N nig. flour mills plc. - audited financial statements for the year ended 31 march 2024

Northern Nigeria Flour Mills Plc

Annual report

for the year ended 31 March 2024

Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Corporate information

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Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Report of The Directors

The directors have pleasure in submitting their report on the annual report of Northern Nigeria Flour Mills Plc for the year ended March 31, 2024.

1. Legal form

The Company was incorporated as a private Limited Liability Company on 29 October 1971. Its registered office is 15, Maimalari road, Bompai Industrial Estate, Kano. The Company was converted to a public limited liability company in 1978 and its shares are quoted on the Nigerian Stock Exchange. It is a subsidiary of Flour Mills of Nigeria Plc which holds 59.6% of the Company's equity. Flour Mills of Nigeria Plc is incorporated in Nigeria.

2. Principal activities

Northern Nigeria Flour Mills Plc was incorporated in Nigeria with interests in milling of wheat, maize and sorghum. The Company operates in Kano state, Nigeria. There have been no material changes to the nature of the Company's business from the prior year.

The Directors do not recommend any dividend in the current financial year (2023: N62.4million) in order to conserve fund.

5. Directors and directors' interests

The names of Directors who are currently in office are detailed on page 2. The directors who served during the year are as follows:

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Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Report of The Directors

In accordance with section 303 of the Companies and Allied Matters Act, 2020 (CAMA), none of the Directors has notified the Company of any declarable interests in contracts with the Company during the year.

6. Directors' interest in shares

The Directors' interests in the issued share capital of the Company as recorded in the Registrar of members and/or as notified by them for the purpose of Section 301 of the Companies and Allied Matters Act, 2020 (CAMA) and disclosed in accordance with Section 385 also of CAMA are as follows:

7. Shareholding Analysis

The shareholding structure of the Company as at 31 March 2024 is as stated below:

8. Parent company

The Company's holding company is Flour Mills of Nigeria Plc which holds 59.6% (2023: 59.6%) of the Company's equity. Flour Mills of Nigeria Plc is incorporated in Nigeria. The ultimate controlling parent is Excelsior Shipping Company Limited, a company registered in Liberia. the beneficial owner of Excelsior Shipping Company is a trust established by the late John S. Coumantaros.

9. Substantial interest in shares

According to the Registrar of Members, the following shareholders of the Company held more than 5% of the issued share capital of the Company.

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Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Report of The Directors

10. Directors'Responsibilities

The Directors are responsible for the preparation of financial statements which give a true and fair view in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards) and in the manner required by the Companies and Allied Matters Act, 2020 (CAMA) and the Financial Reporting Council of Nigeria (FRCN) (Amendment) Act, 2023. In doing so, they ensure that:

• proper accounting records are maintained;
• applicable accounting standards are complied with;
• suitable accounting policies are adopted and consistently applied;
• judgments and estimates made are reasonable;
• the going concern basis is used, unless it is inappropriate to presume that the Company will continue in business; and
• Internal control procedures are instituted which, as far as is reasonably possible, safeguard the assets and also prevent and detect fraud and other irregularities.

11. Donations and Charitables Gifts

No donation was made to any political party or organization during the year (2023: Nil).

The following is an analysis of donations and charitable gifts made during the year.

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Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Report of The Directors

12. Property, plant and equipment

Movement in property, plant and equipment during the year are shown in Note 14 to the financial statements. In the opinion of the Directors, the market value of the Company's property, plant and equipment is not less than the value shown in the audited financial statements.

13. Human Capital

(a) Employment and Employees

The Company reviews its employment policy in line with the needs of the business. Careful recruiting is undertaken to ensure that potential high performers are attracted and retained.

(b) Employee Developments

Local Training and Development Programmes are organized to meet the needs of the Company's modernization / automation strategy implementation.

The Company continues to place premium on its Human Capital Development arising from the fact that this would ensure improved efficiency of the business and maintain strategic advantage over competition.

1. Equal Employment Opportunity and Diversity

The Company has a policy of providing, wherever possible, the same employment opportunities for the disabled people as for others. If employees become disabled every effort is made to ensure their employment continues, with appropriate training where necessary.

Subject to applicable laws we recruit, hire, train, promote, discipline and provide other conditions of employment without regard to a person's race, colour, religion, sex, age, national origin, disability or other classifications protected under the law. This includes providing reasonable accomodation for members' disabilities or religious beliefs and practices. As at year end, the Company had no physically challenged person in its employment (2023: Nil).

(d) Health, Safety and Environment

The Company appreciates the value of a safe work environment to business success and therefore embarks on periodic assessments to ensure compliance and safety. Employees are continuosly sensitized and pep talks on safe work procedures precede the commencement of each shift in the operational areas. The Company provides Personal Protective Equipment to employees as required by the nature of their jobs and safety officers perform regular monitoring to ensure usage compliance.

(e) HIV/AIDS Policy

HIV/AIDS policy guidelines are in place and employees are encouraged to undertake voluntary counseling and testing (VCT) in order to confirm their HIV status. Continuous interactions at workshops with known HIV positive individuals are arranged from time to time to educate staff and eliminate discriminations and stigmatization.

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Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Report of The Directors

(f) Performance Management/Target Setting

Performance Management/Target Setting is implemented in line with Management resolve to set strategic objectives for effective monitoring of performance of the Company and its employees.

14. Events after the reporting period

There were no significant developments after the reporting date which could have had a material effect on the state of affairs of the Company at 31 March 2024 and the profit for the year ended on that date which have not been adequately provided for or disclosed in the financial statements.

15. Independent Joint Auditors

Messrs. KPMG Professional Services (KPMG) and Ahmed Zakari & Co. (AZ), having satisfied the relevant corporate governance rules on their tenure in office have indicated their willingness to continue in office as auditors to the Company. In accordance with Section 401(2) of the Companies and Allied Matters Act (CAMA), 2020, therefore, the independent joint auditors will be re-appointed at the next annual general meeting of the Company without any resolution being passed. A resolution will however be proposed authorizing the Directors to fix their remuneration.

BY ORDER OF THE BOARD

Theophilus Ogwuche

Company Secretary

FRC/2019/ICAN/00000019501

26, Post Office Road, Kano

Nigeria

30th May, 2024.

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Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Corporate Governance Report

1. Introduction

Nothern Nigeria Flour Mills Plc subscribe to the highest level of Corporate Governance and best practices in the conduct of our business. The Company's governance practices are constantly reviewed to ensure that it is consistent with global standards.

The Company's good corporate governance is the bedrock of strong public trust and confidence reposed in the Company by shareholders, consumers, and employees toward long-term success.

In the pursuit of delivering greater shareholder value, the Company continue to subject its operations to the highest standards of corporate governance, which is an essential foundation for sustainable corporate success. A principle that guides its operations and actions towards success, which is only worth celebrating when achieved through a process supported and sustained with the right values and principles.

The Company's Code of Corporate Governance provides a robust framework for the governance of the Board and the Company. The Company ensures compliance with the Code of Corporate Governance for Public Companies issued by the Securities and Exchange Commission ("the SEC Code").

Governance Structure

2. The Board

The Board of Directors is responsible for the governance of the company and is accountable to shareholders for creating and delivering sustainable value through the management of the company's business.

The Board is committed to the highest standards of business integrity, ethical values, and governance; it recognizes the responsibility of the company to conduct its affairs with transparency, fairness, and social responsibility.

The Board determines the overall strategy of the company and follows up on its implementation, supervises the performance of the company, and ensures adequate management, thus actively contributing to developing the company as a focused, sustainable, and global brand.

The synergy between the Board and Management fosters interactive dialogue in setting broad policy guidelines in the management and direction of the company to enhance optimal performance and ensure that associated risks are properly managed. Furthermore, the Board plays a central role in conjunction with Management in ensuring that the company is financially strong and well-governed and that risks are identified and well-mitigated.

In addition to the Board's direct oversight, the Board exercises its oversight responsibilities through two (2) Committees, namely, Board Risk and Audit Committee and the Board Remuneration and Governance Committee.

In addition to the Board Committees, the Statutory Audit Committee of the Company, which comprises two members of the Board of Directors and three representatives of the Shareholders, also performs its statutory role as stipulated by the Companies and Allied Matters Act (CAMA), 2020.

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Northern Nigeria Flour Mills Plc

Annual report for the year ended 31 March 2024

Corporate Governance Report

Members of the Board of Directors are seasoned professionals, who have excelled in various sectors including manufacturing, accounting, engineering as well as law. They possess the requisite integrity, skills, and experience to bring to bear independent judgment on the deliberations of the Board and decisions of the Board (without prejudice to Directors' right to earn Directors' fees and hold interest in shares). They have a good understanding of the company's businesses and affairs to enable them properly evaluate information and responses provided by Management and to provide an objective challenge to Management.

Material decisions may be taken between meetings by way of written resolutions, as provided for in the Articles of Association of the company. The Directors are provided with comprehensive group information at each of the quarterly Board meetings and are also briefed on business developments between Board meetings.

During the year under review, the Directors and other key personnel of the Company complied with the following:

1. The National Code of Corporate Governance for Public Companies which became effective in January 2019.
2. The Securities and Exchange Commission (SEC) issued Code of Corporate Governance for public companies.

3. Responsibilities of the Board

The Board has the ultimate responsibility for determining the strategic objectives and policies of the company to deliver long-term value by providing overall strategic direction within a framework of rewards, incentives, and controls. The Board has delegated the responsibility for the day-to-day operations of the company to Management and ensures that Management strikes an appropriate balance between promoting long-term growth and delivering short-term objectives. In fulfilling its primary responsibility, the Board acknowledges the relationship between good governance and risk management practices, about the achievement of the company's strategic objectives and good consumer satisfaction.

Other powers reserved for the Board are the determination of Board structure, size, and composition, including appointment and removal of Directors, succession planning for the Board and senior management, and Board Committee membership.

4. Roles of Chairman and Chief Executive

The roles of the Chairman and Chief Executive are separate and no one individual combines the two positions. The Chairman's main responsibility is to lead and manage the Board to ensure that it operates effectively and fully discharges its legal and regulatory responsibilities. The Chairman is responsible for ensuring that Directors receive accurate, timely, and clear information to enable the Board to make informed decisions and provide advice to promote the success of the company.

The Board has delegated the responsibility for the day-to-day management of the company to the Managing Director/Chief Executive Officer, who is supported by Executive Management.

The Managing Director executes the powers delegated to him by guidelines approved by the Board of Directors.

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