dangote flour mill annual report 2014

VisionTo be a world class enterprise that is passionate about the quality of life of the general populace and

giving high returns to stakeholders.

MissionTouch the lives of people byproviding their basic needs.

Contents

Notice of 9th Annual General Meeting 2

Corporate Information 3

Financial Highlights 4

Chairman’s Statement 5

Board of Directors 7

Report of the Directors 8

Corporate Governance Report 13

Statement of Management’s Responsibilities 19

Report of the Audit Committee 20

Report of the Independent Auditors 21

Consolidated and Separate Statements of Profit or Loss 22

Consolidated and Separate Statements of Comprehensive Income 23

Consolidated and Separate Statements of Financial Position 24

Consolidated and Separate Statements of Changes in Equity 25

Consolidated and Separate Statements of Cash Flows 26

Notes to the Consolidated and Separate Statements of Cash Flows 27

Notes to the Consolidated and Separate Financial Statements 28

Consolidated Statement of Value Added 67

Five Years Financial Summary — Group 68

Five Years Financial Summary — Company 69

Share Capital History/Data on Unclaimed Dividends 70

E-Dividend Mandate Form 71

Proxy Form 73

Notice of 9th Annual General Meeting

AISHA LADI ISA (MRS)Company Secretary/Legal Adviser

NOTICE IS HEREBY GIVEN that the 9th ANNUAL GENERAL MEETING OF DANGOTE FLOUR MILLS PLC will hold on Friday, the 31st day of July, 2015 at Transcorp Metropolitan Hotels, 10 Murtala Mohammed Highway, Calabar, Cross River State, at 11.00 a.m. prompt to transact the following business:

1. To receive the Audited Financial Statements of the Company for the year ended 30th September, 2014 together with the reports of the Directors and Audit Committee thereon;

2. To elect/re-elect Directors;

3. To re-appoint the Auditors;

4. To authorise the Directors to fix the remuneration of the Auditors;

5. To appoint members of the Audit Committee.

SPECIAL BUSINESS

6. To consider and if thought fit, to pass the following as Special Resolutions:

(i) “That in accordance with section 31(3) of the Companies and Allied Matters Act CAP 20, Laws of the Federation of Nigeria 2004, the name of the Company, Dangote Flour Mills Plc be, and is hereby changed to TIGER BRANDED CONSUMER GOODS PLC.”

(ii) “That Clause 1 of the Memorandum of Association of the Company be and is hereby substituted by the new clause: ‘The name of the Company is TIGER BRANDED CONSUMER GOODS PLC’. “ and

(iii) “That the Memorandum and Articles of Association of the Company be and are hereby amended accordingly”.

PROXYA 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/her. A proxy need not be a member of the Company. A proxy for an organisation may vote on a show of hands and on a poll. For the appointment to be valid, a completed Proxy Form must be deposited at the registered office of the Company or with the Registrar not later than 48 hours before the time fixed for the meeting.

NOTES

1. CLOSURE OF REGISTER AND TRANSFER BOOKS

NOTICE IS HEREBY GIVEN that the Register of Members and Transfer Books of the Company will be closed from Tuesday, the 14th day of July, 2015 to Thursday, the 16th day of July, 2015.

2. AUDIT COMMITTEE

In accordance with Section 359(5) of the Companies and Allied Matters Act 2004, C20 Laws of the Federation of Nigeria, 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. The Audit Committee comprises three (3) shareholders and three (3) Directors.

BY ORDER OF THE BOARD

AISHA LADI ISA (MRS)Company Secretary/Legal Adviser

Dated this 29th day of April, 2015

DANGOTE FLOUR MILLS PLC Terminal ‘E’Greenview Development Building (2nd Floor) Apapa WharfLagos, [email protected]

Corporate Information

LEGAL FORM Dangote Flour Mills Plc was incorporated in Nigeria on 1st January, 2006. The Company is listed on the Lagos Floor of the Nigerian Stock Exchange (NSE) with the symbol “DANGFLOUR”. The Group’s parent company is Tiger Brands Limited, which is listed on the Johannesburg Stock Exchange. REGISTERED OFFICES Terminal ‘E’ Greenview Development Building (2nd Floor), Apapa Wharf Lagos, Nigeria.

TRANSFER OFFICE

EDC Registrars Limited154, Ikorodu Road, Onipanu, Shomolu, Lagos. COMPANY SECRETARY

Aisha Ladi Isa (Mrs) AUDITORS Akintola Williams Deloitte(Chartered Accountants) 235, Ikorodu Road, Ilupeju, Lagos. BANKERS Zenith Bank Plc Diamond Bank Plc Mainstreet Bank Limited Access Bank Plc Sterling Bank Plc First City Monument Bank Plc First Bank of Nigeria Plc United Bank for Africa Plc GTBank Plc Ecobank Nigeria Plc Stanbic IBTC Bank Plc BOARD OF DIRECTORS The names of Directors who were in office during the period under review are as follows: Executive Directors Non-Executive Directors

Mr. Nthabiseng Segoale (Resigned 1st March, 2014) Alh. Aliko Dangote, GCONMr. Noel Doyle — Ag CEO (Appointed 1st March, 2014; Resigned 1st July, 2014) Mr. Peter Bamhatha MatlareMr. Thabo Mabe (Appointed 1st July, 2014) Mr. Olakunle Alake Mr. Sudarshan Kasturi (Appointed 1st September, 2014) Mr. Asue Ighodalo Mrs. Olufunke Ighodaro Mr. Ian Isdale Mr. Arnold Ekpe (Appointed 28th October, 2013) Mr. Noel Doyle (Appointed 1st July, 2014)

Financial Highlights

COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sep 30-Sep 30-Sep 30-Sep 2014 2013 (N=’000) 2014 2013

31,704,340 23,079,590 Turnover 41,268,771 29,960,419

(6,055,112) (5,647,490) Loss before tax from continuing operations (9,285,013) (8,342,294)

1,895,810 1,166,842 Taxation 3,006,708 1,577,990

(4,159,302) (4,480,648) Loss for the period from continuing operations (6,278,305) (6,764,304)

— — Profit/(Loss) from discontinued operation 168,797 (452,697)

(4,159,302) (4,480,648) Loss for the period (6,109,508) (7,217,001)

FINANCIAL POSITION

2,500,000 2,500,000 Share capital 2,500,000 2,500,000

14,074,523 18,233,825 Total equity 9,608,132 18,106,525

Per 50 kobo share data (kobo)

(83.19) (89.61) — Loss per share (124.40) (158.66)

— — — Dividend per share — —

NOTE

On 19 August 2013, the Group, at the Annual General Meeting, announced the decision of its board to dispose of Dangote Agrosacks Limited. The disposal has been effected on 30th November, 2013 for N=7.55 billion and profit has been accounted for in these financial statements.

Chairman’s Statement

Dregulators here present, invited guests, gentlemen of the press, ladies and gentlemen.

I have the pleasure to welcome you to the 9th Annual General Meeting of our Company, Dangote Flour Mills Plc.

Please permit me to present to you an overview of our operations and other events that shaped the year under review. The year 2014 witnessed many challenges, including security concerns, and declining margins in the flour milling industry occasioned by overcapacity. These factors affected our performance and had gone ahead to shape our current business year.

The Group’s trading performance for the year under review is consistent with our business turnaround

istinguished Shareholders, Members of the Board of Directors, representatives of the SEC, NSE, CAC and other

Alhaji Aliko Dangote, GCONChairman

plan. It represents an improvement over the annualised results of the previous period. Turnover of N=41.3 billion was 3.3% better than the previous year. Despite continued pressure on margins occasioned by stiff competition in the industry, operating loss before abnormal items dropped to N=4.8 billion. Abnormal items of N=1.6 billion represents the impairment of excess production capacity in Apapa, Ikorodu and Calabar. Operating loss after tax was N=6.3 billion.

DIVISIONAL PERFORMANCE

Flour

Sales volumes increased by 6.7% while cost of sales dropped by 5.1%, resulting in a Gross Profit of N= 2.4 billion. The first quarter witnessed a slowdown in sales volumes as a result of price adjustments in the flour milling industry. This business recovered the lost volumes in subsequent quarters and was able to surpass preceding year’s volumes.

Additional operational efficiencies were implemented, resulting in substantial improvement in operational results before adjusting for abnormal items of N= 1.5 billion. The impact of the operational improvements should reflect positively in the results of subsequent periods.

Pasta

This division recorded a dip in sales turnover during the year under review relative to the preceding period. This is due to the focus on quality improvements and operational efficiency aimed at positioning the division for future improved performance.

Noodles

Noodles volumes declined by 4.3% during the year under review. New product offerings, a robust route to market and improved marketing are some of the initiatives under way in order to improve this category’s performance.

Chairman’s Statement

re-tuning its business model towards improving on the predictability of its earnings and margins.

CUSTOMERS

Our key partners in the business, our customers, continue to remain the cornerstone of Dangote Flour Mills. Notwithstanding the challenges faced during the 2014 financial year, we continued to receive excellent patronage from some of our key customers of many years. We are immensely grateful for this unwavering support.

I wish to make particular note, at this juncture, of the support from our Kano customers during the period following the mothballing of the Kano flour factory. It is heartening to note that there was no loss of business volumes as a result of the exercise.

PROPOSED CHANGE OF COMPANY NAME

In line with the purchase of majority shares in your Company by Tiger Brands Limited, your Company proposes to change its name from Dangote Flour Mills Plc to Tiger Branded Consumer Goods Plc. A resolution to that effect will be presented for your approval at this Annual General Meeting.

APPRECIATION

On behalf of the Board of Directors, I would like to thank the management and staff of the various businesses for their immense contributions to the business during the year.

I am also grateful to my fellow shareholders, as well as our customers, suppliers, bankers, government agencies and regulatory authorities, for the unrelenting support and continued confidence in Dangote Flour Mills Plc.

Thank you and God bless.

Alhaji Aliko Dangote, GCONChairman

THE BOARD

Since the last Annual General Meeting, Messrs. Thabo Mabe and Sudarshan Kasturi joined the Company as Group Chief Executive and Chief Financial Officer respectively. Their appointments will be ratified during the course of this meeting.

Mr. Ian Isdale, Mr. Asue Ighodalo and Mr. Olakunle Alake will be retiring by rotation as Directors of the Company. Messrs Ighodalo and Alake hereby offer themselves for re-election in line with corporate governance guidelines.

Mr. Isdale will be retiring from the services of Tiger Brands Limited and the Board of the Company on account of age. Please join me in thanking him for his service to the Company and wishing him a happy retirement.

OUR STAFF

Our staff remain our strength; they have continued to maintain productive work ethics, which has helped the Company maintain its key position in the industry with satisfactory service delivery to customers. We will continue to place high priority on their training and development, seek and retain the best talents in our continued pursuit of operational and service excellence.

OUTLOOK FOR THE FUTURE

The Company has made some progress in stabilising its delivery platform and optimising the business infrastructure. As part of this process, the Company mothballed operations at its Kano Flour factory in order to improve on capacity utilisation and optimise cost.

To support its business recovery strategy, the Company effected key appointments into its leadership team. This is being complemented by strategic personnel appointments at management level.

For the future, the Company will focus on completing the optimisation of its business infrastructure and

Report of the DirectorsFor the year ended 30 September, 2014

1. ACCOUNTS The Directors are pleased to submit their report together with the audited accounts of the Company for the year

ended 30 September, 2014.

2. RESULT Group Company N=’000 N=’000

Turnover 41,268,771 31,704,340 Total comprehensive loss (6,109,508) (4,159,302)

3. PRINCIPAL ACTIVITIES

The principal activities of the Company during the year under review were as follows:

(a) Manufacturing and selling of bread and confectionery flour

(b) Manufacturing and selling of wheat offal (Bran)

(c) Manufacturing of semolina.

The principal activities of its subsidiaries are:

Dangote Pasta Limited

Manufacturing and selling of spaghetti, macaroni and other pasta products.

Dangote Agrosacks Limited

Manufacturing and selling of packaging materials. (Per Note 24 of the annual financial statements, disposal of Dangote Agrosacks Limited was effected during the year).

Dangote Noodles Limited

Manufacturing and selling of noodles.

4. LEGAL FORM The Company started operating as a division of Dangote Industries Limited in 1999. It was incorporated and

commenced operations as a public limited liability company on 1st January, 2006. The Company was quoted on The Nigerian Stock Exchange on 4th February, 2008.

5. DIRECTORS AND DIRECTORS’ INTEREST The names of Directors who are currently in office are as follows:

Alhaji Aliko Dangote, GCON Mr. Olakunle Alake Mr. Asue Ighodalo Mr. Arnold Ekpe Mr. Ian Isdale Mr. Peter Bambatha Matlare Mrs. Olufunke Ighodaro Mr. Nthabisheng Segoale – Resigned on 1st March, 2014 Mr. Noel Doyle – Appointed on 1st March, 2014 Mr. Thabo Mabe – Appointed on 1st July, 2014 Mr. Sudarshan Kasturi – Appointed on 1st September, 2014

In accordance with the provisions of Section 259 of the Companies and Allied Matters Act, Cap C20, Laws of the Federation of Nigeria 2004, one-third of the Directors of the Company shall retire from office annually. The retiring Directors shall be those who have been longest in office since their last election. In accordance with the provisions of this section, Mr. Ian Isdale, Mr. Asue Ighodalo and Mr. Olakunle Alake retire by rotation at the forthcoming Annual General Meeting (AGM). Being eligible, Mr. Asue Ishodalo and Mr. Olakunle Alake offer themselves for re-election, while Mr. Ian Isdale will not be seeking re-election.

The following Directors were appointed by the Board since the most recent Annual General Meeting and will be ratified at the forthcoming Annual General Meeting (AGM):

Mr. Thabo Mabe Mr. Sudarshan Kasturi


In accordance with the provisions of Article 77 of the Company’s Articles of Association and Section 249(3) of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria 2004, the appointed Directors shall retire by rotation at the Annual General Meeting, Mr. Asue Ighodalo and Mr. Olakunle Alake and being eligible would offer themselves for re-election.

No Director has a service contract not terminable within five years.

The Directors’ interest 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 Laws of the Federation of Nigeria 2004 are as follows:

Number of 50k Shares held as at

30 September, 2014 30 September, 2013 Direct Indirect Total Direct Indirect Total

Directors

Alhaji Aliko Dangote 38,728,948 — 38,728,948 38,728,948 — 38,728,948

Mr. Peter Bambatha Matlare — — — — — —

Mr. Olakunle Alake 2,377,500 — 2,377,500 2,377,500 — 2,377,500

Mrs. Olufunke Ighodaro — — — — — —

Mr. Ian Isdale — — — — — —

Mr. Asue Ighodalo — — — — — —

Mr. Arnold Ekpe — — — — — —

Mr. Nthabisheng Segoale N/A N/A N/A — — —

Mr. Noel Doyle — — — — — —

Mr. Thabo Mabe — — — — — —

Mr. Sudarshan Kasturi — — — — — —

6. DIRECTORS’ RESPONSIBILITIES The Directors are responsible for the preparation of financial statements which give a true and fair reflection of the

state of affairs of the Company at the end of the financial year and of the profit or loss for that period and which complies with the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria 2004. In doing so, they ensure that:

(a) Proper accounting records are maintained which disclose with reasonable accuracy the financial position of the Company and the Group and which ensures that the financial statements comply with the requirements of the Companies and Allied Matters Act of Nigeria;

(b) Applicable International Financial Reporting Standards are followed;

(c) Proper Accounting records are maintained;

(d) Suitable accounting policies are adopted and consistently applied;

(e) Judgments and estimates made are reasonable and prudent;

(f) It is appropriate for the financial statements to be prepared on a going concern basis;

(g) Adequate internal control procedures are instituted and maintained which are designed to safeguard the assets of the Company and the Group and to prevent and detect fraud and other irregularities.

7. CORPORATE GOVERNANCE Management is committed to manage the Company with best practices and policies which align the strategy of

the Company with the interests of all stakeholders. This, in the long run, will result in a beneficial relationship and long-term growth.

Dangote Flour Mills Plc embraces good corporate governance as a key strategy in achieving business success incorporating compliance with applicable laws and regulations as a responsible corporate entity.

The Board, in line with its responsibilities to shareholders, works to achieve worldwide best practice in corporate governance and endeavours to conduct the business of the Company and the Group in a fair, honest and transparent manner which conforms to high ethical standards.


8. SUBSTANTIAL INTEREST IN SHARES

The Registrar has advised that according to the Register of members on 30th September 2014, Tiger Brands Limited with 3,283,277,052 and Dangote Industries Limited with 500,000,000 ordinary shares of 50k each respectively held 65.67% and 10% of the issued share capital of the Company.

9. FIXED ASSETS

Movements in fixed assets during the year are shown in Note 10 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 accounts.

10. DONATIONS AND CHARITABLE GIFTS

Dangote Flour Mills Plc identifies with the aspirations of our operational environment by supporting charitable and worthy causes. During the year under review, no donation was made to any political party or religious organisation.

11. POST BALANCE SHEET EVENTS

Subsequent to year-end, the group is currently reviewing its capital structure to address the debt burden and future capital requirements of the Company. There are no other significant developments since the balance sheet date which could have had a material effect on the state of affairs of the Company as at 30 September, 2014 and the profit for the year ended on that date which have not been adequately recognised.

12. COMPANY DISTRIBUTORS

The Company’s products are distributed through many distributors across the country.

13. SUPPLIERS

The Company procures its materials on an arm’s length basis from foreign and local suppliers. Amongst its main suppliers are Cargill International SA, Ameropa S.A., Vitachem Nigeria Limited and Biochemical Derivatives Nigeria Limited.

14. ANALYSIS OF SHAREHOLDINGS

Analysis of shareholdings as at 30 September, 2014:

No. of Cumulative Holders No. of Cumulative Units Range S/Holders Holders % Units Units %

1 — 1,000 143,487 143,487 44.30 127,186,583 127,186,583 2.54

1,001 – 5,000 161,772 305,259 49.95 291,625,605 418,812,188 5.83

5,001 – 10,000 11,516 316,775 3.56 76,960,925 495,773,113 1.54

10,001 — 50,000 6,057 322,832 1.87 113,473,035 609,246,148 2.27

50,001 — 100,000 548 323,380 0.17 40,741,900 649,988,048 0.81

100,001 — 500,000 407 323,787 0.13 84,902,506 734,890,554 1.70

500,001 — 1,000,000 44 323,831 0.01 31,964,088 766,854,642 0.64

1,000,001 — 2,000,000 17 323,848 0.01 24,009,443 790,864,085 0.48

2,000,001 — 5,000,000 15 323,863 0.00 48,620,525 839,484,610 0.97

5,000,001 — 10,000,000 6 323,869 0.00 37,145,537 876,630,147 0.74

10,000,001 — 50,000,000 7 323,876 0.00 201,668,168 1,078,298,315 4.03

50,000,001 — 100,000,000 2 323,878 0.00 138,424,633 1,216,722,948 2.77

200,000,001 — 500,000,000 and above 2 323,880 0.00 3,783,277,052 5,000,000,000 75.67

Total 323,880 100.00 5,000,000,000 100.00


15. HUMAN RESOURCES

1. Employment, training and employees

The Company recruits without discrimination in considering applications for employment through selection of the most suitable individuals after interview and thorough scrutiny. The Company employs management professionals and technical expertise and continues to invest in developing such skills and maintaining set standards. The Company also has in-house training facilities in addition to external training for employees. This gives every employee equal opportunity for career development.

2. Employee welfare and safety at work The Company continuously strives to improve health and safety measures at its operations under the supervision

of an Health, Safety and Environment expert to ensure a safe working environment. It does so through implementation of the following initiatives:

• Maintaining a high standard of hygiene in all its premises through sanitation practices and the regular fumigation exercises have been further strengthened by the installation of pest and rodent control measures;

• Safety and environment workshops have been organised for all employees with broad focus on good house-keeping to ensure a safe working environment;

• Nutritionally balanced meals are provided in staff canteens at subsidised prices at the various factory sites;

• The use of safety shoes, goggles and aprons etc. by employees is enforced;

• The Company carries out safety and fire awareness drills for all employees on a regular basis;

• As a guide in the performance of all functions, a written safety policy for ensuring safe working practices is in place;

• Safety Officers and Security Supervisors are at hand to ensure the use of and implementation of safety systems and procedures;

• There is a clinic within each factory to provide adequate medical care in the event of accidents or any emergency in the work place;

• The Company allows employees and their immediate families to attend good hospitals at its expense under the Company’s HMO Scheme;

• Fire prevention and fire-fighting equipment are installed in strategic positions within the premises of each factory.

3. Employee Development Local and overseas training and development programmes have been organised to meet the needs of the

Company’s modernisation and automation strategy implementation. The Company continues to place a premium on its human capital development arising from the fact that this would ensure improved efficiency in the business and maintain a strategic advantage over competition. On the other hand, employees are fully equipped to provide quality service which ultimately will be beneficial to the organisation and thus contribute to its growth.

16. AUDIT COMMITTEE In compliance with the provisions of section 359(3) of the Companies and Allied Matters Act, Cap C20 Laws of the

Federation of Nigeria 2004, the Company has an Audit Committee comprising three (3) Shareholders and three (3) Directors as follows:

Mr. Alex Adio — Shareholder/Chairman Alhaji Musa Baba Bichi — Shareholder/Member Mr. Eric Akinnifesi Akinduro — Shareholder/Member Mrs. Olufunke Ighodaro — Director/Member Mr. Asue Ighodalo — Director/Member Mr. Olakunle Alake — Director/Member

The functions of the Audit Committee are as laid down in section 357(2) of the Companies and Allied Matters Act Cap C20 Laws of the Federation of Nigeria, 2004.

17. AUDITORS

Messrs Akintola Williams Deloitte (Chartered Accountants) have indicated their willingness to continue in office as the Company’s Auditors in accordance with Section 357(2) of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria, 2004. A resolution will be proposed at the upcoming AGM authorising the Directors to formalise their remuneration.

BY ORDER OF THE BOARD

AISHA LADI ISA (MRS)Company Secretary

Terminal ‘E’ Greenview Development Building (2nd Floor) Apapa Wharf Lagos, Nigeria.



Corporate Governance Report

DANGOTE FLOUR MILLS PLC is committed to best practice and procedures in corporate governance. It recognises that corporate governance is fundamental to earning the confidence and trust of the shareholders. It provides the structure through which the objectives of the Company are set and the means of attaining such objectives. Overseen by the Board of Directors, corporate governance practices are constantly under review in line with the dynamics of the business environment.

The corporate governance policies adopted by the Board of Directors are designed to ensure that the Company’s business is conducted in a fair, honest and transparent manner which conforms to high ethical standards. The code of corporate governance for public companies provides the basis for promoting sound corporate governance in the Company. The governance framework helps the Board to discharge its duties of providing oversight and strategic counsel in balance with its responsibility to ensure conformity with regulatory requirements and acceptable risk.

The Board

Appointment to the Board is made by shareholders at the Annual General Meeting on the recommendation of the Board of Directors.

The Board consists of ten (10) members comprising the Chairman, Vice Chairman, two (2) Executive Directors and six (6) non-Executive Directors.

The Board delegates the day-to-day running of the Company’s affairs to the Group Chief Executive Officer, who is supported in this task by an Executive Director and the Executive Management.

The Board governs and supervises the overall activities of the Company through the Group Chief Executive Officer.

Responsibilities of the Board of Directors

It is the responsibility of the Board of Dangote Flour Mills Plc to:

• Ensure that the Company’s operations are conducted in a fair and transparent manner that conforms to high ethical standards;

• Ensure integrity of the Company’s financial and internal control policies;

• Ensure the accuracy, adequacy and timely rendition of the statutory returns and financial reporting to the regulatory authorities (NSE, CAC, SEC) and shareholders;

• Ensure value creation for the shareholders, employees and other stakeholders;

• Review and approve corporate policies, strategy, annual budget and business plans;

• Monitor implementation of policies and the strategic direction of the Company;

• Set performance objectives, monitor implementation and corporate performance;

• Review and approve all major and capital expenditure of the Company;

• Ensure that the statutory rights of all shareholders are protected at all times;

• Provide the Company with entrepreneurial leadership within a framework of prudent and effective controls which enables risk to be assessed and managed;

• Deploy the Company’s resources to profitable use;

• Outline the Company’s strategic and corporate aims;

• Ensure that the necessary financial and human resources are in place for the Company to meet its objectives;

• Review management performance on a continuous basis;

• Set the Company’s values and standards;

• Take decisions objectively in the interest of the Company;

• Ensure that its obligations to its shareholders and other stakeholders are understood and met;

• Constructively challenge and help develop proposals on strategies developed by Management.

The Board carries out some of the above responsibilities through the respective Board Committees whose terms of reference set out clearly their roles, responsibilities, scope of authority and procedure for reporting to the Board. Each Committee is presided over by a non-Executive Director to ensure strict compliance with the principles of good corporate governance, while the Audit Committee has a representative of the shareholders as its Chairman. The Chairman of the Board is not a member of any of the Committees.


Members of the Board of Directors hold quarterly meetings to decide on policy matters and direct the affairs of the Company and Group, review its performance, its operations, finances and formulate growth strategies. Attendance at Directors’ meetings was impressive. In line with provisions of section 258(2) of the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria 2004, the records of Directors’ attendance at Board meetings is available for inspection at the Annual General Meeting. The remuneration of Executive Directors is fixed and reviewed by a committee of non-Executive Directors.

Frequency of Meetings

The Board of Directors holds at least four (4) meetings a year, to consider important corporate events and actions such as approval of Corporate Strategy, Annual Corporate Plan, review of internal risk management and control systems, review performance and direct the affairs of the Company, its operations, finances and formulate growth strategies. It may however, convene a meeting whenever the need arises. During the year under review, the Board had a total of seven (7) meetings.

Standing Committees of the Board

The Board carries out some of the above responsibilities through the Board Committees whose terms of reference clearly set out their roles, responsibilities, scope of authority and procedure for reporting to the Board.

1. Board Governance/Remuneration Committee

Composition:

Mr. Arnold Ekpe — Chairman Mr. Peter Bambatha Matlare — Member Mr. Noel Doyle — Member

Functions:

(i) To review and make recommendations to the Board for approval of the Company’s human resources policy, organisational structure and any proposed amendments when necessary.

(ii) Review and advise on governance and compliance issues.

(iii) To make recommendations on the remuneration structure for non-Executive Directors and variable compensation for executive and senior management.

(iv) Such other matters as the Board may delegate to the Committee.

2. Board Finance and Investment Committee (Now known as Board Audit and Risk Committee)

The Committee is made of five (5) members consisting of non-executive Directors. However, the Group Chief Executive Officer and Group Chief Finance Officer attend the meetings as well.

The Committee met four (4) times during the year under review.

Composition: Mrs. Olufunke Ighodaro — Chairperson Mr. Asue Ighodalo — Member Mr. Olakunle Alake — Member Mr. Ian Isdale — Member Mr. Noel Doyle — Member

Functions:

The Committee will perform specific responsibilities in relation to the following:

1.1 Finance and Investment

1.1.1 Review and make recommendations to the Board regarding the Company’s investment strategy, policy and guidelines, its implementation and compliance with those policies and guidelines, and the performance of the Company’s investments portfolios.

1.1.2 Oversee the Company’s investment planning, execution and monitoring process.

1.1.3 Review annually, the Company’s financial projections, as well as capital and operating budgets, and review on a quarterly basis with management, the progress of key initiatives, including actual financial results against targets and projections.

1.1.4 Review and recommend for Board approval, the Company’s capital structure, including, but not limited to capital raising, mergers, acquisitions, business expansions, allotment of new capital, debt limits and any changes to the existing capital structure.

1.1.5 Recommend for Board approval, the Company’s dividend policy, including nature and timing.

1.1.6 Ensure that an effective tax policy is implemented.

1.1.7 Periodically review the Company’s liquidity position.

1.1.8 Review and make recommendations to the Board regarding the Delegation of Authority limits of the Company.

1.1.9 Review and recommend major expenditure items within the limit of the Committee as specified in the Delegation of Authority.

1.2 Risk Management

1.2.1 Ensure there is an efficient risk management framework for the identification, quantification and management of business risks facing the Company.

1.2.2 Evaluate the Company’s risk profile and the action plans in place to manage the risk.

1.2.3 Review the Company’s risk management framework policy on at least an annual basis, and more frequently if necessary; approve risk management related policies, procedures and parameters that govern the management of all business functions, services, operations and management information systems.

1.2.4 Review the Company’s system of internal control to ascertain their adequacy and effectiveness.

1.2.5 Obtain assurance and report annually in the financial report, on the operating effectiveness of the Company’s internal control framework.

1.2.6 Evaluate internal processes for identifying, assessing, monitoring and managing key risk areas, the exposures in each category, significant concentrations within those risk categories, the metrics used to monitor the exposures and Management’s views on the acceptable and appropriate levels of the risk exposures.

1.2.7 Ensure the Company’s business continuity management and disaster recovery plan is comprehensive and adequate.

1.2.8 Periodically evaluate the effectiveness of the processes for managing the Company’s health, safety, security and environmental risks.

1.3 Financial Reporting/ Statement

1.3.1 Review and recommend the Company’s accounting policies.

1.3.2 Review the significant financial reporting issues and practices of the Company, and ensure the adequacy and effectiveness of the financial controls within the Company including controls relating to the “closing of the books” process.

1.3.3 Define and monitor the Company’s policy regarding press releases as well as financial information provided to analysts and rating agencies.


1.3.4 Review the Company’s legal representation letter presented to the external auditors and discuss significant items, if any, with the Company Secretary.

1.3.5 Review the decisions of the Statutory Audit Committee on the financial statements and ensure compliance.

1.3.6 Review and agree the terms of the engagement and the audit fees for the External Auditors.

1.3.7 Assess and confirm the independence of the statutory auditor annually. The report of this assessment should be submitted to the Board.

1.3.8 Review and ratify the quarterly and annual financial statements.

1.3.9 Review critical accounting issues, legal and regulatory matters, contingent liabilities that may have material effect on the Company’s financial statements.

1.3.10 Review and monitor related party transactions and assess their propriety.

1.3.11 Ensure adequacy of statutory reporting to regulatory bodies.

1.4 Internal Audit

1.4.1 Review and approve the annual internal audit plan encompassing all of the Company’s auditable activities and entities and on a quarterly basis discuss the status of implementation of the internal audit plan.

1.4.2 Review the scope of the internal audit function and the adequacy of available resources.

1.4.3 Annually review and reassess the internal audit division’s responsibilities and functions, making changes as necessary.

1.4.4 Require an independent evaluation of internal audit function’s activities every three years in line with the provisions of the SEC Code of Corporate Governance.

1.4.5 Oversee the establishment of whistle blowing procedures for the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal controls, auditing matters, unethical activity, breach of the corporate governance code. Ensure the confidentiality and anonymity of submissions received with respect to such complaints.

1.4.6 At least on an annual basis, obtain and review a report by the internal auditors, describing the strength and quality of internal controls including any issues or recommendations for improvement, raised by the most recent internal control review of the Company.

1.4.7 Investigate any matter brought to its attention within the scope of the Committees’ duties.

1.4.8 Review reports on all attempted and actual frauds, thefts and breaches of law that could have a significant impact on the Company’s business and follow-up with appropriate disciplinary actions.

1.5 Regulatory Compliance

1.5.1 Review the adequacy and effectiveness of the compliance programme established within the Company.

1.5.2 Review the processes for ensuring that existing, new and amended legal and regulatory requirements are identified and reflected in the Company’s processes.

1.5.3 Evaluate the nature and effectiveness of action plans implemented to address identified compliance weaknesses.



3. The Audit Committee

The Audit Committee is made up of six (6) members, consisting of three (3) representatives of the shareholders and three (3) members of the Board of Directors. Members of the Audit Committee are elected at the general meetings. The Committee, in compliance with the requirements of corporate governance practice is chaired by a shareholder. The Committee met once during the year under review.

Composition:

Mr. Alex Adio — Shareholder/Chairman Alhaji Musa Baba Bichi — Shareholder Mr. Eric Akinnifesi Akinduro — Shareholder Mrs. Olufunke Ighodaro — Director Mr. Asue Ighodalo — Director Mr. Olakunle Alake — Director

In addition to its responsibility to review the scope, independence and objectivity of the external audit, the Audit Committee carries out all such matters as are reserved to the Audit Committee by the Companies and Allied Matters Act, Cap C20 Laws of the Federation of Nigeria, 2004, listed below:

• Ensuring the independence and objectivity of the Audit (Statutory and Internal)

• Review adequacy and effectiveness of Dangote Flour Mills Plc internal control policies prior to endorsement by the Board.

• Direct and supervise investigations on matters within the scope, such as evaluations of the effectiveness of the Company’s internal control system, cases of employee, business partner and client misconduct or conflict of interest.

COMPLIANCE STATEMENT

The Company filed its 2014 audited accounts with The Nigerian Stock Exchange within the required time frame.

ATTENDANCE OF MEETINGS BY MEMBERS OF THE BOARD/BOARD COMMITTEES FROM OCTOBER, 2013 TO SEPTEMBER, 2014

BOARD OF DIRECTORS’ MEETINGS

Attendance

Name of Directors 28th Oct. 18th Nov. 19th Feb. 2nd Apr. 6th May 31st July 25th Sept. 2013 2013 2014 2014 2014 2014 2014

Alhaji Aliko Dangote, GCON P P A P A P P

Mr. Peter Bambatha Matlare P P P P P P P

Mr. Olakunle Alake P A P P P P P

Mrs. Olufunke Ighodaro P P P P P P P

Mr. Asue Ighodalo P P P P A P A

Mr. Arnold Ekpe N/A A P A P P A

Mr. Ian Isdale P P P A P P P

Mr. Nthabisheng Segoale P P P N/A N/A N/A N/A

Mr. Noel Doyle N/A N/A N/A P P P P

Mr. Thabo Mabe N/A N/A N/A N/A N/A P P

Mr. Sudarshan Kasturi N/A N/A N/A N/A N/A N/A P

N.B.: * P — Present * A — Apologies * N/A — Yet to be appointed or resigned


BOARD FINANCE AND INVESTMENT COMMITTEE MEETINGS (NOW BOARD AUDIT AND RISK COMMITTEE)

Attendance

Name 28th Oct. 18th Feb. 30th July 24th Sept. 2013 2014 2014 2014

Mrs. Olufunke Ighodaro P P P P

Mr. Olakunle Alake P P P P

Mr. Noel Doyle N/A N/A P P

Mr. Asue Ighodalo P P A A

Mr. Ian Isdale P A P A

AUDIT COMMITTEE MEETING

Attendance

Name 18th November, 2013

Mr. Alex Adio P

Mr. Eric Akinnifesi Akinduro P

Alhaji Kassimu Ibrahim A

Mrs. Olufunke Ighodaro P

Mr. Asue Ighodalo P

Mr. Olakunle Alake P

N.B.:

* P — Present

* A — Apologies

* N/A — Yet to be appointed or resigned

SECURITY TRADING POLICY

In compliance with Section 14 of the NSE Amended Listed Rules, the Company has established a Securities Trading Policy guiding securities transactions by its Directors. The Board ultimately has the responsibility for the Company’s compliance with the rules relating to insider trading. The Company’s Directors, executives and senior employees are prohibited from dealing with the Company’s shares in accordance with the Investments & Securities Act, 2007. As required by law, the shares held by Directors are disclosed in the Annual Report.

Management of Dangote Flour Mills Plc are responsible for the preparation of the consolidated financial statements that present fairly the financial position of the Group as at 30 September 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”). In preparing the financial statements, management is 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 IFRSs are insufficient to enable

users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance;

— Making an assessment of the Group’s ability to continue as a going concern; — Maintaining adequate accounting records that are sufficient to disclose and explain the financial position of the

Group and its transactions and results accurately in accordance with IFRS; — Designing, implementing and maintaining an effective and sound system of internal controls throughout the

Group; — Maintaining statutory accounting records in compliance with legislation in force in Nigeria and in accordance with

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 by implementing a sound internal control system. The financial statements of the Group for the year ended 30 September 2014, were approved by management on 18th November, 2014. Signed on behalf of management of the Group.

Mr. Thabo Mabe Mr. Sudarshan Kasturi Mr. Moruf AdealuGroup Chief Executive Officer Executive Director Chief Finance Officer

FRC/2013/IODN/00000001741 FRC/2013/IODN/00000001750 FRC/2013/MULTI/00000005382

18 November, 2014 18 November, 2014 18 November, 2014

Statement of Management’s ResponsibilitiesFOR THE PREPARATION AND APPROVAL OF THE CONSOLIDATED FINANCIAL STATEMENTSFor the year ended 30 September, 2014

TO THE MEMBERS OF DANGOTE FLOUR MILLS PLC

In accordance with the provisions of Section 359(6) of the Companies and Allied Matters Act, CAP 20 Laws of the Federation of Nigeria 2004, we have examined the Auditors’ report for the year ended 30th September, 2014. We have obtained all the information and explanations we required.

In our opinion, the Auditors’ report is consistent with our review of the scope and planning of the audit. We are also satisfied that the accounting policies of the Company are in accordance with the legal requirements and agreed ethical practice. Having reviewed the Auditors’ findings and recommendations on Management matters, we are satisfied with Management’s response therein.

Mr. Alex AdioChairman, Audit Committee


Members of the Committee

Alhaji Kasimu IbrahimMr. Akinduro Eric AkinnifesiMr. Asue IghodaloMrs. Olufunke IghodaroMr. Olakunle Alake

Report of the Audit Committee

Akintola Williams Deloitte235 Ikorodu Road, IlupejuP.O. Box 965, MarinaLagos,Nigeria

Tel: +234 (1) 271 7800Fax: +234 (1) 271 7801www.deloitte.com/ng

Report of the Independent Auditors

REPORT OF THE INDEPENDENT AUDITORSTO THE MEMBERS OF DANGOTE FLOUR MILLS PLC

Report on the Financial Statements

We have audited the accompanying consolidated and separate financial statements of Dangote Flour Mills Plc and its subsidiaries which comprise the consolidated and separate statement of financial positions as at 30 September 2014, the consolidated and separate statement of profit or loss and other comprehensive income, consolidated and separate statement of changes in equity and consolidated and separate statement of cash flows for the year then ended 30 September 2014, a summary of significant accounting policies and other explanatory information.

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 International Financial Reporting Standards, the Companies and Allied Matters Act CAP C20 LFN 2004, the Financial Reporting Council of Nigeria Act No. 6, 2011, and for such internal control as the Directors determine are necessary to enable the preparation of consolidated and separate 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 Dangote Flour Mills Plc and its subsidiaries as at 30 September 2014 and the financial performance and cash flows for the year then ended 30 September 2014. Dangote Flour Mills Plc and its subsidiaries have kept proper books of account, which are in agreement with the consolidated and separate financial position and consolidated and separate profit or loss and other comprehensive income, in accordance with the Companies and Allied Matters Act CAP C20 LFN 2004, the International Financial Reporting Standards, and the Financial Reporting Council of Nigeria Act No. 6, 2011.

Emphasis of Matters

Without qualifying our opinion, we draw attention to Note 1.6 in the financial statements which indicates that the Group incurred a net loss of N=6.2 billion during the year ended 30 September 2014 and, as of that date, the Group’s current liabilities exceeded its current assets by N=15.15 billion. These conditions, along with other matters as set forth in Note 1.6, indicate the existence of a material uncertainty that may cast doubt about the Group’s ability to continue as a going concern. Details of management’s consideration of these conditions and their expectations around the future sustainability of the business coupled with the expected future support from the parent company are also included in the same Note.

Uche Erobu, FCA-FRC/2013/ICAN/00000000871For: Akintola Williams DeloitteChartered AccountantsLagos, Nigeria18 November, 2014

Consolidated and Separate Statements of Profit or LossFor the year ended 30 September, 2014

COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) Notes 2014 2013

31,704,340 23,079,590 Revenue 4 41,268,771 29,960,419

(29,321,039) (22,728,987) Cost of sales (38,872,328) (29,317,791)

2,383,301 350,603 Gross profit 2,396,443 642,628 (4,256,586) (3,642,573) Distribution and administrative expenses (7,539,291) (6,743,190)

124,208 42,708 Other income 5 302,997 233,975

— (64,618) Loss on significant disposals of property 6 — (130,678)

Operating loss from continuing operations (1,749,077) (3,313,880) before impairment (4,839,851) (5,997,265)

Impairment of plant and equipment and (1,469,479) — investment 6 (1,592,372) —

(3,218,556) (3,313,880) Operating loss from continuing operations 5 (6,432,223) (5,997,265)

(2,843,397) (2,346,275) Finance costs 7 (2,863,188) (2,364,956)

6,841 12,665 Interest received 7 10,398 19,927

Loss before taxation from continuing (6,055,112) (5,647,490) operations (9,285,013) (8,342,294)

1,895,810 1,166,842 Taxation 8 3,006,708 1,577,990

Loss after taxation from continuing (4,159,302) (4,480,648) operations (6,278,305) (6,764,304) Discontinued operation

Profit/(loss) after tax for the period from — — discontinued operation 24 168,797 (452,697)

(4,159,302) (4,480,648) Loss for the year (6,109,508) (7,217,001) Attributable to: (4,159,302) (4,480,648) Owners of the parent (6,219,905) (7,932,996)

(4,159,302) (4,480,648) Continuing operations (6,212,863) (6,698,446) — — Discontinued operation (7,042) (1,234,550)

— — Non-controlling interests 110,397 715,995

— — Continuing operations (65,442) (65,365)

— — Discontinued operation 175,839 781,360

(4,159,302) (4,480,648) (6,109,508) (7,217,001)

Basic and diluted loss per share (83.19) (89.61) (kobo per share) 9 (124.40) (158.66)

(83.19) (89.61) Continuing operations (124.26) (133.97)

— — Discontinued operation (0.14) (24.69)

Consolidated and Separate Statements of Comprehensive IncomeFor the year ended 30 September, 2014

COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) Notes 2014 2013 (4,159,302) (4,480,648) Loss for the year (6,109,508) (7,217,001)

— — Other comprehensive income — — Total comprehensive loss (4,159,302) (4,480,648) for the year (6,109,508) (7,217,001)

Attributable to:

(4,159,302) (4,480,648) Owners of the parent (6,219,905) (7,932,996)

— — Non-controlling interests 110,397 715,995

(4,159,302) (4,480,648) (6,109,508) (7,217,001)

The accompanying notes and significant accounting policies form an integral part of these financial statements.

Consolidated and Separate Statements of Financial PositionAs at 30 September, 2014

COMPANY GROUP

30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) Notes 2014 2013

Assets 20,753,568 21,777,704 Non-current assets 31,270,965 32,898,984 15,353,413 17,351,051 Property, plant and equipment 10 26,342,645 30,002,456 2,597,637 2,597,637 Investment in subsidiary companies 11 — — 2,802,518 1,829,016 Deferred taxation asset 12 4,928,320 2,896,528 32,810,175 33,066,395 Current assets 23,530,524 24,768,875 4,052,548 7,686,391 Inventories 13 5,429,059 9,372,457 5,267,827 3,961,715 Trade and other receivables 14 6,933,990 7,789,466 15,829,139 17,219,636 Amounts owed by subsidiaries 11 — — 3,541,950 3,288,629 Short-term loans receivable 15 6,619,923 6,183,288 4,118,711 910,024 Cash and bank balances 16 4,547,552 1,423,664 — 4,956,000 Assets classified as held for sale — 17,813,681 53,563,743 59,800,099 Total assets 54,801,489 75,481,540 Equity and liabilities 14,074,523 18,233,825 Issued capital and reserves 10,091,277 16,311,182 2,500,000 2,500,000 Ordinary share capital 17 2,500,000 2,500,000 18,116,249 18,116,249 Share premium 17 18,116,249 18,116,249 (6,541,726) (2,382,424) Accumulated losses (10,524,972) (4,305,067) Non-controlling interests (483,145) 1,795,343 14,074,523 18,233,825 Total equity 9,608,132 18,106,525 6,515,384 12,039,546 Non-current liabilities 6,515,384 12,099,553

1,470,936 2,393,244 Deferred taxation liability 12 1,470,936 2,453,251 5,044,448 9,646,302 Long-term borrowings 18 5,044,448 9,646,302 32,973,836 29,526,728 Current liabilities 38,677,973 35,671,584 6,198,025 7,677,861 Trade and other payables 19 9,841,355 11,992,772 149,204 149,204 Taxation 8.4 171,276 238,448 25,243,989 17,757,915 Short-term borrowings 20 27,282,725 21,040,451 — 1,547,289 Amounts owed to subsidiaries — — 1,382,618 2,394,459 Bank overdrafts 16 1,382,617 2,399,913 — — Liabilities classified as held for sale — 9,603,878 53,563,743 59,800,099 Total equity and liabilities 54,801,489 75,481,540

The accompanying notes and significant accounting policies form an integral part of these financial statements.

The consolidated and separate financial statements were approved by the Board of Directors and authorised for issue on 18 November 2014. They were signed on its behalf by:

Alhaji Aliko Dangote, GCON Mr. Thabo Mabe Mr. Sudarshan Kasturi Mr. Moruf AdealuChairman Group Chief Executive Officer Executive Director Chief Finance OfficerFRC/2013/IODN/00000001766 FRC/2013/IODN/00000001741 FRC/2013/IODN/00000001750 FRC/2013/MULTI/00000005382

Consolidated and Separate Statements of Changes in EquityFor the year ended 30 September, 2014

Share Total capital attributable Non- and Accumulated to owners of controlling Total (N=’000) premium profit/(loss) the parent interests equity

GROUP

Balance at 31 December 2012 20,616,249 3,627,929 24,244,178 1,079,348 25,323,526

(Loss)/profit for the period — (7,932,996) (7,932,996) 715,995 (7,217,001)

Balance at 30 September 2013 20,616,249 (4,305,067) 16,311,182 1,795,343 18,106,525

(Loss)/profit for the year — (6,219,905) (6,219,905) 110,397 (6,109,508)

Settlement of non-controlling interest of

discontinued operation — — — (2,388,885) (2,388,885)

Balance at 30 September 2014 20,616,249 (10,524,972) 10,091,277 (483,145) 9,608,132

COMPANY

Balance at 31 December 2012 20,616,249 2,098,224 22,714,473 — 22,714,473

Loss for the period — (4,480,648) (4,480,648) — (4,480,648)

Balance at 30 September 2013 20,616,249 (2,382,424) 18,233,825 — 18,233,825

Loss for the year — (4,159,302) (4,159,302) — (4,159,302)

Balance at 30 September 2014 20,616,249 (6,541,726) 14,074,523 — 14,074,523

Consolidated and Separate Statements of Cash FlowsFor the year ended 30 September, 2014

COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) Notes 2014 2013

Cash flows from operating activities

407,155 (1,865,103) Cash operating (loss)/profit A (964,459) 6,547

(2,967,355) 761,804 Working capital changes B (71,960) 4,167,690

(2,560,200) (1,103,299) Cash (utilised)/generated from operations (1,036,419) 4,174,237

6,841 12,665 Interest received 10,398 19,927

(2,843,397) (2,346,275) Finance costs (2,863,188) (2,871,893)

— (156,327) Taxation paid C (74,572) (161,231)

Net cash (outflow)/inflow from

(5,396,756) (3,593,236) operating activities (3,963,781) 1,161,040

Cash flows from investing activities

(631,823) (332,096) Purchase of property, plant and equipment D (1,113,115) (851,023)

Proceeds on disposal of Dangote Agrosacks

7,553,750 — Limited 7,553,750 —

Proceeds on disposal of property, plant

393 60,811 and equipment 23,911 305,366

Net cash inflow/(outflow) from

6,922,320 (271,285) investing activities 6,464,545 (545,657)

Cash flows from financing activities

980,000 6,003,525 Long-term borrowings raised 18 980,000 6,003,525

(6,007,124) (6,167,103) Long-term borrowings repaid 18 (6,007,124) (8,351,103)

7,722,089 1,844,845 Short-term borrowings raised/(repaid) 6,667,544 (1,333,013)

Net cash inflow/(outflow) from

2,694,965 1,681,267 financing activities 1,640,420 (3,680,591)

Net increase/(decrease) in cash and

4,220,528 (2,183,254) cash equivalents 4,141,184 (3,065,208)

Transferred to assets held for sale 24 — 2,196,855

Cash and cash equivalents — (329,089)

Bank overdrafts — 2,525,944

Cash and cash equivalents at

(1,484,435) 698,819 beginning of the year (976,249) (107,896)

Cash and cash equivalents at

2,736,093 (1,484,435) end of the year E 3,164,935 (976,249)

Notes to the Consolidated and Separate Statements of Cash FlowsFor the year ended 30 September, 2014

COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) 2014 2013 A Cash operating profit/(loss) (3,218,556) (3,313,880) Operating loss from continuing operations (6,432,223) (5,997,265) Operating profit/(loss) from discontinued operation 168,797 (343,860)

Add back: 728,191 — Impairment of assets not in use 1,592,372 — — (206,887) Gratuity: Payments during the year — (444,596) Profit on disposal of business — (2,597,750) — Dangote Agrosacks Limited — — Fair value re-measurement on — — assets held for sale 24 187,354 2,627,873 — (64,618) (Profit)/Loss on disposal of fixed assets — 378,241 Loss on obsolete assets written off to 255,354 117,200 profit and loss 362,597 237,703 1,900,878 1,603,082 Depreciation 3,156,644 3,548,451 3,339,038 — Impairment of amounts due by subsidiary — —

407,155 (1,865,103) Cash operating (loss)/profit (964,459) 6,547

B Working capital changes 3,378,489 (416,217) Decrease/(increase) in inventories 3,580,802 (577,858) (3,456,632) (805,229) Increase in trade and other receivables (1,232,486) (1,900,640) (2,889,212) 1,983,250 (Decrease)/increase in trade and other payables (2,420,276) 6,646,188

(2,967,355) 761,804 Working capital changes (71,960) 4,167,690 C Taxation paid (149,204) (212,284) Amounts payable at beginning of year (238,448) (401,155) — (93,247) Income statement charge — continuing operations (7,400) (134,034) — — Income statement charge — discontinued operation — (23,786) — — Classified as held for sale — 159,296 149,204 149,204 Amounts payable at the end of year 171,276 238,448

— (156,327) Total taxation paid (74,572) (161,231) D Purchase of property, plant and equipment — (332,096) Expansion — (601,774) (631,823) — Replacement (1,113,115) (249,249)

(631,823) (332,096) (1,113,115) (851,023) E Cash and cash equivalents at end of the year 4,118,711 910,024 Cash and bank balances 4,547,552 1,423,664 (1,382,618) (2,394,459) Bank overdrafts (1,382,617) (2,399,913) 2,736,093 (1,484,435) 3,164,935 (976,249)

1. General information

1.1 Company information

Dangote Flour Mills Plc (the Company) is a public limited company incorporated in Nigeria. Its parent company is Tiger Brands Limited, a company listed on the Johannesburg Stock Exchange. The addresses of its registered office and principal place of business are disclosed in the introduction to the annual report.

1.2 Nature of operations

The principal activities of Dangote Flour Mills Plc and subsidiaries (“the Group”) are the milling of wheat and production of wheat products. Dangote Pasta Limited and Dangote Noodles Limited are fully owned subsidiaries of the Dangote Flour Group. Dangote Flour produces bread flour, confectionery flour, pasta semolina.

1.3 Accounting period

In 2013, the Company changed its reporting period end from 31 December to 30 September, so as to align its reporting period with that of its parent Company.

As a result of the above change in reporting period, the comparative period is for 9 months and in not directly comparable with current year reporting. The reporting period covered by the financial statements is 01 October 2013 to 30 September 2014.

1.4 Assets held for sale

At the annual general meeting held on 19 August, 2013 the shareholders approved the resolution to dispose of the shares in Dangote Agrosacks Limited and as a result Agrosacks assets and liabilities were classified as “Held for sale” in the financial statements for the period ended 30 September 2013 to give visibility of the impact of the disposal.

As a result, the amount relating to Agrosacks Limited was re-classified and included as a separate line item relating to discontinued operations. On 30 November 2013, the sale was concluded and the disposal is therefore reflected in the year ended 30 September 2014.

1.5 Performance

The financial results reflect the difficult and competitive trading environment in which the business operates. While the results for 2014 are disappointing, there was gradual and sustained improvement quarter by quarter. Margins improved substantially compared to prior year.

Management changes, process improvements, customer engagements, enhancement of the internal control environment as well as a review of the products positioning were amongst the key focus areas of attention. Satisfactory progress has been achieved in implementing these interventions which have been designed to turn the Group’s performance around. The Company’s controlling shareholder, Tiger Brands Limited is committed to providing financial and managerial support to achieve the turnaround.

1.6 Going concern

Total Group assets exceeded total Group liabilities as at 30 September 2014 by N=9,608,132,000 (2013: N=18,106,525,000). However, Group current liabilities exceeded current assets as at 30 September 2014 by N=7,647,285,000 (2013: N=10,902,709,000), not including a loan of N=7,500,165,000 advanced by the parent company.The Group recognised a loss for 12 months ended September 2014 of N=6,219,905,000 (9 months ended September 2013: N=7,932,966,000) which has resulted in accumulated losses of N=10,524,972,000 at 30 September, 2014 (2013: accumulated losses of N=4,305,067,000). Included in 2014 loss is a non-recurring impairment charge to the value of N=1,592,372,000.

Management considers that, in light of the changes implemented as mentioned in Note 1.5, and considering

the gradual and sustained improvement in the Group’s trading results on a quarter by quarter basis in the 2014 financial year, together with the expected further improvements in performance as indicated in the Group’s budgets for the coming year, and expected cash flows in the next twelve months and given the confirmed support of the parent company, that the Company will be able to continue to meet its obligations as they fall due, and hence the preparation of the Group financial statements on a going concern basis, is appropriate.

Notes to the Consolidated and Separate Financial StatementsFor the year ended 30 September, 2014

2. Statement of compliance with IFRS

2.1 New and revised IFRSs affecting amounts reported and/or disclosures in the financial statements In the current period, the Group has applied a number of new and revised IFRSs issued by the International

Accounting Standards Board (IASB) that are mandatorily effective for an accounting period that begins on or after 1 January 2014.

Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities

The Group has applied the amendments to IAS 32 Offsetting financial assets and financial liabilities for the first time in the current year. 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’ and ‘simultaneous realisation and settlement’.

The amendments have been applied retrospectively. [As the Group does not have any financial assets and financial liabilities that qualify for offset, the application of the amendments has had no impact on the disclosures or on the amounts recognised in the Group’s consolidated financial statements. The Group has assessed whether certain of its financial assets and financial liabilities qualify for offset based on the criteria set out in the amendments and concluded that the application of the amendments has had no impact on the amounts recognised in the Group’s consolidated financial statements.

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:

• Obtain funds from one or more investors for the purpose of providing them with professional investment management services.

• Commit to its investor(s) that its business purpose is to invest funds solely for returns from capital appreciation, investment income, or both.

• 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.

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.

IFRIC 21 Levies

The Group has applied IFRIC 21 Levies for the first time in the current year. IFRIC 21 addresses the issue as to when to recognise a liability to pay a levy imposed by a government. The Interpretation defines a levy, and specifies that the obligating event that gives rise to the liability is the activity that triggers the payment of the levy, as identified by legislation. The Interpretation provides guidance on how different levy arrangements should be accounted for, in particular, it clarifies that neither economic compulsion nor the going concern basis of financial statements preparation implies that an entity has a present obligation to pay a levy that will be triggered by operating in a future period.

IFRIC 21 has been applied retrospectively. The application of this Interpretation has had no material impact on the disclosures or on the amounts recognised in the Group’s consolidated financial statements.


2.2 New and revised IFRSs in issue but not yet effective

The Group has not applied the following new and revised IFRSs that have been issued but are not yet effective:

IFRS 9 Financial Instruments5

IFRS 15 Revenue from Contracts with Customers4

Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations3

Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation3

Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants3

Amendments to IAS 19 Defined Benefit Plans: Employee Contributions1

Amendments to IFRSs Annual Improvements to IFRSs 2010-2012 Cycle2

Amendments to IFRSs Annual Improvements to IFRSs 2011-2013 Cycle1

1 Effective for annual periods beginning on or after 1 July 2014, with earlier application permitted. 2 Effective for annual periods beginning on or after 1 July 2014, with limited exceptions. Earlier application is

permitted. 3 Effective for annual periods beginning on or after 1 January 2016, with earlier application permitted. 4 Effective for annual periods beginning on or after 1 January 2017, with earlier application permitted. 5 Effective for annual periods beginning on or after 1 January 2018, with earlier application permitted.

IFRS 9 Financial Instruments

IFRS 9 issued in November 2009 introduced new requirements for the classification and measurement of financial assets. IFRS 9 was subsequently amended in October 2010 to include requirements for the classification and measurement of financial liabilities and for derecognition, and in November 2013 to include the new requirements for general hedge accounting. Another revised version of IFRS 9 was issued in July 2014 mainly to include:

(a) impairment requirements for financial assets and

(b) limited amendments to the classification and measurement requirements by introducing a ‘fair value through other comprehensive income’ (FVTOCI) measurement category for certain simple debt instruments.

Key requirements of IFRS 9:

• all recognised financial assets that are within the scope of IAS 39 Financial Instruments: Recognition and Measurement are required 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. Debt instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are measured at FVTOCI. All other debt investments and equity investments are measured at their fair value at the end of subsequent accounting periods. In addition, under IFRS 9, 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.

• with regard to the measurement of financial liabilities designated as at fair value through profit or loss, IFRS 9 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. Under IAS 39, the entire amount of the change in the fair value of the financial liability designated as fair value through profit or loss is presented in profit or loss.

• in relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under IAS 39. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.


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

• thenew general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in IAS 39. Under IFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principle of an ‘economic relationship’. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced.

The Directors of the Company anticipate that the application of IFRS 9 in the future may have a material 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 effect of IFRS 9 until the Group undertakes a detailed review.

IFRS 15 Revenue from Contracts with Customers

In May 2014, IFRS 15 was issued which establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. IFRS 15 will supersede the current revenue recognition guidance including IAS 18 Revenue, IAS 11 Construction Contracts and the related Interpretations when it becomes effective.

The core principle of IFRS 15 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the Standard introduces a 5-step approach to revenue recognition:

• Step 1: Identify the contract(s) with a customer

• Step 2: Identify the performance obligations in the contract

• Step 3: Determine the transaction price

• Step 4: Allocate the transaction price to the performance obligations in the contract

• Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation

Under IFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when ‘control’ of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in IFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by IFRS 15.

The Directors of the Company anticipate that the application of IFRS 15 in the future may have a material impact on the amounts reported and disclosures made in the Group’s consolidated financial statements. However, it is not practicable to provide a reasonable estimate of the effect of IFRS 15 until the Group performs a detailed review.

Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations

The amendments to IFRS 11 provide guidance on how to account for the acquisition of a joint operation that constitutes a business as defined in IFRS 3 Business Combinations. Specifically, the amendments state that the relevant principles on accounting for business combinations in IFRS 3 and other standards (e.g. IAS 36 Impairment of Assets regarding impairment testing of a cash generating unit to which goodwill on acquisition of a joint operation has been allocated) should be applied. The same requirements should be applied to the formation of a joint operation if and only if an existing business is contributed to the joint operation by one of the parties that participate in the joint operation.

A joint operator is also required to disclose the relevant information required by IFRS 3 and other standards for business combinations.

The amendments to IFRS 11 apply prospectively for annual periods beginning on or after 1 January 2016. The Directors of the Company do not anticipate that the application of these amendments to IFRS 11 will have a material impact on the Group’s consolidated financial statements.



Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation

The amendments to IAS 16 prohibit entities from using a revenue-based depreciation method for items of property, plant and equipment. The amendments to IAS 38 introduce a rebuttable presumption that revenue is not an appropriate basis for amortisation of an intangible asset. This presumption can only be rebutted in the following two limited circumstances:

(a) when the intangible asset is expressed as a measure of revenue; or

(b) when it can be demonstrated that revenue and consumption of the economic benefits of the intangible asset are highly correlated.

The amendments apply prospectively for annual periods beginning on or after 1 January 2016. Currently, the Group uses the straight-line method for depreciation and amortisation for its property, plant and equipment, and intangible assets respectively. The Directors of the Company believe that the straight-line method is the most appropriate method to reflect the consumption of economic benefits inherent in the respective assets and accordingly, the Directors of the Company do not anticipate that the application of these amendments to IAS 16 and IAS 38 will have a material impact on the Group’s consolidated financial statements.

Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants

The amendments to IAS 16 and IAS 41 define a bearer plant and require biological assets that meet the definition of a bearer plant to be accounted for as property, plant and equipment in accordance with IAS 16, instead of IAS 41. The produce growing on bearer plants continues to be accounted for in accordance with IAS 41.

The Directors of the Company do not anticipate that the application of these amendments to IAS 16 and IAS 41 will have a material impact on the Group’s consolidated financial statements as the Group is not engaged in agricultural activities.

Amendments to IAS 19 Defined Benefit Plans: Employee Contributions

The amendments to IAS 19 clarify how an entity should account for contributions made by employees or third parties to defined benefit plans, based on whether those contributions are dependent on the number of years of service provided by the employee.

For contributions that are independent of the number of years of service, the entity may either recognise the contributions as a reduction in the service cost in the period in which the related service is rendered, or to attribute them to the employees’ periods of service using the projected unit credit method; whereas for contributions that are dependent on the number of years of service, the entity is required to attribute them to the employees’ periods of service.

The Directors of the Company do not anticipate that the application of these amendments to IAS 19 will have a significant impact on the Group’s consolidated financial statements.

Annual Improvements to IFRSs 2010 – 2012 Cycle

The Annual Improvements to IFRSs 2010 – 2012 Cycle include a number of amendments to various IFRSs, which are summarised below.

The amendments to IFRS 2 (i) change the definitions of ‘vesting condition’ and ‘market condition’; and (ii) add definitions for ‘performance condition’ and ‘service condition’ which were previously included within the definition of ‘vesting condition’. The amendments to IFRS 2 are effective for share-based payment transactions for which the grant date is on or after 1 July 2014.

The amendments to IFRS 3 clarify that contingent consideration that is classified as an asset or a liability should be measured at fair value at each reporting date, irrespective of whether the contingent consideration is a financial instrument within the scope of IFRS 9 or IAS 39 or a non-financial asset or liability. Changes in fair value (other than measurement period adjustments) should be recognised in profit and loss. The amendments to IFRS 3 are effective for business combinations for which the acquisition date is on or after 1 July 2014.



The amendments to IFRS 8 (i) require an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments, including a description of the operating segments aggregated and the economic indicators assessed in determining whether the operating segments have ‘similar economic characteristics’; and (ii) clarify that a reconciliation of the total of the reportable segments’ assets to the entity’s assets should only be provided if the segment assets are regularly provided to the chief operating decision-maker.

The amendments to the basis for conclusions of IFRS 13 clarify that the issue of IFRS 13 and consequential amendments to IAS 39 and IFRS 9 did not remove the ability to measure short-term receivables and payables with no stated interest rate at their invoice amounts without discounting, if the effect of discounting is immaterial. As the amendments do not contain any effective date, they are considered to be immediately effective.

The amendments to IAS 16 and IAS 38 remove perceived inconsistencies in the accounting for accumulated depreciation/amortisation when an item of property, plant and equipment or an intangible asset is revalued. The amended standards clarify that the gross carrying amount is adjusted in a manner consistent with the revaluation of the carrying amount of the asset and that accumulated depreciation/amortisation is the difference between the gross carrying amount and the carrying amount after taking into account accumulated impairment losses.

The amendments to IAS 24 clarify that a management entity providing key management personnel services to a reporting entity is a related party of the reporting entity. Consequently, the reporting entity should disclose as related party transactions the amounts incurred for the service paid or payable to the management entity for the provision of key management personnel services. However, disclosure of the components of such compensation is not required.

The Directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Group’s consolidated financial statements.

Annual Improvements to IFRSs 2011 – 2013 Cycle

The Annual Improvements to IFRSs 2011 – 2013 Cycle include a number of amendments to various IFRSs, which are summarised below.

The amendments to IFRS 3 clarify that the standard does not apply to the accounting for the formation of all types of joint arrangement in the financial statements of the joint arrangement itself.

The amendments to IFRS 13 clarify that the scope of the portfolio exception for measuring the fair value of a group of financial assets and financial liabilities on a net basis includes all contracts that are within the scope of, and accounted for in accordance with, IAS 39 or IFRS 9, even if those contracts do not meet the definitions of financial assets or financial liabilities within IAS 32.

The amendments to IAS 40 clarify that IAS 40 and IFRS 3 are not mutually exclusive and application of both standards may be required. Consequently, an entity acquiring investment property must determine whether:

(a) the property meets the definition of investment property in terms of IAS 40; and

(b) the transaction meets the definition of a business combination under IFRS 3.

The Directors of the Company do not anticipate that the application of these amendments will have a significant impact on the Group’s consolidated financial statements.

3. Summary of accounting policies

3.1 Statement of Compliance with IFRS

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards.

3.2 Basis of preparation

The consolidated financial statements have been prepared on the historical cost basis, as explained in the accounting policies below.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.


Basis of preparation (Continued)

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of IFRS 2, leasing transactions that are within the scope of IAS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in IAS 2 or value in use in IAS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

• Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

• Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

• Level 3 inputs are unobservable inputs for the asset or liability.

3.3 Presentation of financial statements in accordance with IAS 1 (revised 2007)

The consolidated financial statements are presented in accordance with IAS 1 Presentation of Financial Statements (revised 2007). The Group has elected to present the ‘Statement of comprehensive income’ in a separate statement from the statement of profit or loss and other comprehensive income.

3.4 Basis of consolidation

The Group financial statements consolidate those of the parent company and all of its subsidiary undertaking(s) drawn up to 30 September 2014. Subsidiaries are all entities over which the Group has the power to control the financial and operating policies. The Company obtains and exercises control through more than half of the voting rights for all its subsidiaries. All subsidiaries have a reporting date of 30 September except Dangote Agrosacks Nigeria Limited which was disposed of in November 2013.

The results of subsidiaries acquired are included in the consolidated financial statements from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

Subsidiaries acquired with the intention of disposal within 12 months are consolidated in line with the principles of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations and disclosed as held for sale.

All intragroup transactions, balances, income and expenses are eliminated on consolidation. Non-controlling interests represent the portion of profit or loss, or net assets not held by the Group. It is presented separately in the consolidated statement of profit or loss and other comprehensive income, and in the consolidated statement of financial position, separately from own shareholders’ equity.

A change in the ownership interest of a subsidiary, without a change of control, is accounted for as an equity transaction.

Losses are attributed to the non-controlling interest even if that results in a deficit balance. If the Group loses control over a subsidiary, it:

• Derecognises the assets (including goodwill) and liabilities of the subsidiary;

• Derecognises the carrying amount of any non-controlling interest;

• Derecognises the cumulative translation differences, recorded in equity;

• Recognises the fair value of the consideration received;


Basis of consolidation (continued)

• Recognises the fair value of any investment retained;

• Recognises any surplus or deficit in profit or loss; and

• Reclassifies the parent’s share of components previously recognised in other comprehensive income to profit or loss.

3.5 Interest in group companies

Business combinations are accounted for using the acquisition method. The value of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are expensed.

When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value as at the acquisition date through profit and loss.

Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability, is recognised in accordance with IAS 39 either in profit or loss or as charge to other comprehensive income. If the contingent consideration is classified as equity, it is not remeasured until it is finally settled within equity. In instances where the contingent consideration does not fall within the scope of IAS 39, it is measured in accordance with the appropriate IFRS.

The Company carries its investments in subsidiaries and associate companies at cost less accumulated impairment losses.

3.6 Interest in group companies

Foreign currency transactions The consolidated financial statements are presented in Nigerian Naira, which is the Company’s functional and

presentation currency. Transactions in foreign currencies are initially recorded in the functional currency at the rate of exchange ruling at the date of the transaction.

Translation of foreign currency transactions

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the reporting date. Exchange differences are taken to profit or loss.

If non-monetary items measured in a foreign currency are carried at historical cost, the exchange rate used is the rate applicable at the initial transaction date. If they are carried at fair value, the rate used is the rate at the date when the fair value was determined. The gain or loss arising on retranslation of non-monetary items is treated in line with the recognition of the gain or loss on change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss, respectively).

3.7 Segment reporting

Reporting segments

The Group has reportable segments that comprise the structure used by the chief operating decision-maker (“CODM”) to make key operating decisions and assess performance. The Group’s reportable segments are operating segments that are differentiated by the activities that each undertakes and the products they manufacture and market (referred to as business segments).


Segment reporting (continued)

The Group evaluates the performance of its reportable segments based on operating profit. The Group accounts for intersegment sales and transfers as if the sales and transfers were entered into under the same terms and conditions as would have been entered into in a market related transaction.

The financial information of the Group’s reportable segments is reported to the CODM for purposes of making decisions about allocating resources to the segment and assessing its performance.

3.8 Property, plant and equipment

Property, plant and equipment are stated at cost, excluding the costs of day-to-day servicing, less accumulated depreciation and accumulated impairment losses. Assets subject to finance lease agreements are capitalised at the lower of the fair value of the asset and the present value of the minimum lease payments.

Where an item of property, plant and equipment comprises major components with different useful lives, the components are accounted for as separate assets. Expenditure incurred on major inspection and overhaul, or to replace an item, is also accounted for separately if the recognition criteria are met.

Depreciation is calculated on a straight-line basis, on the difference between the cost and residual value of an asset, over its useful life. Depreciation starts when the asset is available for use. An asset’s residual value, useful life and depreciation method is reviewed at least at each financial year-end. Any adjustments are accounted for prospectively. Depreciation is not calculated in respect of freehold land and assets under construction.

The following useful lives have been estimated:

Freehold land — Not depreciated Leasehold land and buildings — 50 years Plant and machinery — 15 years Motor vehicles — 4 years Tools and equipment — 5 years Furniture and fittings — 5 years Computer equipment — 3 years

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the year the asset is derecognised.

3.9 Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of an intangible asset acquired in a business combination is the fair value at the date of acquisition. Subsequently, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Unless internally generated costs meet the criteria for development costs eligible for capitalisation in terms of IAS 38 (refer to research and development costs accounting policy below), all internally generated intangible assets are expensed as incurred.

3.9.1 Research and development costs

Research costs, being the investigation undertaken with the prospect of gaining new knowledge and understanding, are recognised in profit or loss as they are incurred.

Development costs arise on the application of research findings to plan or design for the production of new or substantially improved materials, products or services, before the start of commercial production. Development costs are only capitalised when the Group can demonstrate the technical feasibility of completing the project, its intention and ability to complete the project and use or sell the materials, products or services flowing from the project, how the project will generate future economic benefits, the availability of sufficient resources and the ability to measure reliably the expenditure during development. Otherwise development costs are recognised in profit or loss.


Research and development costs (continued)

During the period of development, the asset is tested annually for impairment. Following the initial recognition of the development costs, the asset is carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation begins when development is complete. The development costs are amortised over the period of expected future sales.

3.9.2 Derecognition of intangible assets An intangible asset is derecognised on disposal; or when no future economic benefits are expected from its use.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised.

3.10 Impairment

The Group assesses tangible and intangible assets, excluding goodwill, development assets not yet available for use and indefinite life intangible assets, at each reporting date for an indication that an asset may be impaired. If such an indication exists, the recoverable amount is estimated as the higher of the fair value less costs to sell and the value in use. If the carrying value exceeds the recoverable amount, the asset is impaired and is written down to the recoverable amount. Where it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of the cash-generating unit to which the asset belongs is estimated.

In assessing value in use, the estimated future cash flows are discounted to their present value using an appropriate discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, the hierarchy is firstly at the principal market or the most advantageous market in the absence of principal market.

Impairment losses of continuing operations are recognised in profit or loss in those expense categories consistent with the function of the impaired asset.

A previously recognised impairment loss is reversed only if there is a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If this is the case, the carrying amount of the asset is increased to the revised recoverable amount, but not in excess of what the carrying amount would have been had there been no impairment. A reversal of an impairment loss is recognised directly in profit or loss.

3.11 Financial instruments

Financial instruments are initially recognised when the Group becomes a party to the contract. The Group has adopted trade date accounting for “regular way” purchases or sales of financial assets. The trade date is the date that the Group commits to purchase or sell an asset.

Financial instruments are initially measured at fair value plus transaction costs, except that transaction costs in respect of financial instruments classified at fair value through profit or loss are expensed immediately. Transaction costs are the incremental costs that are directly attributable to the acquisition of a financial instrument, i.e. those costs that would not have been incurred had the instrument not been acquired.

A contract is assessed for embedded derivatives when the entity first becomes a party to the contract. When the economic characteristics and risks of the embedded derivative are not closely related to the host contract, the embedded derivative is separated out, unless the host contract is measured at fair value through profit or loss.

The Group determines the classification of its financial instruments at initial recognition.

Classification

The Group’s classification of financial assets and financial liabilities are as follows:

Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’.


Financial instruments (continued)

The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Debt and equity instruments issued by a group entity 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.

Description of asset/liability Classification

Investments Available-for-sale Derivatives Financial instruments at fair value through profit or loss Loans and advances receivable Loans and receivables Loans to subsidiaries Loans and receivables Trade and other receivables Loans and receivables Cash and cash equivalents Loans and receivables Loans payable and borrowings Financial liabilities at amortised cost Trade and other payables Financial liabilities at amortised cost Loans from subsidiaries Financial liabilities at amortised cost

3.11.1 Financial assets

Available-for-sale financial assets

These are non-derivative financial assets that are designated as available-for-sale or are not classified as loans and receivables or held-to-maturity investments or financial assets at fair value through profit or loss.

Available-for-sale financial assets are subsequently measured at fair value with unrealised gains or losses recognised directly in other comprehensive income. When such a financial asset is disposed of, the cumulative gain or loss previously recognised in other comprehensive income is recognised in profit or loss. Interest earned on the financial asset is recognised in profit or loss using the effective interest method. Dividends earned are recognised in profit or loss when the right of receipt has been established.

Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, loans and receivables are measured at amortised cost less impairment losses.

Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process.

Impairment of financial assets

The Group assesses at each reporting date whether there is objective evidence a financial asset, or group of assets, is impaired.

Available-for-sale financial assets

In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. “Significant” is to be evaluated against the original cost of the investment and ‘prolonged’ against the period in which the fair value has been below its original cost. Factors taken into consideration would include external market and economic outlook reports, observable trends and cyclicality.

If an available-for-sale asset is impaired, the amount transferred from other comprehensive income to profit or loss is:

• the difference between the asset’s acquisition cost (net of any principal payments and amortisation); and

• its current fair value, less any impairment loss previously recognised in profit or loss.


Financial assets (continued)

Reversals in respect of equity instruments classified as available-for-sale are not recognised in profit or loss. Reversals of impairment losses on debt instruments are reversed through profit or loss if the increase in fair value of the instrument can be objectively related to an event occurring after the impairment loss was recognised in profit or loss.

Assets carried at amortised cost

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows (excluding future expected credit losses) discounted at the asset’s original effective interest rate.

The Group assesses whether there is objective evidence of impairment individually for financial assets that are individually significant, and individually or collectively for financial assets that are not individually significant. In relation to trade receivables, an allowance for impairment is made when there is objective evidence (such as the probability of insolvency or significant financial difficulties of the debtor) that the Group will not be able to collect all of the amounts due under the original terms of the sale. The carrying amount of the asset is reduced through the use of an allowance account, and is recognised in profit or loss. Impaired debts are derecognised when they are assessed as uncollectible.

If, in a subsequent period, the amount of the impairment decreases and the decrease relates objectively to an event occurring after the impairment, it is reversed to the extent that the carrying value does not exceed the amortised cost. Any subsequent reversal of an impairment loss is recognised in profit or loss.

Financial liabilities at amortised cost After initial recognition, liabilities that are not carried at fair value through profit or loss are measured at amortised

cost using the 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 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 debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the amortisation process.

Fair value

The fair value of listed investments is the quoted market bid price at the close of business on the reporting date. For unlisted investments, the fair value is determined using appropriate valuation techniques. Such techniques include using recent arm’s length market transactions, reference to the current market value of similar instruments, discounted cash flow analysis and option-pricing models.

Derivative instruments

Derivatives are financial instruments whose value changes in response to an underlying factor, require little or no net investment and are settled at a future date. Derivatives, other than those arising on designated hedges, are measured at fair value with changes in fair value being recognised in profit or loss.

Derecognition of financial assets and financial liabilities

Financial assets or parts thereof are derecognised when:

• the right to receive the cash flows have expired; • the right to receive the cash flows is retained, but an obligation to pay them to a third party under a ‘pass-

through’ arrangement is assumed; or • the Group transfers the right to receive the cash flows, and also transfers either all the risks and rewards, or

control over the asset.

Financial liabilities are derecognised when the obligation is discharged, cancelled or expired.



3.11.2 Non-current assets held for sale and discontinued operations

An item is classified as held-for-sale if its carrying amount will be recovered principally 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.

Assets classified as held-for-sale are not subsequently depreciated and are held at the lower of their carrying value and fair value less costs to sell.

A discontinued operation is a separate major line of business or geographical area of operation that has been

disposed of, or classified as held-for-sale, as part of a single coordinated plan. Alternatively, it could be a subsidiary acquired exclusively with a view to resale.

In the consolidated statement of profit or loss and other comprehensive income of the reporting period and of

the comparable period, income and expenses from discontinued operations are reported separate from income and expenses from continuing activities down to the level of profit after taxes, even when the Group retains a non-controlling interest in the subsidiary after the sale. The resulting profit or loss (after taxes) is reported separately in the statement of profit or loss and other comprehensive income.

3.12 Inventories

Inventories are stated at the lower of cost or net realisable value. Costs incurred in bringing each product to its present location and conditions are accounted for as follows:

Raw materials Weighted average cost.

Finished goods and work-in-progress Cost of direct material and labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs.

Consumables are written down with regard to their age, condition and utility.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated completion and selling costs.

3.13 Provisions

Provisions are recognised when the Group has a present legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss and other comprehensive income net of any reimbursement.

If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.14 Leases

At inception date an arrangement is assessed to determine whether it is, or contains, a lease. An arrangement is accounted for as a lease where it is dependent on the use of a specific asset and it conveys the right to use that asset.

Leases are classified as finance leases where substantially all the risks and rewards associated with ownership of an asset are transferred from the lessor to the Group as lessee. Finance lease assets and liabilities are recognised at the lower of the fair value of the leased property or the present value of the minimum lease payments. Finance lease payments are allocated, using the effective interest method, between the lease finance cost, which is included in financing costs, and the capital repayment, which reduces the liability to the lessor.

Leases (continued)

Capitalised lease assets are depreciated in line with the Group’s stated depreciation policy. If there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of its estimated useful life and lease term.

Operating leases are those leases which do not fall within the scope of the definition of a finance lease. Operating lease rentals are charged against trading profit on a straight-line basis over the lease term.

3.15. Revenue

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership have passed to the buyer, usually on dispatch of the goods, unless the Group is responsible for delivery, in which case the sale of goods is recognised on delivery.

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received/receivable excluding value-added tax, normal discounts, rebates, settlement discounts, promotional allowances, and internal revenue which is eliminated on consolidation.

The Group assesses its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent.

3.16. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective assets. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Qualifying assets generally take two years to get ready for their intended use.

3.17. Taxation The income tax expense represents the sum of current tax payable (both current and deferred).

Current tax The current tax is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement

of profit or loss and other comprehensive income because it excludes items of income or expense that are taxable or deductible in other years, and it further excludes items that are never taxable or deductible. Current tax may include under or over provisions relating to prior year taxation. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Current taxation relating to items recognised outside profit or loss is recognised outside profit or loss. Current tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred taxation 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 the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.

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. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent it has become probable that future taxable profit will allow the asset to be utilised.


Taxation (continued)

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised based on tax rates/laws that have been enacted or substantively enacted by the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Dividends withholding tax

A dividend withholding tax of 10% is withheld on behalf of the taxation authority on dividend distributions. Withholding tax is payable on the earliest of declaration or payment of dividends. Should payment not have been affected when due, the net amount payable to the taxation authority is included as part of trade and other payables at the time a dividend is declared.

Value added tax

Revenues, expenses and assets are recognised net of the amount of value added tax except:

• where the value added tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the value added tax is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

• receivables and payables that are stated with the amount of value added tax included.

The net amount of value added tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

3.18. Employee benefits A liability is recognised when an employee has rendered services for benefits to be paid in the future, and an

expense when the entity consumes the economic benefit arising from the service provided by the employee.

In respect of defined contribution plans, the contribution paid by the Company is recognised as an expense. If the employee has rendered the service, but the contribution has not yet been paid, the amount payable is recognised as a liability.

In respect of defined benefit plans, the Company’s contributions were previously based on the recommendations of independent actuaries and the liability measured using the projected unit credit method, up to the date of cessation of the scheme.

Actuarial gains and losses were recognised in the statement of profit or loss and other comprehensive income when the net cumulative unrecognised actuarial gains and losses for each individual plan at the end of the previous reporting period exceed 10% of the higher of the defined benefit obligation and the fair value of plan assets at that date. These gains or losses were recognised over the expected average remaining working lives of the employees participating in the plans.

Past-service costs were recognised as an expense on a straight-line basis over the average period until the benefits became vested. If the benefits vested immediately following the introduction of, or changes to, a defined benefit plan, the past-service cost was recognised immediately.

On cessation of the scheme, it was agreed that the frozen liability at closure would be paid into an independently administered fund, as a contribution to a defined contribution plan.


3.19. Contingent assets and contingent liabilities

A contingent asset is a possible asset that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Contingent assets are not recognised as assets.

A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Alternatively, it may be a present obligation that arises from past events but is not recognised because an outflow of economic benefits to settle the obligation is not probable, or the amount of the obligation cannot be measured with sufficient reliability. Contingent liabilities are not recognised as liabilities unless they are acquired as part of a business combination.

3.20. Events after the reporting period

Amounts recognised in the financial statements are adjusted to reflect significant events arising after the reporting date, but before the financial statements are authorised for issue, provided there is evidence of conditions that existed at the reporting date. Events after the reporting date that are indicative of conditions that arose after the reporting date are dealt with by way of a disclosure in the notes to the financial statements.

3.21. Significant accounting judgements and estimates

Judgements In the application of the Group’s accounting policies, which are described in Note 3, the Directors of the Company

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.

Impairment of assets: Determmination of smallest CGU, includes an assesment of independence of sales. The

CGU’s determined were the company’s Dangote Flour Mills, Dangote Pasta Limited and Dangote Noodles Limited. This judgement has a fundamental effect on the impairment consideration. In the process of applying the Group’s accounting policies, management has made the following judgements, apart from those involving estimations, which have the most significant effect on the amounts recognised in the financial statements.

Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.

Carrying value of intangible and tangible assets

Intangible and tangible assets are tested for impairment annually or more frequently if there is an indicator of impairment. Tangible assets and finite life intangible assets are tested when there is an indicator of impairment. The calculation of the recoverable amount requires the use of estimates and assumptions concerning the future cash flows which are inherently uncertain and could change over time. In addition, changes in economic factors, such as discount rates, could also impact this calculation.

Residual values and useful lives of tangible and intangible assets

Residual values and useful lives of tangible and intangible assets are assessed on an annual basis. Estimates and judgements in this regard are based on historical experience and expectations of the manner in which assets are to be used, together with expected proceeds likely to be realised when assets are disposed of at the end of their useful lives. Such expectations could change over time and therefore impact both depreciation charges and carrying values of tangible and intangible assets in the future.


Provisions

Best estimates, being the amount that the Group would rationally pay to settle the obligation, are recognised as provisions at the reporting date. Risks, uncertainties and future events, such as changes in law and technology, are taken into account by management in determining the best estimates.

Where the effect of discounting is material, provisions are discounted. The discount rate used is the pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability, all of which requires management estimation.

The establishment and review of the provisions requires significant judgement by management as to whether or not a reliable estimate can be made of the amount of the obligation. The Group is required to record provisions for legal or constructive contingencies when the contingency is probable of occurring and the amount of the loss can be reasonably estimated. Liabilities provided for legal matters require judgements regarding projected outcomes and ranges of losses based on historical experience and recommendations of legal counsel. Litigation is however unpredictable and actual costs incurred could differ materially from those estimated at the reporting date.

Impairment of trade and other receivables

The Company makes allowance for doubtful debts based on an assessment of the recoverability of receivables. Allowances are applied to receivables where events or changes in circumstances indicate that the carrying amounts may not be recoverable. Management specifically analysed historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in customer payment terms when making a judgment to evaluate the adequacy of the allowance of doubtful debts of receivables. Where the expectation is different from the original estimate, such difference will impact the carrying value of receivables.

Allowance for inventories written down

Reviews are made periodically by management on damaged, obsolete and slow moving inventories. These reviews require judgment and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.

Deferred tax assets

Deferred tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies and funding strategy. Further details are contained in Note 12.


COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) 2014 2013 4. Revenue

31,704,340 23,079,590 Flour products 29,809,011 21,219,884 — — Spaghetti, macaroni and other pasta products 5,820,371 4,667,669 — — Noodles products 5,639,389 4,072,866

31,704,340 23,079,590 Total revenue 41,268,771 29,960,419

5. Operating loss

Operating loss from continuing operations is determined after charging the following: External auditors’ remuneration 43,300 44,000 — Audit fees 83,066 67,500 10,000 20,881 — Other fees and expenses 10,000 20,881 1,900,878 1,603,082 Depreciation 3,156,644 3,548,451

111,194 84,877 Buildings 198,349 120,977 1,740,748 1,493,087 Plant, equipment and vehicles 2,875,239 3,392,979 48,936 25,118 Computer and office equipment 83,056 34,495

90,340 115,692 Professional and consultant fees 90,340 160,004 Operating lease charges 185,062 101,149 Land and buildings 261,155 176,149

1,359,855 1,596,126 Staff costs 2,354,033 2,416,658

1,213,928 1,525,676 Salaries, allowances and other benefits 2,159,588 2,301,473 79,373 28,643 Employer’s contribution to retirement funding 127,891 68,744 66,554 41,807 Employer’s contribution to medical aid 66,554 46,441

124,208 42,708 Sale of scrap product and other sundry income 302,997 233,975

Non-recurring items

— 244,188 Redundancy costs — 495,881 255,354 95,000 Stock write off 255,354 116,410 — — Provision for bad debts 123,326 201,584 270,000 564,986 Statutory liabilities 1,047,000 1,026,095


COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) 2014 2013 5. Operating loss (continued) Directors’ emoluments (Note 25) Executive directors 67,175 2,600 — salaries and bonuses 102,721 51,960 73,245 29,759 — retirement, medical and other benefits 108,451 65,956 Non-executive directors 5,650 22,423 — fees 5,650 22,423 146,070 54,782 Total directors’ emoluments 216,822 140,339 — — Less: Paid by subsidiaries — — 146,070 54,782 Emoluments paid by company 216,822 140,339 The number of Directors excluding the Chairman whose emoluments were within the following ranges were: 3 3 N=5 000 000 — N=10 000 000 3 3 — — N=14 800 001 — N=15 000 000 — — 1 1 N=15 000 000 and above 1 1 The number of employees with gross emoluments within the bands stated below are: 512 421 Up to N=1 000 000 915 975 211 256 N=1 000 001 – N=2 000 000 354 359 70 119 Above N=2 000 001 134 159 793 796 1,403 1,493

Prior year numbers restated to include distribution drivers.

Average number of persons in the Company’s employment in the financial period were as follows: 103 90 Managerial 160 142 275 245 Senior staff 360 440 3 5 Expatriates 11 5 177 228 Distribution drivers 173 228 235 228 Junior staff 699 678

793 796 1,403 1,493

6. (Loss)/Profit on significant disposals of property and impairment of plant and equipment and investment

Loss on disposal on PPE (trucks and — (64,618) motor vehicles) — (130,678) 2,597,750 — Profit on disposal of subsidiary — — (3,339,038) — Impairment of amounts due by subsidiary — — (728,191) — Impairment of assets not in use (1,592,372) —

(1,469,479) (64,618) Total attributable to ordinary shareholders (1,592,372) (130,678)


COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) 2014 2013 7. Finance costs

(2,108,048) (2,208,403) Long-term borrowings (2,108,048) (2,208,403) (735,349) (137,872) Bank and other short-term borrowings (755,140) (156,553)

(2,843,397) (2,346,275) (2,863,188) (2,364,956)

Interest received

6,841 12,665 From cash and cash equivalents 6,841 19,927 — — Other financial assets 3,557 —

6,841 12,665 10,398 19,927

(2,836,556) (2,333,610) Net finance costs (2,852,790) (2,345,029)

8. Taxation

8.1 Income tax recognised in profit and loss

Current taxation

— (109,526) Nigerian current taxation (7,400) (132,918)

In respect of prior years: — 12,799 Nigerian current taxation — 6,980 — 3,480 Education tax — 2,027

— (93,247) (7,400) (123,911)

Deferred taxation 1,895,810 1,260,089 Temporary differences, current year 3,014,108 1,701,901

1,895,810 1,166,842 Total taxation 3,006,708 1,577,990

Dangote Noodles Ltd, a subsidiary of the company, obtained approval from the Nigerian Investment Promotion Commission for a five-year pioneer tax status incentive (tax holiday), effective 1 July 2010. Movement per deferred tax accounts: 973,502 827,533 Deferred taxation asset (Note 12) 2,091,800 942,874 922,308 432,556 Deferred taxation liability (Note 12) 922,308 759,027

1,895,810 1,260,089 3,014,108 1,701,901

The charges for taxation in these financial statements were based on the provisions of the Companies Income Taxation Act, CAP C21, LFN 2004 as amended and the Education Tax Act, CAP E4, LFN 2004.



COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) 2014 2013 Taxation (continued)

8.2 Reconciliation of income tax expense to accounting loss: (6,055,112) (5,647,490) Loss before tax from continuing operations (9,285,013) (8,342,294)

1,816,534 1,694,247 Income tax credit calculated at 30% (2012: 30%) 2,785,504 2,502,688 — (326,401) Non-deductible expenses (348,106) (464,734) 779,325 — Non-taxable income — — Tax losses and tax offsets not recognised (1,001,711) — as deferred tax assets — (222,418) Tax offsets not previously recognised as — — deferred tax assets — 97,838 Effect of minimum tax provisions and — (121,277) education tax (7,400) (128,595) 259,304 — Effect of prior year under provision 534,081 (206,789) 42,358 (79,727) Other items 42,629 —

1,895,810 1,166,842 Income tax credit recognised in profit or loss 3,006,708 1,577,990

8.3 Unrecognised deductible temporary differences, unused tax losses and unused tax credits — — Income tax expense recognised in profit or loss 713,580 779,009

8.4 Current tax liabilities 83,770 83,770 Income tax payable 105,841 148,666 57,003 57,003 Education tax 57,004 81,351 8,431 8,431 Capital gains tax 8,431 8,431

149,204 149,204 171,276 238,448

9. Basic and diluted loss per share Basic loss per share is calculated by dividing the net loss for the year by the weighted average number of ordinary shares outstanding during the year. Basic and diluted loss per share is the same as there are no dilutive effects on earnings.

Total comprehensive loss attributable to ordinary shareholders: (4,159,302) (4,480,648) Total comprehensive loss for the period (N=‘000) (6,219,905) (7,932,996) (4,159,302) (4,480,648) Continuing operations (6,212,862) (6,698,446) — — Discontinued operation (7,042) (1,234,550)

Weighted average number of ordinary 5,000 5,000 shares (million) 5,000 5,000 Basic and diluted loss per share (83.19) (89.61) (kobo per share) (124.40) (158.66)

(83.19) (89.61) Continuing operations (124.26) (133.97) — — Discontinued operation (0.14) (24.69) No ordinary share transactions or potential transactions occurred after the reporting date that would have changed the number of ordinary shares or potential ordinary shares outstanding at the end of the period if those transactions had occurred before the reporting date.


Plant, Leasehold vehicles Computer Assets GROUP land and and and office under (N= ’000) buildings equipment equipment construction Total 10. Property, plant and equipment Cost Balance at 31 December 2012 7,664,944 55,392,682 581,463 1,891,517 65,530,606 Additions 73,178 680,402 21,354 76,089 851,023 Disposals — (1,417,690) — — (1,417,690) Transfer to discontinued operation (1,103,050) (14,299,517) — (278,262) (15,680,829) Balance at 30 September 2013 6,635,072 40,355,877 602,817 1,689,344 49,283,110 Additions 138,200 385,540 121,338 468,037 1,113,115 Disposals — (128,595) (12,212) — (140,807) Transfers between classes of assets 44,516 1,509,366 20,635 (1,574,517) — Impairment — (5,642,935) — — (5,642,935)

Balance at 30 September 2014 6,817,788 36,479,254 732,577 582,865 44,612,484 Accumulated depreciation

Balance at 31 December 2012 606,729 20,428,828 446,402 — 21,481,959

Depreciation 120,977 3,392,979 34,495 — 3,548,451 Continued operations 103,180 2,706,593 34,495 — 2,844,268 Discontinued operation 17,797 686,386 — — 704,183

Disposals — (734,082) — — (734,082) Fair value loss on remeasurement of discontinued operation (57,105) (2,570,768) — — (2,627,873) Transfer to discontinued operation (51,888) (2,335,913) — — (2,387,801)

Balance at 30 September 2013 618,713 18,181,044 480,897 — 19,280,654

Depreciation 198,349 2,875,239 83,056 — 3,156,644 Disposals — (108,749) (8,147) — (116,897) Impairment — (4,050,563) — — (4,050,563) Balance at 30 September 2014 817,062 16,896,971 555,806 — 18,269,839 Carrying amount

Balance at 30 September 2013 6,016,359 22,174,833 121,920 1,689,344 30,002,456 Balance at 30 September 2014 6,000,726 19,582,283 176,771 582,865 26,342,645

In 2013 assets amounting to N=14.2 billion were encumbered by debenture in favour of Zenith Bank Plc, Ecobank Plc, Diamond Bank Plc, FCMB Plc, Access Bank Plc and United Bank for Africa Plc.

During the year ended 30 September 2014, an impairment charges in relation to the Group’s property, plant and equipment of Dangote Flour, Pasta and Noodles of N=0.73 billion, N=0.74 billion and N=0.12 billion, respectively, were reported. The impairment charges were primarily driven by entities being in a loss making position and having significant level of under-utilized assets. The recoverable amount and impairment loss of the asset are based on volume projections and capacity utilizations over five years.


Plant, Leasehold vehicles Computer Assets COMPANY land and and and office under (N= ’000) buildings equipment equipment construction Total 10. Property, plant and equipment (continued)

Cost Balance at 31 December 2012 5,493,055 23,102,819 332,009 1,431,971 30,359,854 Additions 50,917 183,736 21,354 76,089 332,096 Disposals — (395,715) — — (395,715)

Balance at 30 September 2013 5,543,972 22,890,840 353,363 1,508,060 30,296,235

Additions 77,447 226,873 106,195 221,308 631,823 Disposals — (5,277) (2,228) — (7,505) Transfer between assets — 1,451,443 — (1,451,443) — Impairment — (2,723,466) — — (2,723,466)

Balance at 30 September 2014 5,621,419 21,840,414 457,330 277,925 28,197,088

Accumulated depreciation

Balance at 31 December 2012 422,472 10,937,285 252,630 — 11,612,387

Depreciation 84,877 1,493,087 25,118 — 1,603,082 Disposals — (270,285) — — (270,285)

Balance at 30 September 2013 507,349 12,160,087 277,748 — 12,945,184

Depreciation 111,194 1,740,748 48,936 — 1,900,878 Disposals — (4,983) (2,129) — (7,112) Impairment — (1,995,275) — — (1,995,275)

Balance at 30 September 2014 618,543 11,900,577 324,555 — 12,843,675 Carrying amount

Balance at 31 December 2013 5,036,623 10,730,753 75,615 1,508,060 17,351,051 Balance at 30 September 2014 5,002,876 9,939,837 132,775 277,925 15,353,413

In 2013 assets amounting to N=14.2 billion were encumbered by debenture in favour of Zenith Bank Plc, Ecobank Plc, Diamond Bank Plc, FCMB Plc, Access Bank Plc and United Bank for Africa Plc.

During the year ended 30 September 2014, an impairment charge of N=0.73 billion was reported. The impairment charge was primarily driven by the Company being in a loss making position and having significant level of under-utilized assets. The recoverable amount and impairment loss of the asset are based on volume projections and capacity utilizations over five years.

COMPANY

30 Sept 2014 30 Sept 2013 Percentage Percentage

(N=’000) holding (%) (N=’000) holding (%)11. Investment in subsidiaries

11.1 Interest in subsidiary companies

Unlisted – shares at cost: Dangote Pasta Limited 2,507,637 99% 2,507,637 99% Dangote Noodles Limited 90,000 90% 90,000 90% 2,597,637 2,597,637

Loans receivable from subsidiaries – held directly Dangote Pasta Limited — Amounts due by subsidiary 16,293,232 14,612,558

— Impairment (3,339,038) —

12,954,194 14,612,558

Dangote Noodles Limited 2,874,945 2,607,078

15,829,139 17,219,636

In 2007 the Company acquired a controlling interest in Dangote Pasta Limited and during 2008, in Dangote Noodles Limited.

The investments and loans were evaluated for impairment by evaluating net asset values of the subsidiary companies using cost and income valuation techniques. The fair value measurement took into account the ability of the Group to generate economic benefits from the entities by using their plants and assets in their highest and best use.

11.2 Details of Group’s material subsidiaries as at the end of reporting period:

Portion of ownership, interest and voting power held by the Group Place of incorporation 30-Sept 30-Sept Name of subsidiary Principal activity and operation 2014 2013

Dangote Pasta Limited Manufacturing and sale of pasta products Nigeria 99% 99% Dangote Noodles Limited Manufacturing and sale of noodles products Nigeria 90% 90%

11.3 Details of non-wholly owned subsidiaries with non-controlling interests:

Portion of ownership, interest and voting (Loss)/profit allocated power held by non- to non-controlling Accumulated non- controlling interests interests controlling interests 12 months 9 months ended ended 30-Sept 30-Sept 30-Sept 30-Sept 30-Sept 30-Sept Name of subsidiary 2014 2013 2014 2013 2014 2013 Dangote Pasta Limited 1% 1% (24,510) (18,112) (29,825) (5,315) Dangote Noodles Limited 10% 10% (40,933) (47,253) (453,321) (412,388) Dangote Agrosacks Limited 1% 1,821 22,977 — 128,243 Agrosacks Obajana Limited 25% 174,018 758,383 — 2,084,803 110,397 715,995 (483,146) 1,795,343



COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=’000) 2014 2013

12. Deferred taxation Balance at beginning of year: 1,829,016 1,001,483 — Deferred tax asset 2,896,528 1,621,122 (2,393,244) (2,825,800) — Deferred tax liability (2,453,251) (2,855,079)

(564,228) (1,824,317) 443,277 (1,233,957)

Income statement movement

Temporary differences: deferred tax asset 973,502 827,533 — Continuing operations 2,091,800 942,874 — Discontinued operation — (589,721) Temporary differences: deferred tax asset/(liability) 922,308 432,556 — Continuing operations 922,308 759,027 — Discontinued operation — 108,398 Transfer to discontinued operation — Deferred tax liability — 589,721 — Deferred tax asset — (133,065)

1,331,582 (564,228) Balance at end of year 3,457,384 443,277

2,802,518 1,829,016 — Deferred tax asset 4,928,320 2,896,528 (1,470,936) (2,393,244) — Deferred tax liability (1,470,936) (2,453,251)

Assessed losses available for offset against future taxable income have been recognised as it is probable that there will be future taxable income against which the assessed loss may be utilised, based on best estimate cashflows.

COMPANY GROUP


12.1 Analysis of deferred tax asset balances:

— — Property, plant and equipment 1,487,595 595,541 — — Gratuity 49,512 49,512 773,930 603,901 Allowance for bad debt 1,024,188 823,225 2,028,230 1,225,115 Losses 2,365,995 1,378,735 358 — Others 1,030 49,516

2,802,518 1,829,016 4,928,320 2,896,528

12.2 Analysis of deferred tax liability balance: (1,470,936) (2,393,244) Property, plant and equipment (1,470,936) (2,453,251) 12.3 Deductible temporary differences, unused tax losses and unused tax credits for which no deferred tax assets have been recognised are attributable to the following:

— Tax losses (revenue in nature) 713,580 779,009

12.3 Analysis of movement in deferred tax balances

9 months ended September 2013 Year ended September 2014

COMPANY, 12 months Sept 2014 Opening Profit and Opening Profit and Closing balance loss balance loss balance Property, plant and equipment (2,825,800) 432,556 (2,393,244) 922,308 (1,470,936) Gratuity 255,475 (255,475) — — — Other provisions 422,835 181,066 603,901 170,387 774,288 Losses 323,173 901,942 1,225,115 803,115 2,028,230 (1,824,317) 1,260,089 (564,228) 1,895,810 1,331,582 9 months ended September 2013 Year ended September 2014

GROUP, 12 months Sept 2014 Opening Profit and Held for Opening Held for Closing balance loss sale balance sale balance

Property, plant and equipment (2,458,034) 759,027 (158,703) (1,857,710) 1,874,370 16,660 Gratuity 329,110 (349,770) 70,171 49,511 — 49,511

Other provisions 571,794 237,082 63,865 872,741 152,477 1,025,218 Losses 323,173 1,055,562 — 1,378,735 987,261 2,365,995

(1,233,957) 1,701,901 (24,667) 443,277 3,014,107 3,457,384

COMPANY GROUP


13. Inventories 2,360,469 7,030,498 Raw materials and work-in-progress 3,008,046 7,882,459 536,364 207,909 Finished goods 841,305 765,089 1,411,069 565,184 Engineering spares and other stock 1,942,305 962,612 (255,354) (117,200) Amount written down slow moving (362,597) (237,703)

4,052,548 7,686,391 5,429,059 9,372,457

Inventory is carried at the lower of cost and net realisable value. The amount of write down of inventories recognised as an expense is N=363 million (2013: N=238 million). This expense is included in cost of sales.

Inventory recognised as an expense during the period totalled N=34.3 billion (2013: N=26.6 billion).

COMPANY GROUP


14. Trade and other receivables 9,795,324 8,677,964 Trade receivables 11,710,089 9,940,320 449,873 520,271 Prepayments 542,040 602,431 1,007,695 799,887 Sundry receivables 1,486,275 4,000,808

11,252,892 9,998,122 Total 13,738,404 14,543,559 (5,398,425) (5,436,248) Impairment allowance: Trade receivables (6,217,775) (6,126,190) (586,640) (600,159) Impairment allowance: Other receivables (586,639) (627,903)

5,267,827 3,961,715 Net trade and other receivables 6,933,990 7,789,466



14. Trade and other receivables (continued)

Credit risk and provisioning

The average credit period granted to customers is 30 days. Trade receivables, which generally have 30 – 60 day terms, are non-interest bearing and are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.

Before accepting a new customer the Group and the Company initially trades with the customer on a 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.

Included in the impairment allowance is N=1.1 billion (2013: N=2.4 billion) of the Dangote Flour Mills Plc’s trade debtors which is backed by an insurance bond, overdue by more than one year. The carrying amount approximates fair value.

Trade receivables disclosed above include amounts that are past due at the end of the reporting period for which the Group has not recognised an allowance for doubtful debts because there has not been a significant change in credit quality and the amounts are still considered recoverable. Of the trade receivables balance at the end of the year, the three companies below made up the largest customers in the Group and the Company are:

COMPANY GROUP


265,258 160,950 Company A 1,048,004 294,224 163,359 95,098 Company B 878,784 188,402 139,628 90,242 Company C 664,792 165,617

568,245 346,290 2,591,580 648,243

Impairment allowance

Impairment allowance is made when there is objective evidence that the Company will not be able to collect the debts. The allowance raised is the amount needed to reduce the carrying value to the present value of expected future cash receipts. Bad debts are written off when identified. Movements in the impairment allowance account were:

COMPANY GROUP


6,036,407 6,036,407 Balance at the beginning of the year 6,754,093 6,649,746 (51,342) — Utilised during the year (51,342) — — — Raised during the year 101,664 104,347

5,985,065 6,036,407 Balance at the end of the year 6,804,415 6,754,093

Past due but not impaired analysis: Net trade receivables ageing: 4,304,157 1,784,291 Current to 60 days 5,297,602 2,085,770 77,776 38,129 61 to 90 days 115,852 46,733 7,093 7,237 91 to 180 days 46,806 105,803 7,875 1,412,060 > 180 days 32,054 1,575,824 4,396,899 3,241,717 5,492,314 3,814,130


14. Trade and other receivables (continued)

COMPANY GROUP


Impairment analysis: Trade receivables ageing: — — Current to 60 days — — — — 61 to 90 days — — — — 91 to 180 days — — 5,398,425 5,436,248 > 365 days 6,217,775 6,126,190

5,398,425 5,436,248 Total impairment 6,217,775 6,126,190

Recoverability of trade receivables

In determining the recoverability of the trade receivable, the Group and the 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 impairment allowance required in excess of the allowance for doubtful debts.

Amounts past due but not impaired greater than 180 days are covered by an indemnity of N=1.7 billion (2013: N=1.7 billion) provided by Dangote Industries Limited and hence have not been provided for.

COMPANY GROUP


15. Short-term loans receivable

Unsecured, interest free loans repayable on request: 3,541,950 3,288,629 Due from related parties (refer to Note 21) 6,619,923 6,122,476 — — Other short-term loans — 60,812

3,541,950 3,288,629 Total 6,619,923 6,183,288

The carrying amount of short-term loans approximates their fair value.

COMPANY GROUP


16. Cash and cash equivalents 4,118,711 910,024 Bank balances and short-term deposits 4,547,552 1,423,664 (1,382,618) (2,394,459) Bank overdrafts (1,382,617) (2,399,913)

2,736,093 (1,484,435) 3,164,935 (976,249)


COMPANY GROUP


17. Share capital and premium

Authorised share capital 3,000,000 3,000,000 6 000 000 000 ordinary shares of 50k each 3,000,000 3,000,000 Issued ordinary share capital 2,500,000 2,500,000 5 000 000 000 ordinary shares of 50k each 2,500,000 2,500,000 18,116,249 18,116,249 Share premium 18,116,249 18,116,249

18. Long-term borrowings

14,562,028 14,725,606 Balance at beginning of the year 14,562,028 16,909,606 980,000 6,003,525 Loan advanced 980,000 6,003,525 (6,007,124) (6,167,103) Repayment (6,007,124) (8,351,103)

9,534,904 14,562,028 Balance at the end of the year 9,534,904 14,562,028

5,044,448 9,646,302 Long-term portion 5,044,448 9,646,302 Short-term portion included in short-term 4,490,456 4,915,726 borrowings (Note 20) 4,490,456 4,915,726

The loan of N=980 million was obtained in July 2014 and is repayable over periods of 72 months at fixed interest rate of 7%.

Prior period loans were obtained in January 2013 and are repayable over periods of 36 to 48 months at fixed interest rates of 15% and 16% per annum. The loans are secured by a debenture over the assets of the Company.

COMPANY GROUP


19. Trade and other payables 3,874,662 5,493,944 Trade payables and accruals 7,369,003 9,425,128 1,593,384 1,163,076 Customers’ deposits 1,593,384 1,163,076 570,157 644,697 Retirement benefit obligation 19.1 719,146 809,733 159,822 376,144 Withholding tax 159,822 594,835

6,198,025 7,677,861 Net trade and other payables 9,841,355 11,992,772

19.1 Retirement benefit obligation 644,697 851,584 Opening balance 809,733 1,254,329 61,170 — Interest accrued 73,360 — (135,710) (206,887) Benefits paid by from company (163,947) (444,596)

570,157 644,697 Closing balance 719,146 809,733


COMPANY GROUP


19.2 Retirement benefit obligation — Pension Fund (Included in trade payables and accruals)

19,931 26,427 Opening balance 16,440 41,666 156,292 159,656 Interest accrued 237,355 218,813 (142,838) (166,152) Benefits paid by from company (196,638) (244,039) 33,385 19,931 Closing balance 57,157 16,440 The average credit period on purchases is 30 days. No interest is charged on the trade payables from the date of the invoice. The Group has financial risk management policies in place to ensure that all payables are paid within pre-agreed credit terms.

The carrying amount approximates fair value.

The outstanding balance for retirement benefit obligation of N=719m accrues interest at 10%.

COMPANY GROUP


20. Short-term borrowings — — Unsecured loans (a) 250,000 250,000 Amounts due to related parties 10,871,922 3,377,132 (refer to Note 21) 12,660,658 6,409,667 9,881,611 9,465,058 Letters of credit for wheat purchases 9,881,611 9,465,058 Short-term portion of long-term 4,490,456 4,915,726 borrowings (Note 18) 4,490,456 4,915,726

25,243,989 17,757,916 Total 27,282,725 21,040,451

(a) A subsidiary of the Company, Dangote Noodles Limited has a loan balance of N=310 million due to Dangote Industries Limited at a fixed interest rate of 8% per annum. There is no fixed period of payment and the amount is payable on demand. The carrying amount approximates fair value.

21. Related party disclosures

Unless stated otherwise, all related party transactions are concluded at arm’s length in the normal course of business. All material intergroup transactions are eliminated on consolidation.

COMPANY GROUP


Amounts due from related parties (refer to Note 15) — — a Dangote Cement Plc. 24,014 24,014 3,066,999 3,058,121 b Dangote Industries Limited 6,048,688 5,786,636 51,000 51,000 d Dangote Textiles Nigeria Limited 51,000 51,000 — — e Dangote Foundation 58,512 65,937 — — j Dangote Freight Limited 13,758 15,381 — 230,647 k UAC Foods — 230,647 1,500 1,500 Dangote Fisheries Nigeria Limited 1,500 1,500 475,162 72 Other 475,162 72 (52,711) (52,711) Impairment allowance (52,711) (52,711)

3,541,950 3,288,629 Total 6,619,923 6,122,476 Amounts due to related parties (refer to Note 20) 404,382 403,725 a Dangote Cement Plc 575,047 501,920 — — b Dangote Industries Limited 1,454,141 2,661,108 — — c National Salt Company of Nigeria Plc 12,046 12,640 209,228 184,777 f Dangote Sugar Refinery Plc 284,978 255,353 68,061 174,339 g Dangote Nigeria Limited 68,061 174,446 1,779,602 1,779,602 h Dangote Transport Nigeria Limited 1,779,602 1,873,960 528,446 557,221 i Greenview Development Nigeria Limited 528,446 557,221 — 13,907 l Deli Foods Limited — 13,907 213,785 — m Dancom Technologies Limited 284,577 93,679 107,802 — n Dangote Agrosacks Limited 107,802 — 42,931 42,931 Bluestar Shipping Company 42,931 42,931 17,520 17,645 Dangote Port Operations 17,520 17,645 7,500,165 202,985 Tiger Brands Limited 7,500,165 202,985 — — Bulk Pack Nigeria Limited — 802 — — Other 5,342 1,070

10,871,922 3,377,132 Total 12,660,658 6,409,667

(a) Dangote Pasta Limited is a related party by means of common shareholding and buys flour (raw material) from Dangote Flour Mills.

(b) Dangote Noodles Limited is a related party by means of common shareholding and buys flour (raw material) from Dangote Flour Mills.

(c) UAC Foods is a related party by means of common shareholding and buys flour (raw material) from Dangote Flour Mills PLC.

(d) Deli Foods Limited is a related party by means of common shareholding and buys flour (raw material) from Dangote Flour Mills PLC.



22. Financial instruments

The main risks arising from the Group’s financial instruments are, in order of priority: procurement risk, liquidity risk, credit risk, interest rate risk and foreign currency risk, as detailed below.

The Group’s objective in using financial instruments is to reduce the uncertainty over future cash flows arising principally as a result of commodity price, currency and interest rate fluctuations. The use of derivatives for the hedging of firm commitments against commodity price, foreign currency and interest rate exposures must be approved by the Board of Directors. Significant finance obtained is approved by the Board of Directors. The Group finances its operations through a combination of retained surpluses, bank borrowings and long-term loans.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s trade receivables (customers) and investment securities.

The potential concentration of credit risk consists mainly of other receivables and cash and cash equivalents. The Group limits its counterparty exposures from its cash and cash equivalents by dealing only with well established financial institutions of a high quality credit standing. The maximum exposure to credit risk is represented by the carrying amount of each financial asset in the statement of financial position.

Credit risk in respect of the Group’s customer base is controlled by the application of credit limits and credit monitoring procedures. Certain significant receivables are monitored on a daily basis. Where appropriate, credit guarantee insurance is obtained. The Group’s credit exposure in respect of its customer base is represented by the net aggregate balance of amounts receivable. Concentrations of credit risk (ageing analysis of trade receivables) are disclosed in Note 14.

Procurement risk (commodity price risk) Commodity price risk arises from the Group being subject to raw material price fluctuations caused by supply

conditions, weather, economic conditions and other factors. The strategic raw materials acquired by the Group include wheat and polypropylene.

The Group uses derivative instruments to reduce the volatility of commodity input prices of strategic raw materials. Derivative contracts are taken out in order only to match an underlying physical requirement for the raw material. The Group does not enter into ‘naked’ derivative contracts.

Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s approach to managing liquidity risk is to ensure, as far as possible, that it will always have sufficient cash on demand to meet its liabilities when they fall due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group manages its liquidity risk by monitoring weekly cash flows and ensuring that adequate cash is available or borrowing facilities with shareholders and holding company structures are accessible and maintained.

The following tables detail the Group’s and Company’s remaining contractual maturity for non-derivative financial liabilities. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and Company will be required to pay. The table includes both interest and principal cash flows.


Financial instruments (continued)

0 – 6 7 – 12 1 – 5 > 5 GROUP months months years years

At 30 September 2014:

Trade and other payables (Note 19) 9,841,355 — — — Borrowings (long- and short-term) (Note 18 & 20) 16,242,264 7,192,957 8,558,618 333,332 At 30 September 2013:

Trade and other payables (Note 19) 11,992,772 — — — Borrowings (long- and short-term) (Note 18 & 20) 11,689,139 9,351,312 9,646,302 — COMPANY


Trade and other payables 6,198,025 — — — Borrowings (long- and short-term) 20,490,092 4,588,551 5,209,794 —


Trade and other payables 7,677,861 — — — Borrowings (long- and short-term) 9,865,509 7,892,407 9,646,301 —

Interest rate risk management

Interest rate risk results from the cash flow and financial performance uncertainty arising from interest rate fluctuations. Financial assets and liabilities affected by interest rate fluctuations include bank and cash deposits as well as bank borrowings. The Group manages interest rate risk by ensuring that loans and overdrafts are on fixed rates and balances from subsidiary and other related companies are interest free.

Foreign currency risk

The Group has currency exposure arising from purchases of raw materials (wheat) and goods and services in currencies other than the reporting currency. The Group is exposed to the extent of exchange rate fluctuation on its outstanding liabilities under letters of credit. As at 30 September, 2014 the Company had short-term financial liabilities held in US Dollar of N=9,881,611,000 (2013: N=9,465,058,000). The effect of a 5% fluctuation in the exchange rate would result in a corresponding movement in the Naira value of financial liabilities held in US Dollars of N=494,080,500 (2013: N=500,000,000). The level of foreign currency risk is monitored regularly by the Company’s management.

Capital management

The Group’s policy is to maintain a strong capital base and healthy capital ratios so as to maintain investor, creditor and market confidence and to sustain future development of the business. The Company and Group manages its capital structure, calculated as equity plus net debt and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Company and Group may adjust the dividend payment to shareholders, return capital to shareholders, issue new shares or increase or decrease levels of debt.

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 frequent basis. As part of this review, the committee considers the cost of capital and the risks associated with each class of capital. The Group has put in place measures to improve on current gearing ratios.


Financial instruments (continued) Fair value of financial instruments

Financial instruments are normally held by the Group until they close out in the normal course of business. There are no significant differences between carrying values and fair values of financial assets and liabilities. Trade and other receivables, investments and loans and trade and other payables carried on the statement of financial position approximate the fair values thereof. Long-term and short-term borrowings are measured at amortised cost using the effective interest method and the carrying amounts approximate their fair value.

The Group used techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data for determining and disclosing the fair value of financial instruments.

23. Contingent liabilities and commitments

Contingent liability

As at 30 September 2014, the contingent liabilities in respect of legal litigation against the Group were N=32 million (2013: N=209 million). According to the Directors and Solicitors acting on behalf of the Group, the expected final liabilities, if any, are not likely to be significant and no provision has been made in these financial statements.

The contingent liability relates to claims made for demurrage costs, loss of income and damages from alleged negligence.

Commitments

Lease commitments under operating leases:

COMPANY GROUP

12 months 9 months 12 months 9 months ended ended ended ended 30-Sept 30-Sept 30-Sept 30-Sept 2014 2013 (N=‘000) 2014 2013

Lease as lessee Non-cancellable operating lease rentals are payable as follows: 323,485 189,934 — Less than one year 374,347 189,934 324,270 212,674 — One to five years 527,718 212,674

Capital commitments — — Authorised and committed — — 647,755 402,608 Total commitments 902,065 402,608

Some leases require restoration of the facilities at the Group’s expense upon termination of the agreements. Management is confident all lease agreements will be renewed under largely the same terms and has not provided for demolition costs.


24. Discontinued operation On 19 August 2013, the Group, at the annual general meeting, announced the decision of its board to dispose of

Dangote Agrosacks. The disposal has been effected on 30 November 2013 for N=7.55bn and the profit has been accounted for in these

financial statements.

The results for the period are presented below:

12 months 9 months ended ended 30-Sept 30-Sept (N=’000) 2014 2013 Results for the period ended September

Revenue 2,966,625 13,621,327 Cost of sales (2,366,040) (10,351,855) Gross profit 600,585 3,269,472 Distribution and administrative expenses (111,566) (985,452)

Operating profit 489,019 2,284,020 Net finance costs (80,295) (506,937)

Profit before taxation 408,724 1,777,083 Taxation (52,573) 398,093

Profit for the period 356,151 2,175,176 Attributable to: Owners of the parent 182,133 1,416,793 Non-controlling interests 174,018 758,383 Fair value re-measurement on assets held for sale (187,354) (2,627,873) Profit/ (loss) after tax on discontinued operation 168,797 (452,697)

Major classes of assets and liabilities of Dangote Agrosacks Limited classified as held for sale Assets

Property, plant and equipment 10,665,156 Deferred taxation asset 589,721 Amounts due from related parties 1,557,881 Inventories 3,914,560 Trade and other receivables 4,943,008 Cash and bank balances 329,089

Assets classified as held for sale 21,999,415

Fair value re-measurement on assets held for sale 2,627,873 Elimination of intercompany balances 1,557,881 Net assets classified as held for sale 17,813,661


Discontinued operation (continued) 9 months ended 30-Sept 2013 Liabilities

Deferred taxation liability (133,065) Taxation (159,296) Trade and other payables (6,113,574) Bank overdrafts (2,525,944) Short-term borrowings (671,999)

Liabilities classified as held for sale (9,603,878)

Net Assets 12,395,537

Minorities: Obajana Agrosacks Limited (2,085,671) Dangote Agrosacks Limited (128,243) Net assets attributable to the Company 10,181,623 Sales proceeds (7,553,750)

Fair value re-measurement on assets held for sale 2,627,873

Net cash flows for the period ended September 2013

Operating 4,288,291 Investing (390,562) Financing (3,624,337)

Net cash inflow 273,392

25. Remuneration of directors

Remuneration of Directors and key management personnel for the year ended 30 September 2014 was N=277 million (2013: N=192 million).

For year ended For the nine months 30 September 2014 ended 30 September 2013

Board Other Board Other (N=’000) meetings fees Total meetings fees Total

Non-executive Directors:

Alh. Aliko Dangote 750 400 1,150 1,250 6,274 7,524 Mr. Olakunle Alake 800 1,500 2,300 2,000 5,649 7,649 Mr. Arnold Ekpe 600 300 900 — — — Mr. Asue Ighodalo 400 900 1,300 1,600 5,650 7,250 2,550 3,100 5,650 4,850 17,573 22,423

Remuneration of directors (continued)

For year ended For the nine months 30 September 2014 ended 30 September 2013

Number of Number of ordinary Percentage ordinary Percentage Nature of shares of issued shares of issued interest (N=’000) share capital (N=’000) share capital

Directors’ interest in share capital Alhaji Aliko Dangote shareholding 38,729 0.77% 38,729 0.77% Olakunle Alake shareholding 2,378 0.05% 2,378 0.05%

26. 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 delivered. The Group’s reportable segments under IFRS 8, operating segments are as follows:

Flour: milling and sale of bread and confectionery flour Pasta: manufactures and sells spaghetti and macaroni Noodles: manufactures and sells noodles

All segments operate in the same geographical area and on an arm’s length basis in relation to inter-segment pricing.

The factors used to identify the Group’s reportable segments include the basis of organisation and the format of regular reporting to management as a basis for decision making. Management has chosen to organise the Group around differences in products and separate entities within the Group. None of the segments have been aggregated.


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) —

3,

557

(19,

791)

—

(2

,852

,790

)

Lo

ss b

efor

e ta

xati

on f

rom

con

tinu

ing

oper

atio

ns

(6

,055

,112

) —

(3

,346

,319

) (6

24,8

70)

741,

288

(9,2

85,0

13)

Ta

xatio

n

1,89

5,81

0 —

89

5,36

0 21

5,53

8 —

3,

006,

708

Lo

ss a

fter

tax

atio

n fr

om c

onti

nuin

g op

erat

ions

(4,1

59,3

02)

—

(2

,450

,959

) (4

09,3

32)

741,

288

(6,2

78,3

05)

Pr

ofit f

rom

dis

cont

inue

d op

erat

ion

— S

acks

—

168,

797

—

—

—

16

8,79

7

(L

oss)

/pro

fit

for

the

peri

od

(4

,159

,302

) 16

8,79

7 (2

,450

,959

) (4

09,3

32)

741,

288

(6,1

09,5

08)

N

ine

mon

ths

ende

d 30

Sep

tem

ber

2013

R

even

ue

23

,079

,590

—

4

,674

,880

4,

073,

866

(1,8

67,9

17)

29,9

60,4

19

Cos

t of s

ales

(2

2,72

8,98

7)

—

(5,0

22,8

03)

(3,8

71,3

39)

2,30

5,33

8 (2

9,31

7,79

1)

Gro

ss p

rofi

t

35

0,60

3 —

(

347,

923)

20

2,52

7 43

7,42

1 64

2,62

8

Dis

trib

utio

n an

d ad

min

istr

ativ

e ex

pens

es

(2

,738

,399

) —

(7

28,3

47)

(779

,556

) (4

37,4

21)

(4,6

83,5

53)

N

on-r

ecur

ring

item

s

(904

,174

) —

(1

,114

,365

) (4

1,09

8)

—

(

2,05

9,63

7)

O

ther

inco

me

42,7

08

—

16

7,75

7

23

,510

—

233,

975

O

pera

ting

loss

bef

ore

abno

rmal

item

s

(3,2

49,2

62)

—

(2,

022,

878)

(5

94,6

17)

—

(

5,86

6,58

7)

Ab

norm

al it

ems

(6

4,61

8)

—

(46,

156)

(1

9,90

4)

—

(130

,678

)

Ope

rati

ng lo

ss a

fter

abn

orm

al it

ems

(3

,313

,880

) —

(2,0

69,0

34)

(614

,521

) —

(5,

997,

265)

Net

fina

nce

cost

s

(2,3

33,6

10)

—

6,79

0 (1

8,20

9)

—

(2,3

45,0

29)

Lo

ss a

fter

tax

atio

n fr

om c

onti

nuin

g op

erat

ions

(5,6

47,4

90)

—

(2,0

62,2

44)

(632

,730

) —

(8,

342,

294)

Taxa

tion

1,

166,

842

—

250,

971

160,

177

—

1,57

7,99

0

Loss

aft

er t

axat

ion

from

con

tinu

ing

oper

atio

ns

(4

,480

,648

) —

(1

,811

,273

) (4

72,5

53)

—

(

6,76

4,30

4)

Lo

ss fr

om d

isco

ntin

ued

oper

atio

n —

Sac

ks

—

(4

52,6

97)

—

—

—

—

Loss

for

the

per

iod

(4

,480

,648

) (4

52,6

97)

(1,8

11,2

73)

(472

,553

) —

(6

,764

,304

)

Not

es to

the

Cons

olid

ated

and

Sep

arat

e Fi

nanc

ial S

tate

men

tsFo

r th

e ye

ar e

nded

30

Sept

embe

r, 20

14

26.

Segm

ent

info

rmat

ion

(con

tinu

ed)

Se

gmen

t as

sets

and

liab

iliti

es

Hel

d fo

r

Fl

our

sale

Pa

sta

Noo

dles

In

ter-

grou

p

(N=’0

00)

prod

ucts

sa

cks

prod

ucts

pr

oduc

ts

elim

inat

ions

To

tal

A

s at

30

Sept

embe

r 20

14

To

tal a

sset

s

53

,653

,743

—

18

,131

,597

2,

763,

195

(19,

657,

046)

54

,801

,489

To

tal l

iabi

litie

s

(39,

489,

220)

—

(1

8,88

8,02

5)

(7,1

93,9

63)

20,3

77,8

51

(45,

193,

357)

As

at 3

0 Se

ptem

ber

2013

To

tal a

sset

s

59

,800

,099

—

18

,264

,822

2,

104,

162

(4,6

87,5

43)

75,4

81,5

40

Tota

l lia

bilit

ies

(41,

566,

274)

—

(1

6,57

0,29

0)

(6,1

28,0

60)

6,88

9,60

9 (5

7,37

5,01

5)

O

ther

seg

men

t in

form

atio

n

For

the

year

end

ed 3

0 Se

ptem

ber

2014

D

epre

ciat

ion

1,90

0,87

8 —

1,

119,

290

136,

477

—

3,15

6,64

4

Add

itio

ns t

o no

n-cu

rren

t as

sets

631,

823

—

302,

324

178,

968

—

1,11

3,11

5

Impa

irm

ent

(728

,191

) —

(7

45,3

32)

(118

,849

) —

(1

,592

,372

)

N

ine

mon

ths

ende

d 30

Sep

tem

ber

2013

D

epre

ciat

ion

1,60

3,08

2 70

4,18

3 1,

124,

865

116,

321

—

3,54

8,45

1

Addi

tions

to

non-

curr

ent a

sset

s

332,

096

153,

419

299,

785

65,7

23

—

851,

023

Rev

enue

fro

m m

ajor

pro

duct

s an

d se

rvic

es

Th

e fo

llow

ing

is th

e an

alys

is o

f Gro

up’s

rev

enue

from

con

tinui

ng o

pera

tions

from

its

maj

or p

rodu

cts

and

serv

ices

:

H

eld

for

Flou

r sa

le

Past

a N

oodl

es

Inte

r-gr

oup

(N=

’000

) pr

oduc

ts

sack

s pr

oduc

ts

prod

ucts

el

imin

atio

ns

Tota

l

Fo

r th

e ye

ar e

nded

30

Sept

embe

r 20

14

31

,704

,340

—

5,

820,

370

5,63

9,38

9 (1

,895

,328

) 41

,268

,771

N

ine

mon

ths

ende

d 30

Sep

tem

ber

2013

23,0

79,5

90

—

4,67

4,88

0 4,

073,

866

(1,8

67,9

17)

29,9

60,4

19

27.

Even

ts a

fter

the

rep

orti

ng p

erio

d

Th

ere

are

no s

igni

fican

t eve

nts

afte

r th

e re

port

ing

perio

d.

Con

solid

ated

Sta

tem

ent o

f Val

ue A

dded

Fo

r th

e ye

ar e

nded

30

Sept

embe

r, 20

14

CO

mPA

Ny

GR

Ou

P

12

mon

ths

9

mon

ths

12

mon

ths

9

mon

ths

en

ded

en

ded

en

ded

en

ded

30

-Sep

t

30-S

ept

30

-Sep

t

30-S

ept

20

14

20

13

20

14

20

13

N=’0

00

%

N=’0

00

%

N=’0

00

%

N=’0

00

%

Reve

nue

31

,704

,340

23,0

79,5

90

41

,268

,771

29,9

60,4

19

Oth

er in

com

e

(2

,473

,542

)

42,7

08

30

2,99

7

233,

975

Inte

rest

inco

me

6,

841

12

,665

10,3

98

19

,927

29,2

37,6

39

23

,134

,963

41,5

82,1

66

30

,214

,321

Le

ss:

Mat

eria

ls a

nd s

ervi

ces:

—

Im

port

ed

(22,

691,

131)

(15,

599,

144)

(27,

545,

868)

(18,

934,

434)

—

Loca

l

(11,

692,

990)

(7,6

37,8

26)

(1

4,77

8,64

9)

(1

1,74

4,81

3)

Valu

e ad

ded

(5,1

46,4

82)

100

(102

,007

) 10

0 (7

42,3

51)

100

(464

,926

) 10

0

A

pplie

d as

fol

low

s

To p

ay e

mpl

oyee

s

Sala

ries,

wag

es a

nd o

ther

ben

efits

1,

359,

855

(26)

1,

596,

126

(1,5

65)

(2,3

54,0

33)

(317

) 2,

416,

658

(520

)

To p

ay p

rovi

ders

of

capi

tal

Inte

rest

pay

able

and

sim

ilar

char

ges

2,

843,

397

(55)

2,

346,

275

(2,3

00)

2,86

3,18

8 (3

86)

2,36

4,95

6 (5

09)

To p

ay g

over

nmen

t

Cur

rent

Tax

atio

n

—

—

93,2

47

(91)

7,

400

(1)

123,

911

(27)

To e

nhan

ce a

sset

s an

d pa

yabl

e fo

r gr

owth

Def

erre

d ta

xatio

n

(1

,895

,810

) 37

(1

,260

,089

) 1,

235

(3,0

14,1

08)

406

(1,7

01,9

01)

366

Dep

reci

atio

n

1,90

0,87

8 (3

7)

1,60

3,08

2 (1

,572

) 3,

156,

644

(425

) 3,

548,

451

(763

)N

on-c

ontr

ollin

g in

tere

st

—

—

—

—

110,

397

—

715,

995

(154

)Lo

ss s

usta

ined

(9,3

54,8

02)

181

(4,4

80,6

48)

4,39

3 (6

,219

,904

) 82

3 (7

,932

,996

) 1,7

07

Valu

e ad

ded

(5,1

46,4

82)

100

(102

,007

) 10

0 (7

42,3

51)

100

(464

,926

) 10

0

Valu

e ad

ded

repr

esen

ts th

e ad

ditio

nal w

ealth

the

Gro

up h

as b

een

able

to c

reat

e by

its

own

and

its e

mpl

oyee

s’ e

ffort

s.

The

repo

rt s

how

s th

e al

loca

tion

of th

is w

ealth

am

ong

empl

oyee

s, c

apita

l pro

vide

rs, g

over

nmen

t and

that

ret

aine

d fo

r fu

ture

wea

lth c

reat

ion.

This

rep

ort i

s no

t pr

epar

ed u

nder

IFR

S. In

stea

d, it

has

bee

n pr

epar

ed in

com

plia

nce

with

the

Nig

eria

n C

ompa

nies

and

Alli

ed M

atte

rs A

ct (

CAM

A) 2

004.

Five Years Financial SummaryFor the year ended 30 September, 2014

GROuP IFRS IFRS IFRS restated IFRS NGAAP 12 months 9 months 12 months 12 months 12 months ended ended ended ended ended 30-Sept 30-Sept 31-Dec 31-Dec 31-Dec 2014 2013 2012 2011 2010 N=’000 N=’000 N=’000 N=’000 N=’000

NET ASSETSProperty, plant and equipment 26,342,645 30,002,456 44,048,647 46,754,990 41,229,708Deferred taxation asset 4,928,320 2,896,528 1,621,122 939,531 —Other long-term assets — — 3,894 90,836 —Assets classified as held for sale — 17,813,661 — — — Net current liabilities (15,147,449) (10,902,689) (5,548,354) (11,740,900) (9,845,390) 16,123,516 39,809,956 40,125,309 36,044,457 31,384,318

Deferred taxation liabilities (1,470,936) (2,453,251) (2,855,079) (4,114,138) (3,409,430)Gratuity provision — — (1,254,329) (1,730,447) (828,013)Liabilities classified as held for sale — (9,603,878) — — —Long-term loan (5,044,448) (9,646,302) (10,692,375) (2,184,000) — 9,608,132 18,106,525 25,323,526 28,015,872 27,146,875

CAPITAL AND RESERVES

Share capital 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000Share premium 18,116,249 18,116,249 18,116,249 18,116,249 18,116,249Retained earnings (10,524,972) (4,305,067) 3,627,929 6,897,652 6,327,597Non-controlling interest (483,145) 1,795,343 1,079,348 501,971 203,029

9,608,132 18,106,525 25,323,526 28,015,872 27,146,875

REVENuE AND PROFITRevenue 41,268,771 29,960,419 41,472,599 66,281,326 67,600,954

(Loss)/profit before taxation (9,285,013) (8,342,294) (5,602,972) 758,742 4,911,885Other comprehensive income items — — 70,990 276,870 —Taxation 3,006,708 1,577,990 1,258,659 (109,668) (2,189,310)Profit/(loss) after tax for the period from discontinued operation 168,797 (452,697) 2,080,977 — — Non-controlling interest (110,397) (715,995) (577,377) (302,322) 39,567

(Loss)/profit transferred to revenue reserve (6,219,904) (7,932,996) (2,769,723) 623,622 2,762,142

Per share data (kobo per share)Loss per share (124) (159) (55) 12 55Net assets per share 192 362 506 560 543

Note:

1. Earnings per share are based on (loss)/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.

This report is not prepared under IFRS. Instead, it has been prepared in compliance with the Companies and and Allied Matters Act (CAMA) requirement.

Five Years Financial SummaryFor the year ended 30 September, 2014

COmPANy IFRS IFRS IFRS restated IFRS NGAAP 12 months 9 months 12 months 12 months 12 months ended ended ended ended ended 30-Sept 30-Sept 31-Dec 31-Dec 31-Dec 2014 2013 2012 2011 2010 N=’000 N=’000 N=’000 N=’000 N=’000

NET ASSETS

Property, plant and equipment 15,353,413 17,351,051 18,747,467 20,633,574 19,880,243Investments 2,597,637 2,597,637 7,553,637 7,553,637 7,553,637Deferred taxation asset 2,802,518 1,829,016 1,001,483 455,913 —Other long-term assets — — — 83,502 —Assets classified as held for sale — 4,956,000 — — —Net current liabilities (163,661) 3,539,667 9,613,645 2,472,543 2,829,608

20,589,907 30,273,371 36,916,232 31,199,169 30,263,488

Deferred taxation liabilities (1,470,936) (2,393,244) (2,825,800) (3,569,341) (3,136,273)Gratuity provision — — (851,584) (1,277,236) (638,061)Long-term loan (5,044,448) (9,646,302) (10,524,375) — —

14,074,523 18,233,825 22,714,473 26,352,592 26,489,154

CAPITAL AND RESERVES

Share capital 2,500,000 2,500,000 2,500,000 2,500,000 2,500,000Share premium 18,116,249 18,116,249 18,116,249 18,116,249 18,116,249Retained earnings (6,541,726) (2,382,424) 2,098,224 5,736,343 5,872,905

14,074,523 18,233,825 22,714,473 26,352,592 26,489,154

REVENuE AND PROFIT

Revenue 31,704,340 23,079,590 29,859,976 38,679,844 42,695,383

(Loss)/profit before taxation (6,055,112) (5,647,490) (4,264,583) 1,373,230 5,481,077Other comprehensive income items — — — 130,231 —Taxation 1,895,810 1,166,842 1,126,464 (583,078) (1,727,829)

(Loss)/profit transferred to revenue reserve (4,159,302) (4,480,648) (3,138,119) 920,383 3,753,248

Per share data (kobo per share)Loss per share (83) (90) (63) 18 75Net assets per share 281 365 454 527 530

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.

This report is not prepared under IFRS. Instead, it has been prepared in compliance with the Nigerian Companies and and Allied Matters Act (CAMA) 2004.

Share Capital History/Data on Unclaimed Dividends

Dangote Flour Mills Plc was quoted on the Nigerian Stock Exchange on 4th February, 2008.

The share capital history of the Company is as indicated below:

Date Authorised Share Capital Issued and Fully Paid Consideration

Value Shares Value Shares

04/02/2008 3,000,000,000 6,000,000,000 2,500,000,000 5,000,000,000 Cash

SHARE CAPITAL HISTORy

uNCLAImED DIVIDEND HISTORy PAymENT NO. NO. OF SHAREHOLDERS NET AmOuNT N=

1 206,443 87,803,680.68

2 247,601 162,218,048.49

3 224,817 257,883,073.65

4 270,426 116,522,896.86

5 233,434 48,452,716.17

TOTAL 672,880,415.85

AUTHORISED SIGNATURE & STAMPOF BANKERS

AUTHORISED SIGNATURE & STAMPOF BANKERS

Proxy FormFLOUR

Dangote Flour Mills PlcRC 501757

DANGOTE FlOuR mills PlC9Th ANNuAl GENERAl mEETiNG Will hOlD ON FRiDAy, 31sT

DAy OF July, 2015 AT TRANsCORP mETROPOliTAN hOTEls, 10 muRTAlA mOhAmmED hiGhWAy, CAlAbAR,

CROss RivER sTATE AT 11.00 A.m.

i/We* .......................................................................................................................

of ...............................................................................................................................

hereby appoint .....................................................................................................

...................................................................................................................................

of ...............................................................................................................................or failing him, the Chairman of the meeting, as my/our proxy to act and vote for me/us and on my/our behalf at the Ninth Annual General meeting of the Company to be held at 11.00 a.m. on Friday, 31st July, 2015.

Dated this ................ day of .......................................... 2015.

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 them will suffice, but the names of all joint holders should be shown.

Admission CardDANGOTE FlOuR mills PlC

PlEAsE ADmiT ThE shAREhOlDER ON This FORm OR his/hER APPOiNTED PROxy TO ThE9Th ANNuAl GENERAl mEETiNG WhiCh Will hOlD ON FRiDAy, 31sT DAy OF July, 2015

AT TRANsCORP mETROPOliTAN hOTEls, 10 muRTAlA mOhAmmED hiGhWAy, CAlAbAR, CROss RivER sTATE AT 11.00 A.m.

Name of shareholder* ......................................................................................................................................................................................................................

iF yOu ARE uNAblE TO ATTEND ThE mEETiNG

A member (shareholder) who is unable to attend 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.

No. of Shares held Signature of person attending

IMPOrTANTPlease insert your name in blOCk CAPiTAls on both proxy and admission card where marked*.

AISHA LADI ISA (MrS)Company Secretary/Legal Adviser


rESOLuTIONS FOr AgAINST

1. To receive the Audited Financial statements of the Company for the year ended 30 september, 2014 together with the reports of the Directors and Audit Committee thereon;

2. To elect and approve the appointment of the following Directors: (i) mr. Thabo mabe Executive Director (ii) mr. sudarshan kasturi Executive Director

To re-elect the following Directors: (i) mr. Asue ighodalo (ii) mr. Olakunle Alake

3. To re-appoint the Auditors;

4. To authorise the Directors to fix the remuneration of the Auditors;

5. To appoint members of the Audit Committee.

SPECIAL BuSINESS6. To consider and if thought fit, to pass the following as

special Resolutions:

(i) “That in accordance with section 31(3) of the Companies and Allied matters Act CAP 20, laws of the Federation of Nigeria 2004, the name of the Company, Dangote Flour mills Plc be, and is hereby changed to TIgEr BrANDED CONSuMEr gOODS PLC.”

(ii) “That Clause 1 of the memorandum of Association of the Company be and is hereby substituted by the new clause: ‘The name of the Company is TIgEr BrANDED CONSuMEr gOODS PLC’. ” and

(iii) “That the memorandum and Articles of Association of the Company be and are hereby amended accordingly”.

Please indicate with an “x” in the appropriate space how you wish your votes to be cast on resolutions set out above. unless otherwise instructed, the proxy will vote or abstain from voting at his/her own discretion.

Before posting the above form, please sign/tear off this part and retain it for admission to the meeting.✂

The registrars EDC Registrars ltd. 154, ikorodu Road, Onipanu, shomolu, lagos.

dangote flour mill annual report 2014

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