments

IFRS 9: Financial Instruments, issued in November 2009 and amended in October

2010, introduces new requirements for the classification and measurement of financial

assets and financial liabilities and for derecognition.


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Key requirements of IFRS 9:

All recognised financial assets that are within the scope of IAS 39 Financial

Instruments: Recognition and Measurement to be subsequently measured at

amortised cost or fair value. Specifically, debt investments that are held within a

business model whose objective is to collect the contractual cash flows, and that have

contractual cash flows that are solely payments of principal and interest on the

principal outstanding are generally measured at amortised cost at the end of

subsequent accounting periods. All other debt investments and equity investments are

measured at their fair values at the end of subsequent accounting periods. In addition,

under IFRS 9 Financial Instruments, entities may make an irrevocable election to

present subsequent changes in the fair value of an equity investment (that is not held

for trading) in other comprehensive income, with only dividend income generally

recognised in profit or loss.

3 New and revised IFRS in issue but not yet effective (continued)

With regard to the measurement of financial liabilities designated as at fair value

through profit or loss, IFRS 9 Financial Instruments requires that the amount of change

in the fair value of the financial liability, that is attributable to changes in the credit risk

of that liability, is presented in other comprehensive income, unless the recognition of

the effects of changes in the liability's credit risk in other comprehensive income would

create or enlarge an accounting mismatch in profit or loss. Changes in fair value

attributable to a financial liability's credit risk are not subsequently reclassified to profit

or loss. Previously, under IAS 39 Financial Instruments: Recognition and

Measurement, the entire amount of the change in the fair value of the financial liability

designated as at fair value through profit or loss was recognised in profit or loss.

The directors of the Company anticipate that the application of IFRS 9 in the future may

have a significant impact on amounts reported in respect of the Group's financial assets

and financial liabilities. However, it is not practicable to provide a reasonable estimate

of the effects of IFRS 9 until a detailed review has been completed.

Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities

The amendments to IFRS 10 define an investment entity and require a reporting entity

that meets the definition of an investment entity not to consolidate its subsidiaries but

instead to measure its subsidiaries at fair value through profit or loss in its consolidated

and separate financial statements. To qualify as an investment entity, a reporting entity

is required to:


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l Obtain funds from one or more investors for the purpose of providing them with

professional investment management services.

l Commit to its investor(s) that its business purpose is to invest funds solely for

returns from capital appreciation, investment income, or both.

l Measure and evaluate performance of substantially all of its investments on a

fair value basis.

Consequential amendments have been made to IFRS 12 and IAS 27 to introduce new

disclosure requirements for investment entities. The directors of the Company do not

anticipate that the investment entities amendments will have any effect on the Group's

consolidated financial statements as the Company is not an investment entity.

Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities

The amendments to IAS 32 clarify the requirements relating to the offset of financial

assets and financial liabilities. Specifically, the amendments clarify the meaning of

'currently has a legally enforceable right of set-off'. The directors of the Company do

not anticipate that the application of these amendments to IAS 32 will have a

significant impact on the Group's consolidated financial statements as the Group does

not have any financial assets and financial liabilities that qualify for offset.

4 Significant accounting policies

4.1 Statement of compliance with IFRS

The Consolidated and separate Financial Statements have been prepared in

accordance with International Financial Reporting Standards

4.2 Basis of preparation

The Consolidated Financial Statements have been prepared on the historical cost basis

except for certain properties, biological assets and financial instruments that are

measured at revalued amounts or fair values, as explained in the accounting policies

below. Historical cost is generally based on the fair value of the consideration given in

exchange for assets.

The principal accounting policies are set out below:

4.3 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the

Company and entities (including structured entities) controlled by the Company and

its subsidiaries. Control is achieved when the Company:


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l has power over the investee;

l is exposed, or has rights, to variable returns from its involvement with the

investee; and

l has the ability to use its power to affect its returns

l The Company reassesses whether or not it controls an investee if facts and

circumstances indicate that there are changes to one or more of the three

elements of control listed above.

The results of subsidiaries acquired or disposed of during the year are included in the

Group statement of comprehensive income from the effective date of acquisition or up

to the effective date of disposal, as appropriate. Where necessary, adjustments are

made to the financial statements of subsidiaries to bring the accounting policies used

in line with those used by the Group. All intra-Group transactions, balances, income

and expenses are eliminated on consolidation.

4.4 Basis of consolidation

When the Company has less than a majority of the voting rights of an investee, it has

power over the investee when the voting rights are sufficient to give it the practical

ability to direct the relevant activities of the investee unilaterally. The Company

considers all relevant facts and circumstances in assessing whether or not the

Company's voting rights in an investee are sufficient to give it power, including:

l the size of the Company's holding of voting rights relative to the size and

dispersion of holdings of the other vote holders;

l potential voting rights held by the Company, other vote holders or other parties;

l rights arising from other contractual arrangements; and

l any additional facts and circumstances that indicate that the Company has, or

does not have, the current ability to direct the relevant activities at the time that

decisions need to be made, including voting patterns at previous shareholders'

meetings.

Consolidation of a subsidiary begins when the Company obtains control over the

subsidiary and ceases when the Company loses control of the subsidiary. Specifically,

income and expenses of a subsidiary acquired or disposed of during the year are

included in the consolidated statement of profit or loss and other comprehensive

income from the date the Company gains control until the date when the Company

ceases to control the subsidiary. Profit or loss and each component of other

comprehensive income are attributed to the owners of the Company and to the non-


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controlling interests. Total comprehensive income of subsidiaries is attributed to the

owners of the Company and to the non-controlling interests even if this results in the

non-controlling interests having a deficit balance. When necessary, adjustments are

made to the financial statements of subsidiaries to bring their accounting policies into

line with the Group's accounting policies. All intra group assets and liabilities, equity,

income, expenses and cash flows relating to transactions between members of the

Group are eliminated in full on consolidation. Subsidiaries are all entities over which the

Group has the power to govern the financial and operating policies generally

accompanying a shareholding of more than one half of the voting rights. The existence

and effect of potential voting rights that are currently exercisable or convertible are

considered when assessing whether the Group controls another entity. Subsidiaries

are fully consolidated from the date on which control is transferred to the Group. They

are de-consolidated from the date that control ceases.

Changes in the Group's ownership interests in existing subsidiaries

Changes in the Group's ownership interests in subsidiaries that do not result in the

Group losing control over the subsidiaries are accounted for as equity transactions.

The carrying amounts of the Group's interests and the non-controlling interests are

adjusted to reflect the changes in their relative interests in the subsidiaries. Any

difference between the amount by which the non-controlling interests are adjusted

and the fair value of the consideration paid or received is recognised directly in equity

and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or

loss and is calculated as the difference between (i) the aggregate of the fair value of

the consideration received and the fair value of any retained interest and (ii) the

previous carrying amount of the assets (including goodwill), and liabilities of the

subsidiary and any non-controlling interests. All amounts previously recognised in

other comprehensive income in relation to that subsidiary are accounted for as if the

Group had directly disposed of the related assets or liabilities of the subsidiary (i.e.

reclassified to profit or loss or transferred to another category of equity as

specified/permitted by applicable IFRSs). The fair value of any investment retained in

the former subsidiary at the date when control is lost is regarded as the fair value on

initial recognition for subsequent accounting under IAS 39, when applicable, the cost

on initial recognition of an investment in an associate or a joint venture.


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4.5 Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition

method. The consideration for each acquisition is measured at the aggregate of the fair

values (at the date of exchange) of assets given, liabilities incurred or assumed, and

equity instruments issued by the Group in exchange for control of the acquiree.

Acquisition-related costs are recognized in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability

resulting from a contingent consideration arrangement, measured at its acquisition-

date fair value. Subsequent changes in such fair values are adjusted against the cost of

acquisition where they qualify as measurement period adjustments (see below). All

other subsequent changes in the fair value of contingent consideration classified as an

asset or liability are accounted for in accordance with relevant IFRS. Changes in the fair

value of contingent consideration classified as equity are not recognized.

Where a business combination is achieved in stages, the Group's previously-held

interests in the acquired entity are remeasured to fair value at the acquisition date (i.e.

the date the Group attains control) and the resulting gain or loss, if any, is recognized in

profit or loss. Amounts arising from interests in the acquiree prior to the acquisition

date that have previously been recognized in other comprehensive income are

reclassified to profit or loss, where such treatment would be appropriate if that interest

were disposed of.

The acquiree's identifiable assets, liabilities and contingent liabilities that meet the

conditions for recognition under IFRS 3, Business combinations are recognized at their

fair value at the acquisition date, except that:

l deferred tax assets or liabilities and liabilities or assets related to employee

benefit arrangements are recognized and measured in accordance with IAS 12

Income Taxes and IAS 19 Employee Benefits respectively;

l assets (or disposal Groups) that are classified as held for sale in accordance with

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations are

measured in accordance with that Standard.

Goodwill is measured as the excess of the sum of the consideration transferred, the

amount of any non-controlling interests in the acquiree, and the fair value of the

acquirer's previously held equity interest in the acquiree (if any) over the net of the

acquisition-date amounts of the identifiable assets acquired and the liabilities

assumed. If, after reassessment, the net of the acquisition-date amounts of the


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identifiable assets acquired and liabilities assumed exceeds the sum of the

consideration transferred, the amount of any non-controlling interests in the acquiree

and the fair value of the acquirer's previously held interest in the acquiree (if any), the

excess is recognised immediately in profit or loss as a bargain purchase gain.

Non-controlling interests that are present ownership interests and entitle their holders

to a proportionate share of the entity's net assets in the event of liquidation may be

initially measured either at fair value or at the non-controlling interests' proportionate

share of the recognised amounts of the acquiree's identifiable net assets. The choice of

measurement basis is made on a transaction-by-transaction basis. Other types of non-

controlling interests are measured at fair value or, when applicable, on the basis

specified in another IFRS. When the consideration transferred by the Group in a

business combination includes assets or liabilities resulting from a contingent

consideration arrangement, the contingent consideration is measured at its

acquisition-date fair value and included as part of the consideration transferred in a

business combination. Changes in the fair value of the contingent consideration that

qualify as measurement period adjustments are adjusted retrospectively, with

corresponding adjustments against goodwill. Measurement period adjustments are

adjustments that arise from additional information obtained during the 'measurement

period' (which cannot exceed one year from the acquisition date) about facts and

circumstances that existed at the acquisition date.

4.6 Acquisition of entities under common control

Business combinations arising from transfers of interests in entities that are under the

control of the shareholder that controls the Group are accounted prospectively as of

the date that transfer of interest was effected. The assets and liabilities acquired are

recognised at the carrying amounts recognised previously in the Group controlling

shareholder's consolidated financial statements. The difference between the

consideration paid and the net assets acquired is accounted for directly in capital

reserve.

4.7 Investments in associates

An associate is an entity over which the Group has significant influence. Significant

influence is the power to participate in the financial and operating policy decisions of

the investee but is not control or joint control over those policies.

The results, assets and liabilities of associates are incorporated in these financial

statements using the equity method of accounting, except when the investment is


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classified as held for sale, in which case it is accounted for in accordance with IFRS 5,

Non-current Assets Held for Sale and Discontinued Operations.

Under the equity method, investments in associates are carried in the Group statement

of financial position at cost as adjusted for post-acquisition changes in the Group's

share of the net assets of the associate, less any impairment in the value of individual

investments. Losses of an associate in excess of the Group's interest in that associate

(which includes any long-term interests that, in substance, form part of the Group's net

investment in the associate) are recognized only to the extent that the Group has

incurred legal or constructive obligations or made payments on behalf of the associate.

An investment in associate is accounted for using the equity method from the date on

which the investee becomes an associate.

Any excess of the consideration over the Group's share of the net fair value of the

identifiable assets, liabilities and contingent liabilities of the associate recognized at

the date of acquisition is recognized as goodwill. The goodwill is included within the

carrying amount of the investment and is assessed for impairment as part of that

investment. Any excess of the Group's share of the net fair value of the identifiable

assets, liabilities and contingent liabilities over the cost of acquisition, after

reassessment, is recognized immediately in profit or loss.

Where a Group entity transacts with an associate of the Group, profits and losses are

eliminated to the extent of the Group's interest in the relevant associate.

The requirements of IAS 36 Impairment of Assets are applied to determine whether it

is necessary to recognise any impairment loss with respect to the Group's investment

in an associate. When necessary, the entire carrying amount of the investment

(including goodwill) is tested for impairment in accordance with IAS 36, Impairment of

Assets as a single asset by comparing its recoverable amount (higher of value in use

and fair value less costs to sell) with its carrying amount, Any impairment loss

recognised forms part of the carrying amount of the investment. Any reversal of that

impairment loss is recognised in accordance with IAS 36, Impairment of Assets to the

extent that the recoverable amount of the investment subsequently increases. Upon

loss of significant influence over an associate, any retained investment is measured at

fair value at that date and the fair value is regarded as its fair value on initial recognition

as a financial asset in accordance with IAS 39, Financial Instruments: Recognition and

Measurement. The difference between the previous carrying amount of the associate


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attributable to the retained interest and its fair value is included in the determination of

the gain or loss on disposal of the associate. In addition, the Group accounts for all

amounts previously recognised in other comprehensive income in relation to that

associate on the same basis as would be required if that associate had directly

disposed of the related assets or liabilities. Therefore, if again or loss previously

recognised in other comprehensive income by that associate would be reclassified to

profit or loss on the disposal of the related assets or liabilities, the Group reclassifies

the gain or loss from equity to profit or loss (as a reclassification adjustment) when it

loses significant influence over that associate. When a Group entity transacts with its

associate, profits and losses resulting from the transactions with the associate are

recognised in the Group's financial statements only to the extent of interests in the

associate that are not related to the Group.

4.8 Non-current assets held for sale

Non-current assets and disposal groups classified as held for sale are measured at the

lower of carrying amount and fair value less costs to sell.

Non-current assets and disposal groups are classified as held for sale if their carrying

amount will be recovered through a sale transaction rather than through continuing

use. This condition is regarded as met only when the sale is highly probable and the

asset (or disposal group) is available for immediate sale in its present condition.

Management must be committed to the sale which should be expected to qualify for

recognition as a completed sale within one year from the date of classification.

The subsequent accounting for changes in the fair value of the contingent

consideration that do not qualify as measurement period adjustments depends on

how the contingent consideration is classified. Contingent consideration that is

classified as equity is not remeasured at subsequent reporting dates and its

subsequent settlement is accounted for within equity. Contingent consideration that is

classified as an asset or a liability is remeasured at subsequent reporting dates in

accordance with IAS 39, Financial Instruments: Recognition and Measurement, or IAS

37 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the

corresponding gain or loss being recognised in profit or loss.

If the initial accounting for a business combination is incomplete by the end of the

reporting period in which the combination occurs, the Group reports provisional

amounts for the items for which the accounting is incomplete. Those provisional

amounts are adjusted during the measurement period or additional assets or liabilities


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are recognized to reflect new information obtained about facts and circumstances that

existed as of the acquisition date that, if known, would have affected the amounts

recognized as of that date.

4.9 Goodwill

Goodwill represents the excess of the consideration over the fair value of the net

identifiable assets of the acquired entity at the date of the acquisition. Goodwill arising

on an acquisition of a business is carried at cost as established at the date of acquisition

of the business (see note 4.4 above) less accumulated impairment losses, if any.

The excess of the purchase price over the carrying amount of non-controlling interest,

when the Group increases its interest in an existing subsidiary, is recognised in equity.

Goodwill is tested annually for impairment and carried at cost less accumulated

impairment losses. Impairment losses on goodwill are not reversed. Gains and losses

on the disposal of an entity include the carrying amount of goodwill relating to the

entity sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing.

The allocation is made to those cash generating units or groups of cash-generating

units that are expected to benefit from the business combination in which the goodwill

arose.

The Group's policy for goodwill arising on the acquisition of an associate is described in

4.6 above.

4.10 Revenue recognition

Revenue is measured as the fair value of the consideration received or receivable and

represents amounts receivable for goods and services provided in the normal course of

business, net of discounts, VAT and other sales-related taxes.

4.10.1 Sale of goods

Revenue from the sale of goods is recognised when the goods are delivered and titles

have passed, at which time all the following conditions are satisfied:

l the Group has transferred to the buyer the significant risks and rewards of

ownership of the goods;

l the Group retains neither continuing managerial involvement to the degree

usually associated with ownership nor effective control over the goods sold;


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l the amount of revenue can be measured reliably;

l it is probable that the economic benefits associated with the transaction will flow

to the entity; and

l the costs incurred or to be incurred in respect of the transaction can be

measured reliably.

4.10.2 Dividend and interest revenue

Dividend income from investments is recognised when the shareholders' rights to

receive payment have been established (provided that it is probable that the economic

benefits will flow to the Group and the amount of revenue can be measured reliably).

Interest income is recognised when it is probable that the economic benefits will flow

to the Group and the amount of revenue can be measured reliably. Interest income is

accrued on a time basis, by reference to the principal outstanding and at the effective

interest rate applicable, which is the rate that exactly discounts estimated future cash

receipts through the expected life of the financial asset to that asset's net carrying

amount on initial recognition.

4.10.3 Rental income

Rental income from letting property is recognised in the income statement on a

straight-line basis over the term of the lease. Lease incentives granted are considered

as an integral part of the total rental income and recognised over the term of the lease.

4.11 Foreign currency translation

For the purpose of these financial statements, the results and financial position of

Flour Mills and its subsidiaries are expressed in Naira, which is the functional currency

of the Group and Company, and the presentation currency for the Group financial

statements.

In preparing the financial statements of the individual companies, transactions in

currencies other than the entity's functional currency (foreign currencies) are

recognized at the rates of exchange prevailing on the dates of the transactions. At the

end of each reporting period, monetary assets and liabilities that are denominated in

foreign currencies are retranslated at the rates prevailing at that date. Non-monetary

items carried at fair value that are denominated in foreign currencies are translated at

the rates prevailing at the date when the fair value was determined. Non-monetary

items that are measured in terms of historical cost in a foreign currency are not

retranslated.


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Exchange differences on monetary items are recognised in the income statement in

the period in which they arise except for:

l exchange differences on foreign currency borrowings relating to assets under

construction for future productive use, which are included in the cost of those

assets when they are regarded as an adjustment to interest costs on those

foreign currency borrowings;

l exchange differences on transactions entered into in order to hedge certain

foreign currency risks

l exchange differences on monetary items receivable from or payable to a foreign

operation for which settlement is neither planned nor likely to occur (therefore

forming part of the net investment in the foreign operation), which are

recognised initially in other comprehensive income and reclassified from equity

to profit or loss on repayment of the monetary items.

4.12 Pensions and other post-employment benefits

The Group and Company operate a defined contribution based retirement benefit

scheme for its staff, in accordance with the Pension Reform Act of 2004 with employee

contributing 7.5% and the employer contributing 9% each of the employee's relevant

emoluments. Payments to defined contribution retirement benefit plans are

recognised as an expense when employees have rendered the service entitling them to

the contributions.

The Group also operates a gratuity scheme for its qualified staff. Benefits are related to

the employees' length of service and remuneration. The cost of providing gratuity

benefits is determined using the Projected Unit Credit Method, with actuarial valuations

being carried out at the end of each reporting period. All actuarial gains and losses are

recognised immediately through other comprehensive income. Net interest is

calculated by applying the discount rate at the beginning of the period to the net

defined benefit liability or asset. Defined benefit costs are categorised as follows:

l Service cost (including current service cost, past service cost, as well as gains

and losses on curtailments and settlements).

l Net interest expense or income.

l Remeasurement.

The Group presents the first two components of defined benefit costs in profit or loss in

the line item ['employee benefits expense'/others (please specify)]. Curtailment gains

and losses are accounted for as past service costs.


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The retirement benefit obligation recognised in the consolidated statement of financial

position represents the actual deficit or surplus in the Group's defined benefit plans.

Any surplus resulting from this calculation is limited to the present value of any

economic benefits available in the form of refunds from the plans or reductions in

future contributions to the plans.

In addition the group operates long service award to its qualified staff. The benefits are

graduated depending on the employees number of years in service to the group.

4.13 Taxation

Income tax expense represents the sum of the tax currently payable and deferred tax.

4.13.1 Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs

from profit as reported in the consolidated statement of comprehensive income

because of items of income or expense that are taxable or deductible in future years

and items that are never taxable or deductible. The Group and Company's liability for

current tax is calculated using tax rates that have been enacted or substantively

enacted by the end of the reporting period.

4.13.2 Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of

assets and liabilities in the consolidated financial statements and the corresponding

tax bases used in the computation of taxable profit. Deferred tax liabilities are

generally recognised for all taxable temporary differences. Deferred tax assets are

generally recognised for all deductible temporary differences to the extent that it is

probable that taxable profits will be available against which those deductible

temporary differences can be utilised. Such deferred tax assets and liabilities are not

recognised if the temporary difference arises from goodwill or from the initial

recognition (other than in a business combination) of other assets and liabilities in a

transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated

with investments in subsidiaries and associates, and interests in joint ventures, except

where the Group is able to control the reversal of the temporary difference and it is

probable that the temporary difference will not reverse in the foreseeable future.

Deferred tax assets arising from deductible temporary differences associated with

such investments and interests are only recognised to the extent that it is probable


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that there will be sufficient taxable profits against which to utilise the benefits of the

temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and

reduced to the extent that it is no longer probable that sufficient taxable profits will be

available to allow all or part of the asset to be recovered.

Deferred tax liabilities and assets are measured at the tax rates that are expected to

apply in the period in which the liability is settled or the asset realised, based on tax

rates (and tax laws) that have been enacted or substantively enacted by the end of the

reporting period. The measurement of deferred tax liabilities and assets reflects the tax

consequences that would follow from the manner in which the Group expects, at the

end of the reporting period, to recover or settle the carrying amount of its assets and

liabilities.

Current and deferred tax are recognised in the statement of comprehensive income,

except when they relate to items that are recognised in other comprehensive income or

directly in equity, in which case, the current and deferred tax are also recognised in

other comprehensive income or directly in equity respectively. Where current tax or

deferred tax arises from the initial accounting for a business combination, the tax effect

is included in the accounting for the business combination.

4.14 Property, plant and equipment

Land and buildings mainly comprise factories, depots, warehouses and offices. All

property, plant and equipment are stated at historical cost less depreciation. Historical

cost includes expenditure that is directly attributable to the acquisition of the items.

Subsequent costs are included in the asset's carrying amount or recognised as a

separate asset, as appropriate, only when it is probable that future economic benefits

associated with the item will flow to the Group and the cost of the item can be measured

reliably. The carrying amount of the replaced part is derecognised. All other repairs and

maintenance are charged to profit or loss during the financial period in which it is

incurred.

Depreciation on property, factory buildings, machinery, vehicles, furniture and

equipment is calculated on a straight-line basis at rates deemed appropriate to write

off the cost of the assets to their residual values over their expected useful lives.


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Leasehold land is depreciated over the lease term. Freehold land is not depreciated.

Fixtures and equipment are stated at cost less accumulated depreciation and any

recognised impairment loss.

Depreciation is recognised so as to write off the cost or valuation of assets (other than

land and properties under construction) less their residual values over their useful

lives, using the straight-line method, on the following bases:

Freehold land Nil

Buildings 50 years

Plant and machinery 5 - 16 years

Furniture and equipment 4 - 10 years

Motor vehicles 5 years

Computer equipment 3 years

The estimated useful lives, residual values and depreciation method are reviewed at

the end of each reporting period, with the effect of any changes in estimate accounted

for on a prospective basis. An asset's carrying amount is written down immediately to

its recoverable amount if the asset's carrying amount is greater than its estimated

recoverable amount.

An item of property, plant and equipment is derecognised upon disposal or when no

future economic benefits are expected to arise from the continued use of the asset.

Any gain or loss arising on the disposal or retirement of an item of property, plant and

equipment is determined as the difference between the sales proceeds and the

carrying amount of the asset and is recognised in profit or loss.

Properties in the course of construction (capital work-in-progress) are carried at cost,

less any recognised impairment losses. Cost includes professional fees and for

qualifying assets borrowing costs capitalised in accordance with the Group's

accounting policy.

4.15 Borrowing cost

Borrowing costs are interest and other costs that the Group incurs in connection with

the borrowing of funds. These include interest expenses calculated using the effective

interest rate method, finance charges in respect of finance leases and exchange


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differences arising from foreign currency borrowings' interest cost. Where a range of

debt instruments is used to borrow funds, or where the financing activities are

coordinated centrally, a weighted average capitalisation rate is applied.

Borrowing costs directly attributable to the acquisition, construction or production of

qualifying assets, which are assets that necessarily take a substantial period of time to

get ready for their intended use or sale, are added to the cost of those assets, until such

time as the assets are substantially ready for their intended use or sale. The Group

defines a qualifying asset as an asset that takes more than a year to prepare for its

intended use. All other borrowing costs are expensed in the period in which they are

incurred.

Investment income earned on the temporary investment of specific borrowings

pending their expenditure on qualifying assets is deducted from the borrowing costs

eligible for capitalisation.

All other borrowing costs are recognised in profit or loss in the period in which they are

incurred.

4.15 Government grants

Government grants are not recognised until there is reasonable assurance that the

Group will comply with the conditions attaching to them and that the grants will be

received.

Government grants are recognised in profit or loss on a systematic basis over the

periods in which the Group recognises as expenses the related costs for which the

grants are intended to compensate. Specifically, government grants whose primary

condition is that the Group should purchase, construct or otherwise acquire non-

current assets are recognised as deferred revenue in the consolidated statement of

financial position and transferred to profit or loss on a systematic and rational basis

over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already

incurred or for the purpose of giving immediate financial support to the Group with no

future related costs are recognised in profit or loss in the period in which they become

receivable.


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The benefit of a government loan at a below-market rate of interest is treated as a

government grant, measured as the difference between proceeds received and the fair

value of the loan based on prevailing market interest rates.

4.16 Intangible assets

4.16.1 Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost

less accumulated amortisation and accumulated impairment losses. Amortisation is

recognised on a straight-line basis over their estimated useful lives. The estimated

useful life and amortisation method are reviewed at the end of each reporting period,

with the effect of any changes in estimate being accounted for on a prospective basis.

Intangible assets with indefinite useful lives that are acquired separately are carried at

cost less accumulated impairment losses.

Amortisation is recognised so as to write off the cost of finite intangible assets over

their useful lives, using the straight-line method, on the following bases:

Software 3 years

4.16.2 Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognised separately from

goodwill are initially recognised at their fair value at the acquisition date (which is

regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination

are reported at cost less accumulated amortisation and accumulated impairment

losses, on the same basis as intangible assets that are acquired separately.

4.16.3 Derecognition of intangible assets

An intangible asset is derecognised on disposal, or when no future economic benefits

are expected from use or disposal. Gains or losses arising from derecognition of an

intangible asset, measured as the difference between the net disposal proceeds and

the carrying amount of the asset, are recognised in profit or loss when the asset is

derecognised.


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4.16.4 Impairment of tangible and intangible assets excluding goodwill and

financial assets.

At the end of each reporting period, the Group reviews the carrying amounts of its

tangible and intangible assets to determine whether there is any indication that those

assets have suffered an impairment loss. If any such indication exists, the recoverable

amount of the asset is estimated in order to determine the extent of the impairment

loss (if any). When it is not possible to estimate the recoverable amount of an individual

asset, the Group estimates the recoverable amount of the cash-generating unit to

which the asset belongs. When a reasonable and consistent basis of allocation can be

identified, corporate assets are also allocated to individual cash-generating units, or

otherwise they are allocated to the smallest Group of cash-generating units for which a

reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for

use are tested for impairment at least annually, and whenever there is an indication

that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In

assessing value in use, the estimated future cash flows are discounted to their present

value using a pre-tax discount rate that reflects current market assessments of the

time value of money and the risks specific to the asset for which the estimates of future

cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less

than its carrying amount, the carrying amount of the asset (or cash-generating unit) is

reduced to its recoverable amount. An impairment loss is recognised immediately in

the income statement, unless the relevant asset is carried at a revalued amount, in

which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or

a cash-generating unit) is increased to the revised estimate of its recoverable amount,

but so that the increased carrying amount does not exceed the carrying amount that

would have been determined had no impairment loss been recognised for the asset (or

cash-generating unit) in prior years. A reversal of an impairment loss is recognised

immediately in the income statement, unless the relevant asset is carried at a revalued

amount, in which case the reversal of the impairment loss is treated as a revaluation

increase.


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4.17 Inventories

Inventories are stated in the financial statements at the lower of cost and net realisable

value. Cost comprises direct materials and, where applicable, direct labour costs and

those overheads that have been incurred in bringing the inventories to their present

location and condition. Cost is calculated using the first in first out method (FIFO). Net

realisable value represents the estimated selling price less all estimated costs of

completion and costs to be incurred in marketing, selling and distribution.

Spare parts are valued at the lower of cost and net realisable value. Value reductions

and usage of parts are charged to profit or loss. Spare parts that are acquired as part of

an equipment purchase and only to be used in connection with this specific equipment

are initially capitalised and depreciated as part of the equipment.

4.18 Biological assets

A biological asset is a living animal or plant. Agricultural produce is the harvested

product of the entity's biological assets. The Group's agricultural produce consists of

soya bean, sorghum, cassava sugar canes, palm trees and maize.

Agricultural produce that is yet to be harvested from the Group's biological assets is

measured at its fair value less costs to sell at the point of harvest. Fair value is measured

with reference to the price in an active market at the point of harvest adjusted for its

present location and condition. Fair value changes and expenses incurred in

establishing and maintaining the assets are recognised in statement of profit or loss.

Finance charges are not capitalised.

4.19 Trade payables

Trade payables are held at amortised cost which equates to nominal value. Long-term

payables are discounted where the effect is material.

4.20 Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, current balances with banks and

similar institutions and highly liquid investments generally with maturities of three

months or less. They are readily convertible into known amounts of cash and have an

insignificant risk of changes in value.

4.21 Provisions

Provisions are recognised when the Group has a present obligation (legal or

constructive) as a result of a past event, it is probable that the group will be required to


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settle the obligation, and a reliable estimate can be made of the amount of the

obligation.

The amount recognised as a provision is the best estimate of the consideration

required to settle the present obligation at the end of the reporting period, taking into

account the risks and uncertainties surrounding the obligation. When a provision is

measured using the cash flows estimated to settle the present obligation, its carrying

amount is the present value of those cash flows (when the effect of the time value of

money is material).

When some or all of the economic benefits required to settle a provision are expected

to be recovered from a third party, a receivable is recognised as an asset if it is virtually

certain that reimbursement will be received and the amount of the receivable can be

measured reliably.

4.22 Restructuring

A restructuring provision is recognised when the Group has developed a detailed

formal plan for the restructuring and has raised a valid expectation in those affected

that it will carry out the restructuring by starting to implement the plan or announcing

its main features to those affected by it. The measurement of a restructuring provision

includes only the direct expenditures arising from the restructuring, which are those

amounts that are both necessarily entailed by the restructuring and not associated

with the ongoing activities of the entity.

4.23 Onerous contracts

Present obligations arising under onerous contracts are recognised and measured as

provisions. An onerous contract is considered to exist where the Company has a

contract under which the unavoidable costs of meeting the obligations under the

contract exceed the economic benefits expected to be received from the contract.

4.24 Leases

Leases are classified as finance leases whenever the terms of the lease transfer

substantially all the risks and rewards of ownership to the lessee. All other leases are

classified as operating leases.

Operating lease payments are recognised as an expense on a straight line basis over

the lease term, except where another systematic basis is more representative of the

time pattern in which economic benefits from the leased assets are consumed.


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Contingent rentals arising under operating leases are recognised as an expense in the

period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such

incentives are recognised as a liability. The aggregate benefit of incentives is

recognised as a reduction of rental expense on a straight line basis, except where

another systematic basis is more representative of the time pattern in which economic

benefits from the leased assets are consumed.

Where there are no agreed lease terms, rent payable is recognised as incurred.

4.25 Financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a

party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction

costs that are directly attributable to the acquisition or issue of financial assets and

financial liabilities (other than financial assets and financial liabilities at fair value

through profit or loss) are added to or deducted from the fair value of the financial

assets or financial liabilities, as appropriate, on initial recognition. Transaction costs

directly attributable to the acquisition of financial assets or financial liabilities at fair

value through profit or loss are recognised immediately in the income statement.

4.25.1 Financial assets

The Groups financial assets are classified into available for sale (AFS) and loans and

receivables. The classification depends on the nature and purpose of the financial

assets and is determined at the time of initial recognition.

4.25.2 Effective interest method

The effective interest method is a method of calculating the amortised cost of a debt

instrument and of allocating interest income over the relevant period. The effective

interest rate is the rate that exactly discounts estimated future cash receipts (including

all fees paid or received that form an integral part of the effective interest rate,

transaction costs and other premiums or discounts) through the expected life of the

debt instrument, or, where appropriate, a shorter period, to the net carrying amount

on initial recognition.

Income is recognised on an effective interest basis for debt instruments other than

those financial assets classified as at FVTPL.


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4.25.3 Available-for-sale financial assets (AFS financial assets)

AFS financial assets are non-derivatives that are either designated as AFS or are not

classified as (a) loans and receivables, (b) held-to-maturity investments or (c) financial

assets at fair value through profit or loss.

Listed equities held by the Group that are traded in an active market are classified as

AFS and are stated at fair value at the end of each reporting period. Changes in the

carrying amount of available-for-sale financial assets are recognised in other

comprehensive income and accumulated under the heading of fair value reserve.

When the investment is disposed of or is determined to be impaired, the cumulative

gain or loss previously accumulated in the fair value reserve is reclassified to profit or

loss.

Dividends on AFS equity instruments are recognised in the income statement when the

Group's right to receive the dividends is established.

The fair value of AFS monetary financial assets denominated in a foreign currency is

determined in that foreign currency and translated at the spot rate prevailing at the

end of the reporting period. The foreign exchange gains and losses that are recognised

in profit or loss are determined based on the amortised cost of the monetary asset.

AFS equity investments that do not have a quoted market price in an active market and

whose fair value cannot be reliably measured are measured at cost less any identified

impairment losses at the end of each reporting period.

4.25.4 Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable

payments that are not quoted in an active market. Loans and receivables include 'trade

and other receivables', 'loans to joint ventures' and 'cash and cash equivalents' in the

statement of financial position which are measured at amortised cost using the

effective interest method, less any impairment.

Interest income is recognised by applying the effective interest rate, except for short-

term receivables when the recognition of interest would be immaterial.

4.25.5 Impairment of financial assets

Financial assets are assessed for indicators of impairment at the end of each reporting

period. Financial assets are considered to be impaired when there is objective evidence


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that, as a result of one or more events that occurred after the initial recognition of the

financial asset, the estimated future cash flows of the investment have been affected.

For AFS equity investments, a significant or prolonged decline in the fair value of the

security below its cost is considered to be objective evidence of impairment:

For all other financial assets, objective evidence of impairment could include:

l significant financial difficulty of the issuer or counterparty; or

l breach of contract, such as a default or delinquency in interest or principal

payments; or

l it is becoming probable that the borrower will enter bankruptcy or financial re-

organisation; or

l the disappearance of an active market for that financial asset because of

financial difficulties.

For certain categories of financial assets, such as trade receivables, assets that are

assessed not to be impaired individually are, in addition, assessed for impairment on a

collective basis. Objective evidence of impairment for a portfolio of receivables could

include the Group's past experience of collecting payments, an increase in the number

of delayed payments in the portfolio past the average credit period of 90 days, as well

as observable changes in national or local economic conditions that correlate with

default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss

recognised is the difference between the asset's carrying amount and the present

value of estimated future cash flows, discounted at the financial asset's original

effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as

the difference between the asset's carrying amount and the present value of the

estimated future cash flows discounted at the current market rate of return for a similar

financial asset.

The carrying amount of the financial asset is reduced by the impairment loss directly

for all financial assets with the exception of trade receivables, where the carrying

amount is reduced through the use of an allowance account. When a trade receivable

is considered uncollectible, it is written off against the allowance account. Subsequent

recoveries of amounts previously written off are credited against the allowance


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account. Changes in the carrying amount of the allowance account are recognised in

the income statement.

When an AFS financial asset is considered to be impaired, cumulative gains or losses

previously recognised in other comprehensive income are reclassified to profit or loss

in the period.

For financial assets measured at amortised cost, if, in a subsequent period, the

amount of the impairment loss decreases and the decrease can be related objectively

to an event occurring after the impairment was recognised, the previously recognised

impairment loss is reversed through profit or loss to the extent that the carrying

amount of the investment at the date the impairment is reversed does not exceed

what the amortised cost would have been had the impairment not been recognised.

In respect of AFS equity securities, impairment losses previously recognised in profit

or loss are not reversed through profit or loss. Any increase in fair value subsequent to

an impairment loss is recognised in other comprehensive income and accumulated

under the heading of investments revaluation reserve. In respect of AFS debt

securities, impairment losses are subsequently reversed through profit or loss if an

increase in the fair value of the investment can be objectively related to an event

occurring after the recognition of the impairment loss.

4.25.6 Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash

flows from the asset expire, or when it transfers the financial asset and substantially all

the risks and rewards of ownership of the asset to another entity. If the Group neither

transfers nor retains substantially all the risks and rewards of ownership and continues

to control the transferred asset, the Group recognises its retained interest in the asset

and an associated liability for amounts it may have to pay. If the Group retains

substantially all the risks and rewards of ownership of a transferred financial asset, the

Group continues to recognise the financial asset and also recognises a collateralised

borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset's

carrying amount and the sum of the consideration received and receivable and the

cumulative gain or loss that had been recognised in other comprehensive income and

accumulated in equity is recognised in profit or loss.


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On derecognition of a financial asset other than in its entirety (e.g. when the Group

retains an option to repurchase part of a transferred asset), the Group allocates the

previous carrying amount of the financial asset between the part it continues to

recognise under continuing involvement, and the part it no longer recognises on the

basis of the relative fair values of those parts on the date of the transfer. The difference

between the carrying amount allocated to the part that is no longer recognised and the

sum of the consideration received for the part no longer recognised and any

cumulative gain or loss allocated to it that had been recognised in other

comprehensive income is recognised in profit or loss. A cumulative gain or loss that

had been recognised in other comprehensive income is allocated between the part

that continues to be recognised and the part that is no longer recognised on the basis

of the relative fair values of those parts.

4.26 Financial liabilities and equity instruments

4.26.1 Classification as debt or equity

Debt and equity instruments issued by the Group are classified as either financial

liabilities or as equity in accordance with the substance of the contractual

arrangements and the definitions of a financial liability and an equity instrument.

4.26.2 Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of

an entity after deducting all of its liabilities. Equity instruments issued by the Group are

recognised as the proceeds received, net of direct issue costs.

Repurchase of the Group's own equity instruments is recognised and deducted directly

in equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or

cancellation of the Group's own equity instruments.

4.26.3 Financial liabilities

Financial liabilities are classified as 'other financial liabilities'.

4.26.3.1 Other financial liabilities

Other financial liabilities (including borrowings and trade and other payables) are

initially measured at fair value. Subsequently they are measured at amortised cost

using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a

financial liability and of allocating interest expense over the relevant period. The


effective interest rate is the rate that exactly discounts estimated future cash

payments (including all fees and points paid or received that form an integral part of

the effective interest rate, transaction costs and other premiums or discounts) through

the expected life of the financial liability, or (where appropriate) a shorter period, to the

net carrying amount on initial recognition.

4.26.3.2 Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's

obligations are discharged, cancelled or they expire. The difference between the

carrying amount of the financial liability derecognised and the consideration paid and

payable is recognised in profit or loss.

4.27 Segment reporting

Operating segments are reported in a manner consistent with the internal reporting

provided to the chief operating decision-maker. The chief operating decision-maker is

responsible for allocating resources and assessing performance of the operating

segments and has been identified as the Chief Executive Officer of Flour Mills of Nigeria

Plc.

5 Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group's accounting policies, which are described in note 4, the

Directors are required to make judgements, estimates and assumptions about the

carrying amounts of assets and liabilities that are not readily apparent from other

sources. The estimates and associated assumptions are based on historical experience

and other factors that are considered to be relevant. Actual results may differ from

these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis.

Revisions to accounting estimates are recognised in the period in which the estimate is

revised if the revision affects only that period, or in the period of the revision and future

periods if the revision affects both current and future periods.

5.1 Critical judgements in applying accounting policies

The following are the critical judgements, apart from those involving estimations (see

note 4.2 below), that the directors have made in the process of applying the Group's

accounting policies and that have the most significant effect on the amounts

recognised in the consolidated financial statements.

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5.1.1 Biological assets

Fair value of the produce is measured with reference to the price in an active market at

the point of harvest adjusted for its present location and condition.

5.1.2 Provision for gratuity

The Company operates an unfunded defined benefit scheme which entitles staff who

put in a minimum qualifying working period of five years to gratuity upon leaving the

employment of the Company. IAS 19 requires the application of the Projected Unit

Credit Method for actuarial valuations. Actuarial measurements involve the making of

several demographic projections regarding mortality, rates of employee turnover etc.

and financial projections in the area of future salaries and benefit levels, discount rate,

inflation etc.

5.2 Key sources of estimation uncertainty

The following are the key assumptions concerning the future, and other key sources of

estimation uncertainty at the end of the reporting period, that have a significant risk of

causing a material adjustment to the carrying amounts of assets and liabilities within

the next financial year.

5.2.1 Allowance for credit losses

The Company periodically assesses its trade receivables for probability of credit losses.

Management considers several factors including past credit record, current financial

position and credibility of management, judgment is exercised in determining the

allowances made for credit losses.

Provisions are made for receivables that have been outstanding for 365 days, in

respect of which there is no firm commitment to pay by the customer.

Furthermore all balances are reviewed for evidence of impairment and provided

against once recovery is doubtful.

These assessments are subjective and involve a significant element of judgment by

management on the ultimate recoverability of amounts receivable.

5.2.2 Useful life of property, plant and equipment

Property, plant and equipment represent a significant proportion of the asset base of

the Group, accounting for about 51% of the Group's total assets. Therefore the

estimates and assumptions made to determine their carrying value and related

depreciation are critical to the Group's financial position and performance.

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The charge in respect of periodic depreciation is derived after determining an estimate

of an asset's expected useful life and the expected residual value at the end of its life.

Increasing an asset's expected life or its residual value would result in the reduced

depreciation charge in the statement of comprehensive income.

The group reviews the estimated useful lives of property, plant and equipment at the

end of each reporting period. During the current year, the Directors determined that

the useful lives of certain items of plant and equipment should be increased, due to

past experiences and good maintenance culture.

The financial effect of this reassessment, assuming the assets are held until the end of

their estimated useful lives is to reduce the consolidated depreciation expense in the

current year and the next 3 years by the following amount.

N'000

Mar-14 977,230

Mar-15 1,017,469

Mar-16 1,069,219

Mar-17 1,155,965

5.2.3 Valuation of financial liabilities

As at the end of the reporting period, the Group was granted some government

assisted loans at below market rates. In accordance with IAS 20, the government grant

which is the difference between the proceeds of the loans and their fair value should be

accounted for. Based on IAS 39, all financial liabilities should be initially recognized at

fair value. In computing the fair value of these loans, the imputed interest rate used in

discounting the cash flows associated with the loans is based on management

judgement of best estimate of its borrowing cost at the time the loans were granted.

5.2.4 Provision for long term service award

A provision for long term service award is granted at first to employees that have spent

a minimum of ten years in service and for every multiple five years an employee

remains in service. IAS 19 requires the application of the Projected Unit Credit Method

for actuarial valuations. Actuarial measurements involve the making of several

demographic projections regarding mortality, rates of employee turnover etc. and

financial projections in the area of future salaries and benefit levels, discount rate,

inflation etc.

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5.2.5 Valuation of deferred tax

The Group's tax charge on ordinary activities is the sum of the total current and deferred

tax charges. The calculation of the of the Group's total tax charge necessarily involves a

degree of estimation and judgment in respect of certain items whose treatment cannot be

finally determined until resolution has been reached with the relevant tax authority. Under

the Nigerian tax system, self-assessment returns are subjected to a desk review for the

determination of tax due for remittance in the relevant year of assessment. This is

however not conclusive as field audits are carried out within six years of the end of the

relevant year of assessment to determine the adequacy or otherwise of sums remitted

under self-assessment thus making tax positions uncertain.

6. Restatement of prior year

Certain balances relating to 2013 and 2012 financial years were restated in the current

year, related balances have been properly stated in Statement of Financial Position.

Details of related adjustments and reclassification are stated below:

Adjustments: Group Company

2013 2012 2013 2012

N'000 N'000 N'000 N'000

Recomputation of actuarial

valuation in respect of retirement

benefits for Bagco division of the

Company and two subsidiaries (186,559) (301,817) (221,469) -

Long service award under provision 1,483,966 1,021,250 1,323,376 553,656

Previous provision on long service

award included in other

creditors reversed (49,518) (20,729) (39,558) (9,590)

Inventory adjustment on

revaluation of harvested

produce of a subsidiary 110,891 - - -

Adjustments relating to IFRS adoption

in a subsidiary 121,446 - - -

Impact of the adjustments on deferred

tax - assets (123,121) - (139,942) -

Impact of the adjustments on deferred

tax - liabilities 18,137 - - -

Impact of the adjustments on Income tax 33,174 - - -

Net adjustment on retained

earnings 1,408,416 698,704 922,407 544,066

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The adjustments above relate majorly to the incorporation of actuarial valuation

liabilities relating to long service award and retirement benefits as well as

adjustments to properly state the IFRS impact on the subsidiaries and the resultant

effects of the adjustments on both deferred and income taxes.

Below are details of Reclassifications:

N1.4 billion representing cost of construction of buildings as at 31 March 2013 by one

of the subsidiaries, which was previously included in property, plant and equipment

has been reclassified to inventories as the subsidiary is into construction and sale of

buildings.

N1.87 billion previously included in property, plant and equipment, represent

operating lease was reclassified to other long term assets.

Capital reserves resulting from various mergers of companies under common control

have been reclassified to retained earnings 2013 - N6.6 billion (2012 - N4.33 billion).

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Group 31-Mar-14 31-Mar-13

Products Revenue Cost of sales Gross profit Revenue Cost of sales Gross profit

N’000 N’000 N’000 N’000 N’000 N’000

Food 259,821,156 225,623,850 34,197,306 221,109,191 193,274,686 27,834,505

Cement 47,229 41,052 6,177 899,324 897,387 1,937

Agro Allied 57,554,709 50,026,529 7,528,180 50,852,120 44,450,561 6,401,559

Packaging 13,594,821 11,816,612 1,778,209 22,456,950 19,629,939 2,827,011

Port operations

and others 619,897 538,814 81,083 3,513,367 3,071,084 442,283

Real Estate - - - - - -

Others 504,873 438,835 66,038 3,110,377 2,718,825 391,552

332,142,685 288,485,692 43,656,993 301,941,329 264,042,482 37,898,847

Company

Products Revenue Cost of sales Gross profit Revenue Cost of sales Gross profit

N’000 N’000 N’000 N’000 N’000 N’000

Food 210,924,913 185,789,772 25,135,141 189,013,645 169,592,052 19,421,593

Cement 912,672 803,912 108,760 899,324 806,916 92,408

Agro Allied 13,322,657 11,735,046 1,587,611 13,259,828 11,897,350 2,307,504

Packaging 20,541,124 18,093,314 2,447,810 22,456,950 20,149,446 2,307,504

245,701,366 216,422,044 29,279,322 225,629,747 202,445,764 23,183,983

Group Company

6. Revenue 31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

Analysis by geographical area

Within Nigeria 329,319,170 299,167,844 242,877,851 222,856,262

Outside Nigeria 2,823,515 2,773,485 2,823,515 2,773,485

332,142,685 301,941,329 245,701,366 225,629,747


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Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

6.1 Other operating income

Insurance claims 72,925 134,610 45,829 115,353

Sundry income 2,186,472 1,938,335 2,131,002 1,360,953

Rent received 63,672 176,167 272,005 217,039

Profit/ (loss) on disposal

of fixed assets 265,046 (5,909) 22,055 (6,031)

Profit on fair value of

biological assets 49,239 - - -

Demurrage 55,774 26,097 - -

Sales of scraps 374,975 549,328 - 57,274

Exchange gain/(loss) 16,890 61,079 (3,237) 63,916

Release of deferred income on

BOI loan 746,839 292,512 226,223 100,720

Provision no longer required 5,124 653,739 27,916 593,350

Bad debts recovered 6,851 377,113 - 267,113

Income on government grant 30,146 1,204,237 26,028 935,613

3,873,953 5,407,308 2,747,821 3,705,300

7. Investment income

Dividend income 8,250 35,564 1,002,250

Interest receivable and similar

income 5,027,713 5,456,436 4,510,830 5,210,270

5,027,713 5,464,686 4,546,394 6,212,520

8. Finance costs

Interest expense 16,101,379 11,407,268 9,358,092 8,281,195

16,101,379 11,407,268 9,358,092 8,281,195

9 Investment in Associate

Unquoted

United Cement Company of

Nigeria Limited 20,781,295 19,076,773 20,781,295 19,076,773

Additions in the year 5,805,542 1,704,522 5,805,542 1,704,522

Share of previous years’ losses (18,723,092) (17,685,099) - -

7,863,745 3,096,196 26,586,837 20,781,295

Share of current year’s loss (73,651) (1,037,993) - -

7,790,094 2,058,203 26,586,837 20,781,295

Summary of financial information on associate

Effective ownership Total Total Net

interest Revenue Loss assets liabilities assetsN’000 N’000 N’000 N’000 N’000

2014 %30

48,785,166 245,501,806 126,191,514 107,475,314 18,716,2002013 %

28.148,240,265 5,047,314 115,231,826 113,482,757 1,749,069

The rights issue made by the associate company in the period was allocated to the existing shareholders in the same proportion.


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9 Investment in Associate (continued)

The Directors believe that the revenue to be generated from the operations of the associate company in future will

improve its prospects. This is based on increased capacity utilisation and availability of gas supply. Therefore, no

impairment allowance has been made for the value of this investment.

The associate company is incorporated in Nigeria.

The Directors are of the opinion that the market value of the unquoted investments is not lower than the cost.

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

10. Profit before tax

The profit before tax is arrived at

after charging/(crediting):

Depreciation and amortisation 12,446,682 9,636,285 6,872,991 6,641,643

Directors’ emoluments

Fees 2,200 2,200 2,200 2,200

Salaries and other emoluments 47,183 49,203 47,183 49,203

Restructuring cost - 159,668 - 159,668

Auditors’ remuneration 179,958 135,947 103,300 88,800

(Profit)/loss on disposal of fixed assets (265,046) (5,909) (22,055) 6,031

Finance cost 16,101,379 11,407,268 9,358,092 8,281,195

Exchange (gain)/loss 3,237 (61,079) 3,237 (63,916)

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

Restated Restated

11. Taxation

Income tax charged at 30% based on

the adjusted profit for the year 2,207,430 1,981,791 1,431,414 1,434,381

Education tax (2% of assessable

profit) 453,839 419,564 341,273 298,551

Capital gains tax - 1 - 1

Under/(over) provision in prior year (112,432) 119,249 (278,169) -

2,548,837 2,520,605 1,494,518 1,732,933

Deferred taxation 607,222 846,345 763,147 1,022,371

Charge as per profit or loss statement

(Note 11.1) 3,156,059 3,366,950 2,257,665 2,755,304

Per statement of financial position

At 1 April 2,780,479 4,339,540 2,021,513 3,353,121

Transfer on merger with Nigerian Bag

Manufacturing Company Plc and Niger Mills

Company Limited. - 711,075

Charge for the year 2,548,836 2,520,605 1,494,518 1,732,933

Opening balance adjustment 2,256 - -

Transfer on consolidation of

ROM Oil Limited 98,419 -

- Cash (897,968) (4,169,384) (257,992) (3,775,616)

- Withholding tax utilised (1,767,092) (8,701) (1,744,305) -

2,666,511 2,780,479 1,513,734 2,021,513

Corporation tax and education tax is calculated at 30 % and 2% respectively (2013: 30 % & 2%) of the estimated taxable profit

for the year.


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11. Taxation (continued)

The charge for the year can be reconciled to the profit per the statement of comprehensive income as follows:

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

Restated Restated

Profit before tax on continuing operations (A) 8,227,983 10,876,848 12,541,354 11,626,381

Tax at the statutory corporation tax rate of

30% (2013: 30 %) 2,468,395 3,263,054 3,762,406 3,492,208

Effect of income that is exempt from taxation (1,329,238) (1,188,980) (1,289,012) (938,487)

Effect of expenses that are not deductible

in determining taxable profit 717,721 56,554 330,493 8,921

Effect of application of commencement rules 80,562 569,802 - -

Effect of concessions (research and

development and other allowances) (316,585) (133,499) (258,142) 34,050

Effect of unused tax losses and tax offset not

recognised as deferred tax assets 2,131,806 285,033 - -

Effect of previously unrecognised and unused

tax losses and deductible temporary differences

now recognised as deferred tax assets (646,466)

Effect of balancing charges 500 - -

Education tax at 2% of assessable profits 453,839 359,661 341,273 298,551

Capital gains tax - 1 - 1

Minimum tax adjustments 1,344 5,917 - -

Others - 247 - -

3,561,878 3,217,790 2,887,018 2,895,243

Adjustments recognised in the current period

in relation to the current tax of prior periods (112,432) 119,248 (278,169) -

Adjustments recognized in the current

period in relation to the deferred tax of prior

periods (589,338) - (589,338) (169,851)

Income tax expense recognized in profit or

loss (relating to continuing operations) 2,860,108 3,337,038 2,019,512 2,725,392

Effective tax rate (B/A above) 3,156,059 3,366,950 2,257,665 2,755,304

Analysis of total income tax expense

Charged to profit or loss 2,860,108 3,337,038 2,019,512 2,725,392

Charged to Other comprehensive income 295,951 29,912 238,153 29,912

Total income tax expense (B) 3,156,059 3,366,950 2,257,665 2,755,304

The company obtained production date certificate in respect of the pioneer status tax holiday for its Apapa West Mill in September

2013. Based on the certificate, the production date (effective commencement date of pioneer status) is 1 October 2012. The

related current and deferred tax impacts of N278.2million and N589.3million respectively have been reflected in the current year

profit or loss account.


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12. Property, plant and equipment

Plant, Trucks,

Leasehold Capital machinery, motorcycles

2013 land and work-in- furniture and and motor

buildings progress equipment vehicles Total

12.1 Group N’000 N’000 N’000 N’000 N’000

Cost

At 1 April 2012 16,462,892 52,219,585 73,658,894 8,098,712 150,440,083

Additions 814,122 31,865,013 3,434,143 1,185,818 37,299,096

Transfer on acquisition

of Thai Farm International

Limited, New Horizon

Limited and ROM Oil

Limited 1,286,788 9,132 1,162,631 42,473 2,501,024

Transfers /Reclassification

(Note 12.1.2) 5,368,478 (21,230,277) 15,891,127 (29,328) -

Adjustments (Note 12.1.1) (86) (684,093) (22,791) (117,853) (824,823)

On disposals - - (217,498) (427,478) (644,976)

At 31 March 2013 23,932,194 62,179,360 93,906,506 8,752,344 188,770,404

At 1 April 2012 1,774,175 - 32,763,209 3,708,291 38,245,675

Charge for the year 442,841 - 7,801,992 1,226,463 9,471,296

Transfer on acquisition of

Thai Farm International

Limited, New Horizon Limited

and ROM Oil Limited 5,689 - 211,181 13,843 230,713

Adjustments (Note 12.1.1) 8,189 - 291,733 17,987 317,909

On disposals - - (151,317) (422,333) (573,650)

At 31 March 2013 2,230,894 - 40,916,798 4,544,251 47,691,943

Net book value

At 31 March 2013 21,701,300 62,179,360 52,989,708 4,208,093 141,078,461

At 31 March 2012 14,688,717 52,219,585 40,895,685 4,390,421 112,194,408

2014 N’000 N’000 N’000 N’000 N’000

12.1 Cost

At 1 April 2013 23,932,194 62,179,360 93,906,507 8,752,345 188,770,406

Additions 1,630,549 33,763,916 3,681,422 1,654,374 40,730,261

Transfers (Note 12.1.2) 7,535,386 (18,725,965) 11,310,614 (297,723) (177,688)

Adjustments (Note 12.1.1) - - (5,571) - (5,571)

Reclassification (Note 12.1.2) 5,114,222 (38,509,405) 33,371,439 - (23,744)

On disposals (253,945) - (124,331) (369,489) (747,764)

At 31 March 2014 37,958,406 38,707,906 142,140,080 9,739,507 228,545,899

Depreciation

At 1 April 2013 2,230,894 - 40,916,798 4,544,251 47,691,943

Charge for the year 1,049,771 - 9,962,226 1,275,282 12,287,280

Transfer 1,146 - 512 (512) 1,146

Reclassifications

On disposals (90,430) - (73,872) (557,684) (721,987)

At 31 March 2014 3,191,381 - 50,805,664 5,261,337 59,258,382

Net book value

At 31 March 2014 34,767,025 38,707,906 91,334,416 4,478,170 169,287,517

At 31 March 2013 21,701,300 62,179,360 52,989,708 4,208,093 141,078,461


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12 Property, plant and equipment (continued)

12.1.1 Adjustments

Adjustments relates to corrections for items including spares, computer software as well as certain preoperational expenses in one of the subsidiaries which were reclassified to fixed assets.

12.1.2 Reclassifications/transfersThese represent capital work in progress reclassified from other lines of assets.

12.1.3 Capital work in progressCapital work in progress comprises Building, Plant and Machinery under construction during the year.

12.1.4 Assets pledged as securities There are negative pledges over the Group's fixed and floating assets, which have been given in relation to some of the group's bank borrowings (see note 29)

12.1.5 Impairment losses recognised in the yearThe group carried out impairment assessment of its fixed assets in the period. No impairment loss was identified.

Plant, Trucks,

Leasehold Capital machinery, m/cycles

Land and work-in- furniture and and motor

The Company Buildings progress equipment vehicles Total

2013 N’000 N’000 N’000 N’000 N’000

12.2 Cost

At 1 April 2012 7,105,277 19,870,645 39,972,179 2,303,978 69,252,079

Transfer on merger of Nigeria Bag

Manufacturing Company Plc and

Niger Mills Company Limited. 3,366,597 2,286,735 17,506,837 504,708 23,664,877

Additions 279,332 10,470,721 1,081,696 469,059 12,300,808

Transfers 1,995,166 (12,369,089) 10,361,750 12,172 (0)

Reclassifications 359,942 (2,324,002) 1,790,482 (7,593) (181,171)

Eliminated on disposals - - (160,670) (241,636) (402,306)

At 31 March 2013 13,106,314 17,935,011 70,552,274 3,040,689 104,634,289

Depreciation

At 1 April 2012 969,797 - 20,026,841 1,052,670 22,049,308

Transfer on merger of Nigeria

Bag Manufacturing Company Plc

and Niger Mills Company Limited. 336,279 - 8,654,791 341,364 9,332,434

Charge for the year 272,501 - 5,843,759 447,396 6,563,656

Reclassifications - - - - -

Eliminated on disposals - (116,163) (226,372) (342,534)

At 31 March 2013 1,578,577 - 34,409,228 1,615,058 37,602,864

Net book value

At 31 March 2013 11,527,737 17,935,011 36,143,046 1,425,631 67,031,425

At 31 March 2012 6,135,480 19,870,645 19,945,338 1,251,308 47,202,771


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Leasehold Capital Machinery, furniture m/cycles and

2014 Land and work-in- and motor

Buildings progress equipment vehicles Total

12.2 The Company N’000 N’000 N’000 N’000 N’000

Cost

At 1 April 2013 13,106,314 17,935,011 70,552,274 3,040,689 104,634,289

Additions 707,391 8,283,142 561,261 687,645 10,239,438

Transfers (Note 12.2.1) 5,172,554 (15,394,069) 10,165,449 49,850 (6,216)

Eliminated on disposals (253,945) - (84,070) (326,808) (664,822)

At 31 March 2014 18,732,315 10,824,083 81,194,915 3,451,378 114,202,690

Depreciation

At 1 April 2013 1,578,577 - 34,409,228 1,615,058 37,602,864

Charge for the year 560,885 - 5,702,711 520,124 6,783,720

Transfers (Note 12.2.1) - 512 (512) -

Eliminated on disposals (90,430) - (63,766) (294,532) (448,729)

At 31 March 2014 2,049,032 - 40,048,685 1,840,137 43,937,855

Net book value

At 31 March 2014 16,683,282 10,824,083 41,146,229 1,611,241 70,264,835

At 31 March 2013 11,527,737 17,935,011 36,143,046 1,425,631 67,031,425

12.2.1 Reclassifications/transfers

These represent capital work in progress reclassified from other lines of assets and computer software reclassified to intangible

assets.

12.2.2 Capital work in progress

Capital work in progress comprises Building, Plant and Machinery under construction during the year.

12.2.3 Assets pledged as securities

There are negative pledges over Company’s fixed and floating assets, which have been given in relation to some of the group’s

borrowing (see note 29)

12.2.4 Impairment losses recognised in the year

The Company carried out impairment assessment of its fixed assets in the period. No impairment loss was identified.

13 Intangible assets

Group Computer software Berth Rehabilitation Trademarks Total

N’000 N’000 N’000 N’000

Cost

At 1 April 2012 77,765 487,742 460,000 1,025,507

Additions 317,029 - - 317,029

On disposals - - - -

At 31 March 2013 394,794 487,742 460,000 1,342,536

Amortisation

At 1 April 2012 28,187 46,452 430,000 504,639

Charge for the year 111,763 23,226 30,000 164,989

Adjustments -

At 31 March 2013 139,950 69,678 460,000 669,628

Net book value

At 31 March 2013 254,844 418,064 - 672,908

At 31 March 2012 49,578 441,290 30,000 520,868


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Group Computer software Berth Rehabilitation Trademarks TotalN’000 N’000 N’000 N’000

CostAt 1 April 2013 394,794 487,742 460,000 1,342,536Additions 41,399 - - 41,399On disposals - - -

At 31 March 2014 436,193 487,742 460,000 1,383,935

Amortisation

At 1 April 2013 139,950 69,678 460,000 669,628Charge for the year 136,176 23,226 - 159,402

At 31 March 2014 276,126 92,904 460,000 829,030

Net book valueAt 31 March 2014 160,067 394,838 - 554,905

At 31 March 2013 254,844 418,064 - 672,908

13.1.1Computer software relates to acquisition of software licence and any other development costs directly attributable to the preparation of the computer software for its intended use. Amortization of computer software is calculated based on useful life of 5 years.

13.1.2Berth Rehabilitation represents the cost of dredging and rehabilitation of berths at the Nigerian Ports Authority. Terminals A and B, which is being amortised over the remaining period of initial concession period of 20 years.

13.1.3Trademark represents consideration for the use of “Topfeeds” brand by Premier Feed Mills Company Limited, structured in two parts, of US$4m (N600 million) and US$500,000 (N75 million) respectively. The US$4m is to be amortised over a period of 3 years while the US$500,000 is payable annually for 5 years at US$100,000 per annum. The first part has been fully paid.


Company Computer software TotalN’000 N’000

13.2 CostAt 1 April 2012 35,499 35,499Additions 216,502 216,502Transfer on acquisition of Nigerian Bag Manufacturing Company Plc. 8,340 8,340

At 31 March 2013 260,341 260,341

AmortisationAt 1 April 2012 17,714 17,714Charge for the year 77,987 77,987

At 31 March 2013 95,701 95,701

Net book valueAt 31 March 2013 164,640 164,640

At 31 March 2012 17,785 17,785


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Company Computer software Total

N’000 N’000CostAt 1 April 2013 260,341 260,341Additions 41,399 41,399

-At 31 March 2014 301,740 301,740

-Amortisation -At 1 April 2013 95,701 95,701Charge for the year 89,271 89,271

-At 31 March 2014 184,972 184,972

-Net book value -At 31 March 2014 116,768 116,768

-At 31 March 2013 164,640 164,640

Group Company31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’00013 Intangible assets

13.4 Goodwill

Goodwill on acquisition of ROM Oil Mills Limited 1,351,067 1,351,067 - -

Goodwill on acquisition of Thai Farm Limited 920,139 920,139 - -

Goodwill from New Horizon Flour Mills Limited 1,876,816 1,876,816 - -

Less: Accumulated impairment losses - - - -

4,148,022 4,148,022 - -

Goodwill has been assessed for impairment as part of the annual mandatory impairment testing. Goodwill was apportioned to Cash Generating Units (CGUs) that are expected to benefit from the respective business combinations on the basis of management expectation of the benefit to be derived from the synergy. As the carrying value of the assets of the CGU to which the Goodwill was apportioned is lower than the recoverable amount, Management will recognize no impairment loss on the Goodwill.

Allocation of goodwill to cash generating unitsGoodwill was apportioned to CGUs that are expected to benefit from the synergies of the respective business combinations on the basis of their net asset values.

Goodwill has been allocated for impairment test purposes to the following cash-generating units.

* Flour Mills of Nigeria Plc.* Premier Feed Mills Company Limited* Nigerian Eagle Flour Mills Limited

Before recognition of impairment losses the carrying amount of goodwill was allocated to the cash generating units as follows.

31-Mar-14ROM OIL THAI FARM QUILVEST N’000

Flour Mills of Nigeria Plc. 769,754 801,153 1,876,816 3,447,723Premier Feed Mills Company Limited 581,313 - - 581,313Nigerian Eagle Flour Mills Limited - 118,986 - 118,986

4,148,022


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Cash generating units

The recoverable amount of the cash generating units is determined based on a value in use calculation which uses cash flow

projections based on five year projection of current year EBITDA and an average cost of capital of 14.5% per annum (2013:

12% per annum).

The directors believe that any reasonably possible change in the key assumptions on which the recoverable amount is based

would not cause the aggregate carrying amount to exceed the aggregate recoverable amount of the cash generating unit.

Key forecast assumptions

The key assumptions used in the value in use calculations for the cash generating units are as follows.

Net cash flow The Net cash flow is based on 5-year forecast with the current year EBITDA taken as year zero.

Growth rate The Growth rate of 10% has been applied based on management expectations of improve in

performance of the Company.

Inflation rate Inflation rate is based on forecast consumer price indices during the period for the country. The

value assigned to the key assumption is consistent with external sources of information.


N’000 N’000 N’000 N’00014. Investments in subsidiaries

UnquotedApapa Bulk Terminal Limited - - 50,000 50,000Flour Mills Registrars Limited - - 50,000 50,000Golden Shipping Company Nigeria Limited - - 10,000 10,000Golden Noodles Company Limited - - 50,000 50,000Golden Transport Company Limited - - 25,000 25,000Golden Sugar Company Limited - - 10,000 10,000Southern Star Shipping Company (Nigeria) Limited - - 10,000 10,000Kaboji Farms Limited - - 30,000 30,000Premier Feed Mills Company Limited - - 12,750 12,750Nigerian Eagles Flour Mills Limited 510,000 510,000Golden Penny Rice Limited - - 10,000 10,000Crestview Towers Limited - - 10,000 1,000Olympic Towers Limited - - 10,000 10,000New Horizon Flour Mills Limited - - 125,000 125,000ROM Oil Mills Limited - - 1,915,728 1,521,078Thai Farm International Limited - - 660,066 878,598Agri Palm Limited - - 5,000 5,000Agri Estates Limited - - 5,000 5,000Agro Allied Farms Sunti Limited - - 5,000 5,000Agro Allied Syrups Limited - - 5,000 5,000FMN Cement Industries Nigeria Limited 1,000 -Sunti Golden Sugar Estates Limited 5,000 -Best Chickens Limited 10,000 -Provision for investment in unquoted Company

Flour Mills Registrars Limited - - (3,818) (31,734)Southern Star Shipping Company (Nigeria) Limited - - (10,000) (10,000)

- - 3,510,727 3,281,691Quoted

Northern Nigeria Flour Mills Plc - - 303,441 303,441

- - 303,441 303,441

- - 3,814,168 3,585,132


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14. Investments in subsidiaries (continued)

Company Shareholding % Principal activity

31-Mar-14 1-Mar-13

Subsidiaries

Apapa Bulk Terminal Limited

50,000,000 ordinary shares of N1 each 100 100 Port operations

Flour Mills Registrars Limited

50,000,000 ordinary shares of N1 each 100 100 Company registrars

Golden Shipping Company Nigeria Limited

10,000,000 ordinary shares of N1 each 100 100 Shipping agency

Golden Noodles Company Limited

100,000,000 ordinary shares of 50k each 100 100 Manufacturing of noodles

Golden Transport Company Limited

50,000,000 ordinary shares of 50k each 100 100 Haulage of goods and services

Golden Sugar Company Limited

20,000,000 ordinary shares of 50k each 100 100 Manufacturing of sugar

Northern Nigeria Flour Mills Plc

78,120,966 ordinary shares of 50k each 53 53 Flour milling

Southern Star Shipping Company (Nigeria) Limited

20,000,000 ordinary shares of 50k each 100 100 Shipping agency

Kaboji Farms Limited

30,000,000 ordinary shares of N1 each 100 100 Farming

Premier Feed Mills Company Limited

25,500,000 ordinary shares of N0.5 each 62 62 Livestock feeds

Nigerian Eagle Flour Mills Limited

510,000,000 ordinary shares of N1 each 51 51 Flour milling

Golden Penny Rice Ltd

20,000,000 ordinary shares of 50k each 100 100 Importation and bagging of rice

Crestview Towers Ltd

2,000,000 ordinary shares of 50k each 100 100 Real estate

Olympic Towers Ltd

20,000,000 ordinary shares of 50k each 100 100 Real estate

Agri Palm Limited

10,000,000 ordinary shares of 50k each 100 100 Agriculture

Agri Estates Limited


Agro Allied Farms Sunti Limited


Agro Allied Syrups Limited


New Horizon Flour Mills Limited

250,000,000 ordinary shares of 50k each 100 100 Holding company

Rom Oil Mills Limited

9,000,000 ordinary shares of 50k each 90 90 Manufacturing of Edible oil

Thai Farm International Limited

349,650,135 Ordinary shares of 50k share 75 100 Manufacturing of cassava flour

Best Chickens Limited

20,000,000 ordinary shares of 50k each 100 - Agriculture

FMN Cement Industries Nigeria Limited

2,000,000 ordinary shares of 50k each 100 - Manufacturing of cement

Sunti Golden Sugar Estates Limited

10,000,000 ordinary shares of 50k each 100 - Manufacturing of sugar

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14.2 The accounts of all the subsidiary companies were included in the consolidated financial statements.

14.3 All the subsidiary companies are incorporated in Nigeria.

Business Combinations

Subsidiaries incorporated

Proportion Consideration

2014 Principal Date of of voting equity transferred

Activity incorporation acquired N’000

Best Chickens Limited

Agriculture 13/05/2013 100% -

FMN Cement Industries

Nigeria Limited Manufacturing of cement 8/7/2013 100% -

Sunti Golden Sugar

Estates Limited Manufacturing of sugar 4/07/2013 100% -

Best Chickens Limited and Sunti Golden Sugar Estate Limited were incorporated in line with the Group focused

drive to expand its agro-allied business. Best Chickens Limited was incorporated to add protein to the Group’s

Food basket while Sunti Golden Sugar Estates Limited was established as part of backward integration and also in

line with Federal Government drive of reducing importation of sugar.

Consideration transferred

No consideration was transferred as these were all newly incorporated companies.

Subsidiaries with significant Non-Controlling Interest

Principal activity NCI Proportion %

Subsidiaries

Northern Nigeria Flour Mills Plc Flour milling 47%

Premier Feed Mills Company Limited Livestock feeds 38%

Nigerian Eagle Flour Mills Limited Flour milling 49%

14.4 All the subsidiary companies with significant non-controlling Interest are incorporated in Nigeria.

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14.5 Investments in subsidiaries

Summarised financial information of Group’s subsidiaries with material NCI.

The summarised financial information below represent amounts before intra group eliminations.

Northern Nigeria Flour Mills 31-Mar-14 31-Mar-13

N’000 N’000

Statement of financial position

Current assets 2,576,926 2,765,711

Non-current assets 689,689 857,706

Current liabilities 1,187,714 1,634,103

Non-current liabilities 304,989 383,597

Total equity 1,773,912 1,605,717

31-Mar-14 31-Mar-13

N’000 N’000

Statement of comprehensive income

Total income 13,623,098 12,516,347

Expenses 13,281,297 12,185,470

Profit/(loss) for the year 233,545 225,145

Other comprehensive income for the year 5,930 27,427

Total comprehensive income for the year 239,475 252,572

Dividend paid to non-controlling interests - 33,502

Net cash inflow (outflow) from operating activities (55,295) 1,125,731

Net cash inflow (outflow) from investing activities 41,487 (246,182)

Net cash inflow (outflow) from financing activities (85,327) (27,030)

Net cash inflow (outflow) 526,380 625,515

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Investments in subsidiaries (continued)

Summarised financial information of Group’s subsidiaries with material NCI


Premier Feed Mills Company Limited 31-Mar-14 31-Mar-13

N’000 N’000


Current assets 5,975,492 6,153,044

Non-current assets 9,01,646 4,977,440

Current liabilities 7,386,897 5,274,948

Non-current liabilities 4,607,942 3,813,487

Equity 3,382,299 2,042,049

31-Mar-14 31-Mar-13

N’000 N’000


Total revenue 35,277,514 30,609,702

Expenses 34,213,008 30,184,088

Profit/(loss) for the year 1,462,647 424,428

Total comprehensive income for the year 1,462,647 424,428

Dividend paid to non-controlling interests - -

Net cash inflow (outflow) from operating activities 2,048,039 1,087,820

Net cash inflow (outflow) from investing activities (4,456,926) (1,532,066)

Net cash inflow (outflow) from financing activities 1,655,160 1,204,076

Net cash inflow (outflow) 62,446 816,173

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14.5 Investments in subsidiaries (continued)

Summarised financial information of Group’s subsidiaries with material NCI


Nigerian Eagles Flour Mills Limited 31-Mar-14 31-Mar-13

N’000 N’000


Current assets 5,023,923 3,180,740

Non-current assets 3,195,473 3,333,253

Current liabilities 3,366,919 559,311

Non-current liabilities 1,666,361 3,101,155

Total Equity 3,186,116 2,853,527

31-Mar-14 31-Mar-13

N’000 N’000


Total revenue 16,406,342 18,975,393

Total expenses 15,509,568 17,897,014

Profit/(loss) for the year 321,025 955,758

Total comprehensive income for the year 321,025 955,758

Dividend paid to non-controlling interests

Net cash inflow (outflow) from operating activities (959,224 ) 5,107,995

Net cash inflow (outflow) from investing activities (256,136 ) (59,803 )

Net cash inflow (outflow) from financing activities 687,577 (4,096,344 )

Net cash inflow (outflow) 531,642 1,059,424

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

15 Other financial assets

Available for sale investments

Unquoted

Maiduguri Flour Mills Limited 5,956 5,268 5,956 5,268

Nextport Tradings Limited 2,000 2,000 2,000 2,000

Nigeria Cement Company Plc - 60 - 60

7,956 7,328 7,956 7,328

Quoted

Transnational Corporation Plc 127,500 17,620 127,500 17,620

Loans carried at amortised cost

Interest free loan to target Companies

ROM Oil Mills Limited - - 389,250 389,250

135,456 24,948 524,706 414,198

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Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

16 Long-term loans receivable N’000 N’000 N’000 N’000

United Cement Company of Nigeria Limited 11,457,561 19,717,445 11,457,562 19,717,445

Thai Farm International Limited - - 286,144 249,038

At 31 March 11,457,561 19,717,445 11,743,706 19,966,483

16.1 Movement in long-term loans receivable

At 1 April 19,717,445 18,578,584 19,966,483 18,578,584

Additions during the year 2,185,658 3,404,792 2,222,765 3,653,830

21,903,103 21,983,376 22,189,248 22,232,414

Repayments in the year (10,445,542) (2,265,931) (10,445,542) (2,265,931)

At 31 March 11,457,561 19,717,445 11,743,706 19,966,483

The loan granted to United Cement Company of Nigeria Limited, an associate company, was to finance

projects at the Greenfield cement plant, Mfamosing, Calabar, under the terms of shareholders’ agreement.

The loan, which has no fixed term or repayment date attracts interest at 90 day NIBOR plus 2%. In 2013, a

sum of N1.7 billion was converted to acquire 1,704,521,910 ordinary shares of N1 each at par in United

Cement Company of Nigeria Limited. Similarly in 2014, a sum of N5.805billion was further converted to

acquire 5,371,311,840 ordinary shares of N1 each thus increasing its shareholding to 30%. (2013: 28.1%).

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

17 Deferred revenue

Opening balance 3,979,368 1,720,696 1,494,646 -

Additions 769,342 2,551,184 333,143 1,595,366

Release of deferred income from

government grant (746,839) (292,512) (226,224) (100,720)

4,001,871 3,979,368 1,601,565 1,494,646

Current 865,738 607,220 394,896 119,858

Non-current 3,136,133 3,372,148 1,206,669 1,374,788

4,001,871 3,979,368 1,601,565 1,494,646

The deferred revenue arises as a result of the benefit received from below-market-interest rate

government assisted loans (BOI loans) granted to date. The revenue is recognised in profit or loss over

the tenor the loan.

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18 Deferred tax

The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the current and prior reporting period.

Group Accelerated tax depreciation

18.1 Deferred tax liabilities N’000

At 1 April 2012 9,433,955

Charge for the year 1,280,538On acquisition of ROM Oil Mills Limited 230,304

At 31 March 2013 (restated) 10,944,797

Credit to profit or loss 861,227

At 31 March 2014 11,806,025

18.2 Deferred tax assets

At 1 April 2012 -Charge for the year 434,193

At 31 March 2013 (restated) 434,193

Credit to profit or loss 254,005

At 31 March 2014 688,198

Deferred tax assets and liabilities are offset where the Group has a legally enforceable right to do so. The following is the analysis of the deferred tax balances (after offset) for financial reporting purposes:

31-Mar-14 2013N’000 N’000

Restated

Deferred tax liabilities 11,806,025 10,944,797Deferred tax assets (688,198) (434,193)

11,117,827 10,510,604

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18.3 Deferred tax liabilities

Deferred tax

Group

2014 Opening Recognised Recognisedbalance in profit or in other Closing

loss comprehensive balanceincome

N’000 N’000 N’000 N’000Deferred tax (assets)/liabilities in relation to:Property, plant and equipment 12,530,826 661,269 - 13,192,095Tax losses (183,696) 114,202 - (69,494)Exchange difference 34,162 (46,042) - (11,880)Retirement benefits (1,495,302) (147,806) - (1,643,108)Provisions for bad debt (314,783) (126,656) - (441,440)Provisions for obsolete inventories (111,075) (0) - (111,076)Other provisions (152,506) 35,741 - (116,765)Upfront fees 242,351 (193,881) - 48,470Armotised cost adjustments (51,742) 54,618 - 2,876Prepayments 463 (0) - 463Deferred income (12,837) - - (12,837)Accrual of interest payment (5,997) (0) - (5,997)Gain on fair valuation of biological assets - 16,037 - 16,037Adjustment recognised in current tax year 2,745 (262) - 2,483Arising on actuarial (gains)/losses on staff retirement benefit 27,995 57,798) 295,951 266,148Profit that will subject to tax in 2014 & 2015 YOA (N3,085,000) - 1,851 - 1,851

10,510,604 311,272 295,951 11,117,827

2013 Opening Recognised Recognisedbalance in profit or in other Closing

loss comprehensive balanceincome

N’000 N’000 N’000 N’000

Property, plant and equipment 10,335,120 2,195,706 - 12,530,826Tax losses (2,996) (180,700) - (183,696)Exchange difference 11,579 22,583 - 34,162Retirement benefit (689,489) (805,813) - (1,495,302)Provisions for bad debt (112,314) (202,469) - (314,783)Provisions for obsolete inventories (25,798) (85,277) - (111,075)Other provisions (269,879) 117,373 - (152,506)Upfront fees 242,351 - - 242,351Amortised cost adjustments (49,034) (2,708) - (51,742)Prepayment - 463 - 463Deferred income - (12,837) - (12,837)Accrual of interest payment (5,585) (412) - (5,997)Gain on fair valuation of biological assets - - - -Adjustment recognised in current tax year - 2,745 - 2,745Arising on actuarial (gains)/losses on staff retirement benefit - - 29,912 27,995

9,433,955 1,483,376 (57,907) 10,510,604

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18.3 Deferred tax liabilities (continued)

Company Accelerated

tax depreciation

N’000

At 1 April 2012 7,457,983

Charge for the year 1,022,371

Transfer on merger with Nigerian Bag Manufacturing Company Plc 1,427,737

As 31 March 2013 9,908,091

At 1 April 2013 9,908,091

Charge for the year 763,147

As 31 March 2014 10,671,238

18.4 Deferred tax assets

At 1 April 2012 -

Credit to profit or loss (57,907)

As 31 March 2013 (57,907)

At 1 April 2013 (57,907)

Charge for the year -

As 31 March 2014 (57,907)

Deferred tax assets and liabilities are offset where the Company has a legally enforceable right to do

so. The following is the analysis of the deferred tax balances (after offset) for financial reporting

purposes:

2014 2013

N’000 N’000

Restated

Deferred tax liabilities 10,671,238 9,908,091

Deferred tax assets (57,907) (57,907)

10,613,331 9,850,184

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Deferred tax liabilities (continued)

Deferred tax

Company

2014 Recognised

Recognised Recognised directly in Reclassified

in profit or in other equity on from equity

Opening loss comprehensive merger with to profit or Closing

balance income BagCo and loss balance

Niger Mills

N’000 N’000 N’000 N’000 N’000 N’000

Deferred tax (assets)/liabilities in

relation to:

Property, plant and equipment 11,592,896 863,084 - - - 12,455,980

Tax losses (183,696) 114,202 - - - (69,494)

Exchange difference 31,914 (46,858) - - - (14,945)

Retirement benefits (1,326,974) (156,070) - - - (1,483,043)

Provisions for bad debt (314,783) (114,996) - - - (429,779)

Provisions for obsolete inventories (111,076) - - - - (111,076)

Other provisions (38,330) 4,895 - - - (33,434)

Upfront fees 242,351 (193,881) - - - 48,470

Armotised cost adjustments (51,742) 54,619 - - - 2,876

Prepayments 463 - - - - 463

Deferred income (12,837) - - - - (12,837)

Accrual of interest payment (5,997) - - - - (5,997)

Arising on actuarial (gains)/losses on

staff retirement benefit 27,995 - 238,153 - - 266,148

9,850,184 524,994 238,153 - 10,613,331

2013 Recognised

Restated Recognised Recognised directly in Reclassified

in profit or in other equity on from equity

Opening loss comprehensive merger with to profit or Closing

balance income BagCo and loss balance

Niger Mills

N’000 N’000 N’000 N’000 N’000 N’000

Deferred tax (assets)/liabilities

in relation to:

Property, plant and equipment 8,356,152 1,264,322 - 1,972,422 - 11,592,896

Tax losses - 57,584 - (241,280) - (183,696)

Exchange difference 11,579 (32,182) - 52,517 - 31,914

Retirement benefits (689,489) (391,737) - (245,748) - (1,326,974)

Provisions for bad debt (112,314) (153,763) - (48,706) (314,783)

Provisions for obsolete inventories (25,798) (48,033) - (37,244) (111,076)

Other provisions (269,879) 240,278 - (8,729) - (38,330)

Upfront fees 242,351 (0) - - 242,351

Armotised cost adjustments (49,034) (5,584) - 2,876 (51,742)

Prepayments - 463 - - - 463

Deferred income - (12,837) - (12,837)

Accrual of interest payment (5,585) 5,585 - (5,997) - (5,997)

Arising on actuarial (gains)/losses

on staff retirement benefit - 57,442 29,912 - - 27,995

7,457,983 2,364,207 27,995 1,427,274 - 9,850,184

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19 Biological assets

GroupPalm Cassava Sugar Total

N’000 N’000 N’000 N’000Cost/valuation

As at 1 April 2012 - - -Addition - 5,435 - 5,435

As at March, 2013 - 5,435 - 5,435

As at 1 April 2013 - 5435 - 5,435Addition 456,780 149,206 98,776 704,762Harvested in the current year - (4,738) - (4,738)Fair value gain/(loss) 53,458 (5,018) 98 48,538

Balance at 31 March 2014 510,238 144,884 98,874 753,997

Analysed into: 2014 2013N’000 N’000

Non-current 609,112 -Current 144,885 5,435

At 31 March 2014 753,997 5,435

19.1 Biological assets are stated at their revalued amount, which is the fair value at the date of revaluation. Fair value is determined at market-based evidence by appraisal. Revaluation of biological assets is carried out at sufficient regularity to identify any material movement and any material differences are adjusted accordingly to ensure that the carrying value of the assets does not differ materially from the fair values determined as at the balance sheet date.

As at 31 March, 2014. Agri Palm’s material biological asset consist only of oil palm trees coming from 2 (two) existing farms (Igbueyi, Iguabanor)

Matured palm trees occupied a total of 1750 Hectare; total number of matured trees was 262,000 production trees

Valuation of biological assets with no reliable market based price requires judgement and involves the selection of a method, formulae and assumptions. Using the income approach based on discounted cash flows, the fair value measurement of the biological asset is based on forecasted future cash flows discounted to its present value using the current market determined rate. The net cash flow representing the cash inflow from the sales of every metric tonne of FFB net of cost of harvesting and production. The assumption applied in the valuation was a discount rate of 14.5% at 31 March, 2014.

19.2 300 hectares was planted under sugar cane at Sunti Farm in 2013/14.The assumptions on tonnes cane/hectare at harvest is 95 tonnes for plant crop.

19.3 Agricultural produce is generated by Thai Farm and Kaboji Farm. Thai Farm is involved in the cultivation of cassava, while Kaboji farm is involved in cultivation of maize, soyabeans, cassava and sorghum. These products are harvested and sold to major third parties without further processing. The agricultural produce in existence at year end was solely cassava.

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20 Other long term assets - Operating lease

Group31-Mar-14 31-Mar-13

N’000 N’000Cost At 1 April 1,900,000 -Additions - 1,900,000

At 31 March 1,900,000 1,900,000

AmortisationAt 1 April 31,667 -Amortization for the year 38,000 31,667

At 31 March 69,667 31,667

Net book valueAt 31 March 1,830,333 1,868,333

Analysed into:Current 95,496 38,000Non-current 1,734,837 1,830,333

1,830,333 1,868,333

The property to which the operating lease relates is the land at 311 Apapa Road, Apapa, Lagos State which has been leased from Railway Property Management Company Limited. The property was inherited from Brossette Nigeria Limited on the acquisition of Quilvest Properties Limited in June 2012 with a residual lease period of 11 years. The lease term was extended to a period of 21 years with effect from 1 January 2014. In addition to the lump sum prepaid on the lease asset, the lease contract stipulates annual rent of N6.25million over the lease period.

The commitment for the future rentals is analysed below:

< 1 year 2 - 5 years > 5 years TotalN’000 N’000 N’000 N’000

3/31/2014

Minimum annual rent 6,250 25,000 93,750 2,000,000

6,250 25,000 93,750 1,875,000

21 Deposit for shares

ROM Oil Mills Limited (Note 21.1) 1,494,171FBC Beverages Company Limited 700,000

2,194,171

21.1 This represents the amount paid for shares in ROM Oil Mills Limited, an edible oil processing company based in Ibadan. All legal processes relating to the acquisition of the shares were not concluded and also the Company did not have control or the ability to direct the relevant activities of ROM Oil Mills Limited as at 31 March 2012. Upon conclusion of acquisition arrangement during this financial year, the deposit for shares was transferred to investment in subsidiaries account.

21.2 This represents part payment to acquire the shares of FBC Beverages Company Limited, with an agreement to pay up the balance of N1,300,000,000 at the end of January 2012. This amount was subsequently refunded to Flour Mills of Nigeria Plc in 2013.

RC 2343RC 2343

094


Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

22 Inventories N’000 N’000 N’000 N’000

Raw materials 43,146,447 48,908,044 31,452,585 28,347,765

Work-in-progress 4,646,605 2,430,490 1,097,651 1,028,361

Finished goods 4,896,246 4,440,018 3,740,846 3,139,624

Consumables stores and

maintenance spares 11,454,510 10,366,961 9,373,067 8,831,209

Allowance for obsolete stocks (459,866) (495,019) (293,045) (354,232)

63,683,942 65,650,494 45,371,104 40,992,727

The cost of inventories recognised as an expense during the year in respect of continuing operations was

N200.2 billion (31 March 2013: N162.9 million).

Raw materials and Consumables stores and maintenance spares include an amount of N7.7 billion and N1.7

billion respectively of value of goods imported not yet received (goods in transit) at year end.

Group Company

23 Trade and other receivables 31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

Trade receivables 13,427,873 9,286,917 6,852,695 8,377,121

Allowance for doubtful debts (1,562,438) (1,100,798) (1,447,890) (1,014,720)

11,865,435 8,186,119 5,404,805 7,362,401

Other receivables

Advance to contractors and suppliers 1,793,115 4,011,746 1,443,245 3,114,162

Staff debtors 765,879 839,420 665,745 721,386

Other debtors 2,847,196 6,276,897 1,752,002 3,578,401

Intercompany receivables (Note 40.3) - - 38,855,830 36,173,800

17,271,625 19,314,182 48,121,627 50,950,147

The average credit period on sale of goods is 30 days. No interest is charged on the overdue receivables. The

Group has recognised an allowance for doubtful debts of 100% against all receivables over 365 days because

historical experience has been that receivables that are past due beyond 365 days are not recoverable.

Allowances for doubtful debts are recognised against trade receivables between 30 and 365 days based on

estimated irrecoverable amounts determined by reference to past default experience of the counterparty and

an analysis of the counterparty’s current financial position.

Before accepting a new customer the Group initially trades with the customer on cash basis to assess the

customer’s ability and also determine the customer’s transaction volumes. This enables a reasonable credit limit

to be set. Once these are determined the customer is then allowed to apply for a credit facility from the

company through a rigorous process with several levels of approval. Also certain categories of credit customers

provide bank guarantees before being accepted as credit customers of the Group. Credit sales form a small

portion of overall sales. The concentration of credit risk is limited due to this fact and the large and unrelated

customer base. The Group has pledged no trade receivables during the year.

RC 2343RC 2343

095


Trade and other receivables (continued)

Of the trade receivables balance at the end of the year, top largest customers in the Group and Company are:

31-Mar-14 Group Company N’000 %

Customer A 1,168,388 13% 22%Customer B 658,259 7% 12%Customer C 221,639 2% 4%Customer D 204,031 2% 4%

No other customer represents more than 2% of the total balance of trade receivables.

Included in the Group and Company’s trade receivables balance are receivables with a carrying value of N5.8 billion which are past due at the reporting date for which the Group has not made any impairment allowance as there has not been a significant change in the credit quality and the amounts are still considered recoverable. The Group and Company do not hold any collateral over these balances.


N’000 N’000 N’000 N’000

Ageing of past due but not impaired receivables

31-60 days 4,017,357 4,938,579 1,267,820 3,381,67561-180 days 1,030,348 910,343 546,466 623,354181-365 days 792,244 699,970 570,378 479,302

Total 5,839,949 6,548,895 2,384,664 4,484,332

Ageing of impaired trade receivables

31-60 days - - -61-180 days - - -181-365 days - - -Over 365 days 1,562,438 1,100,798 1,447,890 1,014,720

Total 1,562,438 1,100,798 1,447,890 1,014,720

Movement in the allowance fordoubtful debts

Balance at the beginning of the period 1,100,798 787,319 1,014,720 520,949Transfer from Nigerian Bag company Plc and Niger Mills Company Limited

- 251,482Amounts written off during the year as uncollectible - (21,927) (21,927)Amounts recovered during the year (379,171) (377,113) (226,451) (267,113)

Increase in allowance recognised in profit or loss 840,811 712,519 659,621 531,329

Balance at the end of the period 1,562,438 1,100,798 1,447,890 1,014,720

In determining the recoverability of trade receivable, the Group and Company consider any change in the credit quality of the trade receivable from the date credit was initially granted up to the reporting date. The concentration of credit risk is limited because of the customer base being large and unrelated and large credit risks are insured against irrecoverability. Accordingly, the Directors believe that there is no further credit allowance required in excess of the allowance for doubtful debts already made.

RC 2343RC 2343

096



N’000 N’000 N’000 N’00024 Other assets

Prepaid rent on operating lease assets 100,175 69,667 - -Prepayments 2,110,717 1,710,231 1,693,959 1,460,321

2,210,892 1,779,898 1,693,959 1,460,321

25 Cash and cash equivalents

Cash on hand 317,926 85,209 263,287 69,785Bank balance 16,507,237 21,752,273 10,961,161 16,844,827

Cash and bank balances 16,825,163 21,837,482 11,224,448 16,914,612Bank overdrafts (Note 29) (48,750,087) (22,048,900) (28,514,942) (6,581,584)

(31,924,924) (211,418) (17,290,494) 10,333,028

Cash and cash equivalents comprise cash and bank balance, net of outstanding bank overdrafts. The carrying amount of these assets approximate their fair value.


N’000 N’000 N’000 N’00026 Share capital

Authorised:

4,000,000,000 ordinary shares of 50 kobo each 2,000,000 2,000,000 2,000,000 2,000,000

Issued and fully paid:

At 1 April

2,385,684,716 ordinary shares of 50 kobo each 1,192,842 1,167,388 1,192,842 1,167,388On merger with Nigerian Bag Manufacturing Company Plc and Niger Mills Company Limited - 25,454 - 25,454

At 31 March

2,385,684,716 ordinary shares of 50 kobo each 1,192,842 1,192,842 1,192,842 1,192,842

Upon conclusion of the merger with Niger Mills Company Limited and Nigerian Bag Manufacturing Company Plc in 2013, some minority shareholders exercised their right of share option as follows: - 11 ordinary shares of Niger Mills Company Limited for 2 ordinary shares of Flour Mills of Nigeria Plc and 25 ordinary shares of Nigerian Bag Manufacturing Company Plc for 1 Flour Mills of Nigeria Plc share. This resulted in N3.3 billion share premium.


N’000 N’000 N’000 N’00027 Share premium

At 1 April 36,812,540 33,526,369 36,812,540 33,526,369Arising from rights issue during the year - - -On merger with Nigerian Bag Manufacturing Company Plc and Niger Mills Company Limited - 3,286,171 - 3,286,171

Balance at end of year 36,812,540 36,812,540 36,812,540 36,812,540

This comprises share premium arising from rights issue of 436.8 million ordinary shares at N12 per share in 2005 and 156 million ordinary shares at N7.70 per share in 2000 and 455.6 million ordinary shares at N62 in 2012 by Flour Mills of Nigeria Plc. and the premium realised on the additional shares issued in 2013 stated above.

RC 2343 RC 2343097



N’000 N’000 N’000 N’00028 Capital reserve

At 1 April 281,201 4,405,525 - -

Transfer on merger of Nigerian Bag Manufacturing Company Plc - (4,124,324) - -

At 31 March 281,201 281,201 - -

Upon conclusion of Merger arrangement between Niger Mills Company Limited and Nigerian Bag Manufacturing Company Plc, the difference between the share capital and share premium of the merged entities and the nominal value of their investment in Flour Mills was transferred to Capital Reserves

29. Borrowings Group Company31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

Borrowings at amortised cost N’000 N’000 N’000 N’000Unsecured borrowings at amortised cost

Bank overdrafts (Note 25) 48,750,087 22,048,900 28,514,942 6,581,584

Other borrowings

Bank of Industry Loan - CBN intervention fund 18,021,526 7,318,389 11,808,580 6,019,266Commercial Agricultural Credit Scheme - Agricultural loans (b) 4,426,871 3,093,193 - -

Other Bank Loans (c) 25,056,442 22,104,769 - -

47,504,839 32,516,351 11,808,580 6,019,266

96,254,926 54,565,251 40,323,522 12,600,850Secured borrowings at amortised cost

Bank overdrafts (Note 25)

Other borrowingsOther Bank Loans (d) and (e) 28,802,576 39,175,817 9,485,837 27,669,797

Total borrowings at 31 March 125,057,502 93,741,068 49,809,359 40,270,647

Analysed into

Current 76,443,426 53,877,818 42,939,435 32,825,633Non-current 48,614,076 39,863,248 6,869,924 7,445,014

125,057,502 93,741,066 49,809,359 40,270,647Bank loans movement

At 1 April 71,692,165 33,140,954 33,689,063 1,904,498Additions 67,444,062 42,282,537 25,509,260 35,515,890Repayments (62,828,813) (3,731,326) (37,903,906) (3,731,326)

At 31 March 76,307,414 71,692,165 21,294,417 33,689,062

a Flour Mills of Nigeria Plc Group obtained funds from the CBN/BOI Power and Aviation Intervention Fund and Manufacturing Intervention Fund in different tranches, with tenures of 6 to 10 years. The amortised cost of these loans as at 31 March 2014 was N18.015 billion. Principal repayment commenced in September 2011. Principal and interest are paid quarterly. The facilities have fixed interest rates between 6% and 10%. The loans were granted to finance or refinance the construction cost of the group’s power plants and expansion of manufacturing plants.

b N4.426 billion (2013: 3.093 billion) outstanding in Commercial Agricultural Credit Scheme - Agricultural loans as at 31 March 2014 were obtained by some subsidiaries with interest rates between 7% and 9%. The moratorium periods for these loans are between 18 months and 24 months. Loan tenures ranged between 6 months and 7 years. Principal and interest are also payable quarterly

c Other bank loans (unsecured) are Usance facilities totalling N25billion (2013 N22billion); obtained by the group from various commercial banks in Nigeria. The facilities are used to finance the importation of raw materials. These facilities were granted at average interest rates of 5% with tenures of less than one year.

d Included in other bank loans above is a 5 years syndicated term loan facility granted in year ended 31 March 2012 to Golden Sugar Company Limited amounting to N22 billion by a consortium of banks. The loan is secured on a floating charge over all the company’s assets and has been fully drawn down as at 31 March 2014.

e The remaining other bank loans are repayable by instalments at various dates between 2014 and 2022 with interest rate varying between 13% to 15%.

Loans obtained under (a) and (b) were obtained at below market interest rate and were hence recorded at their fair value at inception using the appropriate market rate at date of draw down. Due to the nature of the lending and the providers, the benefit of the below market rate has been treated as government assistance and included in deferred revenue (Note 24).

RC 2343 RC 2343098


GroupNominalinterest 31-Mar-14 31-Mar-13

Currency rate Maturity N’000 N’000

Bank overdrafts (Note 25) Naira On demand 48,750,087 22,048,900

Other borrowings

Bank of Industry Loan - CBN intervention fund Naira 7% - 10% 18,021,526 7,318,389Commercial Agricultural Credit Scheme - Agricultural loans Naira 9% 4,426,871 225,725Other Term loans Naira 13% - 15% 53,859,018 64,148,052

125,057,502 93,741,066

CompanyNominalinterest 31-Mar-14 31-Mar-13

Currency rate Maturity N’000 N’000

Bank overdrafts (Note 25) Naira On demand 28,514,9426,581,584

Other borrowings

Bank of industry Loan - CBN intervention fund Naira 7% - 10% 11,808,580 6,019,266Commercial Agricultural Credit Scheme - Agricultural loans Naira 9% -

Other Term loans Naira 13% - 15% 9,485,831 7,669,797Supplier’s credit

- -49,809,359 40,270,647


30. Unsecured fixed rate bond N’000 N’000 N’000 N’000

5-Year 12% fixed rate unsecured bond 26,908,600 34,536,278 26,908,600 34,536,278

Analysed into:

Non-current 16,484,216 23,211,894 16,484,216 23,211,894Current 10,424,384 11,324,384 10,424,384 11,324,384

At March 31 26,908,600 34,536,278 26,908,600 34,536,278

The Company issued a 5 year 12% fixed rate unsecured bond of N37.5 billion due on 09 December 2015. The bond is repayable over 5 years with a 2-year moratorium on principal. The coupon is payable semi-annually in arrears on 09 December and 09 June of each year up to and including the Final Maturity Date. An effective interest rate of 12.57% is incurred on the bond.

RC 2343 RC 2343099


31 Retirement benefit plans

The employees of the Group are members of government approved Pension scheme (Pension reform

act, 2004) which is managed by several private sector service providers. The Group is required to

contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits.

The only obligation of the Group with respect to the retirement benefit plan is to make the specified

contributions.

The Group operates unfunded defined benefit plans for qualifying employees of the Group. Under the

plans, the employees are entitled to retirement benefits on attainment of a retirement age ranging from

50 to 60 years.

The most recent actuarial valuations of the present value of the defined benefit obligation were carried

out at 31 March 2014 by HR Nigeria Limited. The present value of the defined benefit obligation, and the

related current service cost, were measured using the Projected Unit Credit Method.

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

(restated) (restated)

At 1 April 4,266,712 4,123,936 3,462,939 2,584,246

Transfer on acquisition of subsidiary - 675,627

Net periodic benefit expense 808,798 949,168 609,559 511,542

Remeasurement on defined benefit

obligation (464,597) (234,277) (455,928) 218,012

Curtailment (18,399) (11,754) -

Transfer 33,389

Payment during the year (919,400) (560,361) (727,669) (526,488)

At 31 March 3,673,114 4,266,712 2,922,289 3,462,939

RC 2343 RC 2343100


The principal assumptions used for the purpose of the actuarial valuations were as follows:

Valuation at Valuation at2014 2013 2014 2013

% % % %Discount rate 14 14.5 14 14.5Expected rate(s) of salary increases 12 12 12 12Average rate on inflation (p.a) 9% 10% 9% 10%

Amounts recognised in income in respect of these defined benefit schemes are as follows:

Demographic assumptions:

Mortality in serviceThe rates of mortality assumed for employees are the rates published in the A67/70 Ultimate Tables, published jointly by the Institute and Faculty of Actuaries in the UK.

Sample age Number of deaths in year out Withdrawalof 10,000 lives from Service

Age band Rate25 7 </= 30 2.5%30 7 31 - 39 1.5%35 9 40 - 44 1.0%40 14 45 - 50 0.0%45 26

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13N’000 N’000 N’000 N’000

Current service cost 529,970 269,093 347,587 251,153Interest on obligation 278,828 292,206 261,972 260,389Remeasurement on defined benefit obligation (464,597) 153,592 (455,928) 218,012

344,201 714,891 153,631 729,554

Of the expense for the year, N808.79million (2013: N561.29 million) has been included in profit or loss in the statement of comprehensive income as administrative expenses. Actuarial gains and losses have been reported in other comprehensive income.

The cumulative amount of actuarial gains/ (loss) recognised in other comprehensive income is N464.60 million (2013: (N153.59million)).

RC 2343 RC 2343101


31 Retirement benefit plans (continued)

The amount included in the statement of financial position arising from the Group’s obligations in respect of its defined retirement benefit schemes is as follows:

Group 31-Mar-14 31-Mar-13N’000 N’000

(restated)

Present value of defined benefit obligations 3,673,114 4,266,712Fair value of scheme assets - -

Deficit in scheme 3,673,114 4,266,712

Past service cost not yet recognised in statement of financial position. -

Liability recognised in the statement of financial position. 3,673,114 4,266,712

Movements in the present value of defined benefit obligations were as follows:

31-Mar-14 31-Mar-13N’000 N’000

(restated)

At 1 April 4,266,712 4,123,936Service cost 529,970 269,093Interest cost 278,828 292,206Actuarial gains and losses remeasurement (464,597) 153,592Benefits paid (919,400) (560,361)Curtailment (18,399) (11,754)

At 31 March 3,673,114 4,266,712

Of the expense for the year, N808.79million (2013: N562.16 million) has been included in profit or loss in the statement of comprehensive income as administrative expenses. Actuarial gains and losses have been reported in other comprehensive income.

The cumulative amount of actuarial gains/(losses) recognised in other comprehensive income is N464.60 million(2013: N153.59million).

The amount included in the statement of financial position arising from the Group’s obligations in respect of its defined retirement benefit schemes is as follows:

Company 31-Mar-14 31-Mar-13N’000 N’000

(restated)

Present value of defined benefit obligations 2,922,289 3,462,939Fair value of scheme assets -

Deficit in scheme 2,922,289 3,462,939Past service cost not yet recognised in the statement of financial position. - -

Liability recognised in the statement of financial position. 2,922,289 3,462,939

RC 2343 RC 2343102


Retirement benefit plans (continued)

Movements in the present value of defined benefit obligations were as follows:31-Mar-14 31-Mar-13

N'000 N'000

(restated)

At 1 April 3,462,939 2,584,246Service cost 347,587 251,153Interest cost 261,971 258,472Actuarial gains and losses (455,928) 219,929Intercompany transfers 33,389 -Benefits paid (727,669) (526,488)Transfer on acquisition of subsidiary 675,627

At 31 March 2,922,289 3,462,939

32. Long service award

Long term service award is granted at first to employees that have spent a minimum of ten years in service and for every multiple five years the employee remains in service. Payment to employee is given in cash and kind.

The principal assumptions used for the purpose of the actuarial valuations were as follows:

Group Valuation at2014 2013 2012

% % %Discount rate 14 13 14.5Expected rate(s) of salary increases 12 12 12Average rate on inflation (p.a) 9 10 10

Company Valuation at

2014 2013 2012% % %

Discount rate 14 13 14.5Expected rate(s) of salary increases 12 12 12Average rate on inflation (p.a) 9 10 10

Demographic assumptions:

Mortality in serviceThe rates of mortality assumed for employees are the rates published in the A67/70 Ultimate Tables, published jointly by the Institute and Faculty of Actuaries in the UK.

Sample age Number of deaths in Withdrawal fromyear out of 10,000 lives Service

Age band Rate

25 7 </=30 2.5%

30 7 31 - 39 1.5%

35 9 40 - 44 1.0%

40 14 45 - 50 0.0%45 26

RC 2343 RC 2343103


Long service award (continued)Group 31-Mar-14 31-Mar-13 31-Mar-12

N'000 N'000 N'000

At 1 April 1,483,966 1,021,250 899,813

Service cost 258,388 175,271 178,063Interest cost 181,964 118,023 66,191Benefits paid (194,721) (134,709) (100,882)Actuarial (gains)/loss - change in assumption (134,526) 139,960 (21,935)Actuarial (gains)/loss - experience (277,500) 164,171 -

At 31 March 1,317,571 1,483,966 1,021,250

CompanyAt 1 April 1,323,376 553,656 484,313Service cost 177,247 119,255 62,282Interest cost 161,287 66,311 65,661Transfer from other group companies 12,727 - -Benefits paid (171,854) (123,070) (82,025)Transfer on acquisition of subsidiary 376,954Actuarial (gains)/loss - change in assumption (102,971) 136,126 (18,668)Actuarial (gains)/loss - experience (245,281) 74,494 42,093

At 31 March 1,154,531 1,323,376 553,656

The Long service award balance was restated in 2012 and 2013 because the balances were not recognised in accordance with IAS 19 employee benefits on transition.


32.1 Actuarial (gain)/loss N'000 N'000 N'000 N'000

Retirement benefit obligation (464,597) 153,592 (455,928) 219,929Long service award (412,026) 304,131 (348,252) 210,620

Actuarial gain/(loss) (876,623) 457,723 (804,180) 430,549Tax 295,951 29,912 238,153 29,912

Net actuarial gain (580,672) 487,635 (566,027) 460,461


N'000 N'000 N'000 N'00033. Trade and other payables (restated) (restated)

Trade payables 14,186,617 29,599,750 11,481,177 20,791,361Amounts received in advance 10,280,430 7,331,200 6,330,782 6,078,853Value added tax payable 91,215 1,734,459 - 1,652,914Withholding tax payable 31,298 188,724 29,244 188,618Sundry creditors 1,705,948 4,293,877 1,228,892 3,665,350Intercompany payables (Note 41.7) - 2,085,338 1,171,698Accruals 11,820,525 2,306,091 5,373,397 4,271,968

38,116,032 45,454,100 26,528,831 37,820,762

The average credit period on purchases is 28 days. No interest is charged on trade payables. The Group and Company have financial risk management policies in place to ensure that all payables are paid within a reasonable time of the credit time frame.

Included in trade and other payables is N885 million due to subsidiary companies.

RC 2343 RC 2343104


34. Dividend payable N’000 N’000 N’000 N’000

At 1 April 189,793 191,941 189,793 191,941Declared during the year 4,771,369 4,056,500 4,771,369 4,056,500Payment during the year (4,868,865) (4,058,648) (4,868,865) (4,058,648)

At 31 March 92,297 189,793 92,297 189,793


35. Cash generated from operations N’000 N’000 N’000 N’000

(Restated) (Restated)Reconciliation of profit after tax to net cash generated by operating activities Profit after taxation 5,367,875 7,539,809 10,437,522 8,900,989

Adjustments for:Depreciation 12,287,280 9,471,296 6,783,720 6,563,656Amortisation - intangible assets 159,402 164,989 89,271 77,987Amortisation - operating lease 38,000 - - -Actuarial gain/ (losses) remeasurement 580,672 (487,635) 566,027 (460,461)Finance cost 16,101,379 11,407,268 9,358,092 8,281,195Interest received (5,027,712) (5,456,436) (4,510,830) (5,210,270)Dividend received - (8,250) (35,566) (1,002,250)Loss/(profit) on disposal of fixed assets (265,046) 5,909 (22,055) 6,031Goodwill adjustment - (3,564,294) - -Non-controlling interest in subsidiaries (36,699) (2,946,165) - -Share of loss in associate 73,651 1,037,993 - -Transfer on merger of Nigerian Bag Manufacturing Plc and Niger Mills - (1,502,442) - 5,401,380Investments adjustment on Niger Mills Company Limited and Nigeria Bag Manufacturing Co. Ltd on merger - - - 1,980,118Fixed assets transferred on the merger of subsidiaries and acquisition of subsidiaries - (2,270,311) - (14,332,443)Investment adjustments (176,119) - - -Fixed assets adjustments 208,149 1,142,732 6,216 181,171

Operating cash flows before movements in working capital 29,310,831 14,534,463 22,672,398 10,387,103Changes in assets and liabilities:Decrease/(increase) in inventories; 1,966,553 (15,373,040) (4,378,377) (14,717,738)Decrease/(increase) in trade and otherreceivables 4,693,979 (1,888,451) 2,828,521 (16,940,199)Increase in other assets (400,485) (307,264) (233,638) (802,518)Increase in biological assets (748,562) (5,435) - -(Increase)/decrease in due from related parties (1,745,681) (230,586) 945,348 (911,442)(Decrease)/ increase in trade and other payables (7,338,069) 20,344,845 (11,291,933) 18,002,947Increase in trade deferred revenue 22,503 2,258,671 106,919 1,494,646(Decrease)/increase in due to related parties (11,264) 45,184 (45,645) 45,645(Decrease)/increase in retirement benefit obligations (593,598) 142,776 (540,650) 878,693(Decrease)/increase in long service award (166,395) 462,716 (168,845) 769,720Decrease/increase in provisions (214,428) (339,503) (214,925) 205,335Increase in deferred tax assets (254,005) (434,193) - (57,907)Increase in deferred tax liabilities 861,227 1,510,842 763,147 2,450,108

Increase/(decrease) Income tax liabilities (113,968) (1,559,061) (507,779) (1,331,608)

25,268,637 19,161,964 9,934,540 (527,215)


RC 2343 RC 2343105



N’000 N’000 N’000 N’00036. Earnings per share

From continuing operations

Net profit attributable to equity holders of the parent Company 4,612,033 6,745,915 10,437,522 8,900,989

Earnings from continuing operations for the purpose of basic earnings per share excluding discontinued operations - - - -

4,612,033 6,745,915 10,437,522 8,900,989Effect of dilutive potential ordinary shares: - - -

Earnings from continuing operations for the purpose of diluted earnings per share excluding discontinued operations 4,612,033 6,745,915 10,437,522 8,900,989

The denominators used are the same as those detailed above for both basic and diluted earnings per share from continuing and discontinued operations.


Weighted average number of shares (‘000) 2,385,685 2,385,685 2,385,685 2,385,685

Basic (kobo) 193 283 438 373

Diluted (kobo) 193 283 438 373

37. Substantial interest in shares

Excelsior Shipping Company Limited has 1,244,755,606 (2013 - 1,244,755,606) ordinary shares of 50k each, representing 52.18% of the issued and paid-up share capital of the Company. Stanbic Nominees Nigeria Limited has 170,801,838 ordinary share of 50k each representing 7% of the issued and paid -up share capital of the company. No other individual shareholder held up to 5% of the issued share capital of the Company at 31 March 2014.

Group Company2014 2013 2014 2013

38. Directors N’000 N’000 N’000 N’000

The remuneration paid to Directors was:Fees 2,200 2,200 2,200 2,200Salaries and other emoluments 47,183 49,203 47,183 49,203

49,383 51,403 49,383 51,403

Fees and other emoluments disclosed above include amount paid to:

Chairman - - - -Other Directors 49,383 51,403 49,383 51,403

49,383 51,403 49,383 51,403

RC 2343 RC 2343106


38. Directors (continued)

The Chairman waived his rights to receive emoluments.

The number of Directors excluding the Chairman whose emoluments were within the following ranges:

Group Company2014 2013 2014 2013

N N Number Number Number Number190,001 - 200,000 11 11 11 11

19,000,001 - 20,000,000 2 2 2 213 13 13 13

N’000 N’000 N’000 N’000

Highest paid Director received 25,731 28,671 25,731 28,671

39. Employees

The average number of persons employed during the year was as follows:

Group Company2014 2013 2014 2013

Number Number Number NumberManagerial 1,099 1,090 908 902Others 3,729 3,706 2,248 2,232

4,828 4,796 3,156 3,134

Staff costs relating to the above were: N’000 N’000 N’000 N’000

Salaries, wages and other benefits 12,203,537 13,417,013 8,859,262 8,226,155Pensions 574,192 566,977 446,340 447,346Long service award 440,352 293,294 338,534 245,392

13,218,081 14,277,284 9,644,136 8,918,893Gratuity 808,798 949,168 609,559 511,917

14,026,879 15,226,452 10,253,695 9,430,810

The number of employees in receipt of emoluments excluding allowances and pension/gratuity within the following ranges were:

Group Company2014 2013 2014 2013

N N Number Number Number Number60,001 - 90,000 - -90,001 - 100,000 - -

100,001 - 200,000 333 335 - -200,001 - 300,000 460 485 110 189300,001 - 400,000 555 550 338 361400,001 - 500,000 389 394 287 280500,001 - 600,000 274 301 252 260600,001 - 700,000 178 160 122 125700,001 - 800,000 304 297 265 207800,001 - 900,000 481 498 298 280900,001 - 1,000,000 247 259 147 184

Over 1,000,001 1,607 1,517 1,337 1,248

4,828 4,796 3,156 3,134

RC 2343 RC 2343107

40 Segment information

Information reported to the chief operating decision maker for the purposes of resource allocation and

assessment of segment performance focuses on types of goods or services delivered or provided. The

Group’s reportable segments under IFRS 8, Operating segments are as follows.

Food

Cement

Agro Allied

Packaging

Port Operation

Real Estate

Others

40.1 The Group

40.1.1 Segment profit or loss

The following is an analysis of the Group’s revenue and results from continuing operations by reportable

segments.

Segment Segment Segment Segment

revenue profit revenue profit

31-Mar-14 31-Mar-14 31-Mar-13 31-Mar-13

N ‘000 N ‘000 N ‘000 N ‘000

Food 259,821,156 6,071,184 221,109,191 10,784,208

Cement 47,229 (122,238) 899,324 (414,670)

Agro Allied 57,554,709 2,250,288 50,852,120 889,798

Packaging 13,594,821 (139,823) 22,456,950 1,267,838

Port Operation 619,897 108,499 3,513,367 222,579

Real Estate - (4,287) - -

Others 504,873 (9,291) 3,110,377 (834,912)

332,142,685 8,154,332 301,941,329 11,914,841

Share of profits of associates (73,651) (1,037,993)

Profit before tax (continuing operations) 8,227,983 10,876,848

Segment revenue reported above represents revenue generated from external customers. There were no inter-

segment sales in the current year.

The accounting policies of the reportable segments are the same as the Group’s accounting policies described in note 4.

Segment profit represents the profit earned by each segment without allocation of share of profits of associates, IFRS

adjustment and income tax expense. This is the measure reported to the chief operating decision maker for the purposes

of resource allocation and assessment of segment performance.


RC 2343 RC 2343108

Segment information (continued)

40.1.2 Segment assets and liabilities 31-Mar-14 31-Mar-13

N ‘000 N ‘000

Segment assets

Food 201,400,705 198,372,632

Cement 325,973 1,078,237

Agro Allied 40,901,926 20,474,521

Packaging 24,780,140 24,313,421

Port Operation 11,823,825 11,335,118

Real Estate 6,361,387 8,237,806

Others 11,655,489 16,326,257

Consolidated total assets 297,249,445 280,137,992

Segment liabilities

Food 151,931,537 139,015,230

Cement 54,480 70,893

Agro Allied 23,850,325 14,072,236

Packaging 16,087,173 15,164,357

Port Operation 6,163,150 6,523,844

Real Estate 8,046,293 2,996,550

Others 7,440,435 19,809,631

Consolidated total liabilities 213,690,013 197,652,741

40.2 Company

40.2.1 Segment profit or loss

The following is an analysis of the Company’s revenue and results from continuing operations by

reportable segment.

Segment Segment Segment Segment

revenue profit revenue profit

31-Mar-14 31-Mar-14 31-Mar-13 31-Mar-13

N ‘000 N ‘000 N ‘000 N ‘000

Food 216,114,068 11,273,286 189,013,645 9,739,041

Cement 47,229 (121,752) 899,324 (414,670)

Fertilizer 14,519,009 1,459,992 13,259,828 1,034,172

Packaging 15,021,060 (154,492) 22,456,950 1,267,838

Others - - - -

Total 245,701,366 12,457,034 225,629,747 11,626,381

Profit before tax (continuing operations) 12,457,034 11,626,381


RC 2343 RC 2343109

40.2.2 Segment assets and liabilities 31-Mar-14 31-Mar-13N’000 N’000

Segment assetsFood 188,112,437 176,341,264Cement 324,930 1,148,261Agro Allied 6,928,048 7,538,071Packaging 24,780,140 25,892,418Others - 12,969,711

Total assets 220,145,555 223,889,725

Segment liabilitiesFood 104,089,723 95,889,798Cement 52,890 72,802Agro Allied 972,658 3,811,848Packaging 16,087,173 15,572,630Others - 15,941,536

Total liabilities 121,202,444 131,288,614

41 Related party transactions

41.1 Related party Transaction Rendered/Received

Apapa Bulk Terminal Limited Related company that provide Cargo handling business and warehouse rental services to FMN group entities

Flour Mills Registrars Limited Related company that provide share registration and capital market business

Golden Shipping Company Nigeria Limited Related party company that provide custom clearing and forwarding services

Golden Noodles Company Limited Related party company that purchases its entire Noodles flour requirements

Golden Transport Company Limited Related party company that provide transport services to FMN group entities

Golden Sugar Company Limited Related party company that purchases its packaging material from FMN

Northern Nigeria Flour Mills Plc Related party company that buys its Wheat grains from Southern Star Shipping company

Southern Star Shipping Company (Nigeria) Limited Related party company that provide shipping services to FMN group entities

Kaboji Farms Limited Related party company that purchases fertilizer from FMN

Premier Feed Mills Company Limited Related party company that buys its raw materials of maize and soya beans from Kaboji farm

Nigerian Eagle Flour Mills Limited Related party company that purchases its packaging material from FMN

Golden Penny Rice Ltd Related party company that purchases its packaging material from FMN

Crestview Towers Ltd Related party company that builds and sell/lease apartments

Olympic Towers Ltd Related party company that builds and sell/lease apartments


RC 2343 RC 2343110

41.1 Related party Transaction Rendered/Received

Agri Palm Limited Related party company that sells its by-product to ROM oil

Agri Estates Limited Related party company that purchases fertilizer from FMN

Agro Allied Farms Sunti Limited Related party company that purchases fertilizer from FMN

Agro Allied Syrups Limited Related party company that purchases fertilizer from FMN

and provides cassava flour to FMN

New Horizon Flour Mills Limited Related party company that provide real estate service to

FMN group entities

ROM Oil Mills limited Related party company that provide refine edible oil to

Golden Noodles Company Limited

Thai Farm International Limited Related party company that supplies cassava flour to FMN

and Tapioca sifting to Premier Feeds Limited

Best Chickens Limited Related party company that buys its raw material from

Premier feeds Limited

FMN Cement Industries Nigeria Limited Related party company that carry on the business of

cement manufacturing and purchases its packaging

material from FMN

Sunti Golden Sugar Estates Limited Related party company that provide raw sugar for Golden

Sugar Company Limited sugar refinery

United Cement Company Nigeria Limited An associated company that carry on the business of

cement production

41.2 The following investments are controlled by Flour Mills of Nigeria Plc. Refer to note 14 for percentage holding

Company41.3 The following transactions were carried out with

related parties during the year: 31-Mar-14 31-Mar-13N’000 N’000

Purchase of goods and services

Nigerian Bag Manufacturing Company Plc - -Golden Transport Company Limited 1,853,940Golden Penny Rice Limited 13,129,379Golden Noodles Company Limited 7,893,368 332,879Golden Shipping Company Nigeria Limited 134,615Flour Mills Registrars Limited -Thai Farm International Limited 111,715 62,435Apapa Bulk Terminal Limited 48,346

8,005,082 15,561,594Sale of goods

Golden Noodles Company Limited 2,990,948 1,959,644Premier Feed Mills Company Limited 288,897 299,536Kaboji Farms Limited 199,200 240,600Northern Nigeria Flour Mills Plc 1,622,516 323,425Nigerian Eagle Flour Mills Limited 412,271 808,249Golden Sugar Company Limited 27,860 -

5,541,692 3,631,454


RC 2343 RC 2343111

Company

31-Mar-14 31-Mar-13

N’000 N’000

41.4 Amounts due from subsidiary companies

Golden Shipping Company Nigeria Limited 388,993 66,526

Apapa Bulk Terminal Limited 1,522,011

Golden Transport Company Limited 117,913

Flour Mills Registrars Limited 10,616 869

Golden Sugar Company Limited 24,719,793 21,276,588

Kaboji Farms Limited 2,043,056 1,324,837

Nigerian Eagle Flour Mills Limited 12,095

Golden Noodles Company Limited 287,620 5,449,598

Premier Feed Mills Company Limited 150,520 52,455

Northern Nigeria Flour Mills Plc 141,075 1,263,100

Thai Farm International Limited 552,990 59,041

Olympic Towers Limited 906,131

New Horizon Flour Mills Limited 2,598,359 3,806,304

Crestview Towers Limited -

Rom Oil Mills Limited 2,676,036 316,332

Agri Palm Limited 1,159,142 -

Golden Noodles Company Limited 2,660,497 -

Agro Allied Syrups Limited 607,897

Agro Allied Farms Sunti Limited 365,338

Best Chickens Limited 199,387

Quilvest Properties Ltd 158,625

Sunti Golden Sugar Estate Ltd 129,795

FMN Agro-allied Ventures Nigeria Limited 4,834

FMN Cement Industries Nigeria Limited 1,256

38,855,830 36,173,800

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

41.5 Amounts due from associated Company

United Cement Company of Nigeria Limited 465,453 490,728 394,372 490,728

41.6 Amount due from related companies

Maiduguri Flour Mills Limited 49,595 1,095,260 38,930 95,559

Burham Cement Limited 739 - 739 -

Pure Oil Mills Limited 608 - 608 -

Golden Penny Power Limited 116 - 116 -

Golden Agri Inputs Limited 82 - 82 -

Sovereign Foods Limited 1,258 - 1,258 -

Papalanto Sugar Project 2,361 - 2,361 -

Iganmu Power Company Limited 2,048 - 2,048 -

Port Harcourt Flour Mills Limited 7,932 - 7,932 -

Others 177,043 - 177,043 984,550

241,783 1,095,260 231,118 1,080,109

Amount due from related party 707,236 1,585,988 625,490 1,570,837

Total intercompany receivables 707,236 1,585,988 39,481,320 37,744,637


RC 2343 RC 2343112

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

41.7 Amount due to subsidiary companies

Crestview Towers Limited 258,937

Golden Penny Rice Limited 912,761

Golden Transport Company Limited 50,001 -Apapa Bulk Terminal Limited 146,973 -

Nigerian Eagle Flour Mills Ltd 295,710 -

Olympic Towers Limited 319,020 -

Crestview Tower Limited 519,576 -

Golden Penny Rice Limited 751,247 -

Agri Estates Limited 2,810 -

2,085,338 1,171,698

41.8 Amount due to related companiesAgri Estates Limited - 4,427 - 4,427

Agro Allied Farms Sunti Limited - 2,039 - 2,039

Top Feed Limited 18,557 - - -

Other related company 15,824 39,179 - 39,179

34,381 45,645 - 45,645

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

41.9 Loans to related parties (Note 16)

11,457,561 19,717,445 11,743,705 19,717,445

11,457,561 19,717,445 11,743,705 19,717,445

The Group loans are at rates comparable to the average commercial rate of interest.

31-Mar-14 31-Mar-13

N’000 N’000

41.10 Compensation of key management personnel

Short term benefits 266,322 236,317

Post-employment benefits 36,377 38,197

Other long term benefits - 18,389

Share based payments - -

Terminal benefits - 19,809

302,699 312,712

The remuneration of directors and key executives is determined by the remuneration committee having regard to the performance of individuals and market trends.


RC 2343 RC 2343113

42 Categories of financial instruments

Group

31-Mar-14 Loans and Available for Non-financial

receivables sale assets Total

N’000 N’000 N’000 N’000

Assets

Cash and bank balances 16,825,163 - - 16,825,163

Trade and other receivables 11,865,435 - 5,406,190 17,271,625

Long term loan receivable 11,457,561 - - 11,457,561

Investments - 135,456 - 135,456

Due from related companies 707,236 - - 707,236

40,855,395 135,456 5,406,190 46,397,041

Group

31-Mar-14 Amortized Non-financial

cost liabilities Total

N’000 N’000 N’000

Borrowings 125,057,502 - 125,057,502

Unsecured fixed rate bond 26,908,600 - 26,908,600

Trade and other payables 14,186,617 23,929,415 38,116,032

Due to related companies 34,381 - 34,381

166,187,100 23,929,415 190,566,515



N’000 N’000 N’000 N’000

Assets




Investments - 24,948 - 24,948

Due from related companies 1,585,988 - - 1,585,988

52,166,454 24,948 10,288,643 62,480,045

Group



N’000 N’000 N’000

Liabilities

Borrowings 93,741,066 - 93,741,066



Due to related companies 45,645 - 45,645

157,922,739 15,854,354 173,777,093


RC 2343 RC 2343114

42 Categories of financial instruments

Company



N’000 N’000 N’000 N’000

Assets




Investments - 524,706 - 524,706

Due from related company 625,490 - - 625,490

28,998,448 524,706 42,716,823 72,239,977

Company



N’000 N’000 N’000

Liabilities

Borrowings 49,809,359 - 49,809,359



Due to related company - - -

88,199,136 15,047,654 103,246,790



N’000 N’000 N’000 N’000

Assets




Investments - 414,198 - 414,198

Due from related company 1,570,838 - - 1,570,838

46,535,720 414,198 42,866,360 89,816,278

Company



N’000 N’000 N’000

Liabilities

Borrowings 40,270,646 - 40,270,646



Due to related company 45,645 - 45,645

95,643,930 17,029,403 112,672,333


RC 2343 RC 2343115

43 Risk management

Risk management roles and responsibilities are assigned to stakeholders in the Group at three levels: The Board, Executive Committee and line managers.

The Board oversight is performed by the Board of Directors through the Board Risk Management Committee.

The second level is performed by the Executive Management Committee (EXCOM).

The third level is performed by all line managers under EXCOM and their direct reports. They are required to comply with all risk policies and procedures and to manage risk exposures that arise from daily operations. Programme and reports of internal audit are presented to the audit committee at periodic intervals

The Internal Audit Department provides an independent assurance of the risk frame work. It assesses compliance with established controls and recommendations for improvement in processes are escalated to relevant management, Audit Committee and Board of Directors.

The Group's activities expose it to a variety of financial risks: market risk (including foreign exchange risk, interest rate risk and commodity price risk), credit risk and liquidity risk. Risk management is carried out by management under policies approved by the board of directors. Management identifies and evaluates the financial risks in co-operation with the Group's operating units. The board provides written principles for overall risk management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk and liquidity risk. The Group's overall risk management program seeks to minimize potential adverse effects on the Company's financial performance.

43.1 Capital risk management

The Group and Company manage their capital to ensure that it is able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group's and Company's overall strategy remains unchanged from 2013.

The Group monitors capital on the basis of the debt to equity ratio. This ratio is calculated as net debt divided by total equity. Net debt is calculated as total borrowings (including overdrafts, bonds and other bank loans as shown in the consolidated statement of financial position) less cash and cash equivalents. Total equity is the equity attributable to owners of Flour Mills of Nigeria Plc. in the consolidated statement of financial position.

The Group and Company are not subject to any externally imposed capital requirements.

The Group's risk management committee reviews the capital structure of the Group on a semi-annual basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital.

Gearing ratio

The debt to equity ratios as at the end of the reporting period were as follows:

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

Debt 151,966,102 128,277,344 76,717,959 74,806,925

Cash and cash equivalents (31,924,924) (211,418) (17,290,494) (10,333,028)

Net Debt 120,041,178 128,065,926 59,427,465 64,473,987

Equity 83,559,432 82,485,250 98,943,112 92,601,111

Net debt to equity ratio 144% 155% 60% 70%

Debt is defined as long and short term borrowings (excluding derivatives and financial guarantee contract)

Equity includes all capital and reserves of the Group and Company that are managed as capital.


RC 2343 RC 2343116

43.2 Market risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices such as interest rate, exchange rates and other prices.

The Group's activities expose it primarily to financial risks of changes in foreign currency exchange rates, interest rates and commodity prices.

Market risks exposures are measured using sensitivity analysis. There has been no change to the Group's exposure to market risks or the manner in which these risks are managed and measured.

43.2.1 Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to the changes in market interest rates.

The Group is exposed to interest rate risk because it borrows funds denominated in USD and CHF at floating interest rates. The sensitivity analyses below have been determined based on the exposure to interest rates for both USD and CHF denominated borrowings at the end of the reporting period. For floating rate liabilities, the analysis is prepared assuming the amount of the liability outstanding at the end of the reporting period was outstanding for the whole year. 10 basis points (BP) increase or decrease are used when reporting LIBOR risk internally to key management personnel and these represent management's assessment of the reasonably possible change in interest rates.

If LIBOR had been 10 basis points (i.e. 0.1%) higher/lower and all other variables were held constant, the Group and Company's profit or loss will be affected as follows:

Group Company

31-Mar-14 31-Mar-13 31-Mar-14 31-Mar-13

N’000 N’000 N’000 N’000

Profit/(loss) Profit/(loss)

after tax after tax

If LIBOR is 10 BP lower:

Borrowings (USD) 6,196 2,011 3,040 928

Borrowings (GBP) 7 - 7 -

Borrowings (EURO) 52 - 52 -

If LIBOR is 10 BP higher:

Borrowings (USD) (6,196) (2,011) (3,040) (928)

Borrowings (GBP) (7) - (7) -

Borrowings (EURO) (52) - (52) -


RC 2343 RC 2343117

43.2.2 Foreign currency risk management

The Group and Company undertake transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The Group and Company are mainly exposed to USD, GBP, EUR and CHF.

The following table details the Group and Company’s sensitivity to a 3%, increase and decrease in Naira against USD, GBP, EUR and CHF currencies. Management believes that a 3% movement in either direction is reasonably possible at the balance sheet date. The sensitivity analyses below include outstanding balances of USD, GBP, EUR and CHF denominated assets and liabilities. A positive number indicates an increase in profit where Naira strengthens by 3% against the USD, GBP, EUR and CHF. For a 3% weakening of Naira against the USD, GBP, EUR and CHF there would be an equal and opposite impact on profit, and the balances below would be negative.


N’000 N’000 N’000 N’000Profit/(loss) Profit/(loss) Profit/(loss) Profit/(loss)

after tax after tax after tax after tax

Naira strengthens by 3% against the USD 464,857 1,366,377 391,034 847,382Naira strengthens by 3% against the GBP 843 946 725 195Naira strengthens by 3% against the EUR 2,043 1,408 2,036 109Naira strengthens by 3% against the CHF 3,659 389 2,437 389

Naira weakens by 3% against the USD (464,857) (1,366,377) (391,034) (847,382)Naira weakens by 3% against the GBP (843) (946) (725) (195)Naira weakens by 3% against the EUR (2,043) (1,408) (2,036) (109)Naira weakens by 3% against the CHF (3,659) (389) (2,437) (389)

43.2.3 Commodity price riskThe Group is further exposed to commodity price risk. The risk arises from the Group’s need to buy specific quantities and qualities of raw materials to meet its milling requirements. These raw materials include wheat, rice, raw sugar and cassava flour. The risk is partly mitigated by buying these raw materials three months in advance of use.

43.3 Credit risk managementCredit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies where available and, if not available, the Group uses other publicly available financial information and its own trading records to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the risk management committee annually.

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. Ongoing credit evaluation is performed on the financial condition of accounts receivable and, where appropriate, credit guarantee insurance cover is purchased.

Apart from the Companies listed below, the Group does not have significant credit risk exposure to any single counter party or any Group counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are related entities.

Financial assets and other credit exposuresMaximum credit risk


N’000 N’000 N’000 N’000

Trade Receivables 11,865,435 8,186,119 5,404,805 7,362,401Other receivables 5,406,189 11,128,064 42,716,822 43,587,748

Bank deposits 16,507,237 21,752,273 10,961,161 16,844,827

The Group does not hold any collateral or other credit enhancements to cover this credit risk.


RC 2343 RC 2343118

Credit risk management (continued)

The table below shows the credit limit and balance of five major counterparties at the financial reporting

date using the rating symbols.

31-Mar-14 31-Mar-13

Carrying Carrying

Counterparty Credit limit amount amount

N’000 N’000 N’000

Company A 2,500,000 1,168,388 1,502,676

Company B 260,000 204,031 253,952

Company C 300,000 134,381 231,066

Company D 130,000 118,727 217,655

Company E 160,000 118,632 124,659

43.4 Liquidity risk management

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

financial liabilities that are settled by delivering cash or another financial asset.

Ultimate responsibility for liquidity risk management rests with the board of directors, which has

established an appropriate liquidity risk management framework for the management of the Group’s

short, medium and long-term funding and liquidity management requirements. The Group and

Company manage liquidity risk by maintaining adequate reserves, banking facilities and reserve

borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the

maturity profiles of financial assets and liabilities.

The following table details the Group’s and Company’s expected maturity for its non-derivative financial

assets. The tables below have been drawn up based on the undiscounted contractual maturities of the

financial assets including interest that will be earned on those assets. The inclusion of information on

non-derivative financial assets is necessary to understand the Group’s liquidity risk management as the

liquidity is managed on a net asset and liability basis.

Maturity analysis of financial liabilities

The following tables details the Group and Company’s remaining contractual maturity for its non-

derivative financial liabilities with agreed repayment periods. The tables have been drawn up based on

the undiscounted cash flows of financial liabilities based on the earliest date on which the Group can be

required to pay. The table includes both interest and principal cash flows. To the extent that interest

flows are floating rate, the undiscounted amount is derived from interest rate curves at the balance

sheet date. The contractual maturity is based on the earliest date on which the entities may be required

to pay.


RC 2343 RC 2343119

Group Less than 1-3

31st March 2014 1 month months 3 months 1-5 years 5+ years Total

to 1 year

N’000 N’000 N’000 N’000 N’000 N’000

Unsecured fixed rate bond 5,320,685 5,103,699 16,484,216 - 26,908,600

Overdrafts 47,961,915 788,172 - - - 48,750,087

Other borrowings - - 27,693,339 48,614,076 - 76,307,415

Trade payables 687,467 6,624,477 6,874,673 - - 14,186,617

48,649,382 12,733,334 39,671,711 65,098,292 166,152,719

Group Less than 1-3

31 March 2013 1 month months 3 months 1-5 years 5+ years Total

to 1 year

N’000 N’000 N’000 N’000 N’000 N’000

Unsecured fixed rate bond - 4,536,278 6,788,106 23,211,894 - 34,536,278

Overdrafts 22,048,900 - - - - 22,048,900

Other borrowings 25,820,723 671,256 5,336,939 26,114,660 13,748,588 71,692,167

Trade payables 1,479,987 4,439,962 23,678,800 - - 29,598,750

49,349,610 9,647,497 35,803,845 49,326,554 13,748,588 157,876,095

Company Less than 1-3


to 1 year

N’000 N’000 N’000 N’000 N’000 N’000


Overdrafts 28,514,942 - - - - 28,514,942

Other borrowings - - 14,424,493 6,869,924 - 21,294,417

Trade payables 574,059 5,166,530 5,740,588 - - 11,481,177

29,089,001 10,487,215 25,268,780 23,354,140 88,199,136

Company Less than 1-3


to 1 year

N’000 N’000 N’000 N’000 N’000 N’000


Overdrafts 6,581,584 - - - - 6,581,584

Other borrowings 25,495,870 187,143 561,036 1,088,777 6,356,237 33,689,063

Trade payables 7,276,976 3,118,704 10,395,681 - - 20,791,361

39,354,430 7,842,125 17,744,823 24,300,671 6,356,237 95,598,286


RC 2343 RC 2343120

44 Fair value of financial instruments

Except as detailed in the following table, the directors consider that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values

Group

Financial assets Carrying Carrying

amount Fair value amount Fair value

N’000 N’000 N’000 N’000

31-Mar-14 31-Mar-14 31-Mar-13 31-Mar-13

Available for sale financial assets 135,456 135,456 24,948 24,948

Long term loan receivable 11,457,561 11,457,561 19,717,445 19,717,445Trade receivables 11,865,435 11,865,435 8,186,119 8,186,119

Other receivables 765,879 765,879 839,420 839,420

Cash and bank balances 15,338,074 15,338,074 21,837,482 21,837,482

Financial liabilities

Unsecured fixed rate bond 26,908,600 26,908,600 34,536,278 34,536,278

Overdrafts 48,750,087 48,750,087 22,048,900 22,048,900

Other borrowings 66,257,249 66,257,249 71,692,165 71,692,165

Trade payables 14,186,617 14,186,617 29,599,750 29,599,750

Company Carrying Carrying

amount Fair value amount Fair value

N’000 N’000 N’000 N’000

31-Mar-14 31-Mar-14 31-Mar-13 31-Mar-13

Available for sale financial assets 135,456 135,456 48,396 48,396

Long term loan receivable 11,743,706 11,743,706 10,513,140 10,513,140

Trade receivables 9,265,251 9,265,251 8,623,747 8,623,747

Other receivables 665,745 665,745 829,324 829,324

Cash and bank balances 11,224,448 11,224,448 8,876,377 8,876,377

Financial liabilities

Unsecured fixed rate bond 26,908,600 26,908,600 38,123,278 38,123,278

Overdrafts 28,514,942 28,514,942 6,581,584 6,581,584

Other borrowings 48,660,538 48,660,538 14,774,491 14,774,491

Trade payables 11,481,177 11,481,177 8,259,343 8,259,343

Fair value hierarchy - 2014Level 1 Level 2 Level 3

N’000 N’000 N’000Available for sale instrument 303,441 - -Biological assets - 243,759 510,238


RC 2343 RC 2343121

45 Guarantees and other financial commitments

(a) Financial commitments

The Directors are of the opinion that all known liabilities and commitments which are relevant in assessing the Company’s state of affairs have been taken into consideration in the preparation of the financial statements under review.

Capital expenditure authorised by the Directors but not provided for in these financial statements was N37.49 billion (2013 - N17.1billion).

(b) Gas agreement

The long term gas purchase agreement signed by the Company for the supply of natural gas to Apapa Factory in April 2005 for twenty years came into effect during the last quarter of 2006. This commits the Company to taking up a specified minimum quantity of gas over the duration of the purchase agreement.

46 Contingent liabilities

As at 31 March 2014, there were contingent liabilities in respect of litigation against the Group and the Company amounting to N1.04 billion (2013 - N1.4 billion and N77.4 million) respectively. According to the Directors and Solicitors acting on behalf of the Company, the liabilities, if any, are not likely to be significant. The Group also had contingent liabilities arising from unconfirmed letters of credit amounting to N.27.9 billion (2013 - N23.6 billion). No provision has been made in these financial statements.

47 Events after the reporting period

There were no events after the reporting date that could have had a material effect on the financial statements of the Group that have not been provided for or disclosed in the financial statements.


RC 2343 RC 2343122

Non IFRS Statement Consolidated Statement of Value Added For The Year Ended 31st March, 2014

Gro

up

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20

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42,6

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RC 2343 RC 2343123

GROUP IFRS IFRS IFRS NGAAP NGAAP NGAAP

AS AT 31 MARCH 2014 2013 2012 2011 2010 2009

N’000 N’000 N’000 N’000 N’000 N’000

Property, plant and equipment 169,287,517 141,078,461 112,194,408 71,801,682 60,631,911 47,831,394

Investments 19,383,113 21,800,594 22,578,627 4,301,969 240,000 404,500

Deferred taxation asset 688,198 434,193 -

Other Long term assets 7,046,877 6,651,263 1,104,596 12,513,847 29,552,866 21,937,362

Net (current liabilities)/current

assets (27,815,138) (4,336,496) 18,204,612 18,405,897 363,305 2,165,947

Long term loan (65,098,292) (63,075,142) (57,086,051) (45,919,232) (28,220,786) (27,240,347)

Deferred revenue (3,136,133) (3,372,148) 1,401,513) - - -

Deferred taxation liabilities (11,806,025) (10,944,797) (9,433,955) (7,555,668) (5,691,055) (4,431,058)

Retirement benefit obligation (3,673,114) (4,266,712) (4,123,936) (3,553,061) (3,609,321) (3,509,523)

Long Service Award (1,317,571) (1,483,966) (1,021,250) - - -

83,559,432 82,485,250 81,015,538 49,995,434 53,266,920 37,158,275

CAPITAL AND RESERVES

Share capital 1,192,842 1,192,842 1,167,388 939,605 854,186 854,186

Share premium 36,812,540 36,812,540 33,526,369 5,866,676 5,866,676 5,866,676

Capital reserve 281,201 281,201 4,405,525 4,405,525 4,124,324 4,124,324

General reserve 41,636,076 41,283,813 36,857,460 34,011,489 39,006,891 23,340,421

Owners of the Company 79,922,659 79,570,396 75,956,742 45,223,295 49,852,077 34,185,607

Non-controlling interest 3,636,773 2,914,854 5,058,796 4,772,139 3,414,843 2,972,668

83,559,432 82,485,250 81,015,538 49,995,434 53,266,920 37,158,275

TURNOVER AND PROFIT

Turnover 332,142,685 301,941,329 258,268,251 238,796,940 206,608,017 180,068,194

Profit before taxation 8,227,983 10,876,848 11,803,161 16,445,415 24,439,549 5,470,455

Other comprehensive

(loss)/ profit 690,492 (487,635) 385,086 - - -

Taxation (2,860,108) (3,337,038) (4,041,532) (6,995,211) (7,491,563) (1,578,701)

Total comprehensive income 6,058,367 7,052,174 8,146,715 9,450,204 16,947,986 3,891,754

Non-controlling interest 758,617 802,223 602,366 963,269 429,675 76,316

Profit transfer to general

reserve 5,299,750 6,249,951 7,544,349 8,486,935 16,518,311 3,815,438

Earnings Basic (kobo) 193 283 308 452 967 246

Earnings Diluted (kobo) 193 283 308 452 967 246

Net assets (Naira) 36 35 43 27 31 24

Note:

1. Earnings per share are based on profit after taxation and the number of issued and fully paid ordinary shares at the end of each financial year.

2. Net assets per share are based on net assets and the number of issued and fully paid ordinary shares at the end of each financial year.

Non IFRS StatementFive Years Financial Summary

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Non IFRS StatementFive Years Financial Summary

COMPANY IFRS IFRS IFRS NGAAP NGAAP NGAAP

AS AT 31 MARCH 2014 2013 2012 2011 2010 2009

N’000 N’000 N’000 N’000 N’000 N’000

Property, plant and

equipment 70,264,835 67,031,425 47,202,771 25,702,524 25,553,986 22,129,335

Investments 30,925,712 24,780,625 24,705,717 22,127,408 2,759,993 2,771,993

Other Long term assets 11,860,474 20,131,123 18,596,369 12,089,910 28,922,933 21,374,453

Deferred taxation asset 57,907 57,907

Net current assets 25,143,051 27,326,132 29,867,608 26,657,467 5,359,078 4,171,387

Long term loan (23,354,141) (30,656,907) (30,281,112) (37,885,756) (21,012,322) (21,734,433)

Deferred revenue (1,206,669) (1,374,788) - -

Deferred taxation liabilities (10,671,238) (9,908,091) (7,457,983) (4,769,907) (4,128,134) (3,724,534)

Retirement benefit

obligation (2,922,289) (3,462,939) (2,584,246) (1,857,858) (2,070,751) (2,119,962)

Long Service Award (1,154,531) (1,323,376) (553,656) - - -

98,943,111 92,601,111 79,495,468 42,063,788 35,384,783 22,868,239

CAPITAL AND RESERVES

Share capital 1,192,842 1,192,842 1,167,388 939,605 854,186 854,186

Share premium 36,812,540 36,812,540 33,526,369 5,866,676 5,866,676 5,866,676

Capital reserve - - - -

Revenue reserve 60,937,729 54,595,729 44,801,711 35,257,507 28,663,921 16,147,377

98,943,111 92,601,111 79,495,468 42,063,788 35,384,783 22,868,239

TURNOVER AND PROFIT

Turnover 245,701,366 225,629,747 - 161,796,284 157,094,863 147,388,331

Profit before taxation 12,457,034 11,626,381 (9,353,687) 14,264,723 19,300,962 3,595,443

Other comprehensive

(loss)/ profit 647,852 (460,461) 273,081 - - -

Taxation (1,991,517) (2,725,392) (3,259,081) (4,168,971) (5,930,231) (1,125,931)

Profit transferred toRevenue reserve 11,113,370 8,440,528 (12,339,687) 10,095,752 13,370,731 2,469,512

Per share data- (kobo)

Earnings - basic 439 373 (540) 537 783 145

Earnings - diluted 439 373 (540) 537 783 145

Dividend 210 200 160 200 200 50

Net assets (Naira) 42 40 42 22 21 15

Note:

1. Earnings per share are based on profit after taxation and the number of issued and fully paid ordinary shares

at the end of each financial year.

2. Net assets per share are based on net assets and the number of issued and fully paid ordinary shares at the

end of each financial year.

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Performance Indicators

RC 2343 RC 2343126

Share Capital History of the Company

26/09/78 0 15,000,000 8,000,000 15,000,000

26/08/80 10,000,000 25,000,000 0 15,000,000

21/11/80 0 25,000,000 10,000,000 25,000,000 Scrip 2:3

12/11/84 7,500,000 32,500,000 0 25,000,000

16/01/85 0 32,500,000 7,500,000 32,500,000 Scrip 3:10

09/11/93 65,000,000 97,500,000 0 32,500,000

18/02/94 0 97,500,000 65,000,000 97,500,000 Scrip 2:1

03/10/96 152,500,000 250,000,000 0 97,500,000

01/11/96 0 250,000,000 32,500,000 130,000,000 Scrip 1:3

23/11/96 0 250,000,000 65,00,000 195,000,000 Scrip 1:2

16/09/99 100,000,000 350,000,000 0 195,000,000

04/01/00 0 350,000,000 78,000,000 273,000,000 Cash

10/09/02 150,000,000 500,000,000 0 273,000,000

27/02/03 0 500,000,000 91,000,000 364,000,000 Scrip 1:3

04/02/05 0 1,000,000,000 218,400,000 582,400,000 Rights issue 3 for 5

07/09/06 0 1,000,000,000 194,133,334 776,533,334 Scrip 1:3

10/09/08 0 1,000,000,000 854,186,668 854,186,668 Scrip 1:10

21/10/10 0 1,000,000,000 77,653,334 939,605,334 Scrip 1:10

22/06/11 1,000,000,000 2,000,000,000 0 939,605,334

15/02/12 0 2,000,000,000 227,782,666 1,167,388,000 Rights Issue 8 for 33

31/03/13 0 2,000,000,000 25,454,000 1,192,842,000 Share exchange upon

BAGCO and Niger Mills

Merger

31/03/14 0 2,000,000,000 0 1,192,842,000

RC 2343

GOLDEN PENNY

FLOUR

…The Bakers' Pride

Golden Penny Noodles is made from the finest quality

wheat, fortified with vitamins and it swells when

cooked. The nutritious, tasty and non-sticky noodles

cannot but send your taste buds on a trip. It comes in

four exciting flavours - Chicken flavour (available in

70g, 100g and 150g big pack big chop), Onion Chicken

(available in 100g), Seafood flavour (available in 70g

and 100g) and Beef (available in 100g).

The No. 1 Flour brand in Nigeria with the highest quality and yield. Prime Flour - 50kg; Confectionery Flour 10kg & 50kg; Soft Biscuit Flour - 50kg and Noodle flour - 50kg.

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RC 2343

GOLDEN PENNY

SEMOVITAGet your game on with the meal for champions;

high in fibre and fortified with vitamins to give

you energy always.

Comes in 1kg, 2kg, 5kg and 10kg.

… Secret of Healthy Living

GOLDEN PENNY

GOLDENVITAGOLDENVITAA satisfying whole wheat meal that has three times more fibre than regular semolina for easy digestion.

Comes in 500g, 1kg, 2kg, 5kg and 10kg.

… Healthy Food, Healthy Body

RC 2343 RC 2343128

RC 2343

Made from Durum, it is light, non-sticky, tasty, rich in

protein, high in fiber, and has no cholesterol and is easy

to cook. Spaghetti (500g and 250g), Spaghetini,

Bucatini, Macaroni (500g and 200g) Macaroni large,

Eliche, Twist (500g and 200g), Picolini Penne, Bambini,

Fideo, Rings, Couscous and Pasta rice.

… My family's choice

GOLDEN PENNY

PASTA

RiceGOLDEN PENNY

Only healthy people can change their world, so, enjoy the true taste of rice with 100% sortexed, non-sticky, long grain premium rice for optimum satisfaction.Available in 450g, 750g, 25kg and 50kg

RC 2343 RC 2343129

RC 2343

Noodies

…..So tasty, so crunchy, so cool

Share fun and excitement with the tasty

crunchy Marios Cheese balls that guarantee a

WOW taste explosion. Cheese flavour (15g

and 30g); Barbeque flavour (15g and 30g).

Marios Cheese Balls

Noodies is an excitingly different and

uniquely tasty noodle snack. The vitamin

enriched, crisp fun snack offers a very

filling and satisfying experience that

always spurs you to do the crunch.

Available in 30g packs of Sweet flavours

(Orange, Chocolate, Vanilla, Strawberry)

and Savory flavours (Curry, Barbeque).

RC 2343 RC 2343130

RC 2343

Agro Allied

High yielding new Soybean varieties planted at Kaboji, Niger State

New Agricultural Equipment delivered to Kaboji Farm

Harvesting Soya at Kaboji Farms, Niger State for Premier Feed Mills and Rom Oil Mills Co. Ltd.

Group Companies in Ibadan

New state-of-the-art Crop Sprayer for usein FMN Group plantations

RC 2343 RC 2343131

Rice Harvesting at Sunti Agro Allied Farms Limited's 'Sunflag Outgrower “Scheme”, Raba, Niger State

RC 2343

Modern GPS Technology used for land leveling at Sunti Sugar Estate

Harvesting Irrigated Seed Cane at Sunti to develop commercial sugar plantations

in Niger State

GPS Base Station for Automated Land Leveling

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RC 2343

Agri Palm Ltd's Palm Processing Millat Ugbogui, Edo State

Palm Plantation at Iguiye, Edo State

Cassava Growing at Agro Allied Syrups Limited, Shao, Kwara State

Cassava Tubers Unloading for Processing into HQCF at Thai Farm, Ososa, Ogun State

RC 2343 Corporate Social Responsibility

Education

Flour Mills of Nigeria Plc in line with its Corporate Social Responsibility

philosophy, initiatives and programmes focused on the following key areas –

Environmental Sustainability; Education, Research and Skills Development;

Health and Welfare; Infrastructural Development; and Security.

Bus donation

Flour Mills of Nigeria Plc donated a brand new Toyota Hiace 15 Seater Bus to New Era Girls Senior Secondary School, Surulere, Lagos.

Alhaji Olalekan Saliu with Mr. Paul Gbededo presenting the bus to Mrs. Abiola Agbe-Davies, Principal, New Era Girls Senior Secondary School and Mr. Ayobade Obajimi, Tutor General/Permanent Secretary, District IV, Ministry of Education, Lagos State.

Directors of FMN and Ministry of Education officials with students of New Era Girls Senior Secondary School.

UI Food Research Centre

Professor Charles Aworh, Professor Idowu Olayinka receiving the cheque from Mr. Paul Gbededo, GMD and Alhaji Olalekan Saliu at Golden Penny Place, Apapa.

Flour Mills of Nigeria Plc reaffirmed its commitment to University of Ibadan Food Research Centre with the donation of an additional N30 million towards the establishment of the Flour Mills Food Research Centre, having made an initial grant of N30 million in 2013.

The UI-FMN partnership is part of on-going efforts at transforming the Department of Food Technology, UI, into a world-class centre of excellence in food research.

RC 2343 RC 2343134

Osun Schools Tourism Competition - Quiz & Debate

FMN Sponsors Channels TV Kids’ Cup

Contestants at the State finals

Mr. Joseph Umolu (FMN Head, Legal Service) with the finalists

WinnersOrganising Committee with contestants

RC 2343

RC 2343 RC 2343135

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Blocks of Classrooms constructed at Niger State

A block of classrooms constructed at Batagi school, Niger State.

Official Opening of a Primary/Secondary School in Mokwa, Niger State.

Completed building of a Primary/Secondary School in Mokwa, Niger State.

Police Station constructed at Kaboji, Niger State

Representatives of FMN and some officers of the Nigerian Police Force during the official hand-over of the constructed Police Station at Kaboji

RC 2343

RC 2343

Health and Welfare

Flour Mills of Nigeria Plc organized a free eye

screening exercise for residents of Apapa and

its environs.

The exercise was conducted by medical

practitioners from Lagos University Teaching

Hospital for two days in December, 2013 at the

Town Hall, Apapa Local Government. Free eye

glasses were presented to residents in

need.

Free Eye Screening

Some Directors, FMN with Medical Practitioners of Lagos University Teaching Hospital

Free eye screening conducted for residents of Apapa by Lagos University Teaching Hospital staff, sponsored by Flour Mills of Nigeria Plc.

Opening of Sunti Clinic

Constructed Clinic at Sunti, Niger State

RC 2343 RC 2343137

RC 2343

Company Events Commissioning of

Golden Penny Place

Launching of Our Core Value (PIILOT)

Golden Penny Place, Apapa.

Mr. George S. Coumantaros, Chairman commissions Golden Penny Place

Mr. George S. Coumantaros with other Directors at the commissioning of Golden Penny Place

Mr. Paul Gbededo, GMD launching “PIILOT”

Members of staff during the launch

Mr. Paul Gbededo, GMD with members of staff displaying acronym of the new core value

In demonstration of its strong commitment to best practices in Corporate Governance, professionalism and high ethical standards in all aspects of its business, Flour Mills of Nigeria Plc., formally launched its new Core Value, “PIILOT” across board within the organization, its subsidiaries and associated companies.

The acronym 'PIILOT' represents the six main thrust of FMN core values of Performance, Integrity, Initiative, Leadership, Ownership and Teamwork.

Golden Penny Place, FMN’s Corporate Head Office

was officially commissioned by the Chairman,

Mr. George Coumantarous in September 2013.

RC 2343 RC 2343138

Long Service Award 2013RC 2343

Flour Mills of Nigeria Plc held a grand reception for long serving and retiring staff of the company.

Golden Bites CHINCHIN Launch

Flour Mills of Nigeria Plc. formally introduced another new quality product – Golden Bites Chinchin into the Nigerian snacks market.The Company launched the new product during a facility tour organised for customers at its ultra-

Directors and Awardees cutting the Long Service Award and Retirement Cake.

Some of the Awardees displaying their Long Service Award Certificates and gifts at the grand reception.

Group Head, Corporate Marketing FMN Plc, Mr. Martin Anyanwu, giving the welcome address

Customers unveiling Golden Bites Chinchin

Display of Golden Bites Chinchin

RC 2343 RC 2343139

RC 2343 RC 2343140

Notes

Back of e-dividend form

RC 2343 RC 2343143

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

of …………………………………………………………………..............................

being member(s) of Flour Mills of Nigeria Plc

hereby appoint …………………………………………………….........................

…………………………………………………………………..................................

of…………………………………………………………………...............................

……………………………………….

or failing him Mr. George. S Coumantaros or failing Mr. John G. Coumantaros or failing him Dr. (Chief) Emmanuel. A. Ukpabi (KJW),as my/our proxy to vote for me/us at the Annual General Meeting of the company to be held on 10th September, 2014and at any adjournment thereof.

Dated this……….....................…….day of………...……...........………2014

Signature .......................................................................................

Notes:

1. Please sign this proxy card and post it to reach the registered office of the company not less than 48 hours before the time for holding the meeting.

2. If executed by a corporation, the proxy card should be sealed with the common seal

3. This proxy card will be used both by show of hands and in the event of a poll being directed or demanded.

4. In the case of joint holders the signature of any one of themwill suffice, but the names of all joint holders should be shown.

RESOLUTIONS FOR AGAINST

1. To adopt the Annual Report and Account

2. To declare a dividend

3. (i) To re-elect the following Directors:

Mr. John Katsaounis

Mr. Thanassis Mazarakis

Mr. Folarin R. A. Williams

Alhaji Y. Olalekan A. Saliu

(ii) To confirm the appointment of the following

Director:

Mr. Foluso O. Phillips

4. To approve Directors’ remuneration.

5. To authorize the Directors to fix Auditors’ remuneration.

6. To appoint members of the Audit committee.

7. To approve the resolution on bonus share of 1 for 10 out of the company’s General Reserve.

Proxy FormFLOUR MILLS OF NIGERIA PLC

54TH ANNUAL GENERAL MEETING TO BE HELD AT 12 NOON

ON WEDNESDAY 10TH SEPTEMBER, 2014

AT THE GRAND BALL ROOM, EKO HOTEL & SUITES,

ADETOKUNBO ADEMOLA STREET, VICTORIA ISLAND, LAGOS.

Please indicate with “x” in the appropriate box how

you wish your vote to be cast on the resolution set out

above. Unless otherwise instructed, the Proxy will

vote or abstain from voting at his / her discretion.

Before posting the above, Please tear off this part and retain it for admission to the meeting

ADMISSION CARD

FLOUR MILLS OF NIGERIA PLC

54TH ANNUAL GENERAL MEETING TO BE HELD AT 12 NOON

ON WEDNESDAY 10TH SEPTEMBER, 2014

ATTHE GRAND BALL ROOM, EKO HOTEL & SUITES,

ADETOKUNBO ADEMOLA STREET, VICTORIA ISLAND, LAGOS.

NAME OF SHAREHOLDER*…………………………………………………………….......................................................................

IF YOU ARE UNABLE TO ATTEND THE MEETING

A member (shareholder) who is unable to attend the annual general meeting is allowed by law to vote by proxy. A proxy

need not be a member of the Company. The above proxy card has been prepared to enable you exercise your right to vote

if you cannot personally attend.

The names of three Directors of the Company have been entered on the card to ensure your representation at the meeting,

but if you wish, you may insert in the blank space on the form(marked**)the name of any person who will attend the

meeting and vote on your behalf instead of one of the Directors.

IMPORTANT*

Please insert your name in BLOCK CAPITALS on both proxy and admission card where marked*

RC 2343 RC 2343144

Investor Relations

Flour Mills Nigeria Annual Report 2014