NASCON 2017 AR

Growing value to expand capabilitiesWe grew value to expand capabilities across the value chain driven through our highly motivatedworkforce, flexible pricing strategy and optimal distribution in our business areas.We delivered premium value by improving our product quality, route-to-market efficiency andenhanced customer engagement.2 Nascon Allied Industries PLC Annual Report 2017

CONTENT 01 Financials 0041 Introduction Introduction 4 Statutory Audit Committee Report 56 Corporate Governance Operations 6 Statements of Management’s Responsibilities 58Our Vision, Mission and Core Values 8 Independent Auditor’s Report 592017 At a Glance Statement of Profit or Loss and OtherChairperson’s Statement 02 Comprehensive Income 62 Statement of Financial Position 63Operations 12 Statement of Changes in Equity 64 14 Statement of Cash Flows 65Company Overview 16 Accounting Policies 66Managing Director’s Review 22 Notes to the Financial Statements 78Chief Financial Officer’s Review 26Management Team 28 Other National Disclosures 105Human Resources 34 Value Added Statement 106Risk Management Five Year Financial Summary Health, Safety and Environment Supplementary Information 05 Financials Corporate Governance 03 Claimed/Unclaimed Dividend Details 108Corporate Governance Report Board & Committee Structure 40 Share Capital History 109Board of Directors 45Report of the Directors 48 Notice of Annual General Meeting 110 50 Directors and Professional Advisers 111 Corporate Information 112 Supplementary Information Board and Committee Meeting Dates and Attendance 113 Mandate for e-dividend Payments 114 Proxy Form 115 3 Nascon Allied Industries PLC Annual Report 2017

Our Vision, Mission and Core Values Vision Our vision is to be a world class consumer goods company that is recognized for the quality of our products and services, delivering high returns to our stakeholders. Mission • To deliver consistently good results to our shareholders by selling high quality products at affordable prices, backed by excellent customer service. • To satisfy market demand by producing the best quality products with the best resources and processes that comply with international industry standards and industry best practices. • To provide economic benefit to local communities in which we operate. • To set a good example in areas of corporate governance, sustainability, health and safety. Core Values Customer Service As a world-class organisation, we understand that we exist to serve and satisfy ourcustomers. Accordingly, our customer orientation reflects intimacy, integrity and learning. Entrepreneurship We continuously seek and develop new businesses, and employ innovative ideas to retain our market leadership. Excellence We are a large organisation, working together to deliver the best products and services to our valuable customers and stakeholders. To achieve this, we demonstrate teamwork, respect and meritocracy. Leadership We thrive on being leaders in our business, markets and communities. To drive this, we focus on continuous improvement, partnership and professionalism. NASCON Allied Industries Plc is a member of the Dangote Group of companies4 Nascon Allied Industries PLC Annual Report 2017



2017 At a Glance Sales Revenue EBITDA 2017 2017 2017405,304MT ₦27.06B ₦9.35B 406,203 18.29 4.83 377,816 328,297 16.18 4.32 3.97 11.25313,388 10.84 3.552013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016Operating Earnings Dividend Profit per Share per Share 2017 2017 2017 ₦7.63B ₦2.02 ₦1.503.82 3.82 1.02 0.91 0.90 0.70 0.79 0.55 3.03 2.83 0.50 0.702013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 20166 Nascon Allied Industries PLC Annual Report 2017

7Nascon Allied Industries PLC Annual Report 2017

Chairperson’s Statement “We were able to satisfy the demands of our existing customers, increase ”our market share, and strengthen our market leadership position8 Nascon Allied Industries PLC Annual Report 2017

Chairperson’s Statement Introduction“We remain committed to executing our sustainable growth strategy,to deepen consumer trust and to grow shareholder confidence”Dear Shareholders, focused on reducing fleet Unfortunately, the drawbacks Corporate Governance OperationsOn behalf of the Board of turn-around time, while we’ve been experiencing in theDirectors, it is my pleasure to deploying compelling brand Tomato Paste and Vegetable Financialspresent the Annual Report and communications to grow value. Oil categories over the last twoAccounts of NASCON Allied This multi-pronged management years continued. The required SupplementaryIndustries Plc for the financial approach enabled us to advance raw materials, triple concentrate Informationyear ended 31st December 2017, our overall business interests. Tomato Paste and Crude Palmat this Annual General Meeting. Oil, remained on the restricted Through intense focus and list, and our efforts to source thePermit me to start by extending operational discipline, we required materials locally weremy appreciation to the Board delivered unprecedented returns futile.of Directors, management, in our salt segment and alsostaff, shareholders and increased sales in the highly Going forward, we are optimisticother important NASCON competitive seasoning market. about the year ahead, as westakeholders for their For the financial year ended 31st remain strongly committeddedication, unwavering December 2017, we recorded to executing our sustainablecommitment, and hard work an impressive turnover of growth strategy, therebywhich resulted in the significant ₦27.06bn, representing a 48% growing consumer trust andbusiness achievements we improvement on ₦18.29bn in the shareholder confidence.achieved in 2017 as we pursued previous year. Profit after taxthe execution of the aligned increased by 121% from ₦2.42bn Lastly, I would like to thankstrategic goals. in 2016 to ₦5.34bn, and Earnings everyone for their tremendous Per Share grew by 122% from efforts, passion and resilience inIn 2017, the recession started ₦0.91 to ₦2.02. In addition, we delivering a strong set of results.showing signs of abating, maintained our financial stability I have absolute confidence thatlargely aided by improved with ₦9.4bn in cash reserves. the Board and the Managementglobal oil prices and increased team will continue to work inoil production volumes. The oil Furthermore, the Board has tandem to surpass this year’ssector grew by 25%, foreign recommended for your kind performance. Please kindlyinvestment increased compared consideration and approval accept the assurances of myto the 2016 average and the at this AGM, the payment of highest regards.manufacturing sector witnessed a dividend of ₦1.50 per 50ksustained expansion for the last share, totaling ₦3.97bn and ‘Yemisi Ayeninine months of the year. These representing a payout ratio Chairpersontrends had a positive impact of 74%. This is a significanton consumer spending and improvement from 2016 whenmanufacturing activities. we paid a dividend of ₦0.70 per 50k share, totaling ₦1.85bn andWe leveraged on our core translating to a dividend payoutcompetencies, operated flexible ratio of 77%.pricing for our products,expanded our fleet operations, 9 Nascon Allied Industries PLC Annual Report 2017



Supplementary InformationOperations 11Nascon Allied Industries PLC Annual Report 2017

Company OverviewNASCON Allied Industries plant was commissioned with designed to produce andPlc is Nigeria’s leading refiner an initial installed capacity of package Tomato Paste fromand distributor of household, 110,000 metric tonnes. tomato concentrate wasfood processing and industrial commissioned in 2015 with ansalt with installed production The Company was privatised installed capacity of 37,440capacity of 567,000 metric in 1991 with its shares listed on metric tonnes. The Vegetabletonnes per annum. We have the Nigerian Stock Exchange in Oil refinery was commissionedrecently expanded our product October 1992, through which in 2015 and can producelines to include Tomato Paste, Dangote Industries Limited 156,000 metric tonnes of refinedVegetable Oil and Seasoning in purchased majority shares vegetable oil from crude palma bid to transform to a FMCG in National Salt Company of oil.company, ensuring that our Nigeria. Following the reverseproducts become staples in the takeover of NASCON by Our Productshomes of millions of Nigerians. Dangote Salt Limited (DSL) in Dangote Salt 2007, NASCON acquired the NASCON offers a comprehensiveWe employ over 500 people assets, liabilities and business Salt product portfolio that arein our factories, warehouses, undertakings of DSL. Total sold mostly in 50kg bags underfleet and offices throughout production capacity increased to the well-known “Dangote”Nigeria with our headquarters 567,000 metric tons per annum, brand. For us salt is more thanin Oregun, Lagos. We strictly with the inclusion of three just the mineral that enhancesadhere to rigorous industry and refineries. the flavour in food. As anregulatory standards that ensure essential element in our diet,quality products for Nigeria’s Our Plants we fortify it with iodine underever-increasing consumer and The Apapa refinery, located UNICEF guidelines and Nigeriandeveloping industrial markets. in the Apapa Port of Lagos, regulations to combat iodineOur products have Standards was commissioned in 2001 deficiency disorders.Organization of Nigeria (SON), manufacturing 275,000 metricInternational Organization tonnes per annum. The Port Dan-Q Seasoningfor Standardization (ISO) and Harcourt refinery located in the Our Seasoning is presentlythe National Agency for Food sea port in Rivers State was available in chicken and beefand Drugs Administration and commissioned in 2003 with an flavour variants with plans toControl (NAFDAC) certifications. installed capacity of 210,000 expand our flavour offerings in metric tonnes per annum. The line with consumer needs andWe have three regional sales Oregun plant was commissioned the demand for flavour variationoffices that manage the in 2004 with an installedwarehouses and other capacity to refine 82,000 metric Dangote Tomato Pastedistribution centers strategically tonnes of salt per annum. Our This is a thick paste made fromlocated to serve the Nigerian plants are primarily powered triple concentrate. We enteredand neighbouring markets. We through the National Grid with into this product category inown a fleet of over 200 trucks Caterpillar generators fueled by response to an identified supplydedicated to the distribution of gas or diesel, with combined gap within the Nigerian marketour products across Nigeria. capacity to generate 6.1MW of where local production plus power. imports have been unable toOur History effectively meet local demand.National Salt Company of We made a strategic decisionNigeria was established as in 2011 to grow the company Dangote Vegetable Oila salt refinery at Ijoko, Ogun through new product lines and In response to the obviousState in 1973, as a joint venture changed our name to NASCON supply gap in the market and thebetween the Federal Military Allied Industries in 2014 from perennial shortage of vegetableGovernment of Nigeria and National Salt Company of oil, resulting in the influx of lowAtlantic Salt & Chemical Inc. of Nigeria to reflect our new quality grey imports into Nigeria,Los Angeles, California, USA, positioning. We took advantage we commenced the productiondue to an identified need for of our existing site in Ota and and sale of vegetable oil as aself-sufficiency in the production construction activities high grade refined product forof salt, an essential commodity. commenced in 2012. We domestic and industrial use in ofConstruction work commenced commissioned the Seasoning 2015.on October 20, 1974 with the plant in 2014 with an installedrefinery completed in December capacity of 3,744 metric tonnes1975 and erection of plants and per annum. The Tomato Pastemachinery in August 1976. The packaging plant, which is12 Annual Report 2017 Nascon Allied Industries PLC

Installed Capacity Introduction567,000MT Corporate Governance Operations Apapa 275,000MT P/Harcourt 210,000MT Oregun 82,000MT Financials 37,440MT Supplementary Information Ota3,744MT 156,000MT Ota Ota Nascon Allied Industries PLC 13 Annual Report 2017

Managing Director’s Review “We executed strategic initiatives which had a positive impact onprofitability and business sustainability”Significant increase in initiatives which had a positive conducted in line with internalShareholder Value and impact on profitability & and international best practices.Company Profitability business sustainability. We implemented a number of quality control initiatives toThe economy started showing People are the key to our enhance our product qualitysigns of recovery from success, and we have been in both our salt and seasoningthe 2016 recession by the working hard to activate the businesses.second quarter of 2017. This enormous potential that comesrecovery was made possible from a workforce empowered The team pursued aggressiveby higher global oil prices, to give their best. In 2017 over and sustained marketing ofimproved production levels 300 employees were trained, our refined salt and seasoningin the oil sector, increased equipping them with skills to brands, gaining significantforeign exchange reserves, develop their abilities and to increase in our in-homeand relatively stable inflation. improve their productivity. penetration, and ensuringWe are confident that our Employee welfare ranks high availability of our refined saltbrand offerings are structured on our priorities, and we on table tops in markets acrossto capitalize on growth have put in place a system the country. Trade promotionsopportunities as the economy which monitors and rewards and incentives on achievementimproves. excellence, hard work and of set targets were part of dedication. our tactical initiatives to ourNASCON’s strong results distributors, this was supportedare exemplified with Health and safety standards with television and radioanother consecutive year of were at the center of our commercials that resonatedimproved turnover, profits welfare strategy in 2017. We with our consumers to increaseand shareholder returns. Our implemented 15 safety golden top of mind awareness.volume for the year ended rules as a guiding star in31st December 2017 was our day to day operational We implemented a new405,304MT with an increase in activities. The core aim was customer service strategyRevenue of 48%, PBT by 125% to create an organizational to enhance our customerand grew our EPS by 122%. framework to optimize safety relationship management. We standards. Over 5,000 health strengthened the customerIn 2017 we executed strategic and safety activities were service team and improved14 Annual Report 2017 Nascon Allied Industries PLC

Managing Director’s Review Introduction“We will remain strongly focused on growth, and would be leveraging ona range of opportunities within the business to build scale”customer interactions. long improvements across Our impressive achievement Corporate Governance Operations our operations with particular reported for 2017 isAt NASCON we maintain a strong efficiency performances demonstration of the Financialsvalue chain pricing model that recorded by the Seasoning Plant commitment of a teamrecommends the prices of our in Ota 96% (2016: 70%) comprising of each memberretail packs, whilst ensuring of the NASCON ALLIEDour products are available in Business outlook INDUSTRIES family. I wouldconvenience stores across the At NASCON we will remain like to thank everyone for theircountry. strongly focused on growth, commitment to achieving our and would be leveraging on a strategic vision for the company.We expanded our fleet range of opportunities within theoperations with the addition of business to build scale across I want to specifically thank98 new trucks which ensured our brands. We intend to deliver our distributors, consumers,that we were able to deliver our on our promises made to all suppliers, team members, andproducts to our customers in stakeholders. strategic stakeholders, forthe most reliable, efficient and contributing to our successeffective manner, whilst reducing We will continue to leverage story. We look forward toour reliance on third-party truck synergies and enhance continuing these mutuallyoperators. efficiencies across the business beneficial relationships in the operations to curtail costs. years aheadProduction reported an Product innovation andimpressive performance in the improvement in our seasoning Paul Farreryear under review, delivering a business aimed at delivering Managing Directorcombined production efficiency savory taste experiences willof 80% (2016: 76%) These remain a priority.results are attributable to year Supplementary Information Nascon Allied Industries PLC 15 Annual Report 2017

Chief Financial Officer’s Review “Total revenue in 2017increased by 48% to ₦27.06bn from ₦18.29bn in 2016 with 2017 Salt revenue increasing by 50% to ₦22.25bn from ₦14.82bn in 2016”Summary of Financial Performance 31-Dec-17 31-Dec-16 ₦’000 ₦’000Financial HighlightsTotal Revenue 27,064,325 18,291,792Gross Profit 9,994,015 5,917,694GP Margin (%) 36.9%EBITDA* 9,354,478 32.4%EBITDA Margin (%) 34.6% 4,833,013Operating Profit 7,626,856Profit Before Tax 7,909,488 26.4%PBT Margin (%) 29.2% 3,818,674Net Profit 5,343,592 3,516,331Earnings per share (₦) 2.02Net Cash & Cash Equivalents 9,438,170 19.2%Total Assets 30,123,247 2,415,183*Earnings before interest, taxes, depreciation and amortisation 0.91 2,453,499 24,603,267“The profit before tax was ₦7.91bn, compared to ₦3.52bn in 2016,which represents a 125% increase”Salt 31-Dec-17 31-Dec-16Seasoning ₦’000 ₦’000Tomato PasteVegetable Oil 22,247,384 14,823,697Freight 765,296Total Revenue - 544,458 192,904 3,858,741 8,342 27,064,325 479,375 2,435,920 18,291,79216 Annual Report 2017 Nascon Allied Industries PLC

Chief Financial Officer’s Review Introduction2017 was a rebound year for the Nigerian economy and the positive macro-economic trends resulted in arobust year for NASCON. We increased total revenue by 48% to ₦27.06bn {2016: ₦18.29bn}. Salt revenueincreased by 50% to ₦22.25bn {2016: ₦14.82bn} driven primarily by price increases per bag in Q1. Seasoningrevenue increased by 41% to ₦0.77bn {2016: ₦0.54bn} and Freight revenue increased by 58% to ₦3.86bn {2016:₦2.44bn}. Vegetable Oil revenue declined by 60% to ₦0.19bn {2016: ₦0.48bn} and Tomato Paste had no revenuecompared to ₦0.01bn in 2016.Volume by Product 31-Dec-17 31-Dec-16 Corporate Governance OperationsSalt Tonnes TonnesSeasoningTomato Paste 403,432 403,505Vegetable Oil 1,404 1,347Total Volume - 34 468 1,317 405,304 406,203Despite the increase in revenue, salt volume stayed flat in 2017 at 403,432MT compared to 403,505MT in 2016.Seasoning volume increased by 4% in 2017 to 1,404MT compared to 1,347MT in 2017 driven by focusing ourmarketing attention on brand differentiation and strategic market activations and penetrationUnfortunately, the 2015 CBN FX policy continued to stall the importation of the necessary raw materials for bothTomato Paste and Vegetable Oil. Despite the challenges, in 2017, we were able to sell 468MT of Vegetable Oilremaining in our tanks while we continue to focus our efforts on sourcing both raw materials locally.Profitability 31-Dec-17 31-Dec-16 FinancialsEBITDA ₦’000 ₦’000Depreciation and amortizationOperating Profit 9,354,478 4,833,013 (1,727,622) (1,014,339) 7,626,856 3,818,674Profitability by Product 31-Dec-17 31-Dec-16 SupplementaryEBITDA ₦’000 ₦’000 InformationDepreciation and amortizationOperating Profit 9,354,478 4,833,013EBITDA (1,727,622) (1,014,339)Depreciation and amortization 7,626,856Operating Profit 9,354,478 3,818,674 (1,727,622) 4,833,013 7,626,856 (1,014,339) 3,818,674Operating profit in 2017 was ₦7.63bn, an increase of 100% over ₦3.82bn in 2016. Due to improved efficiencies,operating margin increased to 28% in 2017 compared to 21% in 2016. Salt contributed ₦8.23bn {2016: ₦4.56bn}to the total operating profit, Seasoning contributed ₦0.10bn {2016: ₦0.07bn} while Freight generated a loss of(₦0.52bn) {2016: (₦0.53bn)}. Tomato Paste (₦0.03bn) {2016: (₦0.05bn)} and Vegetable Oil (₦0.24bn) {2016:(₦0.14bn)} both made losses due to lack of raw materials for productionCost of Sales 31-Dec-17 31-Dec-16Direct material cost ₦’000 ₦’000Direct labour costExternal haulage 10,148,410 7,231,144Depreciation 886,686 822,450Loading 3,285,123 2,535,489Manufacturing expenses 1,471,697 767,389Total Cost of Sales 107,438 108,048 1,170,956 909,578 12,374,098 17,070,310 Nascon Allied Industries PLC 17 Annual Report 2017

Chief Financial Officer’s ReviewCombined production efficiency 80% {2016: 76%}. Salt efficiency in all 3 plants increased to 79% {2016:76%} and Seasoning efficiency increased to 96% {2016: 70%}.2017 Cost of Sales increased by 38% to ₦17.07bn {2016: ₦12.38bn}. The major drivers were direct materials,depreciation and external haulage. Direct materials increased by 40% due to increase in the cost of rawmaterials and various packaging materials while depreciation increased by 92% due to improvementsin our machinery and new trucks acquired in the year. External haulage increase of 30% was due toadditional hiring of third party transporters to mitigate the infrastructure challenges in Nigeria and ensuretimely delivery of all our products.Gross profit increased by 69% to ₦9.99bn {2016: ₦5.92bn} and gross profit margin increased to 37%compared to 32% in 2016.“Gross profit margin increased to 37%; EBITDA margin increasedto 34.6% and PBT margin increased to 29.2%”Administrative and Distribution Expenses 31-Dec-17 31-Dec-16Distribution Expenses ₦’000 ₦’000Administrative Expenses 638,189Operating Costs 604,718 1,773,737 1,479,315 2,378,455 2,117,504Distribution costs decreased by 5% due to branding and distribution spend being pegged in relation tovolume achievement, while Administrative expenses increased by 20%.Finance Income 31-Dec-17 31-Dec-16Bank deposits ₦’000 ₦’000Fixed deposits 671 340Finance Income 54,988 354,074 55,328 354,745Finance Cost 31-Dec-17 31-Dec-16Interest on borrowings ₦'000 ₦'000Finance Cost 72,113 357,671 72,113 357,671Finance income increased by 541% in 2017 as surplus funds were invested in the year. Finance costs in2017 was ₦0.07bn {2016: ₦0.36bn}. These are related to specific borrowings for capital projects. Theaverage effective interest during the year was 15%.The profit before tax was ₦7.91bn, compared to ₦3.52bn in 2016, which represents a 125% increaseTaxation 31-Dec-17 31-Dec-16Income Tax Expense ₦’000 ₦’000Total Tax (Charge)/Credit 2,565,896 1,101,148 2,565,896 1,101,148Tax expense for the year increased by 133% to ₦2.57bn, including a deferred tax expense of ₦0.57bn. Theeffective tax rate was 32%.The profit for the year was ₦5.34bn, a 121% increase over ₦2.42bn in 2016. This resulted in a 122% increase inearnings per share in 2017 of ₦2.02 compared to ₦0.91 in 2016.18 Annual Report 2017 Nascon Allied Industries PLC

Chief Financial Officer’s Review 31-Dec-17 31-Dec-16 Introduction ₦’000 ₦’000Financial Position Corporate Governance OperationsProperty, plant and equipment 9,419,203 6,346,688Intangible assets - 47,374Other non-current assets 5,513Current assets 1,838Cash and bank 11,225,466 15,711,623Total assets 9,476,740 2,492,069 30,123,247 24,603,267Non-current liabilities 31-Dec-17 31-Dec-16Current liabilities ₦’000 ₦’000DebtTotal liabilities 1,934,135 1,393,517 16,615,330 15,124,953 38,570 38,570 18,588,035 16,557,040Share capital 31-Dec-17 31-Dec-16Share premium ₦’000 ₦’000Retained earningsTotal equity 1,324,719 1,324,719 434,037 434,037 9,776,456 6,287,471 11,535,212 8,046,227There was a 22% increase in total assets of ₦30.12bn {2016: ₦24.60bn}. Main driver was Cash at the Financialsbank which increased by 280% over 2016 due to increased revenue. Total liabilities increased by 12% to₦18.59bn {2016: ₦16.56bn} mainly due to trade and other payables.Net Cash & Cash Equivalents in 2017 was ₦9.44bn, a 285% increase of last year {2016: ₦2.45bn}. Capital Supplementaryexpenditure increased by 799% to ₦4.82bn {2016: ₦0.54bn} as we purchased new trucks to ensure fast Informationand efficient delivery of our products. Cash flow from operations increased by 518% in 2017 to ₦13.84bn{2016: ₦2.24bn}.Recommended dividendOn Monday 5th March, 2018, the Directors proposed a dividend of ₦1.50 per share {2016: ₦0.70} tobe paid to shareholders on Tuesday 8th May, 2018. The dividend represents a payout ratio of 74%.The proposed dividend is subject to the approval of shareholders at the Annual General Meetingon Thursday, 3rd May, 2018. If approved, the total amount payable will be ₦3.97bn {2016: ₦1.85bn}.The dividend will be payable to all shareholders whose names appear in the company’s Registrar ofMembers at close of business on Thursday 19th of April, 2018.Financial PositionIn compliance with the Regulatory requirement in Nigeria, the Consolidated and Separate Statementof Financial Position as at 31st December, 2017 has been signed by NASCON Allied Industries Plc’sFinance Controller, Tunde Iwamofe, who is a Registered Member of a Nigerian Professional AccountancyInstitute.Going ConcernThe Directors continue to apply the Going Concern principle in the preparations of the financialstatements. After considering the liquidity position and the availability of resources, the Directorsconcluded that there are no significant threats to the Company’s Going Concern capabilities.Aderemi Saka 19Chief Financial Officer Annual Report 2017 Nascon Allied Industries PLC

MMaannaaggeemmeenntt TTeeaammAdewale Akinwale Olushola Shosanya Tunde Iwamofe Patrick Mogaha Shalom Okonmah Jude Amaechi Fatima Aliko-Dangote20 Annual Report 2017 Nascon Allied Industries PLC

Management TeamOlusegun Ajala Rabi Adamu Rabiu Mohammed Nura Shuaibu Gerhard ScheepersPaul Farrer Aderemi Saka Adedayo Samuel Nascon Allied Industries PLC 21 Annual Report 2017

Management TeamPaul Farrer | Managing DirectorPaul joined NASCON as Managing Director in 2015, having previously been the ChiefOperating Officer and Group Executive Director of Food Concepts Plc.His experience in the foods business spans 21 years in the South and West Africanmarkets; in international companies such as TGI Fridays (Americana Group), SteersHoldings – Debonairs Pizza, Famous Brands and Innscor International.He is an alumnus of East London Technical College, South Africa.Fatima Aliko-Dangote | Executive Director, CommercialFatima joined the Dangote Group in 2014 as the Special Assistant to the ManagingDirector-Cement and later worked as a Group Corporate Strategy Specialist. In thislatter role, she provided planning and analytical support across all the Business Units ofthe Dangote Group.She holds a Bachelor’s degree in Law from the University of Surrey in the UK. Fatimahas been called to the Nigerian Bar, and has worked as an Associate at Banwo andIghodalo Legal Chambers, on areas related to capital markets, intellectual property andenergy.Aderemi Saka | Chief Financial OfficerAderemi has a Bachelor’s Degree in Accounting and a Masters in Business Administration(International Business) from Georgia State University, USA. She has 19 years ofexperience working in the United States with various multinationals and publiclytraded corporations. Prior to joining NASCON as CFO, Aderemi was part of the GroupCorporate Strategy team at Dangote Industries Limited.She has experience in financial analysis, planning, budgeting, forecasting, operationaland financial risk management, regulatory controls, internal auditing, financial strategyand modeling, and program management.Gerhard Scheepers | Head, OperationsGerhard has decades of experience across sales, sales force management, productionmanagement, operational financial management and driving operational efficiency forgrowth.He began his career in factory operations for Bidbake South Africa rising to becomethe Managing Director and later Group Operations Director. His immediate pastleadership roles include Group Operations Director for Trimark Industries and Directorof Operations at Orbiline Pty SA.Olushola Shosanya | Head, SalesShoIa has decades of experience in sales management, sales force management andwarehousing. He is also a Sales trainer. He started his career in Nigerian BottlingCompany, where he received both local and international trainings on sales managementand trade activationsHe joined NASCON in 2016 having previously worked at 3D Impact Marketing as aMarketing consultant and holds a Bachelor’s degree in Animal Science from ObafemiAwolowo University and Post Graduate Diploma in Marketing from the University ofLagos.22 Annual Report 2017 Nascon Allied Industries PLC

Management TeamRabiu Mohammed | Head, Fleet & Logistics IntroductionRabiu has 30-year experience spanning production, plant, fleet, transport, logistics andwarehouse management. He began his career with Nigerian Bottling Company where he Corporate Governance Operationsrose to Plant manager, working across the Northern states and Onitsha.He Joined the Dangote Group in 1996 as Head of transport for the Flour business andhas held various positions of increasing responsibility and complexity across DangoteCement before being deployed as the Head of Fleet and Logistics for NASCON.Olusegun Ajala | Acting Head, Marketing FinancialsOlusegun is a marketing professional with over 12 years’ cognate experience in experientialmarketing, consumer marketing, trade channel development, category management, Supplementaryshopper marketing, new product development, public relations, events and sponsorship. InformationHe joined NASCON in 2016 having previously worked at Nigeria Bottling Company. Hehas a Bachelor’s degree in Pure and Applied Chemistry from Ladoke Akintola Universityof Technology and Master’s degree in Marketing and Management from the Universityof Bradford, UK. He is a fellow of the National Institute of Marketing of Nigeria, and anaffiliate member of the Chartered Institute of Marketing UK.Rabi Adamu | Acting Head, Human Resources and AdministrationRabi is a seasoned practitioner with 20 years of practical HR Management workexperience within the Dangote Group.She started her career with Dangote Group in 1998 as an Executive Officer. She graduatedfrom Bayero University, Kano and holds a Post Graduate Diploma in Management fromFUTO. She also has an MBA in Human Resources from Lagos State University.She is also a member of Nigerian Institute of Management and an Associate Member ofthe Chartered Institute of Personnel Management.Shalom Okonmah | Acting Head, ProcurementShalom has 20 years of work experience spanning sales, finance, treasury, procurement,international trade and importation. She holds an Accounting degree from Edo StateUniversity and a Masters in Business Administration from the University of Calabar.She started her career with Dangote Group as an Executive Officer in 1997 beforemoving to Dangote Agrosacks Limited, where she rose to the position of Head Treasury,Procurement and Clearing.She is also a member Chartered Institute of Purchasing and Supply Chain Managementand Chartered Institute of Cost Management.Nura Shuaibu | Head, ProjectsNura is a Mechanical Engineer with a degree from Ahmadu Bello University, Zaria. Priorto joining NASCON, he worked with the Ministry of Works and Housing, Kano as traineeEngineer and Gaskiya Textile Mills as Assistant Mechanical Engineer.He joined the Company in 1997 as a pioneer staff and has worked in various functionswith increasing responsibility including maintenance manager, plant manager and projectmanager. Nascon Allied Industries PLC 23 Annual Report 2017

Patrick Mogaha | Head, Internal AuditPatrick began his audit career as a Financial Auditor with First Bank of Nigeria PLCand has over 19 years of experience in Internal Audit, Information Systems Audit andFraud & Forensic Audit. Prior to joining NASCON, he was the Deputy Head of Audit forDangote Cement.Patrick is a Fellow of the Institute of Chartered Accountants of Nigeria, Certified FraudExaminer, Certified Forensic Accountant, Certified Information Systems Auditor anda former member of Committee of Chief Inspectors of Banks in Nigeria. He holds aBachelor degree in Accounting and a MBA in Banking and Finance from ESUT BusinessSchool, Enugu.Adewale Akinwale | Head, Risk ManagementAdewale joined NASCON as Head, Risk Management from his former role as Head,Enterprise Risk Management at the Nigerian Aviation Handling Company PLC. He hascognate experiences in the fields of Risk Management, HSE, Strategy, Logistics andBusiness Continuity Management. His previous work experiences include functionalroles in Strategy consulting, Logistics and Business Continuity Management fromMessrs S.I.A.O Professional Services, Barratts Priceless U.K. and IKEA Tottenham U.K.He has a Bachelor’s degree in Business Management from University of Sunderland, UK,he is an Associate Business Continuity Professional of the Disaster Recovery Institute,USA and an Affiliate Member of the Institute of Risk Management, UK.Jude Amaechi | Head, Health Safety and EnvironmentJude joined NASCON in 2017 with over 12 years of valuable experience. Prior toNASCON, he was a HSE Coordinator at Ponticelli Nigeria Limited.He has a Bachelor’s degree in Soil Science and Technology and a Master’s degree inSoil Survey and Land Use Planning from Federal University of Technology, Owerri. He isa certified HSE professional from National Examination Board of Occupational Safetyand Health UK, Occupational Safety and Health Academy USA, ISO 9001: QualityManagement System UK, He is a member of the Institute of Safety Professionals ofNigeria and Nigeria Institute of Chartered Management.Tunde Iwamofe | Financial ControllerTunde has over 10 years of experience in financial reporting, analysis, planning,budgeting, forecasting, internal audit, tax planning and computation. Prior to joiningNASCON in 2008, He was the Account Manager for Somotex Nigeria Limited a memberof the Mohinani Group of Companies. He is an Associate of the Institute of CharteredAccountants of Nigeria and a Certified Change Manager.Adedayo Samuel | Company SecretaryAdedayo was the pioneer Company Secretary of NASCON when the Company wasprivatized by the Federal Government. He was responsible for taking the Company tothe Nigerian Stock Exchange upon privatization in 1992.He has extensive and varied experience in Corporate Governance, broad exposure inlitigation and in the Judiciary where he had served as a Chief Magistrate. He obtainedhis LLB degree from the then University of Ife and was called to the bar over threedecades ago.24 Annual Report 2017 Nascon Allied Industries PLC



Human Resources “People are the key to oursuccess, and we work hard to harness the enormous potential that comes froman empowered workforce”Human Resource Management including 40 managements, 170 • Identification, documentationand Development senior and 337 junior full time and continuous addressingPeople remain the most valuable employees. The outsourced of skills gaps in theasset in NASCON’s constant count is over 600 depending on organization.aim to achieve its mission. The the needs of the company.Human Resource Department • Plan developmental(HRD) focuses on people A total of 96 employees were programs to bridge the skilldevelopment in its efforts to recruited during the year after gaps identified.develop a dynamic and robust going through a process oforganization. It constantly ensuring that the caliber of staff • Updated job profiles andreviews and refines its processes are engaged towards boosting KPIs for all job functionsand policies for optimum our staff strength and increasingperformance. productivity. We at NASCON, • Identified successors for key offer equal opportunity of roles within the business forThis year, we initiated strategies employment. The recruitment subsequent schedule forfor the purpose of linking, of additional management staff addressing the competencycomparing and closing identified aimed to improve decision- needs.performance gaps in HR systems making in the organization andwithin the company’s plans. The enhance the quality of our work. • Mapped out a framework forcore HR network along with implementing the succession.other organization development Career Development andinitiatives focused on: Succession Plan. • Established a policy for• Reviewing departmental We at NASCON believe in prioritizing internal vacancies the continuous learning and for any vacant position. structures and policies development of our workforce.• Reviewing Standard This we do by developing their Additionally, in order to skills, knowledge and attitude. motivate, reward, retain and Operating Procedures (SOPs) In line with the departmental encourage internal growth within• Updating the employee objectives, we have commenced the company, we have converted on a series of initiatives and some part-time staff to full-time handbook plans aimed at developing the employees. Some employees• Evaluating manpower workforce to ensure continuity, were also upgraded/promoted better performance and to higher levels of responsibilities requirements and efficiency. Initiatives such are: to foster job enrichment and recruitment rotation policy of our company.As at 31st December 2017, Training and EmployeeNASCON’s’ head count was 547, Development During the year, employees26 Annual Report 2017 Nascon Allied Industries PLC

Human Resourceswere trained both in the plant A total of 583 training courses hospitals and services in favor of Introductionand externally via the Dangote were attended via the Dangote our employees.Academy. The in-house training academy, over 300 employees Corporate Governance Operationstargeted all operational staff. were trained in- house in line Additionally, series of health andThere were special trainings with the in plant development HSE talks were effected by our Financialsconducted for operators in training strategy, this excludes in-house clinic to improve onthe various production plants. the 197 truck drivers from our health awareness. SupplementaryThe objective was to impart fleet unit who underwent series Informationcustomized skills, based on of organized training ranging Management introduced theidentified skill gaps required to from defensive driving, road “Free Meal” programme toensure total understanding of rage, accident prevention and support the operation staff;function, procedures, process others. These courses have this is in a bid to improve theirand the need to carry out task helped in no small means to nutritional health status and therightly at the first instance. reduce the rate of accident productivity output.The expected outcome being caused by negligence of driversimproved quality of work, on the highway. The canteen facilities wereminimal waste and reduced upgraded for better aestheticsdowntime. Staff Remuneration and services. More storage NASCON’s salary policy is to facilities were provided for theEmployees of different cadre award remuneration packages employees’ cloakroom.across all the departments that are competitive within thewere exposed to different business sector. This ensures The Future of our people.training courses mostly from ability to attract, motivate and We foresee a future whereour Dangote Academy. These retain quality employees. NASCON and its people workcourses include: in a conducive and dynamic• Mandatory professional Staff are appraised yearly environment that ensures during the annual appraisal continuous learning, upgrading Education(MCPE) organized exercise. Salary increases and of skills and processes to jointly by the professional performance bonuses were improve organization efficiency. bodies and the academy awarded during the year An environment where people with the aim of improving as an outcome of the 2016 work together in the overall professional skills. appraisal process. Ability and interest of the organization.• Leadership and Supervisory contributions were the basis of development aimed at the decisions taken. Rabi Adamu improving the supervisory Acting, Head Human Resources and leadership function Long Service Awards and Administration• Sales and Marketing courses NASCON values and recognizes• Health and Safety the contribution, loyalty and• Customer service dedication of our staff that have• Finance and Accounting been with us for several years.• Human Resources and To appreciate their efforts, the Admin. Long Service awards for such dedicated and loyal employeesBoth the in-house and Dangote is in process and will beAcademy training were aimed implemented during the year.at employee developmentvia nurturing their personal Employee Welfarecreativity to equipping them We believe that healthy staffwith knowledge and skills makes a healthy organization. Inrequired to perform better. The line with this, during the year, 3middle management and People HMO providers were engagedDevelopment courses aimed at as against 1 in the previous year.encouraging strategic thinking This allowed for more choice ofand developing managerial skills. Nascon Allied Industries PLC 27 Annual Report 2017

Risk Management “Our goal at NASCONis to achieve corporateexcellence through risk management”NASCON’s Risk Management adverse risk factors and explore follows the globally acceptedprocess has fully developed positive risk factors for increased ISO 31000 standard withinto an integral part of the profitability. necessary adjustments to suitorganization’s business culture the uniqueness of our businessand dynamics in the year under Our Enterprise Risk Framework environment. Risk is definedreview. augments the organization’s under the ISO 31000:2009 strategic intention to standards as the “effect ofFollowing the successful continuously excel by generating uncertainty on objectives”.approval and implementation improved profitability and The ISO definition is based onof a comprehensive and protecting shareholder’s value the premise that “uncertaintyuniquely tailored Enterprise sustainably despite the harsh (risks) can have consequences inRisk Management Framework economic realities of the terms of economic performanceby the Board of Directors in Nigerian business environment. and professional reputationthe previous year; the risk for corporate organizations.management process now Our approach to Risk Therefore, managing riskeffectively guides the strategic Management effectively helps organizations toexecution of business objectives Our approach to risk perform well in an environmentmethodically to avoid or transfer management at NASCON full of uncertainty”. Strategy and Business Planning (Risk Appetite Tolerance Limits)Risk Identification Risk Measurement Risk Control & Risk Control & & Assessment & Prioritization Reporting Reporting Risk Management Oversight, System and Tools28 Annual Report 2017 Nascon Allied Industries PLC

Risk Management ReportOur risk methodology is aimed Risk appetite in this parlance actually become real. Introductionat analyzing and retaining risks refers to the total value ofwhere doing so contributes financial and non-financial Risk Measurement and Corporate Governance Operationsvalue to our business and it is exposure that the organization Prioritizationwithin our defined risk appetite. is willing to undertake on the This requires that the FinancialsTherefore, we ensure that the basis of risk-return trade-offs. consequences of potential risksavailability of needed expertise, Risk tolerance on the other hand or actual risk incidents are fullycapabilities, processes and refers to amount of uncertainty understood and quantified.controls to manage all types the organization is willing to NASCON’s overall risk ratingof risks that the business could accept; wherein exceeding the is based on the potential forface. defined risk tolerance levels damage from any specific risk, could impact negatively on the multiplied by its probability ofStrategy and Business Planning success of the strategy and occurrence. These consequencesThe Board of Directors objectives of the organization. can be injury to staff, destructionare responsible for setting of assets, financial losses orthe strategic plan for the Risk identification and damage to our reputation.organization; these could be Assessment Ultimately, all will have someshort, medium and long term Procedures for identifying risks consequences for shareholderbased on the set objectives, the are applied at the departmental, value.vision and the mission of the plant and organizational levels.organization. Qualitative and quantitative Risks incidents reported tools deployed to manage are prioritized based onStrategic plans are presented to this process effectively across consideration for likelihood ofthe management for execution the organization including the occurrence and adjudged leveland required resources are conduct of Risk and Control Self- of impact. Five levels of severitymade available in order to Assessments, Key Risk Indicator have been defined for bothachieve the strategic intent of Monitoring and Loss Incident measurement parameters andthe shareholders. The strategic Reporting. Processes for risk properly defined as captured inplans are carefully designed to identification and assessment Figures 1.1 and 1.2 below.be in line with the defined Risk are conducted on a regular basisappetite and tolerance limits and supplemented with special Supplementaryalready set by the Board of risk reports when unexpectedly InformationDirectors. high risks are envisaged or Assessing Level of Impact Catastrophic Major Moderate Minor InsignificantParameter 5 4 3 21Financial >25% of Gross income >15%-25% of Gross >5%-15%of Gross 1%-5% of Gross <1% of Gross Income Income Income income Negative publicity Negative publicity Negative publicity No negative Minimal negativeReputational lasting over 6 months; lasting for over lasting for over publicity, customer publicity, High customer 3 months, Some 1 month, Some defection; impact customer defection, irreparable customer defection; customer defection; on share price or defection; No share pricing Decline in share price; Decline in share investor divestment impact on share decline;Major investor Few instances of price; No investor price or investor divestment investor divestment divestment divestment Nascon Allied Industries PLC 29 Annual Report 2017

Risk Management ReportRisk control and reporting risk of loss resulting from a Industrial All Risk, Goods inAfter risks have been identified borrower’s failure or inability Transit) insurance policies whichand their potential impact to repay a credit facility or provide relief in the event of thequantified, mitigation strategies otherwise meet a contractual crystallization of insured risks.are recommended, implemented, obligation. Credit Risk existsmonitored and reported to in two basic forms: Risk types covered under thethe Executive Committee on a. Direct Credit Risk: It is broad headers include politicala monthly basis and to the the risk of loss from a risks, market risks, reputationBoard on a quarterly basis. counterparty / client’s risks, health & safety risksWhere necessary, special risk inability or unwillingness to and business continuity risks.reports are sent to relevant pay it’s on and off balance Specialist risks such as legal,stakeholders on a need-to- sheet commitments. financial and informationknow basis. The Board Finance, b. Indirect Credit Risk: It is technology risks are jointlyRisk and Audit Committee a risk that arises in our managed with the respectivereviews risk reports and business when a sale for functional departments.approves the implementation which payment is not dueof recommended risk control immediately is mitigated Some of the technical toolsmeasures. by the provision of a bank used in the application of Risk guarantee. Management principles in theRisk monitoring organization include:The Risk Management team is 2. Operational Risks • Weekly Loss Incidentresponsible for coordinating Operational risks areall the risk management Reportingprocesses implemented classified as incidents that • Monthly Key Risk Indicatorsacross the organization and result in actual or likelyensures that risk controls change in value ensuing (KRI) reportingare duly implemented. from inadequate or failed • Risk reporting at MonthlyWhere required risk controls internal processes, peopleremain outstanding, the Risk and systems, or from external Performance Review (MPR)Management team ensures events including legal risk. Meetingstimely escalation to relevant Examples of operational risks • Quarterly risk reporting toapproving authorities for the identified in NASCON include the Board Finance, Risk andrequired budgetary approvals fires at plants, unplanned Audit Committeeor control modification. The risk disruption from equipment • Bi-annual Risk and Controlmonitoring process leads to the malfunctions, health and Self-Assessmentidentification and assessment of safety issues, and low staff • Annual Engineering/new risks that are then analyzed productivity. Technical Risk assessmentsusing the process flow described • Plant Operational Riskabove. 3. Insurance Risks Assessment exercises Insurance is used as a means • Control plan monitoring andRisk management oversight, of protection from financial evaluationsystems and tools loss from risk which have been • Loss estimation usingThe internal Risk Management considered best transferred to Scenario analysisfunction of NASCON is an insurance underwriter. This • Insurance policyresponsible for risk oversight follows the Risk management management including policyin the business. The function principle of using insurance as a design, renewals and claimsis responsible for identifying, risk transfer mechanism primarily managementmeasuring, monitoring and used to hedge against the riskcontrolling the full spectrum of of a contingent, uncertain loss. The effectiveness of the Riskrisk facing the business; these NASCON therefore maintains Management function isrisks have been classified under several regulatory (Group monitored by the Internal Audit3 broad categories namely: Life Assurance, Commercial function in line with Three Lines1. Credit Risks Vehicle, Private Motor, Marine of Defense (3LoD) principle. Credit Risk is defined as the and NSITF) and best-practice In the Three Lines of Defense based (Business interruption, model, management control is the first line of defense in risk management, the risk function30 Annual Report 2017 Nascon Allied Industries PLC

Risk Management Reportis the second line of defense, until the 3rd quarter of the year equipment and replacement Introductionand an independent internal when improved oil production of spare parts on existingaudit function is the third line. signalled the end of the equipment, the FX challenges Corporate Governance OperationsEach of these three “lines” economic recession. opened up opportunities forplays a distinct role within the local ingenuity and NASCON Financialsorganization’s wider governance The reduction in production benefited from new partnershipsframework as shown in Fig 3.0. volumes by major players in through collaboration with Supplementary the food sub-sector Nigeria other major players in the InformationOVERVIEW OF KEY RISKS IN impacted negatively on manufacturing industry for theYEAR 2017 NASCON’s business in terms local sourcing of equipment.As a business operating in the of volume, however, the lossNigerian business environment, on volume did not impact on New production lines wereNASCON was not spared from volume the bottom-line revenue sourced and installed locallythe economic challenges that of the organization due to and this was also significantfaced organizations in the attendant price increases on in reducing the usual leadpast year. While some of these finished goods. times and attendant costschallenges were across board from shipping equipment fromand impacted on most business Foreign Exchange challenges overseas.entities in the country, some NASCON’s management hadwere more operational and to pro-actively manage the FX Apapa Gridlock and increasedlocalized to the manufacturing challenges in its bid to sustain cost on sourcing of rawand distribution industry in crude salt and associated materials particular. raw material imports from its The traffic situation at the suppliers across the globe. nation’s main gateway,Economic recession and Through our effective currency the Apapa port impactedreduced spending power hedging, business continuity and significantly on NASCON’s abilityThe economic recession that global supply chain planning to import raw materials andcrippled consumer spending for strategies, we were able to distribute finished products outmuch of year 2016 continued sustain all high FX imports into of its Apapa plant. Apapa plantup until the 1st half of year 2017 the country and the business contributes significantly to thewhen marginal growth of 0.7% did not suffer any loss-time on total edible salt production ofGDP was recorded in June 2017. production from raw material the business and serves as theDespite the turnaround from exhaustion. major source of production fornegative growth, consumer customers in the Lagos, South-confidence remained poor up In terms of sourcing new west, North-central and North-1. Business 2. Risk Management 3. Internal Audit operations Department 1. Ensure that business1. Promote Risk culture 1. Understand business operations and risk and desired risk dynamics and complexities management identify behavioral decisions for apt risk management. and control risks in a being made. timely and optimal 2. Engage all stakeholders for manner by providing2. Ensure macro and micro timely redress of identified independent oversight risk management by risks. on policies and limits monitoring for procedures deployed acceptable risk 3. Ensure a holistic approach to across the exposures. risk management and risk organization. reporting.3. Continuously monitor positions and report inherent risks to relevant stakeholders. Nascon Allied Industries PLC 31 Annual Report 2017

Risk Management Reportwest regions of the country. of the Niger. This effort has been Highlight of achievements in significantly buoyed by technical the year 2017Road construction efforts in the and operational partnerships • Implementation of WhistleApapa axis critically affected the with some of the other businessflow of traffic into the port and units within the Dangote group Blowing policy across allthe average trip into the Apapa who already have market plants and workshops.port was in the range of 4 to 7 presence in the countries where • Full implementation of Riskdays for trucks and tippers for NASCON intends to penetrate. Management Frameworkmost of the year. and Tools: Risk and Control Whilst Salt is clearly the product Self-Assessment, LossThis significant risk was with the highest potential for Incident Reporting, Key Riskmitigated with the acquisition export earnings; its export trade Reporting, Monthly Key Riskof new trucks and upgrade of into West Africa continues to Indicator monitoring.existing fleet; additional trucks be challenging majorly due to • Implementation of Customerwere also sourced from 3rd differences in preference for salt credit rating system.party stakeholders. variants between Anglophone • Reconstruction of Port and Francophone West African Harcourt Plant (Ongoing).Increased Logistics Turnaround countries. While Anglophone • Renovation of Oregun PlantTime West African countries have a Crude Salt WarehouseThe average turnaround time preference for refined table salt (Ongoing).for trucks heading up to the with a Particle Size Distribution • Capacity increaseNorth East and North West of (PSD) between 1000- 1200 (Installation of additionalthe country were affected by microns, Francophone West production lines at Oregun).the collapse of arterial highways African countries have a • Addition of 98 new truck toand bridges mostly in the Middle preference for salt crystals boost logistics operations.belt region. Some of the major between 100-150 microns. These • Implementation of Goldenbridge collapse and severely difference in preferences have rules for HSSE management.damaged roads include the considerable bearings on pricing • Construction of waterfollowing: - and profitability in the medium treatment plant at Oregun• Tegina- jebba Bridge to long term. Plant.• Jebba-Mokwa Bridge • Renovation of staff canteen• Lafia- Jos Bridge Despite the present challenges, and upgrade of catering• Zungeru-Bida Bridge NASCON will continue to services to boost staff• Ayangba-Lokoja Road explore opportunities despite morale. the challenges and efforts are • Installation of HygieneThe business incurred additional ongoing to significantly scale up stations at all entrances todiesel cost as trucks plying export trades further into other the production plants.this routes from the Lagos and West African countries. • Fire Risk AssessmentsPort Harcourt plants had to conducted across all plants inbe diverted on longer routes Corporate trade customers line with ISO 45001 standard.to ensure product delivery to Despite the pessimisms thatcustomers. came with the economic Adewale Akinwale recession, the silver lining Head, Risk ManagementOPPORTUNITIES RECORDED IN for NASCON was in theYEAR 2017 form of increased focus on local sourcing by the majorIncrease in export trade manufacturing companies.NASCON consolidated on some NASCON took advantage of theof the successes of its export opportunities presented andtrade strategies from Year 2016 strategic supply agreementsby pushing the boundaries of were reached with medium toexport trade into nearby West large sized corporate customers.African countries notably theRepublic of Benin and Republic32 Annual Report 2017 Nascon Allied Industries PLC



Health, Safety and Environment “We are committed tointernational and local best practices in all NASCON operations”Health, Safety and Environment condition of our workplaces investors.is viewed from the standpoint as and effectively communicatea function which has significant safety to our employees, To keep our strategic objectiveseffect on the overall operation of contractors and visitors. Above on track, we set targets onour business, whilst the business all, we also aim to reduce key performance indicatorsplays an important role in the workplace incidents which may (KPI’s) that will be dependentdevelopment of the nation’s have negative effects on our on the core values of oureconomy; it has its peculiar reputation and overall on our business and expectation ofhazards that need to be well revenue. our shareholders. A soundmanaged. technical HSE professional In NASCON we are developing team has been set up toAs a global player in the and implementing new HSE champion the responsibilitiessalt industry, NASCON is policies based on safety golden of overseeing the performancecommitted to international rules and health, safety, social and improvement plan of HSEand local best practices in her and environment (HSSE) across the group. For properoperations with the aim of standards to manage our evaluation and management ofreducing occupational health strategy to achieve our business our occupational hazards weissues, industrial accidents, objectives. are committed to continuousenvironmental degradation improvement of the way weand to uphold her brand name. Our core HSE values are tied manage our workplace hazardsIn NASCON, our core value to People, Environment, Asset and observe complianceis to ensure “GOAL ZERO” and Reputation (PEAR). These with legal and regulatorywhich stands for ‘no fatality, no values will bring about a new requirements that govern theaccident, no occupational illness, approach to work, improve our land.no environmental pollution and good manufacturing practicesno litigation. We have in place (GMP), help transform the Our HSE personnel conducta robust safety mechanism attitude of our employees, regular pre-engagement healthto manage our operational contractors, visitors and the assessment, inductions of newhazards to as low as reasonably way our competitors view employees and transferredpracticable (ALARP). us. It will give us an edge employees with the aim of over other manufacturers of ensuring that all staff areOUR STRATEGIC OBJECTIVES similar products in terms of medically fit to work andNASCON aims to create a safety insurance premium, legal suits, understand the inherent hazardsculture which will improve the compensation and attraction of associated with our business34 Annual Report 2017 Nascon Allied Industries PLC

Health, Safety and Environmentupon resumption management executives the operational risks associated Introduction regarding occupational health with the department and itsWe carry out regular internal and safety. On site, we have management system and we are Corporate Governance Operationsaudits and inspections on medical facilities as well as committed to the reduction ofour occupational health and competent medical staff and road traffic accidents (RTA). Financialssafety management systems, an operational site ambulanceequipment and in addition available for emergency HSE department collaborates Supplementaryreport all incidents with the aim evacuations. More so, regular closely with the fleet team to Informationof identifying root causes and drills are conducted with the aim increase their awareness onput measures in place to avoid of testing the effectiveness and road safety, high way codes andreoccurrences. Furthermore, functionality of our emergency defensive driving techniques.external audits and inspections facilities and preparedness We further conduct dailyare carried out by industry of workers in the event of an truck inspections to ensureregulators as well as certification emergency. Quarterly site truck’s road worthiness, reducebodies. HSE meetings are conducted road accidents and delay in where various HSE lectures product delivery time. WeWe encourage incident reporting are delivered, awareness on engage our truck drivers onwith a system in place to record safety issues and learning from monthly safety pep-talks andand investigate all reported incidents (LFI’s) are cascaded quarterly driver’s performanceincidents. The findings and and awards and recognition of recognition performance awardsrecommendations are submitted persons based on good safety to encourage safe driving. Into executive management and practices are rewarded. addition, pre-trip briefings areBoard of Directors to ensure conducted for truck drivers andthat health and safety measures Fleet Safety Management the state of their health is alsoare taken seriously across the The fleet team plays a very considered prior to any journey.business and incidents are significant operational role in This is done to ensure that allreduced to as low as reasonably the business which cannot be truck drivers are fit to workpracticable. over emphasized. In NASCON, and are reminded of the rules we realize the importance of governing driving for NASCONAll staff at different levels the fleet team in realizing theare encouraged to report overall objective of the business. We closely supervise ourany concerns with senior We also put into consideration contractors and ensureNASCON 15 GOLDEN RULES1. Report all incidents 2. Stop unsafe work 3. Work with valid work permit 4. Verify isolation before work 5. Protect yourself against a fall at height6. Do not work under a suspend 7. Obtain authorization before 8. Obtain authorization before 9. Conduct gas test 10. Do not smoke overriding equipmented load entering a confined place11. No alcohol while working 12. Do not use your phone or 13. Wear your seat belt 14. Do not discharge or dispose 15.Use correct PPEs exceed speed limit of hazardous materials Nascon Allied Industries PLC 35 Annual Report 2017

Health, Safety and Environmentsafety procedures are not The environment and e-waste The essential steps for incidentcompromised in their activities. policies which have been reporting and investigation areFor every contract awarded endorsed by the Managing made up of four processes:we conduct a pre-job meeting Director are effectively 1. Incident Notification: Alland induction for contractor communicated and circulatedpersonnel and pre-mobilization to both staff and contractors. incidents shall be reportedof equipment before site These policies are reviewed using the NASCON riskmobilization and ensure every three (3) years or as at observation card / channeledappropriate personal protective when necessary for continuous in a timely manner based onequipments (PPE’s) are worn. improvement, thereby setting severity of occurrence.Contractor sites are regularly and reviewing environmental 2. Incident classification/inspected and all unsafe acts objectives and targets. escalation/reporting alert:and conditions are identified, Incidents are classified asreported and ensured they are HAZARD EFFECT near misses or accidents andclosed out to promote a safe MANAGEMENT PROCESS then risk level is determinedworkplace. (HEMP) TOOL 3. Investigation: An This is a structured set of investigation team is setOUR ENVIRONMENT controls for managing safety up comprising of severalNASCON trusts in a robust in the business to ensure and staff of NASCON based onenvironmental management to demonstrate that business the severity of the incident.system geared towards reducing objectives are met. More critical cases orthe effect of climate change. those involving fatalitiesIt is noteworthy to state that Risk Management Standard: This are investigated by uppersalt dust contributes to climate standard considers the activities management staff orchange and global warming of employees and contractors management executives,effects, we take necessary conducting routine and non- while managers and teamsteps to avoid salt dust into the routine activities, as well as the heads are part of theenvironment. This also helps production services provided by investigation team in otherto avoid legal challeneges and their operation within NASCON. less critical incidents. Everyreputation damages from our investigation process involveshost communities. This, if not Risk = Likelihood x Severity: witnesses’ statements andwell managed could attract The consequences of a specific pictures, where necessary.legal challenges from our host / particular hazard being 4. Communication ofcommunities and therefore released and the likelihood of it lesson learnt: This isaffect our reputation. This happening. carried out after allis why we are committed to investigations have beenthe implementation of ISO Risk control effectiveness reviewed by management14001:2015 Environmental (Traffic Light System) executives. Findings andManagement System (EMS) INCIDENT REPORTING AND recommendations arewhich is a systematic approach INVESTIGATION STANDARD: generated and furtherto management of environment This standard is to describe the cascaded to all staff throughwithin the scope of our arrangement and requirement Learning From Incidentsoperations. for reporting, classification, (LFI) and safety alerts. The escalation and investigation aim of this process is toWe conduct external of occupational HSE incidents ensure that all employeesEnvironmental Assessment across NASCON. Closure and are aware of the incidentReport (EAR) and its outcome communication of incidents and have the knowledge ofinforms areas of improvement is crucial to enable NASCON actions to take to preventof dust emission and noise. understand the effectiveness of further recurrence.We comply with local and risk management program andinternational standards by to ensure that employees learn HSE PERFORMANCEapplying for environmental lessons so as to avoid future REPORTING STANDARD:permits from state- owned and reoccurrences This management toolfederal environmental agencies. ensures NASCON keeps track and regularly report on the36 Annual Report 2017 Nascon Allied Industries PLC

Health, Safety and Environmentperformances of the HSE key The leading indicators include analysis, safety operational Introductionperformance indicators (KPI’s) HSE meetings, unsafe acts and procedures).in order to support the business conditions, observations, golden • Implementation of Safetydecision making process. The rules violation, HSE trainings, pre-job meetings andKPI’s are grouped into two; Fire response readiness, drills, induction of contractorsLeading and Lagging indicators audits and inspections, etc personnel. • Implementation of site HSELagging indicators are To effectively manage safety quarterly meeting. Corporate Governance Operationsmandatory and are reactive on site, we established a close • Implementation of safetyin nature such as fatality, relationship with the operations Management committee FinancialsLost Time Incidents (LTI’s), and fleet teams for adequate monthly meeting.recordable injuries, occupational supervision of their activities, • Implementation of monthly Supplementaryillnesses and near misses etc. training of their personnel Management site safety tour. InformationThese shall be monitored, and ensuring that safety • Commenced site HSE hazarddocumented and reported procedures are followed. These tracking and report tobi-monthly and quarterly to initiatives has led to an increase executive management.executive management and in compliance to Personal • Implementation of safetyboard of directors. They shall Protective Equipment (PPE), recognition and rewardingbe further subjected to rigorous infrastructural renovations, program.investigation to identify the root identification and reporting of • Full implementation ofcauses and cascaded to all staff unsafe acts and conditions on NASCON 15 Golden Rules.to avoid recurrence. site and the overall safety culture of staff has greatly improved. Jude AmaechiLeading indicators, on the other Head, Health, Safety andhand are recommended, despite 2017 HIGHLIGHTS Environmentnot being mandatory. Leading • Hiring of Head HSE and 5indicators are monitored,collected, documented and new HSE professionals.reported to management on a • Implementation of new HSEmonthly basis for managementreview and if necessary for policies.adoption of proper corrective • Development andactions. implementation of new safe system of work procedures (Permit to work, Job safety Nascon Allied Industries PLC 37 Annual Report 2017



CorporateGovernance

Corporate Governance Report “We took many steps to further improve our governance and to propelNASCON to greater heights. I am dedicated to continue driving good corporate governance practices and structures.”General information the requirements of the Nigerian corporateNASCON Allied Industries Plc is committed to best governance regulations, which include but arepractice and procedures in corporate governance. not limited to the Securities and ExchangeThe corporate governance practices are constantly Commission’s Code of Corporate Governance forunder review, in line with dynamics of the business Public Companies in Nigeria and the Companiesenvironment. There was considerable focus on and Allied Matters Act.the company’s corporate governance practicesespecially at the Board level during the year. Responsibilities of the Board of Directors It is the responsibility of the Board of NASCONThe Corporate Governance policies adopted by Allied Industries Plc to: • Ensure integrity of the Company’s financial andthe Board of Directors are designed to ensure that internal control policies.the Company’s business is conducted in a fair, • Ensure the accurate, adequate and timelyhonest and transparent manner which conforms rendition of statutory returns and financial reporting to the regulatory authoritiesto high ethical standards. The Board delegates (Nigerian Stock Exchange, Corporate Affairs Commission, Securities and Exchangethe day-to-day running of the Company’s Commission) and shareholders. • Ensure value creation for shareholders,affairs to the Managing Director/Chief Executive employees and other stakeholders. • Review and approve corporate policies,Officer supported in this task by an Executive strategy, annual budget and business plan • Monitor implementation of policies and theManagement Committee. The Board of Directors strategic direction of the Company. • Set performance objectives, monitorconsists of 10 members; the Chairperson, 2 implementation and corporate performance. • Review and approve all major capitalExecutive Directors and 7 Non-Executive Directors expenditure of the Company. • Ensure that the statutory rights of shareholdersout of which 3 are Independent. They are: are protected at all times.‘Yemisi Ayeni Chairperson Meeting of the Board of Directors The Board of Directors holds several meetingsPaul Farrer Executive Director in the year to consider important corporateFatima Aliko-Dangote Executive DirectorOlakunle Alake DirectorHalima Aliko-Dangote DirectorAbdu Dantata DirectorSada Ladan-Baki DirectorChris Ogbechie Independent DirectorKnut Ulvmoen DirectorFatima Wali-Abdurrahman Independent DirectorComplianceNASCON is committed to compliance with40 Annual Report 2017 Nascon Allied Industries PLC

Corporate Governance Report Introductionevents and actions such as approval of corporate Committees report to the Board of Directors onstrategy, annual corporate plan, review of their activities and decisions which are ratified byinternal risk management and control systems, the full Board, at a meeting.review performance and direct the affairs of theCompany, its operations, finance and formulate In compliance with the practices of goodgrowth strategies. corporate governance, the Chairman of the Board is not a member of either of these committees.Record of Directors’ meetings The Finance, Risk and Audit Committee Corporate Governance OperationsAttendance at Directors’ meetings is impressive. The Finance, Risk and Audit Committee isIn line with provisions of Section 258(2) of the responsible for monitoring the integrity of theCompanies And Allied Matters Act Of Nigeria, Cap financial statements of the Company. It alsoC20 Lfn 2004, the record of Directors attendance assesses and monitors all risks associated withat Board meetings is available for inspection at the the operations of the Company, developing andAnnual General Meeting. monitoring the implementation of Internal Control System, by Management. The Committee assistsBoard meeting attendance: the Board in its responsibility relating to the oversight of the Company’s financial credit andThe Committee held seven (7) meetings in 2017 risk management policies and procedures.‘Yemisi Ayeni 7/7Paul Farrer 7/7Fatima Aliko-Dangote 7/7Olakunle Alake 7/7 The Committee is comprised of seven (7)Halima Aliko-Dangote* 5/7 Directors:Abdu Dantata 7/7 Chris Ogbechie ChairmanSada Ladan-Baki** 5/7 Paul Farrer Member FinancialsChris Ogbechie 6/7 Fatima Aliko-Dangote MemberKnut Ulvmoen 7/7 Olakunle Alake MemberFatima Wali-Abdurrahman 7/7 Halima Aliko-Dangote Member*Halima Aliko-Dangote was on an approved leave of Abdu Dantata Memberabsence.**Sada Ladan-Baki was on approved work assignment with Sada Ladan-Baki Membera related party company.Key activities of the Board: Key matters of the committee: Supplementary• The board carried out an extensive review of • Reviewed the 2016 annual reports and Information the company’s short and long term strategy, accounts culminating in a detailed strategic plan. • Reviewed the 2017 quarterly financial reports• Consideration reports of the Board • Reviewed the critical accounting policies Committees with recommendations for approval. applied in the preparation of the financial• The Board considered the quarterly unaudited statements financial reports and audited full year reports • Reviewed the reports on key operational risks and proposed a dividend. and the related controls and processes to• Financing requirements for rehabilitation and manage and mitigate said risks full automation of the salt refinery.• Operational performance, marketing strategy Finance, Risk and Audit Committee attendance: and report on business and projects.• Risk Management objectives and The Committee held five (5) meetings in 2017 implementation. Chris Ogbechie 5/5 Paul Farrer 5/5 Fatima Aliko-Dangote 5/5 Olakunle Alake 5/5 Halima Aliko-Dangote* 2/5Board Committees Abdu Dantata 5/5The Board delegated some of its responsibilitiesto standing committees that consists of Executive Sada Ladan-Baki** 4/5Directors and Non-Executive Directors. Theseare the Establishment and General Purpose *Halima Aliko-Dangote was on an approved leave ofand Finance, Risk and Audit Committees. The absence. **Sada Ladan-Baki was on approved work assignment with a related party company. Nascon Allied Industries PLC 41 Annual Report 2017

Corporate Governance ReportThe Establishment and General Purpose Kudaisi Ayodele Sarat 5/5CommitteeThe Committee is responsible for reviewing the Halima Aliko-Dangote* 4/5policy framework for employee and remunerationissues. The Committee also institutes a transparent Abdu Dantata 5/5procedure for the appointment of new Directorsto the Board of Directors and recommendation Chris Ogbechie 3/5to the Board regarding the tenures and the re-appointment of Directors. *Halima Aliko-Dangote was on an approved leave of absence.The committee is comprised of five (5) Directors: Key matters of the committee: • Ensured the independence and objectivity ofKnut Ulvmoen Chairman the Audit.Paul Farrer Member • Reviewed the adequacy and effectiveness ofFatima Aliko-Dangote Member NASCON Allied Industries’ internal control policies prior to endorsement by the Board.Halima Aliko-Dangote Member • Directed and supervised investigations into matters within its scope, such as evaluation ofFatima Wali-Abdurrahman Member the effectiveness of NASCON Allied Industries’ internal controls.Key matters of the committee: In addition to the above stated responsibilities, the• Considered the proposed new organizational Committee carries out all such other functions as stipulated by the Companies and Allied Matters and salary structure, including new positions Act of Nigeria, CAP C20 LFN 2004. and portfolios• Considered the controls and procedures for Code of Business Conduct and Code of monitoring staff and IT output quality Governance for Directors The Company has a code of business conduct,Establishment & General Purpose Committee which is applicable to all employees and Directors. Mindful of our reputation, we have zero toleranceattendance: to all forms of unethical behavior including bribery and corruption. The policy is designed to promoteThe Committee held four (4) meetings in the year a culture of honesty and accountability. It also provides guidance on mechanisms to reportKnut Ulvmoen 4/4 unethical conduct.Paul Farrer 4/4 Whistle Blowing Policy We continually strive to create a workFatima Aliko-Dangote 4/4 environment where employees, contract workers, vendors, service providers, customers andHalima Aliko-Dangote* 0/4 other stakeholders have the opportunity to make confidential disclosures on misconduct,Fatima Wali-Abdurrahman 4/4 irregularities or malpractice, without fear of harassment and/or victimization and with the*Halima Aliko-Dangote was on an approved leave of assurance that their concerns will be takenabsence. seriously, investigated, and appropriate action will be taken.The Statutory Audit Committee In line with Section 32 of the SEC Code andThe Committee is made up of six (6) members, international best practice in Corporate Governance, the Board has established a Whistlethree (3) representatives of Shareholders and Blowing Policy to enable staff, in confidence, raise concerns about possible improprieties in financialthree (3) members of the Board of Directors. and other matters and to do so without fear of reprisal, provided that such concerns are raised inThe members are elected annually at General good faith.Meetings. The Committee, in compliance to therequirement of good corporate governancepractices is chaired by a representative of theShareholders and include:Okey Nwuke Chairman/ShareholderUmar Farouk ShareholderKudaisi Ayodele Sarat ShareholderHalima Aliko-Dangote DirectorAbdu Dantata DirectorChris Ogbechie DirectorStatutory Audit Committee attendance:The committee held five (5) meetings in 2017Okey Nwuke 5/5Umar Farouk 5/542 Annual Report 2017 Nascon Allied Industries PLC

Corporate Governance ReportEmployees and other stakeholders are encouraged Shareholders can direct any complaints or Introductionto report incidents of misconduct in a confidential enquiries to the Company Secretariat or to theand anonymous manner through the internal Registrars, depending on the nature of complaint.reporting channels (i.e. Line Manager, Head of Our policy is to acknowledge receipt of theDepartment, and CEO) and/or the outsourced complaint within 48 hours and respond/resolveKPMG Ethics Line. the query within 10 working days of receipt.The Board subscribed to the KPMG Ethics Line Annual General Meeting (AGM) Corporate Governance Operationsto strengthen confidence in our Whistle Blowing The AGM is the principal opportunity for the BoardPolicy. The KPMG Ethics Line contact details to meet shareholders and explain the Company’s Financialsare: 0703 000 0026, 0703 000 0027, 0808 progress and to answer any questions raised. The822 8888, 0708 060 1222, 0809 993 6366 or Notice of AGM is dispatched to all shareholders [email protected]. and published in two leading national newspapers Information and on our website, at least 21 working daysThe Board has delegated oversight over whistle before the AGM is held.blowing to the Finance, Risk and Audit Committee.All matters reported are investigated and reported The Board and senior management team ofto the Committee including the action taken. the Company are available for discussions with shareholders before the Annual General Meeting.Insider Trading Policy The Chairmen of the Committees and myself areIn accordance with Section 14 of the Nigerian also available to answer shareholders’ questionsStock Exchange Amended Listing Rules, the Board during formal proceedings of the Annual Generalhas put in place a Security Trading Policy which Meeting.applies to all Directors and Employees and also tothose who may at any time possess, any insider or The Annual General Meeting to discuss this 2017material information about the Company. Annual Report will be held at the Civic Centre, Victoria Island, Lagos, at 11.00am on 3rd May 2018.The Security Trading Policy as endorsed bythe Board is in substantial conformity with the Conflict of Interest and related-partystandard set out in Section 14 of the Amended transactionsListing Rules. The Board maintains procedures to ensure that related-party transaction and potential conflictsAccordingly, it is hereby confirmed that, of interest are identified, disclosed and managed.after specific inquiries of all the Directors of Details of the related-party transactions during thethe Company, they have all confirmed their year is set out on page 102.compliance with the Policy in the period beforethe Company results were announced for the 2017 Shareholders’ Interest and Relationsfinancial year. The Board ensures the protection of the statutory and general rights of shareholders at all timesThere is no case of non-compliance with the particularly their rights to vote at the generalPolicy. Furthermore, the compliance of the meetings. All shareholders, regardless of volumeCompany Directors with the listing rules and the of shareholding or social status are treated equally.anti-insider trading policy will continue to be The Company has an Investor Relations team thatdisclosed in the Company’s quarterly and other manages effective two-way communications withfinancial reports. our investors.Complaints management ‘Yemisi AyeniThe Company has adopted a complaints Chairpersonmanagement policy in accordance with therequirements of the Securities and ExchangeCommission’s rules relating to the ComplaintsManagement Framework of the Nigerian CapitalMarkets. Nascon Allied Industries PLC 43 Annual Report 2017



Board & Committee Structure 5 Establishment and General Introduction Purpose Committee10 members Knut Ulvmoen (c)members Board of Directors Paul Farrer Corporate Governance Operations Fatima Aliko-Dangote ‘Yemisi Ayeni (c) Halima Aliko-Dangote Paul Farrer Fatima Wali-Abdurrahman Fatima Aliko-Dangote Olakunle Alake 7 Finance, Audit and Risk Halima Aliko-Dangote Committee Abdu Dantata members Sada Ladan-Baki Chris Ogbechie (c) Chris Ogbechie Paul Farrer Knut Ulvmoen Fatima Aliko-Dangote Fatima Wali-Abdurrahman Olakunle Alake Halima Aliko-Dangote Abdu Dantata Sada Ladan-Baki 6 Statutory Audit Financials Committee members Okey Nwuke (c) Umar Farouk Supplementary Kudaisi Ayodele Sarat Information Halima Aliko-Dangote Abdu Dantata Chris Ogbechie 15 Management Committee members Paul Farrer (c) Fatima Aliko-Dangote Aderemi Saka Gerhard Scheepers Olushola Shosanya Rabiu Mohammed Olusegun Ajala Nura Shuaibu Rabi Adamu Shalom Okonmah Patrick Mogaha Adewale Akinwale Jude Amaechi Tunde Iwamofe Adedayo Samuel(c) denotes ChairpersonThe Management Committee and Statutory Audit Committee are not Committees of the Board Nascon Allied Industries PLC 45 Annual Report 2017

Board of Directors Board of DirectorsChris Ogbechie Fatima Wali-Abdurrahman Abdu Dantata Fatima Aliko-Dangote Paul Farrer46 Annual Report 2017 Nascon Allied Industries PLC

Sada Ladan-Baki Halima Aliko-Dangote Knut Ulvmoen‘Yemisi Ayeni Olakunle Alake Nascon Allied Industries PLC 47 Annual Report 2017

Board of Directors ‘Yemisi Ayeni I Chairperson ‘Yemisi is the immediate past Managing Director, Shell Nig. Closed Pension Fund Administrator Ltd, a position she held for 10 years. She was also a Council Member of the Nigerian Stock Exchange and was recently appointed as a Non-Executive Director on the Board of Stanbic- IBTC Pension Managers Ltd., and an Executive Board Member of Women in Management and Business (WIMBIZ). A graduate of Economics (Specialising in Accounting and Business Finance) from the University of Manchester, UK, she is also a member of the Institute of Chartered Accountants in England and Wales. She started her career with Price Waterhouse, London in 1985, relocated to their Lagos office in 1991 and joined Shell Nigeria in 1994. She held a wide variety of roles in various Shell companies, including her being Finance Director of SNEPCo. Paul Farrer I Managing Director Paul joined NASCON as Managing Director in 2015, having previously been the Chief Operating Officer and Group Executive Director of Food Concepts Plc. His experience in the foods business spans 20 years in the South and West African markets; in international companies such as TGI Fridays (Americana Group), Steers Holdings – Debonairs Pizza, Famous Brands and Innscor International. He is an alumnus of East London Technical College, South Africa.Fatima Aliko-Dangote I Executive Director, CommercialFatima joined the Dangote Group in 2014 as the Special Assistant to the Managing Director-Cement and later worked as a Group Corporate Strategy Specialist. In this latter role, sheprovided planning and analytical support across all the Business Units of the Dangote Group.BoardShe holds a Bachelor’s degree in Law from the University of Surrey in the UK. Fatima hasbeen called to the Nigerian Bar, and has worked as an Associate at Banwo and Ighodalo LegalChambers, on areas related to capital markets, intellectual property, and energy.She was appointed to the Board in 11th of March, 2016.Olakunle Alake I DirectorOlakunle is Chief Operating Officer of Dangote Industries. He was appointed to the Boardof Dangote Industries in 2001 and has since been instrumental to the growth of the parentcompany and its subsidiaries.He holds a Bachelor’s degree in Civil Engineering from Obafemi Awolowo University lle-Ife(1983) and is a Fellow of the Institute of Chartered Accountants of Nigeria.He joined Dangote Industries in 1990, after six years at PWC. He has held several managementpositions in Dangote Industries, including Financial Controller and Head of Strategic Services.He has deep finance and accounting experience and brings substantial experience in finance,mergers and acquisitions to the Board.Halima Aliko-Dangote I DirectorHalima holds a Bachelor’s Degree in Marketing from the American Intercontinental University,London, United Kingdom and a MBA from Webster Business School, London, also in the UK.She started her career as a business analyst with KPMG Professional Services in Lagos, Nigeria,before she joined Dangote Industries Limited in 2010. She has held a number of key roles atDangote Industries including Special Assistant to the President/Chief Executive.She is currently the Executive Director in charge of Commercial activities at Dangote FlourMills. She resigned as Executive Director at NASCON in February 2016 but remains on theBoard as a Director.48 Annual Report 2017 Nascon Allied Industries PLC

Board of Directors Introduction Abdu Dantata I Director Abdu is the Executive Director in charge of Logistics and Distribution for Dangote Industries Limited, a position he has held since the Group was established more than 20 years ago. He is also the Chairman of Agad Nigeria Limited, a trading and transportation Company operating throughout Nigeria. He is a fellow of the Nigerian Institute of Shipping. He brings his extensive experience in sales, logistics and distribution to Board.Sada Ladan-Baki I Director Corporate Governance OperationsSada’s experience spans thirty years in public service and fund administrationHe sits on the board of several companies and belongs to many professional associationsincluding the Institute of Logistics and Distribution (Chartered Fellow) and the NigerianInstitute of Marketing (Chartered Member).He is a graduate of Economics with an MBA from Ahmadu Bello University, Zaria. Chris Ogbechie I Independent Director Financials Chris has wide experience in marketing, strategy and corporate governance derived from his SupplementaryProfile work as Head of Marketing/Sales at Nestle Nigeria and from his consulting work with Nigerian, Information Ghanaian and Kenyan firms over the years. He is the Director of First bank Sustainability Centre, Lagos Business School and Chairman, Board of Directors, Diamond Bank Plc. He teaches strategy and corporate governance at the Lagos business School and Strathmore Business School in Nairobi, Kenya. Chris has a first-class honours degree in Mechanical Engineering from Manchester University, an MBA from Manchester Business School and a PhD in Business Administration from Brunel Business School in the UK. Knut Ulvmoen I Director Knut joined Dangote in 1996 as the Finance Director. He is a management professional with extensive background in finance and administration of multinational companies including Revisor-Centret, Norcem Group, Bulkcem and Scancem. He has been instrumental in moving the Group from import and trading into a manufacturing conglomerate with tentacles across the African continent. He holds a Master’s of Science degree in Business and is a Member of the Norwegian Association of Authorised Accountants.Fatima Wali-Abdurrahman I Independent DirectorFatima is an architect, real estate developer and management professional. She is currentlythe Chief Executive Officer of the Filmo Group and Deputy President of the Housing FinanceProfessionals Association of Nigeria. She serves on the boards of NMRC (Nigeria MortgageRefinance Co.) and the Advisory Board of the Chapel Hill Denham Fund for Women. Shewas recently appointed a member of the Board of Directors of the OANDO Foundation, isa WIMBOARD Lead Ambassador (WIMBIZ Initiative) and a member of the PresidentialCommittee for Flood Relief and Rehabilitation. A graduate of both Architecture and UrbanStudies from the University of Minnesota, U.S.A., she holds a M.Sc. (Arch.) in Economics andManagement of Construction from the University of LondonNascon Allied Industries PLC 49 Annual Report 2017

Report of the Directors’ “The Board is satisfied that the Annual Report represents a fair, balancedand realistic view of events during the 2017 financial year.”The Directors are pleased to submit their report Legal formtogether with the audited financial statements of The Company was incorporated on April 30, 1973the Company for the year ended December 31, as a limited liability company. The shares are2017. currently quoted on the Stock Exchange.Having considered all the matters reviewed and Principal Activitiesbrought before the Board, the Board is satisfied The principal activities of the company during thethat the Annual Report represents a fair, balanced year include processing of Raw Salt into Refined,and realistic view of events during the 2017 Edible and Industrial Salts. The company alsofinancial year. produced Seasoning Vegetable Oil.Directors’ Responsibilities Business ReviewThe Directors are responsible for the preparation The Business Review comprises of the following,of the financial statements which give a true and each of which are incorporated by reference into,fair view of the state of affairs of the Company in and forms part of this Report of the Directors:accordance with Companies And Allied Matters • Chairperson’s Statement on page 9Act Of Nigeria, Cap C20 Lfn 2004. • MD Review on pages 14 - 15 • CFO Review on pages 16 - 19In doing so, they ensure that: • Corporate Governance Report on pages 40 - 43• proper accounting records are maintained; • Risk Management Report on pages 28 - 32• applicable accounting statements are followed; • HSE Report on pages 34 - 37• suitable accounting policies are adopted and • Human Resources Report on pages 26 - 27 consistently applied; Results of the Year and Dividend• judgments and estimates made are reasonable Total revenue of the Company increased to ₦27.06 billion {2016: ₦18.29 billion}. Profit for the year and prudent; also increased to ₦5.34 billion {2016: ₦2.42 billion}.• the going concern basis is used, unless it is Proposed final dividend for 2017 is ₦3.97 billion. inappropriate to presume that the Company Unclaimed Dividends will continue in business; The total amount outstanding as at 31 December,• internal control procedures are instituted which 2017 is ₦566.75million. A summary of the report as far as is reasonably possible, safeguard the assets and prevent and detect fraud and other irregularities.50 Annual Report 2017 Nascon Allied Industries PLC