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DANGOTE FLOUR MILLS PLC Financial statements - 31 March 2015

DANGOTE FLOUR MILLS PLC

UNAUDITED CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS

for six months ended 31 March 2015


CONTENTS

page

Corporate Information 3

Statement of managements responsibility 4

Consolidated and separate statement of profit or loss and other comprehensive income 5 - 6

Consolidated and separate statement of financial position 7

Consolidated and separate statement of changes in equity 8

Consolidated and separate statement of cash flows 9

Notes to the consolidated and separate statement of cash flows 10

Notes to the consolidated and separate financial statements 11 - 45

Consolidated and separate statement of value added 46

Five year review summary (Group) 47

Five year review summary (Company) 48


CORPORATE INFORMATION

LEGAL FORM

Dangote Flour Mills Plc was incorporated in Nigeria on 1 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

Apapa Wharf, Lagos.

TRANSFER OFFICE

EDC Registrars Limited

154, Ikorodu Road, Onipanu,

Shomolu, Lagos.

COMPANY SECRETARY

AISHA LADI ISA (Mrs)

AUDITORS

Akintola Williams Deloitte (Chartered Accountants)

235, Ikorodu Road, Illupeju, Lagos.

BANKERS

Zenith Bank Plc Diamond Bank Plc

Mainstreet Bank Ltd 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. Thabo Mabe Alh. Aliko Dangote (GCON)

Mr. Sudarshan Kasturi Mr. Peter Matlare

Mr. Olakunle Alake

Mr. Asue Ighodalo

Mrs. Olufunke Ighodaro

Mr. Ian Isdale

Mr. Arnold Ekpe

Mr. Noel Doyle

3


Group Chief Executive Officer Group Chief Finance Officer

FRC/2013/IODN/00000001741 FRC/2013/IODN/00000001750

Mr. Thabo Mabe Mr. Sudarshan Kasturi

The financial statements of the Group for the period ended 31 March 2015, were approved by management on

29th April 2015

Signed on behalf of management of the Group

- Preventing and detecting fraud and other irregularities by implementing a sound system of internal controls.

STATEMENT OF MANAGEMENT'S RESPONSIBILITIES FOR THE PREPARATION AND APPROVAL OF THE

CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED 31 MARCH 2015

Management of Dangote Flour Mills Plc are responsible for the preparation of the consolidated interim financial

statements that present fairly the financial position of the Group as at 31 March 2015, and the results of its

operations, cash flows and changes in equity for the period then ended, in compliance with International

Financial Reporting Standards ("IFRS").

In preparing the financial statements, management are responsible for:

- Properly selecting and applying accounting policies;

- Presenting information, including accounting policies, in a manner that provides relevant, reliable, comparable

and understandable information;

- Providing additional disclosures when compliance with the specific requirements in 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

4


CONSOLIDATED AND SEPARATE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEfor six months ended 31 March 2015

Period Period Year Period Period YearMar 2015 Mar 2014 Sept 2014 (N '000) Notes Mar 2015 Mar 2014 Sept 2014

17,225,408 14,485,979 31,704,340 Revenue 4 21,971,387 18,583,698 41,268,771

(15,588,658) (14,017,918) (29,321,039) Cost of sales (19,577,701) (17,828,851) (38,872,328)

1,636,750 468,061 2,383,301 Gross profit 2,393,686 754,847 2,396,443

(2,272,928) (1,730,341) (4,256,586) Distribution and administrative expenses (4,142,591) (3,326,329) (7,539,291)

12,775 32,026 124,208 Other income 5 25,311 38,760 302,997

(623,403) (1,230,254) (1,749,077) Operating loss from continuing operations before abnormal items (1,723,595) (2,532,722) (4,839,851)

(3,523,121) - - Currency devaluation (3,523,121) - -

- 2,597,750 (1,469,479)

Impairment of plant and equipment & investment, profit on sale of

subsidiary and other non recurring items 6 - (777,000) (1,592,372)

(4,146,524) 1,367,496 (3,218,556) Operating (loss)/ profit after abnormal items 5 (5,246,716) (3,309,722) (6,432,223)

(1,790,512) (1,425,004) (2,843,397) Finance costs 7 (1,802,539) (1,441,056) (2,863,188)

3,132 8,392 6,841 Interest received 7 3,948 8,392 10,398

(5,933,904) (49,116) (6,055,112) Loss before taxation from continuing operations (7,045,307) (4,742,386) (9,285,013)

74,766 (99,163) 1,895,810 Taxation 8 264,160 434,205 3,006,708

(5,859,138) (148,279) (4,159,302) Loss after taxation from continuing operations (6,781,147) (4,308,181) (6,278,305)

Discontinued operation

Profit after tax for the period from discontinued operation 24 - 168,781 168,797

(5,859,138) (148,279) (4,159,302) Loss for the period (6,781,147) (4,139,400) (6,109,508)

Attributable to:

(5,859,138) (148,279) (4,159,302) Owners of the parent (6,755,276) (4,269,004) (6,219,905)

(5,859,138) (148,279) (4,159,302) Continuing operations (6,755,276) (4,261,946) (6,212,863)

Discontinued operation - (7,058) (7,042)

Non-controlling interests (25,871) 129,604 110,397

Continuing operations (25,871) (46,235) (65,442)

Discontinued operation - 175,839 175,839

(5,859,138) (148,279) (4,159,302) (6,781,147) (4,139,400) (6,109,508)

(117.18) (2.97) (83.19) Basic and diluted loss per share (kobo per share) 9 (135.11) (85.38) (124.40)

(117.18) (2.97) (83.19) Continuing operations (135.11) (85.24) (124.26)

- - - Discontinued operation - (0.14) (0.14)

COMPANY GROUP

5


CONSOLIDATED AND SEPARATE STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

GROUP


(5,859,138) (148,279) (4,159,302) Loss for the period (6,781,147) (4,139,400) (6,109,508)

- - - Other comprehensive income: - - -

(5,859,138) (148,279) (4,159,302) Total comprehensive loss for the period (6,781,147) (4,139,400) (6,109,508)

Attributable to:

(5,859,138) (148,279) (4,159,302) Owners of the parent (6,755,276) (4,269,004) (6,219,905)

- - - Non-controlling interests (25,871) 129,604 110,397

(5,859,138) (148,279) (4,159,302) (6,781,147) (4,139,400) (6,109,508)

for six months ended 31 March 2015

COMPANY

6


CONSOLIDATED AND SEPARATE STATEMENT OF FINANCIAL POSITIONat 31 March 2015

Mar 2015 Mar 2014 Sept 2014 (N '000) Notes Mar 2015 Mar 2014 Sept 2014

Assets

20,235,154 20,802,325 20,753,568 Non-current assets 30,715,494 31,956,944 31,270,965

14,824,842 16,642,518 15,353,413 Property, plant and equipment 10 25,574,756 28,785,365 26,342,645

2,597,637 2,597,637 2,597,637 Investment in subsidiary companies 11

2,812,675 1,562,170 2,802,518 Deferred taxation asset 12 5,140,739 3,171,579 4,928,320

34,055,823 32,415,787 32,810,175 Current assets 25,117,313 20,923,122 23,530,523

5,826,491 4,202,860 4,052,548 Inventories 13 7,501,275 5,843,573 5,429,059

5,671,807 5,977,882 5,267,827 Trade and other receivables 14 7,994,029 7,482,752 6,933,989

16,911,060 18,027,196 15,829,139 Amounts owed by subsidiaries 11

3,635,323 3,049,483 3,541,950 Short-term loans receivable 15 6,768,444 5,886,952 6,619,923

2,011,142 1,158,366 4,118,711 Cash and bank balances 16 2,853,565 1,709,845 4,547,552

54,290,977 53,218,112 53,563,743 Total assets 55,832,807 52,880,066 54,801,489

Equity and liabilities

8,215,385 18,085,546 14,074,523 Issued capital and reserves 3,336,001 12,042,178 10,091,277

2,500,000 2,500,000 2,500,000 Ordinary share capital 17 2,500,000 2,500,000 2,500,000

18,116,249 18,116,249 18,116,249 Share premium 17 18,116,249 18,116,249 18,116,249

(12,400,864) (2,530,703) (6,541,726) Accumulated losses (17,280,248) (8,574,071) (10,524,972)

Non-controlling interests (509,016) (463,938) (483,145)

8,215,385 18,085,546 14,074,523 Total equity 2,826,985 11,578,240 9,608,132

4,355,542 9,214,045 6,515,384 Non-current liabilities 4,355,542 9,274,052 6,515,384

1,342,372 2,111,685 1,470,936 Deferred taxation liability 12 1,342,372 2,171,692 1,470,936

3,013,169 7,102,360 5,044,448 Long-term borrowings 18 3,013,169 7,102,360 5,044,448 - - - -

41,720,050 25,918,521 32,973,836 Current liabilities 48,650,279 32,027,774 38,677,973

6,590,074 6,792,590 6,198,025 Trade and other payables 19 11,433,606 10,608,222 9,841,355

205,047 263,081 149,204 Taxation 8.4 238,703 356,877 171,276

33,218,560 16,566,908 25,243,989 Short-term borrowings 20 35,271,601 18,766,732 27,282,725

1,706,369 2,295,943 1,382,618 Bank overdrafts 16 1,706,369 2,295,943 1,382,617

54,290,977 53,218,112 53,563,743 Total equity and liabilities 55,832,807 52,880,066 54,801,489

The consolidated and separate financial statements with accompanying notes on pages 5 to 48 were approved by the Board of Directors on its behalf by:

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

COMPANY GROUP

7


CONSOLIDATED AND SEPARATE STATEMENT OF CHANGES IN EQUITYfor six months ended 31 March 2015

Share Total

capital attributable Non-

and Accumulated to owners controlling Total

(N '000) premium loss of the parent interests equity

Group

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

(Loss)/ profit for the period - (4,269,004) (4,269,004) 129,604 (4,139,400) Settlement of non-controlling interest of

discontinued operations - - - (2,388,885) (2,388,885)

Balance at 31 March 2014 20,616,249 (8,574,071) 12,042,178 (463,938) 11,578,240

(Loss)/ profit for the period - (1,950,901) (1,950,901) (19,207) (1,970,108)

Settlement of non-controlling interest of discontinued operations - -

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

(Loss)/ profit for the period - (6,755,276) (6,755,276) (25,871) (6,781,147) -

Balance at 31 March 2015 20,616,249 (17,280,248) 3,336,001 (509,016) 2,826,985

Company

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

Loss for the period - (148,279) (148,279) - (148,279)

Balance at 31 March 2014 20,616,249 (2,530,703) 18,085,546 - 18,085,546

Loss for the period - (4,011,023) (4,011,023) - (4,011,023)

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

Loss for the period - (5,859,138) (5,859,138) - (5,859,138)

Balance at 31 March 2015 20,616,249 (12,400,864) 8,215,385 - 8,215,385

8


CONSOLIDATED AND SEPARATE STATEMENTS OF CASH FLOWSfor six months ended 31 March 2015

GROUP


Cash flows from operating activities

(3,303,054) (211,999) 407,155 Cash operating (loss)/ profit A (3,829,545) (397,519) (964,459)

(2,703,660) (1,533,611) (2,967,355) Working capital changes B (1,541,420) 1,975,279 (71,960)

(6,006,715) (1,745,610) (2,560,200) Cash (utilised)/ generated from operations (5,370,965) 1,577,760 (1,036,419)

3,132 8,392 6,841 Interest received 3,948 8,392 10,398

(1,790,512) (1,425,004) (2,843,397) Finance costs (1,802,539) (1,441,056) (2,863,188)

(8,112) - - Taxation paid C (9,394) (3,977) (74,572)

(7,802,206) (3,162,222) (5,396,756) Net cash (outflow)/ inflow from operating activities (7,178,951) 141,120 (3,963,781)

Cash flows from investing activities

(314,898) (291,379) (631,823) Purchase of property, plant and equipment D (538,880) (441,003) (1,113,115)

- 7,553,750 7,553,750 Proceeds on disposal of Dangote Agrosacks Limited - 7,553,750 7,553,750

- - 393 Proceeds on disposal of property, plant and equipment - 5,900 23,911

(314,898) 7,262,372 6,922,320 Net cash (outflow)/inflow from investing activities (538,880) 7,118,647 6,464,545

Cash flows from financing activities

- - 980,000 Long-term borrowings raised 18 - - 980,000

(2,288,786) (2,531,923) (6,007,124) Long-term borrowings repaid 18 (2,288,786) (2,537,933) (6,007,124)

7,974,571 (1,221,368) 7,722,089 Short term borrowings raised/ (repaid) 7,988,877 (4,331,682) 6,667,544 . . .

5,685,784 (3,753,291) 2,694,965 Net cash inflow/ (outflow) from financing activities 5,700,090 (6,869,615) 1,640,420

(2,431,321) 346,859 4,220,528 Net (decrease)/increase in cash and cash equivalents (2,017,741) 390,152 4,141,184

2,736,093 (1,484,435) (1,484,435) Cash and cash equivalents at beginning of the period 3,164,935 (976,249) (976,249)

304,773 (1,137,577) 2,736,093 Cash and cash equivalents at end of the period E 1,147,194 (586,097) 3,164,935

COMPANY

9


NOTES TO THE CONSOLIDATED AND SEPARATE STATEMENT OF CASH FLOWSfor six months ended 31 March 2015

GROUP


A Cash operating (loss)/profit

(4,146,524) 1,367,496 (3,218,556) Operating loss from continuing operations (5,246,716) (3,309,722) (6,432,223)

- - - Operating profit from discontinued operation - 301,648 168,797

Add back:

- - 728,191 Impairment of assets not in use - - 1,592,372

- 18,343 - Gratuity: Provision for the period - 18,343 -

Gratuity: Payment during the period - (24,352) -

- (2,597,750) (2,597,750) Profit on disposal of business - Dangote Agrosacks Limited - - -

- - - Fair value re-measurement on assets held for sale 24 - - 187,354

- - - Currency devaluation - foreign loans and LCs - - -

22,950 - - Loss on disposal of fixed assets 22,950 - -

- - 255,354 Loss on obsolete assets written off 29,843 - 362,597

- - Provision on statutory liabilities - 777,000 -

- - Fair value re-measurement on net assets held for sale - DAS - 187,371 -

820,520 999,912 1,900,878 Depreciation 1,364,378 1,652,193 3,156,644

- - 3,339,038 Impairment of amounts due by subsidiary - - -

(3,303,054) (211,999) 407,155 Cash operating (loss)/profit (3,829,545) (397,519) (964,459)

B Working capital changes

(1,773,943) 3,483,531 3,378,489 (Increase)/Decrease in inventories (2,102,059) 3,528,883 3,580,802

(1,579,274) (2,584,581) (3,456,632) (Increase)/Decrease in trade and other receivables (1,208,561) 607,946 (1,232,486)

649,557 (2,432,561) (2,889,212) Increase/(Decrease) in trade and other payables 1,769,200 (2,161,550) (2,420,276)

(2,703,660) (1,533,611) (2,967,355) Working capital changes (1,541,420) 1,975,279 (71,960)

C Taxation paid

(149,204) (149,204) (149,204) Amounts payable at beginning of year (171,276) (238,448) (238,448)

(63,954) (113,877) - Income statement charge - continuing operations (76,822) (122,406) (7,400)

205,047 263,081 149,204 Amounts payable at the end of year 238,703 356,877 171,276

(8,112) - - Total taxation paid (9,394) (3,977) (74,572)

D Purchase of property, plant and equipment

- (291,379) - Expansion - (291,378) -

(314,898) - (631,823) Replacement (538,880) (149,625) (1,113,115)

(314,898) (291,379) (631,823) (538,880) (441,003) (1,113,115)

E Cash and cash equivalents at end of the year

2,011,142 1,158,366 4,118,711 Cash and bank balances 2,853,565 1,709,845 4,547,552

(1,706,369) (2,295,943) (1,382,618) Bank overdrafts (1,706,369) (2,295,943) (1,382,617)

304,773 (1,137,577) 2,736,093 1,147,195 (586,098) 3,164,935

COMPANY

10


NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTSfor six months ended 31 March 2015

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 financial 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 subsidiaries of the Dangote Flour Group. Dangote Flour

produces bread flour, confectionery flour and pasta semolina.

1.3 Accounting period

The reporting period covered by the financial statements is 01 October 2014 to 31 March 2015.

1.4 Performance

The business continues to record healthy volume growths quarter on quarter. Underlying margins have significantly improved,

aided by better operational efficiencies, cost control and efficient procurement. The business environment remains volatile. The

devaluation of the Naira and the scarcity of foreign exchange pose significant challenges. Other than the one-off impact of

currency devaluation, the company’s results reflect a continuously improving performance in line with the turnaround plan.

1.5 Going concern

Total group assets exceeded total group liabilities as at 31 March 2015 by N2.827 bn (2014: N11.578 bn). However, group

current liabilities exceeded current assets as at 31 March 2015 by N11.146 bn (2014: N11.002 bn), not including a loan of N12.387

bn (2014: N353 m) advanced by the parent company.The group recognised a loss for 6 months ended March 2015 of N6.755 bn

(2014: N4.269 bn) which has resulted in accumulated losses of N17.280 bn at 31 March, 2015 (2014: accumulated losses of

N8.574 bn).

11


NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (Continued)for six months ended 31 March 2015

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 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.

12



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 Instruments (3)

IFRS 15 Revenue from Contracts with Customers (2)

Amendments to IFRS 11 Accounting for Acquisitions of Interests in Joint Operations (1)

Amendments to IAS 16 and IAS 38 Clarification of Acceptable Methods of Depreciation and Amortisation (1)

Amendments to IAS 16 and IAS 41 Agriculture: Bearer Plants (1)

1 Effective for annual periods beginning on or after 1 January 2016, 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 • the new 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.

13



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

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 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.

14




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.

15




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.

16



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.

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.

3.2 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 31

March 2015. 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.

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;

• 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.

17



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).

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.

18



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.

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.

19



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'. 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.

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.

20



3.10 Financial instruments (Continued)

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 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.

21



3.12 Inventory

Inventory is stated at the lower of cost and 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 or 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.

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

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.

22



3.17 Taxation (Continued)

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no

longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is

settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the

reporting period.

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.

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.

23



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 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.

Judgements

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.

24



3.21 Significant accounting judgements and estimates (Continued)

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 receivable

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.

25


NOTES TO THE CONSOLIDATED AND SEPARATE FINANCIAL STATEMENTS (continued)for six months ended 31 March 2015

GROUP

Period Period Year Period Period YearMar 2015 Mar 2014 Sept 2014 (N '000) Mar 2015 Mar 2014 Sept 2014

4 Revenue

17,225,408 14,485,979 31,704,340 Flour products 16,204,285 13,666,617 29,809,011

Spaghetti, macaroni and other pasta products 3,055,100 2,188,584 5,820,371

Noodles products 2,712,002 2,728,497 5,639,389

17,225,408 14,485,979 31,704,340 Total revenue 21,971,387 18,583,698 41,268,771

5 Operating loss

Operating loss from continuing operations is determined after

charging/(crediting) the following:

External auditors' remuneration

22,093 21,600 43,300 Audit fees 39,535 37,450 83,066

11,879 2,000 10,000 Other fees and expenses 11,879 2,000 10,000

820,520 999,912 1,900,878 Depreciation 1,364,378 1,652,193 3,156,644

56,271 55,542 111,194 Buildings 68,337 66,488 198,349

733,511 922,399 1,740,748 Plant, equipment and vehicles 1,254,847 1,557,044 2,875,239

30,738 21,971 48,936 Computer and office equipment 41,194 28,661 83,056

53,313 148,242 90,340 Professional and consultant fees 96,572 348,461 90,340

Operating lease charges

98,683 71,677 185,062 Land and buildings 123,766 129,645 261,155

22,950 - - Net (profit) / loss on disposal of plant, equipment and vehicles 22,950 - -

691,906 660,139 1,359,855 Staff costs 1,083,477 1,034,542 2,354,033

626,864 639,106 1,213,928 Salaries, allowances and other benefits 990,879 986,185 2,159,588

36,355 7,355 79,373 Employer's contribution to retirement funding 63,910 32,402 127,891

28,687 13,678 66,554 Employer's contribution to medical aid 28,687 15,955 66,554 13,678 15,955

(12,775) (32,026) (124,208) Sale of scrap product and other sundry income (25,311) (38,760) (302,997)

23,334 - 525,354 Non-recurring items 45,877 - 1,425,680

- - 255,354 Stock write off - - 255,354

23,334 - - Provision for bad debts 45,877 - 123,326

- - 270,000 Statutory liabilities - - 1,047,000

COMPANY

26



GROUP


5 Operating loss (continued)

Directors' emoluments (note 25)

Executive directors

44,639 19,296 67,175 - salaries and bonuses 62,353 19,296 102,721

31,337 3,065 73,245 - retirement, medical and other benefits 43,773 3,065 108,451

Non-executive directors

3,250 7,474 7,250 - fees 3,250 11,085 7,250

79,226 29,835 147,670 Total directors' emoluments 109,376 33,446 218,422

- - - Less: Paid by subsidiaries - - -

79,226 29,835 147,670 Emoluments paid by Company 109,376 33,446 218,422

6 Impairment of plant and equipment & investment, profit on sale of

subsidiary and other non recurring items

- - - Provision for statutory liabilities - (777,000) -

- 2,597,750 2,597,750 Profit on disposal of subsidiary - Dangote Agrosack - - -

- - (3,339,038) Impairment of amounts due by subsidiary - - -

- - (728,191) Impairment of assets not in use - - (1,592,372)

- 2,597,750 (1,469,479) Total attributable to ordinary shareholders - (777,000) (1,592,372)

7 Finance costs

(1,258,645) (1,168,523) (2,108,048) Long-term borrowings (1,258,645) (1,168,523) (2,108,048)

(531,867) (256,481) (735,349) Bank and other short term borrowings (543,894) (272,533) (755,140)

(1,790,512) (1,425,004) (2,843,397) (1,802,539) (1,441,056) (2,863,188)

COMPANY

27



GROUP


7 Finance costs (Continued)

Interest received

3,132 8,392 6,841 From cash and cash equivalents 3,948 8,392 6,841

- - - Other financial assets - - 3,557

3,132 8,392 6,841 3,948 8,392 10,398

(1,787,380) (1,416,612) (2,836,556) Net finance costs (1,798,591) (1,432,664) (2,852,790)

8 Taxation

8.1 Income tax from continuing operations recognised in profit or loss

Current taxation

(63,954) (108,981) - Nigerian current taxation (76,822) (117,510) (7,400)

- (4,896) - Education tax - (4,896) -

- - - Capital gain tax - - -

- - - Nigerian current taxation - - -

- - - Education tax - - -

(63,954) (113,877) - (76,822) (122,406) (7,400)

Deferred taxation

138,721 14,714 1,895,810 Temporary differences, current year 340,982 556,610 3,014,108

74,766 (99,163) 1,895,810 Total taxation 264,160 434,205 3,006,708

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:

10,157 266,846 973,502 Deferred taxation asset (note 12) 212,419 (275,051) 2,091,800

128,563 (281,559) 922,308 Deferred taxation liability (note 12) 128,563 (281,559) 922,308

138,721 (14,714) 1,895,810 340,982 (556,610) 3,014,108

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.

8.2 Reconciliation of income tax expense to accounting (loss)/ profit:

(5,933,904) (49,116) (6,055,112) (Loss)/ profit before tax from continuing operations (7,045,307) (4,742,386) (9,285,013)

1,780,171 14,735 1,816,534 Income tax credit/ (expense) calculated at 30% (2012: 30%) 2,113,592 1,422,716 2,785,504

(117,562) (94,346) - Non-deductible expenses (84,215) (117,510) (348,106)

- 779,325 Non taxable income - -

(1,523,888) (1,001,711) Tax losses and tax offsets not recognised as deferred tax assets (1,688,395) -

- - -

Profit on sale of subsidiaryrecognised in the company in a different

period than for group accounts (681,336) -

(63,954) (108,981) - Effect of minimum tax provisions and eduction tax (76,822) (101,326) (7,400)

- - 259,304 Effect of prior year under provision - 534,081

- 89,429 42,358 Other items - (88,339) 42,629

74,766 (99,163) 1,895,810 Income tax credit recognised in profit or loss 264,160 434,205 3,006,708

COMPANY

28



GROUP


8 Taxation (continued)

8.3 Unrecognised deductible temporary differences, unused tax

losses and unused tax credits

1,523,888 - - Income tax expense not recognised in profit or loss 1,688,395 865,211 713,580

8.4 Current tax liabilities

147,724 263,081 83,770 Income tax payable 181,380 356,877 105,841

57,003 - 57,003 Education tax 57,004 - 57,004

319 - 8,431 Capital gains tax 319 - 8,431

205,047 263,081 149,204 238,703 356,877 171,276

9 Basic and diluted loss per share

Basic loss per share is calculated by dividing the net loss for the period by the

weighted average number of ordinary shares outstanding during the period. Basic and

diluted loss per share is the same as there are no dilutive effects on earnings.

Total comprehensive loss attributable to ordinary shareholders:

(5,859,138) (148,279) (4,159,302) Total comprehensive loss for the period (N '000) (6,755,276) (4,269,004) (6,219,905)

(5,859,138) (148,279) (4,159,302) Continuing operations (6,755,276) (4,261,946) (6,212,863)

- - - Discontinued operation - (7,058) (7,042)

5,000 5,000 5,000 Weighted average number of ordinary shares (million) 5,000 5,000 5,000

(117.18) (2.97) (83.19) Basic and diluted loss per share (kobo per share) (135.11) (85.38) (124.40)

(117.18) (2.97) (83.19) Continuing operations (135.11) (85.24) (124.26)

- - - Discontinued operation - (0.14) (0.14)

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.

COMPANY

29



Plant,

Leasehold vehicles Computer Assets

GROUP land and and and office under con-(N '000) buildings equipment equipment struction Total

10 Property, plant and equipment

Cost

Balance at 30 September 2013 6,635,072 40,355,877 602,817 1,689,344 49,283,110

Additions 4,646 125,717 83,769 226,871 441,003

Disposals - (10,536) - - (10,536)

Balance at 31 March 2014 6,639,718 40,471,058 686,586 1,916,214 49,713,577

Additions 133,554 259,824 37,568 241,167 672,113

Disposals - (118,059) (12,212) - (130,271)

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

Additions 2,557 304,106 104,481 127,736 538,880

Disposals - (6,324) (22,950) - (29,274)

Transfers between classes of assets 15,370 170,962 129,927 (316,259) -

Impairment - - - - -

Balance at 31 March 2015 6,835,715 36,947,998 944,036 394,341 45,122,090

Accumulated depreciation

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

Depreciation 66,488 1,557,044 28,661 - 1,652,193

Disposals - (4,635) - - (4,635) Fair value loss on remeasurement of discontinued operation - - - - -

-

Balance at 31 March 2014 685,201 19,733,453 509,558 - 20,928,212

Depreciation 131,861 1,318,195 54,395 - 1,504,451

Disposals - (104,114) (8,147) - (112,261)

Impairment - (4,050,563) - - (4,050,563) -


Depreciation 68,337 1,254,847 41,194 - 1,364,378

Disposals - (6,324) - - (6,324)

Adjustment (1,182) (75,816) (3,561) - (80,558)

Balance at 31 March 2015 884,217 18,069,679 593,439 - 19,547,335

Carrying amount


Balance at 31 March 2014 5,954,517 20,737,605 177,028 1,916,214 28,785,365


Balance at 31 March 2015 5,951,498 18,878,319 350,597 394,341 25,574,756

30



Plant,

Leasehold vehicles Computer Assets

COMPANY land and and and office under con-(N '000) buildings equipment equipment struction Total

10 Property, plant and equipment

Cost


Additions 222 80,010 82,830 128,317 291,379 Disposals - - - - - Transfer to discontinued operation - - - - -

Balance at 31 March 2014 5,544,194 22,970,850 436,193 1,636,377 30,587,614

Additions 77,225 146,864 23,365 92,991 340,445

Disposals - (5,277) (2,228) - (7,505)

Transfers between classes of assets - 1,451,443 - (1,451,443) -

Impairment - (2,723,466) - - (2,723,466)


Additions - 163,845 98,765 52,288 314,898

Disposals - - (22,950) - (22,950)

Transfer between assets 14,728 141,765 120,417 (276,910) -

Balance at 31 March 2015 5,636,147 22,146,025 653,563 53,302 28,489,037

Accumulated depreciation


Depreciation 55,542 922,399 21,971 - 999,912 -

Balance at 31 March 2014 562,891 13,082,486 299,719 - 13,945,096

Depreciation 55,652 818,349 26,965 - 900,966

Disposals - (4,983) (2,129) - (7,112)

Impairment - (1,995,275) - - (1,995,275) -


Depreciation 56,271 733,511 30,738 - 820,520 Disposals - - - - -

Balance at 31 March 2015 674,814 12,634,088 355,293 - 13,664,195

Carrying amount


Balance at 31 March 2014 4,981,303 9,888,364 136,474 1,636,377 16,642,518


Balance at 31 March 2015 4,961,333 9,511,937 298,269 53,302 14,824,842

31



11 Investment in subsidiariesPercentage Percentage Percentage

(N '000) holding (%) (N '000) holding (%) (N '000) holding (%)

11.1 Interest in subsidiary companies

Unlisted - shares at cost:

Dangote Pasta Limited 2,507,637 99% 2,507,637 99% 2,507,637 99%

Dangote Noodles Limited 90,000 90% 90,000 90% 90,000 90%

2,597,637 2,597,637 2,597,637

Loans receivable from subsidiaries – held directly

Dangote Pasta Limited Amounts due by subsidiary 17,422,738 15,358,367 16,293,232

Impairment (3,339,038) - (3,339,038)

14,083,700 15,358,367 12,954,194

Dangote Noodles Limited 2,827,360 2,668,829 2,874,945

16,911,060 18,027,196 15,829,139

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:

Name of subsidiary Mar 2015 Mar 2014 Sept 2014

Dangote Pasta Limited Manufacturing and sale Nigeria 99% 99% 99%

of pasta products

Dangote Noodles Limited Manufacturing and sale of Nigeria 90% 90% 90%

noodles products

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

Portion of ownership, interest (Loss)/ profit allocated to

and voting power held by non- non-controlling interests

controlling interests Period Period

Name of subsidiary Mar 2015 Mar 2014 Mar 2015 Mar 2014 Mar 2015 Mar 2014 Sept 2014

Dangote Pasta Limited 1% 1% (7,370) (12,220) (37,195) (17,535) (29,825)

Dangote Noodles Limited 10% 10% (18,501) (34,015) (471,821) (446,403) (453,320)

Dangote Agrosacks Limited - 1,821 - - -

Agrosacks Obajana Limited - 174,018 - - -

(25,871) 129,604 (509,016) (463,938) (483,145)

COMPANYMar 2015 Mar 2014 Sept 2014

and operation

Portion of ownership, interest and voting

Place of incorporation

Accumulated non-controlling interests

power held by the Group

Principal activity

32



GROUPPeriod Period Year Period Period Year

Mar 2015 Mar 2014 Sept 2014 (N '000) Mar 2015 Mar 2014 Sept 2014

12 Deferred taxation

Balance at beginning of period:

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

(1,470,936) (2,393,244) (2,393,244) Deferred tax liability (1,470,936) (2,453,251) (2,453,251)

1,331,582 (564,228) (564,228) 3,457,384 443,277 443,277

Income statement movement

10,157 (266,846) 973,502 Temporary differences : deferred tax asset 212,419 275,051 2,091,800

128,563 281,559 922,308 Temporary differences : deferred tax asset/ (liability) 128,563 281,559 922,308

1,470,303 (549,515) 1,331,582 Balance at end of year 3,798,367 999,887 3,457,385

2,812,675 1,562,170 2,802,518 Deferred tax asset 5,140,739 3,171,579 4,928,320

(1,342,372) (2,111,685) (1,470,936) Deferred tax liability (1,342,372) (2,171,692) (1,470,936)

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. -

12.1 Analysis of deferred tax asset balances:

- - - Property, plant and equipment 1,684,101 595,541 1,487,595

- 193,409 - Gratuity 49,512 337,215 49,512

773,930 606,712 773,930 Allowance for bad debt 1,029,944 823,224 1,024,188

2,038,387 762,049 2,028,230 Losses 2,376,824 1,415,598 2,365,995

358 - 358 Others 358 - 1,030

2,812,675 1,562,170 2,802,518 5,140,739 3,171,579 4,928,320

12.2 Analysis of deferred tax liability balance:

(1,342,372) (2,111,685) (1,470,936) Property, plant and equipment (1,342,372) (2,171,692) (1,470,936)

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:

1,523,888 - - Tax losses (revenue in nature) 2,401,975 865,211 713,580

COMPANY

33



12.3 Analysis of movement in deferred tax balances

Opening Profit and Closing Opening Profit and Closing

Company, 6 months March 2015 balance loss balance balance loss balance

Property, plant and equipment (2,393,244) 281,559 (2,111,685) (1,470,936) 128,563 (1,342,372)

Gratuity 193,409 - 193,409 - - -

Other provisions 606,712 - 606,712 774,288 - 774,288

Losses 1,028,895 (266,846) 762,049 2,028,230 10,157 2,038,387

(564,228) 14,713 (549,515) 1,331,582 138,721 1,470,303

Opening Profit and Closing Opening Held for Closing

Group, 6 months March 2015 balance loss balance balance sale balance

Property, plant and equipment (1,857,710) 281,559 (1,576,151) 16,660 325,069 341,728

Gratuity 337,215 - 337,215 49,512 - 49,512

Other provisions 823,224 - 823,224 1,025,218 5,084 1,030,302

Losses 1,140,547 275,051 1,415,598 2,365,995 10,829 2,376,824

443,276 556,610 999,886 3,457,384 340,982 3,798,366



13 Inventories

5,013,427 3,527,873 2,360,469 Raw materials and work-in-progress 5,566,384 3,825,441 3,008,046

19,521 62,278 536,364 Finished goods 508,159 532,218 841,305

793,543 612,709 1,411,069 Engineering spares and other stock 1,456,575 1,485,914 1,942,305

- - (255,354) Amount written down slow moving (29,843) - (362,597)

5,826,491 4,202,860 4,052,548 7,501,275 5,843,573 5,429,059

Inventory is carried at the lower of cost and net realisable value. Raw materials consumed and recognised in cost of sales during the period totalled N19.1 billion (2014: N17.0 billion).

14 Trade and other receivables

9,956,685 10,456,410 9,795,324 Trade receivables 12,055,611 12,200,955 11,710,089

531,296 881,873 449,873 Prepayments 677,162 1,079,217 542,040

1,190,759 680,089 1,007,695 Sundry receivables 2,106,488 960,756 1,486,274

11,678,739 12,018,372 11,252,892 Total 14,839,261 14,240,928 13,738,403

(5,420,295) (5,436,248) (5,398,425) Impairment allowance: Trade receivables (6,258,595) (6,126,190) (6,217,775)

(586,637) (604,242) (586,640) Impairment allowance: Other receivables (586,637) (631,986) (586,639)

5,671,807 5,977,882 5,267,827 Net trade and other receivables 7,994,029 7,482,752 6,933,989

6 months ended March 2014




COMPANY

34



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 N1.1 billion (2014: N2.4 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:



237,686 242,330 265,258 Company A 446,516 243,828 1,048,004

222,826 165,557 163,359 Company B 364,399 166,865 878,784

132,143 157,478 139,628 Company C 229,048 158,034 664,792

592,655 565,365 568,245 1,039,963 568,728 2,591,580

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:

5,985,065 6,036,407 6,036,407 Balance at the beginning of the period 6,804,414 6,754,093 6,754,093

- - (51,342) Utilised during the period - - (51,342)

21,867 4,083 - Raised during the period 40,817 4,083 101,663

6,006,932 6,040,490 5,985,065 Balance at the end of the period 6,845,233 6,758,176 6,804,414

Past due but not impaired analysis: Net trade receivables ageing:

2,491,640 2,892,789 4,304,157 Current to 60 days 3,426,392 3,130,981 5,297,602

12,752 174,409 77,776 61 to 90 days 20,626 234,571 115,852

23,858 119,588 7,093 91 - 180 days 259,335 132,691 46,806

2,008,140 1,833,376 7,875 > 180 days 2,090,663 1,958,316 32,054

4,536,390 5,020,162 4,396,899 5,797,016 5,456,559 5,492,314

Impairment analysis: Trade receivables ageing:

- - - Current to 60 days - - -

- - - 61 to 90 days - - -

- - - 91 – 180 days - - -

5,420,295 5,436,248 5,398,425 > 365 days 6,258,595 6,126,190 6,217,775

5,420,295 5,436,248 5,398,425 Total impairment 6,258,595 6,126,190 6,217,775

COMPANY

35





14 Trade and other receivables (continued)

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 N1.7 billion (2014: N1.7 billion) provided by Dangote

Industries Limited and hence have not been provided for.

15 Short-term loans receivable

Unsecured, interest free loans repayable on request:

3,635,323 3,049,483 3,541,950 Due from related parties (refer to note 21) 6,768,444 5,886,952 6,619,923

3,635,323 3,049,483 3,541,950 Total 6,768,444 5,886,952 6,619,923

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

16 Cash and cash equivalents

2,011,142 1,158,366 4,118,711 Bank balances and short-term deposits 2,853,565 1,709,845 4,547,552

(1,706,369) (2,295,943) (1,382,618) Bank overdrafts (1,706,369) (2,295,943) (1,382,617)

304,772 (1,137,577) 2,736,093 1,147,195 (586,098) 3,164,935

17 Share capital and premium

Authorised share capital

3,000,000 3,000,000 3,000,000 6 000 000 000 ordinary shares of 50k each 3,000,000 3,000,000 3,000,000

Issued ordinary share capital

2,500,000 2,500,000 2,500,000 5 000 000 000 ordinary shares of 50k each 2,500,000 2,500,000 2,500,000

18,116,249 18,116,249 18,116,249 Share premium 18,116,249 18,116,249 18,116,249

18 Long-term borrowings

9,534,904 14,562,028 14,562,028 Balance at beginning of the period 9,534,904 14,562,028 14,562,028

2,562,876 - 980,000 Loan advanced 2,562,876 - 980,000

(2,288,786) (2,439,771) (6,007,124) Repayment (2,288,786) (2,439,771) (6,007,124)

9,808,994 12,122,257 9,534,904 Balance at the end of the period 9,808,994 12,122,257 9,534,904

3,013,169 7,102,360 5,044,448 Long-term portion 3,013,169 7,102,360 5,044,448

6,795,824 5,019,897 4,490,456 Short-term portion included in short-term borrowings (note 20) 6,795,824 5,019,897 4,490,456

COMPANY

36





19 Trade and other payables

3,388,065 4,547,504 3,874,662 Trade payables and accruals 7,957,811 7,896,935 7,369,003

2,476,110 1,142,859 1,593,384 Customers’ deposits 2,600,907 1,468,376 1,593,384

582,144 663,040 570,157 Retirement benefit obligation 19.1 731,133 803,724 719,146

143,755 439,187 159,822 Withholding tax 143,755 439,187 159,822 - - - -

6,590,074 6,792,590 6,198,025 Net trade and other payables 11,433,606 10,608,222 9,841,355

19.1 Retirement benefit obligation

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

29,922 - 61,170 Interest accrued 29,922 - 73,360

(17,935) 18,343 (135,710) Benefits paid by from company (17,935) (6,009) (163,947)

582,144 663,040 570,157 Closing balance 731,133 803,724 719,146

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 N731m accrues interest at 10%.

20 Short-term borrowings

- - - Unsecured loans (a) 250,000 250,000 250,000

16,049,412 3,321,778 10,871,923 Amounts due to related parties (refer to note 21) 17,852,454 5,271,603 12,660,658

10,373,324 8,225,233 9,881,610 Letters of credit for wheat purchases 10,373,323 8,225,232 9,881,611

6,795,824 5,019,897 4,490,456 Short-term portion of long-term borrowings (note 18) 6,795,824 5,019,897 4,490,456

33,218,560 16,566,908 25,243,989 Total 35,271,601 18,766,732 27,282,725

(a) A subsidiary of the Company, Dangote Noodles Limited has a loan balance of N250 million due to Dangote

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.

Amounts due from related parties (refer to note 15)

- - - a Dangote Cement Plc. 24,014 - 24,014

2,842,199 2,999,514 3,066,999 b Dangote Industries Limited 5,856,901 5,732,431 6,048,688

- - - c National Salt Company of Nigeria Plc - 24,014 -

51,000 51,000 51,000 d Dangote Textiles Nigeria Limited 51,000 66,381 51,000

- - - e Dangote Foundation 63,522 - 58,512

- - - j Dangote Freight Limited 13,758 - 13,758

16,148 50,108 - k UAC Foods 16,148 50,108 -

1,500 1,500 1,500 Dangote Fisheries Nigeria Limited 1,500 66,658 1,500

724,476 72 475,162 Other 741,601 72 475,162

- (52,711) (52,711) Impairment allowance - (52,711) (52,711)

3,635,323 3,049,483 3,541,950 Total 6,768,444 5,886,952 6,619,923

COMPANY

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.

37





21 Related party disclosures (continued)

Amounts due to related parties (refer to note 20)

331,999 331,999 404,382 a Dangote Cement Plc 492,407 331,999 575,047

- - - b Dangote Industries Limited 1,463,116 1,690,827 1,454,141

- - - c National Salt Company of Nigeria Plc 17,480 217,760 12,046

201,805 199,849 209,229 f Dangote Sugar Refinery Plc 293,331 212,091 284,978

68,061 68,069 68,061 g Dangote Nigeria Limited 68,061 60,529 68,061

1,779,602 1,779,603 1,779,602 h Dangote Transport Nigeria Limited 1,779,602 1,795,120 1,779,602

655,187 528,446 528,446 i Greenview Development Nigeria Limited 655,187 540,832 528,446

264,933 - 213,785 m Dancom Technologies Limited 330,103 - 284,577

136,778 - 107,802 n Dangote Agrosacks Limited 136,778 - 107,802

25,992 42,931 42,931 Bluestar Shipping Company 25,992 46,046 42,931

17,520 17,645 17,520 Dangote Port Operations 17,520 22,236 17,520

12,387,409 353,236 7,500,165 Tiger Brands Limited 12,387,409 353,407 7,500,165

180,126 - - Other 185,468 757 5,342

16,049,412 3,321,778 10,871,923 Total 17,852,454 5,271,603 12,660,658

a) Dangote Cement Plc is a related company through common shareholdings. Dangote Cement Plc buys consumables from Dangote Agrosacks Ltd provides haulage

trucks from time to time to the Company.

e) Dangote Foundation is a related company through common shareholding and buys pasta and noodles products from the Company’s subsidiaries.

b) Dangote Industries Limited is a related company through shareholding in Dangote Flour Mills Plc. It provides strategic management services.

c) National Salt Company of Nigeria Plc is a related company through common shareholding and procures consumables from Dangote Agrosacks Ltd.

d) Dangote Textiles Nigeria Limited is a related company through common shareholding. No transactions were concluded during the periods under review.

COMPANY

n) Dangote Agrosacks Limited is a related party by means of common shareholding and sells packaging materials to Dangote Flour group.

f) Dangote Sugar Refinery Plc is a related company by means of common shareholding and provides power and LPFO (Low Pour Fuel Oil) to some of the Company’s mills.

g) Dangote Nigeria Ltd is a related party by means of common shareholding.

h, j) Dangote Transport Nigeria Limited and Dangote Freight Limited are a related party by means of common shareholding and provides haulage services to the

Company and the Group.

i) Greenview Development Nigeria Limited is a related party by means of common shareholding and provides leased property during the period under review.

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

m) Dancom Technologies Limited is a related party by means of common shareholding and provision of information technology services.

38



22 Financial instruments

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 counter-

party 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 material acquired by the Group is wheat.

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.

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

39



22 Financial instruments (continued)

0 – 6 7 – 12 1 – 5 > 5

months months years years

Group

At 31 March 2015:

Trade and other payables (note 19) 11,433,606 - - -

Borrowings (long and short-term) (note 18 & 20) 13,261,401 22,010,201 2,346,503 666,666

At 31 March 2014:

Trade and other payables (note 19) 10,608,222 - - -

Borrowings (long and short-term) (note 18 & 20) 10,425,962 8,340,770 7,102,360 -

Company

At 31 March 2015:

Trade and other payables 6,590,074 -

Borrowings (long and short-term) 11,208,359 22,010,201 2,346,503 666,666

At 31 March 2014:

Trade and other payables 6,792,590 - - -

Borrowings (long and short-term) 9,203,838 7,363,070 7,102,360 -

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 31 March, 2015 the Company had short-term financial liabilities held in US Dollar of N10.4 bn (2014: N8.2 bn). 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 N519m (2014: N411m). 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.

40



22 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 31 March 2015, the contingent liabilities in respect of legal litigation against the Group were N25 million (2014: N209 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.

Commitments

Lease commitments under operating leases:


Lease as lessee

Non-cancellable operating lease rentals are payable as follows:

131,273 189,934 323,485 - Less than one year 176,297 326,757 374,347

247,340 212,674 324,270 - One to five years 501,650 375,459 527,718

378,613 402,608 647,755 Total commitments 677,947 702,216 902,065

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.

Capital commitments

- 38,068 - Authorised and committed - 50,424 -

COMPANY Group

41



24 Discontinued operation

On the 19th of August 2013, the Group announced the disposal of Dangote Agrosacks.

The disposal has been effected on 30 November 2013 for N7,55bn and the profit has been accounted for in the financial statements.

The results for the period are presented below:

Period Period Year

Results for the period Mar 2015 Mar 2014 Sept 2014

Revenue - 2,966,625 2,966,625

Cost of sales - (2,366,040) (2,366,040)

Gross profit - 600,585 600,585

Distribution and administrative expenses - (111,566) (111,566)

Operating profit - 489,019 489,019

Net finance costs - (80,295) (80,295)

Profit before taxation - 408,724 408,724

Taxation - (52,572) (52,572)

Profit for the period - 356,151 356,151

Attributable to:Owners of the parent - 182,133 182,133

Non-controlling interests - 174,018 174,018

Fair value re-measurement on assets held for sale - (187,371) (187,354)

Profit after tax on discontinued operation - 168,781 168,797

42


25 Remuneration of directors

Remuneration of Executive and Non - Executive directors for the period ended 31 March 2015 was N109 million (2014: N33 million).

Board Other Board Other

(N’000) meetings fees Total meetings fees Total

Non-executive Directors:

Alh. Aliko Dangote 250 - 250 500 3,137 3,637

Mr. Olakunle Alake 400 1,000 1,400 1,000 2,824 3,824

Mr. Arnold Ekpe 400 - 400 - - -

Mr. Asue Ighodalo 400 800 1,200 800 2,824 3,624

1,450 1,800 3,250 2,300 8,785 11,085

Number of Number of

ordinary Percentage ordinary Percentage of

shares of issued shares issued share

Directors’ interest in share capital (’000) share capital (’000) capital

Alhaji Aliko Dangote shareholding 38,729 0.77% 38,729 0.77%

Olakunle Alake shareholding 2,378 0.05% 2,378 0.05%

Nature of interest

Period

ended 31 Mach 2014ended 31 March 2015

Period

Period

ended 31 March 2015

Period

ended 31 Mach 2014

43



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

Sacks: manufactures and sells packaging materials

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.

Segment revenue and results Flour Sacks Pasta Noodles Inter-Group Total

Period ended 31 March 2015

Revenue 17,225,408 3,055,100 2,712,002 (1,021,123) 21,971,387

Cost of sales (15,588,658) (2,980,941) (2,029,225) 1,021,123 (19,577,701)

Gross profit 1,636,750 74,159 682,777 - 2,393,686

Distribution and administrative expenses (2,272,928) (1,007,724) (861,939) - (4,142,591)

Other income 12,775 7,136 5,400 - 25,311

Operating loss before abnormal items (623,403) (926,429) (173,762) - (1,723,594)

Abnormal items (3,523,121) (3,523,121)

Operating loss after abnormal items (4,146,524) (926,429) (173,762) - (5,246,715)

Net finance costs (1,787,380) 816 (12,027) - (1,798,591)

Loss before taxation (5,933,904) (925,613) (185,789) - (7,045,307)

Taxation 74,766 188,617 777 - 264,160

Loss for the period (5,859,138) (736,996) (185,012) - (6,781,146)


Revenue 14,485,979 - 2,188,584 2,728,497 (819,362) 18,583,698

Cost of sales (14,017,918) - (2,353,443) (2,276,853) 819,362 (17,828,851)

Gross profit 468,061 - (164,859) 451,645 - 754,847

Distribution and administrative expenses (1,730,341) - (797,570) (798,418) - (3,326,329)

Other income 32,026 - 1,984 4,750 - 38,760

Operating loss before abnormal items (1,230,254) - (960,445) (342,023) - (2,532,722)

Abnormal items 2,597,750 - (777,000) - (2,597,750) (777,000)

Operating loss after abnormal items 1,367,496 - (1,737,445) (342,023) (2,597,750) (3,309,722)

Net finance costs (1,416,612) - (3,384) (12,668) - (1,432,664)

Loss after taxation from continuing operations (49,116) - (1,740,829) (354,691) (2,597,750) (4,742,386)

Taxation (99,163) - 518,832 14,537 - 434,205

Loss after taxation from continuing operations (148,279) - (1,221,997) (340,154) (2,597,750) (4,308,181)

Loss from discountinued operation - Sacks - 168,781 - - - 168,781

Loss for the period (148,279) 168,781 (1,221,997) (340,154) (2,597,750) (4,139,400)

44



26 Segment information (continued)

Segment assets and liabilities Flour Pasta Noodles Inter-Group Total

at 31 March 2015

Total assets 54,290,977 19,307,705 3,079,510 (20,845,384) 55,832,807

Total liabilities (46,075,591) (20,801,130) (8,016,393) 21,887,293 (53,005,821)

at 31 March 2014

Total assets 53,218,112 19,162,134 2,127,626 (21,627,806) 52,880,066

Total liabilities (35,132,566) (18,689,599) (6,489,218) 19,009,557 (41,301,827)

Other segmental information Flour Pasta Noodles Inter-Group Total

Period ended 31 March 2015 -

Depreciation 820,520 480,389 63,470 - 1,364,378

Additions to non-current assets 314,898 137,127 86,855 - 538,880


Depreciation 999,912 584,920 67,361 - 1,652,193

Additions to non-current assets 291,379 77,847 71,778 - 441,003

Revenue from major products and services

The following is the analysis of Group’s revenue from continuing operations from its major products and services:

Flour Pasta Noodles Inter-Group

(N’000) products products products eliminations Total

Period ended 31 March 2015 17,225,408 3,055,100 2,712,002 (1,021,123) 21,971,387

Period ended 31 March 2014 14,485,979 2,188,584 2,728,497 (819,362) 18,583,698

27 Events after the reporting period

There are no significant events after the reporting period.

45


CONSOLIDATED STATEMENT OF VALUE ADDEDfor six months ended 31 March 2015

Period Period Year Period Period YearMar 2015 Mar 2014 Sept 2014 Mar 2015 Mar 2014 Sept 2014

(N '000) % (N '000) % (N '000) % (N '000) % (N '000) % (N '000) %

Revenue 17,225,408 14,485,979 31,704,340 21,971,387 18,583,698 41,268,771

Other Income 12,775 32,026 (2,473,542) 25,311 38,760 302,997

Profit of disposal on DAS - 2,597,750 - - - -

Interest income 3,132 8,392 6,841 3,948 8,392 10,398

17,241,315 17,124,147 29,237,638 22,000,646 18,630,850 41,582,166

Less: Materials and services - Imported (12,933,384) (8,737,440) (22,691,131) (16,137,577) (11,682,283) (27,545,868)

- local (6,938,897) (5,350,768) (11,692,990) (8,657,981) (7,394,381) (14,778,649)

Value added (2,630,966) 100 3,035,939 100 (5,146,482) 100 (2,794,913) 100 (445,814) 100 (742,351) 100

Applied as follows:

To pay employees

Salaries, wages and other benefits 691,906 (26) 660,139 22 1,359,855 (26) 1,083,477 (39) 1,034,542 (232) 2,354,033 (317)

To pay providers of capital

Interest payable and similar charges 1,790,512 (68) 1,425,004 47 2,843,397 (55) 1,802,539 (64) 1,441,056 (323) 2,863,188 (386)

To pay government

Current taxation 63,954 (2) 113,877 4 - - 76,822 (3) 122,406 (27) 7,400 (1)

To enhance assets and provide for growth

Deferred taxation (138,721) 5 (14,714) - (1,895,810) 37 (340,982) 12 (556,610) 125 (3,014,108) 406

Depreciation 820,520 (31) 999,912 33 1,900,878 (37) 1,364,378 (49) 1,652,193 (371) 3,156,644 (425)

Non-controlling interest (25,871) 1 129,604 (29) 110,397

Currency delavuation - - - - - - - -

Loss sustained (5,859,138) 223 (148,279) (6) (9,354,802) 181 (6,755,276) 242 (4,269,004) 957 (6,219,905) 823

Value added (2,630,966) 100 3,035,939 100 (5,146,482) 100 (2,794,913) 100 (445,814) 100 (742,351) 100

Value added represents the additional wealth the Group has been able to create by its own and its employees efforts.

The report shows the allocation of this wealth among employees, capital providers, government and that retained for future wealth creation.

This report is prepared in compliance with the Nigerian Companies and and Allied Matters Act (CAMA) 2004. It is not requirement by IFRS.

COMPANY GROUP

46


Five year summaryfor six months ended 31 March 2015

IFRS IFRS IFRS IFRS restated IFRS6 months 12 months 9 months 12 months 12 months

GROUP (N '000) Mar 2015 Sept 2014 Sept 2013 Dec 2012 Dec 2011

NET ASSETS

Property, plant and equipment 25,574,756 26,342,645 30,002,456 44,048,647 46,754,990

Deferred taxation asset 5,140,739 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 (23,532,967) (15,147,450) (10,902,689) (5,548,354) (11,740,900)

7,182,528 16,123,515 39,809,956 40,125,309 36,044,457

Deferred taxation liabilities (1,342,372) (1,470,936) (2,453,251) (2,855,079) (4,114,138)

Gratuity provision - - - (1,254,329) (1,730,447)

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

Long-term loan (3,013,169) (5,044,448) (9,646,302) (10,692,375) (2,184,000)

2,826,986 9,608,132 18,106,525 25,323,526 28,015,872

CAPITAL AND RESERVES

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

Share premium 18,116,249 18,116,249 18,116,249 18,116,249 18,116,249

Retained earnings (17,280,248) (10,524,971) (4,305,067) 3,627,929 6,897,652

Non-controlling interest (509,016) (483,145) 1,795,343 1,079,348 501,971

2,826,985 9,608,132 18,106,525 25,323,526 28,015,872

REVENUE AND PROFIT

Revenue 21,971,387 41,268,771 29,960,419 41,472,599 66,281,326

(Loss)/profit before taxation (7,045,307) (9,285,013) (8,342,294) (5,602,972) 758,742

Other comprehensive income items - - - 70,990 276,870

Taxation 264,160 3,006,708 1,577,990 1,258,659 (109,668)

- 168,797 (452,697) 2,080,977 -

Non-controlling interest 25,871 (110,397) (715,995) (577,377) (302,322)

(Loss)/profit transferred to revenue reserve (6,755,276) (6,219,905) (7,932,996) (2,769,723) 623,622

Per share data (kobo per share)

Loss per share (135) (124) (159) (55) 12

Net assets per share 57 192 362 506 560

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 period.

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 period.


Profit/ (loss) after tax for the period from

discontinued operation

47


Five year summary (continued)for six months ended 31 March 2015

IFRS IFRS IFRS IFRS restated IFRS6 months 12 months 9 months 12 months 12 months

COMPANY (N '000) Mar 2015 Sept 2014 Sept 2013 Dec 2012 Dec 2011

NET ASSETS

Property, plant and equipment 14,824,842 15,353,413 17,351,051 18,747,467 20,633,574

Investments 2,597,637 2,597,637 2,597,637 7,553,637 7,553,637

Deferred taxation asset 2,812,675 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)/assets (7,664,227) (163,661) 3,539,667 9,613,645 2,472,543

12,570,927 20,589,907 30,273,371 36,916,232 31,199,169

Deferred taxation liabilities (1,342,372) (1,470,936) (2,393,244) (2,825,800) (3,569,341)

Gratuity provision - - - (851,584) (1,277,236)

Long-term loan (3,013,169) (5,044,448) (9,646,302) (10,524,375) -

8,215,385 14,074,523 18,233,825 22,714,473 26,352,592

CAPITAL AND RESERVES

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

Share premium 18,116,249 18,116,249 18,116,249 18,116,249 18,116,249

Retained earnings (12,400,864) (6,541,726) (2,382,424) 2,098,224 5,736,343

8,215,385 14,074,523 18,233,825 22,714,473 26,352,592

REVENUE AND PROFIT

Revenue 17,225,408 31,704,340 23,079,590 29,859,976 38,679,844

(Loss)/profit before taxation (5,933,904) (6,055,112) (5,647,490) (4,264,583) 1,373,230

Other comprehensive income items - - - - 130,231

Taxation 74,766 1,895,810 1,166,842 1,126,464 (583,078)

(Loss)/profit transferred to revenue reserve (5,859,138) (4,159,302) (4,480,648) (3,138,119) 920,383

Per share data (kobo per share)

Loss per share (117) (83) (90) (63) 18

Net assets per share 164 281 365 454 527

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 period

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 period.


48

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