Flour Mills Nigeria annual report 2018

Annual
Report
2018
FEEDING
THE NATION,
EVERYDAY.

Sunti Golden Sugar Estates
The 50 billion naira Sunti Golden Sugar Estates (SGSE), was
commissioned by the President of the Federal Republic of Nigeria,
His Excellency, Muhammadu Buhari in March 2018.
Scan QR Code to
watch Sunti on Video

3 Schools
constructed
for the Sunti
community
Over N50
billion
invested
Engaging over
3,000 sugarcane
outgrowers
17, 000
Hectares
3,000 jobs
created,
10,000 at Full
capacity
30 KM road
construction
from Mokwa to
Sunti

4 Flour Mills of Nigeria Plc | 2018 Annual Report & Accounts
Introduction
Chairman's
Statement
Report of the
Directors
Audit Committee and
Independent Auditor's report
CSR / Other
Information
Financial
Statements
Introduction
Mission And Vision
Notice Of Annual General
Meeting
Directors, Officers, And Other
Corporate Information
Financial Highlights
Corporate Profile
6
8
10
11
12
14 24
40
41
Chairman's
Statement
Chairman's
Statement
Report of the
Directors
Report Of The Directors
Directors Responsibilities In Relation
To Financial Statements
General Mandate Circular
01
Contents
02 03

Flour Mills of Nigeria Plc | 2018 Annual Report & Accounts 5
Introduction
Chairman's
Statement
Report of the
Directors
Financial
Statements
CSR / Other
Information
Audit Committee and
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50
51
52
53
54
137
138
139
140
141
142
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43
Financial
Statements
Independent
Auditors / Audit
Committee Report
CSR / Other
Information
Consolidated And Separate
Statements Of Financial Position
CSR Report
Company Events
E-Mandate Form
Shareholders Data
Update Form
Proxy Form
Statements Of Profit & Loss And Other
Comprehensive Income
Consolidated Statements
Of Changes In Equity
Separate Statements Of Changes
In Equity
Statements Of Cash Flows
Notes To The Annual Report
Consolidated And
Separate Statements
Of Value Added -
Group
Consolidated And
Separate Statements
Of Value Added -
Company
Five Year Financial
Summary - Group
Five Year Financial
Summary - Company
Performance Indicators
Share Capital
History
Report Of Independent
Auditors
Audit Committee Report
04 05 06
143
157
158
159
150

Introduction
Chairman's
Statement
Report of the
Directors
Audit Committee and
CSR / Other
Information
Financial
Statements
Our Vision
Our Mission
Our Goals
To be the leading food and agro-allied group in
Africa
To produce and supply products of superior quality
and value to the market thereby enriching the lives of
consumers, customers, communities, employees and all
stakeholders.
• To be a customer-centric company.
• To be focused on both product and process innovation.
• Always seek to build value for all stakeholders.

Introduction
Chairman's
Statement
Report of the
Directors
Financial
Statements
CSR / Other
Information
Audit Committee and

Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN that the fifty-
eight (58th) ANNUAL GENERAL MEETING
of Flour Mills of Nigeria PLC will be held
at THE LANTANA HALL, EKO HOTEL &
SUITES, ADETOKUNBO ADEMOLA STREET,
VICTORIA ISLAND, LAGOS on Thursday
30th August, 2018 at 12 noon to transact the
following business:
ORDINARY BUSINESS:
1. Receive the Audited Financial Statements
for the year ended 31st March, 2018 and
the Reports of the Directors, Auditors and
Audit Committee thereon.
2. Declare a dividend.
3. Re-elect Directors.
4. Authorize the Directors to fix the
remuneration of the Auditors.
5. Elect members of the Audit Committee.
SPECIAL BUSINESS:
6. Fix the remuneration of the Directors.
7. Renew General Mandate for Related Party
Transactions.
NOTES:
1. PROXY
A member of the company entitled to attend
and vote at the above meeting is entitled to
appoint a proxy to attend and vote instead
of him/her. A proxy need not be a member
of the company. For the appointment to be
valid, a completed and duly stamped proxy
form must be deposited at the office of “Atlas
Registrars Limited, 34 Eric Moore Road,
Iganmu, Lagos, P.O. Box 341, Apapa” not
later than 48 hours before the time fixed for
the meeting.
2. DIVIDEND
The Board recommends a dividend of
N1.00 (2017 – N1.00) per ordinary share of
50 kobo. The dividend is to be declared out
of accumulated pioneer profits.
3. DIVIDEND WARRANTS
If approved, the dividend will be payable
on Monday 3rd September 2018 to
shareholders, whose names appear in
the Register of Members at the close of
business on Friday 3rd August, 2018.
Shareholders who have completed the
e-Mandate Activation Forms will receive a
direct credit of the dividend into their bank
accounts on the payment date.
4.CLOSUREOFREGISTERANDTRANSFER
BOOKS
NOTICE IS HEREBY GIVEN that the
Register of Members and Transfer Books
of the Company will be closed from Monday
6th August to Friday 10th August 2018 both
days inclusive.
5. AUDIT COMMITTEE
In accordance with Section 359(5) of the
Companies and Allied Matters Act CAP
Introduction
Chairman's
Statement
Report of the
Directors
Audit Committee and
CSR / Other
Information
Financial
Statements

C20 LFN 2004, a nomination (in writing) by
any member or shareholder for appointment
to the Audit Committee should reach the
Company Secretary at least 21 days before
the Annual General Meeting.
The Code of Corporate Governance of
the Securities and Exchange Commission
(SEC) requires that some of the members
of the Audit Committee should have basic
financial literacy and be knowledgeable in
internal control processes.
We therefore request that nominations must
be accompanied by a copy of the nominee’s
Curriculum Vitae.
6. RIGHT OF SHAREHOLDERS TO ASK
QUESTIONS
Pursuant to Rule 19.12 (c) of the Nigerian
Stock Exchange’s Rule book 2015, please
note that it is the right of every shareholder
to ask questions not only at the meeting
but also in writing prior to the meeting. We
urge that such questions be submitted to
the Company Secretariat not later than two
weeks before the date of the meeting.
BY ORDER OF THE BOARD
UMOLU, JOSEPH A.O.
Company Secretary
FRC/2013/NBA/00000003687

9th July, 2018
1, Golden Penny Place,
Wharf Road,
Apapa, Lagos.
Introduction
Chairman's
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Report of the
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Financial
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CSR / Other
Information
Audit Committee and

Flour Mills of Nigeria Plc
Annual report for the year ended 31 March 2018
Board of Directors, Officers and Other Corporate Information
Directors
John G. Coumantaros (Chairman) (U.S. Ci�zen)
Dr. (Chief) Emmanuel A. Ukpabi (KJW) (Vice- Chairman)
Paul Miyonmide Gbededo (Group Managing Director)
Alhaji Abdullahi A. Abba
Prof. Jerry Gana, CON
Alfonso Garate (Spanish)
Alhaji Rabiu M. Gwarzo, OON
Ioannis Katsaounis (Greek)
Thanassis Mazarakis (Greek)
Atedo N.A Peterside, CON
Foluso O. Phillips
Alhaji Y. Olalekan A. Saliu
Folarin R. A. Williams
Mrs Salamatu Hussaini Suleiman
Secretary Joseph Odion Umolu
Company registra�on number RC 2343
Date of incorpora�on September 29, 1960
Independent Auditors KPMG Professional Services
KPMG Tower
Bishop Aboyade Cole Street
Victoria Island
Lagos
Registered oﬃce / Business address 1, Golden Penny Place,
Wharf Road
Apapa,
Lagos
Registrars and Transfer oﬃce Atlas Registrars Ltd
34 Eric Moore Road,
Iganmu,
(Bagco Building)
P.O.Box 341, Apapa, Lagos
Bankers Access Bank Plc Skye Bank Plc
Ci�bank Nigeria Limited Stanbic IBTC Bank Plc
Diamond Bank Plc Suntrust Bank Limited
Ecobank Nigeria Limited Union Bank of Nigeria Plc
Fidelity Bank Plc United Bank for Africa Plc
First Bank of Nigeria Limited Wema Bank Plc
First City Monument Bank Plc Zenith Bank Plc
Guaranty Trust Bank Plc
Heritage Bank Plc
Providus Bank Limited
1
Directors, Officers and Other Corporate Information
Introduction
Chairman's
Statement
Report of the
Directors
Audit Committee and
CSR / Other
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Financial
Statements

Group Financial Highlights
Annual report for the year ended 31 March, 2018
Financial Highlights
31-Mar-18 31-Mar-17 Increase /
(Decrease)
N '000 N '000 %
Revenue 542,670,409 524,464,448 3.5
Profit before taxation 16,541,767 10,472,847 57.9
Net income tax (2,925,993) (1,636,395) 78.8
Profit from continuing operations 13,615,774 8,836,452 54.1
Other comprehensive income for the year net of taxation (567,547) 762,491 (174.4)
Non-controlling interest 918,716 886,911 3.6
Retained Profit 12,129,511 8,712,032 39.2
Share Capital 2,050,197 1,312,126 56.3
Shareholders' Fund 150,616,708 102,544,344 46.9
Market Capitalisation 153,764,775 46,711,686 229.2
Proposed Dividend 4,100,394 2,624,252 56.3
Per Share data (kobo)
Earnings (Basic) 483 303 59.4
Earnings (Diluted) 483 303 59.4
Dividend 100 100 0.0
Dividend Cover 4.83 3.03
Net Assets 3673 3908 (6.0)
Stock Exchange quotation at 31st March 3750 1780 110.7
Other Data
Number of employees (Group) 7,305 7,284 0.3
Number of employees (Company) 3,520 3,455 1.9
Introduction
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Audit Committee and

Corporate Profile
The FMN Group is a fully vertically integrated food company
primarily engaged in food processing, which includes flour milling,
production of semovita, masavita, pasta, noodles, vegetable oils,
margarine & spread, refined sugar, breakfast cereals and snacks;
and in the distribution of these products.
Incorporated in September 1960, Flour Mills of
Nigeria (FMN) Plc. is one of Nigeria’s leading
food and agro-allied companies. With a broad
product portfolio, an iconic brand – “Golden
Penny” - and a robust pan Nigerian distribution
network, FMN has grown into a truly diversified
food and agro-allied group.
FMN’s shares were listed on The Nigerian Stock
Exchange in 1978 and had a paid-up Share
Capital of NGN2.050 Billion as at 31st March,
2018 with the current ownership structure
of 59.34% held by foreign shareholders and
40.66% held by other individual and institutional
investors. There is a broad ownership base with
over 80,000 shareholders.
The FMN Group is a fully vertically integrated
food company primarily engaged in food
processing, which includes flour milling,
production of semovita, masavita, pasta,
noodles, vegetable oils, margarine & spread,
refined sugar, breakfast cereals and snacks;
and in the distribution of these products.
Other activities by the Group include production
of livestock feeds, primary processing of locally
grown soybean, palm fruit, cassava, maize,
and sugar cane; storage, aggregation and
distribution of locally sourced grains and export
commodities; manufacture and distribution of
agro-inputs, such as seeds, fertilizers and
agricultural sacks; cultivation of sugar cane,
maize, soyabean, cassava, and oil palm;
support services in the form of manufacturing
and marketing of packaging materials; power
generation; ground transport logistics; port
operations; and shipping, customs clearing,
forwarding, and shipping agency.
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The Group employs directly and indirectly
over 11,000 people from diverse ethnic,
cultural and religious backgrounds working
harmoniously to deliver superior value to
customers and other stakeholders.
The Group delivered over N542 billion in
Revenue and posted an impressive Profit
after tax of N13.6 billion for the year ended
31st March, 2018.
FMN has continued to pursue strategic
business opportunities, such as capacity
expansion and realignment of its core food
business whilst backwardly integrating in
order to further mitigate reliance on imports
and exposure to external volatility in the food
business by increasing local content in a
substantive and sustainable way.
The following developments, milestones and
investments in the Group during the year are
noteworthy:
• Successful Rights Issue Programme
culminating in receipt of net proceeds of
approximately N39.2 billion.
• Sunti Golden Sugar Estates Mill
commissioning in March 2018, a N50
Billion Investment in sugar plantation.
• Launch of new flour brand varieties –
“Bakers’ whole wheat flour”, “Easy bake
flour” and “Classic flour” in response to
customers’ needs.
• Increase in the capacity of our solvent
extraction plant in Rom Oil Mills Limited,
Ibadan in order to expand our market
share in vegetable oils, margarine and
spreads.
• Award of concessions for three (3) silo
complexes across locations in Nigeria by
the Federal Ministry of Agriculture and
Rural Development.
• Addition of 10 tons per hour extrusion line
to support aqua feeds for the local and
international markets in Calabar.
• Commissioning of new molasses addition
project to utilize molasses received from
our Sunti Golden Sugar mill.
Further value has been created for
stakeholders by reinforcing the Group’s
commitment to educational advancement,
health, safety, security and the wellbeing of
employees in the working environment.
FMN Group is continuously exploring
opportunities for strategic partnerships to
further enhance its competitive positioning
in our main lines of business in Nigeria and
to one day extend our business activities
beyond the borders of our home market.
In spite of prevailing economic headwinds,
the Board is optimistic that FMN has a bright,
robust and prosperous future and it continues
to demonstrate its commitment to Feeding
the Nation, everyday.
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Chairman's Statement
Despite persistent economic challenges, we
have stayed true to our core strategic direction,
of ‘Feeding the Nation, Everyday,’ which has
become our mantra.
John G. Coumantaros
Chairman, FMN
Introduction
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INTRODUCTION
Members of the Board of Directors,
Esteemed Ladies, and Gentlemen,
it is my pleasure to welcome you to
the 58th Annual General Meeting
of our great company, Flour Mills
of Nigeria Plc.
While we take stock of our
performance in the last financial
year, I believe it is pertinent that we
remind ourselves of our mission
as an organization: ‘FMN, Feeding
the Nation, Everyday - by building
superior supply and value chains,
we seek to produce and supply
products of great quality and value
to our customers thereby enriching
the lives of all stakeholders.’ In
that regard, we have continued to
show, first hand our commitment
to enhancing the livelihood of
millions of Nigerian families, by
ensuring that they have access to
not just good food that adequately
caters for their nutritional needs,
but a company that invests and is
actively involved in empowering
the different communities in which
it operates. As a business, FMN
has over the years spearheaded
Nigeria’s industrial growth through
its investments in world class
industrial plants, manufacturing
and management best practices,
as well as in health and safety
standards. Despite the swings
of the economic cycle, we have
stayed true to our core strategic
direction, of ‘Feeding the Nation,
Everyday’ which has become our
mantra.
Against this backdrop, I hereby
present the Annual Report and
Financial Statements for the
year ended 31st March 2018.
This report will show that our
company has continued to record
giant strides across major market
segments, even as we continue to
consolidate on our strategy to drive
efficiency and grow our footprints
in our Agro-allied division.
BUSINESS ENVIRONMENT
The Nigerian economy
experiencedanappreciable
recovery during the 2017 fiscal
year, emerging from its worst
recession in a quarter of a century.
The improvement aligned with
the trends depicted by the major
economic indicators during the
period.
Nigeria’s Gross Domestic Product
(GDP) grew by 0.82% year-on-
year in 2017 compared with the
negative growth of -1.58% in
2016. The positive trend was
complemented by a moderation
of the headline inflation which
declined consecutively on a
monthly basis dropping to 14.33%
in February 2018 from 18.6% in
December 2016.
Nigeria’s external reserve climbed
to an impressive US$46.2 billion
in Quarter 1, 2018, a dramatic
growth from US$30.30 billion
recorded at the end of June 2017,
thanks to the improved production
level of crude oil and the rising
prices which rallied to around
US$52 per barrel (Brent Crude) in
2017. In addition to the improved
fortunes in the oil industry,
other contributory factors which
impacted the size of the external
reserve included the stability in
the foreign exchange market,
improved liquidity, renewed
investor’s confidence, the Central
Bank of Nigeria’s (CBN) bold
monetary policy and the fiscal
stimulus. It is instructive to note
that the average exchange rate of
the Naira was relatively stable at
the Interbank Foreign Exchange
Market settling at N305.65 to a US
dollar at the end of March 2018
(2017-N305.25).
The turnaround of the economy
had a positive impact in the
Nigerian capital market. The
NigerianStockExchangeachieved
a robust growth of 42% reported to
be the highest in the world in 2017.
Market capitalization rose from
N9.02 trillion at the end of 2016
to the closing value of N13.61
trillion at the end of 2017. The
impressive market performance
was supported by sustained
investor’s sentiment largely driven
by improved macroeconomic
indicators, including relative
stability in exchange rate,
improved liquidity in the foreign
exchange market, positive GDP
growth, declining inflation and
some other helpful factors, all of
which impacted favourably on the
financials of quoted companies.
In spite of the general positive
economic outlook, the
manufacturing sector still faced
daunting challenges posed by
inadequate public power supply,
infrastructure deficiencies, high
cost of borrowing, high inflation
rate, weak consumer demand,
and a concern for security in some
parts of the Nation.
THE YEAR AT FMN
I am pleased to report that in spite
of the challenging socio-economic
and tough business environment,
Flour Mills of Nigeria PLC posted a
strong performance which is in line
with our strategy to continuously
create value for our Stakeholders.
The Company’s Revenue grew
by 4% to reach N389 Billion while
Profit Before Tax was N14 Billion,
a 29% increase from N10 Billion
recorded last financial year. Profit
After Tax went down by 6% to
N9.2 Billion primarily due to the
effect of Deferred Tax Adjustment
following the Company’s exit from
Pioneer Status.
Flour Mills Group delivered an
impressive result. Revenue
grew 3.5% to reach N542 billion
while Profit Before Tax increased
from N10 Billion to N16 Billion, a
remarkable 58% increase.
Distinguished Shareholders,
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DIVIDEND
In recognition of the importance of
dividend and the need to continually
create returns for Shareholder’s
investments, the Directors will
propose to Shareholders at the
Annual General Meeting the
payment of a dividend of N1.00 for
every ordinary share of 50 kobo,
same as last year.
RIGHTS ISSUE
Following the approval given by
shareholders at the 2015 Extra
Ordinary General Meeting of the
company to raise up to N40 Billion
of additional equity by way of a
Rights Issue, the Directors, with
the approval of The Securities &
Exchange Commission decided to
undertake the Rights Issue through
a “Shelf Program” in tranches over
a period of three years.
I am happy to report that with
some improvement in the general
economic condition, the Directors
decided in September 2017 to
proceed with Series 1 under the
N40,000,000,000 Rights Issue
Program by issuing 1,476,142,418
ordinary shares of 50 kobo each
through a Rights Issue on the basis
of 9 new ordinary shares for every
16 ordinary shares held at the close
of business on 8th December 2017
at N27.00 per share.
I am very pleased to inform our
shareholders that the FMN’s
Rights Issue was oversubscribed.
The receipt of the net proceeds
of approximately N39.2 billion in
March 2018 would significantly
impact on the company’s financials
and improve the capital structure,
leverage and the health of the
balance sheet. The additional
capital will be applied to repay
part of the existing debts and
other financial obligations, provide
working capital support and help to
strategically position the company
for sustainable growth.
On behalf of the Directors of the
company, I take this opportunity
to express deep appreciation and
thanks to our shareholders for their
renewed confidence and trust in the
company’s ability to deliver great
value. I also thank the regulatory
authorities and the capital market
operators for their support over the
years.
OUR BUSINESSES
FMN has over the years evolved
into what is today, one of the biggest
food and agro-allied businesses in
the country - Feeding the Nation,
Everyday. To ensure that we
continue to operate at optimal levels
in order to meet the diverse needs
of our stakeholders, our businesses
have been restructured into four
major operational pillars of Food,
Sugar, Agro-allied (Oils and fats,
Feeds and Proteins, Starches and
Agro Distribution), and Support
Services. The restructuring is in
harmony with our fully integrated
“farm-to-table” model, which is
backed with the best practices, and
the great passion of our people to
deliver quality always.
Going forward, we would continue
to leverage on our size and the
synergies within the group to
optimize costs and improve the
efficiency of our shared services.
Food
Our food business, has over the
years been strategically positioned
to focus on the development
of our key food value chains,
namely: Grains, Sweeteners, Oils
and fats, Starches and Proteins.
Under Grains, the Wheat value
chain which remains the mainstay
and core focus of our business,
has despite prevailing strong
economic headwinds continued to
show a sustained growth, thereby
reinforcing the leadership position
and market’s appeal of the ‘Golden
Penny,’ foods brand. Our bread
flour, ball foods, and pasta are all
leaders in their segments.
Our Food strategy is based on
five key pillars, namely, Category
Leadership; winning at point of
purchase and with our Customers;
Innovation; Supply Chain
excellence; and enabled by the
winning food organization. The
year has witnessed strategy being
translated into action in some key
areas.
To meet the various needs of our
partnersanddownstreamcustomers
in the bakery, and confectionery
industry, we introduced three
new flour varieties: Bakers’ whole
wheat flour, Easy bake flour and
Classic flour. This is in addition to
the popular Golden Penny Prime
and Confectionery Flours. The new
varieties are a clear demonstration
of the fact that we listen to our
customers and consumers and
respond to their needs. We also
continued to focus on and evolve
our ‘route to market’ with our trade
partners with the deployment of
vans and sales automation to assist
re-distribution. As part of this we
also introduced new trade terms.
In terms of innovation we have
invested in building capability
and ideation to build a pipeline
of initiatives and execute existing
ones. The early examples of this can
be seen in Noodles, where we are
at the tail end of plans to introduce
new and exciting product ranges,
which will now include seasonings
that have been infused with local
flavors, and packaging variations of
40 grams and 120 grams.
In furtherance of our commitment
to empower our partner bakers,
we recently initiated a capacity
development and knowledge
sharing program, aptly named,
“FMN Baker’s School.” The school
creates an unparalleled avenue
where we engage, educate and
interact with bakers on the best
practices and innovative solutions
in the wheat-to-bread value chain.
As at the end of March 2018, we
had successfully trained over 200
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master bakers at the ‘FMN Baker’s
School.’
Last year, when we announced the
commissioning of our state-of-the-
art Sorghum mill in Kano it was with
great excitement considering the
prospects of a centrally sited local
cereal hub. Today, I am pleased to
confirm that our huge investment
has started making the much-
desired impact in the areas of Group
synergy, with the development
and introduction of new Sorghum
based products. Our latest offering
from the Sorghum mill, ‘Masalina,’
will soon be at market stalls to the
delight of our consumers.
Sugar
Our Golden Sugar Company Limited
is on a steady growth trajectory as
we continue to gain inroads into
newer markets and improve market
share.
In line with the Federal
Government’s backward integration
policy regarding the mandatory
upstream operation requirements
for sugar processors, Golden Sugar
Company acquired 100% equity
in Sunti Golden Sugar Estates
Limited (SGSE) which was formally
commissioned on the 15th of
March 2018 by the His Excellency,
Muhammadu Buhari (GCFR),
President of the Federal Republic
of Nigeria, with the support of our
numerous stakeholders.
The sugar estate at Sunti, near
Mokwa in Niger State is situated
on 17,000 hectares of irrigable
farmland, and a Sugar mill that
processes 4,500 metric tons of
sugarcane per day. At full capacity,
the mill is expected to produce 1
Million tons of sugarcane which
roughly translates into 100,000
metric tons of sugar yearly.
At the time of the commissioning,
which by all accounts was a
resounding success, the estate
had completed a network of
roads infrastructure for its use
and this offers great benefits to
the surrounding 28 communities
running for 34 kilometers. The
roads network provides a variety
of access routes to the homes of
the indigenes. Drains, culverts, and
flood-protection walls have also
been constructed.
It is important to note that our N50
billion investment in Nigeria's sugar
value chain provides a concrete
example of the effort to reduce sugar
importation, make huge savings
in foreign exchange, boost local
capacity, and reduce unemployment
by putting thousands of Nigerians
to work in the agricultural sector,
which is very much aligned to this
Administration's policy thrust and
agenda.
Agro-Allied
FMN has continued to consolidate
its footprints in the Agriculture
Sector with a firm commitment to
lead the required transformation in
that space, while aligning with the
Agriculture policies at the Federal
level, as well as the respective
states in which we operate.
Wearenotunmindfulofthecountry’s
efforts to diversify its revenue base
as well the productivity of nascent
sectors. We see ourselves as
processors that have a vested
interest in transforming the yields
of farmers and improve the
technology available to them. This
helps to ensure that we have a
steady supply of cost-effective and
abundant material to run our plants.
As a group that has always sought
to be ahead of the curve, this has
formed a strong rationale for our
involvement in Agribusiness. We
recognize the role that we can
play in the development of quality
seed systems, improvement in the
uptake of mechanization, control
of pests and diseases, technology
to reduce post-harvest losses and
proven and commercial technology
for first -level processing. These are
important elements in building a
Pivots at Sunti Sugar Estates
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robust and diverse supply chain of
locally sourced raw materials.
Oils and Fats
Today, ROM Oil Mills Ltd is
undoubtedly one of the largest new
generation edible oil complexes in
Africa, and perhaps one of our major
investments in the development
of the oils and fats value chain in
Nigeria.
As a strategic response to market
development and on the premise
of expanding market share locally
and internationally for vegetable oil,
margarines and spreads, we have
in the last fiscal year embarked on
a plan to significantly increase the
capacity of our solvent extraction
plant. Furthermore, we will be
introducing new size variations to
themarket-100ml oilpouch forSoya
and Vegetable oils, and a 15 grams
pouch for Golden Penny spreads.
ROM Oil continues to get input
support from our 4,500-hectare oil
palm plantation in Edo state while
Soybean is sourced locally across
the country.
Agri Palm Limited, our 4,500
hectares of oil palm plantation at
Iguiye and Ugbogui, near Benin city
continues to record improvements
in yields with a 25% increase in
fresh fruit bunches. With renewed
focus on improving plantation
maintenance and agronomy
practices, we reckon that we would
record greater improvements in the
supply of crude palm oil (CPO) to
ROM Oil.
Following our acquisition of
additional 20,000 hectares of
arable land in Edo state, we are
now at the process of ascertaining
the boundaries by planting beacons
for better management, and have
also commenced with the Free
Prior Informed Consent process,
as required to obtain Environmental
Impact Assessment Certificate.
Feeds and Proteins
The increasingly critical role of
poultry, animal and fish feeds in
the integrated food chain cannot be
over emphasized. It is underpinned
by the important contributions of
domestic animals to the global food
supply, which in turn reinforces our
strategy to lead in that sector. I am
proud to state that our subsidiary
company, Premier Feed Mills
Limited is the leading producer of
aqua and poultry feeds in Nigeria.
In Calabar, we added an additional
10 tons per hour extrusion line to
support aqua feeds for the local
and international markets, while
in Ibadan, we have commissioned
a new molasses addition project
to utilize molasses from our Sunti
sugar mill. This approach will
ensure we produce higher quality
feeds in anticipation of our plans
to introduce a new cattle feeds
product line.
Our 10,000-hectare farm in Kaboji,
Niger state supplies inputs to
Premier Feeds and Northern Nigeria
Flour Mills (NNFM) Plc and serves
as model laboratory for cultivation of
maize and soybean in Nigeria. We
are halfway through a restructuring
process for crop production with
the focus on aligning the 2018
season to white maize, wheat and
soy seed production. Additionally,
we have recently partnered with
Corteva Agriscience, a globally
renowned company with a wealth
of experience in crop protection and
biotechnology solutions to introduce
and develop hybrid maize varieties.
Our partnership with Corteva will
see us working on key aspects
of the maize value chain, with
a focus on promoting modern
farming techniques and practices,
as well as capacity development
and knowledge transfer for the
technology to support local
production and use of improved
quality inputs, including crop
protection.
Empowering small-scale businesses
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I am happy to announce that we
have begun the sustainability
testing phase for the most viable
varieties that would be suitable for
our environment and we envisage
that the next step would be the
establishment of a world-class hybrid
maize production plant in Nigeria.
Starches
Our upstream company in the
Cassava value chain, Agro-Allied
Syrups Ltd, has in the period under
review successfully cultivated about
800 hectares of cassava in Shao,
Kwara state. You would recall that in
my last year’s report, I highlighted our
Group’s agreement with Ere-Egwa
Farms Limited, a company with wide
experience in the growing of Cassava
to support our downstream company
with the supply of Cassava through a
contract farming arrangement. I am
pleased to report that the strategic
decision had started yielding the
desired results, as evident in the
increased supply of Cassava tubers
to Thai Farm International Limited,
our downstream company in the
value chain.
As a pathway to a sustainable
partnership at our farms with
smallholder farmers and farmer
groups, we instituted an outgrower
scheme to strengthen not just
our supply chain, but to create
shared values, and simulate
economic development in the rural
communities. In the year under
review, 35 farmers covering 250 Ha
of land participated in our outgrower
scheme growing Cassava.
Cultivation commenced at the first
quarter of 2017 while harvest was
concluded in the first quarter of 2018.
We are positive that with the renewed
interest and progress recorded, the
scheme will be expanded to include
55 farmers or more, to cover 400 Ha
of land.
Additionally, I am happy to report
that Thai Farms has now embarked
on developing a new local content
product line with the introduction of
Golden Penny Garri. With this new
initiative, we have started to deliver
premium quality of Golden Penny
Garri into the Nigerian market to the
great delight of our customers. The
new product has great potential to
deliver well in the international market
by virtue of its superior quality, shelf-
life and very attractive packaging.
Those who have tested our product
can attest to its freshness, quality
and affordability. We envisage that
our entry is going to redefine not just
the quality and production standards
for a much-loved staple in Nigeria
but also across the region.
Agro Inputs and Distribution
Through this value chain we are
continuing our work to develop a fully
functional distribution network and
ecosystem for reaching smallholder
farmers and farmer groups, that will
serve as a platform for improved
interactions, knowledge transfer
and capacity development; supply
and distribution of high yielding
seeds, fertilizers, bags, and a route
to market through a guaranteed
off-take solution. The ecosystem is
being further expanded to include
Agronomy support and Agric
extensions services, where we
leverage on our in-house expertise
as well as working with NGOs, and
other partners to offer farmers the
much-needed access to improve
farming methods.
It is noteworthy that our subsidiary
company, Golden Agri Inputs Limited
(GAIL), is still very much focused on
aggregating locally produced grains
with the improved cooperation and
partnership of key stakeholders
like outgrowers, farmer groups,
cooperatives and Government
agencies. In that regard, I am happy
to report that we have recently been
informed by the Federal Government
that the Group has been awarded
concessions for 3 Silo complexes
across strategic locations in the
country by the Federal Ministry of
Agriculture and Rural Development.
We are awaiting the completion of
the concession process in order to
take possession of the respective
locations as they will form a channel
to deliver our suite of products and
services targeted at the Nigerian
farmer.
The Golden Fertilizer Division
continues to support and align
with the Federal Government’s
Presidential Fertilizer Initiatives (PFI)
working with the support of partners
including, Fertilizer Producers &
Suppliers Association of Nigeria
(FEPSAN) and Nigerian Sovereign
Investment Authority (NSIA) to
ensure that farmers across the
country have access to NPK.
We are embarking on an aggressive
refurbishment of our existing plants,
investing in new machinery and
channels to boost our blending
and distribution capacity, which will
ultimately bridge the gap between
the demand and output for our very
well-regarded brand. In addition,
His Excellency, Muhammadu Buhari (GCFR), President of the Federal
Republic of Nigeria, commissions Sunti Golden Sugar Estates
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we are executing plans to establish
new blending plants in other parts of
the country as a strategic initiative to
counter logistics challenges in our
drive to ensure that our products are
accessible across the length and
breadth of the country.
Support Services
With the improved level of activities
recorded in the agricultural sector,
Bagco Division recorded an upsurge
in demand for agricultural sacks in
the last fiscal year. To position the
division to fully capture the surge of
activities, additional machinery will
be installed at the Bagco factories in
Kano in the next fiscal year. Morpack
on the other hand recorded less
favorable volumes than expected.
This was mostly due to depressed
demands from the non-staple
categories within the fast-moving
consumer goods sectors. However,
despite this slight setback, we are
optimistic that the trend would be
reversed in the next financial year.
In Golden Transport Division, we
have continued to face the recurring
challenges to the performance of our
trucks due to bad road conditions. As
a recourse to these challenges, we
are investing in the renewal of our
fleets to enhance productivity and
reduce bottlenecks resulting from
incessant breakdown. We have also
continued with our partnership with
3rd party transport services to further
boost our operational efficiencies,
while stimulating the development
and capacity of smaller transport and
logistics businesses.
In Apapa Bulk Terminal Limited
(ABTL), we continued to record
notable advancements in process
efficiency, especially with respect to
berth utilization. And this is achieved
in spite of prevailing challenges
of insufficient depth at berths 4
and 5 to accommodate larger
ships, inadequate storage facility
to accommodate 3rd party imports
and exports and the incessant traffic
gridlock at Apapa.
In furtherance of her security
management protocol, and the
overall safety awareness and
performance, ABTL has commenced
with the implementation of daily
safety awareness and induction
session for all articulated vehicles
entering the terminal.
Quality Assurance
Millions of families rely on us for
great tasting foods, that provide
nourishment daily. Their confidence
in FMN is deeply rooted in our
promise to deliver quality products
at every turn, starting from our
investments into the research and
development of quality seeds, to the
delivery of consumer products that
meet their expectations on nutrition,
health and wellness.
Overthepastyear,wehavecontinued
to pursue even more stringent quality
controls in our production lines, with
the institution of a higher certification
with the Food Safety Management
System (FSSC 22000:2017), and
the Quality Management System
ISO 9001:2015. This is in addition
to an enhanced technical support
service to key distributors and end
consumers.
AtFMN,Qualityremainsawatchword.
It is at the heart of everything we
do, and remains a priority in all our
processes – Feeding the Nation,
Everyday - from sourcing, storage, to
processing and up till the consumer
gets the final product.
SUSTAINABILITY / CORPORATE
SOCIAL RESPONSIBILITY
I am pleased to inform that
Health & Safety and Environment
Sustainability (HSES) are now a
central group function at FMN. The
Group HSES framework has been
implemented successfully across
all our activities. In the period under
review, we recorded zero severe
injuries and zero employee and
contractor fatalities.
At FMN, we remain committed to a
sustainability approach that is based
on respect for people, cultures
and the natural environment. This
is so because we appreciate that
the success and sustainability of
our business requires creation of
Sunti Golden Sugar Estates,
Niger State
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value for our shareholders, other
stakeholders and the larger society.
In this regard, we have approved and
adopted a sustainability statement at
the board level, for the continuous
improvement of the environmental,
social and economic aspects of our
operations. This will be accomplished
through our commitment to
preserving biodiversity, reducing
water usage, proper waste
management and reduction of the
emission of greenhouse gases. We
will remain dedicated to caring for
the livelihood of local communities
and our employees in terms of health
and welfare. We will also continue to
deliver strong profitable growth by
engaging in ethical and transparent
business practices.
Our policy is to constantly set high
safety standards at our plants;
improve the working conditions of our
employees, and positively impact the
environment and host communities.
These actions, we are convinced will
enhance our business performance
and further drive our sustainability
journey.
The policy is hinged on the following
Corporate Social Responsibility
(CSR) pillars:
• Education, research and skills
development
• Environmental sustainability
• Health, safety and welfare
• Infrastructural Development
• Security
Our different businesses are
given the necessary flexibility to
determine the most appropriate
CSR intervention in their localities.
This measure ensures that our CSR
projects are as effective, as they
are impactful. However, the general
guiding principles are informed by
long-term focus, and on the basis of
consultations with the communities in
which the businesses operate. Some
of our social investments for the year
are as follows:
• As an Organization that takes
Education, research and skills
development very seriously, we
made a large donation towards
the renovation works and
equipping of the new specialized
Laboratory at the Department of
Food Technology, Yaba College
of Technology, Lagos.
• To promote inclusive education
for the mentally and physically
challenged in Nigeria, FMN
completed, commissioned and
handed-over a vocational Centre
for special needs children at
Methodist Primary School,
Apapa. The center was fully
furnished with equipment for
hairdressing, shoe making,
tailoring, ICT to mention a few.
The vocational center will be
managed by Caregiver Initiative,
an NGO that is experienced
in working with special needs
children.
• A GEORGE S. COUMANTAROS
DISTINGUISHED Professorial
Chair has been established
at the University of Ibadan as
part of efforts to enhance the
effectiveness of Flour Mills
Food Research Centre at the
University.
• Commencement of Technical
partnership by Niger Mills
Calabar with the Calabar Area
office of the Industrial Training
Fund (ITF) to train fourteen (14)
youths aged 18 - 40 years with a
minimum academic qualification
of first school leaving certificate
(FSLC) across its four (4) host
communities in the following
skill areas; Fashion designing;
Bakery and pastry; Aluminum
fabrication; Plumbing and Fitting;
and, Welding and Fabrication.
• Renovation and commissioning
of St. Martins Catholic School,
Orile- Odo, Alomaja, Ibadan, Oyo
state by ROM Oil Mills.
• Commencement of a joint
training and research project for
young farmers at IITA, Ibadan by
Premier Feeds.
• Completion of a flood control
structure, provision of boreholes
and school support projects by
Sunti Golden Sugar Estates for
its host communities at Sunti,
near Mokwa, Niger State.
• Installation of street lights at
Iganmu.
• Donations and product support
to various organizations and
charitable institutions, including:
Modupe Cole Memorial Child
Care and Treatment Home,
Lagos, Bethesda home for the
blind, Lagos, and Our Lady of the
Annunciation Church orphanage,
Ibadan to name a few.
• FMN is partnering with the Flour
Millers Association of Nigeria
(FMAN) to provide support to
the Bakery schools in Yaba and
Kaduna.
HUMAN CAPITAL DEVELOPMENT
Our business continues to make
great strides through the dynamic
contributions of our people and we
are proud of them. Therefore, we
Partnering with Smallholder
farmers
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recognize that we must continue
to acquire, grow and retain a
committed, dedicated, and diverse
workforce.
In continuation of our policies
and programs, our PIILOT
(Performance, Integrity, Initiative,
Leadership, Ownership and
Teamwork) ambassadors –
employees who were role models
of our core values, were rewarded
through a quarterly and annual
recognition awards. Interestingly,
an employee of a third-party service
provider emerged the ‘Employee
of the year,’ for the second time
running. The employee who was
rewarded with an automatic full-
time employment in FMN has since
joined our business as a Scrabber
operator in Golden Sugar Company.
Our process improvement
programme received a boost in
2017 with the commencement of
our Human Resources Process
Automation project tagged “Project
Falcon.” The electronic platform,
“eHR,” will provide seamless access
to HR services from anywhere,
at any time and on any electronic
device registered and approved by
FMN.
We have strengthened the FMN
Managers’ College and expanded
our annual 360-degree PIILOT
assessment to all managers to
improve our Managers’ Quality
Index (MQI). This emphasizes the
desired behaviors and helps to
overcome deviant PIILOT conducts
across FMN.
As part of a strategic initiative to
ensure that employees have access
to adequate information about our
business, the Group Managing
Director’s Brief, a quarterly
interactive and engagement session
with employees across the country
has become a regular feature in
every calendar year. The weekly
Golden Penny e-Newsletter and
other timely information channels,
remained active and contributed to
sustaining our cordial relationship
with the employees, staff unions
and further improved Group-wide
communication.
For sustained quality health care
and wellness of our employees,
various health awareness and
screening sessions on Malaria,
Hypertension, Hepatitis, HIV/Aids,
Cancer, Tuberculosis and Diabetes
were deployed for employee
education and empowerment.
CONCLUSION
Distinguished shareholders, as we
mark the end of another eventful
financial year, I am delighted to say
that, FMN has made remarkable
progress. You can be rest assured
that, as we consider the future, it is
with the confidence that we have
the right strategy, leadership, the
best people, and the right culture, to
position our company for continuous
growth.
Given the gains that were
recorded by the economy in
2017, and the outlook for future
growth, your Directors and I see
more opportunities than we see
challenges. We believe that with the
improvement of key infrastructures,
stability in exchange rates and
inflation, and the implementation
of bold new reforms by the
Government, the productive sectors
will open up for even greater
opportunities in 2018.
Our core strategic focus at FMN
is “Feeding the Nation, Everyday.”
This mantra succinctly defines our
guiding philosophy and inspires
the various businesses which
we operate; as we continue to
enrich the lives of producers,
our customers, communities,
distributors, shareholders, our
esteemed employees and all our
key stakeholders.
Let me close by expressing my
gratitude and appreciation to
my colleagues on the board, the
management team and all our
employees for their commitment
and passion towards our collective
goal of establishing FMN as an
enviable brand.
Similarly, I would also love to
express my sincere thanks to
members of the audit committee,
our distinguished shareholders,
bankers and other professional
advisers for their interest, support,
trust and confidence.
John G. Coumantaros
Chairman
Passionate and
resourceful employees
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Board of Directors
Mr. John G. Coumantaros is the Chairman, Board of
Directors, Flour Mills of Nigeria Plc (FMN).
Mr. Coumantaros, an experienced and successful
entrepreneur, sitting on the Board of several international
companies, was born in 1961. He graduated from Yale
University with a B.A. Degree in History in 1984.
Mr. Coumantaros began his long relationship with FMN
in 1984 and was appointed to FMN’s Board as a non-
executive Director in 1990. He served as a Non-Executive
Vice Chairman of the Company since 2012 before his
present appointment as Chairman of FMN Board of
Directors on 10th September 2014. He sits on the Board
of the Oxbow Carbon LLC, a leading international energy
company and is a director of ELBISCO a fast-moving
consumer food business in Athens, Greece.
Mr. John Coumantaros has over 30 years’ experience in
international trade, logistics, manufacturing, and industry
and is passionately dedicated to continuing the evolution
of FMN with its Golden Penny Food Brands as one of
the leading fast-moving consumer food companies and
largest agro-allied concerns in Nigeria and in Africa.
Chief Ukpabi was the Group Managing Director of Flour
Mills of Nigeria Plc from January 2002 to 31st March
2013 when he retired and was elevated to the position of
Non-Executive Vice Chairman.
Chief Ukpabi studied at the University of Ibadan and
proceeded to the University of Nigeria, Nsukka where
he obtained a Bachelor’s Degree in Chemistry 1971. He
further studied at Ashridge Management College and
attendedAdvance Management Programme of the Lagos
Business School in 1996 as well as IESE Management
Programme, Spain in 1998. He also participated in a
good number of technical and management training
programmes in the UK, USA and Switzerland.
Until March 2003, Chief Ukpabi was the Vice-Chairman,
Nigerian Bag Manufacturing Company Plc, now a
Division of FMN. He sits on the Board of Northern
Nigerian Flour Mills Plc, Apapa Bulk Terminal Ltd, Golden
Sugar Company Limited and a few other subsidiaries of
FMN.
Mr. John G. Coumantaros
Chairman Vice Chairman Group MD / CEO
Chief Emmanuel Ukpabi Mr. Paul Gbededo
Paul Gbededo, a Fellow of the Polymer Institute of
Nigeria and Managing Director of FMN’s Agro-Allied
Business, was appointed Group Managing Director /
Chief Executive Officer of FMN on 1st April, 2013.
Paul was educated at the Polytechnic of North London
UK where he obtained Graduateship of Plastic and
Rubber Institute and Associateship of National College
of Rubber Technology in 1980, and holds MSc. Degree
in Polymer Technology (1981) of Loughborough
University of Technology, UK. An alumnus of Lagos
Business School, Advanced Management Programme
3, he attended Pasta Machinery Use, Maintenance
and Operation at FAVA, Italy in 2005. He attended the
Finance for Senior Executives of the Havard Business
School, 2013.
Paul’s over 30 years career with FMN Group started
at Nigerian Bag Manufacturing Company Plc (1982 –
1998). There, he acquired extensive experience serving
in various managerial positions as Process Control
Manager, Production Manager, General Manager
Production and became the first Nigerian Production
Director in 1993.
Paul, best known for his pioneering role in fertilizer, pasta
and rice, joined FMN in 1998 as Plant Manager/Director
in charge of fertilizer operations, pioneering development
of the product, “Golden Fertilizer” the first choice of
Nigerian farmers.
He also served as a pioneer General Manager/Director
for Golden Pasta Company Limited, a former subsidiary
(now a division) of FMN – which has grown to become
Africa’s biggest pasta plant.
In July 2012, Paul was elevated to the position
of Managing Director, Agro-Allied business with
responsibility to implement FMN Group’s backward
integration policies, programmes and initiatives. In
addition, he directs the operations of Golden Penny
Rice Limited and sits on the Boards of Golden Sugar
Company Limited and some other subsidiaries of FMN.
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Board of Directors
Prof. Jerry Gana Prof. Jerry Gana, CON
Non-Executive Director
Professor Jerry Gana (a Commander of the Order of the
Niger), graduated from Ahmadu Bello University, Zaria
in 1970 with a B.A. (Hons) degree, (Upper Division) in
Geography, and proceeded to the University ofAberdeen,
Scotland, for an M.sc Course in Rural Resources
Planning, leading to a Ph.D thesis on Market Place
Systems and Rural Development in 1974. He further
obtained a Certificate in Education from the University
of London, and taught at Ahmadu Bello University from
1974 to 1986, rising to the post of Professor in 1985.
Prof. Jerry Gana has served the nation in various
capacities with distinction. These include: Senator
of the Federal Republic; Consulting Director of the
Directorate of Food, Roads and Rural Infrastructure
(DFRRI); Chairman of MAMSER; Minister of Agriculture
and Natural Resources; Information and Culture;
Cooperation and Integration in Africa; and Information
and National Orientation.
Prof. Gana is the immediate past Pro Chancellor and
Chairman of Governing Council of the University of
Lagos between 2013 to 2017.
Alhaji Abdullahi Ardo Abba
Alhaji Abdullahi was educated at Yola Middle School
and later proceeded to further his educational career
in London between 1963 and 1967 where he attended
the College for Distributive Trade and later University of
London for his Diploma in Livestock Production.
His work experience includes being Kaduna Abbatoir
Manager, Production Manager/Deputy Managing
Director Mokwa Cattle Ranch; and, Managing Director at
the Bauchi Meat Company Ltd and former Commissioner
for Agriculture in North Eastern State and later Gongola
State from 1975 -1979.
Alhaji Abdullahi who joined the Board of Flour Mills
of Nigeria Plc as a Non-Executive Director in 1983 is
presently the Chief Executive of Abbas Agro Limited
.In addition, he runs a medium-sized dairy plant for the
production of yoghurt, ice cream and citrus fruit drinks
as well as being the Proprietor of Alkama Bakery, Yola.
Mr. Alfonso Garate
Mr. Alfonso Garate joined the Board of Flour Mills of
Nigeria Plc. as a Non-Executive Director on Wednesday
11th March 2015.
He holds a Bachelor of Economics and Business
Administration Degree from University Pontificia
Comillas – ICADE, Madrid, Spain (1992) and attended
Harvard Business School – Advanced Management
Program (2009). He is also an alumnus from IMD
(International Institute for Management Development)
Business School of Post Graduate Studies in Lausane,
Switzerland (2005-2007).
Avery experienced professional in business development
in emerging markets with strong capabilities in general
management, business strategy, corporate finance,
structured finance and international trading and shipping,
Mr. Garate started his career in investment banking and
telecom institutions where he held numerous positions.
Thereafter, he proceeded to Holcim Ltd where he held
different management positions and subsequently
became the Chief Executive Officer of Holcim Trading
SA, the worldwide leader trading and shipping
organization for cementitious and building materials.
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Alhaji Rabiu Gwarzo, OON, Vice Chairman of Northern
Nigeria Flour Mills Plc started his educational career with
a brief stint at Bayero University Kano and proceeded to
West Ham College and North East London Polytechnic,
both in London where he studied Commercial Accounting
between 1972 and 1975. He holds a Certificate in
Accounting and Finance of University of Strathclyde,
Glasgow, Scotland (1982).
He joined Northern Nigeria Flour Mills Plc as an
Accountant in 1985, rose to the position of Deputy
Managing Director in 1991 ; Managing Director in 1997
and was elevated to the position of Non-Executive Vice-
Chairman of the Company in 2011.
Alhaji Rabiu, (an Officer of the Order of Niger), who
joined the Board of Flour Mills of Nigeria Plc. as a non-
executive member on 8th December, 2009, is also a
member of Kano Peace Development Initiative and a
Director of Kano State Investment Company Limited.
Mr. Ioannis Katsaounis
Mr. Ioannis Katsaounis is a non-executive member of the
Board of Directors of Flour Mills of Nigeria Plc, a position
he has occupied since September, 1993
Mr. Katsaounis, an Honourary Doctorate Degree holder
in Business Administration from the University of Bolton,
Manchester, UK (2017), is a Graduate of Economics
from the University of Geneva (1972); Graduate Degree
holder in Regional Development, University of Athens
(1975); Bachelor of Science Degree in Mechanical
Engineering (University of Minnesota 1969) and an MBA
in Economics from the University of California, Berkeley
(1970). He is an alumnus of Harvard Business School of
Post Graduate Studies.
Prior to joining Flour Mills, Mr. Katsaounis was the
founder and owner of Plexus Construction Company,
Greece (1974 – 1985). He has also served as Managing
Director and General Manager of Alucanco S.A. Greece,
an aluminum cans manufacturing company (1985-2000)”
Mr. Thanassis Mazarakis
Thanassis Mazarakis is a non-executive member of
the Board of Directors of Flour Mills of Nigeria PLC, a
position he has occupied since 3rd July, 2006.
He holds a Bachelor of Arts degree from Princeton
University (1984) and a Masters in Business
Administration from the Wharton School at the University
of Pennsylvania (1988). Prior to joining Flour Mills, Mr.
Mazarakis has held numerous finance, marketing and
general management positions. Most recently he was
the Chief Financial Officer of the Prudential Insurance
Company of America, one of the largest US life insurance
companies, and the Chief Executive Officer of Chase
Merchant Services, the largest global credit and debit
card transaction processor.
Board of Directors
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Alhaji Yunus O. A. SaliuMr. Atedo N. A Peterside, CON
Non-Executive DirectorNon-Executive Director
Mr. Peterside is the founder of Stanbic IBTC Bank Plc
and the Chairman of Cadbury Nigeria Plc. He is also the
Chairman and Founder of ANAP Business Jets Limited.
He was the Chairman of the Committee that crafted the
first Corporate Governance Code for Public Companies
in Nigeria. Mr. Peterside also sits on the Boards of
Nigerian Breweries Plc (Heineken Subsidiary), Standard
Bank Group Limited, The Standard Bank of South Africa
Limited and Unilever Nigeria Plc and is also the Alternate
Vice Chairman (Private Sector) of the Nigerian Industrial
and Competitiveness Advisory Council, which is chaired
by the Vice President of the Federal Republic of Nigeria.
Alhaji Saliu, is a Fellow of the Institute of Chartered
Accountants of Nigeria (ICAN).
He holds an Upper Second Class honours Bachelor of
Science Degree in Economics - University of Ibadan in
June 1969 had a brief stint with the Civil Service of the
old Western Nigeria where he worked as Administrative
Officer Grade IV (Assistant Secretary) from 1969 to
December, 1970. He travelled to the United Kingdom
in January 1971 for training in Accountancy which he
completed in June 1973.
On his return to Nigeria, he joined the accounting firm of
KPMG Audit (formerly Peat Marwick Ani Ogunde & Co)
as an Audit Senior in February 1974 and was admitted
into the Partnership of the firm in 1982. He remained
a Partner of KPMG Audit for twelve years before joining
Flour Mills of Nigeria Plc in February 1994 as Finance
Director/Company Secretary. He stepped aside from
his role of Finance Director in September, 2011 and
continued to serve Flour Mills as an Executive Director
and Company Secretary.
Alhaji Saliu retired as the Company Secretary on 31st
December 2015 and remains on the Board of Directors
as a Non-Executive Director of the Company.
Mr. Folusho O. Phillips
Foluso is the Executive Chairman and Founder of
Phillips Consulting Limited, a business and management
consulting firm, with offices in Nigeria and representation
in South Africa. He joined the Board of Flour Mills of
Nigeria Plc as a non-executive director on 12th March,
2014.
He is a qualified Industrial Economist, a Fellow of the
Chartered Institute Of Management Accountants
of the United Kingdom, and a Fellow of the Institute
of Chartered Accountants of Nigeria. He brings with
him experience and expertise in finance, business
management, enterprise development and macro-
economic policy management.
Mr. Phillips who is very active in the Nigerian corporate
scene, sits on the boards of diverse commercial and
non-governmental organizations and charities, as
director, trustee or shareholder. He is a Board member
of the Nigeria Economic Summit Group; Chairman,
Nigeria/South Africa Chamber of Commerce; Chairman
PRIMERA Africa Group ( a Finance and Financial
Advisory Group). Mr. Phillips also serves as Director,
Special Olympics of Nigeria; Director, Vigeo Holdings
(a Power & Energy company in Nigeria); Chairman of
The Sickle Cell Advocacy and Managment Initiative; a
Director of the Institute of Human Virology of Nigeria;
Chairman Yellow Brick Road ( a leading advertising
and PR company in Nigeria); and is a member of the
Board of Africa.Com. ( a Pan African digital news and
communication platform)
Foluso is a prolific speaker, who has addressed many
international business seminars and conferences
including Wharton Business School and Harvard
Business School both in U.S.A., Business in Africa’s
Leadership Summit in South Africa and several other
leadership conferences, business and trade summits
across Africa, the USA and Europe”
Board of Directors
Introduction
Chairman's
Statement
Report of the
Directors
Financial
Statements
CSR / Other
Information
Audit Committee and

Mr. Joseph O. Umolu
Company Secretary
Mr. Joseph Odion Umolu, a Member of the Nigerian Bar
Association (NBA), is currently the Company Secretary
of Flour Mills of Nigeria Plc. Prior to this appointment,
Joseph was the Company’s Head of Legal Services.
He holds an Upper Second Class Honours Bachelor
of Arts Degree in Philosophy from the University of
Ibadan and an Upper Second Class Honours Degree in
Law, from the University of Lagos. He was called to the
Nigerian Bar in October, 2000 and subsequently obtained
a Master’s degree in Law from the University of Lagos.
Joseph’s career in corporate legal practice cuts across
both the private and public sectors. He served as a
counsel in Gocuz Chambers where he was the Managing
Counsel before joining the Nigerian Civil Aviation
Authority as Senior Legal Officer in 2003. He proceeded
to the Legal Department of Union Bank of Nigeria Plc
where he rose to the position of a Manager.
Joseph began his career with FMN as Manager, Legal
Services in January 2012 and later became Head, Legal
Services in 2014. He was appointed the Company
Secretary effective 14 January 2016 and was elevated to
become Director, Legal Services in 2017.
Mr. Folarin R. A. Williams
Mr. F. R. A. Williams, joined the Board of Flour Mills of
Nigeria Plc as a non-executive member on 20th May,
2005.
He was educated at Imperial College of Science and
Technology, London where he graduated Bs.c (Hons.)
AGGI Chemical Engineering. He received the Dr.
Loveless award for Outstanding Work in the Humanities
from the University of London in 1976.
He studied at Selwyn College Cambridge from 1981
to 1983, obtained MA Cantab Law, was called to the
Nigerian Bar in 1984. Mr. Williams is the Managing
Partner of Chief Rotimi Williams’ Chambers. He is a
highly experienced legal practitioner who is principally
active in commercial and corporate advisory work and
litigation. He was Council Member and Treasurer of the
Section on Business Law, Nigerian Bar Association. He
is a Fellow of the Center for International Legal Studies,
Salzburg Austria.
He served on the Board of GlaxoSmithKline Nigeria Plc,
G. Cappa Plc and the Delta Steel Company Ltd.
He is currently the Chairman of Pharma Deko Plc and
United Parcel Service (Nigeria) Ltd. He serves as a
director of other companies.
He is a squash enthusiast and was former Chairman of
the Lagos State Squash Rackets Association and former
Vice President of the Nigerian Squash Federation.
Mrs. Salamatu H. Suleiman
Mrs. Salamatu Hussaini Suleiman joined the Board
of Flour Mills of Nigeria Plc. as an Independent Non-
Executive Director on Wednesday 8th March 2017.
Mrs. Salamatu Hussaini Suleiman, who is presently an
Independent non-executive director of Stanbic IBTC
Holdings Plc, is an experienced professional in corporate
business development and an amazon in the Nigerian
public sphere widely known for her advocacy for the
education of the girl-child and women development.
Mrs. Suleiman obtained an LLB (Hons) degree from
Ahmadu Bello University, Zaria, Kaduna State, Nigeria in
1981 as well as an LLM (with Distinction in “Multinational
Enterprise and the Law”) from the London School of
Economics & Political Science in 1987. She commenced
her professional career as a State Counsel with the
Ministry of Justice Sokoto in 1981 and thereafter worked
with Continental Merchant Bank from 1988 to 1996
and NAL Merchant Bank from 1996 to 1997. She also
worked as Secretary/Legal Adviser with the Aluminum
Smelter Company of Nigeria from 1997 to 2001 and later
became the Secretary and Director of Legal Services at
the Securities & Exchange Commission between 2001
and 2008.
Mrs. Suleiman was appointed Honourable Minister
of Women Affairs and Social Development, Federal
Republic of Nigeria in December 2008 and went on to
become the Honourable Minister of State, Foreign Affairs
Ministry, Federal Republic of Nigeria in 2010. In February
2012, Mrs. Suleiman was appointed Commissioner,
Political Affairs, Peace and Security, ECOWAS
Commission and completed her tenure at the end of April
2016”
Board of Directors
Introduction
Chairman's
Statement
Report of the
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Audit Committee and
CSR / Other
Information
Financial
Statements

Introduction
Chairman's
Statement
Report of the
Directors
Financial
Statements
CSR / Other
Information
Audit Committee and

Report of The Directors
1. Accounts
The are pleased to present the annual report the audited consolidated and separate financial statements of the and its
.
2. Legal form
The as incorporated in on th as a private limited and converted to a public in
3. Principal activities
The is in flour produc�on of edible oil and refined produc�on of and other
distribu�on and sale of and of laminated and
4. Results
5. Dividend
The are pleased to recommend to shareholders at the annual the declara�on of
a dividend of This dividend is to be declared out of accumulated pioneer profit.
6. Directors and directors' interests
0.
accordance the of the re�re offer themselves for the
Retiring by rotation:
7. Directors' interests in shares
The interests in the issued share capital of the as recorded in the of members as no�fied them for the purpose of
Interests in shares
31-Mar-18 31-Mar-17
Director
Direct Indirect Direct Indirect
8. Profile of Directors seeking re-election
8,295,673*
**
* Mr. Ioannis Katsaounis owns these shares indirectly through Windward Transport Company
** Mr. Atedo N. A. Peterside, CON. owns these shares indirectly through the First ANAP Domes�c Trust.
Mrs Salamatu Hussaini Suleiman
Report of the Directors
Introduction
Chairman's
Statement
Report of the
Directors
Audit Committee and
CSR / Other
Information
Financial
Statements

Mr. John Coumantaros
Mr. Coumantaros with over 30 years’ experience in international trade, logistics, manufacturing, and industry was appointed to FMN’s
Board as a non-executive Director in 1990. He served as a Non-Executive Vice Chairman of the Company since 2012 before his present
appointment as Chairman of FMN Board of Directors on 10th September 2014. He graduated from Yale University with a B.A. Degree
in History in 1984.
He also sits on the Board of the Oxbow Carbon LLC, a leading international energy company and is a director of ELBISCO a fast-moving
consumer food business in Athens, Greece.
Mr. John Coumantaros is passionately dedicated to the economic development of Nigeria and welfare of Nigerians. He is an avid
protagonist of the FMN mantra “Feeding the Nation, everyday” in the evolution of FMN through its Golden Penny Food Brands as one of
the leading fast moving consumer food companies and one of the largest agro-allied concerns in Nigeria and in Africa.
Dr. (Chief) Emmanuel A. Ukpabi (KJW)
Chief Ukpabi was the Group Managing Director, Flour Mills of Nigeria Plc from January 2002 to 31st March, 2013 when he retired and
was elevated to the position of Non-Executive Vice Chairman.
Chief Ukpabi studied at the University of Ibadan and proceeded to the University of Nigeria, Nsukka where he obtained a Bachelor’s
Degree in Chemistry (1971). He further studied at Ashridge Management College and attended Advance Management Programme of the
Lagos Business School in 1996 as well as IESE Management Programme, Spain in 1998. He also participated in a good number of technical
and management training programmes in the UK, USA and Switzerland.
Chief Ukpabi is a recipient of a number of awards, including a Doctor of Science Degree Honoris Causa, by Lautech University, Ogbomoso,
Oyo State, Nigeria in 2008. Chief Ukpabi is a knight of John Wesley and a Fellow of the Nigerian Institute of Marketing; Nigerian Institute
of Management and Nigerian Institute of Food Science and Technology.
Prof. Jerry Gana, CON
Professor Jerry Gana (a Commander of the Order of the Niger), graduated from Ahmadu Bello University, Zaria in 1970 with a B.A.
(Hons) degree, (Upper Division) in Geography, and proceeded to the University of Aberdeen, Scotland, for an M.sc Course in Rural
Resources Planning, leading to a Ph.D thesis on Market Place Systems and Rural Development in 1974. He further obtained a Certificate
in Education from the University of London, and taught at Ahmadu Bello University from 1974 to 1986, rising to the post of Professor in
1985. He was appointed to FMN’s Board as a non-executive Director on 13th March 2013.
Prof. Jerry Gana has served the nation in various capacities with distinction. These include: Senator of the Federal Republic; Consulting
Director of the Directorate of Food, Roads and Rural Infrastructure (DFRRI); Chairman of MAMSER; Minister of Agriculture and Natural
Resources; Information and Culture; Cooperation and Integration in Africa; and Information and National Orientation.
He is the immediate past Pro Chancellor and Chairman of Governing Council of the University of Lagos between 2013 to 2017.
Mr. Alfonso Garate
Mr. Alfonso Garate joined the Board of Flour Mills of Nigeria Plc. as a Non-Executive Director on Wednesday 11th March 2015.
He holds a Bachelor of Economics and Business Administration Degree from University Pontificia Comillas – ICADE, Madrid, Spain (1992)
and attended Harvard Business School – Advanced Management Program (2009). He is also an alumnus of IMD (International Institute
for Management Development) Business School of Post Graduate Studies in Lausane, Switzerland (2005-2007).
Alfonso is a very experienced professional in business development in emerging markets with strong capabilities in general management,
business strategy, corporate finance, structured finance and international trading and shipping.
9. Directors’ Responsibilities
The Directors are responsible for the preparation of financial statements which give a true and fair view in accordance with International
Financial Reporting Standards (IFRSs) and in a manner required by the Companies and Allied Matters Act CAP.C.20, Laws of the Federation of
Nigeria 2004 and the Financial Reporting Council of Nigeria (FRCN) Act. In doing so, they ensure that:
• proper accounting records are maintained;
• applicable accounting standards are complied with;
• suitable accounting policies are adopted and consistently applied;
• judgments and estimates made are reasonable and prudent;
• the going concern basis is used, unless it is inappropriate to presume that the Company will continue in business and;
• Internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets, prevent and detect fraud and other
irregularities.
10. Corporate Governance Report
Introduction
The Company is committed to the best practice and procedures in corporate governance. Its business is conducted in a fair, honest and
transparent manner which conforms to high ethical standards. This enables the Board of Directors and Management to accomplish the
company’s strategic goals, ensure good growth and corporate stability for the benefit of all stakeholders.
Board Composition
The Company’s Articles of Association provide that the Company’s Board of Directors shall consist of not more than fifteen directors. Presently,
the Board has a non-executive Chairman, a non-executive Vice Chairman, one executive director and eleven non-executive directors, two of
whom are independent directors.
The thorough process for selecting Board members gives premium to educational and professional background, integrity, competence,
capability, knowledge, expertise, skills, experience and diversity.
Introduction
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Report of the
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Audit Committee and

Board meetings
Members of the Board of Directors hold a minimum of four quarterly mee�ngs to approve the Company’s business strategy and objec�ves, decide on policy
ma�ers, direct and oversee the company’s affairs, progress, performance, opera�ons, finances; and ensure that adequate resources are available to meet
the company’s goals and objec�ves. A�endance of Directors at quarterly mee�ngs is very good.
It is noteworthy that the Company's Memorandum and Ar�cles of Associa�on allows for teleconferencing in order to ensure wide consulta�on and maximum
par�cipa�on by board members.
In line with provisions of Sec�on 258(2) of the Companies and Allied Ma�ers Act of Nigeria, Cap C20 Laws of the Federa�on of Nigeria 2004, record of
Directors’ a�endance at Board mee�ngs is available for inspec�on at the Annual General Mee�ng.
Role of Directors
The highlights of the role of directors include:
Cri�cal and regular examina�on of the company’s overall strategy with a view to ensuring that its goals, business plan and budget are in
alignment.
Assign respec�ve commi�ees to consider and take appropriate decisions on issues requiring Board a�en�on.
Establish well-considered objec�ves for the company and monitor implementa�on, reviewing performance and ensure the deployment of
appropriate competencies.
Ensure that adequate resources are available to meet the company’s goals and objec�ves.
Oversee Board appraisal, training, succession planning, appointment and remunera�on of members.
Board Committees
The Board of Directors has two principal board commi�ees in line with Securi�es and Exchange Commission (SEC)’s Code of Corporate Governance.
These are listed below indica�ng the summary of a�endance at mee�ngs held during the financial year ended 31 March 2018:
Remuneration/ Governance Committee
Members of the commi�ee include:
Mr. John G. Coumantaros
Dr. (Chief) Emmanuel A. Ukpabi (KJW)
Mr. Joseph Umolu - Company Secretary
Record of a�endance at Mee�ngs (Yes - Present; No - Absent):
Name 19-Jul-17 06-Dec-17
Mr. John G. Coumantaros Yes No
Dr. (Chief) Emmanuel A. Ukpabi (KJW) Yes Yes
Mr. Thanassis Mazarakis Yes Yes
Mr. Joseph Umolu Yes Yes
Risk Management Committee
Members of the commi�ee include:
Mr. Paul Miyonmide Gbededo
Alhaji Y. Olalekan A. Saliu
Mr. Joseph Umolu - Company Secretary
Record of a�endance at Mee�ngs (Yes - Present; No - Absent):
Name 19-Jul-17 06-Dec-17
Mr. P. M. Gbededo Yes Yes
Mr. T. Mazarakis Yes Yes
Alh R.M. Gwarzo, OON No Yes
Alh. Y. O. A. Saliu Yes Yes
Mr. Joseph Umolu Yes Yes
Divisions and Directorates
For effec�ve management, the Group is structured along the following Divisions and Directorates
Finance Corporate Services/Legal
Human Resources Technical
Marke�ng and Sales Supplies/Procurement
Logis�cs General Services
Internal Audit Bag Manufacturing
Pasta Produc�on Agro Allied
Fer�lizer Opera�ons Flour Opera�ons
Frequency and Attendance of Board Meetings
The Board held four (4) mee�ngs during the financial year ended March 31, 2018. The no�ce for each mee�ng was in line with the Company’s Ar�cles of
Associa�on and Board papers were provided to directors in advance.
Senior Execu�ves of the Company are from �me to �me invited to a�end Board mee�ngs and make representa�ons of their business units.
A summary of record of a�endance at Board mee�ngs is presented below:
Introduction
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Name 19-Jul-17 06-Sep-17 06-Dec-17 13-Mar-18
Mr. John G. Coumantaros Yes Yes Yes Yes
Dr. (Chief) Emmanuel Akwari Ukpabi (KJW) Yes Yes Yes Yes
Mr. Paul M. Gbededo Yes Yes Yes Yes
Alhaji Abdullahi Ardo Abba Yes Yes Yes Yes
Alhaji Rabiu Muhammad Gwarzo, OON Yes Yes Yes Yes
Mr. Ioannis Katsaounis Yes Yes Yes Yes
Mr. Thanassis Mazarakis Yes Yes Yes Yes
Mr. Atedo N. A. Peterside, CON Yes Yes Yes Yes
Mr. Folarin Ro�mi Abiola Williams Yes Yes Yes Yes
Prof. Jerry Gana, CON Yes Yes Yes Yes
Alhaji Yunus Olalekan Saliu Yes Yes Yes Yes
Mr. Folusho Olajide Phillips [Independent ] Yes Yes No No
Mr. Alfonso Garate Yes Yes Yes Yes
Mrs. Salamatu Suleiman [Independent ] Yes Yes Yes Yes
Yes - Present
No - Absent
Board Appointment
The Board of Directors is responsible for the overall direc�on, supervision and control of the company. The company’s Ar�cles of Associa�on, FMN Code of
Conduct and the Securi�es and Exchange Commission’s (SEC) Corporate Governance Guidelines describe the responsibili�es and authori�es of the Board of
Directors and set out rules and procedures for the composi�on, appointment and opera�ons of the Board of Directors.
The Remunera�on and Governance Commi�ee of the Board shall access and evaluate prospec�ve candidates and make appropriate recommenda�on to the
Board with respect to appointments to the Board. A descrip�on of the desirable characteris�cs that the Remunera�on and Governance Commi�ee and the
Board should consider before recommending candidates for nomina�on/appointment as Directors are set out in the Board of Directors Charter and include:
Integrity, reputa�on, knowledge, competence and commitment
Familiarity with Nigerian commercial and economic environment
Regional balancing
Knowledge in FMN areas of business.
The Remunera�on and Governance Commi�ee should review such quali�es and characteris�cs at least annually and recommend any appropriate changes to
the Board for considera�on.
Board Evaluation and Summary of Evaluation Results
The annual evalua�on of the performance of the Board and that of its Commi�ees, the Chairman and the individual directors as performed for the year
ended 31st March 2018 in line with sec�on 15.6 of the SEC Code of Corporate Governance by our External Consultants – Messrs Ernst & Young.
The evalua�on included the review of FMN’s Corporate Governance framework, with specific focus on the Board structure and composi�on, responsibili�es,
proceedings and rela�onships, individual director’s competencies and respec�ve roles in the performance of the Board through surveys and one- on- one
interviews with members of the Board and key personnel of the company.
On the basis of the evalua�on exercise, the Board of FMN demonstrated good understanding of the responsibili�es as provided in the SEC Code of Corporate
Governance and largely complied during the year ended 31 March 2018.
Statutory Audit Committee
Composition
Pursuant to sec�on 359(3) of the Companies and Allied Ma�ers Act of Nigeria, Cap C20 Laws of the Federa�on of Nigeria 2004, the Company’s Audit
Commi�ee comprises three Directors and three shareholders as follows::
Mr. Kashimawo. A. Taiwo resigned on 6 September 2017
Mr. Ebenezer. O. Oladokun resigned on 6 September 2017
Mr. Sunday .O. Ogunnowo resigned on 6 September 2017
Mr. Ajani Babajide Adetunji appointed on 6 September 2017
Mr. Olalekan Oladepo Adesina appointed on 6 September 2017
Mr. Oluwasesan James Otukoya appointed on 6 September 2017
Dr (Chief) Emmanuel. A. Ukpabi (KJW)
Mr. Foluso Phillips
Alh. Yunus .O. Saliu
Mr. Joseph Umolu Secretary
The func�ons of the Commi�ee are laid down under sec�on 359 (6) of the Companies and Allied Ma�ers Act Cap C20 Laws of the Federa�on of Nigeria,
2004.
Meetings
Members of the Audit Commi�ee receive regular reports and updates on financial ma�ers and internal control reviews from internal and external auditors. A
summary of record of a�endance at Statutory Audit Commi�ee mee�ngs held during the financial year ended 31 March 2018 is shown below:
Name 22-Jun-17 28-Jun-17 08-Dec-17 20-Mar-18
Mr. Kashimawo A. Taiwo Yes Yes N/a N/a
Mr. Ebenezer .O. Oladokun Yes Yes N/a N/a
5
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Mr. Sunday .O. Ogunnowo Yes Yes N/a N/a
Mr. Ajani Babajide Adetunji N/a N/a Yes Yes
Mr. Olalekan Oladepo Adesina N/a N/a Yes Yes
Mr. Oluwasesan James Otukoya N/a N/a Yes Yes
Mr. Foluso Phillips No No No No
Dr. (Chief) Emmanuel. A. Ukpabi (KJW) Yes Yes Yes Yes
Alh. Yunus. O. Saliu Yes Yes Yes Yes
Mr. Joseph Umolu Yes Yes Yes Yes
Yes- Present
No- Absent
N/A- Not applicable (not a member on this date)
The Corporate Governance Rating System Certification
We are pleased to announce that our Company has passed the CGRS ra�ngs process and has been duly cer�fied and accorded the CGRS cer�fica�on mark
with effect from January 2018.
The Highlights of the recently introduced Corporate Governance Ra�ng System (CGRS) ini�a�ve of the Nigerian Stock Exchange (NSE) and the Conven�on of
Business Integrity (CBI) are as follows:
The NSE and CBI partnered to develop the Corporate Governance Ra�ng System (CGRS) which is integral to the Premium Board and CGRS Index.
The CGRS concept was conceived as a process to help the regulatory func�on in the market, act sufficiently to improve standards, gather informa�on on
the market and improve performance of capital market operators.
The CGRS process comprises three segments:
Independently verified self-assessment by the company
Directors’ Fiduciary Awareness Cer�fica�on Test
Corporate Integrity assessment of the company, where percep�ons of actual company behaviour are sought from internal and external stakeholders
Combina�ons of the three segments with a�endant weighted scores are then collated and companies with a score of 70% and above are accorded the CGRS
cer�fica�on mark.
The successful companies were celebrated at a cer�fica�on ceremony in February 2018.
Internal Audit:
The Company’s efforts to con�nuously ensure sound financial discipline and adherence to high ethical standards, as part of its robust corporate governance
strategy, have resulted in the se�ng up of a strong Group Internal Audit which is risk focused.
The Internal audit func�on is currently manned by a team of professionals charged with the responsibility of ensuring that strategic business risks facing the
Group are promptly iden�fied, effec�vely mi�gated, recommenda�ons proffered and con�nuously monitored. To ensure independence of this important
func�on, Internal Audit reports directly to the statutory Audit Commi�ee on a quarterly basis and is supervised by the Risk Management Commi�ee of the
Board.
Risk Management Policy
Overview
Risk to FMN is any event that has a poten�al of genera�ng losses, unpleasant surprises and also gives room to an�cipate opportuni�es. Risk in our business
refers to probability that the outcome of events may differ from our expecta�ons. Risk management is a process whereby the company methodically
addresses the risks associated with its ac�vi�es for the purpose of achieving sustained benefits within each ac�vity and across the por�olio of all ac�vi�es. Risk
is an integral part of the Company's business. FMN will not seek to avoid risks, but will understand, manage and effec�vely evaluate them in the context
of expected return. The Company’s priority is to produce and supply products of superior quality and value to the market, thereby, enriching the lives of
all stakeholders. To achieve this, FMN has adopted the concept of enterprise risk management.
Enterprise Risk Management (ERM) is a structured and disciplined approach to the management of risk that considers strategy, assets, liabili�es, process,
people, technology and resources within the business with purpose of con�nually evalua�ng and managing risks to business strategies and objec�ves on an
enterprise basis. “ERM is a process, effected by an en�ty’s board of directors, management and other personnel, applied in strategy se�ng and across the
enterprise, designed to iden�fy poten�al events that may affect the en�ty, and manage risks to be within its risk appe�te, to provide reasonable assurance
regarding the achievement of the en�ty objec�ves” – COSO Enterprise Risk Management Integrated Framework.
Risk Management Philosophy
Our risk management philosophy and culture are the set of shared beliefs, values, a�tudes and prac�ces that govern how we consider the risk inherent in
our business ac�vi�es, from points of strategy development and implementa�on to our day-to-day ac�vi�es. We believe that an efficient risk management
system across all lines of our business will ensure more efficient use of capital and resources and reduce the likelihood of opera�onal losses.
Risk Management Principles
As part of our drive to ensure a successful implementa�on of our ERM framework, we are guided by risk management principles:
Embedding – ERM is fully embedded within the major func�onal and opera�onal processes just as strategic planning and performance measurement
system.
Consistency– We adopt a consistent method for the iden�fica�on, assessment monitoring, mi�ga�on, control and communica�on of risks associated with
all of its ac�vi�es, func�ons, processes, and events in an effort to efficiently and effec�vely achieve its corporate objec�ves.
Risk Awareness – We foster a result driven and risk awareness culture to move the company to a posi�on where decisions are taken with full considera�on
of relevant risks and their implica�ons.
6
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Ownership – Specific risk owners within the Company’s workforce have sound understanding of the risk impac�ng their opera�ons or areas of
responsibility and are able to respond with appropriate strategies and mechanisms to iden�fy, assess, monitor, and control those risks.
Accountability – Risk owners within the Company’s workforce are accountable for the risk management ac�ons in their respec�ve areas of responsibility.
Authority – Risk owners have the required level of authority and flexibility to determine and execute the proper course of ac�on to manage the risk in their
respec�ve areas of responsibility.
Communication– The Company’s informa�on system is con�nually updated to accommodate data output necessary for proper assessment and monitoring
of risks.
Risk Management Objectives
Our risk management objec�ves are as follows:
To ensure that threats to our major strategic plans and business investments are iden�fied and well mi�gated against;
To ensure that our business growth plans are consistent with our risk appe�te and supported by an effec�ve and efficient risk management func�on;
To iden�fy any real and perceived risks exposures that may impact or be associated with the effec�ve and efficient management and co-ordina�on of the
Company’s ac�vi�es;
To integrate risk management into the culture and strategic decision making processes of the company;
Ensure that top management as well as individuals responsible for risk management possess the requisite exper�se and knowledge to accomplish their
func�ons;
To comply with appropriate regula�ons and leading industry prac�ces.
Risk Appetite and Tolerance
Our risk appe�te ar�culates the amount and types of risk we are prepared to accept or reject while pursuing the achievement of our strategic objec�ves. Our
risk appe�te seeks to minimise erosion of earnings or capital that could arise from inadequate business strategy, changes in macroeconomic factors including
foreign exchange rates and opera�onal inefficiencies. Our risk tolerance ar�culates the amount of uncertainty FMN is prepared to accept in total or more
narrowly within a certain business unit, a par�cular risk category or for a specific ini�a�ve. It is the level of varia�on the company is willing to accept around
specific objec�ves.
FMN Risk Categories
Our strategy for managing risks is to establish and sustain a robust ERM framework that is embedded in our processes. Consequently, for effec�ve
management, risk in FMN have been divided into five categories. These include:
1. Business Risk
2. Financial Risk
3. Operational Risk
4. Reputational Risk
5. Compliance Risk
Risk Assessment
Risk assessment follows risk iden�fica�on exercise. It involves analysing the risks to arrive at a level that describes FMN’s exposure. This is performed by
determining the level of impact and the likelihood of occurrence of the risk crystalizing. The aim is to focus Management’s a�en�on on the most important
risks and possible opportuni�es. Risk assessment sets the groundwork for risk response and mi�ga�ons. The five (5) point scale have been categorised into
three (3) levels of risk (High, Medium and Low).
High: These comprise risks categorised as major and catastrophic. These risks pose significant challenge to the achievement of FMN’s objec�ves and could
pose a threat to the Company. Risks rated high are reported to Management for appropriate a�en�on.
Medium: These comprise risks categorised as moderate. These risks could poten�ally affect the short-term goals of the Company. Depending on the goal
they affect, they could require the a�en�on of Management, but could usually be handled by a senior staff.
Low: These comprise risks categorised as minor and insignificant. These risks are expected to happen in the normal course of business. The effect of such
risks on the Company’s goals or objec�ves is usually minimal and they can be handled effec�vely by lower level staff.
7
Introduction
Chairman's
Statement
Report of the
Directors
Financial
Statements
CSR / Other
Information
Audit Committee and

FMN Top Risks
Below are the company’s top strategic risks iden�fied during the financial year. Management’s a�en�on is focused on mi�ga�ng these risks to be within our
desired risk appe�te.
S/N Risk Description Mitigation
1 Raw Materials unavailability The risk that raw materials may not be sufficient
or available to produce required volume of products
due to:
Delays in supply of products
Unavailability of clearing papers
Unavailability of Foreign exchange which affects
purchase of raw materials
Unfavourable weather condi�ons which affects
the growth of raw materials
Efficient supply chain management including raw
material forecasts and sourcing. Varie�es of wheat
are mixed to extend produc�on in cases of raw
material shortage.
Use of mul�ple suppliers
Adequate local storage facili�es
2 Importa�on Ban/increase in tariff The risk that there will be a ban or increase in tariff
on the importa�on of key raw materials such as
wheat.
Work with the government to help achieve the local
produc�on of wheat.
Provide support and maintain rela�onships with
local farmers to ensure an alterna�ve source of raw
materials in the event of importa�on ban.
3 Loss of market share The risk that FMN may lose customers/market share Diversified por�olio of products to ensure coverage
of consumer trends.
Rigorous processes of strategy development
Systema�c review of emerging consumer and route-
to-market trends
Centralized market intelligence gathering and
analysis
4 Non compliance with laws and
regula�ons
The risk that FMN will be penalized/incur fines for
noncompliance with regulatory requirements or
failure to render regulatory/statutory returns
promptly.
Automated monitoring of statutory and regulatory
returns.
Regular interface with regulators through liaison
officers
Code of Business Conduct and suppor�ng framework
of policies set out compliance requirements.
5 Cyber security risks The risk of a�ack on IT systems through
unauthorized access to Company’s IT infrastructure.
Strengthened IT security controls.
Vulnerability assessment and penetra�on tes�ng.
IT controls policies
Mobile devices and privileged accounts monitoring
Perimeter fencing
End user awareness training
6 Liquidity risk The risk that the business will be unable to meet its
short term debt obliga�ons due to limited access to
capital/funds.
Use of long-term debts with lower interest rates as
against short term.
80% cash sales as against credit sales.
Implementa�on of credit control policy which
includes bank guarantees.
Good treasury management
Use of Interna�onal treasury solu�on which helps
manage assets and liabili�es
7 Interest rate risk The risk of loss of profitability as a result of increase
in interest rates.
Leverage Group level bargaining power based on the
volume of the business, nego�ate compe��ve
interest rate
Evalua�on of different sources of funds, evaluate
criteria and choose with lower interest rate
Taking advantage of subsidized loan from
government which results in fixed and lower rate
compared to commercial banks
ENTERPRISE RISK MANAGEMENT AT FMN
Board of Directors
Understand and approve risk appe�te statements
Assign “deep dive” responsibility to risk commi�ees
Consider risk appe�te in strategy approval
Board Risk Committee
Approve ERM charter
8
Introduction
Chairman's
Statement
Report of the
Directors
Audit Committee and
CSR / Other
Information
Financial
Statements

Flour Mills Nigeria annual report 2018

Flour Mills Nigeria annual report 2018

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Flour Mills Nigeria annual report 2018