Annual Report & Accounts 2 0 1 2 - Honeywell Flour Mills · PDF fileAnnual Report & Accounts 2 0 1 2 PAGES INTRODUCTION a. ... c. Group Balance Sheet 38 d. Group Profit and Loss Account

Honeywell Flour Mills Plc. 1

C o n t e n t s

Annual Report& Accounts2 0 1 2

PAGES

INTRODUCTION

a. Financial Highlights 3

b. Performance Indicators

c. Notice of Annual General Meeting 5

d. Directors and other Corporate Information 7

BUSINESS REVIEW

a. Chairman's Statement 9-12

b. Chief Executive Officer's Report 13-17

c. The Board of Directors’ Profile 19-21

d. The Report of the Directors 22-27

e. The Report of the Audit Committee 28

FINANCIAL STATEMENTS

a. Report of the Independent Auditors 34

b. Statement of Significant Accounting Policies 35-37

c. Group Balance Sheet 38

d. Group Profit and Loss Account 39

e. Statement of Cash Flows 40

f. Notes to the Financial Statement 41-50

g. Value Added Statement 51

h. Financial Summary 52-53

STAKEHOLDERS INFORMATION

a. List of key Distributors 55

b. Share Capital History 56

C. Unclaimed Dividends 57

D. Application for E-Dividend 59

E. Proxy Form 61

4

Honeywell Flour Mills Plc.


Introduction

Financial Highlights 3

Performance Indicators 4

Notice of Annual General Meeting 5

Directors and other Corporate Information 7

2



Financial Highlights

Introduction

%2012 2011 Change

Results in millions of NairaTurnover 38,072 34,058 12%Profit before taxation 3,663 3,516 4%Profit after taxation 2,702 2,492 8%Proposed dividend* 1,190 1,031 15%Shareholders' funds 16,802 15,131 11%Share capital 3,965 3,965 - Total assets 44,940 29,138 54%

Data per 50k ShareEarnings (kobo) 34.08 31.43 8%Dividend* (Kobo) 15.00 13.00 15%Net Assets (Kobo) 211.88 190.80 11%

Stock Exchange InformationStock Exchange Quotation as atMarch 31 (in Naira per Share) 2.17 4.84 -55%Number of Shares Issued (in millions) 7,930 7,930 0%Market Capitalization as at March 31(In millions of Naira) 17,208 38,381 -55%

The Directors propose a Dividend payment of 15kobo (2011: 13kobo) per share on the Issued Share Capital of 7,930,197,658 ordinary shares of 50 kobo each, subject to the approval of the Shareholders at the Annual General Meeting.

Financial Calendar Date

(i) 3rd Annual General Meeting to receive the Audited Financial Statements for the year ended March 31, 2012 September 25, 2012

(ii) Payment of Dividend September 26, 2012

*



* EPS growth was 8% from 2011 to 2012

* EPS growth was 231% over the last five years

* Assets growth was 54% from 2011 to 2012

* Assets growth was 114% over the last five years

* PBT growth was 4% from 2011 to 2012

* PBT growth was 311% over the last five years

2008 2009 2010 2011 2012

* Shareholders' Funds growth was 11% from 2011 to 2012

* Shareholders' Funds growth was 240% over the last five years

* Turnover growth was 12% from 2011 to 2012

* Turnover growth was 100% over the last five years

2008 2009 2010 2011 2012

* PAT growth was 8% from 2011 to 2012

* PAT growth was 238% over the last five years

Performance Indicators

0

10

20

30

40

2008 2009 2010 2011 2012

Turnover( =N= billions)

0

1

2

3

4

2008 2009 2010 2011 2012

Profit before Tax( =N= billions)

0

0.5

1

1.5

2

2.5

3

2008 2009 2010 2011 2012

Profit After Tax (=N= billions)

0

5

10

15

20

2008 2009 2010 2011 2012

Shareholders' Funds (=N= billions)

0

10

20

30

40

50

2008 2009 2010 2011 2012

Total Assets(=N= billions)

0

10

20

30

40

2008 2009 2010 2011 2012

Earnings per Share (kobo)

Introduction



NOTICE IS HEREBY GIVEN that the 3rd Annual General Meeting of Honeywell Flour Mills Plc as a publicly quoted Company will hold as follows:

Date: Tuesday, 25th September, 2012Venue: Civic Centre, Ozumba Mbadiwe Street,

Victoria Island,Lagos.Time: 11a.m

The following will be transacted at the meeting as ordinary business:

(i) To receive the Audited Financial Statements for the year ended 31 March, 2012 together with the Report of the Directors, Auditors and Audit Committee thereon.

(ii) To declare a dividend.(iii) To elect Directors.(iv) To approve the remuneration of Directors.(v) To authorise the Directors to fix the Auditors remuneration(vi) To elect members of the Audit Committee.

Proxy:Any member of the Company entitled to attend and vote at the Annual General Meeting is also entitled to appoint a Proxy to attend and vote in his/her stead. A Proxy needs not be a member of the Company. A Proxy Form is enclosed herewith. A Proxy form must be completed and deposited at the office of the Company's Registrar, First Registrars Limited, 2 Abebe Village Road, Iganmu Lagos not later than 48 hours before the time fixed for the meeting.

Audit Committee:Any Shareholder may nominate another Shareholder as a member of the Audit Committee by giving notice in writing of such nomination to the Secretary of the Company at least 21 days before the Annual General Meeting.

Dividend:If the Dividend recommended by the Directors is approved by the members at the Annual General Meeting, Dividend will be paid by Wednesday, 26 September, 2012 to the Shareholders whose names appear in the Company's Register of Members at the close of business on Friday 31 August, 2012.

Closure of Register and Transfer Books:The Register of Members and Transfer books will be closed from Monday 3 September, 2012 to Friday 7 September 2012, both days inclusive for the purpose of updating the Register of Members.

E-Dividend:Notice is hereby given to all Shareholders to open bank accounts, stock broking accounts and CSCS accounts for the purpose of dividend. A detachable application form for e-dividend is attached to this Annual Report to enable all Shareholders to furnish particulars of their accounts to the Registrar (First Registrars Limited) as soon as possible.

BY ORDER OF THE BOARD

Oluwayemisi Busari (Mrs)Company Secretary

Notice of Annual General Meeting

Introduction



Board of Directors

Secretary

Operational Office

Registrars

Registered Office

Bankers

Auditors

Dr. Oba Otudeko, D.Sc. (Hon.), CFR – ChairmanFolaranmi Babatunde Odunayo – Executive Vice Chairman/CEOAdebisi Otudeko (Mrs) – Resigned with effect from 01 July, 2011Obafemi OtudekoDr. Nino Albert Ozara – Executive DirectorLt. General Garba Duba [Rtd]David William Obray (South African)Chief Kola Jamodu, MFR – Resigned with effect from 15 July, 2011Akinsoji AkintayoJens Mollenbach (Danish) – Appointed with effect from 05 April, 2011Theophilus Oluranti Sokunbi – Appointed with effect from 17 October, 2011

Oluwayemisi Busari (Mrs)Tel: +234 1 731 5870, +234 1 793 2694

2nd Gate Bye-PassTin Can Island PortApapa, LagosWebsite: www.honeywellflour.comE-mail: [email protected]

First Registrars Nigeria Limited2, Abebe Village RoadIganmu, Lagos

SW8/1185 Sanda StreetMolete, Ibadan

Access Bank PlcKeystone Bank Limited (Formerly Bank PHB Plc)Diamond Bank PlcEcobank Nigeria PlcFidelity Bank PlcFirst Bank of Nigeria PlcGuaranty Trust Bank PlcStandard Chartered Bank Nigeria LimitedUnion Bank of Nigeria PlcUnited Bank for Africa PlcZenith Bank Plc

Balogun Badejo & Co(Chartered Accountants)24, Ilupeju Bye-PassIlupeju, Lagos

Introduction

Directors and Other Corporate Information



BusinessReview

Chairman’s Statement 9 - 12

Chief Executive Officer’s Report 13 - 17

The Board of Directors Profile 19 - 21

The Report of the Directors 22-27

The Report of the Audit Committee 28



BusinessReview

Dr. Oba Otudeko, D.Sc. (Hon.), CFR

Chairman’s Statement

Fellow Shareholders, Distinguished Ladies and

Gentlemen: It is with much pleasure and delight that I

welcome you all to the 3rd Annual General Meeting

(AGM) of your Company, Honeywell Flour Mills Plc. I

appreciate the privilege to once again present to you, our

Company's Annual Report and Financial Statements for the

year ended March 31, 2012. Distinguished Shareholders, this

is our 3rd Annual General Meeting since the landmark public

listing of our Company on the Nigerian Stock Exchange

(NSE) in 2009. In the period between that watershed moment

and today, we have surmounted many challenges as a business

and have grown, year-on-year, despite a particularly difficult

operating environment. My statement to you today will

enunciate the more recent accomplishments of our Company.



BusinessReview

Chairman’s Statement... cont’d

Characteristically, I will begin my address with a

brief review of the economic environment, globally

and domestically, within which we operated in the

last financial year and upon which our performance

can be objectively assessed.

The economic events of the last three quarters of 2011

and the first three months of 2012 were largely

influenced by incidents of sovereign debt crises

across several European countries which had

resultant adverse effects on the world economy and

significantly lowered global growth for the period.

In its 2011 estimates for growth in world economic

output, the International Monetary Fund (IMF)

reported a decline of 1.4 percentage points from 5.2%

in 2010 to 3.8% in 2011. This slowdown in growth

was on account of the inter-relationship between the

crisis of confidence generated by the emerging cracks

in the Eurozone and the slowdown in both US jobs

creation and manufacturing in Asia. These factors

were exemplified in the massive financial bailouts

arranged for Greece and Portugal and the recurring

threat of defaults on repayment of government bonds

by Spain and Italy.

In the United Kingdom, unemployment reached a 17

year high while the United States experienced

disappointing job creation rates and had its coveted

AAA credit rating downgraded by the rating agency,

Standard and Poor.

The decline in growth in the Western World

expectedly led to a reduction in demand for goods

produced in the East. China experienced a

deceleration in production and raised interest rates

several times during the period even as it faced

concerns of an overheating economy.

In Africa, a nine month-long civil war in Libya was

the high point of several revolutions that gripped

northern Africa and contributed to keeping the

international price of crude oil above the USD100

mark for most of 2011.

The successful outcome of the 2011 April General

Global Economic Environment

Nigeria Economic Environment

Elections followed by the swearing in of President

Goodluck Jonathan in May 2011 triggered the

commencement of real economic activities in the

country.

On a macro level, Nigeria's performance during the

review period was in line with global trends, as

economic performance was less impressive than the

year before. The National Bureau of Statistics (NBS)

estimated the real growth rate of Gross Domestic

Product (GDP) for each consecutive quarter of our

financial year to be 7.61%, 7.3%, 7.68% and 6.17%

which were all lower than in the corresponding

quarters in the preceding financial year.

Despite the best efforts of the Central Bank of

Nigeria (CBN), inflation for the period remained in

double digits and peaked at 12.6% in January 2012,

following the industrial strikes that greeted the

announcement of a removal of fuel subsidies. In the

CBN's bid to tighten fiscal policy, it increased the

Monetary Policy Rate (MPR) multiple times up to

12% prevailing in March 2012. This measure led to

an increase in interest rates and a resultant decline in

credit growth to the real sector which had negative

impact on many businesses.

In November 2011, after many months of defending

the national currency even in the face of dwindling

external reserves, the CBN devalued the Naira by

increasing the official exchange rate mid-point from

N150 to N155 per USD with a plus/minus 3% band.

This also had negative effects on import dependent

businesses and heightened the fears of foreign

investors. Crude oil output was relatively stable at

above 2.2 million barrels per day and Nigeria reaped

the benefits of high prices on the country's reference

crude oil, Bonny Light, which sold for over USD100

per barrel for most of the period.

The security situation in the northern part of the

country worsened, resulting in loss of lives and

properties and significantly restricting the movement

of goods and personnel in the region.



BusinessReview


Our Performance

Dividend

Dear Shareholders, the financial year ending March

31, 2012 was a remarkable one for our Company. We

posted an improved performance in spite of the

various operating challenges especially the high

costs of raw materials, energy and logistics.

Broad sales growth was achieved across our strong

food brands resulting in a 12% increase in revenue

from N34 billion to N38 billion. Let me emphasize

that this growth was only constrained by challenges

to pass on input costs into higher prices and our

running out of production capacity.

Good management of our costs led to a Profit before

Tax (PBT) of N3.66 billion, relative to last year's

performance of N3.51 billion; a growth of 4% year-

on-year.

It is most heartening to further reassure you that we

have a very good business and our fundamentals

reinforce this assertion. Our Company's Profit after

Tax (PAT), for the year in review, rose 8% to N2.7

billion from N2.49 billion achieved in 2011.

Earnings Per Share (EPS) rose by the same margin of

8% to 34.08 kobo while Shareholders' Funds and

Total Assets increased by 11% and 54% to N17

billion and N45 billion respectively.

It is a great time to be in the foods business. All the

indicators point to the fact that we are at the cusp of a

new era, one which will require the ability to

iteratively adopt and adapt to the changing tastes and

habits of consumers. And because we are well aware

of this emerging reality, we are positioning your

Company to be the leading Fast Moving Consumer

Goods (FMCG) manufacturer in Nigeria. In the last

one year, we made significant investments, not only

in increasing plants and machinery capacity but also

in improving human capabilities through various

overseas and local technical trainings and leadership

development programmes for staff to further drive

innovation and growth.

Having achieved good performance in the year, we

re-affirm our resolve to create value for shareholders

and pass on same; as such the Board of Directors has

recommended a total dividend pay-out of N1.19

billion representative of a distribution of 15 kobo for

every 50 kobo ordinary share held. Subject to your thapproval, the dividend will be paid on 26

September, 2012.

This recommendation is in line with our dividend

policy of providing shareholders with steady,

growing and sustainable dividends.

Our wholly owned subsidiary – Honeywell

Superfine Foods Limited – a foods-focused FMCG

company currently producing great tasting snacks,

instant noodles and pasta products under the

Honeywell brand, made considerable progress

during the year in review. The Company recorded

sales gains to achieve a turnover increase of 64% up

to N7.8 billion while Profit after Tax (PAT) climbed

10% to reach N83 million.

Our continued success in this line of business

depends on our ability to anticipate customers'

needs, develop appropriate products to fulfil those

needs and then educate them on the benefits of

choosing the Honeywell brand every time. To

achieve this, we have begun supporting our brands

with higher media spend and our marketing efforts

are now being geared towards striking more intimate

chords with our cherished customers and esteemed

distributors. Our key focus over the next few months

is to forge strategic partnerships with retailers across

various channels to enhance product visibility and

drive sales growth.

The performance for the financial year ending

March 31, 2013 is expected to reflect a significant

improvement of the FY 2012 performance.

Messrs. Jens Mollenbach and Oluranti Sokunbi

joined the Board on April 5, 2011 and October 17,

2011 respectively as non-Executive Directors.

In accordance with the Company's Articles of

Honeywell Superfine Foods Limited

Board



BusinessReview


Association, the following Directors namely, Mr.

Folaranmi Babatunde Odunayo, Dr. Nino Ozara and

Mr. Akinsoji Akintayo retire by rotation at this AGM

and being eligible offer themselves for re-election.

Also Mr. Oluranti Sokunbi retires at this AGM and

being eligible, offers himself for election. Mr. Jens

Mollenbach was elected at the last AGM and is not

due for retirement.

Distinguished Shareholders, please join me in

appreciating the contribution of members of the

Board to the success of our great Company. They

provide robust insight and guidance to the

Management of the Company and their impact is

evident in the financial results presented here today.

On behalf of the Board of Directors, Shareholders

and Management of Honeywell Flour Mills Plc., I

wish to express our deep sense of gratitude to our

loyal customers, without whose patronage these

excellent results would not have been achieved.

The hard work, diligence and professionalism of all

staff of the Company across the country are also

appreciated. The enduring attitude of growing

together, embracing challenges and being

accountable is very much in consonance with our

shared values.

We also appreciate the great relationships we have

cultivated and continue to enjoy with our

distributors, logistics service providers and

suppliers.

We operate in a dynamic business environment and

the challenges of yesterday will be significantly

different from those of tomorrow. Fellow

Shareholders, the 2013 financial year will be no less

challenging but we shall not be daunted by the

magnitude of the obstacles ahead. Already, the

drought in the US is being felt in the price hike for

wheat, our key raw material. Furthermore, the impact

of an upward review in import tariffs for our raw

materials will also be felt and is going to affect our

Appreciation

Future Outlook

profits going forward, especially if we cannot pass

these increases to consumers.

Last year, at this forum, I informed you all of our

progress on the on-going expansion of our milling

capacity from 1,610MT/day to 2,610MT/day. This

62% capacity increase is being complemented with

additional investments in power generation, grains

storage and finished goods warehousing facilities.

These projects are due to come on stream in October

2012 and will strengthen our competitive ability and

help to meet the growing demand for our high quality

food products. In summary, I expect next year to also

be better than this year despite the challenges we

expect to face.

In concluding, I want to thank you for your

investment in Honeywell Flour Mills Plc. and for

your support and faith in the ability of the Board of

Directors to direct the affairs of your Company.

I assure you of our commitment to continue to grow

shareholder value and create wealth for our dear

country. I say a big 'Thank You' to all distinguished

shareholders and guests here today and wish you all

outstanding success in the years to come.

Thank you for your kind attention and do have a

pleasant Annual General Meeting.

God bless you.

OBA OTUDEKO, CFR

Chairman

Conclusion



Chief Executive Officer’s ReportBusinessReview

Distinguished Shareholders,

It gives me great pleasure to welcome you to the 3rd

Annual General Meeting of the Company, and to

address you on some key activities of the Company

during the last financial year, especially such issues

as had defined the financial performance of the

Company.

During the financial year, we began actively to

execute the Mill expansion project. As always,

expansion projects involve a lot of planning and

checking of engineering details often to micro levels

in order to ensure that the outcome will enable us

achieve the production and quality objectives that

were envisaged in the first instance. I am happy to

report that the painstaking effort by Management

and the Project Team did not distract us from the

achievement of superior earnings and profit levels in

the year under review.

We were faced with the challenges of rising interest

rates from a tolerable 12% to 14% and then to 16%

by the end of the financial year. The liquidity-

moping up effort of the Central Bank of Nigeria

which resulted in rising interest rates also led to a

depreciation in the value of the Naira. Wheat prices

remained bullish during the financial year under

review and this exerted a push on input cost.

Traffic gridlock around Tin Can Island Port, our

operational base, was probably the greatest

challenge we faced throughout the financial year. We

have our customers and suppliers to thank for their

abiding support despite the difficulties of coming

and going, and especially for the many hours lost in

the traffic gridlock in and around the Port. A lasting

solution to the traffic congestion had been identified

by the Federal Government since 2010 - the

Introduction

construction of a Trailer Park for the articulated

trucks which visit the Port on a daily basis for goods

evacuation. The contract was awarded in year 2010,

and construction works commenced in earnest.

However, the project came to a standstill in early

2012 and no progress has been recorded since then. It

would appear that a fundamental disagreement has

developed between the Federal and the State

Governments as to which of the two of them is

statutorily empowered to embark on such a project.

It remains our fervent hope that this will soon be

resolved so that a condusive infrastructure can arise

for Port users and manufacturers like ourselves that

are embedded within the Tin Can Island Port

environment.

Despite these challenges, the Company was able to

achieve improved earnings and profit. We were also

able to successfully defend our quality superiority

and brand leadership positions across all our product

offerings. We are proud to say that our flour,

semolina, and wheat meal products remained in peak

demand whilst significant growth was experienced

in respect of our pasta and noodles products.

Folaranmi Babatunde Odunayo



BusinessReview

Chief Executive Officer’s Report... cont’d

Business Performance

We recorded modest improvements across key

performance metrics during the financial year. The

Company posted a turnover of N38billion,

representing a growth of 12% over 2011. Profit

before Tax also grew by 4% to N3.7billion, whilst

Profit after Tax grew by 8% to N2.7billion. Other

performance metrics worthy of mention include a

growth of 54% and 11% in total assets and

shareholders' funds respectively.

Marketing management is at the core of our strategy

to build an enduring business through the

development of brand equity in our product offerings

across the trade. Our brand building activities are

well supported by a strong drive for consistency in

product quality in respect of which our brands are

already well known for.

During the year, we intensified our brand advertising

effort and this has greatly enhanced awareness for

some of our brands. The now famous 'iPOD man',

also known as 'Bam Bam La La' our television

commercial for Honeywell Noodles has put the

brand in the consciousness of the Nigerian

consumers. The advert was an instant success as it

was very well accepted by consumers, young and

old. The positive impact of this advertisement on

earnings and profits will be significantly felt in the stfinancial year ending 31 March, 2013.

Our Honeywell Semolina brand continues to enjoy

dominance in the trade. It is the preferred brand in this

category, and for this reason there exists a huge

potential for further growth. Our Mills E&F expansion

project which is planned for commissioning in

October 2012 envisages a doubling of our Semolina

production capacity from 125metric tonnes per day to

235metric tonnes per day.

Our star product, Honeywell Wheat Meal will gain

the potential of an increase in capacity from

70mt/24hours to 420mt/24hours when the mill expansion project is completed. This product

remains customers' favourite brand in its category, as

(

)

sales volume grew from 11,401mt in 2011 to st15,578mt in the financial year ended 31 March,

2012.

A strong customer care culture supports our drive to

deliver quality products and a satisfactory service to

our customers. It is at the core of our strategy to

sustain the loyalty of our customers through a

favourable perception of the Corporate brand. We

strive for consistency in product quality, and see to it

that our customers have a satisfying experience

during the ordering process. Our goal is prompt

delivery service and the provision of a customer-

satisfying after-sales service. We resolved 44

customer complaints in 2012 financial year, most of

which arose from poor customer product handling

and storage.

In the case of flour, we also carry out baking

demonstrations to show bakers better baking

methods and how they can maximize their yield from

the use of our flour. Most of the customers we service

in this manner are indirect customers, bakeries who

buy our flour from dealers and sub-dealers. No matter

where the complaints come from, we endeavour to

reach complainants within 24hours of receiving such

complaints and help them to resolve the problems.

For Noodles and Pasta products, additional customer

care support comes by way of experiential activities

which are designed to demonstrate to customers how

best to cook the products for maximum meal

experience. This takes place in schools, restaurants,

market places, trade fairs and other public places

where consumers can be reached.

Our customer care efforts are supported by other

marketing activities which help to widen the demand

potentials for our brands.

Our Baking School, whose doors were opened in

2006, was set up to provide an intensive theoretical

and practical baking training to Master Bakers who

Customer Care

Baking School



BusinessReview


already have established themselves as bakers after

undergoing informal apprenticeship training in

owner-operated bakeries across the country. Such

bakeries constitute 95% of the bakeries in Nigeria.

Our Baking School admits these bakers and imparts

on them the theoretical and scientific knowledge

which underpin the baking process so that they can

truly become masters of their baking operations.

With the knowledge which they receive at the

Baking School, many of them can now deliver

higher baking yield, better quality bread and superior

profits from their operations.

Our Baking School is fully equipped with modern

baking equipment and is manned by well qualified

staff who received their training from the American

Institute of Baking in Manhattan, Kansas State,

USA. Our Baking School provides an essential

service to Nigerian Bakers (about 250 of them have

been trained so far) and they are admitted to the

programme regardless of the brand of flour they use

at their bakery at the time of enrollment. Whilst we

see it as a Corporate Social responsibility to give

back to society from which the Company has also

benefitted, there is no doubt that the programme also

helps us to build a strong customer loyalty as

attendees get to appreciate the quality of our brands.

Our Baking School graduation ceremonies are well

publicized in the media. The successes and the

attendant positive public perception have a

beneficial effect on all our brands.

Last year, we informed you of the plan to expand our

milling capacity. Already in my address, I have made

references to this expansion work with respect to our

Whole Wheat Meal and Semolina. We are happy to

inform you that the planned commissioning of Mills

E&F in October 2012 will enable your Company to

achieve a 62% capacity increase, from 1,610mt/24

hours to 2,610mt. Flour output will increase by 55%

to 1,534mt/24 hours whilst Semolina's daily output

will almost double, from 125mt to 235mt. The

existing Mills as well as the new ones have been

Plant Expansion.

configured in such a manner as to permit us the

flexibility to make changes to our production mix at

any point in time so that actual production can reflect

the prevailing customer needs and the attendant

profitability profile. The full impact of the production

capacity increase on our earnings will be felt in the

financial year ending March 2014, whilst for the year

ending March 2013, only the last 5 months of the

financial year will be impacted.

The new production facility will include 30,000mt of

storage silos, and an automated palletization and

stacking system in the flour warehouse.

The new Agricultural Transformation Agenda of the

Federal Government, among other objectives, seeks

to promote the use of local crops in industrial food

production, thus enhancing their use in the food value

chain. The Federal Government's plan as regards

cassava, has the following objectives;

a) to achieve up to 40% substitution of cassava

flour in wheat flour that is used in bread

production, and a consequent increase in the

market for cassava tubers of more than

800,000mt.

b) create new opportunities for native and modified

starch by raising production level to 280,000mt

by 2015

c) to take advantage of new global market

opportunities for dried chips by producing

900,000mt of cassava chips for export by 2015.

d) to expand market opportunities for the use of

cassava as a sweetener (High Fructose Cassava

Syrup) in the soft drinks industry by producing

up to 182,000mt of high fructose cassava syrup

e) to take advantage of emerging market

opportunities in fuel ethanol by utilizing cassava

to produce up to 1.2 billion litres of ethanol, using

up to11million mt of cassava.

According to the Policy Agenda, these measures will

generate 1.2million jobs in Nigeria.

With respect to the Flour Milling industry, the

Agricultural Transformation Agenda.



BusinessReview


implementation of the Cassava Transformation

Agenda has had the unfortunate effect of increasing

production cost by way of a duty levy of 15% on

wheat grain, thereby raising effective duty to 20%. stThis levy was introduced with effect from 1 July,

2012. Whilst this levy was introduced to encourage

the use of cassava flour in the flour milling industry,

the supply of high quality cassava flour remains in

short supply.

With other members of the Flour Milling industry,

we are in dialogue with the Federal Government to

express our support for the local inclusion policy and

to discuss our successes and challenges on the road

to the full implementation of the Cassava value chain

Policy. We are happy to report that discussions have

been fruitful and it is our expectation that the room

for dialogue will be kept open.

All Flour Mills in the world are engineered to accept

a maximum of 3% return flour for reprocessing. The

reprocessing route is available for the introduction of

cassava flour in the Mill, and this is how we are

presently able to add cassava flour to wheat flour.

Fortunately, we have already engineered the new

Mills, soon to be commissioned, with a cassava flour

receiving and processing facility at a 10% inclusion

rate. The older mills in our factory as currently

engineered can only accept a maximum of 3%

cassava flour, and we are in the process of re-

engineering them to allow the 10% inclusion rate.

This rate is the maximum that can be attained in a

wheat mill, given the natural characteristics of

cassava flour. The process changes and re-

engineering in the older mills will require

considerable investment and a lead time of at least

12 months. We have already embarked on this

course. The attainment of 10% inclusion capability

will position us for increased cassava flour usage as

and when this becomes more available in the market

place.

The blending of up to 40% cassava flour with wheat

flour, as envisaged in the Government's programme

can take place only at the bakery level whilst Flour

Milling plants can blend up to a maximum of 10%

cassava flour. The Government may already have

accepted this technical position as plans are already

underway by Government to train bakers and support

them with blenders and other necessary equipment.

In conjunction with our technical partners, we are

carrying out tests with some new enzymes on

composite flour in order to be able to achieve the

required 10% cassava flour inclusion rate in wheat

flour, without compromising consumer acceptance

of bread from the composite flour.

The technical and professional strength of our people

remain our source of competitive advantage. We are

an equal opportunity employer with a dynamic

people-management practice. The Company does

not discriminate in its employment policies and

practices, and has consistently participated in high

level career fairs to attract highly qualified

professionals.

In the year under review, a total of 757 employees

were in the service of the Company and its

Subsidiary as against 656 in the previous year. Our

employees' retention strategies have also been very

effective as evident in our low attrition during the

year under review.

We acknowledge that the Company's ability to

sustain a competitive advantage over the long term is

dependent on continuous development of our

employees through skills empowerment. As part of

our effort to ensure that the required levels of skills

and competencies are regularly available, about 90%

of our staff benefited from learning opportunities,

locally and internationally, in the year under review.

Health, Safety and Environment:-

The total well-being of our employees is of priority

and as such, we pay close attention to the

enforcement of safety and hygiene regulations

within the premises as well as off-site. Our Health

Human Capital Development



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and Safety Committee drives the implementation

of our Health, Safety and Environment programmes

for continuous elimination of risks to the health and

well-being of our staff.

Our employees' medical coverage which is

provided by a leading Health Maintenance

Organization (HMO) is consistently being

challenged to deliver timely and qualitative health

care to our employees. We also operate an

adequately equipped, government-accredited in-

house clinic to complement the services of the

Health Maintenance Organization. The clinic

organizes a monthly Health Talk for staff on relevant

and topical health and environment issues.

The Securities and Exchange Commission (SEC)

has mandated all companies quoted on the Nigerian

Stock Exchange to prepare their Financial

Statements under IFRS guidelines by year 2012. It is

rightly believed that it will be in the interest of the

Nigerian economy for reporting entities to adopt

globally accepted accounting standards. The IFRS

standards which are issued by the International

Accounting Standards Board aim to provide “a

single set of high quality, global accounting

standards that require transparent and comparable

information in general purpose Financial

Statements’.

Consequently, your Company and its fully owned

Subsidiary are currently at an advanced stage in the

transition from the adoption of the Nigerian General

Accounting Standards to that of the International

Financial Reporting Standard (IFRS). The Financial

Statements for the year ending March 31, 2013 will

be prepared and presented on the basis of IFRS. The

comparable figures for the year ended March 31,

2012 will be restated on IFRS basis in the full IFRS

Financial Statements for year 2013. We have also

commenced the process of embedding the IFRS into

International Financial Reporting Standards (IFRS)

our internal business processes, systems, and

procedures across functions and departments in the

Company, including the implementation of a

comprehensive and robust IFRS-compliant

Enterprise Resource Planning (ERP).

We are well positioned to aggressively grow our

business and increase our market share in an

increasingly competitive environment.The expected

commissioning of the new Mills E&F by October

2012 will provide the opportunity for significant

improvement in earnings, profitability, assets base,

and shareholders' value.

On behalf of the Management and Staff of the

Company, I wish to express our appreciation to the

Chairman and the Board for their guidance and

support during the year. I will also like to thank the

Management and Staff for their loyalty and team

work which has made the achievement of these

financial results possible. To our suppliers, dealers

and customers, I also say thank you for your

steadfast support. And to the Shareholders, we say

thank you for your faith in the prospects of the

Company.

Thank you very much for your attention.

Babatunde Odunayo

Executive Vice Chairman /CEO

Conclusion

A View of Honeywell Flour Mills Plc’sExpansion Project in Progress.


THE BOARD OF

DIRECTORS


Dr. Oba Otudeko, D.Sc. (Hon.), CFRChairman

He is an entrepreneur with business interests spanning various sectors of the Nigerian economy...

Folaranmi Babatunde Odunayo

He attended Kings College Lagos, and completed University education at the

then University of Ife in 1975...

Executive Vice Chairman/CEO

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Lt. General Garba Duba (Rtd.)

General Duba is a retired Lieutenant-General of the Nigerian Army...

Non-Executive DirectorJens Erik Mollenbach

Mr. Mollenbach, a Danish National, graduated in 1972, from Copenhagen University with a Masters Degree in

Economics...

Non-Executive Director

1

2 3 4


THE BOARD OF

DIRECTORS

Akinsoji Akintayo

Mr. Akintayo had a robust career with Honeywell Flour Mills where he was initially

employed in the position of Financial Controller and later Finance Director...

Non-Executive DirectorDave Obray (South African)

Mr. Obray, a South African, an Electrical Engineer had his academic and

professional training in South Africa...

Non -Executive Director

5 6Obafemi Otudeko

He is a Chartered Accountant and an Executive Director of the Honeywell

Group...

Non-Executive Director

Dr. Nino Albert Ozara

Dr. Ozara graduated with a First Class Honours Degree in Soil Science at the

University of Ibadan in 1981...

Executive Director, Production

7 8 9

Theophilus Oluranti Sokunbi

Former Managing Director,West African Portland Cement Plc...

Non- Executive Director


THE BOARD OF

DIRECTORS

A Fellow of the Chartered Institute of Bankers, UK, Institute of Chartered and Corporate Accountants, UK; Institute of Chartered Accountants of Nigeria and Institute of Chartered Secretaries and Administrators of Nigeria. He is the Chairman of Honeywell Group of Companies, Fan Milk Plc and Bharti Airtel (Airtel Nigeria). He is also a Director of Khalil & Dibbo (Haulage) Limited and Lagos Sheraton Hotel. He is a former Director of Central Bank of Nigeria, Ecobank Transnational Incorporated, British American Tobacco Company Limited and Franco-Nigerian Chamber of Commerce and Industry. He is also a former Chairman of the Board of First Bank of Nigeria Plc and former President of the Nigerian Stock Exchange. He is a member of the office of Distinguished Friends of London Business School.

He worked with Coopers & Lybrand, an international firm of Chartered Accountants

in the Audit and Management Consulting units for nearly 10 years. Before he joined the Honeywell Group in 1992, he was the Finance

Director of Hagemeyer Nigeria Plc. (now known as DN Meyer Plc). He was appointed the first Managing Director of Honeywell

Flour Mills Plc in April 1997 and has led the growth of the Company from business

commencement until this day. He is the Vice

Chairman of the Business Advisory Council of the Faculty of Business Administration,

University of Lagos, Vice Chairman, Flour Millers Association of Nigeria and a Council member of the Association of Operative

Millers, Middle East and Africa. He was appointed the Executive Vice Chairman of the

Company in November 2008. He is also a

member of the Eko Forum of the National Electricity Regulatory Commission.

A Military Administrator of Sokoto State (1977 -1979), Bauchi State (1984), General Officer Commanding, 2nd Mechanized

Division, Nigerian Army (1987-88), General Officer Commanding, 3rd Armored Division and Commandant,

Nigerian Defense Academy (1990 -1992).

General Duba has played several political

and economic roles as Leader of the Niger State delegation to the National Political Reform Conference and Chairman, New

Nigerian Development Company Ltd. He is currently the Chairman, SGI Nigeria

Limited, a Director of First Bank of Nigeria

Plc and has been on the board of Honeywell Flour Mills Plc since August 1998.

He attended several management courses both locally and internationally which included Senior Management Development programmes at Ashridge Management College and Total Quality Management Course from the Lagos Business School. He held various management positions at West African Portland Cement Plc , and was the Managing Director of the Company between 2003 and 2005. He is a member of several professional bodies including Nigerian Institute of Management and the Nigerian Institute of Marketing. He is presently the Chairman of Jacobs Educational Services Ltd and Tonbol International Ltd. He joined the Board of Honeywell Flour Mills on October 17, 2011.

At the Honeywell Group, he has primary responsibility for the Group's Strategy & Coordination, Corporate Development and Risk Management. He also has direct oversight over the Group's Portfolio Investments. He joined the Honeywell Group in 2003 as a Senior Manager in the Oil and Gas projects group, responsible for strategy formulation and business development. Prior to joining the Honeywell Group, he was a Senior Associate in the Financial Services Industry Practice of PricewaterhouseCoopers where he provided Assurance and Advisory services to clients in the private and public sectors. He has been a member of the Board of Honeywell Flour Mills since 2006. He is also a Director of First Bank Nigeria Plc.

He has held various positions of responsibility including that of District

Engineer (1973-1977), Resident Engineer, Divisional Managing Director (1984 -1987) of Fraser and Chalmers and Project

Manager (1996 -1998) of Babcock International both in South Africa. Mr.

Obray is currently the Managing Director

of Pivot Engineering Company Limited, a position he has held since 2001. He joined

the board of Honeywell Flour Mills in 2002.

He was Finance Director at Honeywell Flour Mills Plc, and was later appointed the Group Chief Finance Officer of the Honeywell Group in 2008. He is a Chartered Accountant and a member of the Institute of Cost and Management Accountants, U.K and the Certified General Accountants of Ontario, Canada. He was previously in the employment of Federal Express in Canada, Consolidated Breweries Limited, Phillips Consulting and Unilever AUDIT Nigeria of UAC of Nigeria Plc. He was appointed to the Board of the Company in May 2009.

He was a University of Ibadan and Commonwealth Scholar. Dr Ozara obtained a Doctorate Degree in Soil Science from Silsoe College, Cranfield Institute of Technology, United Kingdom in 1989. Before joining the Honeywell Group in 1998, Dr Ozara was a University lecturer and Head of Department of Crop Production in 1996 at the Federal University of Technology, Owerri, Nigeria.After joining the HFM Plc, he was trained as a Miller at the Swiss Milling School in Switzerland.

His impressive career has spanned lecturing, marketing, insurance and, consulting. He has held various executive management positions at BP Denmark Ltd, BP International Plc London and Hafnia Services Ltd. Between 1995 and 2006, Mr. Mollenbach was the Managing Director of R.T. Briscoe (Nigeria) Plc and the Managing Director of Fan Milk Plc from 2006 to May 2011. He joined the Board of Honeywell Flour Mills Plc in April 05, 2011.

1 2 3

4 5 6

7 8 9

Dr. Oba Otudeko, D.Sc. (Hon.), CFR Folaranmi Babatunde Odunayo Lt. General Garba Duba (Rtd.)

Jens Erik Mollenbach Theophilus Oluranti Sokunbi Obafemi Otudeko

Dave Obray (South African) Akinsoji Akintayo Dr. Nino Albert Ozara



The Report of the Directors

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The Directors have pleasure in submitting to members their annual report together with the audited financial statements for the year ended 31 March, 2012.

LEGAL STATUSHoneywell Flour Mills Plc (HFM Plc) was initially registered as GATEWAY HONEYWELL FLOUR MILLS LIMITED on 9 July, 1985. A change in the Company's ownership structure led to a change of the name to HONEYWELL FLOUR MILLS LIMITED in June 1995. The Company was converted to a Public Liability Company in 2008. Its shares were listed on the Nigerian Stock Exchange (NSE) in 2009

PRINCIPAL ACTIVITIESThe Group is principally involved in the manufacturing and marketing of wheat-based products including flour, semolina, whole wheat meal, noodles and pasta.

RESULTS Group CompanyN'000 N'000

Turnover 38,071,502 32,949,173

Profit before taxation 3,663,134 3,561,415 Taxation (960,703) (960,703)

Profit after taxation 2,702,431 2,600,712

DIVIDENDThe Directors are pleased to recommend to the shareholders the payment of dividend in respect of the year of N1,189,529,648.70, that is 15 kobo per share. This is subject to deduction of appropriate withholding tax.

PRODUCT DISTRIBUTIONThe Company's products are distributed through many distributors across the country.

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

BOARD COMPOSITIONThe Board consists of a Non-Executive Chairman, six (6) Non-Executive Directors, and two (2) Executive Directors, all bringing high level of competence and expertise. They are professionals and entrepreneurs with vast business management experience and credible track records. The Non-Executive Directors are independent of the management and are free from constraints which may materially affect their judgement as the Directors of the Company.

ROLE OF THE BOARDThe Board has the responsibility for ensuring that the Company is appropriately managed and achieves its strategic objectives with the aim of creating a sustainable long term value for the shareholders.

BOARD MEETINGSMembers of the Board of Directors hold quarterly meetings to decide on policy matters and to direct the affairs of the Company, review its operations, finances and formulate growth strategy. Board agenda and reports are provided ahead of meetings.

for the Year Ended 31 March, 2012



The Report of the Directors...cont’d

RECORD OF DIRECTORS' ATTENDANCE AT MEETINGSFurther to the provision of Section 258(2) of the Companies and Allied Matters Act, CAP C20 LFN 2004, the Records of the Directors' Attendance at Board meetings during the year under review is available at the Annual General Meeting for inspection. Further, and in line with Corporate Governance principles, details of attendance of the current Directors at the Board meetings are as follows:

Names of Directors Number of Number of

Meetings held Meetings attended

Dr. Oba Otudeko, D.Sc. Hon. CFR 5 5

Folaranmi Babatunde Odunayo 5 5

Obafemi Otudeko 5 4

Dr. Nino Albert Ozara 5 5

Lt. General Garba Duba (rtd) 5 4

David William Obray 5 3

Akinsoji Akintayo 5 4

Jens Mollenbach 5 5

Theophilus Oluranti Sokunbi* 5 2

* Appointed with effect from 17 October, 2011.

BOARD CHANGESMessrs Jens Mollenbach and Theophilus Oluranti Sokunbi joined the Board on 5 April, 2011 and 17 October, 2011 respectively as Non-Executive Directors. Mrs Adebisi Otudeko and Chief Kola Jamodu also resigned on 1 July, 2011 and 15 July, 2011 respectively.

In accordance with the Company’s Articles of Association, the following Directors namely, Mr. Folaranmi Babatunde Odunayo, Dr. Nino Ozara, Mr. Akinsoji Akintayo retired by rotation this Annual General Meeting and being eligible, offer themselves for re-election. Also, Mr. Oluranti Sokunbi retires at this Annual General Meeting, being eligible offers himself for election. Mr. Jens Mollenbanch has already been elected at the last AGM.

DIRECTORS AND DIRECTORS’ INTERESTThe names of the current Directors are listed on page 7.

The direct and indirect interests of Directors in the issued share capital of the Company as recorded in the Register of Directors shareholdings and/or as notified by the Directors for the purposes of Sections 275 and 276 of the Companies and Allied Matters Act, CAP C20 LFN 2004 and the listing requirements of the Nigerian Stock Exchange is as stated hereunder:

At 20 June, 2012 At 21 June 2011Indirect Direct Number of SharesNumber Number 2 0 1 2 2 0 1 1

Dr. Oba Otudeko, D.Sc. Hon. CFR* 1,247,264,003 – 1,247,264,003 1,247,264,003

Folaranmi Babatunde Odunayo – 200,000 200,000 200,000

Obafemi Otudeko* 567,951,925 – 567,951,925 567,951,925

Dr. Nino Albert Ozara – 250,000 250,000 250,000

Lt. General Garba Duba (rtd) – 537,600 537,600 537,600

David William Obray – 200,000 200,000 200,000

Akinsoji Akintayo – 200,000 200,000 100,000

Jens Mollenbach – 150,000 150,000 –

Oluranti Sokunbi – – – –

*Dr. Oba Otudeko and Mr. Obafemi Otudeko have indirect holdings amounting to 1,247,264,003 and 567,951,925 respectively through Siloam Global Services Limited who is a 75% equity holder in the Company.

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DIRECTORS' INTEREST IN CONTRACTSNone of the Directors have notified the Company for the purpose of Section 227 of the Companies and Allied Matters Act, CAP C20 LFN 2004 of any disclosable interest in contracts with which the Company was involved during the year ended 31 March, 2012.

RESPONSIBILITIES OF THE DIRECTORSIn accordance with the provisions of Sections 334 and 335 of the Companies and Allied Matters Act, CAP C20 LFN 2004, the Directors are responsible for the preparation of annual financial statements which give a true and fair view of the state of affairs of the Group and the Company, and of the profit for the financial year.

The responsibilities include ensuring that:– Appropriate internal controls are established both to safeguard the assets of the Group and to

prevent and detect fraud and other irregularities;

– The Group keeps accounting records which disclose with reasonable accuracy the financial position of the Group and ensure that the financial statements comply with the requirements of the Companies and Allied Matters Act, CAP C20 LFN 2004 and Financial Reporting Council of Nigeria;

– The Group has used appropriate accounting policies, consistently applied and supported by reasonable and prudent judgements and estimates, and that all applicable accounting standards have been followed; and

– It is appropriate for the financial statements to be prepared on a going concern basis unless it is presumed that the Company and its subsidiaries will not continue in business.

The Directors accept responsibility for the annual financial statements, which have been prepared using appropriate accounting policies supported by reasonable and prudent judgements and estimates, in conformity with Statements of Accounting Standards and the requirements of the Companies and Allied Matters Act, CAP C20 LFN 2004.

The Directors are of the opinion that the financial statements give a true and fair view of the state of the financial affairs of the Company and Group and of the trading result for the year.

The Directors further accept responsibility for the maintenance of accounting records that may be relied upon in the preparation of the financial statements, as well as adequate systems of internal control.

Nothing has come to the attention of the Directors to indicate that the Group will not remain a going concern for at least twelve months from the date of this statement. \

EMPLOYMENT AND EMPLOYEES

Employment policyIt is the policy of the Company that there should be no discrimination in considering applications for employment including those from physically challenged persons. However, there was no physically challenged person in the employment of the Company during the year.

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Training and developmentIt is the Company's policy to equip all employees with the skills and knowledge required for the successful performance of their jobs. We therefore see the investment in our people as major part of our strategic development and have maintained a consistent policy of training our staff, both locally and abroad to enhance their skills and competence.

Health and welfare of employeesThe Company maintains a staff clinic with two full-time nurses and weekly attendance by a physician. It also offers free medical services through a Health Management Organisation (HMO) provider to all members of staff.

The Company continuously strives to improve its operation to ensure a safe working environment. It also maintains high standard of hygiene in all its premises through sanitation practices and regular fumigation exercises, as well as installation of pest and rodent control gadgets. Nutritionally balanced meals are provided in the staff canteen free for the junior staff and at highly subsidized prices for the senior staff.

AUDIT COMMITTEE

In compliance with section 359 (4) of the Companies and Allied Matters Act of Nigeria, members

of the Audit Committee were elected at the Annual General Meeting held on September 26, 2011.

Members that served on the Committee during the year comprise:

Adebayo Adeleke, Chairman/ShareholderAlhaji Lateef Ayodeji Shonubi ShareholderGabriel Olagunju, ShareholderLt. Gen. Garba Duba (Rtd) DirectorDave Obray, DirectorAkinsoji Akintayo Director

The Committee in the conduct of its affairs review the Company's overall risk management and control systems, financial reporting arrangements and standard of business conduct. Members of the Audit Committee have direct access to the Internal Audit Department and Independent Auditors.

The statutory functions of the Committee are provided for in section 359(6)of the Companies and Allied Matters Act, Cap.C20, Law of the Federation of Nigeria, 2004.

The Committee met four times during the year under review .

QUALITY POLICYThe Company is committed to the continuous achievement of business success by maintaining its quality leadership in the flour milling industry.

This is driven by a quality management system designed to ensure that customers are always provided with high quality products and services that meet International Standards. Such standards are in full compliance with all statutory and regulatory requirements and are set out in writing for adherence by all staff at all times.

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SHAREHOLDING ANALYSISThe shareholding structure of the Company as at 31 March 2012 is as stated below:

Share Range No of % of No of % ofholders holders holdings holdings

1 - 1,000 9,870 35.62 9,682,585 0.121,001 - 5,000 13,086 47.23 34,563,491 0.445,001 - 10,000 2,465 8.90 20,415,903 0.2610,001 - 50,000 1,815 6.55 40,729,973 0.5250,001 - 100,000 254 0.92 20,304,922 0.26100,001 - 500,000 169 0.60 3,803,571 0.05500,001 - 1,000,000 25 0.09 19,400,608 0.251,000,001 - 5,000,000 11 0.04 29,422,106 0.375,000,001 - 7,930,197,658 13 0.05 7,721,871,499 97.74

27,708 100.00 7,900,194,658 100.00

SUBSTANTIAL INTEREST IN SHARES

According to the register of members, the following Shareholders of the Company held more than 5

percent of the Issued Share Capital of the Company at 31 March, 2012.

2 0 1 2

Number %

Siloam Global Services Limited 5,939,363,565 75

First Bank of Nigeria Plc 542,998,167 7

BGL Securities Limited JSA/ First Bank of Nigeria Plc 492,300,310 6

DONATIONS AND SPONSORSHIP

The following donations and charitable gifts were made during the year:

N

Widows Mind Project 886,000

Nigerian Red Cross International 145,000

Manufacturers Association of Nigeria (MAN) 100,000

Nigerian Basket Ball Federation (NBBF) 1,685,000

Lagos Boxing Hall of Fame 300,000

Federal Road Safety Commission (FRSC) 265,000

The Nigeria Police Force 100,000

Kansas State University Conference 250,000

Rotary Club International 80,000

Little Saint Orphanage 50,000SOS, Isolo 20,000Love Home, Magodo 10,000

Total 3,891,000

FIXED ASSETS

Movements in fixed assets during the year are shown in note 1 on page 41. In the opinion of the Directors,

the market value of the Company's properties are not lower than the value shown in the financial

statements.

q Share Share BusinessReview




POST BALANCE SHEET EVENT

There are no post balance sheet events which could have had material effect on the financial position

of the Group as at 31 March 2012 and profit attributable to equity holders on that date.

INDEPENDENT AUDITORS

In accordance with section 357 (2) of the Companies and Allied Matters Act, CAP C20 LFN 2004,

Messrs Balogun Badejo & Co. [Chartered Accountants] have expressed their willingness to continue

in office as Independent Auditors to the Company. A resolution will be passed at the Annual General

Meeting to authorize the Directors to fix the remuneration of the Auditors.

By Order of the Board

Oluwayemisi Busari (Mrs)

Company Secretary

2nd Gate Bye Pass,

Tin-Can Island Port,

Apapa, Lagos,

Nigeria.

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In compliance with the provisions of Section 359(6) of the Companies and Allied Matters Act CAP C20

LFN 2004, we the members of the Audit Committee of Honeywell Flour Mills Plc hereby report as

follows:

(a). We have reviewed the scope and planning of the audit requirements;

(b). We have reviewed the External Auditors' Memorandum of Recommendations on Accounting

Policies and Internal Controls together with Management responses; and

(c). We have ascertained that the accounting and reporting policies of the Company for the year ended

31 March 2012 are in accordance with legal requirements and agreed with ethical practices.

In our opinion, the scope and planning of the audit for the year ended 31 March 2012 was adequate and

management responses to the auditors' finding were satisfactory.

Adebayo AdelekeChairman, Audit Committee18 June, 2012.

Members of the Audit CommitteeAdebayo Adeleke – Chairman/ShareholderAlhaji Lateef Ayodeji Shonubi – ShareholderGabriel Olagunju – ShareholderLt. Gen. Garba Duba (Rtd) – DirectorDave Obray – DirectorAkinsoji Akintayo – Director

BusinessReview

The Report of the Audit Committee

2nd Gate Bye-Pass, Tin Can Island Port, P. M .B. 1105, Apapa, Lagos, Nigeria.Tel: 01-793 2694, 01-791 5870.e-mail: [email protected] www.honeywellflour.com



Events

Honeywell Flour Mills Plc Baking School Graduation Ceremony Held on the 28th of February, 2012

One of the graduating students, Mrs. Olufunke Faforepresenting the varieties of pastries made from Honeywell Flour.

The Management staff of Honeywell Flour Mills Plc and some of the graduating student of the 18th Honeywell Baking School.

L-R- Mr. F.B Odunayo (EVC/CEO HFMP), Mrs Olusola Adeniran (Best Graduating Student of the 18th Honeywell Baking School).

The Management staff of Honeywell Flour Mills Plc and some of the graduating student of the 18th Honeywell Baking School.

L-R- Mr. Tunde Adebayo (Human Resources Manager), Dr. Nino Ozara (Production Director), Mr. F.B Odunayo (EVC/CEO), Mr. Benson Evbuomwan (Director, Marketing), Mr. Rotimi Fadipe (Director, Logistics & Supply).

L-R- Mr. Tunde Adebayo (Human Resources Manager), Mr. Seye Ogunwole (National Sales Manager), Dr. Nino Ozara(Production Director), Mr. F.B Odunayo (EVC/CEO), Mr. Benson Evbuomwan (Director, Marketing), Mr. Rotimi Fadipe (Director, Logistics & Supply).



Widows Mind Project Sponsored by Honeywell Flour Mills PlcHeld on the 19th of April, 2012

A cross-section of Participants at the Oasis empowerment programme for the Widows Mind Projectheld at OGS Plaza, Akute, Ogun State.

L-R- President, The Oasis Association, Engineer Gladstone Longe: Director, Marketing, Mr. Benson Evbuomwan: Founder, Widows Mind Evangelism, Mrs Florence Babatunde: Company Treasurer, Honeywell Mrs . Doyin Ibrahim: and Human Resources Manager, Honeywell, Mr Tunde Adebayo at the presentation of equipment to Oasis to facilitate widows'empowerment programme, at OGS Plaza in Ogun State.

A view of some of the equipments presented to the Widows at the Oasis empowerment programme, at OGS Plaza in Ogun State.

L-R- Director Marketing, Honeywell Flour Mills Plc, Mr Benson Evbuomwan presenting Certificate of training to one of the participants at the Oasis empowerment programme for the Widows Mind Project held at OGS Plaza, Akute, Ogun State.

Children of some of the participants offering song of thanks to Honeywell Flour Mills Plc.

Events



Honeywell Flour Mills Plc Annual Customers’ Forum Held on the 11th of July 2012

Mr. F.B Odunayo (EVC/CEO), Dr Nino Ozara (Production Director)

The management staff and dealers of Honeywell Flour Mills Plc celebrating with a cake at the Honeywell 2012 Customer Forum.

Mr. Ibukun Ojo (Director, Finance), Mrs. Doyin Ibrahim (Company Treasurer),Alhaji Opeyemi (MD/CEO Opeyemi Bakeries Ltd), Mr. Lanre Jaiyeola (Commercial Director HSFL), Mr. F.B Odunayo (EVC/CEO),Dr Nino Ozara (Production Director), Mr. Benson Evbuomwan (Director, Marketing).

Alhaji Opeyemi (MD/CEO Opeyemi Bakeries Ltd), Mr Lanre Jaiyeola (Commercial Director HSFL), Mr F.B Odunayo (EVC/CEO), Dr Nino Ozara (Production Director), Mr. Benson Evbuomwan (Director, Marketing), Mr. Seye Ogunwole (National Sales Manager).

A cross section of Dealers present at the 2012 Honeywell Customers’ Forum.

Events

A Group Photograph of Honeywell Staff and Dealers at theHoneywell Customers Forum.



FinancialStatements

Report of the Independent Auditors 34

Statement of Significant Accounting Policies 35-37

Group Balance Sheet 38

Group Profit and Loss Account 39

Statement of Cash Flows 40

Notes to the Financial Statement 41-50

Value Added Statement 51

Financial Summary 52-53



Report of the Independent Auditors

We have audited the accompanying consolidated Financial Statements of Honeywell Flour Mills Plc (the Company) and its subsidiary (together, the Group) on pages 35 to 53 which comprise the Balance Sheet as at 31 March 2012, the Profit and Loss Account, Statement of Cash Flows and Value Added Statement for the year then ended, the Summary of Significant Accounting Policies, Explanatory Notes and Financial Summary.

DIRECTORS RESPONSIBILITIES FOR THE FINANCIAL STATEMENTSThe Company's directors are responsible for the preparation and fair presentation of these financial statements in accordance with the Statement of Accounting Standards applicable in Nigeria and in the manner required by the Companies and Allied Matters Act, CAP C20 LFN 2004. This responsibility includes: designing, implementing and maintaining internal controls relevant to the fair presentation of financial statements that are free from material mis-statement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

AUDITORS' RESPONSIBILITYOur responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with both Local and International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material mis-statement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgement, including the assessment of the risks of material mis-statement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.

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

OPINIONIn our opinion, the Company has kept proper accounting records and the financial statements are in agreement with the records in all material respect and give in a prescribed manner, information required by the Companies and Allied Matters Act, CAP C20 LFN 2004. The financial statements give a true and fair view of the financial position of Honeywell Flour Mills Plc and the Group as at 31 March, 2012 and of its financial performance and cash flows of the Group and of the Company for the year then ended in accordance with all relevant Accounting Standards issued by the Financial Reporting Council of Nigeria.

INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OFHONEYWELL FLOUR MILLS PLC

FinancialStatements

Lagos, Nigeria

2012 Chartered Accountants

Partners:J.O. Asaolu, J.O. ObogwuE.U. Itodo, A.M. AdetuyiG.C.Egwuenu

RC: 133294Other Offices in Nigeria:Abuja, Akure, Benin City,Ibadan, Kaduna.



Statement of Significant Accounting Policies

1. BASIS OF PREPARATION OF FINANCIAL STATEMENTSThe financial statements have been prepared under the historical cost convention.

2. CONSOLIDATIONA subsidiary is an entity controlled by the Company. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an enterprise. The financial statements of the subsidiary are included in the consolidated financial statements from the date that control commences until the date control ceases. Intra-group balances and transactions, and any unrealized gains arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

3. GOODWILL ON BUSINESS COMBINATIONGoodwill represents the excess of the purchase consideration over the fair value of the Group's share of the separate net assets of the subsidiary acquired. Goodwill arising on consolidation of subsidiaries is accounted for in line with the provisions of paragraphs 76 and 77 of the Statement of Accounting Standards 26, which states that "goodwill arising on consolidation should be recognized in the balance sheet and not amortized but tested for impairment annually or more frequently, if events or changes in circumstances indicate that it might be impaired. Impairment losses shall be recognized immediately in the profit and loss account."

4. TURNOVERTurnover represents the net invoiced value of goods sold to third parties, net of discounts and value added tax.

5. FIXED ASSETSProperty, Plant and Equipment are stated at cost or valuation less accumulated depreciation. Historical cost includes expenditure directly attributable to the acquisition of the asset (cost of bringing the assets to its location and working condition). Revaluation of property, plant and equipment are carried out as the need arises. Capital Work-In-Progress represents property, plant and equipment under construction or undergoing installation, and is not depreciated. Upon completion, the attributable cost of each asset is transferred to the relevant asset category. Gains or losses on disposal of property, plant and equipment are included in the profit and loss account.Borrowing cost that are directly attributable to qualifying fixed assets are capitalised. Qualifying fixed assets are those that necessarily take a substantial period of time to construct. Capitalisation of borrowing cost continues up to the date that the assets are capable of producing.

6. DEPRECIATIONConsistent with prior years, depreciation on fixed assets has been calculated on the straight line basis on cost to write off the assets at the following annual rates:

%

Factory building 2Plant and machinery - Pasta 6.66Plant and machinery - Others 10Office/household furniture and fittings 20Office/household equipment 20Computer equipment 25Computer software 33.33Motor vehicles 25Tools and safety equipment 50

FinancialStatements



Statement of Significant Accounting Policies...cont’d

FinancialStatements

7. STOCKSStocks of raw materials have been valued at cost and finished products at cost of production less provision for slow-moving and obsolete stock items.

8. FOREIGN CURRENCIESTransactions denominated in foreign currencies are recorded in Naira at the rates of exchange ruling at the date of transactions. Assets and liabilities in foreign currencies are converted to Naira at the rates of exchange ruling at the balance sheet date and the resultant profit or loss on exchange is taken to the profit and loss account.

9. DEBTORSDebtors are stated net of allowance for any debts considered to be doubtful of collection.

10. TAXATION(i) Income tax

Income tax payable is provided on taxable profits at the current rate of tax.

(ii) Deferred taxDeferred taxation, which arises from timing differences in the recognition of items for accounting and tax purposes, is calculated using the liability method. Deferred taxation is fully provided for on timing differences, which are expected to reverse at the rate of tax likely to be in force at the time of reversal.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the associated unused tax losses and deductible temporary differences can be utilised. Deferred tax assets are reduced to the extent that it is no longer possible that the related tax benefit will be realised.

11. LEASES(i) Finance leases

All leases in which the Company transfers substantially all the risks and rewards of ownership are classified as finance leases. At the beginning of the lease term, the leased asset is measured at an amount equal to the net investment in the lease as a receivable. Initial direct costs are included in the initial measurement of the finance lease receivable and are used to reduce the amount of income recognized over the lease term. Subsequent recognition of finance income shall be based on a pattern reflecting a constant periodic rate of return on the lessor's net investment in the finance lease.

The income allocation is based on a pattern reflecting a constant periodic return on the lessor's net investment in the finance lease. Lease payments relating to the period, excluding costs of services, are applied against the gross investment in the lease to reduce both the principal and the unearned finance income.

(ii) Operating leasesLeases which are not finance leases are classified as operating leases.Lease income from operating leases is recognised in income statement on a straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern in which use benefit derived from the leased asset is diminished.



Statement of Significant Accounting Policies...cont’d

FinancialStatements

Initial direct cost incurred by lessors in negotiating and arranging an operating lease was added to the carrying amount of the leased asset and was recognised as an expense over the lease term on the same basis as the lease income.

The depreciation policy for depreciable leased assets is consistent with our normal depreciation policy for similar assets, and depreciation shall be calculated in accordance with SAS 3 - Property, Plant and Equipment.

12. PROVISIONSA provision is recognized where, as a result of a past event, the group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

13. CASH AND CASH EQUIVALENTSFor the purpose of reporting cash flows, cash and cash equivalents include cash on hand, cash balances with banks including short-term deposits and investment in money instruments.

14. EMPLOYEES RETIREMENT BENEFITSThe Group operates a defined contributory pension scheme for members of staff which is independent of its finances and managed by Pension Fund Administrators. The scheme is funded by contributions from employer and employees in accordance with the provisions of the Pension Reform Act 2004. The employer's contributions are charged to the profit and loss account.

15. SEGMENT REPORTINGThe Company's business segments are presented by products that are subjected to similar risks and returns. The business segments consist of flour milling and pasta/noodles production. Business segment reporting from geographical location is not applicable to the Company because all the products are produced and marketed within Nigeria.

16. INTERESTBorrowing costs relating to capital expenditure are capitalized in the period in which they are incurred in accordance with the provision of the International Accounting Standard No. 23.

17. RISK MANAGEMENTRisk is associated with any commercial venture. Risk management is a continuous process which runs throughout the Company's activities and operations. All assets are fully insured and our business continuity procedures are reviewed regularly.

18. DIVIDENDDividend proposed by the Directors but not yet approved by members are disclosed in the notes to the financial statements, but not recorded as a liability as there is no obligation at the balance sheet date. Dividend distribution to the shareholders is recognized in the financial statements in the year in which the dividend is approved by the shareholders.

19. EARNINGS PER SHAREThe Group presents basic earnings per share ("EPS") data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.



} Directors

BALANCE SHEETfor the Year Ended 31 March, 2012

FinancialStatements

G r o u p C o m p any2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

ASSETS Notes N'000 N'000 N'000 N'000Tangible Assets 1 27,706,442 12,572,298 27,650,432 12,505,813Investment in Subsidiary 2 – – 999,999 999,999Goodwill 3 900,188 900,188 – –

28,606,630 13,472,486 28,650,431 13,505,812

Current Assets:Stocks 4 5,013,635 3,808,945 4,400,603 3,226,626 Debtors and Prepayments 5 7,259,583 8,031,989 12,114,729 12,811,286 Cash at Bank and in Hand 4,060,232 3,824,187 3,855,221 3,440,130

16,333,450 15,665,121 20,370,553 19,478,042

Less current liabilities:

Creditors 6(i) (19,621,885) (11,014,651) (24,183,810) (15,711,759)

Net Current (Liabilities)/Assets (3,288,435) 4,650,470 (3,813,257) 3,766,283

Creditors:Amount falling due beyond one year 6(ii) (6,243,818) (1,358,633) (5,255,807) –

Provision for Liabilities and Charges 7 (2,272,139) (1,633,590) (2,196,011) (1,456,525)

(8,515,957) (2,992,223) (7,451,818) (1,456,525)

Total Assets Net of Liabilities 16,802,238 15,130,733 17,385,356 15,815,570

CAPITAL AND RESERVESShare Capital 8 3,965,099 3,965,099 3,965,099 3,965,099 Share Premium 9 6,462,041 6,462,041 6,462,041 6,462,041 Revenue Reserve 10 6,375,098 4,703,593 6,958,216 5,388,430

16,802,238 15,130,733 17,385,356 15,815,570

These financial statements were approved by the Board of Directors on 20 June, 2012 and signed on its behalf by:

Dr. Oba Otudeko, D.Sc. (Hon.), CFRChairman

Folaranmi Babatunde OdunayoExecutive Vice Chairman/CEO

The accounting policies on pages 35 to 37 and the notes on pages 41 to 50 are to be read in conjunction with these financial statements.



Profit And Loss Accountfor the Year Ended 31 March, 2012

FinancialStatements

G r o u p C o m p a n y

2 0 1 2 2 0 11 2 0 1 2 2 0 11

Notes N'000 N'000 N'000 N'000

Turnover 11 38,071,502 34,057,624 32,949,173 29,310,102

Cost of sales (31,501,987) (26,933,416) (28,154,428) (24,081,476)

Gross profit 6,569,515 7,124,208 4,794,745 5,228,626

Administration expenses (1,226,321) (1,049,976) (975,613) (822,864)

Distribution expenses (1,884,965) (2,267,091) (1,170,951) (1,257,530)

Interest expenses and similar charges 12 (559,101) (1,114,505) (446,475) (564,768)

Other incomes 13 764,006 823,149 1,359,709 852,693

Profit before taxation 14 3,663,134 3,515,785 3,561,415 3,436,157

Taxation 15(i) (960,703) (1,023,388) (960,703) (1,023,388)

Profit after taxation 10 2,702,431 2,492,397 2,600,712 2,412,769

PER 50k SHARE DATA Kobo Kobo Kobo Kobo

Earnings 34.08 31.43 32.80 30.43

Proposed Dividend 15.00 13.00 15.00 13.00

The accounting policies on pages 35 to 37 and the notes on pages 41 to 50 are to be read in conjunction with these

financial statements.



Statement of Cash Flowsfor the Year Ended 31 March, 2012

FinancialStatements


2 0 1 2 2 0 11 2 0 1 2 2 0 11

Notes N'000 N'000 N'000 N'000

Cash Generated from Operations 16 2,853,917 4,609,163 2,356,044 8,497,475

Income Tax Paid 15(ii) (199,435) (794,628) (199,435) (794,628)

Net cash flow from operating activities 2,654,482 3,814,535 2,156,609 7,702,847

CASH FLOW FROM INVESTING

ACTIVITIES

Purchase of Fixed Assets 1 (16,252,036) (792,684) (16,219,771) (6,559,535)

Proceeds from Sale of Fixed Assets 319 9,609 – 5,259

Interest Income Received 712,820 769,845 724,544 823,929

Net cash Flow from Investing Activities (15,538,897) (13,230) (15,495,227) (5,730,347)

CASH FLOW FROM FINANCING

ACTIVITIES

Interest Paid (577,254) (1,092,108) (464,628) (542,471)

Loan Receipts 35,306,967 10,069,480 36,571,937 8,280,846

Loan Repaid (20,561,019) (11,710,128) (21,322,674) (8,844,867)

Dividend Paid (1,030,926) (872,322) (1,030,926) (872,322)

Share Increase Expense (17,308) – – –

Net Cash Flow from Financing Activities 13,120,460 ( 3,605,078 ) 13,753,709 (1,978,814)

Net increase/(decrease)

in cash and its equivalents 236,045 196,227 415,091 ( 6,314 )

Cash and its Equivalent at 1 April 3,824,187 3,627,960 3,440,130 3,446,444

Cash and its Equivalent at 31 March 17 4,060,232 3,824,187 3,855,221 3,440,130

The accounting policies on pages 35 to 37 and the notes on pages 41 to 50 are to be read in conjunction with these

financial statements.



FinancialStatements

NOTES TO THE FINANCIAL STATEMENTSfor the Year Ended 31 March, 2012

1 TANGIBLE ASSETS

. (i) Group Uncommi- Office/Capital ssioned home

Land and work Plant and plant and Computer furniture MotorBuilding in progress machinery machinery Tools equipment & equip. Vehicles Total

COST N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000

At 1 April, 2011 5,298,970 451,771 10,986,944 25,174 57,583 106,285 268,422 437,011 17,632,160Of additions 19,379 15,902,256 142,596 – 4,391 5,023 14,071 164,320 16,252,036Of transfers/adjustments 2,556,996 (5,711,679) 3,147,958 – – – – – ( 6,725)Of disposals – – – – – – (41) (2,350) ( 2,391)

At 31 March, 2012 7,875,345 10,642,348 14,277,498 25,174 61,974 111,308 282,452 598,981 33,875,080

DEPRECIATIONTo 1 April, 2011 500,304 – 3,874,487 25,174 45,820 91,891 217,172 305,014 5,059,862Charge for the year 100,468 – 896,728 – 6,836 8,090 22,840 75,908 1,110,870On disposals – – – – – (38) (2,056) (2,094)

To 31 March, 2012 600,772 – 4,771,215 25,174 52,656 99,981 239,974 378,866 6,168,638

NET BOOK VALUE

At 31 March, 2012 7,274,574 10,642,348 9,506,282 – 9,318 11,327 42,477 220,116 27,706,442

At 31 March, 2011 4,798,666 451,771 7,112,457 – 11,763 14,394 51,250 131,997 12,572,298

(Ii) Company Uncommi- Office/

Capital ssioned home

Land and work Plant and plant and Computer furniture Motor

Building in progress machinery machinery Tools equipment & equip. vehicles Total

COST N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000 N'000

At 1 April, 2011 5,182,777 446,519 10,413,586 25,174 24,568 83,431 198,481 286,232 16,660,768 Of additions 19,379 15,899,729 142,596 – 3,739 4,\975 6,663 142,690 16,219,771 Of transfers/adjustments 2,556,996 (5,706,429) 3,147,958 – – – – – (1,475)Of disposals – – – – – – – – –

At 31 March, 2012 7,759,153 10,639,819 13,704,140 25,174 28,307 88,406 205,144 428,922 32,879,064

DEPRECIATIONTo 1 April, 2011 384,534 – 3,298,440 25,174 21,895 73,627 170,159 181,126 4,154,955 Charge for the year 100,468 – 896,728 – 2,953 5,594 10,880 57,055 1,073,678 Of transfers/adjustments (14,808) 14,808 – – – – – – –On disposals – – – – – – – – –

To 31 March, 2012 470,194 14,808 4,195,168 25,174 24,848 79,221 181,039 238,181 5,228,633

NET BOOK VALUE

At 31 March, 2012 7,288,959 10,625,011 9,508,972 – 3,459 9,185 24,105 190,741 27,650,432

At 31 March 2011 4,798,243 446,519 7,115,146 _ 2,673 9,804 28,322 105,106 12,505,813



Notes to the Financial Statements...cont’d

FinancialStatements


2 0 1 2 2 0 1 1 2 0 1 2 2 0 11

N'000 N'000 N'000 N'000

2. INVESTMENT IN SUBSIDIARY

Honeywell Superfine Foods Limited – – 999,999 999,999

This represents the Company's 100% investment in

Honeywell Superfine Foods Limited.

3. GOODWILL

Goodwill on Business Combination 900,188 900,188 – –

4. STOCKS

Raw Materials and Consumables 1,649,127 1,735,700 1,157,996 1,267,362

Work in Progress 9,571 14,901 – –

Goods in Transit 3,247,724 1,914,455 3,196,246 1,895,853

Finished Goods 107,213 143,889 46,361 63,411

5,013,635 3,808,945 4,400,603 3,226,626

5. DEBTORS AND PREPAYMENTS

Trade Debtors 603,241 684,826 419,879 527,716

Other Debtors 764,091 3,926,343 3,374,523 3,436,456

Prepayments 2,040,904 224,372 423,873 195,742

Due from Subsidiary Company – – 4,045,107 5,454,924

Due from Related Companies 3,851,347 3,196,448 3,851,347 3,196,448

7,259,583 8,031,989 12,114,729 12,811,286

6. CREDITORS

(i) Amount due within one year:

Trade Creditors 1,021,886 953,731 503,475 429,760

Bank Overdraft 106,216 436,259 9,888 6,259

Current Income Taxes (Note 15.2) 225,618 203,836 225,618 203,836

Sundry Creditors and Accruals 2,863,010 3,914,221 2,330,023 3,626,719

Short-Term Loans 15,405,155 5,506,604 15,405,155 5,506,604

Due to Subsidiary Company – – 5,709,651 5,938,581

19,621,885 11,014,651 24,183,810 15,711,759

(ii) Amount due after one year:

Bank Loans 6,243,818 1,358,633 5,255,807 –




FinancialStatements


2 0 1 2 2 0 11 2 0 1 2 2 0 1 1

N'000 N'000 N'000 N'000

7. PROVISION FOR LIABILITIES

AND CHARGES

Deferred Taxation 2,196,011 1,456,525 2,196,011 1,456,525

Other Provisions 76,128 177,065 - -

2,272,139 1,633,590 2,196,011 1,456,525

8. SHARE CAPITAL

Authorised

8,000,000,000 Ordinary Shares

of 50k each 4,000,000 4,000,000 4,000,000 4,000,000

Issued and Fully Paid

7,930,197,658 (2011: 7,930,197,658)

Ordinary Shares of 50k each

At 31 March 3,965,099 3,965,099 3,965,099 3,965,099

9. SHARE PREMIUM

At 31 March 6,462,041 6,462,041 6,462,041 6,462,04

10. REVENUE RESERVE

At 1 April 4,703,593 3,083,518 5,388,430 3,847,983

Dividend Paid during the year (1,030,926) (872,322) (1,030,926) (872,322)

Retained Profit after payment of dividend 3,672,667 2,211,196 4,357,504 2,975,661

Retained Profit for the

Year after Taxation 2,702,431 2,492,397 2,600,712 2,412,769

At 31 March 6,375,098 4,703,593 6,958,216 5,388,430

At the Company's Annual General Meeting held

on 26 September, 2011, the Shareholders approved

the payment of 13k (N1,030,925,695.54) per share to

members as at the close of business on 2 September, 2011.




FinancialStatements


2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

N'000 N'000 N'000 N'000

11. TURNOVER

Flour, Semolina and Wheat meal 30,263,298 27,559,932 32,949,173 29,310,102

Pasta and Noodles 7,808,204 6,497,692 – –

38,071,502 34,057,624 32,949,173 29,310,102

All sales were within Nigeria.

12. INTEREST EXPENSES AND

SIMILAR CHARGES

Interest on Bank Loans, Overdrafts

and Similar Charges 559,101 1,114,505 446,475 564,768

13. OTHER INCOMES

Stale Wheat/Flour and Corn 28,509 14,371 28,509 14,371

Waste Noodles, Seasoning and Pasta 19,861 16,451 – –

Profit on Sale of Fixed Assets 22 6,898 – 2,709

Interest Income 659,879 769,845 821,604 823,929

Hire of Storage Facilities 13,064 7,851 13,064 7,851

Lease Rental Income* – – 479,295 –

Sundries 42,671 7,733 17,237 3,833

764,006 823,149 1,359,709 852,693

* Lease rental income arose from the leasing of

assets to Honeywell Superfine Foods Ltd under

an operating lease arrangement.

14. PROFIT BEFORE TAXATION

The trading profit is arrived at after charging:

Depreciation 1,110,870 1,133,797 1,073,678 712,801

Bad and Doubtful Debts 54,388 45,618 54,388 32,054

Auditors' Remuneration 12,466 8,200 9,466 6,050

Directors' Emoluments:

Fees 4,165 4,165 4,165 4,165

Others 24,365 24,365 24,365 24,365

Interest on Loans and Overdrafts 559,101 1,114,505 446,475 564,768

And crediting

Profit on Disposal of Fixed Assets 22 6,898 - 2,709

Interest Received 659,879 769,845 821,604 823,929



FinancialStatements



2 0 1 2 2 0 11 2 0 1 2 2 0 1 1

N'000 N'000 N'000 N'000

15. TAXATION

(i) Income Tax Expense:

Company Income Tax 132,916 120,832 132,916 120,832

Education Tax 92,702 83,005 92,702 83,005

(Over)/Under provision (4,401) 456 (4,401) 456

221,217 204,293 221,217 204,293

Deferred tax 739,486 819,095 739,486 819,095

960,703 1,023,388 960,703 1,023,388

. (ii) Current Income Tax Payable:

At 1 April 203,836 794,171 203,836 794,171

Charge for the year 221,217 204,293 221,217 204,293

425,053 998,464 425,053 998,464

Payments during the year (199,435) (794,628) (199,435) (794,628)

At 31 March 225,618 203,836 225,618 203,836

(iii) The charge for income tax is based on the provisions of the Companies Income Tax Act (LFN CAP 60)

as amended to date while education tax is based on Education Tax Act No. 7 CAP E4 LFN, 2004.

(iv) Honeywell Superfine Foods Limited (Subsidiary) was granted pioneer status by The Nigerian

Investments Promotion Commission. Consequently, no provision has been made for income and

deferred taxes in the Group financial statements for the Subsidiary.


2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

N'000 N'000 N'000 N'000

. (v) Deferred Tax:

i Per Profit and Loss Account:

Provision for the year 739,486 819,095 739,486 819,095

ii Per Balance Sheet

At 1 April 1,456,525 637,430 1,456,525 637,430

Charge for the year 739,486 819,095 739,486 819,095

At 31 March 2,196,011 1,456,525 2,196,011 1,456,525




FinancialStatements


2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

N'000 N'000 N'000 N'000

16. STATEMENT OF CASH FLOWS

Reconciliation of net profit after Tax

to cash generated from operation

Net Profit After Taxation 2,702,431 2,492,397 2,600,712 2,412,769

Taxation 960,703 1,023,388 960,703 1,023,388

Operating Profit 3,663,134 3,515,785 3,561,415 3,436,157

Adjustments for:

Depreciation 1,110,870 1,133,797 1,073,678 712,801

(Profit) on Assets Disposal (22) (6,898) – (2,709)

Pasta Deferred Expenditure 5,250 686 – –

Interest Expenses and Similar Charges 559,101 1,114,505 446,475 564,768

Interest Income (659,879) (769,845) ( 821,604 ) (823,929)

Operating Profit before Working

Capital Changes 4,678,454 4,988,030 4,259,964 3,887,088

Working Capital Changes

Decrease/(Increase) in Stocks (1,204,689) 38,689 (1,173,977) 58,441

Decrease/(Increase) in Debtors and Prepayments 772,406 683,080 696,557 (1,676,767)

(Decrease)/Increase in Creditors (1,291,317) (1,184,449) (1,426,500) 6,228,713

(Decrease)/Increase in Provision for Liabilities

and Charges (100,937) 83,813 – –

(1,824,537) (378,867) (1,903,920) 4,610,387

Cash Generated from Operations 2,853,917 4,609,163 2,356,044 8,497,475

17. CASH AND CASH EQUIVALENTS

Cash and its equivalent comprises:

Cash at Bank and in Hand 1,060,232 624,187 855,221 440,130

Short-Term Investment - Fixed Deposit 3,000,000 3,200,000 3,000,000 3,000,000

4,060,232 3,824,187 3,855,221 3,440,130



18. SEGMENT REPORTING

.1 Segmental Profit and Loss Account

Flour Milling Noodles/Pasta Total**

Items 2 012 2 01 1 2 012 2 01 1 2 012 2 01 1

N'000 N'000 N'000 N'000 N'000 N'000

Turnover 32,949,173 29,310,102 7,808,204 4,749,272 38,071,502 34,057,624

Depreciation 1,073,678 712,801 37,192 420,996 1,110,870 1,133,797

Profit before Tax 3,561,415 3,436,157 83,227 75,749 3,663,134 3,515,785

** Turnover Total is arrived at after deducting the inter-segment turnover of N2,685,874,859 and N1,750,169,873 for 2012 and 2011 respectively.

** Profit Before Tax Total is arrived at after adjusting for unrealised (loss)/profit of N18,492,118 and N14,221,000 for 2012 and 2011 respectively.

.2 Segmental Balance Sheet

Flour Milling Noodles/Pasta Total**

Items 2 012 2 01 1 2 012 2 01 1 2 012 2 01 1

N'000 N'000 N'000 N'000 N'000 N'000

Fixed Assets 21,964,745 6,567,233 5,741,697 6,005,502 27,706,442 12,572,298

Current Assets 20,370,553 19,478,042 8,513,381 4,456,224 16,333,450 15,665,121

Current Liabilities 24,183,810 15,711,759 5,192,832 3,557,816 19,621,885 11,014,651

Long Term Liabilities 5,255,807 – 988,011 1,358,633 6,243,818 1,358,633

Net Assets 17,385,356 15,815,570 2,312,421 2,229,194 16,802,238 15,130,733

** Total for current assets, current liabilities and net assets are arrived at after adjusting for inter-segment balances.

FinancialStatements





FinancialStatements


2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

N'000 N'000 N'000 N'000

19. CHAIRMAN'S AND DIRECTORS'

EMOLUMENTS, AND

COMPENSATION FOR LOSS OF OFFICE

The remuneration paid to Directors was:

(i) Fees:

Chairman 800 800 800 800

Other Directors 11,663 9,099 11,663 9,099

12,463 9,899 12,463 9,899

(ii) Fees and other emoluments disclosed above

include amount paid as:

Fees 12,463 9,899 12,463 9,899

Other emoluments 24,365 24,365 24,365 24,365

36,828 34,264 36,828 34,264

(iii) Number of Directors (excluding the

Chairman) whose emoluments were

within certain ranges were: Number Number Number Number

N100,000 and above 9 9 9 9

(iv) Waived Emoluments

Number of Directors who have waived

their rights to receive emoluments – – – –

Aggregate of those emoluments – – – –

(V) Compensation to Directors

For loss of office – – – –

As Directors – – – –

As Executives – – – –




FinancialStatements


2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

N'000 N'000 N'000 N'000

20. EMPLOYEES AND RELATED

REMUNERATION

Number of employees in receipt of emoluments

excluding allowances were within the following

ranges:

Number Number Number Number

Under N500,000 – – – –

N500,001 – N1,000,000 465 435 353 315

N1,000,001 – N1,500,000 76 59 58 40

N1,500,001 – N2,000,000 38 30 29 20

N2,000,001 – N2,500,000 51 33 42 22

N2,500,001 – N3,000,000 17 11 13 7

N3,000,001 – N3,500,000 16 14 11 9

N3,500,001 – N4,000,000 15 8 12 5

N4,000,001 – N4,500,000 23 18 16 11

N4,500,001 – N5,500,000 14 11 10 7

N5,500,001 – N6,000,000 10 8 7 5

N6,000,001 – Above 32 29 26 23

757 656 577 464

21. CONTINGENT LIABILITIES, GUARANTEES AND OTHER FINANCIAL COMMITMENTS

(i) Charges

The Company has loan facilities with First Bank of Nigeria Plc secured by an All Assets Debenture.

(ii) Financial Commitments

The Directors are of the opinion that all known liabilities and commitments have been taken into account

in the preparation of the financial statements under review. These liabilities are relevant in assessing the

Company's state of affairs as at 31 March, 2012.

22. LOANS AND OTHER TRANSACTIONS FAVOURING

DIRECTORS AND OFFICERS

(i) During the year, the Company guaranteed no loan in favour of its Directors and Officers.

(ii) No loans were made to the Directors to purchase the Company's shares during the year.

23. RELATED PARTIES TRANSACTION

At the Balance Sheet date, the Company had amount receivable from a Related Company. Interests have been

accrued on these amounts and recognized in the Profit and Loss account. The balances are shown below:

2 0 1 2 2 0 1 1

N'000 N'000

Metropolitan Trust Limited 3,851,347 3,196,448




FinancialStatements

24. EARNINGS PER SHARE

The Earnings Per Share (EPS) is calculated by dividing the profit attributable to ordinary shareholders by the

number of ordinary shares issued as at 31 March, 2012.

25. COMPARATIVE FIGURES

Certain comparative figures have been restated to reflect proper disclosure and uniformity.

26. APPROVAL OF ACCOUNTS

These financial statements were approved by the Board of Directors of the Company on 20 June, 2012.



Value Added Statementfor the Year Ended 31 March, 2012

FinancialStatements


2 0 1 2 2 0 1 1 2 0 1 2 2 0 1 1

N'000 % N'000 % N'000 % N'000 %

Turnover 38,071,502 34,057,624 32,949,173 29,310,102

Other Revenue 764,006 823,149 1,359,709 852,693

38,835,508 34,880,773 34,308,882 30,162,795

Bought in Goods

and Services (32,619,633) (28,321,398) (28,605,946) (24,889,278)

VALUE ADDED 6,215,875 100 6,559,375 100 5,702,936 100 5,273,517 100

APPLIED AS FOLLOWS:

1 Employees:

Salaries and Benefits 882,770 14 795,288 12 621,368 10 559,791 10

2 Providers of Funds:

Interest on Loans

and Overdrafts 559,101 9 1,114,505 17 446,475 8 564,768 11

3 Government:

Taxation 221,217 4 204,293 3 221,217 4 204,293 4

4 Replacement and

Expansion of Assets:

Depreciation 1,110,870 18 1,133,797 17 1,073,678 19 712,801 14

Deferred Tax 739,486 12 819,095 13 739,486 13 819,095 15

Retained Profit 2,702,431 43 2,492,397 38 2,600,712 46 2,412,769 46

VALUE ADDED 6,215,875 100 6,559,375 100 5,702,936 100 5,273,517 100

Value added is the wealth created by the efforts of the Group and its employees and its allocation between employees,

shareholders, government and re-investment for the future creation of further wealth.



Financial Summary for the Five-Years Ended 31 March,

FinancialStatements

THE GROUP 2 0 1 2 2 0 1 1 2 0 1 0 2 0 0 9 2 0 0 8Balance Sheet N'000 N'000 N'000 N'000 N'000

Fixed Assets 27,706,442 12,572,298 12,916,808 14,064,994 11,241,883 Goodwill on Business Combinations 900,188 900,188 900,188 900,188 900,188 Deferred Costs – – – 721,941 865,682 Stocks 5,013,635 3,808,945 3,847,634 4,591,514 5,164,431 Debtors and Prepayments 7,259,583 8,031,989 8,715,070 2,958,363 2,349,906 Cash and Bank Balances 4,060,232 3,824,187 3,627,960 296,049 207,963

Total Assets 44,940,080 29,137,607 30,007,660 23,533,049 20,730,053

Total Liabilities (25,865,703) (12,373,284) (15,766,320) (17,783,913) (15,539,573)Provision for Liabilities and Charges (2,272,139) (1,633,590) (730,682) (341,541) –

Total Net Assets 16,802,238 15,130,733 13,510,658 5,407,595 5,190,480

Share Capital 3,965,099 3,965,099 3,965,099 3,499,999 1,999,999Share Premium 6,462,041 6,462,041 6,462,041 – –Revenue Reserve 6,375,098 4,703,593 3,083,518 1,907,596 3,190,481

Shareholders Funds 16,802,238 15,130,733 13,510,658 5,407,595 5,190,480

Profit and Loss AccountTurnover 38,071,502 34,057,624 33,528,011 28,580,058 18,773,815

Profit before tax & after exceptional item 3,663,134 3,515,785 2,330,273 687,152 889,950 Taxation (960,703) (1,023,388) (1,154,351) (470,037) (73,498)

Profit after tax 2,702,431 2,492,397 1,175,922 217,115 816,452

Transfer to Revenue Reserve 2,702,431 2,492,397 1,175,922 217,115 816,452

Profit attributable to:

Equity shareholders 2,702,431 2,492,397 1,175,922 217,115 816,452

Earnings per 50k share [k] 34.08 31.43 14.83 2.74 10.30 Net Assets per 50k share [k] 211.88 190.80 170.37 68.19 65.45

NOTE: Earnings and net assets per share are based on 7,930,197,658 ordinary shares of 50k each and profit after tax as at the date of these financial statements.



FinancialStatements

THE COMPANY 2 0 1 2 2 0 1 1 2 0 1 0 2 0 0 9 2 0 0 8

Balance Sheet N'000 N'000 N'000 N'000 N'000

Fixed Assets 27,650,432 12,505,813 6,661,628 7,024,971 6,792,355

Investment in Subsidiary 999,999 999,999 999,999 999,999 999,999

Deferred Costs – – – 671,109 –

Stocks 4,400,603 3,226,626 3,285,067 4,032,490 4,934,457

Debtors and Prepayments 12,114,729 12,666,628 11,134,520 3,215,749 2,325,018

Cash and Bank Balances 3,855,221 3,584,788 3,446,444 218,127 190,514

Total Assets 49,020,984 32,983,854 25,527,658 16,162,445 15,242,343

Total Liabilities (29,439,617) (15,711,759) (10,615,105) (10,482,103) (10,051,863)

Provision for Liabilities and Charges (2,196,011) (1,456,525) (637,430) (280,755) –

Total Net Assets 17,385,356 15,815,570 14,275,123 5,399,587 5,190,480

Share Capital 3,965,099 3,965,099 3,965,099 3,499,999 1,999,999

Share Premium 6,462,041 6,462,041 6,462,041 – –

Revenue Reserve 6,958,216 5,388,430 3,847,983 1,899,588 3,190,481

Shareholders Funds 17,385,356 15,815,570 14,275,123 5,399,587 5,190,480

Profit and Loss Account

Turnover 32,949,173 29,310,102 28,483,098 25,964,192 18,773,815

Profit before tax & after exceptional item 3,561,415 3,436,157 3,102,747 679,144 889,950

Taxation (960,703) (1,023,388) (1,154,351) (470,037) (73,498)

Profit after tax 2,600,712 2,412,769 1,948,396 209,107 816,452

Transfer to Revenue Reserve 2,600,712 2,412,769 1,948,396 209,107 816,452

Earnings per 50k share [k] 32.80 30.43 24.57 2.64 10.30

Net Assets per 50k share [k] 219.23 199.43 180.01 68.09 65.45

NOTE: Earnings and net assets per share are based on 7,930,197,658 ordinary shares of 50k each and profit after tax

as at the date of these financial statements.

Financial Summary for the Five-Years Ended 31 March,



ShareholdersInformation

List of key Distributors 55

Share Capital History 56

Unclaimed Dividends 57

Application for E-Dividend 58

Proxy Form 59



Shareholders Information

CUSTOMER NAME REGION

Adamu Abdullahi North

Ade Distribution & Invest. Co. Lagos West

Ade-Owo Nig Ltd. Lagos

Adeyinka Stores Lagos

Adidot Nigeria Enterprises Lagos

Adunni F. Nehan Lagos

Aduwa Stores North

Ahajas Nig Ltd North

Ahmadu Yusuf North

Ajani Ade Enterprises South West

Akabueze & Sons East

Alhaja Adeshina Lagos

Alhaja Olayiwola Lagos

Alhajaahmed Oshodi Lagos

Alhaji Abdulkadir Hali Maikeke & Sons North

Alhaji Adam Ibrahim North

Alhaji Babangida Na Alh. Saleh North East

Alhaji Lawali Sanni Gusau North

Alhaji Maisugar Ibrahim Adam North

Alhaji Mukhtar Nayaya North

Alhaji Namadi Inuwa North

Alhaji Rasaki Hassan Lagos

Alhaji Tasiu Ilu Kura North

Alhaji Tukur Sabaru North

Alhaji Umaru Ladan North

Ali Hassan North

Amazing Wonder Enterprises Lagos

Aminat Ottun Lagos

Bako Alh. Kontoma & Sons North East

Bekdat Ventures North

Big Treat Confectioneries Ltd Lagos

Blessed A. A. & Sons South East

Bofik Nig Ltd Lagos

Chivic Nig Ltd Lagos

Cleason Nigeria Enterprises South East

Cossy Bros Intern Ltd Lagos

De-Tofola Nigeria Ltd Lagos

Donason Commercial Enterprises South- South

E. Y. Nigeria Limited South- South

Ekene Enterprises Lagos

Emeka Iwegbuna & Bros Ltd North East

Emju Investment Company Ltd South- South

Ezeh (Chief) East

Faith Foods And Confectioneries East

Fantazia Fast Food Ltd East

Femadons Enterp Lagos

Gambo Danbala Lambu North

Gilbest East

Haruna Salihu North

Heron Ventures Lagos

His Favour Commodity Stores Lagos

Ibrahim Sulu Oloje West

CUSTOMER NAME REGION

Ibrahim Usman Ent. North

Ici Holdings Limited East

Imperial Bakeries Nig North

Isiaku Muhammed North

J C Joseph Industries Limited East

Kabiru Ahmed Dokoro North

Kanisuru A & B Stores Lagos

Kemayos Ventures Lagos

Kudyunus Bislar Nig Ltd North West

Laslop Nig Enterprises Lagos

Lasol Nigeria Limited Lagos

Mac-Tell Investment Ltd Lagos

Magbagbeade Stores Lagos West

Mama Somto Lagos

Merciful Business Lagos

Mercy - Vic Enterprises Lagos

Michelle Edmund Ventures South West

Moboluwaduro Commodities Lagos

Moh'd Adam G Ngala North

Mt Olives Nig Ltd West

Murtala Abdulahi Trading North

Nakowa Modern Bakery North

New Gaskiya Enterprises North

Ngaloma General Enterprises North

Nnemelu J.C. East

Obi Okoye East

Ogene Concerns Limited East

Oluwasesan Sose Enterprises West

Opeyemi Bakery Lagos

Palma Seaport Ltd East

Payless Stores Lagos West

Q U Olumide Lagos

Quad & Kay Ventures Lagos

Queensmeal Foods Ltd Lagos

Rarmset Ventures Lagos East

Retail Supermarkets Nigeria Ltd Lagos

Royal Gate Company Limited Lagos

Salisu Maigishiri Markafi North

Say-Suraj Ent North

Seriki Stores Nig Enter Lagos

Shagumba Ventures North

Solohot Fuels Nig Ltd Lagos East

Soyinka & Son Lagos

Sweetsgold Bakery East

Sylmec Ventures Ltd North

Timmy Bakery Lagos

UAC Foods Ltd Lagos

Umar Musa Bakery North

United Multidistribution Co. South East

UTC Plc Lagos

Yahuza Abdullahi & Sons North

Yomdok Nigeria Limited Lagos

List of Key Distributors



Increase Cumulative Increase Cumulative

Authorised (N’000) Year Issued & Fully Paid-up (N’000)

Share Capital History

Share Capital History

1990 - 10,000 - 2

1991 - 10,000 - 2

1992 - 10,000 - 2

1993 - 10,000 - 2

1994 - 10,000 - 2

1995 40,000 50,000 49,998 50,000

2001 160,000 210,000 160,000 210,000

2003 790,000 1,000,000 790,000 1,000,000

2008 1,000,000 2,000,000 999,999 1,999,999

2008 - 2,000,000 - 1,999,999

2008 2,000,000 4,000,000 1,500,000 3,499,999

2009 - 4,000,000 465,100 3,965,099

Consideration

Cash @ N1 each

Cash @ N1 each

Cash @ N1 each

Cash @ N1 each

Cash @ N1 each

Cash @ N1 each

Cash @ N1 each

Cash @ N1 each

Acquisition of Honeywell Superfine Foods Limited

Share Split of N1 to N0.50

Bonus Issue of 3 for 4 shares

Public Issue @ N8.50 each




Unclaimed Dividend


Some Dividend Warrants have not been presented to the Bank for payment while others have been returned to the Registrar as Unclaimed Dividend because the addresses could not be traced.

The Unclaimed Dividend as at 31st July, 2012 is as analysed below:

2010 2011

Dividend Range Number of Unclaimed Number of Unclaimed

Shareholders Dividend Shareholders Dividend

N000 N000

N100,000 - N1,000,000 - - 6 866

N50,000 - N99,999 7 539 7 484

N10,000 - N49,999 35 717 67 1,028

N1,000 - N9,999 623 1,429 1,284 2,483

Less than N1,000 14,430 3,177 15,403 3,613

Total 15,095.00 5,862 16,767 8,474

Total Declared Dividend in Years 872,322 1,031,000

% of Unclaimed Dividend 0.8% 0.8%

Total

Unclaimed

Dividend

N000

866

1,023

1,745

3,912

6,790

14,336

1,903,322

0.8%




Application For E-dividend

Honeywell Flour Mills Plc

To: The Registrar, Date: ............................

First Registrars Nigeria Limited,

Plot 2, Abebe Village Road,

Iganmu, P.M.B 12692,

Marina, Lagos, Nigeria.

Important! The form should be completed in CAPITAL LETTERS using a black or dark blue ballpoint/fountain pen.

Characters and numbers should be similar in style to the following:

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z 0 1 2 3 4 5

Please fill in the form and return to the address above

Surname……………………………………………………………………………………………………………………

Other Names………………………………………………………………………………………………………………

Address…………………………………………………………………………………………………………………....

……………………………………………………………………………………………………………………………

……………………………………………………………………………………………………………………………

Mobile

phone…………………………………………………………………………………………………………………......

Email………………………………………………………………………………………………………………………

Shareholder's Signature

(1)………………………………………………………………………………………………………………

Second signature for joint/company account

(2)……………………………………………………………………………………………………………….

Company's Authorised Signatures/Seal…………………………………………………………………………………….

Bank Account Details

Bank Name…………………………………………………………………………………………………………………

Bank Branch Address………………………………………………………………………………………………………

Bank Account Number…………………………………………………………………………………………………

Branch Sort Code (veryimportant)………………………………………………………………………………………

Bank's Authorised Signatures & stamp……………………………………………………………………………………

Website Email






Proxy Form

Honeywell Flour Mills Plc.3RD ANNUAL GENERAL MEETING TO BE

HELD AT 11.00 A.MON TUESDAY SEPTEMBER 25 2012

AT THE CIVIC CENTRE, OZUMBA MBADIWE STREET, VICTORIA ISLAND, LAGOS.

Before posting the above form please tear off this part and retain it for admission to the meeting

ADMISSION FORM…………………………………………………………………HONEYWELL FLOUR MILLS PLC (RC55495)3RD ANNUAL GENERAL MEETING TO BE HELD at Civic Center Ozumba Mbadiwe street, Victoria Island Lagos on Tuesday September 25, 2012 at 11a.m

Name of Shareholder*…………………………………………………………………………………………….......

Name of Proxy*………………………………………………………………………………………………………………

If you are unable to attend the meeting A member (shareholder) entitled to attend and vote is entitled to appoint one or more proxies to attend and vote instead of him. A Proxy need not be a member. The above proxy form has been prepared to enable you to exercise your right to vote.,

ImportantPlease insert your name in BLOCK CAPITALS on both proxy and admission forms where asterisked. Insert the name of any person where a member of the Company or not, with the exception of the Company who will attend the meeting and vote on your behalf.

“I/We*………………………………………………………………………………………………………………………(Name of Shareholder in block letters)The undersigned, being a member/members of the above-Named Company hereby appoint the Chairman of the meetingOr failing him…………………………………………………………………………as my/our Proxy to vote me/us andOn my/our behalf at the Annual General Meeting of the Company to be held on 25 September, 2012 and atAdjournment thereof.”

Unless otherwise instructed, the proxy will vote or abstain fromVoting as he/she thinks fit.Dated this…………………day of……………………….2012Signature………………………………………………………

Notes 1.Please sign this proxy card and post it to reach theRegistered office of Company not less than 48Hours before the time fixed for the meeting.

2.If executed by a corporation, the proxy card should beSealed with the common seal.

3.This proxy card will be used both by show of hands, And in the event of a poll being directed or demanded.

RESOLUTION FOR AGAINST

1. To adopt the Annual Report and Accounts2. To declare a dividend3. To re-elect the following Directors:

Folaranmi B. Odunayo Dr Nino OzaraSoji Akintayo

4. To approve Directors' remuneration5. To authorize the Directors to fix Auditors

Remuneration.6. To appoint members of the Audit Committee

Please indicate with an “X” in the appropriate section how you which your votes to be cast on resolutions set above. Unless otherwise instructed, the proxy will vote or abstain from voting at his/her discretion.





Note:



Note:

Documents

Annual Report & Accounts 2 0 1 2 - Honeywell Flour Mills · PDF fileAnnual Report & Accounts 2 0 1 2 PAGES INTRODUCTION a. ... c. Group Balance Sheet 38 d. Group Profit and Loss Account