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INTRODUCTION a. Financial Highlights 3b. Notice of Annual General Meeting 4-5c. Corporate Profile 7-9d. Directors and other Corporate Information 10-11

BUSINESS REVIEWa. Chairman’s Statement 13-19b. Immediate Past CEO’s Report 20-23c. Managing Director’s Report 24-27d. The Board of Directors’ Profile 29-32e. Report of the Directors 34-43f. Report of the Audit Committee 44

FINANCIAL STATEMENTSa. Report of the Independent Auditors 51b. Statement of Financial Position 52c. Income Statement 53d. Statement of Comprehensive Income 54e. Statement of Changes in Equity 55f. Statement of Cash Flows 56g. Index to Notes to the Financial Statements 57h. Notes to the Financial Statements 58-93i. Value Added Statement 95j. Financial Summary 96

SHAREHOLDERS' INFORMATIONa. List of Key Distributors 98-100b. Unclaimed Dividends 101c. Share Capital History 102d. Application for E-Dividend 105e. Proxy Form 107f. Electronic Delivery Mandate Form 109g. Notes ` 111

Honeywell Flour Mills Plc. 1

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Financial Highlights for the year ended 31 March, 2014.


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2014 2013Result in millions of Naira Revenue 55,084 45,709 21Profit before taxation 4,237 3,814 11Profit after taxation 3,351 2,843 18Total assets 63,830 55,437 15Shareholders’ fund 20,605 18,553 11Issued and fully paid share capital 3,965 3,965 -

Data per 50k share

kobo kobo koboEarnings 42.26 35.86 6Proposed Dividend* 17.00 35.86 1Net Assets 259.83 233.95 26

Stock Exchange Information

Stock Exchange Quotation as at 31 March (in Naira per Share) 3.87 2.94 0.93Number of Shares Issued (in millions) 7,930 7,930 -Market capitalization as at 31 March (in millions of Naira) 30,689 23,314 32

* The Directors propose a Dividend payment of 17 kobo (2013: 16 kobo) 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.

% Increase/ (Decrease)

Financial Calendar

(I) Dividend Qualification Date September 5, 2104

(ii) Closure of Register of Members September 8 to 12, 2014

(iii) 5th Annual General Meeting to receive the Audited

Financial Statement for the year ended March 31, 2014 September16, 2014

(iv) Payment of Dividend September 17, 2014

Date


Financial Highlights 3

Notice of Annual General Meeting 4-5

Corporate Profile 7-9

Directors and other Corporate Information 10-11

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%

1ncrease/

Result in millions of Naira 2013 2012 ( Decrease)

Revenue 45,709 38,052 20

Profit before taxation 3,815 3,665 4

Profit after taxation 2,844 2,694 6

Total assets 55,437 47,930 16

Shareholders fund 18,553 17,016 9

Issued and fully paid share capital 3,965 3,965 –

Data per 50k share

kobo kobo

Earnings 35.86 33.97 6

Proposed Dividend* 16.00 15.00 7

Net Assets 233.95 214.57 9

Stock Exchange Information

Stock Exchange Quotation as at

March 31 (in Naira per Share) 2.94 2.17 35

Number of Share Issued (in millions) 7,930 7,930 -

Market Capitalization as at March 31

(in millions of Naira) 23,315 17,209 35

Financial Calendar

Date

(i) Dividend Qualification Date September 5, 2014

(ii) Closure of Register of Members September 8 to 12, 2014

(iii) 5th Annual General Meeting to receive the Audited

Financial Statements for the year ended March 31, 2014 September 16, 2014

(iv) Payment of Dividend


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Notice of Annual General Meeting

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Financial Highlights for the year ended March 31, 2014

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Honeywell Flour Mills Plc. 3Honeywell Flour Mills Plc. 4Honeywell Flour Mills Plc. 3

Result in millions of Naira 2014 2013 Revenue 55,084 45,709 21%Profit before taxation 4,237 3,814 11%Profit after taxation 3,351 2,843 18%Total assets 63,830 55,437 15%Shareholders’ fund 20,605 18,553 11%Issued and fully paid share capital 3,965 3,965 -

Data per 50k share kobo kobo Earnings 42.26 35.86 18%Proposed Dividend* 17.00 16.00 6%Net Assets 259.83 233.95 11%

Stock Exchange InformationStock Exchange Quotation as at 31 March (in Naira per Share) 3.87 2.94 32%Number of Shares Issued (in millions) 7,930 7,930 -Market capitalization as at 31 March (in millions of Naira) 30,689 23,314 32%

The Directors proposed a Dividend payment of 17 kobo (2013: 16 kobo) 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.

% Increase/

(Decrease)

*

September 17, 2014

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NOTICE IS HEREBY GIVEN that the Fifth Annual General Meeting of the Company will hold as

follows:

Date: Tuesday September 16, 2014

Venue: Civic Centre

Ozumba Mbadiwe Street

Victoria Island

Lagos.

Time: 11a.m

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

1 To receive the Audited Financial Statements for the year ended 31 March, 2014, together with

the Report of the Directors, Auditors & Audit Committee thereon.

2 To declare a Dividend.

3 To elect Directors.

4 To approve the remuneration of Directors.

5 To authorise the Directors to fix the Auditors remuneration

6 To elect members of the Audit Committee.

Proxy

Any member of the Company entitled to attend and vote at this meeting is also entitled

to appoint a proxy to attend and vote in his/her stead. A proxy need 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.


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Dividend

If the Dividend recommended by the Directors is approved by the members at the Annual General

Meeting, Dividend will be paid by Wednesday, September 17, 2014 to the Shareholders whose

names appear in the Company's Register of Members at the close of business on Friday September

5, 2014.

Closure Of Register And Transfer Books

The Register of Members and Transfer books will be closed from Monday, September 8, 2014 to

Friday, September 12, 2014, 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.

E-Report

In order to improve delivery of our Annual Reports, we have inserted a detachable Form to this

Annual Report and hereby request Shareholders who wish to receive Annual Reports of the

Company in an electronic format to complete and return the Form to the Registrars for further

processing.

In addition, the Annual Reports can be viewed or downloaded from our website at

www.honeywellflour.com

BY ORDER OF THE BOARD

Oluwayemisi Busari (Mrs.)

Company Secretary

FRC/2013/NBA/00000004046


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COMPANY HISTORY

oneywell Flour Mills Plc is a leading and highly successful indigenous Company in Nigeria

Hwith a mission “to use enterprise to make our world better”. To achieve this, the Company

has positioned itself to lead its market in the production, distribution, sales and marketing of

superior quality products.

The Company started as Gateway Honeywell Flour Mills Limited on June 21, 1983 and was

incorporated for the production of flour and livestock feeds from wheat, sorghum, maize and millet. A

change in the Company's ownership structure led to a change in name to Honeywell Flour Mills Limited

in June 1995. Following a successful IPO and subsequent listing on the Nigerian Stock Exchange in

2009, the Company became a publicly quoted Company as Honeywell Flour Mills Plc.

In April 1993, the Company entered into a contract-milling arrangement with a Flour Mill in Ibadan to

produce wheat flour under the brand name of “Honeywell Superfine Flour”. The brand immediately

gained wide acceptability in the flour market. The construction and installation of a 200-metric tonne

wheat Mill commenced in 1995 at the Tin Can Island site.

Following the successful completion of the 200-metric tonne per day Mill, commercial production and

sale of “Honeywell Superfine Flour” commenced on July 13, 1998. The growing demand for the

product made it expedient for the Company to plan for an expansion of the production capacity. Thus, in

1999, the Company embarked on a re-modeling of the wheat Mill to a 360-tonne per day Mill. This

project was completed satisfactorily in May 2000. The installation and commissioning in November

2001 of a 250-metric tonne per day Mill increased the Company's installed capacity to 610 metric tonnes

per day

To remain a relevant and significant player in the flour milling industry, the Company took a giant leap

with the installation of two 500-metric tonne per day Mills that were brought into production in July

2005. This additional capacity brought the total installed capacity of the Company to 1,610 metric

tonnes per day. The Company also launched its brand of Semolina, Honeywell Semolina, in June 2006,

and has been a huge success since its introduction and is today adjudged by consumers as the leading

Semolina brand.

To further maximize its value chain, the Company launched its own brand of noodles in 2006 (initially

as O! Noodles and later re-launched with better quality seasoning and packaging as Honeywell

Noodles). Honeywell Pasta (Spaghetti and Macaroni) and Honeywell Wheat Meal were all launched in

2009. All the brands have been well accepted by consumers and have been growing rapidly.


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Addition of another state-of-the-art twin Mills of 500-metric tonne per day each in 2012 took the

capacity to 2,610 metric-tonnes per day. This latest expansion project is about 1,200% overall increase

in capacity since business commencement. Future capacity expansion has been planned for the

Company's new Sagamu project (which is on a 63 hectares land space at the Sagamu interchange along

the Lagos-Ibadan expressway).

The Company's goal is to support women (who are its core targets) to provide nourishing meals for their

families with its consumer goods and bakers with its industrial product (flour). The Company continues

to invest in new product research and development to be able to produce more food product varieties for

its teeming consumers. The future expansion will be in pasta, noodles and animal feeds production.

Other new products will be introduced to meet consumer demands.

CORE VALUES: • Responsibility • Integrity • Courage • Excellence • Respect

QUALITY POLICYThe Company is committed to the continuous achievement of business successes by maintaining its

quality leadership in the flour milling industry. This is driven by a quality management system designed

to ensure that customers will always be provided with the quality of products and services that they

expect and which meet internal standards set for the purpose. 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.

Honeywell Flour Mills Plc was the first flour milling company in Nigeria to be ISO-certified. All its

processes and procedures across the organization are in line with international best practices to ensure

that it continuously produce good quality products for the complete satisfaction of its highly esteemed

customers. The Company employs state of the art facilities for the production of our various brands and

have a technical partnership with Buhler AG of Switzerland (the leading milling equipment

manufacturer in the world) for the installation and maintenance of its mills and a supply partnership with

Muhlenchemie of Germany for the supply of additives.

PRODUCTSHoneywell Flour Mills produces a wide range of superior quality products for the complete satisfaction

of its highly esteemed customers/consumers. These products include:Flour (Honeywell Superfine Flour and Honeywell Brown Flour): used mainly for baking. The brand


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was launched into the market in July 1998 and has since carved a niche for itself through consistent

superior quality. The company provides efficient customer service, superior baking training and support

for bakers.

Honeywell Semolina: a wheat-based ball food that is easy to prepare, smooth to eat and enjoyed with

any kind of soup. The brand has set new quality standards for semolina which it has maintained since

introduction and this is evident in its continued increased demand and preference by consumers. The

brand packaging is distinct and stands out on shelves.

Honeywell Wheat Meal: launched into the market in 2009. At that time, the category was largely

underdeveloped and not popular. The company has continued to invest in heavy marketing and sales

support to develop and grow the category and make it acceptable to all consumer types. The brand goes

well with any soup, is easy to prepare, hygienically packed and a more healthy way to enjoy ball food. It

is good for everyone irrespective of social status. The brand packaging is distinct and stands out on

shelves.

Honeywell Pasta: made from the finest quality wheat semolina. The brand is well accepted by

consumers for its excellent quality and it comes in very attractive packaging which stands it out on

shelves.

Honeywell Noodles: made from fine quality flour and comes in four different variants; Chicken, Curry

Chicken, Onion Chicken and Seafood. Honeywell Noodles seasoning are a consumer delight. The

brand packaging is distinct and stands out on shelves.

In line with NAFDAC and SON requirements, all the brands are fortified with vitamin A and other

essential minerals that are good for the body.

All the brands are rated in the top 3 of their different categories with respect to market share, top of mind

awareness and consumer usage.

CORPORATE SOCIAL RESPONSIBILITYHoneywell Flour Mills Plc is a socially responsible Company. It engages in projects that are aimed at

alleviating poverty, aiding learning and helping the less privileged. The Company is also the only Flour

Milling Company in Nigeria that provides some formal training for bakers. Most bakers in Nigeria have

not had any formal baking training as the skill has been acquired more through apprenticeship.

However, the Company has since set up a formal training school for bakers in furtherance of its belief

that baking is both a science and an art that cannot be fully mastered through apprenticeship alone but

through some formal training.

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Board of Directors

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

Mr. Folaranmi Babatunde Odunayo - Executive Vice Chairman / CEO

(Retired with effect from April 1, 2014)

Mr. Olanrewaju Bamidele Jaiyeola - Managing Director

(Appointed to the Board effective

October 2, 2013 but assumed office as

Managing Director effective April 1, 2014)

Mr. Obafemi Otudeko

Lt. General Garba Duba [Rtd]

Mr. David William Obray (South African)

Mr. Akinsoji Akintayo

Mr. Jens Mollenbach (Danish) - Resigned effective March 12, 2014

Mr. Theophilus Oluranti Sokunbi

Dr. Nino Albert Ozara - Executive Director

Mr. Rotimi Gbenga D. Fadipe - Executive Director

(Effective October 2, 2013)

Mr. Benson Osaretin Evbuomwan - Executive Director

(Effective October 2, 2013)

Secretary

Oluwayemisi Busari (Mrs)

Tel: +234 1 731 5870, +234 1 793 2694

Operational Offices/Locations/Factories

(a) Apapa Factory

2nd Gate By-Pass

Tin Can Island Port

Apapa,

Lagos.

Website: www.honeywellflour.com

Email: [email protected]

(b) Ikeja Factory

Plot YABB, Mobolaji Johnson Avenue

Alausa

Ikeja,

Lagos.

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Registrars

First Registrars Nigeria Limited

2, Abebe Village Road,

Iganmu, Lagos.

Registered Office

SW8/1185 Sanda Street

Molete, Ibadan.

Bankers

Access Bank Plc

Diamond Bank Plc

Ecobank Nigeria Plc

Fidelity Bank Plc

First Bank of Nigeria Limited

Guaranty Trust Bank Plc

Keystone Bank Limited

Skye Bank Plc

Standard Chartered Bank Nigeria Limited

Union Bank of Nigeria Plc

United Bank for Africa Plc

Zenith Bank Plc

Auditors

BBC PROFESSIONALS

(Chartered Accountants)

24, Ilupeju By-Pass

Ilupeju,

Lagos.


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Chairman’s Statement

Immediate Past CEO’s Report

13 - 19

20 - 23

29 - 32

The Report of the Directors

The Report of the Audit Committee

The Board of Directors’ Profile

34 - 43

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BUSINESS REVIEW

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Dear Shareholders of Honeywell Flour Mills Plc., distinguished Ladies and Gentlemen. It is with a great sense of joy and pride that I welcome you all

to this year's Annual General Meeting (AGM); our fifth as a publicly quoted company.

Fellow Shareholders, it is my sincere belief that our company is on the path to fulfilling the vision upon which it was founded as far back as 1985. Today, we are not only the second largest market leader in the flour milling business in Nigeria, but are also recognised as the quality leader in the

food categories in which we operate.


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



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My conviction that ours is a company of the

future is borne out of the knowledge that we

are making significant investments in organic

growth and expansion, which is cardinal to

meeting the needs of our growing customer

base and securing future earnings. As I present

the Annual Report and Financial Statements st st

for the period 1 April, 2013 to 31 March

2014, I will also share with you some of the

bold initiatives we have taken to ensure that we

stay on the course of sustainable growth and

profitability.

In customary fashion, I will commence my

address with a review of the global and

domestic environments within which our

company operated.

Global Economic EnvironmentThe genera l sen t iment among mos t

economists is that the events of 2013

demonstrated that the effects of the global

recession, experienced five years ago (2008-

2009), may finally be behind us. Although the

rate of global growth slowed to 3.2% as

estimated by the International Monetary Fund

(IMF), there remained clear signs that the

world economy is inching towards a full

recovery.

In the developed world, output rose 1.3% as

exemplified by significant job creation and

rebound in the housing and stock markets in

the United States of America; increased

consumption in the United Kingdom-spurred

growth, while Germany also improved living

standards and reduced its unemployment rate.

In Japan, the much touted 'abenomics',

involving increased government stimulus and

structural reforms proved successful as the

country's economy grew, even if only by 10

basis points over the previous year, to 1.5%.

The monetary policies and actions of the

developed countries occasioned far-reaching

effects in the developing countries which led to

slowing growth. China, the world's second

largest economy, experienced its slowest

growth in about twenty years at 7.7%, albeit

higher than the government's target of 7.5%.

Brazil and India both felt the negative effects

of dampened local consumption and

decelerating exports as they battled to control

inflation by raising lending rates.

In Sub-Saharan Africa, output grew at a rate of

5.4%, a modest improvement over the 5.1%

estimated for 2012.

In the first quarter of 2014, which coincides

with the last quarter of our Company's fiscal

y e a r , t h e U S C e n t r a l B a n k b e g a n

implementing the tapering measures earlier

announced in 2013. In January, the Federal

Reserve reduced its bond buying programme

from $85 billion to $75 billion per month, with

plans to sustain these cutbacks in the coming

months as the US economy improves. The

effect of this is already being felt in the

emerging markets as investors, that had

hitherto fled the near zero interest rate regime

in the US, have begun to pull out their cash


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from emerging market economies to return

them to more stable and possibly higher

returns market such as the US.

This shift in global capital is bound to spark

volatility in the coming months which will be

further compounded by tensions in Eastern

Europe, credit control in China and reduced

demand for exports from other emerging

markets.

Nigerian Economic EnvironmentIn 2013, the macro-economic environment in

Nigeria was characterised by relatively

impressive real Gross Domestic Product

(GDP) rates; a stable Naira to Dollar exchange

rate; relatively high crude oil prices and

tightened monetary policy. Nigeria's real GDP

maintained its impressive growth rate

averaging 6.6% over the four quarters of the

year while for the first quarter of 2014; the

economy grew at the rate of 6.21%, spurred by

growth in trade and agro-allied sector.

Exchange rate stability was achieved by the

Central Bank of Nigeria (CBN) as the Naira to

Dollar exchange rate mid-point was

maintained at N155 with a deviation band of

plus or minus 3% throughout the year. Thus,

importers of goods and critical raw materials

were better able to manage their Dollar

denominated costs. In the period under review,

Nigeria's daily crude oil production output

ranged between 2.2 and 2.5 million barrels per

day and the country's signature crude, Bonny

Light, traded above $100/barrel all through the

year.

The Central Bank of Nigeria (CBN)

maintained a tight monetary policy posture

throughout 2013, by keeping the Monetary

Policy Rate (MPR) at 12%. The CBN also

introduced a 50% Cash Reserve Requirement

(CRR) on public sector deposits in August

2013; a policy which has been sustained into

2014.

This stance contributed to the CBN achieving

its goal of a single digit inflationary rate in

2013. The Consumer Price Index (CPI) which

measures inflation declined from 9% in

January to 8% in December, much lower than

the 11.3% that was the lowest rate recorded in

2012. However, foreign reserves recorded

significant drop in the period under review,

falling to $37.83 billion at the end of March

2014 from $48.7 billion at the beginning of

April 2013. The CBN explained that it was

committed to supporting the Nigerian

currency in a period when the currencies of

major emerging and frontier nations were

experiencing depreciation.

The Prime Lending Rate oscillated between

16.65% in April, 2013 and 16.69% in March,

2014. Micro, Small and Medium-sized

Enterprises (MSMEs), have continued to find

it difficult to obtain credit, despite average

annual loan growth estimated at 20-30%. High

interest rates is one factor behind this.


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BUSINESS REVIEW

On a very positive note, in the first quarter of

2014, the National Bureau of Statistics (NBS)

released the results of the first Gross Domestic

Product (GDP) rebasing exercise conducted in

Nigeria in almost 25 years. The outcome

revealed that the Nigerian economy is bigger

and more diversified than previously

estimated. Indeed, Nigeria now ranks as the

largest economy in Africa with a nominal GDP

of $509.9 billion.

The economy received further boost following

the successful power sector privatisation

exercise conducted in 2013. Power generation

and distribution now lies in the hands of the

private sector and as such, we can look forward

to experiencing improved and more stable

electricity supply in the coming years. This can

only serve to boost economic activities in the

long term.

However, it was not all positive news in our

operating environment, as the recurrent

infrastructural challenges endured, and the

economy was also greatly affected by

insurgency, especially in the north-eastern part

of the country. Economic and social activities

as well as cross-border trade in that part of the

country have almost been ground to a halt by

the activities of both the terrorists themselves

and government directives (curfews) aimed at

curtailing or limiting the threat to social and

economic life.

Our PerformanceThe Honeywell brand promise includes

making our world a better place and so, even as

the global and domestic challenges continue to

persist, we remain committed to making

meaningful impact on the lives of Nigerians by

providing nourishing and affordable food

products.

Fellow shareholders, in spite of the rather

cha l lenging opera t ing envi ronment ,

Honeywell Flour Mills achieved a number of

great things in the last one year. The first of

these achievements is that your Company

recorded a turnover of N55.08 billion

representing a 21% increase over the N46

billion recorded in FY2013. Our increase in

revenue is directly attributed to increased

production capacity and improved distribution

of products. Let me say that this is a superlative

growth especially in the highly competitive

flour milling business, and I commend the

management and staff for their efforts.

The automation of several operational

processes led to an improvement in efficiency

which resulted in an 18% growth in Profit after

Tax (PAT) from N2.8 billion to N3.5 billion.

Shareholders' Fund and Total Assets increased

by 11% and 15% to N20.6 billion and N63.8

billion respectively. Earnings per Share also

rose to 42.26 kobo from 35.86 kobo in the

preceding year.


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BUSINESS REVIEW

DividendOur focus remains the creation of value for

shareholders and increasing the quantum of

dividends paid out to our equity owners on a

sustainable basis. The Board of Directors has

recommended a total dividend pay-out of

N1.34 billion representing a distribution of 17

kobo for every 50 kobo ordinary share held.

Subject to your approval, the dividend will be th

paid on 17 September, 2014.

Changes to the BoardAt the close of the financial year ended 31st

March, 2014, Mr. Folaranmi Babatunde

Odunayo retired as the Chief Executive

Officer (CEO) of the Company. Mr. Odunayo

was CEO since the commencement of

commercial business operations of Honeywell

Flour Mills Plc. in 1998. During his tenure, he

grew the company from a milling capacity of

200 MT/day to the current capacity of 2,610

MT/day. Under his leadership, the company

equally transformed from a mono-product

business into a multi-product one. He left an

indelible mark of achievements in the

successful evolution of our dear company. Mr

Odunayo did not only grow the company by

delivering a basket of leading food brands, but

also by grooming and developing business

leaders to steer the business after his

retirement.

Consequently, I am happy to announce the

emergence of Mr. Olanrewaju Bamidele

Jaiyeola as the new Managing Director of

Honeywell Flour Mills Plc. Mr. Jaiyeola

assumed office on 1st April, 2014. Prior to his

appo in tmen t , Mr. J a iyeo l a was t he

Commercial Director in charge of the Pasta

and Noodles Division and has garnered over

20 years of business experience working

across various functions including Finance

and Sales at both managerial and executive

levels.

I am also pleased to welcome two additional

Executive Directors: Mr. Rotimi Fadipe

(Executive Director, Supply Chain) and Mr.

Benson Evbuomwan (Executive Director,

Marketing) to the Board. Their appointment

took effect from 2nd October, 2013.

Mr. Jens Mollebach resigned his position as a

Non-Executive Director effective March 12,

2014. I invite you to join me in thanking him

for his immense contributions to the success of

the company while wishing him all the best in

his future endeavours.

In line with the Company's Articles of

Association, the following Directors, namely:

Mr Dave Obray, Mr Obafemi Otudeko and Mr

Oluranti Sokunbi retire by rotation at this

Annual General Meeting and being eligible,

offer themselves for re-election.

On-going Projects and Future OutlookWe have commenced a journey towards

becoming a more diversified foods-focused

company after many months of strategic

planning both by the Board and Management,


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BUSINESS REVIEW

commiss ion ing many consumer -end

feasibility studies, and exploring technical

partnerships; we set about developing the

Honeywell Foods and Agro-Allied Industrial

Complex.

Recall that last year, at this gathering, I

informed you of the acquisition of over 60

hectares of land within the Flowergate

Industrial Scheme, along Lagos- Ibadan

Expressway, Sagamu, Ogun State, for the

development of this project: a cluster site for

the production and processing of several food

and agro-allied products with an emphasis on

manufacturing value-added human and animal

feed products that utilize significant quantities

of locally-sourced raw materials including but

not limited to Maize, Sorghum, Cassava,

Soybeans and Palm oil.

This development marks a milestone in our

h i s to ry and i s ano ther o f the g rea t

achievements I made reference to earlier. From

this Greenfield location, we shall develop

growth opportunities which meet the yearning

and demand of consumers, within and outside

Nigeria, for Honeywell brand of food and

agro-allied products.

The Complex is an integrated facility to house

all of Honeywell Group's food factories such

that economics of scale and scope can be

achieved to drive down overall operating

costs, leading to the production of more

affordable food products. The site is planned to

accommodate about 15 to 20 factories on about

80% of the land, while various support

infrastructure will be situated across the

remaining 20%. The site is strategically

located along the route to the Northern and

Eastern parts of the country, making it easier

for nationwide distribution of our products.

The Honeywell Foods and Agro-allied

Industrial Complex will promote the agro-

industrialisation of Nigeria by aligning with

the Federal Government's Agricultural

Transformation Agenda to create thousands of

farm and non-farm jobs and facilitate the

achievement of food security in the country. It may please you to know that your Company

has commenced work on the construction of an

integrated feed mill plant. Completion of this

i n t e g r a t e d p r o j e c t w i l l l e a d t o t h e

establishment of one of the largest animal feed

plants in Nigeria. We are also embarking on

projects that would increase the capacity of our

Pasta and Noodles plants.

AppreciationOn behalf of the Board of Directors,

Management and Staff of Honeywell Flour

Mills Plc., I wish to express our profound

gratitude to our loyal customers whose

continued patronage keeps us in business.

I would like the shareholders to join me in

applauding the tireless commitment of

members of the Board of Directors. Their

vision, knowledge and expertise make your

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Company a leader among its peers. The

Management and Staff must also be celebrated

for their dedication and devotion to the cause

of the Company; indeed the hard work,

diligence, professionalism and leadership

exhibited by the Management must be

commended.

Worthy of note also is the robust relationship

we enjoy with our distributors, logistics

service providers and suppliers. We thank

them all for their support.

ConclusionDistinguished Shareholders, my colleagues on

the Board, Ladies and Gentlemen, I thank you

for your continued faith in the Company and its

management. I also thank you for your

presence at this year's Annual General

Meeting; I look forward to your full

participation in the agenda of today's meeting

and once again, I say welcome to you all.

Dr. Oba Otudeko, CFRChairman of the Board


2014RC 55495

Report of the Immediate Past Chief Executive Officer

BUSINESS REVIEW

Folaranmi Babatunde OdunayoImmediate Past CEO

Distinguished shareholders, ladies and gentlemen, I am pleased to present to you my last

Chief Executive Officer’s Report, and to share with you some of the accomplishments and

successes of the company during the last 17 years that I have had the privilege of driving

the business operations as the pioneer Chief Executive Officer.

Introduction:The economic and political environment continued to pose challenges to the operations of the

business during the financial year just ended. Interest rates remained unacceptably high for

manufacturing operations whilst funds for long-term financing remained largely unavailable.

Despite the challenges which we faced during the year, we were able to bring about appreciable

increase in revenue and profitability through Management's strategic effort to ensure that shareholder

value is kept on the ascent.

Poor Road Infrastructure

The poor state of roads does not encourage availability of transportation to certain parts of the

country, and tariffs then become high to such locations. The quality of roads to Tin Can Island where

our Apapa factory is located is very poor, and degradation remains

unabated. The resultant severe traffic gridlock impacted negatively on

our operations, especially our delivery throughput. The traffic situation

elongated the turn-around time of our logistics business partners and

consequently, the cost of freight also suffered an increase.

The traffic situation occasionally brought business activities to a halt,

and our gratitude must go to our loyal customers and transporters who

have stood by us and have remained supportive.

The Trailer Park project of the Federal Government at the

Tin Can Island Port would certainly go a long way, when

completed, in alleviating the traffic gridlock in that

environment. The Federal Government has promised to

deliver the Trailer Park for use before the end of this

calendar year.

At our Ikeja factory which is located along the Lagos

State Secretariat Road, where we experience no traffic

gridlock, the only access road that is available to us is

also a key access road for senior

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Report of the Immediate Past Chief Executive Officer cont’d

BUSINESS REVIEW

government functionaries. This situation

sometimes create a clash of interest when the

slow maneuverability of our articulated trucks

gets in the way of the smooth traffic that is

desirable for that sensitive part of Ikeja.

We remain on the alert to ensure that our

transportation trucks are able to make their

entrances and exits with minimal traffic delay.

Political Environment

The terrorism in some Northern states of the

country impacted negatively on our sales

volume in those areas. We have compensated

for this by exploiting volume opportunities in

other parts of the Country, and we have thus

been able to deliver revenue growth in the

financial year. We are confident in the

company's ability to continue to thrive despite

the tough operating environment.

Foreign Exchange FluctuationForeign exchange risks pose a major

challenge to us. Our relatively large volume of

wheat importation constantly exposes us to

foreign exchange risks as Naira volatility

continues to remain a significant feature of our

economic barometers. The persistently high

gap between the official exchange rate and the

parallel market is always. a strong indicator of

a possible currency devaluvuation. However

we are glad to observe that the Central Bank

has so far resisted the temptation to choose the

easy path of a steep devaluation. We hope that

this approach will be maintained by the new

leadership of the Central Bank.

Performance Review

The performance of the Company for the year

ended March 31, 2014 indicates that revenue

and operating profit have grown, thus

delivering a net profit before tax of over N4.2

billion(2013 N3.8billion). I am proud to note

the hard work, dedication and commitment

shown by the Management and Staff of the

company in achieving this performance

despite the challenges which we faced.

The total revenue grew by 21%, with strong a

growth in almost all our product categories.

Honeywell Superfine Flour continues to be the

superior and preferred brand among bakers

and a revenue increase of 18% was recorded

in that category. Honeywell Semolina also

maintained its dominance in the trade, and

recorded a growth of 21%. Our Honeywell

Wheat Meal remains the customer's favorite

brand as sales value grew by 74%. Brown

Flour grew by 32%, while our Noodles sales

grew by 37%.


NOODLES

‘Million

6,000

5,000

4,000

3,000

2,000

1,000

02014 2013 2012

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Corporate Social ResponsibilityAs we strive to improve on the revenue earnings

of our product offerings and increase the wealth

of our shareholders we also recognize that

contributions to the welfare of our community

will also serve our business interest. As such, in

addition to the pursuit of revenue and

profitability growth, we also contribute towards

many community welfare improvement

activities.Our Company sponsored various child-growth

and welfare-related events. We also donated to

various non-governmental institutions and

social bodies, including but not limited to

PASTA

‘Million

6,000

5,000

4,000

3,000

2,000

1,000

02014 2013 2012

BROWN FLOUR

‘Million

160

140

120

100

80

60

40

20

02014 2013 2012

WHEAT MEAL

‘Million

4,500

2014 2013 2012

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

0

SEMOLINA

‘Million

8,000

2014 2013 2012

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

FLOUR

‘Million

35,000

2014 2013 2012

30,000

25,000

20,000

15,000

10,000

5,000

0

The growth in Profit before Tax (PBT) and Profit

a f t e r Ta x ( PAT ) w e r e 11 % a n d 1 8 %

respectively.

PROFIT BEFORE TAX/PROFIT AFTER TAX‘Million

2014 2013

4,500

4,000

3,500

3,000

2,500

2,000

1,500

1,000

500

Profit Before Tax

Profit After Tax

0

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'women empowerment',school educational

social activities, road-safety campaigns and

Red Cross activities.

Closing RemarksSince April 1997 when I was appointed the

pioneer Managing Director of Honeywell Flour

Mills Plc, having initially served as Managing

Director of the Honeywell Group, we have

faced and conquered many extraordinary

challenges. Your Company which started as a

marginal player in the Flour Milling industry

with only 200MT/day milling capacity, has

today grown into a large scale integrated foods

business with interest in Wheat Flour,

Semolina, Wheat Meal, Noodles and Pasta

production. We have grown milling capacity

from 200mt/day to 2610mt/day, which is over

1205% capacity growth. All our brands

occupy the first or second position in their

respective categories, and consequently enjoy

an enviable reputation in the highly competitive

market.

The key pillars of our success have been our quality people and processes. Over the years, we have faced significant economic and other externally induced challenges but the quality, perseverance and dedication of our people have enabled us to overcome the challenges that we have faced. As I transfer the mantle of leadership to my successor, Mr Olanrewaju Jaiyeola I am confident that I am leaving behind a new leader who will continue on the path of sustainable growth and deliver greater value to the Shareholders.

Before I take my exit , I will like to express my

deep appreciation to our Shareholders, the

Chairman and other members of the Board for

their faith, trust and support over the last 17

years. Special mention and gratitude goes to the

Chairman, Dr Obafoluke Otudeko for the

opportunity of service in the Honeywell Group

in the last 22 years of which the last 17 years

was in the service of our great company.

Dr Oba Otudeko is an entrepreneur of great

vision who has succeeded in attracting

managerial talents to the Honeywell Group. It is

to his entrepreneurial spirit and leadership that

the growth of our great company is attributable.

The strong motivation that he continues to

impart on the Management of the company,

and the personal example of his entrepreneurial

drive will continue to lead our company to

greater successes.

I would like to thank the entire Management

and Staff for their relentless effort which has

made the yearly growth in our financial

performance possible.

I wish our dear Company greater successes in

the years ahead.

Folaranmi Babatunde OdunayoImmediate Past Executive Vice Chairman/CEOFRC/2013/ICAN/00000003268

The key pillars of our success have been our

quality people and processes. Over the years,

we have faced significant economic and other

externally induced challenges but the quality,

perseverance and dedication of our people have

enabled us to overcome the challenges that we

have faced. As I transfer the mantle of

leadership to my successor, Mr Olanrewaju

Jaiyeola I am confident that I am leaving behind

a new leader who will continue on the path of

sustainable growth and deliver greater value to

the Shareholders.


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Olanrewaju JaiyeolaManaging Director

Managing Director’s Report

BUSINESS REVIEW

Distinguished Shareholders, Ladies and Gentlemen, I warmly welcome you all to the fifth

Annual General Meeting of Honeywell Flour Mills Plc and present to you my first report

on the activities of the Company as the Chief Executive Officer.

Following three months of parallel run (in the position of 'Managing Director Designate') with my

former Boss, Mr. Babatunde Odunayo, I finally took over the mantle of leadership of our great st

Company on 1 April, 2014. I must report that we in Management are proud of the selfless service

rendered by Mr. F. B. Odunayo who, through dedication, focus, drive and of course, the support of the

Board, was able to move our Company from a 200 metric tonne per day organization at

commencement in 1998 to 2,610 metric tonne per day milling business today.

With an enhanced installed capacity base, I believe that our Company is not only better positioned to

compete but it also has the potential to grow revenue, reserves and the returns to shareholders.

IntroductionThe thrust of my report will focus on some of the key developments

and progress in our Company, especially key issues which have

defined the performance of our Company.The financial year was characterized by a high level of terrorism

(especially in some Northern States of Nigeria), infrastructural

deficits (especially of Power and Road networks), high interest

rates and increasing raw material cost.

These factors led to a reduction in volumes in some of the sectors

in which we operate. However, Management faced up to these

challenges by evolving strategic initiatives that delivered

improved performance for the financial year.

World Wheat MarketWorld Wheat Price remained very volatile during the year

due mainly to threat of war in Ukraine, poor harvest from

Argentina, unfriendly freight logistics from the Gulf and

drought condition in key wheat growing areas of the US

plains, where Hard Red Winter (HRW) wheat is mostly



2014RC 55495


planted. This volatility made itself strongly felt

in the cost of wheat purchased during the year,

thus suppressing the level of gross margin

growth which we had hoped to achieve.

We shall continue to monitor developments

and collaborate with our strategic supply chain

partners to make informed decisions, and by

leveraging appropriate market intelligence.

We are also embarking on strategic wheat

procurement/handling initiatives such that

will enable us better manage price volatility,

sustain the integrity of our brands and contain

our overall cost.

Logistics OperationsWe continue to contend with various logistics

challenges as we do business. The state of

roads in Nigeria poses a major challenge to

efficient product delivery effort. More critical

is the ever busy port at which our wheat vessels

are berthed for discharge operations.

The increased traffic of vessels into the Tincan

Island Port recently puts a lot of pressure on

our 'dedicated' berth, thereby increasing the

chances of delay in the discharge operations.

We shall continue to work closely with the

operators of the berth in ensuring that such

delays and consequent demurrage charges are

eventually eliminated.

Sales & MarketingThere are good prospects for Bread flour and

other products derived from Wheat (and

Cassava) in Nigeria. Consumers' behaviour

also favours products like Wheat Meal,

Semolina, Pasta and Noodles. Since the

national bread flour production has the largest

volume our competitors have also been

expanding production capacity as they seek to

tap opportunities in the market. This has

resulted in very stiff competition and

unhealthy rivalry; especially around price thus

eroding margin.

The problem of insecurity especially in the

North East has virtually crippled businesses in

that area. Sales volume from this area has

reduced significantly. The closure of the

borders to neighbouring Countries has also

made border trade almost impossible.

Furthermore, volumes that would have been

purchased by our distributors in the North East

with the intention of shipping to neighbouring

countries such as Niger Republic, Chad and

Cameroon have dwindled. Freight rates to the

volatile regions have also increased as haulage

contractors avoid going there for fear of loss of

products, vehicles and lives.

The implication for our business is huge but we

are confident that our Country will soon pass

through this phase. We are also tapping into

opportunities in other areas of the Country in

the endeavour to fulfill our volume targets.

Business PerformanceI am delighted that despite these challenges,

Honeywell Flour Mills Plc recorded

significant growth in key performance

parameters during the year. The Company

Managing Director’s Report Cont’d

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posted an impressive turnover of N55 billion, a

growth of 21% compared to previous year.

Profit before tax and profit after tax also grew

by 11% and 18% respectively.

Human Capital DevelopmentAs part of our effort to ensure adequate and

consistent supply of required skills and

knowledgeable people who are always

available to run our business, more than 90%

of our employees were exposed to various

learning opportunities (both in-house and

external programmes) during the Financial

Year. Some of the external training

programmes also involved overseas business

management courses and technical training for

some of our middle and top Management staff.

In line with our succession planning

programme, we have also introduced a talent

management scheme to ident i fy top

performers and consciously mentor and

develop them for growing levels of

responsibilities.

Cassava Inclusion PolicyWith the renewed emphasis on cassava flour

inclusion by the Federal Government under

the Agriculture Transformation Programme,

our Company is committed to increasing the

cassava flour content in its wheat flour in

accordance with the regulation set by the

Ministry of Agriculture.Furthermore, our Company is making

strategic plans to assure regular supply and

quality of cassava flour which is used in our

composite flour blending process.

Research and DevelopmentIn our bid to meet ever changing consumer

demand and create growth, Management

continues to engage in research and

development programmes that bring about

improvements and new varieties in our

offerings to our teeming consumers in a cost

effective manner.

In the coming year, we expect to introduce into

the market new initiatives in our products

packaging outlook and also create extensions

to our product offerings.

The present collaboration with our overseas

commercial partners, Master bakers and

regulatory authorities and government

parastatals on the use of cassava flour is

expected to yield appreciable cost savings to

our direct production cost.

Enterprise Resource Planning (ERP)The first implementation phase of our new

Enterprise Resource Planning (ERP) software

was completed and activated with effect from

April 1, 2014. The new ERP software is a tool

for business transformation as it will help us to

achieve full integration of all the operations

and processes of the business on a single on-

line platform.

It is expected that this new processing platform

will bring significant improvement to our

customer service delivery; as our customer

order management, payment and stock

delivery systems will be more promptly

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important aspect of our competitiveness in the

market place and of our overall quality profile.

Future OutlookOur continuous drive for improvement places

us always in a position to surpass our previous

achievements. Management's commitment

and painstaking effort will continue to sustain

the Company's superior earnings in our

industry. Our brands remain the choice of the

Nigerian people owing to the quality of our

product offerings.

There is a steady top and bottom-line growth

over the last 5 years. We have the challenge of

delivering superior growth ratios in the years

ahead.

We shall continue to keep a close watch on the

wheat pricing level in order to keep one of our

key raw material input within a cost efficient

level. In addition, we recognize that an efficient

management of our overhead and financing

cost will lead to full realization of our

profitability goals.

Our goal in the foreseeable future is to increase

our market share for all our products by

delivering successful brands that meet the

yearnings of our customers and consumers.

This should grow the value of the business and

ultimately lead to further wealth creation for

our shareholders.

The successful management and delivery of the

new foods project under execution at Shagamu,

Ogun State, is also a critical success factor for

the years ahead.

AppreciationI kindly urge all shareholders to join me in

wishing our pioneer Chief Executive Officer,

Mr Folaranmi Babatunde Odunayo a happy life

in retirement. As he is certainly not tired, and

still has a lot of energy in him, we will also like

to wish him abundant success in his future

endeavours.

I will close my report by expressing my deep

gratitude to the Chairman, members of the

Board of Directors as well as all our

distinguished Shareholders for the privilege

afforded me in this leading capacity. I promise

to work diligently with my team in ensuring that

our Company is taken to higher performance

levels.

Thank you very much for your presence and

attention.

Olanrewaju Bamidele JaiyeolaManaging Director/CEOFRC/2014/ICAN/00000008542


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ofThe BOARD

DIRECTORS

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

Lt. General Garba Duba (Rtd.)Non-Executive Director



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Obafemi OtudekoNon-Executive Director

Akinsoji AkintayoNon-Executive Director

Dr. Nino Albert OzaraDivisional Managing Director

Benson EvbuomwanExecutive Director, Marketing

Dave Obray (South African)Non-Executive Director

Theophilus Oluranti SokunbiNon-Executive Director

ofThe BOARD

DIRECTORScont’d

Rotimi Gbenga FadipeExecutive Director Supply Chain


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ofThe BOARD

DIRECTORS cont’d


Dr. Oba Otudeko, D.SC. (Hon.) CFR Chairman

An astute entrepreneur with business interests spanning various sectors of the Nigerian economy. 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.

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 the Group Chairman, FBN Holdings Plc and the former President of the Nigerian Stock Exchange. He is a member of the office of Distinguished Friends of London Business School.

Lt. General Garba Duba (Rtd)Non- Executive Director

A retired Lieutenant-General of the Nigerian Army and Military Administrator of Sokoto State (1977 to 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.


Lanre holds a Bachelors degree in Mathematics and Statistics from Obafemi Awolowo University, Ile-Ife, and an MB degree in Finance from University of Lagos. He is also an Associate of the Institute of Chartered Accountants of Nigeria.

He was formerly the Commercial Director at the Company’s Ikeja Factory. He has been in the service of the company for more than 20 years. His career and business management experience in the company, spans finance, sales management, and manufacturing management.

He assumed the role of Managing Director on 1st April 2014.

Obafemi Otudeko Non-Executive Director

He is a Chartered Accountant by training and Executive Director of the Honeywell Group. 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 Pricewaterhouse Coopers where he provided Assurance and Advisory services to clients in the private and public sector.

He has been a member of the Board of Honeywell Flour Mills since 2006. He is also a Director of First Bank of Nigeria Limited.

Akinsoji Akintayo Non-Executive Director

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. He was later appointed the Group Chief Finance Officer of the Honeywell Group in 2008 and as an Executive Director of Honeywell Fisheries Limited.

He is currently the acting Managing Director of Pivot Engineering Company Limited. 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 Nigeria Plc.

He was appointed to the Board of the Company in May 2009.

Dave Obray (South African)Non-Executive Director

Mr. Obray, a South African and an Electrical Engineer with academic and professional training in South Africa 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.

He had also served as Managing Director of Pivot Engineering Company Limited for twelve years. He joined the board of the Company in 2002.


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Rotimi holds an accounting degree from the University of Lagos, and is a Fellow of the Institute of Chartered Accountants of Nigeria. He is a member of the Chartered Institute of Purchasing and Supply, UK and of the Chartered Institute of Logistics and Transport, UK.

He joined the Company more than two decades ago as a Management Trainee. He has acquired a robust business management experience in the areas of finance, audit and supply chain management. He was the pioneer manager for the supplies and logistics function of the Company. He was elevated to the Board in the position of Executive Director, Supply Chain on October 2, 2013.

Rotimi Gbenga FadipeExecutive Director, Supply Chain

Theophilus Oluranti SokunbiNon-Executive Director

A graduate of Chemistry from the University of Ibadan, Nigeria, he obtained a Post Graduate Certificate in Management (PGCM) from University of Derby, U.K. 2000. He has attended several other 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 has held various management positions at West African Portland Cement Plc (Nigeria) where he resigned as the Managing Director in 2005. He is a member of several professional bodies including Nigerian Institute of Management and a fellow of 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.

Dr Albert Ozara, has been appointed to the position of the Divisional Managing Director (Designate) for one of the Company's major divisions. He is currently responsible for managing the Company's Ikeja factory where he has responsibility for its overall performance.

Albert joined the Company in 1998 from the Federal University of Technology, Owerri where he had risen to the position of Head of the Crop Production Department. He holds a First Class degree in Soil Science from the University of Ibadan, and a Doctorate degree also in Soil Science from the Cranfield Institute of Technology, United Kingdom. He subsequently had his professional flour milling training at the Swiss Milling School, St. Gallen, Switzerland and the Buhler Training Centre Uzwil also in Switzerland.

He also had milling operations experience at the Swiss Mill in Zurich.

Dr. Nino Albert Ozara Divisional Managing Director

Benson holds a Bachelors degree in Pharmacy from University of Benin and is a member of Advertising Practitioners Council of Nigeria (APCON).

Benson joined Honeywell Flour Mills in 2006 as General Manager, Marketing after holding senior marketing positions at Procter & Gamble Nigeria and Guinness Nigeria Plc respectively. He has over 16 years of rich brand management experience in the Food and Beverage Sector.

His appointment to the Board took effect from October 2, 2013 when he was elevated to the post of Executive Director, Marketing.

Benson EvbuomwanExecutive Director, Marketing


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Report of the Directors for the Year ended March , 201431

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The Directors have pleasure in submitting to members their annual report together with the audited

financial statement for the year ended March 31, 2014.

PRINCIPAL ACTIVITIESHoneywell Flour Mills Plc. (HFM Plc.) was initially registered as GATEWAY HONEYWELL

FLOUR MILLS LIMITED on June 21, 1983. 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.

The Company is principally involved in the manufacturing and marketing of wheat based products

such as flour, semolina, whole wheat meal, noodles and pasta.

RESULTS FOR THE YEAR

2014

In thousands of Naira

Revenue 55,084,305

3,814,599

Taxation (971,079)

Profit after taxation 3,351,564

45,709,382

2013

The Directors are pleased to recommend to the shareholders the payment of dividend in respect of the

year of N1,348,133,602, that is, 17 kobo per share. This is subject to deduction of appropriate

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

The 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 the Code of Best Practices on

Corporate Governance in Nigeria. Examples of the Company's compliance with these Corporate

2,843,520

4,237,432

(885,868)

CORPORATE GOVERNANCE

PRODUCTS DISTRIBUTION

DIVIDEND

withholding tax.

Governance requirements during the year under review are as follows:

Profit before taxation


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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 to the shareholder.

BUSINESS REVIEW

Board CompositionThe Board consists of a non-executive chairman, five (5) non-executive Directors, and four (4)

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 judgment as directors of the Company.

iii.

Board meetings were held on 17/06/2013, 23/09/2013, 24/09/2013, 18/12/2013 and 12/03/2014.

** Mr. Olanrewaju Jaiyeola, Mr. Rotimi Gbenga Fadipe and Mr. Benson Evbuomwan attended three

meetings which were held after their appointment to the Board on October 2, 2013.

Record of Directors Attendance at Meetings

Meetings held Meetings attended

i.

ii.


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Board Changesiv.

effective March 12 , 2014.

a) Nominations Committee

2 23. Mr. Obafemi Otudeko

Nominations committee meetings were held on 4/9/ 2013 and 16/9/ 2013.

The purpose of the Business Development Committee is to assist the Board in fulfilling its

responsibilities in relation to assessing and managing the Company's business development strategies

and activities. The Committee was formally inaugurated on December 14 , 2012. Details of attendance

at the Business Development Committee meeting during the year are as

Names of Members No. of No. of Meetings held Meetings attended1. Mr. Folaranmi Babatunde Odunayo 4 42. Dr. Nino Ozara 4 43. Mr. Oluranti Sokunbi 4 44. Mr. Jens Mollenbach 4 - Business Development Committee meetings were held on 14/11/2013, 20/12/2013,

7/02/2014 and 13/03/2014.

b) Business Development Committee

v. Committees

In conformity with the Code of Best Practice in Corporate Governance, the Company has in place the

following Committees:

The Nominations Committee is empowered to bring to the Board recommendations regarding the

appointment of any Executive or Non-Executive Director. The Committee ensures that a review of

Board candidates is undertaken in a disciplined and objective manner. Details of attendance at the

Nominations Committee meeting during the year are as follows:


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The Executive Management comprises the Executive Directors and Head of Departments of the Core

Business Units of the Company. It meets on a daily basis and is responsible: for setting overall

corporate targets, reviewing the Company’s performance and operational issues and overseeing the

affairs of the Company on a day-to-day basis. As at March 31, 2014, the Executive Management was

Mr. Folaranmi Babatunde Odunayo - Mr. Olanrewaju Bamidele Jaiyeola - Dr. Albert Nino Ozara - Mr. Rotimi Gbenga Fadipe - Mr. Benson Evbuowan - Executive Director, Marketing

The Executive Vice Chairman, Mr. Folaranmi Babatunde Odunayo retired as the Chief Executive

Officer effective April 1, 2014, while Mr. Olanrewaju Bamidele Jaiyeola became the substantive

Managing Director from April 1, 2014.

BUSINESS REVIEW

Management

comprised of the following members:.

Executive Vice ChairmanManaging Director

Divisional Managing DirectorExecutive Director, Supply Chain

Mr. Ibukun Ojo - Mr. Babatunde Adebayo -

Engr. Abubakar Abari -

Mrs. Oluwayemisi Busari -

Mr. Oluseye Ogunwole -

Directors Interestvii.

Director, FinanceHuman Resources Manager

Chief Engineer

National Sales Manager

Company Secretary

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:

vi.

Unit Holdings Unit Holdings Unit Holdings Unit Holdings

At June 30, 2014 At June 17, 2013

Indirect Direct Indirect Direct

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

Mr. Olanrewaju Bamidele Jaiyeola - 100,000 - 100,000

Mr. Obafemi Otudeko* 567,951,925 - 567,951,925 -

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

Lt. General Garba Duba (Rtd) - 2,558,800 2,558,800

Mr. David William Obray - 200,000 200,000

Mr. Akinsoji Akintayo - 200,000 200,000

Mr. Oluranti Sokunbi - 208,000 129,000

Mr. Rotimi Gbenga Fadipe - 115,000 - 15,000

Mr. Benson Evbuowan - 20,000 - 20,000

* 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 which is a 75% equity

holder in the Company.


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Directors Interest in Contracts

of affairs of the Company, and of the profit for the which give a true and fair view of the state

financial year.

None 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

In 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

The responsibilities include, ensuring that:

- appropriate internal controls are established to safeguard the assets of the Company and to

- the Company keeps accounting records which disclose with reasonable accuracy the financial

- the Company has used appropriate accounting policies, consistently applied and supported by

- the financial statements are prepared on a going concern basis unless it is presumed that the

prevent and detect fraud and other irregularities;

position of the Company and ensure that the financial statements comply with the requirements

of the Companies and Allied Matters Act, CAP C20 LFN 2004;

reasonable and prudent judgments and estimates, and that all applicable accounting standards

have been followed; and

Company will not continue in business.

viii.

Responsibilities of the Directorsix.

The Directors accept responsibility for the annual financial statements, which have been prepared

using appropriate accounting policies supported by reasonable and prudent judgments and estimates,

in conformity with International Financial Reporting Standards (IFRS) and the requirements of the

Companies and Allied Matters Act, CAP C20 LFN 2004 and Financial Reporting Council of Nigeria

Act, No. 6, 2011.

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 of the financial performance during 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 company will not remain a

going concern for at least twelve months from the date of these financial statements.


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The Board has established a system to undertake a formal and rigorous annual evaluation of its

own performance, that of its Committees, the Chairman and individual Directors. The evaluation

system includes the criteria and key performance indicators and targets for the Board, its Committees

and each individual Committee member. The Board engages the services of external consultants to

facilitate the performance evaluation of the Board, its Committees or individual members.

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.

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

internationally to enhance their skills and competence.

Health and welfare of employeesThe Company maintains a staff clinic with a full-time nurse and weekly attendance by a

physician. It also offers free medical services through a health management services 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.

Performance Evaluation of the Boardx.

EMPLOYMENT AND EMPLOYEES


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In compliance with section 359 (4) of the Companies and Allied Matters Act CAP C20 Laws of the

Federation of Nigeria 2004, members of the Audit Committee were elected at the Annual General

Meeting held on 24 September, 2013. Members that served on the Committee during the year

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.

comprise:

Mr. Akinsoji Akintayo Director

Mr. Adebayo Adeleke Shareholder

Mr. Alhaji Lateef Ayodeji Shonubi Shareholder

Mr. Gabriel Olagunju Shareholder

Lt. Gen. Garba Duba (Rtd) Director

Mr. David William Obray Director

AUDIT COMMITTEE

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 details attendance of

meeting of the Committee during the year are as follows:

No. of No. of

Meetings held Meetings attended

Mr. Adebayo Adeleke 4 44 4Mr. Alhaji Lateef Ayodeji Shonubi 4 4Mr. Gabriel Olagunju

4 3Lt. Gen. Garba Duba (Rtd) 4 2Mr. David William Obray

4 4Mr. Akinsoji Akintayo

Audit Committee meetings were held on 14/06/2013, 11/09/2013, 17/12/2013 and 11/03/2014.

The Company is committed to the continuous achievement of business success by maintaining its

quality leadership in the flour milling industry.

QUALITY POLICY

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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The shareholding structure of the company as at March 31, 2014 is as stated below:

Share range No % No %

of holders of holders of holdings of holdings

10001 - 50000 2,576 8.42 60,670,851 0 . 7 7

50001 - 100000 583 1.91 46,703,326 0 . 5 9

100001 - 500000 510 1.67 108,400,598 1 . 3 7

500001 - 1000000 88 0.30 68,783,293 0 . 8 7

1000001 - 5000000 39 0.10 86,488,115 1 . 0 9

5000001 - Above 20 0.10 7,489,962,758 94.45

Total 30,599 100.00 7,930,197,658 100.00

SHAREHOLDING ANALYSIS

1 - 1000 10,419 34.05 9,939,624 0.13

1001 - 5000 13,535 44.23 35,885,548 0.45

5001 - 10000 2,829 9.25 23,363,545 0.29

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 March 31, 2014:

SUBSTANTIAL INTEREST IN SHARES

2 0 1 4

Number %

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

First Bank of Nigeria Limited 400,967,024 5

0.77

0.59

1.37

0.87

1.09


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

N

Federal Road Safety Commission (Safety Campaign) 348,000

Love & Compassionate Orphanage Home 200,000

Nigerian Red Cross (Youth Camp) 136,431

Child Health Advocacy Initiative 768,600

Lagos international Sports Sponsorship 368,085

NUGA Games Sponsorship 170,050

Obafemi Awolowo Foundation (Under 10 Football Competition) 486,311

Flour Milling Association 500,000

Committee for the Disabled (CODISA) 75,800

The Bethesda Home for the Blind 870,000

SUBEB - Ekiti State Schools Board 933,620

Rotary Club (Basic Education and Litteracy Project) 450,000

Standard Organisation of Nigeria 84,000

School for the Blind 190,500

Deepbond Global Sports Initiative (Youth Sports Development) 176,000

International Women's Day (Ogun State) 1,924,261

DONATIONS AND SPONSORSHIP

7,681,658Total


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Movements in Property, Plant and Equipment during the year are shown in note 5 on page 74. In the

opinion of the Directors, the market value of the Company's properties are not lower than the value

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

the Company as at March 31, 2014 and profit attributable to equity holders on that date.

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

Messrs BBC Professionals [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.

PROPERTY, PLANT AND EQUIPMENT

shown in the financial statements.

POST BALANCE SHEET EVENT

INDEPENDENT AUDITORS

Dated June 30, 2014

By Order of the Board

Oluwayemisi Busari (Mrs.)

FRC/2013/NBA/00000004046

Company Secretary


2014RC 55495

Report of the Audit Committee for the Year ended March , 201431

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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:

We confirm that:

(b) We reviewed the external auditors' Management Control Report together with Management responses; and

(c) We have ascertained the accounting and reporting policies of the company for the year ended March 31, 2014 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 March 31, 2014

were adequate and management’s responses to the auditors' finding were satisfactory.

Members of the Audit Committee

Mr. Akinsoji Akintayo Director

Mr. Adebayo Adeleke Chairman/Shareholder

Mr. Alhaji Lateef Ayodeji Shonubi Shareholder

Mr. Gabriel Olagunju Shareholder

Lt. Gen. Garba Duba (Rtd) Director

Mr. David William Obray Director

Mr. Adebayo Adeleke

Chairman, Audit Committee

June 18, 2014


2014RC 55495

Federal Road Safety Corps/Honeywell Flour Mills Plc

“Ember Month” Public Enlightenment Campaign

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EVENTS

Managing Director, Mr Lanre Jaiyeola distributing educativeflyers.

Executive Director Marketing, Mr Benson Evbuomwan,FRSC Ojota Sector Commandant, G. K. Hamzat, Managing Director, Mr Lanre Jaiyeola, Divisional Managing Director, Dr. Nino Ozaraand L. D. Oguntade, FRSC official.

Executive Director Marketing, Mr Benson Evbuomwan in a warm handshake with the Chairman of NURTW, Ojota Motor Park.Senior Brand Manager, Mr Lanre Da Silva looks on.


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Honeywell Supports Ogun State International Women’s Day

Governor Ibikunle Amosu, First Lady and Chief host,Mrs Amosu and Executive Director Marketing, Mr Benson Evboumwan.

The Company’s products and other itemsready for distribution at the event.

Mr Evboumwan, presents productsto participants.


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The winning football teamflanked by several dignitaries. Amongst whom are (middle)Dr Tokunbo Awolowo Dosunmu, (from 3rd right to far right)Chief Gani Adams, Chief Bode Olajumokeand Executive Director, Marketing, Mr Benson Evbuomwan

Representatives of the Companyand the Awolowo Foundation presenting the Award prize to the Winning Team.

The Champions proudly display their trophy, Award prize and several Cartons of Honeywell Noodles. Flanking them (L-R) is Mr Sola Abati, Senior Brand Manager,Dr Tokunbo Awolowo Dosunmu,Mr Benson Evbuomwan, Executive Director, Marketing and Mr Dayo Adeniyi, Trade Marketing Mgr.

Honeywell Partners Awolowo Foundation Under 10 Football Competition


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Sitting from (L-R), National Sales Manager, Mr Seye Ogunwole,Director Finance, Mr Ibukun Ojo, Executive Director, Supply Chain, Mr Rotimi FadipeManaging Director, Mr Lanre Jaiyeola, Rev. (Mrs) Bolanle Adereti, Managing Director, Bofik Nig. Ltd.Executive Director, Marketing,Mr Benson Evboumwan.

Honeywell Flour Mills Baking School Graduation - Regular Course 24

Managing Director, Mr Lanre Jaiyeola,presenting a certificate to one of the graduands. Flanked to the right by Mrs Doyin Ibrahim, Company Treasurer, HFMP, and to the left by Rev. (Mrs) Adereti, Managing Director, Bofik Nig. Ltd.

Directors and Management Staffin a group photograph with graduands of Honeywell Baking School Regular Course 24.


2014RC 55495


Report of the Independent Auditors

Statement of Financial Position

51

52

53

Statement of Comprehensive Income

Statement of Changes in Equity

Income Statement

54

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Statement of Cash Flows 56

Index to Notes to the Financial Statements 57

Notes to the Financial Statements 58-93

Value Added Statement 95

FINANCIALSTATEMENT

Financial Summary 96


2014RC 55495

24, Ilupeju By-Pass, IlupejuG.P.O. Box 3260 Lagos, Nigeria.Tel: + 234 (0) 1-8981859, 7945733E-mail: [email protected] [email protected]: www.bbccharter.com

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

BN: 133294Other Offices in Nigeris:Abuja Akure Benin-CityIbadan Kaduna

Prime An Association ofIndependent Accounting Firms

We have audited the accompanying financial statements of Honeywell Flour Mills Plc. on pages 52 to 93 which comprise the statement of financial position as at March 31, 2014, the statement of comprehensive income , statement of cash flows, statement of changes in equity , the summary of significant accounting policies and notes to the financial statements.

DIRECTORS' RESPONSIBILITY FOR THE FINANCIAL STATEMENTSThe Company's directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies and Allied Matters Act, CAP C20 LFN 2004. This responsibility includes: designing, implementing and maintaining internal control relevant to the fair presentation of financial statements that are free from material misstatement, 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 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 misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal 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 control. 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 financial statements give a true and fair view of the financial position of Honeywell Flour Mills Plc. as at March 31, 2014 and of its financial performance and cash flows for the year then ended in accordance with Companies and Allied Matters Act, CAP C20 LFN 2004 and International Financial Reporting Standard being Standards and Interpretations issued by International Accounting Standards Board adopted by the Financial Reporting Council of Nigeria.

REPORT ON OTHER LEGAL REQUIREMENTSThe Companies and Allied Matters Act requires that in carrying out our audit we consider and report to you on the following matters. We confirm that:

(i) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary ` for the purpose of our audit;

(ii) in our opinion, proper books of account have been kept by the Company, so far as it appears from our examination of those books; and

(iii) the Company's statement of financial position and statement of comprehensive income are in agreement with the

Lagos, Nigeria

REPORT OF THE INDEPENDENT AUDITORS TO THE MEMBERS OFHONEYWELL FLOUR MILLS PLC

books of account.

James O. Obogwu

FRC/2013/ICAN/00000002913

For: BBC PROFESSIONALS


Chartered Accountants

2014

Statement of Financial Position for the Year ended March , 201431

FINANCIALSTATEMENTS

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Note 2014 2013


ASSETS

Non-current assets

Property, Plant and Equipment 5 36,085,450 34,969,128

Intangible Assets 6 12,332 15,904

Total Non-Current Assets 36,097,782 34,985,032

Current assets

Inventories 7 11,287,037 10,009,275

Trade and other Current Receivables 8 5,874,818 6,868,962

Cash and Cash Equivalents 9 10,570,802 3,574,209

Total Current Assets 27,732,657 20,452,446

Total assets 63,830,439 55,437,478

LIABILITIES

Current liabilities

Financial Liabilities 11 26,418,099 25,528,100

Trade and other Payables 10 1,309,256 1,262,714

Current tax Liabilities 15.2 331,984 712,342

Total Current Liabilities 28,059,339 27,503,156

Non-current liabilities

Financial Liabilities 11 10,665,151 5,573,050

Retirement Benefit Obligations 12 805,924 647,186

Deferred Income and Accruals 13 283,259 226,064

Deferred tax Liabilities 15.4 3,411,518 2,934,939

Total Non-Current Liabilities 15,165,852 9,381,239

Total Liabilities 43,225,191 36,884,395

EQUITY

Share Capital 19 3,965,099 3,965,099

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

Retained Earnings 10,178,108 8,125,943

Total Equity 20,605,248 18,553,083

Total liabilities and equity 63,830,439 55,437,478

The financial statements and notes on pages 58 to 93 were approved by the Board of Directors

on June 30, 2014 and signed on its behalf by:

Dr. Oba Otudeko, D.Sc. Hon. CFR Olanrewaju Bamidele Jaiyeola Ibukun Olaniyi Ojo

Chairman Managing Director/CEO Director, Finance

FRC/2013/ICAN/0000002365 FRC/2014/ICAN/00000008542 FRC/2013/ICAN/00000003261



2014RC 55495


Income Statement for the Year ended March , 201431

FINANCIALSTATEMENTS

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Revenue 17 55,084,305 45,709,382

Cost of Sales (44,626,674) (37,788,322)

Gross Profit 10,457,631 7,921,060

Other Income 18 259,542 144,066

Selling and Distribution Expenses (3,486,179) (2,876,600)

Administrative Expenses (1,794,910) (1,468,120)

Results from Operating Activities 5,436,084 3,720,406

Finance Income 688,387 622,534

Finance Cost (1,887,038) (528,340)

Net Finance (Cost)/Income (1,198,651) 94,194

Profit before Taxation 4,237,432 3,814,599

Taxation 15.1 (885,868) (971,079)

Profit for the Year 3,351,564 2,843,520

Earnings per Share:

Earnings per Share (kobo) 42.26 35.86

The notes on pages 58 to 93 form an integral part of these financial statements.


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Honeywell Flour Mills Plc.

Statement of Comprehensive Income for the Year ended March , 201431

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Note 2014 2013In thousands of Naira

Profit for the year recognized in the income statement 3,351,564 2,843,520

Remeasurement of post-employment benefit obligation 12 (30,567) (116,921)

Total comprehensive income 3,320,997 2,726,599

Attributable to the owners of the Company 3,320,997 2,726,599

Total comprehensive income for the year 3,320,997 2,726,599


54


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Statement of Changes in Equity for the Year ended March , 201431

FINANCIALSTATEMENTS

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capital premium earnings equity


At April 1, 2012 3,965,099 6,462,041 6,588,874 17,016,014

Profit for the Year - - 2,843,520 2,843,520

Dividend paid during the Year - - (1,189,530) (1,189,530)

Other Comprehensive Income

Actuarial Loss - - (116,921) (116,921)

At March 31, 2013 3,965,099 6,462,041 8,125,943 18,553,083

To April 1, 2013 3,965,099 6,462,041 8,125,943 18,553,083

Profit for the Year - - 3,351,564 3,351,564

Dividend paid during the Year - - (1,268,832) (1,268,832)

Other Comprehensive Income

Actuarial Loss - - (30,567) (30,567)

To March 31, 2014 3,965,099 6,462,041 10,178,108 20,605,248

This notes on page 58 to 93 form an integral part of these financial statement.


2014RC 55495


Statement of Cash Flows for the Year ended March , 201431

FINANCIALSTATEMENTS

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Cash Flows from Operating Activities

Cash generated from operations 16 7,237,742 (1,568,509)

Retirement benefit paid 12 (16,571) (5,536)

Tax paid 15.2 (789,647) (220,814)

Net Cash Flows generated from Operating Activities 6,431,524 (1,794,859)

Cash Flows from Investing Activities

Interest Received 688,387 622,534

Purchase of Intangible Assets 6 - (19,838)

Purchase of Property, Plant and Equipment 5 (2,962,744) (7,210,483)

Proceeds from Sales of Property, Plant and Equipment 13,025 4,524

Net Cash Flows from Investing Activities (2,261,332) (6,603,263)

Cash Flows from Financing Activities

Interest Payment (1,887,038) (528,340)

Proceeds from Borrowings 11,315,684 11,858,191

Repayment of Borrowings (4,993,581) (2,366,278)

Dividend Paid (1,268,832) (1,189,530)

Cash Generated from Financing Activities 3,166,233 7,774,043

Net Increase/(Decrease) in Cash and Cash Equivalents 7,336,425 (624,079)

Cash and Cash Equivalents at April 1 3,234,377 3,858,456

Cash and Cash Equivalents at March 31 9 10,570,802 3,234,377



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l. Borrowings 6625 Earnings per share 89


Index to Notes to the Financial Statements

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but not yet adopted 91-93


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Honeywell Flour Mills Plc was initially registered as Gateway Honeywell Flour Mills Limited on

June 21, 1983. 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 Nigeria Stock Exchange (NSE) in 2009. As part of

its vertical integration strategy, the Company acquired 100% ownership of Honeywell Superfine

Foods Limited, manufacturers of pasta and noodles in 2008.

Honeywell Flour Mills Plc is a Company domiciled in Nigeria. The Company is principally engaged in

the manufacture and marketing of wheat-based products including flour, semolina, whole wheat

meal, noodles and pasta.

(a) Statement of Compliance

The Financial Statements have been prepared in accordance with International Financial

Reporting Standards (IFRS) being Standards and Interpretations isssued by the International

Accounting Standards Board (IASB) in force as at 31 December, 2012. They have been prepared

in line with IFRS accounting policies selected by the Company on transition to IFRS.

(b) Basis of Measurement

The Financial Statements have been prepared under the historical cost basis, except for items

measured at fair value and the use of actuarial methods for estimating certain employee benefits.

(c) Functional and Presentation Currency

These financial statements are presented in the Nigerian Naira, which is the Company's

functional currency. All financial information presented in Naira has been rounded to the nearest

thousand.

(d) Use of Estimates and Judgments

The preparation of the Financial Statements in conformity with IFRS requires management to

make judgements, estimates and assumption that affect the application of accounting policies and

reported amounts of assets, liabilities, income and expenses. Actual results may differ from these

estimates.

Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to

accounting estimates are recognized in the year in which the estimates are revised and in any

future years affected.

REPORTING ENTITY1

BASIS OF PREPARATION2


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Information about critical judgments in applying accounting policies that have the most

significant effect on the amounts recognized in the financial statements is included in the

following notes:

- measurement of defined benefit obligations; and

- provisions and contingencies.

The accounting policies set out below have been applied consistently to all periods presented in these

financial statements and in preparing the opening IFRS statements of financial position at 1 April 2011

for the purposes of the transition to IFRSs, unless otherwise indicated.

(a) Going Concern

The Directors have a reasonable expectation that the Company has adequate resources to

continue in operational existence for the foreseeable future. The Company continues to adopt the

going concern basis in preparing its financial statements.

(b) Business Combination

Business combinations involving entities under common control are outside the scope of IFRS 3.

The merger by absorption of Honeywell Superfine Foods Limited, a wholly owned subsidiary of

Honeywell Flour Mills Plc, was a business combination under common controls and there is no

other specific IFRS guidance. Accordingly, management has exercised its judgement to apply the

pooling of interest method of accounting for business combination in accordance with IAS 8, 10 -

12. The IAS 8, 12 allows management to consider the most relevant conceptual framework in

developing an accounting policy where IFRS has no specific requirements.

Under a pooling of interests-type method, the acquirer accounts for the combination as follows:

(c) Segment Reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the

Chief Operating Decision Maker. The Chief Operating Decision Maker, who is responsible for

allocating resources and assessing performance of the operating segments, has been identified as

the Board of Directors that make strategic decisions.

SIGNIFICANT ACCOUNTING POLICIES3

The assets and liabilities of the acquiree are recorded at book value not fair value

(although adjustments should be recorded to achieve uniform accounting policies);

No g oodwill is recorded. T he difference between the acquirer's cost of investment

and the acquiree's equity is presented separately within Other Comprehensive Income

Comparative amounts are restated as if the combination had taken place at the beginning

Statement;

of the earliest comparative period presented.


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The Company business operating segments are identified by two factory locations at Ikeja and

Apapa. The Apapa factory manufactures flour, semolina, wheat meal and brown flour while the

Ikeja factory manufactures pasta and noodles.

(d) Foreign Currency Transactions

Foreign currency transactions are translated into Naira using the exchange rates prevailing at the

dates of the transactions or valuations where items are re-measured. Foreign exchange gains and

losses resulting from the settlement of such transactions and from the translation at year-end

exchange rates of monetary assets and liabilities denominated in foreign currencies are

recognized in the income statement, except when deferred in other comprehensive income as

qualifying cash flow hedges and qualifying net investment hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are

presented in the income statement within 'finance income or cost'. All other foreign exchange

gains and losses are presented in the income statement within 'other gains / (losses) - net'.

(e) Property, Plant and Equipment

Land and building held for use in the production or supply of goods or services, or for

administration purposes, are stated in the statement of financial position at deemed cost at the date

of transition to IFRS less accumulated depreciation and any accumulated impairment losses.

All other assets are stated at historical cost less accumulated depreciation and accumulated

impairment losses. All other property, plant and equipment are stated at historical cost or

valuation less accumulated depreciation and impairment losses. Historical cost includes

expenditure that is directly attributable to the acquisition of the items. Cost may also include

transfers from equity of any gains/losses on qualifying cash flows hedges of foreign currency

purchases of property, plant and equipment.

Purchased software that is integral to the functionality of the related equipment is capitalized as

part of the equipment.

Subsequent costs are included in the asset's carrying amount or recognized as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item will

flow to the Company and the cost can be measured reliably. The carrying amount of the replaced

cost is derecognized. All other repairs and maintenance are charged to the income statement

during the financial period in which they are incured.

An item of Property, Plant and Equipment is derecognised on disposal or when no future

economic benefits are expected from its use. Gains or losses on disposal or de-recognition of an


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item of Property, Plant and Equipment are determined by comparing the proceeds from disposal

with the carrying amount of Property, Plant and Equipment, and are recognized in income

statement.

Depreciation is provided on components that have homogenous useful lives by using the straight

line method so as to depreciate the initial cost down to the residual value over the estimated useful

lives.

The useful lives are as follows:

Buildings 20 to 50 years

Tools, Furniture/Fittings and equipment 2 to 5 years

Vehicles 3 to 4 years

Land Not depreciated

Assets residual values and useful lives are reviewed and adjusted if appropriate, at the end of each

reporting date.

Where an indication of impairment exists, an asset's carrying amount is written down

immediately to its recoverable amount, if the asset's carrying amount is greater than its estimated

recoverable amount. The gain or loss arising on the disposal or retirement of an a s s e t i s

determined as the difference between the sales proceeds and the carrying amount of the asset and

is recognized in the income statement for the period.

(f) Intangible Assets

(i) Computer Software

Acquired computer software licenses are capitalized on the basis of the costs incurred to

acquire and bring to use the specific software. These costs are amortized over their estimated

useful lives. Costs associated with maintaining computer software programmes are

recognized as expenses incurred.

Development costs that are directly attributable to the design and testing of identifiable and unique

software products controlled by the Company are recognized as intangible assets when the following

criteria are met:

it is tech nically feasible to complete the software product and use or sell it;

manage ment intends to complete the software product and use or sell it;

there is an ability to use or sell the software product;

economic benefits;

it can be demonstrated how the software product will generate probable future

asset is


2014RC 55495

Directly attributable costs that are capitalized as part of the software product include the software

development employee costs and an appropriate portion of relevant overheads. Other

development expenditure that do not meet these criteria are recognized as expenses as incurred.

Development costs previously recognized as an expense are not recognized as an asset in a

subsequent period.

Computer software development costs recognized as assets are amortized over their estimated

useful lives.

(ii) Amortisation of intangible assets

Intangible assets are amortized on a straight line basis in the income statement over their

estimated useful lives, from the date that they are available for use. The estimated useful life of

computer software for the current and comparative years is five (5) years. Amortization methods,

useful lives and residual values are reviewed at each reporting date and adjusted for, if

appropriate.

(g) Financial Assets

(i) classification

The Company classifies its financial assets in the following categories: at fair value through profit

or loss, loans and receivables, and available for sale. The classification depends on the purpose for

which the financial assets were acquired. Management determines the classification of its

financial assets at initial recognition.

- Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss are financial assets held for trading. A

financial asset is classified in this category if acquired principally for the purpose of selling in

the short term. Derivatives are also categorized as held for trading unless they are designated as

hedges. Assets in this category are classified as current assets if expected to be settled within 12

months; otherwise, they are classified as non-current.


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adequate technical, financial and other resources to complete the development and use or

sell the software product are available; and

the expenditure attributable to the software product during its development can

be reliably measured.


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Loans and receivables are non-derivative financial assets with fixed or determinable payments

that are not quoted in an active market. They are included in current assets, except for maturities

greater than 12 months after the end of the reporting period. These are classified as non-current

assets. the Company's loans and receivables comprise trade and other receivables and cash and

cash equivalents in the statement.

- Available-for-sale financial assets

Available-for-sale financial assets are non-derivatives that are either designated in this category

or not classified in any of the other categories. They are included in non-current assets unless the

investment matures or management intends to dispose of it within 12 months of the end of the

reporting period.

(ii) Recognition and measurement

Regular purchases and sales of financial assets are recognized on the trade-date, the date on which

the Company commits to purchase or sell the asset. Investments are initially recognized at fair

value plus transaction costs for all financial assets not carried at fair value through profit or loss.

Financial assets carried at fair value through profit or loss are initially recognized at fair value,

and transaction costs are expensed in the income statement. Financial assets are derecognized

when the rights to received cash flows from the investments have expired or have been transferred

and the Company has transferred substantially all risks and rewards of ownership. Available-for-

sale financial assets and financial assets at fair value through profit or loss are substantially

carried at fair value. Loans and receivables are subsequently carried at amortized cost using the

effective interest method.

Gains or losses arising from changes in the fair value of the financial assets at fair value through

profit or loss category are presented in the income statement within other (losses) / gains - net in

the period in which they arise. Dividend income from financial assets at fair value through profit

or loss is recognized in the income statement as part of other income when the Company's right to

receive payments is established. Changes in the fair value of monetary and non-monetary

securities classified as available for sale are recognized in other comprehensive income. When

securities classified as available for sale are sold or impaired, the accumulated fair value

adjustments recognized in equity are included in the income statement as 'gains and losses from

investment securities'.

Loans and receivables


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Interest on available-for-sale securities calculated using the effective interest method is

recognized in the income statement as part of other income. Dividends on available-for-sale

equity instruments are recognized in the income statement as part of other income when the

Company's right to receive payments is established.

(iii) Offsetting financial instruments

Financial assets and liabilities are offset and the net amount reported in the statement of financial

position when there is a legally enforceable right to offset the recognized amounts and there is an

intention to settle on a net basis or realize the asset and settle the liability simultaneously.

(iv) Impairment of financial assets

The Company assesses at the end of each reporting period whether there is objective e v i d e n c e

that a financial asset or group of financial assets is impaired. A financial asset or a group of

financial assets is impaired and impairment losses are incurred only if there is objective evidence

of impairment as a result of one or more events that occurred after the initial recognition of the

asset (a 'loss event') and that loss events (or events) has an impact on the estimated future cash

flows of the financial asset or Company of financial assets that can be reliably estimated. The

criteria that the company uses to determine that there is objective evidence of an impairment loss

include:

a breach of contract, such as a default or delinquency in interest or principal payments;

the company, for economic or legal reasons relating to the borrower’s financial difficulty,

granting to the borrower a concession that the lender would not otherwise consider;

it becomes probable that the borrower will enter bankruptcy or other financial reorganization;

the disappearance of an active market for that financial asset because of financial

observable data indicating that there is a measurable decrease in the estimated future cash

flows from a portfolio of financial assets since the initial recognition of those assets, although

the decrease cannot yet be identified with the individual financial assets in the portfolio,

including adverse changes in the payment status of borrowers in the portfolio; and national or local

economic conditions that correlates on the assets in the portfolio.

significant financial difficulty of the issuer or obligor;

difficulties; or


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The Company first assesses whether objective evidence of impairment exists. For loans and

receivables category, the amount of the loss is measured as the difference between the asset's

carrying amount and the present value of estimated future cash flow (excluding future credit

losses that have not been incurred) discounted at the financial asset's original effective interest

rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the

income statement. If a loan or held-to-maturity investment has a variable interest rate, the

discount rate for measuring any impairment loss is the current effective interest rate determined

under the contract.

As a practical expedient, the company may measure impairment on the basis of an instrument's

fair value using an observable market price. If in a subsequent period, the amount of the

impairment loss decreases and the decrease can be related objectively to an event occurring after

the impairment was recognised (such as an improvement in the debtor's credit rating), the reversal

of the previously recognised impairment loss is recognized in the income statement.

(v) Impairment of Non - Financial Assets

Assets that have an indefinite useful life - for example, goodwill or intangible assets not ready

for use - are not subject to amortisation and are tested annually for impairment. Assets that are

subject to amortization are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount may not be recoverable.

An impairment loss is recognized for the amount by which the asset's carrying amount exceeds its

recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell

and value in use. For the purposes of assessing impairment, assets are tested at the lowest levels

for which there are separately identifiable cash flows (cash-generating units). Nonfinancial assets

other than goodwill that suffered impairment are reviewed for possible reversal of the impairment

at each reporting date.

(h) Inventories

Inventories are stated at the lower of cost and estimated net realizable value. Costs comprise

direct materials costs and where applicable, direct labour costs and those overheads that have

been incurred in bringing the inventories to their present location and condition. Cost is calculated

using the weighted average method. Net realizable value represents the estimated selling price

less all estimated costs of completion and costs to be incurred in marketing, selling and

distribution.


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Spare parts and servicing equipment are usually carried as inventory and recognized in profit or

loss as consumed. However, major spare parts and stand-by equipment qualify as property, plant

and equipment when the Company expects to use them during more than one period. Similarly, if

the spare parts and servicing equipment can be used only in connection with an item of property,

plant and equipment, they are accounted for as property, plant and equipment. Such classified

spares are depreciated as property, plant and equipment over the useful life on a straight line basis.

(i) Trade Receivables

Trade receivables are recognized initially at fair value and subsequently measured at amortized

cost using the effective interest rate method, less provision for impairment. The collectability of

trade receivables is reviewed on an ongoing basis. A provision for impairment of trade receivables

is established when there is objective evidence that the Company will not be able to collect all

amounts due, according to the original terms of the receivables. The amount of the provision is the

difference between the asset's carrying amount and the present value of estimated future cash

flows. The amount of the provision is recognized in the income statement.

(j) Research and Development

Research and development expenditure is charged against profits in the year in which it is

incurred, unless it meets the criteria for capitalisation set out in IAS 38 'Intangible assets'.

(k) Cash, Cash Equivalents and Bank Overdrafts

Cash, cash equivalents and bank overdrafts includes cash at bank and in hand plus short-term

deposits less overdrafts. Short-term deposits have a maturity of less than three months from the

date of acquisition. Bank overdrafts are repayable on demand and form an integral part of the

Company's cash management.

(l) Borrowings

Interest- bearing bank loans and overdrafts are recorded at the proceeds received, net of direct

issue costs. Finance charges, including premiums payable on settlement or redemption and direct

issue costs, are accounted for on an accruals basis through the income statement using the

effective interest method and are added to the carrying amount of the instrument to the extent they

are not settled in the period in which they arise.

(m) Trade Payables

Trade payables are obligations to pay for goods or services that have been acquired in the ordinary

course of business from suppliers. Accounts payable are classified as current liabilities if


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payments are due within one year or less. If not, they are presented as non-current liabilities. Trade

payables are recognise initially at fair value and subsequently measured at amortised cost using

the effective interest method.

(n) Investments

Investments are classified as either held-to-maturity, held-for-trading, loans and recievables or

available-for-sale. Held-to maturity investments and loans and recievables are measured at

amortised cost. Held-for-trading and available-for-sale investments are measured at fair value.

Where securities are held-for-trading purposes, gains and losses arising from changes in fair

value are included in the income statement for the period. For available-for-sale investments,

gains and losses arising from changes in fair value are recognised directly in equity, until the

security is disposed of or is determined to be impaired, at which time the cumulative gain or loss

previously recognised in equity is included in the income statements for the period.

(o) Provisions

Provisions are recognised when the Company has a present legal or constructive obligation as a

result of a past event, and it is probable that the Company will be required to settle that obligation

and the amount has been reliably estimated. Provisions for restructuring costs are recognised

when the Company has a detailed formal plan for the restructuring that has been communicated to

affected parties. Provisions are not recognised for future operating losses.

Provisions are measured at the present value of the expenditures expected to be acquired to settle

the obligation using a pre-tax rate that reflects current market assessments of the time value of

money and risks specific to the obligation. The increase in the provision due to passage of time is

recognised as interest expense.

(p) Tax

Income tax expense represents the sum of current tax expense and deferred tax expense. Current

tax and deferred tax are recognised in income statement except to the extent that it relates to a

business combination, or items recognised directly in equity or in other comprehensive income.

(i) Current Tax

Current tax is the expected tax payable or receivable on the taxable income or loss for the

year, using tax rates statutorily enacted at the reporting date, and any adjustment to tax payable in

respect of previous years. The Company is subject to the following types of current tax:


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The measurement of the deferred tax reflects the tax consequences that would follow the manner in

which the Company expects, at het end of the reporting period , to recover or settle the carrying

amounts of its assets and liabilities. For investment property that is measured at fair value, the

presumption that the carrying amount of the investment property will be recovered through sale has not

been rebutted.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when

they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax

liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity,

or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their

tax assets and liabilities will be realized simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary

differences to the extent that it is probable that future taxable profits will be available against which

they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the

extent that it is no longer probable that the related tax benefits will be realized.

(iii) Tax Exposures

In determining the amount of current and deferred tax, the Company takes into account the impact

of uncertain tax postions and whether additional taxes and interest may be due. This assessment

relies on estimates and assumptions and may involve a series of judgements about future events.

Companies Income Tax - This relates to tax on revenue and profit generated by the Company

during the year, to be taxed under the Companies Income Tax Act Cap C21, LFN 2004 as

amended date.

Education Tax - Education tax is based on assessable income of the Company and is governed

by the Education Trust Fund (Establishment) Act LFN 2011.

(ii) Deferred Tax

Deferred tax is recognised in respect of temporary differences between the carrying

amount of assets and liabilities for financial reporting purposes and the amounts used for taxation

purposes. Deferred tax is not recognised for:

Taxable temporary differences arising on the initi al recognition of goodwill.


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New information may become available that causes the Company to change its judgement

regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax

expenses in the period that such determination is made.

(q) Employee benefits

(i) Defined benefit plan

The defined benefit plan defines an amount of gratuity the employee will receive on retirement,

dependent on date of employment, year of service and compensation. The defined benefit plan is

being accounted for using the projected unit method that considers the rate of inflation, the

degree of salary increases of employees, the retirement age among other factors.

The liability recognised in the balance sheet in respect of defined benefit pension plan is the

present value of the defined benefit obligation at the end of the reporting period less the fair

value of plan assets, together with adjustments for unrecognised past service costs. The defined

benefit obligation is calculated annually by independent actuaries using the projected unit credit

method. The present value of the defined benefit obligation is determined by discounting the

estimated future cash outflow using market rates on Government Bonds.

Actuarial gains and losses arising from experience adjustments and changes in actuarial

assumptions are charged or credited to equity in other comprehensive income in the period in

which they arise. Past service costs are recognised immediately in income statement.

(ii) Defined contribution scheme

The Company operates a defined contribution plan which is funded by contributions from t h e

Company and the employees. The Company's contribution is recognised as employee benefit

expenses and charged to the income statement. The contributions of both the Company and the

employees are paid on a monthly basis to a pension fund administrator. The Company has no

legal or constructive obligation to pay further contributions if the pension fund administrator

does not hold sufficient assets to pay all employees the benefits relating to employee service in

the current and prior periods. The contributions are recognised as employee benefit expenses

when they are due.

(iii) Short-term employee benefit

Short-term employee benefit obligations are measured on an undiscounted basis and are

expensed as the related service is provided.


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A liability is recognised for the amount expected to be paid under short-term cash bonus or profit

sharing plan if the Company has a present legal or constructive obligation to pay this amount as a

result of past services provided by the employee, and the obligation can be estimated reliably.

(r) Revenue Recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods

and services in the ordinary course of the Company's activities. Revenue is shown net of Value-

Added Tax, returns, rebates and discounts.

The Company recognises revenue when the amount of revenue can be reliably measured, it is

probable that future economic benefits will flow to the entity and specific criteria have been met

for each of the Company's activities as described below:

(i) Sale of Goods

The Company manufactures and sells a range of products to the distributors and dealers. Sale of

goods are recognised when the Company has delivered product to the customers and there is no

unfulfilled obligation that could affect the customers' acceptance of the products. Delivery does

not occur until the products have been shipped to the specified locations; the risks of

obsolescence and loss have been transferred to the customers and either the customers have

accepted the products in accordance with the sales contract, or the Company has objective

evidence that all criteria for acceptance have been satisfied.

The products are often sold with discounts and rebates. Sales are recorded based on the p r i c e

specified on the sales invoice net of the discounts, rebates and returns at the time of sale.

Sales are also recognised when the customer self-collect the product directly at the C o m p a n y

premises during which the risks and rewards of ownership passes to the customer after the

customer's loaded truck leaves the Company premises.

No element of financing is deemed present where sales are made on agreed credit terms w h i c h

are consistent with the market practice.

(ii) Interest Income

Interest income is recognised using the effective interest rate method. When a loan and

receivable is impaired, the Company reduces the carrying amount to its recoverable amount,

being the estimated future cash flow discounted at the original effective interest rate of the

investment, and continues unwinding the discount as interest income. Interest income on

impaired loan and recievables are recognised using the original effective interest rate.


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(s) Dividend Distribution

Dividend distribution to the Company's Shareholders is recognised as a liability in the Company's

financial statements in the period in which the dividends are approved by the Company's

Shareholders. Dividends are recognised once paid.

(t) Earnings per Share

The Company presents earnings per share (EPS) data for its ordinary shares. EPS is calculated by

dividing the profit or loss attributable to ordinary shareholders of the Company by the number of

ordinary shares outstanding during the year.

(u) Share Capital

The Company has only one class of Shares - ordinary shares which are classified as equity. When

new shares are issued, they are recorded in share capital at their par value. The excess of the issue

price over the par value is recorded in the share premium reserve.

Incremental costs directly attributed to the issue of ordinary shares and recognised as a deduction

from equity, net of any tax effects.

Risk management is inherent in the business operations of the Company. Management has set up

processes and systems to identify, assess, monitor and control business risks including the following :-

(a) Credit Risk

This refers to the risk that a trade debtor will default by failing to make payments in accordance

with the agreed credit terms and conditions. The possible impact of the credit risk is poor Account

Receivable assets quality arising from high level of bad and doubtful debts and possible

impairment of shareholders' funds. The carrying amount of financial assets represents the

maximum credit exposure.

RISK MANAGEMENT4

Mitigating Measures

Cred it application follows rigorous and extensive credit review and approval process.

All c redits are secured by insurance or bank bonds.

Once conditions precedent to credit utilization are met by the customer, the approved

credit is updated, monitored and controlled by the ERP on real times basis in accordance to

credit terms.

Cred it utilization report are prepared and monitored on a daily basis.


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(b) Liquidity Risk

This refers to the risk of company's inability to finance its operation and meet its obligation when

they become due without incurring unacceptable losses. Liquidity risk includes the inability to

manage unplanned decreases or changes in funding sources.

Mitigating Measures

Effic ient and effective working capital management.

Effic ient Naira facility management

Effi cient funds management to eliminate idle funds, meet obligations as they fall due

and reduce interest expenses to the minimum level.

Liqu idity and working capital management reports are prepared and monitored on dai ly

basis.

The Treasury Department is well structured and equipped under the management of a

very experienced and well trained team.

(c) Market Risk

Market risk is the risk of financial loss due to the change in value of the market risk factors.

The Company is faced with the following market risk factors.

Inter est rate risk:- The risk that interest rate will change adversely at the money market.

Fore ign exchange risk:- The risk that foreign exchange rates will fluctuate unfavorably

at the foreign exchange market.

Com modity risk:- The risk that wheat prices will significantly increase at the

international commodity markets.

Mitigating Measures

Effic ient management of exchange and interest rate risks including generation of

relevant risk management reports for monitoring and review on a daily and weekly basis.

Monitor the money, capital and foreign exchange markets including micro and

macroeconomic environment on a daily basic .

Efficient management of the commodity risk by the Logistics and Supplies Department

with a full-fledged experienced and well trained team in the area of wheat dynamics and

procurement strategies.

We monitor price dynamics and changes at the relevant Commodity Exchange Boards on a

real time basis and take proactive decisions on a timely basis.

The commodity risk affects the global milling industry as the wheat prices are determined at

the international commodity markets. We usually increase product price in response to

global volatility in wheat prices in order to recover some portion of the rise in wheat prices .


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FINANCIALSTATEMENTS

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(d) Operational Risk

This relates to the risk of loss resulting from inadequate or failed internal processes, controls,

procedures, people, and systems. Operational risk is inherent in the business activities. These

include risk of inadequate haulage partners required to achieve the Company's objectives in terms

of sales volume and profit; risk of wastages, downtime and other associated losses arising from

inefficient plant operations; risk of breakdown of ERP and IT infrastructure or outright loss of

critical operational/business data and information; risk of loss of Company assets due to

unexpected disaster which may affect business operations; risk of breakdown of internal control

systems and misstatement of financial statements.

Mitigating Measures

Efficient and effective maintenance culture to prevent down time and inefficient production

operations.

Control activities are an integral part of the Company's day to day operations and are defined at

every business area.

Existence of robust ERP and comprehensive computerisation of internal business processes,

systems and procedures.

Existence of robust IT business continuity and disaster recovery programmes .

All insurable business risks are assessed, identified and adequately covered/insured.

Existence of documented standard operating procedures for all business activities and

operations.

All key positions have a minimum of one under-study who can assume the roles immediately

with minimum support, and eventually grow into the position.

We continually train talents to meet our future skill requirements.

Continuous recruitment of qualified haulage contractors to meet corporate requirements and

prevent shortage of delivery trucks. We also acquired and managed some of our delivery trucks

e.g bulk flour loading trucks.

We also have a strong, active and experienced Internal Audit Team. Internal Audit Reports

highlighting control weaknesses are presented periodically to Management and Audit

Committee of the Board.

The Company's internal control and risk management systems ensure that material errors or

inconsistencies in the financial statements are identified and corrected. Financial Statements

are prepared in accordance with international financial reporting standards and policies.

Financial statements are prepared periodically on monthly and quarterly bases for the review

of the Management and the Board of Directors. Performance is monitored and compared with

budgets.


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Notes to the Financial Statement - cont’d

FINANCIALSTATEMENTS

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Capital Furniture

work Plant and And Motor Land Building in progress machinery Equipment vehicles Total

At April 1, 2013 5,660,603 4,834,180 14,353,260 11,913,046 205,596 443,305 37,409,990 Of Additions - 3,495 2,602,055 175,701 60,107 121,386 2,962,744 Of Disposals - - - (172) (9,059) (9,231)Reclassifications - 3,564,429 (10,159,120) 6,594,691 - - -

At March 31, 2014 5,660,603 8,402,104 6,796,195 18,683,438 265,531 555,632 40,363,503

DEPRECIATIONTo April 1, 2013 - 228,314 - 1,961,610 85,136 165,802 2,440,862 Charge for the year - 218,043 - 1,438,322 54,722 133,020 1,844,107 On Disposals - - - (87) (6,829) (6,916)

3,399,932 139,771 291,993 4,278,053To March 31, 2014 - 446,357 -

CARRYING AMOUNT

At March 31, 2014 5,660,603 7,955,747 6,796,195 15,283,506 125,760 263,639 36,085,450

At March 31, 2013 5,660,603 4,605,866 14,353,260 9,951,436 120,460 277,503 34,969,128

5 PROPERTY, PLANT AND EQUIPMENT

As at March 31, 2014a)


Depreciation expenses of N1.646b (2013:N1.074b) has been charged in 'cost of goods sold', N81.792m

(2013: N74.133m) in 'selling and marketing costs' and N115.808m (2013:N100.646m ) in administrative

expenses'.


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Capital Furniture

work Plant and and Motor Land Building in progress machinery equipment Vehicles Total


At April 1, 2012 5,660,603 2,782,545 10,639,821 10,649,550 145,187 327,346 30,205,052Of additions - 2,051,635 3,713,439 1,263,496 60,454 121,459 7,210,483 On disposals - - - - (45) (5,500) (5,545)

At March 31, 2013 5,660,603 4,834,180 14,353,260 11,913,046 205,596 443,305 3 7,409,990

DEPRECIATIONTo April 1, 2012 - 107,066 - 979,181 43,716 63,647 1,193,610 Charge for the year - 121,248 - 982,429 41,450 103,906 1,249,033 Of transfers/adjustments - - - - - - - On disposals - - - - (30) (1,751) (1,781)

To March 31, 2013 - 228,314 - 1,961,610 85,136 165,802 2,440,862

CARRYING AMOUNT

At March 31, 2013 5,660,603 4,605,866 14,353,260 9,951,436 120,460 277,503 34,969,128


FINANCIALSTATEMENTS

As at March 31, 2013b)


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2014 2013

Cost

At April 1, 2013 21,733 1,895

Additions - 19,838

Total Cost 21,733 21,733

Amortization and impairment

At April 1, 2013 5,829 1,697

Amortization for the year 3,572 4,132

At March 31, 2014 9,401 5,829

Net Carrying amount 12,332 15,904

In thousands of Naira 2014 2013

Raw Materials and Consumables 4,341,516 4,492,076

Finished Goods 580,172 285,233

Goods-in-Transit 6,353,484 5,224,389

11,287,037 10,009,275

There are no inventories pledged as security for liabilities.


Gross trade receivables 1,195,081 1,079,325

Allowances for Impairment Losses (360,435) (259,663)

Net Trade Receivables 834,645 819,662

Advance and Prepayments 1,409,837 1,243,720

Due from Related Parties 3,630,336 4,805,580

5,874,818 6,868,962


FINANCIALSTATEMENTS


11,865 7,577Work-in-progress

Total

The fair value of loans to related parties is based on discounted cash flows from using the weighted average

cost of funds of 16.5% (2013:16%).

There is no material difference between the fair value of receivables and their carrying amount.


2014RC 55495

6 INTANGIBLE ASSETS

7 INVENTORIES

8 TRADE AND OTHER CURRENT RECEIVABLES

Amortization expenses of N0.536m (2013: N0.619m) has been charged in ‘cost of goods sold’, N1.250m

(2013: N0.826m) in ‘selling and marketing costs’ and N1.786m (2013: N2.686m) in ‘administrative

expenses’.


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Analysis of Trade Receivables

The analysis below analyses changes in the allowances for impairment losses in the year.


Ageing of Trade Receivables

Total Trade Receivables 1,195,081 1,079,325

Less: Impairment Provision for Trade Receivables (360,435) (259,663)

834,645 819,662

of which:

Carrying amount neither past due nor impaired 833,466 728,127

Carrying amount past due but less than three months 53,596 63,552

Carrying amount past due for more than three month but less than six months 34,126 19,218

Carrying amount past due for more than six months but less than one year 12,996 13,662

Carrying amount past due more than one year 260,896 254,766

1,195,080 1,079,324

Impairment for trade receivables (360,435) (259,663)

834,645 819,661

Impairment Provision for Trade and other Receivables


At April 1 259,663 223,645

Charge to income statement for the period 100,772 36,018

At March 31 360,435 259,663


FINANCIALSTATEMENTS

a. The maximum exposure to credit risk at the reporting date is the carrying value of the receivables.

The Company holds insurance/bank bonds as security against default.

b. As at March 31, 2014, trade receivables of N833 million (2013: N728 million) were past due but not

impaired. These relate to a number of independent customers for whom there is no recent history of

default. Extensive analysis of customer credit risk analysis were performed on the customers.

c. The amount of the provision for impairment was N360 million as at March 31, 2014

(2013: N260 million). The individually impaired receivables mainly relate to wholesalers, which are

in unexpectedly difficult economic situations. It was assessed that a portion of the receivables is

expected to be recovered. Plans are in place to ensure substantial recovery of the receivables.

d. Impairment losses are presented in the income statement with selling and marketing expenses.


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2014 2013

9 CASH AND CASH EQUIVALENTSIn thousands of Naira Bank and Cash Balances 1,300,697 309,579

Short Term Deposits 9,270,105 3,264,630

Balance as stated in the statement of financial position as at 31 March 10,570,802 3,574,209

Less Bank Overdrafts shown as liabilities in the statement of financial position - (339,832)

Cash and Cash Equivalents 10,570,802 3,234,377

There is no material difference between the fair value and the carrying amount of cash equivalents.

Short term deposits represent temporary excess of liquidity invested in low-risk short-term bank deposits with a maturity not exceeding 365 days.

2014 2013

10 TRADE AND OTHER PAYABLESIn thousands of Naira Due within one year

Trade payables 1,213,716 975,676

Accruals 65,456 207,032

Pension and sundry taxes 30,085 80,006

Balance at March 31 1,309,256 1,262,714

Accrued liabilities represent miscellaneous contractual liabilities that relate respectively to expenses that were incurred but not paid for at the year-end.

The carrying amount of trade and other payables and accrued liabilities is considered to be in line with their fair value at the reporting date.

2014 2013

11 FINANCIAL LIABILITIES

In thousands of Naira Current Portion of Loans and Borrowings

Bank Loans 14,262,304 15,676,236

Bank Overdrafts - 339,832 Import Finance Facilities 12,155,795 9,512,032

26,418,099 25,528,100

Non-Current Portion of Loans and Borrowings

Bank Loans 10,665,151 5,573,050 10,665,151 5,573,050

a) Weighted average cost of borrowings was 11.25% ( 2013:12.24%) annually.

b) Bank loans and overdraft are secured by mortgage on property, plant and equipment while import finance facilities are secured by trade receivables.

c) The fair value of current borrowings equals their carrying amount, as the impact of discounting is not significant.


FINANCIALSTATEMENTS


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d) The carrying amounts and fair value of the non-current borrowings are as follows.

Carrying Amount Fair Value

2014 2013 2014 2013

Guaranty Trust Bank Plc. (CBN Intervention Fund) 181,498 364,186 161,516 350,182

Keystone Bank Limited (CBN Intervention fund) - 73,786 - 37,420

3,840,430 First bank of Nigeria Limited 3,921,963 5,255,807 5,185,449

First bank of Nigeria Limited (CBN Intervention Fund) 1,000,000 -

Bank of industry Limited 5,800,000 - 5,800,000 -

10,903,461 5,693,779 10,665,151

(2013:17%)The fair values are based on cash flows discounted using rate based on the average borrowing rate of 17%


The Company has both defined benefit and defined contribution plans.

RETIREMENT BENEFIT OBLIGATIONS

863,205

12

A defined contribution plan is a pension plan under which the Company pays fixed contributions to a

separate entity. The Company has no legal or constructive obligations to pay further contributions if the funds does not

hold sufficient assets to pay all employees the benefits relating to employee service in the current and

The Company pays contributions to publicly or privately administered pension insurance plans on a

mandatory, contractual or voluntary basis.The Company has no further payment obligations once the contributions have been paid. The

contributions are recognized as employee benefit expense when they are due.

A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will

receive on retirement, usually dependent on one or more factors, such as age, years of service and

compensation.

The liability recognized in the statement of financial position in respect of defined benefit pension plans

is the present value of the defined benefit obligation less the fair value of planned assets, together with

adjustments for unrecognized actuarial gains or losses and past service costs.

Plc.

prior periods.

Defined contribution plan

Defined benefit plan

The loan from Bank of Industry Limited (BOI) was granted to the Company to finance the new Pasta Factory which will be located at Sagamu. The loan has a tenor of seven (7) years inclusive of two (2) yearsmoratorium on principal repayment beginning from date of first disbursement. Interest rate on the loan is 10%. The loan and accrued interest on the Bank of Industry’s (BOI) loan was guaranteed by Skye Bank

5,573,051


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2014 2013 Present value of retirement benefit obligation 647,186 433,110

Interest cost 77,702 69,526

Current service cost 67,040 33,165

Benefits paid (16,571) (5,536)

Actuarial (gain) / loss due to change in experience 30,567 116,921

805,924 647,186

The defined benefits obligation is calculated annually by independent actuaries.

The amount recognized in the statement of financial position is determined as follows:


The principal actuarial assumptions were as follows:

Actuarial Method: Projected Unit Method

Discount rate: 11%

Rate of Salary escalation: 15% per annum

Retirement Age: 60 years

Pre-retirement mortality: A1949/52 Ultimate

Withdrawal: Based on the average experience of other similar arrangements adjustments for the company's experience

Expenses: No explicit allowance.

2014 201313 DEFERRED INCOME AND ACCRUALS In thousands of Naira Deferred income and accruals 283,259 226,064

Deferred income and accruals includes government grants. The Company received government

interest grants in respect of CBN intervention loans from Guaranty Trust Bank Plc., Keystone Bank

Limited and First Bank of Nigeria limited at subsidized rate of 7% per annum. The interest grants are

included under non-current liabilities and are recognized in the income statement on a straight line

basis over the tenure of the loans.

RETIREMENT BENEFIT OBLIGATIONS (cont’d)


FINANCIALSTATEMENTS


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2014 201314 PROFIT BEFORE TAXATION In thousands of Naira The following items have been charged/credited in arriving at profit before tax: Depreciation 1,844,107 1,249,033

Allowance for bad and doubtful debts 100,772 36,018

Auditors' remuneration 15,000 13,613

Directors' emoluments:

Fees 16,111 14,955

Others 29,654 29,238

Finance cost 1,887,038 528,340

And crediting

Profit on disposal of fixed assets 10,881 1,068

Finance income 688,387 622,534

15 TAXATION In thousands of Naira 2014 2013 .1 Income Statement

Current company income tax 343,248 610,955

Education tax 66,041 101,387

Over provision - (4,804)

409,289 707,538 Deferred tax provision on origination and reversal of temporary differences 476,579 263,541

Tax charge to income statement 885,868 971,079

Current tax liabilities

The movement in current tax balance is as follows: 2014 2013


At April 1 712,342 225,618

Charge for the year 409,289 707,538

1,121,631 933,156

Payment during the year (789,647) (220,814)

At March 31 331,984 712,342

.2

The provision for income tax is based on the provision 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


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The Company was granted a Pioneer Status Certificate for the new Mills E & F production plant in Apapa

factory.

The required Certificate of Production Day, from the Industrial Inspectorate Department of the Federal

Ministry of Industry, Trade and Investment has been formally issued with the commencement date of

April 1, 2013 for the Pioneer Status Incentive. This will enable the company to enjoy a 5-year Tax

Holiday on the new plants.

The ERP of the Company has been designed to ensure a separate accounting for the new plant. The new

plant is self-accounting in order to prepare an independent Income Statement and Statement of Financial

Position for its operations. The new plant was at the peak of its installed capacity during the year.

Turnover and Profit Before Tax relating to the new plant for the year ended March 31, 2014 were

N24,481,961,000 and N1,715,488,000 respectively.

.3 Pioneer Status

Deferred Tax


Per income statement

Charge to income statement for the year 476,579 263,541

Per statement of financial position

The movement in deferred tax is as follows:

Deferred tax liability:

At April 1 2,934,939 2,671,398

Charge for the year 476,579 263,541

At March 31 3,411,518 2,934,939

.4


FINANCIALSTATEMENTS


2014RC 55495

The Statement of Cash Flows has been drawn up using the indirect method. Working capital comprises

inventories, receivables and current liabilities (excluding bank overdrafts). The cash flow from

investing activities relates to the net amount of investments and disposals whilst the cash position

consists of cash in hand and at bank.

2014 2013 In thousands of Naira .1 Cash flows from operating activities Reconciliation of net profit to operating profit before working capital changes Profit before tax 4,237,432 3,814,599

Adjustments for non cash items: Depreciation of property, plant and equipment 1,844,107 1,249,033 Profit on disposal of property, plant and equipment (10,881) (1,068) Amortization of intangible assets 3,572 4,132 Interest income (688,387) (622,534) Interest expense 1,887,038 528,340 Net charge in retirement benefit obligations 144,742 102,691

Operating profit before working capital changes 7,417,623 5,075,193 .2 Working capital changes Decrease/(increase) in inventories (1,277,761) (5,075,243) (Decrease)/increase in deferred income and accruals 57,195 55,994 (Increase)/decrease in trade and other receivables 994,144 3,257,509 (Decrease) in trade and other payables 46,542 (4,881,962) (179,881) (6,643,702) Cash generated from operations 7,237,742 (1,568,509)

17 SEGMENT REPORTING

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16 STATEMENT OF CASH FLOWS

The Company business operating segments are identified by the two factory locations at Ikeja and Apapa.

The chief operating decision maker, who is responsible for allocating resources and accessing performance

of the operating segments, has been identified as the Board of Directors that makes strategic decisions.

The chief operating decision maker reviews Honeywell's monthly financial and operational information in

order to assess performance and allocate resources. Management has determined the operating segments

based on these reports.

The chief operating decision maker assesses the performance based on operating profits for each operating

segments.


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.2 Revenue by products 2014 2013 Ikeja Apapa T otal Ikeja Apapa Total In thousands of Naira Flour - 32,003,650 32,003,650 - 27,114,403 27,114,403 Semolina - 7,586,479 7,586,479 - 6,261,378 6,261,378 Wheat Meal - 4,066,075 4,066,075 - 2,339,184 2,339,184 Brown Flour - 148,030 148,030 - 112,121 112,121 Pasta 5,622,619 - 5,622,619 5,762,627 - 5,762,627 Noodles 5,657,452 - 5,657,452 4,119,669 - 4,119,669

Total revenue 11,280,071 43,804,234 55,084,305 9,882,296 35,827,086 45,709,382

2014 2013 In thousands of Naira

.3 Revenue by geographical location of customers: Domestic (within Nigeria) 55,084,305 45,709,382 Export (outside Nigeria) - - 55,084,305 45,709,382 All sales were made within Nigeria


2014 2013 Ikeja Apapa Total Ikeja Apapa Total In thousands of Naira Revenue 11,280,070 43,804,234 55,084,304 9,882,296 35,827,086 45,709,382 Cost of sales (9,631,520) (34,995,154) (44,626,674) (8,420,368) (29,367,954) (37,788,322)

Gross profit 1,648,550 8,809,080 10,457,630 1,461,928 6,459,132 7,921,060 Other income 205,070 54,472 259,542 84,578 59,488 144,066 Selling and admin expenses (1,463,458) (3,817,631) (5,281,089) (1,265,753) (3,078,967) (4,344,720)

Segment Operating Profit 390,162 5,045,921 5,436,083 280,753 3,439,653 3,720,406

.1 Revenue and Result


FINANCIALSTATEMENTS


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2013 2014 18 OTHER INCOME

In thousands of Naira Other income comprises the following:

Sale of by-products 81,900 20,800 Net gain on sale of property, plant and equipment 10,881 1,068 Raw wheat sales 13,878 23,592 Sundry income 152,883 98,606 259,542 144,066

2014 201319 SHARE CAPITAL In thousands of Naira Authorized 8,000,000,000 ordinary shares of 50k each 4,000,000 4,000,000 Issued and fully paid 7,930,197,658 (2013: 7,930,197,658) ordinary shares of 50k each 3,965,099 3,965,099

86Honeywell Flour Mills Plc.

20 CHAIRMAN'S AND DIRECTORS' EMOLUMENTS, PENSIONS AND COMPENSATION FOR LOSS OF OFFICE In thousands of Naira The remuneration paid to Directors was .1 Fees: Chairman 1,000 1,000 Other directors 15,111 13,955 16,111 14,955 .2 Fees and other emoluments disclosed above include amount paid as: Fees 16,111 14,955 Other emoluments 31,065 29,238

47,176 44,193


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2014 2013

.3 Number of directors (excluding the chairman) whose

emoluments were within certain ranges were: Number Number N100,000 and above 9 8

.4 Waived emoluments

Number of directors who have waived their rights

to receive emoluments - -

Aggregate of those emoluments - -

.5 Pensions of directors and past directors Aggregate amount of directors' or past directors or past directors' pensions` - - Other pensions - -

.6 Compensation to directors for loss of office

Key management comprises the directors (executive and non-executive) and the Chairman that form part of the leadership team (Chief operating officers).

As directors - - As executives - -

21 EMPLOYEES AND RELATED REMUNERATION

Number of employees in receipt of emoluments excluding allowances were within the following ranges:

2014 2013 Number Number N500,001 - N1,000,000 502 488 N1,000,001 - N1,500,000 88 81 N1,500,001 - N2,000,000 40 37 N2,000,001 - N2,500,000 69 75 N2,500,001 - N3,000,000 40 37 N3,000,001 - N3,500,000 31 28 N3,500,001 - N4,000,000 15 14 N4,000,001 - N4,500,000 12 10 N4,500,001 - N5,500,000 15 15 N5,500,001 - N6,000,000 10 10 N6,000,001 - Above 32 32

Total 854 827


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22 RELATED PARTY TRANSACTIONS

At the year end, the Company had amount receivable from a related company. Interests have been

accrued and recognize in the income statement. The balances are shown below: 2014 2013

in thousands of Naira

Metropolitan Trust Limited 3,630,336 4,805,580

The Chairman of the Company is also a Director of Metropolitan Trust Limited.

As at March 31, 2014, the Company had amount receivable from Metropolitan Trust Limited in respect

of loans.

Interest on the loan was charged at the ruling commercial rates at an averaged 16.5% per annum. The

rate is subject to review in line with market conditions.

The related party balance will be settled in cash.

i Charges

The Company has loan facilities with First Bank of Nigeria Plc secured by 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 March 31, 2014.

iii Legal Charges

The Company has no contingent liabilities in respect of legal claims arising in the ordinary course of

business. It is not anticipated that any material liabilities will arise in the ordinary course of business.

24 LOANS AND OTHER TRANSACTIONS IN FAVOUR OF DIRECTORS AND OFFICERS

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

b) No loans were given to the Directors to purchase the Company's shares during the year.


FINANCIALSTATEMENTS

23 CONTINGENT LIABILITIES, GUARANTEES AND OTHER FINANCIAL COMMITMENTS


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25 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 March 31, 2014.

26 APPROVAL OF FINANCIAL STATEMENTS

These financial statements were approved by the Board of Directors of the Company on June 30, 2014.

27 SIGNIFICANT JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

In preparing its financial statements, the Company has made significant judgements, estimates and

assumptions that impact on the carrying value of certain assets and liabilities, income and expenses as

well as other information reported in the notes. The Company periodically monitors such estimates and

assumptions and make sure that they incorporate all relevant information available at the date when

financial statements are prepared. However, this does not prevent actual figures.

The judgements made in the process of applying the Company’s accounting policies that have the most

significant effect on the amounts recognised in the financial statements, and the estimates and

assumptions that have a significant risk of causing a material adjustment to the carrying amounts of

assets and liabilities within the next financial year are addressed below.

Revenue recognition

The Company makes provisions for trade discounts, volume rebates and charge back for product

returns allowed by the sale contracts when recognising the revenue derived from sales of its products.

Such deductions represent estimates, which are subject to judgements and assumptions based on past

experience as well as the company’s knowledge available at the time the estimate is made.

Allowance for doubtful receivables

The determination of the recoverability of the amount due from customers involves the identification of

whether there is any objective evidence of impairment. In cases where that process is not feasible, a

collective evaluation of impairment is performed. As a consequence, the way individual and collective

evaluations are carried out and the timing relating to the identification of objective evidence of

impairment require significant judgement and may materially affect the carrying amount of receivables

at the reporting date.


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Asset impairment tests

A financial asset or a group of financial assets, other than those categorised at fair value through profit

or loss, are assessed for indicators of impairment at the end of each reporting period. Impairment exists

only when the Company ascertains that a “loss event” affecting the estimated future cash flows of the

financial asset has occurred. It may not be possible to identify a single, discrete event that caused the

impairment and moreover to determine when a loss event has occurred might involve the exercise of

significant judgement.

The amount of impairment loss recognised for financial assets carried at amortised cost is the difference

between the asset’s carrying amount and the present value of estimated future cash flows, discounted at

the effective interest rate.

Net realisable value of inventories

Inventories are stated at the lower of cost and net realisable value. The cost of inventories is written

down to their estimated realisable value when their cost may no longer be recoverable, such as when

inventories are damaged or become wholly or partly obsolete or their selling prices have declined. In

any case, the realisable value represents the best estimate of the recoverable amount, is based on the

most reliable evidence available at the reporting date and inherently involves estimates regarding the

future expected realisable value. The benchmarks for determining the amount of write-downs to net

realisable value include ageing analysis, technical assessment and subsequent events. In general, such

an evaluation process requires significant judgement and may materially affect the carrying amount of

inventories at the reporting date.

Deferred tax estimation

Recognition of deferred tax assets and liabilities involves making a series of assumptions. As far as

deferred tax assets are concerned, their realisation ultimately depends on taxable profits being available

in the future. Deferred tax assets are recognised only when it is probable that taxable profits will be

available against which the deferred tax asset can be utilised and it is probable that the entity will earn

sufficient taxable profit in future periods to benefit from a reduction in tax payments. This involves the

Company making assumptions within its overall tax-planning activities and periodically reassessing

them in order to reflect changed circumstances as well as tax regulations. Moreover, the measurement

of a deferred tax asset or liability reflects the manner in which the entity expects to recover the asset’s

carrying value or settle the liability.


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Actuarial assumptions on defined benefit retirement plans

Accounting for defined benefit plans may be complex because actuarial assumptions are required to

measure the obligation and the expense, with the posibility that actual results differ from the assumed

results. These differences are known as actuarial gains and losses. Defined benefit obligations are

measured using the Projected Unit Method, according to which the Company has to make a reliable

estimate of the amount of benefits earned in return for services rendered in current and prior periods,

using actuarial techniques.

28 NEW ACCOUNTING STANDARDS ISSUED BUT NOT YET ADOPTED

The following new standards, amendments and interpretations have been issued by the IASB but are

not yet effective for the financial year beginning April 1, 2013 and have not been early adopted by

Honeywell Flour Mills Plc (the list does not include information about new pronouncements that affect

interim financial reporting or first-time adopters of IFRS since they are not relevant to the Company.

The Directors anticipate that the new standards, amendments and interpretations will be adopted in the

company’s financial statements when they become effective. The Company has assessed, where

practicable, the potential impact of all these new standards, amendments and interpretations that will be

effective in future periods.

i Ammendments to IAS 1 Presentation of Items of Other Comprehensive Income:

These ammendments improve the presentation of the components of other comprehensive income.

Mainly the Company will be required to group items presented in Other Comprehensive Income

based on whether or not they will be reclassified to profit or loss subsequently. They are effective for

annual periods beginning on or after July 1, 2012.

ii. Ammendment to IAS 1 Presentation of Financial Statements:

The ammendment clarifies that additional comparative information is not necessary for periods

beyond the minimum required by IAS 1, however if voluntarily presented, it should be in

accordance with IFRS, without tiggering a requirement to provide a complete set of financial

statements. It also clarifies that, in the case of changes in accounting policies retrospectively or a

retrospective restatement or reclassification which has a material effect on the information in the

statement of financial position at the beginning of the preceding period, the Company should present

the statement of financial position at the end of the current period and the beginning and end of the

preceding period. However, other than disclosure of certain specified information, related notes will

not be required to accompany the opening statement of financial position as at the beginning of the

preceding period. The ammendment is effective for annual periods beginning on or after January 1,

2013.


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iii. Ammendments to IAS 32 Offsetting Financial Assets and Financial Liabilities :

The ammendments address inconsistencies in current practice when applying the offseting criteria

in IAS 32, mainly by clarifying the meaning of currently legally enforeceable right of set-off and that

some gross settlement systems may be considered equivalent to net settlement. They are effective

for annual periods beginning on or after January 1, 2014.

iv Ammendment to IAS 32 Financial Instrument Presentation :

The ammendment clarifies that income tax relating to distributions to holders of an equity

instrument and to transaction costs of an equity transaction should be accounted for in accordance

with IAS 12. It is effective for annual periods beginning on or after January 1, 2013.

v IFRS 9 Financial Instruments:

This standard introduces new requirements for the classification and measurement of financial

assets and financial liabilities and for derecognition.

IFRS 9 requires all recognised financial assets that are within the scope of IAS 39 Financial

Instruments: Recognition and Measurement to be subsequently measured at amortised cost or fair

value. Specifically, debt investments that are held within a business model whose objective is to

collect the contractual cash flows and that have contractual cash flows that are solely payments of

principal and interest on the principal outstanding are generally measured at amortised cost at the

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

measured at their fair value at the end of subsequent accounting periods.

The most significant effect of IFRS 9 regarding the classification and measurement of financial

liabilities relates to the accounting for changes in fair value of a financial liability (designated as fair

value through profit or loss) attributable to changes in the credit risk of that liability. Specifically,

under IFRS 9, for financial liabilities that are designated as at fair value through profit or loss, the

amount of change in the fair value of the financial liability that is attributable to changes in the credit

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

effects of changes in the liability’s credit risk in other comprehensive income would create or

enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial

liability’s credit risk are not subsequently reclassified to profit or loss. Currently, under IAS 39, the

entire amount of the change in the fair value of the financial liability designated as at fair value

through profit or loss is recognised in profit or loss.


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The derecognition provisions are carried over almost unchanged from IAS 39.

IFRS 9 is effective for annual periods beginning on or after January 1, 2015. the Directors anticipate

that IFRS 9 will be adopted in the Company’s financial statements when it becomes mandatory and

that the application of the new Standard might have a significant impact on amounts reported in

respect of the Company’s financial assets and financial liabilities. However, it is not practicable to

provide a reasonable estimate of that effect until a detailed review has been completed.


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Value Added Statement for the Year ended 31 March, 2014

2014 2013

In thousands of Naira % %

Revenue 55,084,305 45,709,382

Other revenue 259,542 144,066

55,343,847 45,853,448

Bought in goods

and services (45,789,971) (39,211,063)

VALUE ADDED 9,553,876 100 6,642,385 100

APPLIED AS FOLLOWS:

1 To pay employees

Salaries and wages, pension

and social benefits 1,585,300 17 1,050,413 16

2 To pay providers of funds

Finance expenses 1,887,038 20 528,340 8

3 To pay government

Income and education taxes 409,289 4 707,538 11

4 To provide for maintenance and expansion of assets

Depreciation 1,844,107 19 1,249,033 18

Deferred tax 476,579 5 263,541 4

Retained profit 3,351,564 35 2,843,520 43

VALUE ADDED 9,553,876 100 6,642,385 100


Note: Value added is the wealth created by the efforts of the company and its employees and its

allocation between employees, shareholders, government and re-investment for the future

creation of further wealth.


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Financial Summary as at 31 March

2014 2013 2012


4,931,032 Inventories 11,287,037 1 0, 009,2 75

5,874,818Trade and other receivables 6 ,8 68,962 10,126,471

Cash and bank balances 10,570 , 802 3,574, 2 09 3 , 8 58,456

Total net assets

Share premium 6,462,041 6 , 462,0 41 6,462,041

Revenue

Profit attributable to:


STATEMENT OF FINANCIAL POSITION

Intangible assets:

IFRS

STATEMENT OF COMPREHENSIVEINCOME

55,084,305 45,709,38 2 38,052,227

4,237,432 3,814, 5 9 9 3,758,735Profit before tax & after exceptional item

(885,868) (971, 0 7 9 ) (970,960)Taxation

Profit after tax 3,351,564 2,843,5 2 0 2,787,775

3,351,564 2,843 , 5 2 0 2,787,775

Transfer to revenue reserve

3,351,564 2,843 , 5 2 0 2,787,775Equity shareholders

42.26 3 5 . 8 6 35.15Earnings per 50k share [k]

259.83 233 .9 5 214.57Net assets per 50k share [k]

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.

36,085,450 34,969, 128 2 9,014,12 1 Property, plant and equipment

12,332 15,90 4 198Software

Total assets 63,830,439 55,437,4 7 8 47,930,278

Current liabilities (28,059,339) ( 2 7,503,156 ) (21,798,567)

(15,165,852) ( 9 ,381,23 9 ) (9,115,697)Non-current liabilities

20,605,248 1 8 ,553,08 3 1 7,016,014

3,965,099 3 , 965,0 9 9 3,965,099Share capital

10,178,108 8,125,9 4 3 6,588,874Retained earnings

20,605,248 1 8 , 553,083 1 7,016,014Capital employed


2014RC 55495


List of Key Distributors

Unclaimed Dividends

98 - 100

101

105

Proxy Form

Application for E-Dividend

107

Annual Report

Acc

ounts

&

201

4RC 55495

Share Capital History 102

Electronic Delivery Mandate Form 109

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Key Distributors


Abdulahi Salah North Sokoto

Abdullahi Murtala Kano North Kano

Abinukolade Global Ventures Lagos Ketu

Abiola Adio Inv Ltd West Ibadan

Abiola Aramide Olaoluwa Nig.Ent. West Ibadan

Adamu Abdullahi North Gombe

Ade Distribution & Invest. Co Lagos Ijebu Ode

Adeayo Integrated Services Ltd Lagos Atan - Ota

Adebiyi Merchants Stores Lagos Ijora

Adejumo Nigeria Enterprises West Ilorin

Ade-ofeek Nig.Ent West Ibadan

Ade-Owo Nig Ltd. Lagos Idimu

Adeshina (Alhaja) Lagos Itire

Adeyemo Olusola & Associates West Ibadan

Adeyinka stores Lagos Ijora

Adidot Nigeria Enterprises Lagos Ijebu Ode

Adunni F. Nehan Lagos Apongbon

Adunni-Ade Global Ventures Lagos Otta

Aduwa Stores North Gusau

Afi Suru Enterprises Lagos Abeokuta

Ahajas Nig Ltd North Gombe

Alh Ibrahim Dubara North Sokoto

Alh. Modu Gudumbali North Maiduguri

Alh.Ummaru Saidu North Kebbi

Alhaji Bukar Sheriff North Maiduguri

Alhaji Abdulkadir Hali Maikeke & Sons North Sokoto

Alhaji Mukhtar Nayaya North Jos

Alhaji Usman Muhammadu North Niger

Ali Hassan North Maiduguri

Always Ventures West Okenne

Amazing Wonder Enterprises Lagos Ketu

Amen Mart Lagos Akute

Aminat Ottun Lagos Apongbon

Amudeson Nig. Enterprises East Enugu

Aolat adefunke Nig. Ltd West Osogbo

Asalam Stores Ventures Lagos Abeokuta

Aunty Gina Nig Enterprises East Warri

Ayadar Nig Ltd Lagos Iddo

Aznof perfect Stores Ventures Lagos Mushin

Zion Enterprises Lagos Otta

Badamosi Yahaya North Niger

Bako Alh. Kontoma & Sons North Maiduguri

Bekdat Ventures North Abuja

Bello Master Investment North Nassarawa

Bello Sabaru North Sokoto

Bioreal Ltd-WWM North Abuja

Blessed A.A & Sons North Oturkpo

Blessed Chima Umeh Enterprises East Enugu

Blessed Obrown Ent. Nig. Ltd. North Suleja

Bofik Nigeria Ltd Lagos Agbado Ijaiye

Boladale Stores Lagos Ipaja

Bolmic Int Nig Ltd West Oyo

Cansanthonio Nigeria Ltd Lagos Ejigbo

Channel of Blessing Ventures Lagos Iddo

Chidex Frontline Enterprises East Aba

Chijioke Ofonyelu West Ikare Akoko

Chimaco & Brothers Enterprises East Owerri

Chitis Limited East Enugu

Chivic NIg Ltd Lagos Apongbon

Cleanson Nigeria Enterprises North Markurdi

Co-City Best Commercial Enter. East Benin

Cossy Bros Intern Ltd Lagos Apongbon

Cyquem Ventures Ltd East Warri

Damilek Integrated Services Ltd. East Port-Harcourt

Dan-Halima Associate Ventures Ltd North Katsina

Danladi Muhammed North Maiduguri

De-Tofola Nigeria Ltd Lagos Otta

Divine Grace Ventures West Oyo

Donason Commercial Enterprises East Aba

E.Y. Nigeria Limited East Calabar

Ebenezer Dairo Enterprises Lagos Mushin

Ejiofor Ent Nig East Benin

Ekene Enterprises Lagos Trade Fair

Eleven Sixteen Ltd Lagos Agege

NAME REGION LOCATION NAME REGION LOCATION


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Emamac Nigeria Limited East Calabar

Emji Investment Company Ltd East Uyo

Estony Ventures Lagos Agege

Ewedemi & Sons Lagos Okokomaiko

Eweje Stores Lagos Mushin

Ewoma Enterprises East Warri

Ezeh (Chief) East Onitsha

Faith Foods & Confectioneries East Port-Harcourt

Fantazia Fast Food Ltd East Benin

Favour of God Ventures Lagos Abeokuta

Femadons Enterprises Lagos Sango

Femolysis Limited Lagos Ikorodu

Fola Global Quest Ltd Lagos Oke-Odo

Fosmarich Nig. Ltd Lagos Agbado Ijaiye

Frandnivan Ventures East Benin

Frank -Phil Investment Ltd East Onitsha

Frontline Ventures Lagos Badagry

Gambo Danbala Lambu North Kano

Gari Gabas Salisu Sabo North Kano

God's Choice Bakery Nig.Ventures East Benin

God's Own Immaculate Business Ltd West Ibadan

Habibu Goron Duma North Kano

Hamum Global Resources Ltd North Abuja

HardatVenturs (Nig) Ltd. North Abuja

Haruna Salihu North Yobe

Hay Crown Global Ventures West Lokoja

Heron Ventures Lagos Abeokuta

His Favour Commodity stores Lagos Abeokuta

Ibrahim Sulu Oloje West Lokoja

Ibrahim Usman Ent. North Sokoto

ICI Holdings Limited East Onitsha

Ideal Systems & Technical Services Ltd Lagos Egbeda

Ifeoguchi Nig. Ent. Lagos Trade Fair

Imperial Bakeries Nig North Abuja

Insight Trust Links Nig. Ltd Lagos Trade Fair

Isiaku Muhammed North Kaduna

J C Joseph Industries Ltd East Aba

B General Enterprises Jibia North Katsina

J. B. Oyesomi & Sons Nig. Ltd East Benin

J. C. Anugwu & Sons Nig. Ltd East Onitsha

James Franklyn Investment Ltd. North Suleja

Joe-Best Akor Enterprise North Gboko

Jomary Enterprises Lagos Mowe

Justin Charles Global Resources Ltd. Lagos Trade Fair

Kabiru Ahmed Dokoro North Gombe

Kabiru Shuaibu Dansarai North Kano

Kanisuru A & B Stores Lagos Ijebu Ode

Kazmoha Investment Resources Ltd. Lagos Iddo

Kine-Cal International Ltd Lagos Agege

Kubrat Sayed & Sons Nig. Ltd West Ibadan

Kudyunus Bislar Nig Ltd North Kaduna

Kuli Barde Enterprises North Maiduguri

Lafbis Enterprises Lagos Abeokuta

Laji VenturesLagos Ojo Barracks

Laslop Nig enterprises Lagos Ipaja

Lasol Nigeria Ltd Lagos Lasol

Lateefat Adeyeye Enterprises West Ibadan

Lawali Sanni Gusau Alh- North Gusau

Legacy Bakery Ltd West Lokoja

Lolly Global Stores Ltd Lagos Apongbon

Lucky Best Trading Store West Lokoja

M.O Nnaji Industry Ltd East Aba

Mac-Tell Investment Ltd Lagos Mushin

Magbagbeade Stores Lagos Abeokuta

Maigudu Yusuf North Maiduguri

Mama Cass Restaurant Ltd Lagos Ikeja

Mama Somto Lagos Trade Fair

Manymoore Merchandise Ltd East Aba

Mario Barns Ltd East Port-Harcourt

Matwealth Ventures Lagos Yaba

Mbonu (chief) East Onitsha


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Medan Nigeria Enterprises East Uyo

Meneshad Services Ltd East Warri

Merciful Business Lagos Daleko

Michelle Edmund Ventures West Ibadan

Mike mary Investment East Yenegoa

Moboluwaduro Commodities Lagos Abeokuta

Mofine Ventures West Anyigba

MT Olives Nig Ltd West Ilorin

Muhammed Alli Magaru & Sons North Minna

Murtala Abdulahi Trading North Kaduna

Musa Mohammed North Kano

Namadi Inuwa North Kano

New Gaskiya Enterprises North Kano

Ngaloma General Enterprises North Maiduguri

Nnemelu J. C. East Onitsha

Nwosu (Mrs) East Aba

Obi Okoye East Aba

Odilamma Enterprises Nigeria East Owerri

Ogbufor (Santa Maria) East Abakaliki

Ogene Concerns Ltd East Onitsha

Oladejo & Sons Nigeria Ent Lagos Agbado Ijaiye

Olayiwola Alhaja Lagos Ejigbo

Oluwasesan Sose Enterprises West Ibadan

Omowunmi Ventures Lagos Ipaja

Otolorin Ventures West Akure

Palma Seaport Ltd East Nsukka

Platinum Stores Lagos Oshodi

Q.U Olumide Ventures Lagos Apongbon

Quad & Kay Ventures Lagos Apongbon

Raji Opeyemi Industries Lagos Ikotun

Rarmset Ventures Lagos Oke-Arin

Rasaki Hassan Alh Lagos Mushin

Raywens Nig Enterprises Lagos Navy Town

Razkkas Nigerian Ltd Lagos Epe

Retail Supermarkets Nigeria Ltd Lagos Lekki

Rintol Ventures Lagos Oke-Arin

Rite Foods Ltd Lagos Ikeja

Royal Gate Company Ltd Lagos Abeokuta

Runol Enterprises West Ibadan

Ruthies and Ruthys Ltd Lagos Oyingbo

S O Omilabu & sons Ltd Lagos Daleko

S R S Adeshina Nig Ltd Lagos Itire

Saac-Lora Commercial Enterprises West Akure

Safeway Resources Int Ltd East Aba

Samtina Ventures West Osogbo

Say-Suraj Ent North Kaduna

Shagumba Ventures -flour North Katsina

Solak Industries Ltd Lagos Agege

Solohot Fuels Nig Ltd Lagos Badagry

Sylmec Ventures Ltd North Markurdi

TGS Commercial Stores Lagos Lekki

Timmy Bakery Lagos Sagamu

Tinachris Nigeria Ltd West Ikare Akoko

Tomak Nig. Enterp. West Ibadan

Toprange Bakery And Eatery Ltd East Port-Harcourt

Tukur Sabaru Alh. North Sokoto

U.SAB Enterprises East Benin

Umar Musa Bakery North Kaduna

Umaru Ladan Alh. North Bauchi

Uniqueayos Ventures Lagos Mushin

Usezor Integrated Services Ltd North Abuja

Uwana Ventures Lagos Ijesha

W. J. Onyema Supply Co. Ltd West Ore

Wisdom Divinity Ltd. Lagos Ifo

Wollybaj Nig. Enterprises West Okenne

Yomdok Nigeria Ltd Lagos Akute

Zaifa Agencies Ltd East Onitsha


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Unclaimed Dividends


The Unclaimed Dividend as at July 31, 2014 is as analysed below.

Some dividend warrants have not been presented to the Bank for payment while others have been returned to

the Registrar as unclaimed because the address could not be traced.

-

7

13

86

1,515

15,973

17,594

N’000

-

1,046

889

1,623

3,431

4,288

11,277

1,189,530

0.9%

N’000

-

233

320

583

1,011

2,513

4,661

872,322

0.5%

-

13

24

191

1,844

16,734

18,806

N’000

-

1,883

1,702

3,809

4,513

4,742

16,648

1,268,831

1.3%

Amount

N’000

-

1,010

484

814

2,245

3,458

8,010

1,031,000

0.8%

6

7

52

1,179

14,850

16,094

-

1

4

25

458

11,437

11,925

2010 Unclaimed Dividend

Dividend Range



Amount Number of

ShareholdersAmount

Number of Shareholders


Amount Number of

Shareholders

Above N1,000,000

N100,000 - N1,000,000

N50,000 - N99,999

N10,000 - N49,999

N1,000 - N9,999

Less than N1,000

Total

% of Unclaimed Dividend

Number of Shareholders

Total Declared Dividend in Years

Total Amount

N’000

-

6,619

5,155

6,829

11,200

15,001

32,586

4,361,683

0.7%

Detailed list of Unclaimed Dividends can be viewed or downloaded from the Company’s website at



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Share Capital History

Issued & Fully Paid-up (N'000)Year Authorized (N'000)Consideration

Increase Cumulative Increase Cumulative

1990 - 10,000 - 2 Cash @ N1 each

1991 - 10,000 - 2 Cash @ N1 each

1992 - 10,000 - 2 Cash @ N1 each

1993 - 10,000 - 2 Cash @ N1 each

1994 - 10,000 - 2 Cash @ N1 each

1995 40,000 50,000 49,998 50,000 Cash @ N1 each

2001 160,000 210,000 160,000 210,000 Cash @ N1 each

2003 790,000 1,000,000 790,000 1,000,000 Cash @ N1 each

2008 1,000,000 2,000,000 999,999 1,999,999Acquisition of Honeywell Superfine Foods Limited

2008 - 2,000,000 - 1,999,999 Share Split of N1 to N0.50

2008 2,000,000 4,000,000 1,500,000 3,499,999 Bonus Issue of 3 to 4 shares

- 4,000,000 465,100 3,965,099 Public Issue @ N8.50 each


2009


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2014RC 55495


Honeywell Flour Mills Plc

To: The Registrar,

First Registrars Nigeria Limited,

Plot 2, Abebe Village Road,

Iganmu, P.M.B 12692,

Marina, Lagos, Nigeria. Date:........................................................

Important! The form should be completed in CAPITAL LETTERS using a black or dark blue ballpoint 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 6 7 8 9

Please fill in the form and return to the address above

Personal Details

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 (very important).............................................................................................................................

Bank's Authorised Signatures and/or stamp................................................................................................................

FINANCIALSTATEMENTS

Application For E-Dividend



2014RC 55495


2014RC 55495


HONEYWELL FLOUR MILLS PLC5TH ANNUAL GENERAL MEETING TO BEHELD AT 11.00 A.MON TUESDAY SEPTEMBER 16 2014AT THE CIVIC CENTRE,OZUMBA MBADIWE STREET,VICTORIA ISLAND, LAGOS.

(Name of Shareholder in block letters)

The undersigned, being a member/members of the above-Named

Company hereby appoint the Chairman of the meeting Or failing

him.......................................................................................................

..............as my/our Proxy to vote me/us and On my/our behalf at the

Annual General Meeting of the Company to be held on September 16,

2014 and at Adjournment thereof."

Unless otherwise instructed, the proxy will vote or abstain from

Voting as he/she thinks fit.

Dated this..............................day of.............................................2014

Signature............................................................................................

Notes

1.Please sign this proxy card and post it to reach the Registered office

of Company not less than 48 Hours before the time fixed for the

meeting.

2.If executed by a corporation, the proxy card should be Sealed with

the common seal.

3.This proxy card will be used both by show of hands,

And in the event of a poll being directed or demanded

Please indicate with an "X" in the appropriate section how you which your votes to

be east on resolutions set above. Unless otherwise instructed, the proxy will vote

or abstain from voting at his/her discretion.

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)5TH ANNUAL GENERAL MEETING TO BE HELD at Civic Center Ozumba Mbadiwe street, Victoria Island Lagos on Tuesday September 16, 2014 at ll a.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.,

Important

Please 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.

1. To adopt the Annual Report and Accounts

2. To declare a dividend

3. To re-elect the following Directors:

Mr. Dave Obray

Mr. Obafemi Otudeko

Mr. Oluranti Sokunbi

4. To approve Directors' remuneration

5. To authorize the Directors to fix Auditors

Remuneration.

6. To appoint members of the Audit Committee

RESOLUTION FOR AGAINST

107

FINANCIALSTATEMENTS

Proxy Form



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I / We/ Chief/ Dr/ Mr/ Mrs.

Title:

Name:

Address:

hereby agree to the delivery of Annual Report and other statutory documents of

Honeywell Flour Mill Plc to me/us via electronic mode:

The Company should forward the materials to the email address stated below:

e-mail address : ...............................................................................................

Signature : ...............................................................................................

The Registrar First Registrars Nigeria LimitedPlot 2, Abebe Village RoadIganmu Lagos.

FINANCIALSTATEMENTS

Electronic Delivery Mandate Form



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NOTES



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NOTES



2014RC 55495


RC 55495

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